Execution Copy
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$30,000,000
CREDIT AGREEMENT
Dated as of June 13, 1997
Among
PRECISE HOLDING CORPORATION,
as Guarantor,
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PRECISE TECHNOLOGY, INC.,
as Borrower,
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CERTAIN SUBSIDIARIES OF
PRECISE TECHNOLOGY, INC.,
as Subsidiary Guarantors,
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and
FLEET NATIONAL BANK,
as Issuing Bank,
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and
FLEET NATIONAL BANK,
as Lender and as Agent
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T A B L E O F C O N T E N T S
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.01. Certain Defined Terms................................................. 1
1.02. Computation of Time Periods........................................... 25
1.03. Accounting Terms...................................................... 25
1.04. Construction.......................................................... 26
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
2.01. The Advances.......................................................... 26
2.02. Making the Advances................................................... 27
2.03. Issuance of and Drawings and Reimbursement Under Letters of Credit.... 28
2.04. Repayment of Advances................................................. 29
2.05. Termination or Reduction of the Commitments........................... 31
2.06. Prepayments........................................................... 31
2.07. Interest.............................................................. 33
2.08. Fees.................................................................. 34
2.09. Conversion of Revolving Credit Advances............................... 35
2.10. Increased Costs, Etc.................................................. 35
2.11. Payments and Computations............................................. 37
2.12. Taxes................................................................. 38
2.13. Sharing of Payments, Etc.............................................. 40
2.14. Use of Proceeds....................................................... 41
2.15. Source of Funds....................................................... 41
ARTICLE III
CONDITIONS OF LENDING
3.01. Conditions Precedent to Initial Extension of Credit................... 42
3.02. Conditions Precedent to Each Borrowing and Issuance................... 50
3.03. Certain Requirements with respect to Permitted Acquisitions........... 50
3.04. Determinations Under Section 3.01..................................... 51
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01. Representations and Warranties........................................ 51
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Section Page
ARTICLE V
COVENANTS
5.01. Affirmative Covenants................................................. 62
5.02. Negative Covenants.................................................... 67
5.03. Reporting Requirements................................................ 78
5.04. Financial Covenants................................................... 82
ARTICLE VI
EVENTS OF DEFAULT
6.01. Events of Default..................................................... 85
6.02. Actions in Respect of the Letters of Credit upon Default.............. 88
ARTICLE VII
THE AGENT
7.01. Authorization and Action.............................................. 88
7.02. Agent's Reliance, Etc................................................. 89
7.03. Fleet and Affiliates.................................................. 89
7.04. Lender Credit Decision................................................ 89
7.05. Indemnification....................................................... 90
7.06. Successor Agents...................................................... 91
ARTICLE VIII
MISCELLANEOUS
8.01. Amendments, Etc....................................................... 91
8.02. Notices, Etc.......................................................... 92
8.03. No Waiver; Remedies................................................... 93
8.04. Costs and Expenses.................................................... 93
8.05. Right of Set-off...................................................... 94
8.06. Binding Effect........................................................ 95
8.07. Assignments and Participations........................................ 95
8.08. Execution in Counterparts............................................. 98
8.09. No Liability of the Issuing Bank...................................... 98
8.10. Confidentiality....................................................... 99
8.11. Jurisdiction, Etc..................................................... 99
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SCHEDULES
Schedule I - Commitments and Applicable Lending Offices
Schedule II - Existing Accounts
Schedule 4.01(a) - Share Ownership
Schedule 4.01(b) - Subsidiaries
Schedule 4.01(d) - Authorizations, Approvals, Actions, Notices and Filings
Schedule 4.01(l) - Plans and Multiemployer Plans
Schedule 4.01(y) - Open Years
Schedule 4.01(cc) - Existing Debt
Schedule 4.01(dd) - Owned Real Property
Schedule 4.01(ee) - Leased Real Property
Schedule 4.01(ff) - Investments
Schedule 4.01(gg) - Intellectual Property
Schedule 4.01(ii) - Labor Matters
Schedule 5.02(a)(iii) - Existing Liens
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EXHIBITS
Exhibit A - Form of Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Assignment and Acceptance
Exhibit D-1 - Form of Pledge and Security Agreement
Exhibit D-2 - Form of Parent Pledge and Security Agreement
Exhibit E - Form of Intellectual Property Security Agreement
Exhibit F-1 - Form of Parent Guaranty
Exhibit F-2 - Form of Subsidiary Guaranty
Exhibit G - Form of Opinion of Borrower's Counsel
Exhibit H - Form of Senior Subordinated Notes Indenture
Exhibit I - Form of Senior Subordinated Notes Guaranty
Exhibit J - Form of Registration Rights Agreement
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CREDIT AGREEMENT
CREDIT AGREEMENT dated as of June 13, 1997 among PRECISE HOLDING
CORPORATION, a Delaware corporation (together with its successors and assigns,
"Parent"), PRECISE TECHNOLOGY, INC., a Delaware corporation (together with its
successors and assigns, the "Borrower"), each Subsidiary Guarantor (together
with each of their respective successors and assigns, collectively, the
"Subsidiary Guarantors"), the banks, financial institutions and other
institutional lenders listed on the signature pages hereof and each Eligible
Assignee that shall become a party hereto pursuant to Section 8.07 (the
"Lenders") and Fleet National Bank, as agent (together with any successor
appointed pursuant to Article VII, the "Agent") for the Lenders hereunder and as
Issuing Bank.
PRELIMINARY STATEMENTS:
The Borrower has requested that the Lenders lend to the Borrower up to
$30,000,000 in order to (i) effect the Refinancing Transactions, (ii) furnish
certain working capital, (iii) fund the Permitted Acquisitions and certain
general corporate requirements of the Borrower and its Subsidiaries and (iv) pay
transaction fees and expenses in connection with the transactions contemplated
hereby. The Lenders have indicated their willingness to agree to lend such
amounts on the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Advance" means a Revolving Credit Advance or a Letter of Credit
Advance.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of Voting Stock, by contract or otherwise.
"Agent" has the meaning specified in the recital of parties to this
Agreement.
"Agent's Account" means the account of the Agent maintained by the
Agent at Fleet National Bank, ABA No. ▇▇▇-▇▇▇-▇▇▇, for further credit to
Account No. 151035103156 or such other account maintained by the Agent and
designated by the Agent in a written notice to the Lenders and the
Borrower.
"Agreement" shall mean this Credit Agreement, as supplemented,
amended, restated or otherwise modified from time to time.
"Applicable Lending Office" means, with respect to each Lender, such
Lender's Domestic Lending Office in the case of a Base Rate Advance and
such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance.
"Applicable Margin" means, in the case of (x) Base Rate Advances,
1.50% and (y) Eurodollar Rate Advances, 2.50%.
"Appropriate Lender" means, at any time, with respect to (a) the
Revolving Credit Facility, all Lenders (other than the Issuing Bank) and
(b) the Letter of Credit Facility, (i) the Issuing Bank and (ii) if the
other Lenders have made Letter of Credit Advances pursuant to Section
2.03(c) that are outstanding at such time, each such other Lender.
"Assigned Agreements" means all Assigned Agreements referred to in
Section 1(e) of the Security Agreement.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the Agent, in
accordance with Section 8.07 and in substantially the form of Exhibit C
hereto.
"Available Amount" of any Letter of Credit means, at any time, the
maximum amount available to be drawn and unreimbursed under such Letter of
Credit at such time (assuming compliance at such time with all conditions
to drawing).
"Bank Hedge Agreement" means any interest rate Hedge Agreement
required or permitted under Article V that is entered into by and between
the Borrower and any Lender.
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the
higher of:
(a) the rate of interest announced publicly by Fleet in New York,
New York, from time to time, as its prime rate (and such term shall
not be construed to be its best or most favorable rate); and
(b) 1/2 of one percent per annum above the Federal Funds Rate.
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"Base Rate Advance" means an Advance that bears interest as provided
in Section 2.07(a)(x).
"Borrower" has the meaning specified in the recital of parties to this
Agreement.
"Borrower's Account" means the account of the Borrower maintained by
the Borrower with Fleet at its office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Account No. 9373825604, or such other account as the
Borrower and the Agent may from time to time designate as the "Borrower's
Account".
"Borrowing" means a borrowing consisting of simultaneous Revolving
Credit Advances of the same Type made by the Lenders.
"Business" means the business of operating an injection molder of
plastic products for sale and distribution, including without limitation
the assets relating to any such business.
"Business Day" means a day of the year on which banks are not required
or authorized by law to close in New York City or Pittsburgh, Pennsylvania
and, if the applicable Business Day relates to any Eurodollar Rate
Advances, on which dealings are carried on in the London interbank market.
"Calculation Period" means the period of four consecutive fiscal
quarters last ended before the date of the respective event or incurrence
which requires calculations to be made on a Pro Forma Basis.
"Capital Expenditures" means, for any Person for any period, the sum
of, without duplication, all cash expenditures made, directly or
indirectly, by such Person or any of its Subsidiaries during such period
for equipment, fixed assets, real property or improvements, or for
replacements or substitutions therefor or additions thereto, that have been
or should be, in accordance with GAAP, reflected as additions to property,
plant or equipment on a Consolidated balance sheet of such Person;
provided, however, in no event shall any Capital Expenditures made with the
proceeds of a Recovery Payment in accordance with the proviso set forth in
the definition of Extraordinary Receipt be deemed to constitute Capital
Expenditures for purposes hereof; provided further that it is understood
that in no event shall any payment of principal or interest under or the
incurrence of any Capitalized Lease be deemed to be a Capital Expenditure
for purposes of this definition.
"Capitalized Leases" means all leases that have been or should be, in
accordance with GAAP, recorded as capitalized leases.
"Cash Equivalents" means any of the following, to the extent owned by
any Loan Party free and clear of all Liens other than Liens created under
the Collateral Documents and having a maturity of not greater than 180 days
from the date of acquisition thereof: (a) readily marketable direct
obligations of the Government of the United States or any
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agency or instrumentality thereof or obligations unconditionally guaranteed
by the full faith and credit of the Government of the United States, (b)
insured certificates of deposit or time deposits, certificates of deposit
and Eurodollar time deposits with maturities of one year or less from the
date of acquisition, bankers acceptances with maturities not exceeding six
months, and overnight bank deposits, in each case with any commercial bank
that is a Lender or a member of the Federal Reserve System, issues (or the
parent of which issues) commercial paper rated as described in clause (c),
is organized under the laws of the United States or any State thereof and
has combined capital and surplus of at least $500,000,000, (c) commercial
paper in an aggregate amount of no more than $250,000 per issuer
outstanding at any time, issued by any corporation organized under the laws
of any State of the United States and rated at least "Prime-1" (or the then
equivalent grade) by ▇▇▇▇▇'▇ or "A-1" (or the then equivalent grade) by
S&P, (d) repurchase obligations with a maturity of not more than seven days
for underlying securities of the type described in clauses (a) and (b)
above with any financial institution meeting the criteria of (b) above or
(e) Investments in money market or mutual funds that invest in Cash
Equivalents of the types described in clauses (a), (b), (c) and (d) above.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended from time to time, 42 U.S.C. ss. 9601
et seq.
"CERCLIS" means the Comprehensive Environmental Response, Compensation
and Liability Information System maintained by the U.S. Environmental
Protection Agency.
"Change of Control" means at any time (i) a "Change of Control" under
and as defined in the Senior Subordinated Notes Indenture shall have
occurred; (ii) the Permitted Holders (individually or collectively) shall
cease to be the record and beneficial owner (directly or indirectly) of at
least 80% in the aggregate of the Voting Stock of Parent; (iii) Parent
shall cease to be the record and beneficial owner of at least 100% of the
Voting Stock of the Borrower; (iv) any Person or two or more Persons (other
than the Permitted Holders) acting in concert shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of the Securities
and Exchange Commission under the Securities Exchange Act of 1934),
directly or indirectly, of Voting Stock of Parent (or other securities
convertible into such Voting Stock) representing more than 20% of the
combined voting power of all Voting Stock of Parent; or (v) any Person or
two or more Persons (other than the Permitted Holders) acting in concert
shall have acquired by contract or otherwise, or shall have entered into a
contract or arrangement that, upon consummation, will result in its or
their acquisition of the power to exercise, directly or indirectly, a
controlling influence over the management or policies of Parent.
"Collateral" means all "Collateral" and all "Intellectual Property
Collateral" referred to in the Collateral Documents, all Mortgaged
Properties, all cash and Cash Equivalents delivered as collateral and all
other property (whether real or personal) that is or is intended to be
subject to any Lien in favor of the Collateral Agent for the benefit of the
Secured Parties.
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"Collateral Agent" means the Agent acting as collateral agent for the
Secured Parties pursuant to the Collateral Documents, and any successor
thereto appointed pursuant to the terms of the respective Collateral
Documents.
"Collateral Documents" means the Security Agreement, the Intellectual
Property Security Agreement, each Guaranty, each Mortgage and any other
agreement that creates or purports to create a Lien in favor of the
Collateral Agent for the benefit of the Secured Parties.
"Commitment" means a Revolving Credit Commitment or a Letter of Credit
Commitment.
"Confidential Information" means information that the Borrower
furnishes to the Agent or any Lender on a confidential basis, but does not
include any such information that is or becomes generally available to the
public or that is or becomes available to the Agent or such Lender from a
source other than the Borrower.
"Consolidated" refers, with respect to any Person, to the
consolidation of accounts of such Person and its Subsidiaries in accordance
with GAAP.
"Conversion", "Convert" and "Converted" each refer to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section
2.09 or 2.10.
"Current Assets" of any Person means all assets of such Person that
would, in accordance with GAAP, be classified as current assets of a
company conducting a business the same as or similar to that of such
Person, after deducting adequate reserves in each case in which a reserve
is proper in accordance with GAAP.
"Current Liabilities" of any Person means (a) all Debt of such Person
that by its terms is payable on demand or matures within one year after the
date of determination excluding Funded Debt and (b) all other items
(including, without limitation, taxes accrued as estimated) that in
accordance with GAAP would be classified as current liabilities of such
Person.
"Debt" of any Person means, without duplication, (a) all indebtedness
of such Person for borrowed money, (b) all Obligations of such Person for
the deferred purchase price of property or services (other than trade
payables not overdue by more than 90 days (unless diligently contested in
good faith) incurred in the ordinary course of such Person's business), (c)
all Obligations of such Person evidenced by notes, bonds, debentures or
other similar instruments, (d) all Obligations of such Person created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property), (e) all
Obligations of such Person as lessee under Capitalized Leases, (f) all
Obligations, contingent or otherwise, of such Person under acceptance,
letter of credit or similar facilities, (g) all Obligations of such Person
to purchase, redeem, retire,
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defease or otherwise make any payment in respect of any capital stock of or
other ownership or profit interest in such Person or any other Person or
any warrants, rights or options to acquire such capital stock (other than
Obligations of such Person in respect of management profit sharing plans),
valued, in the case of Redeemable Preferred Stock, at the greater of its
voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, (h) all Obligations of such Person in respect of Hedge
Agreements, (i) all Debt of others referred to in clauses (a) through (h)
above or clause (j) below guaranteed directly or indirectly in any manner
by such Person, or in effect guaranteed directly or indirectly by such
Person through an agreement (1) to pay or purchase such Debt or to advance
or supply funds for the payment or purchase of such Debt, (2) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to make payment
of such Debt or to assure the holder of such Debt against loss, (3) to
supply funds to or in any other manner invest in the debtor (including any
agreement to pay for property or services irrespective of whether such
property is received or such services are rendered) or (4) otherwise to
assure a creditor against loss, and (j) all Debt referred to in clauses (a)
through (i) above of another Person secured by (or for which the holder of
such Debt has an existing right, contingent or otherwise, to be secured by)
any Lien on property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not assumed or
become liable for the payment of such Debt, but only to the extent of the
fair market value of such property securing such Debt.
"Debt Agreements" has the meaning specified in Section
3.01(g)(xviii)(C).
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given
or time elapse or both.
"Documents" means the Loan Documents and the Senior Subordinated Notes
Documents.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant
to which it became a Lender, as the case may be, or such other office of
such Lender as such Lender may from time to time specify to the Borrower
and the Agent.
"EBITDA" means, with respect to any Person for any period, the sum,
determined on a Consolidated basis, of (a) net income (or net loss), (b)
Interest Expense, (c) income tax expense, (d) depreciation expense, (e)
amortization expense (including, to the extent excluded from the definition
of Interest Expense, any amortization of deferred financing costs), (f)
investment banking fees incurred by such Person in connection with the
transactions contemplated by this Agreement and the Senior Subordinated
Note Documents, and (g) extraordinary or non-recurring losses and charges
deducted in calculating net income less extraordinary or non-recurring
gains added in calculating net income, in each case of such Person and its
Subsidiaries, determined in accordance with GAAP for such period.
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"Effective Date" has the meaning specified in Section 8.06.
"Eligible Assignee" means with respect to any Facility: (i) a Lender;
(ii) an Affiliate of a Lender; (iii) a commercial bank organized under the
laws of the United States, or any State thereof, and having a combined
capital and surplus of at least $500,000,000; (iv) a savings and loan
association or savings bank organized under the laws of the United States,
or any State thereof, and having a combined capital and surplus of at least
$500,000,000; (v) a commercial bank organized under the laws of any other
country that is a member of the OECD or has concluded special lending
arrangements with the International Monetary Fund associated with its
General Arrangements to Borrow or a political subdivision of any such
country, and having a combined capital and surplus of at least
$500,000,000, so long as such bank is acting through a branch or agency
located in the United States; (vi) a finance company, insurance company or
other financial institution or fund (whether a corporation, partnership,
trust or other entity) that is engaged in making, purchasing or otherwise
investing in commercial loans in the ordinary course of its business and
having a combined capital and surplus of at least $500,000,000; and (vii)
any other Person approved by the Agent and the Borrower, such approval not
to be unreasonably withheld or delayed; provided, however, that neither any
Loan Party nor any Affiliate of a Loan Party shall qualify as an Eligible
Assignee under this definition.
"Environmental Claim" means any written allegation, notice of
violation, action, claim, Environmental Lien, demand, abatement or other
order or direction by any Governmental Authority or any other Person for
personal injury (including sickness, disease or death), tangible or
intangible property damage, damage to the environment, nuisance, pollution,
contamination or other adverse effects on the environment, or for fines,
penalties or restrictions resulting from or based upon (i) the existence,
or the continuation of the existence, of a release (including, without
limitation, sudden or non-sudden accidental or non-accidental releases) of,
or exposure to, any Hazardous Material, audible noise above applicable
standards in, into or onto the environment (including, without limitation,
the air, soil, surface water or groundwater) at, in, by, from or related to
any property currently or formerly owned, operated or leased by any Loan
Party or any activities or operations thereof; (ii) the transportation,
storage, treatment or disposal of Hazardous Materials in connection with
any property currently or formerly owned, operated or leased by any Loan
Party or its current or former operations or facilities; or (iii) the
violation, or alleged violation, of any Environmental Law, order or
Environmental Permit relating to environmental matters connected with any
property currently or formerly owned, leased or operated by any Loan Party.
"Environmental Costs and Liabilities" means any and all losses,
liabilities, obligations, damages, fines, penalties, judgments, actions,
claims, costs and expenses (including, without limitation, fees,
disbursements and expenses of legal counsel, experts, engineers and
consultants and the costs of investigation, feasibility studies and removal
and remedial actions) arising from or under any Environmental Law or from
any order, contract or agreement with any Governmental Authority or other
Person.
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"Environmental Law" means any Federal, state, local or foreign law
(including common law), ordinance, rule, regulation, code, order, writ,
judgment, injunction, decree or judicial or agency interpretation, policy
or guidance having the force and effect of law, relating to the
environment, health, safety or natural resources, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33
U.S.C. ss. 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. ss.
2601 et seq.; the Clean Air Act, 42 U.S.C. ss. 7401 et seq.; the Safe
Drinking Water Act, 42 U.S.C. ss. 3803 et seq.; the Oil Pollution Act of
1990, 33 U.S.C. ss. 2701 et seq.; the Hazardous Material Transportation
Act, 49 U.S.C. ss. 1801 et seq.; the Toxic Substances and Control Act, 15
U.S.C. ss. 2601 et. seq.; the Occupational Safety and Health Act, 29 U.S.C.
ss. 651 et seq.; and any state and local or foreign counterparts or
equivalents, in each case as amended from time to time.
"Environmental Permit" means any permit, approval, license,
authorization, variance, registration or permission required under any
Environmental Law or by any Governmental Authority.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any corporation, trade or business that is or
was (i) a member or general partner of the controlled group of any Loan
Party, or under common control with any Loan Party, within the meaning of
Section 414(b) or (c) of the Internal Revenue Code or (ii) a member of an
affiliated group as defined in Section 414(m) of the Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043(c) of ERISA, with respect to any Pension
Plan unless the 30-day notice requirement with respect to such event has
been waived by the PBGC; or (ii) the requirements of subsection (1) of
Section 4043(b) of ERISA (without regard to subsection (2) of such Section)
are met with respect to a contributing sponsor, as defined in Section
4001(a)(13) of ERISA, of a Pension Plan, and an event described in
paragraph (9), (10), (11), (12) or (13) of Section 4043(c) of ERISA is
reasonably expected to occur with respect to such Pension Plan within the
following 30 days; (b) failure by any Loan Party or an ERISA affiliate to
make a payment to a Pension Plan required under Section 302(c) of ERISA;
(c) the provision by the administrator of any Pension Plan of a notice of
intent to terminate such Pension Plan, pursuant to Section 4041(a)(2) of
ERISA (including any such notice with respect to a plan amendment referred
to in Section 4041(e) of ERISA); (d) the cessation of operations at a
facility of any Loan Party or any ERISA Affiliate in the circumstances
described in Section 4062(e) of ERISA; (e) the complete or partial
withdrawal by any Loan Party or any ERISA Affiliate from a Multiemployer
Plan or a multiple employer plan (as described in Sections 4063 and 4064 of
ERISA) during a plan year; (f) the conditions for imposition of a lien
under Section 302(f) of ERISA shall have been met with respect to any
Pension Plan; (g) the adoption of an amendment to a Pension Plan requiring
the
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provision of security to such Pension Plan, pursuant to Section 307 of
ERISA; or (h) the institution by the PBGC of proceedings to terminate a
Pension Plan pursuant to Section 4042 of ERISA, or the occurrence of any
event or condition described in Section 4042 of ERISA that could reasonably
constitute grounds for the termination of, or the appointment of a trustee
to administer, such Pension Plan.
"Eurocurrency Liabilities" has the meaning specified in Regulation D
of the Board of Governors of the Federal Reserve System, as in effect from
time to time.
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant
to which it became a Lender (or, if no such office is specified, its
Domestic Lending Office), or such other office of such Lender as such
Lender may from time to time specify to the Borrower and the Agent.
"Eurodollar Rate" means, for any Interest Period for all Eurodollar
Rate Advances comprising part of the same Borrowing, the rate appearing on
Page 3750 of the Telerate Service (or on any successor or substitute page
of such Service, or any successor to or substitute for such Service,
providing rate quotations comparable to those currently provided on such
page of such Service, as determined by the Agent from time to time for
purposes of providing quotations of interest rates applicable to U.S.
dollar deposits in the London interbank market) at approximately 11:00
A.M., London time, two Business Days prior to the commencement of such
Interest Period, as the rate for U.S. dollar deposits with a maturity
comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "Eurodollar Rate" with
respect to such Eurodollar Rate Advance for such Interest Period shall be
the rate at which U.S. dollar deposits of $5,000,000, and for a maturity
comparable to such Interest Period, are offered in immediately available
funds in the London interbank market at approximately 11:00 A.M., London
time, two Business Days prior to the commencement of such Interest Period.
"Eurodollar Rate Advance" means an Advance that bears interest as
provided in Section 2.07(a)(y).
"Eurodollar Rate Reserve Percentage" for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing means the
reserve percentage applicable two Business Days before the first day of
such Interest Period under regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation,
any emergency, supplemental or other marginal reserve requirement) for a
member bank of the Federal Reserve System in New York City with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities
(or with respect to any other category of liabilities that includes
deposits by reference to which the interest rate on Eurodollar Rate
Advances is determined) having a term equal to such Interest Period.
- 9 -
"Events of Default" has the meaning specified in Section 6.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
(or any similar successor Federal statute), and the rules and regulations
thereunder, as the same are in effect from time to time.
"Existing Accounts" means each of the accounts of the Borrower
maintained by the Borrower as listed on Schedule II.
"Existing Debt" has the meaning specified in Section 4.01(cc).
"Existing Precise Credit Agreement" means the Credit Agreement, dated
as of March 28, 1996, as amended through the date hereof, among Parent, the
Borrower and the lenders party thereto.
"Existing Precise Redeemable Preferred Stock" means (i) 575 shares of
Series A Cumulative Exchangeable Preferred Stock and (ii) 250 shares of
Series B Cumulative Redeemable Preferred Stock issued by the Borrower in
connection with the acquisition of TMP.
"Existing Precise Subordinated Notes" means the 12.25% senior
subordinated notes due 2006 issued by the Borrower.
"Extraordinary Receipt" means any cash received by or paid to or for
the account of any Person not in the ordinary course of business,
including, without limitation, proceeds of insurance (other than proceeds
of business interruption insurance to the extent such proceeds constitute
compensation for lost earnings) and condemnation awards (and payments in
lieu thereof); provided, however, that an Extraordinary Receipt shall not
include cash receipts received by the Borrower or any Subsidiary of the
Borrower from proceeds of insurance or a condemnation award in respect of
loss or damage to equipment, fixed assets or real property of the Borrower
or any Subsidiary of the Borrower (such receipt, a "Recovery Payment") to
the extent that such proceeds are applied (or in respect of which
expenditures were previously incurred) to replace or repair the equipment,
fixed assets or real property for which such proceeds were received in
accordance with the terms of the Loan Documents and so long as (i) no
Default or Event of Default exists or is continuing at the time such
Recovery Payment is received by the Borrower or any Subsidiary of the
Borrower, (ii) such replacement or repair is commenced within nine months
after the occurrence of such damage or loss and (iii) such proceeds do not
exceed $10,000,000 in the aggregate for all occurrences. The Borrower shall
deliver a certificate to the Agent on behalf of the Lenders signed by an
authorized officer of the Borrower within ten (10) days after the end of
each Fiscal Year certifying compliance with the foregoing clauses (i), (ii)
and (iii).
"Facility" means the Revolving Credit Facility or the Letter of Credit
Facility.
- 10 -
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period (i) to the rate
published by the Telerate service on page five of its daily report as the
"New York Offered Rate" as of 10:00 A.M. (New York City time) for such day
(or, if such day is not a Business Day, for the immediately preceding
Business Day) or (ii) if the Telerate service shall cease to publish or
otherwise shall not publish such rate for any day that is a Business Day,
to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day (or, if such day is not a Business
Day, for the next preceding Business Day) by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day that is a
Business Day, the average of the quotations for such day for such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Final Maturity Date" means June 30, 2002.
"Fiscal Year" means a fiscal year of any Loan Party or any Subsidiary
of any Loan Party ending on December 31 in any calendar year.
"Fixed Charge Coverage Ratio" means, with respect to any Person for
any Rolling Period, the ratio of (a) Consolidated EBITDA for such Person
and its Subsidiaries for such Rolling Period less the amount of all Capital
Expenditures of such Person and its Subsidiaries that have been paid in
cash during such Rolling Period to (b) the sum of (i) Interest Expense of
such Person and its Subsidiaries that has been paid in cash during such
Rolling Period and (ii) regularly scheduled principal payments of Funded
Debt and any Capitalized Leases of such Person and its Subsidiaries made
during such Rolling Period.
"Fleet" means Fleet National Bank in its individual capacity.
"Funded Debt" of any Person means Debt of such Person that by its
terms matures more than one year after the date of creation or matures
within one year from such date but is renewable or extendible, at the
option of such Person, to a date more than one year after such date or
arises under a revolving credit or similar agreement that obligates the
lender or lenders to extend credit during a period of more than one year
after such date, including, without limitation, all amounts of Funded Debt
of such Person required to be paid or prepaid within one year after the
date of determination.
"GAAP" has the meaning specified in Section 1.03.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guaranties" has the meaning specified in Section 3.01(g)(x).
- 11 -
"Guarantor" means each of Parent, each Subsidiary Guarantor and each
other party to a Guaranty.
"Guaranty" has the meaning specified in Section 3.01(g)(x).
"Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos, urea formaldehyde, polychlorinated
biphenyls, and radon gas; (b) any chemicals, materials or substances
defined as or included in the definition of "hazardous substances,"
"hazardous waste," "hazardous materials," "extremely hazardous substances,"
"restricted hazardous waste," "toxic substances," "toxic pollutants,"
"contaminants," or "pollutants," or words of similar import, under any
applicable Environmental Law; and (c) any other chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
Governmental Authority under Environmental Laws.
"Hedge Agreements" means interest rate swap, cap, floor or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements or arrangement.
"Hedge Bank" means any Lender in its capacity as a party to a Bank
Hedge Agreement.
"Indemnified Party" has the meaning specified in Section 8.04(b).
"Information Package" means, with respect to each Permitted
Acquisition, an information package consisting of (i) a description of the
Business being acquired, (ii) historical financial statements (which may be
unaudited) for the respective Business for at least the two full fiscal
years most recently ended and the latest 12-month period ended with the
last day of the fiscal quarter last ended, (iii) projections for the five
years after the respective Permitted Acquisition, (iv) an officer's
certificate for the Rolling Period ended on the date of the most recent
delivery of quarterly financial statements pursuant to Section 5.03(c)
hereof indicating Pro Forma compliance with the financial covenants
contained in Section 5.04 hereof and (v) any other information which the
Borrower in good faith determines should be furnished so that the
Information Package for the respective Business being acquired is, to the
best of the Borrower's knowledge after reasonable investigation, true and
correct in all material respects and is not incomplete by omitting to state
any fact necessary to make the information (taken as a whole) contained
therein not misleading in any material respect.
"Initial Extension of Credit" means the earlier to occur of the
initial Borrowing and the initial issuance of a Letter of Credit hereunder.
"Insufficiency" means, with respect to any Pension Plan or
Multiemployer Plan, the amount, if any, of its unfunded benefit liabilities
(with respect to a Multiemployer
- 12 -
Plan, its proportionate share of unfunded benefit liabilities), as defined
in Section 4001(a)(18) of ERISA.
"Intellectual Property Collateral" means all Intellectual Property
Collateral referred to in Section 1 of the Intellectual Property Security
Agreement.
"Intellectual Property Security Agreement" has the meaning specified
in Section 3.01(g)(xv).
"Interest Coverage Ratio" means, with respect to any Person for any
Rolling Period, the ratio of (a) Consolidated EBITDA of such Person and its
Subsidiaries for the most recent twelve month period to (b) Interest
Expense of such Person and its Subsidiaries during such Rolling Period.
"Interest Expense" means, with respect to any Person for any period,
the amount by which (i) interest expense (including the interest component
on obligations under Capitalized Leases but excluding any amortization of
deferred financing costs), whether paid or accrued, on all Debt of such
Person and its Subsidiaries for such period, including, without limitation
and without duplication, (a) interest expense in respect of Debt resulting
from Advances, (b) commissions, discounts and other fees and charges
payable in connection with letters of credit (including, without
limitation, any Letters of Credit) and (c) any net payment payable in
connection with Hedge Agreements exceeds (ii) the sum of (A) any net
credits received in connection with Hedge Agreements and (B) interest
income, whether paid or accrued, of such Person for such period.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such
Eurodollar Rate Advance or the date of the Conversion of any Base Rate
Advance into such Eurodollar Rate Advance, and ending on the last day of
the period selected by the Borrower pursuant to the provisions below and,
thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The
duration of each such Interest Period shall be one, two, three or six
months, as the Borrower may, upon notice received by the Agent not later
than 11:00 A.M. (New York City time) on the third Business Day prior to the
first day of such Interest Period, select; provided, however, that:
(a) the Borrower may not select any Interest Period with respect
to any Eurodollar Rate Advance that ends after the Final Maturity
Date;
(b) Interest Periods commencing on the same date for Eurodollar
Rate Advances comprising part of the same Borrowing shall be of the
same duration;
(c) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such
Interest Period shall be
- 13 -
extended to occur on the next succeeding Business Day, provided,
however, that, if such extension would cause the last day of such
Interest Period to occur in the next following calendar month, the
last day of such Interest Period shall occur on the immediately
preceding Business Day; and
(d) whenever the first day of any Interest Period occurs on a day
of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months
in such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Inventory" means all Inventory referred to in Section 1(b) of the
Security Agreement.
"Investment" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any capital stock or other ownership
or profit interest, warrants, rights, options, obligations or other
securities of such Person, any capital contribution to such Person or any
other investment in such Person, including, without limitation, any
arrangement pursuant to which the investor incurs Debt of the types
referred to in clause (i) or (j) of the definition of "Debt" in respect of
such Person.
"Investment Agreements" has the meaning specified in Section
3.01(g)(xviii)(F).
"Issuing Bank" means Fleet and each Eligible Assignee to which a
Letter of Credit Commitment hereunder has been assigned pursuant to Section
8.07.
"L/C Cash Collateral Account" means the non-interest bearing cash
collateral account with the Issuing Bank in the name of the Borrower but
under the sole dominion and control of the Agent, which account is subject
to the terms of the Security Agreement.
"L/C Related Documents" has the meaning specified in Section
2.04(b)(ii).
"Lenders" means Fleet, the Issuing Bank and each Person that shall
become a Lender hereunder pursuant to Section 8.07 (but excludes any
participant of any Lender).
"Letter of Credit" has the meaning specified in Section 2.01(b).
"Letter of Credit Advance" means an advance made by the Issuing Bank
or any Lender pursuant to Section 2.03(c).
"Letter of Credit Agreement" has the meaning specified in Section
2.03(a).
- 14 -
"Letter of Credit Commitment" means the amount set forth opposite the
Issuing Bank's name on Schedule I hereto under the caption "Letter of
Credit Commitment" or, if the Issuing Bank has entered into one or more
Assignment and Acceptances, the aggregate amount set forth for the Issuing
Bank in the Register maintained by the Agent pursuant to Section 8.07(e) as
the Issuing Bank's "Letter of Credit Commitment", as such amount may be
reduced at or prior to such time pursuant to Section 2.05.
"Letter of Credit Facility" means, at any time, an amount equal to the
aggregate amount of the Issuing Bank's Letter of Credit Commitment at such
time.
"Leverage Ratio" means, with respect to any Person at any date of
determination, the ratio of (a) Funded Debt (other than contingent
obligations of the type described in clause (f) or (h) in the definition of
"Debt") of such Person at such date to (b) EBITDA of such Person and its
Subsidiaries for the then most recent twelve month period on such date.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property.
"Loan Documents" means for purposes of this Agreement and the Notes
and any amendment or modification hereof or thereof and for all other
purposes other than for purposes of the Collateral Documents, (i) this
Agreement, (ii) the Notes, (iii) the Collateral Documents, (iv) each Letter
of Credit Agreement and (v) each Guaranty and (b) for purposes of the
Collateral Documents, (i) this Agreement, (ii) the Notes, (iii) the
Collateral Documents, (iv) each Letter of Credit Agreement, (v) each
Guaranty and (vi) each Bank Hedge Agreement, in each case as amended or
otherwise modified from time to time.
"Loan Parties" means the Borrower and each Subsidiary Guarantor.
"Management Agreements" has the meaning specified in Section
3.01(g)(xviii)(D).
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means any material adverse change in the
assets, business, condition (financial or otherwise), operations,
performance or properties of the Borrower and its Subsidiaries (on a
Consolidated basis).
"Material Adverse Effect" means a material adverse effect on (a) the
assets, business, condition (financial or otherwise), operations,
performance or properties of the Borrower and its Subsidiaries taken as a
whole, (b) the rights and remedies of the Agent or any Lender under any
Loan Document or (c) the ability of Parent or any Loan Party
- 15 -
to perform its Obligations in any material respect under any Loan Document
to which it is or is to be a party.
"Mentmore Holdings" means Mentmore Holdings Corporation, a Delaware
corporation.
"Mentmore Management Agreement" means the Management Agreement, dated
as of March 15, 1996, between the Borrower and Mentmore Holdings, as
amended.
"Moody's" means ▇▇▇▇▇'▇ Investor Service, Inc.
"Mortgage" means each mortgage, deed of trust or deed to secure debt
required to be delivered pursuant to the terms of this Agreement and
pursuant to which any Loan Party shall have granted to the Collateral Agent
a mortgage lien on such Loan Party's Mortgaged Property, together with any
assignment of leases and rents to be executed in connection therewith.
"Mortgage Policy" means each mortgage title insurance policy (and all
endorsements thereto) in form and substance satisfactory to the Agent for
each Mortgaged Property required to be delivered pursuant to this
Agreement.
"Mortgaged Property" means each real property owned or leased by the
Borrower and each Subsidiary Guarantor and required to be mortgaged
pursuant to this Agreement.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any
of the preceding five plan years made or accrued an obligation to make
contributions.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer
or other disposition of any asset or the sale or issuance of any Debt or
capital stock or other ownership or profit interest, any securities
convertible into or exchangeable for capital stock or other ownership or
profit interest or any warrants, rights, options or other securities to
acquire capital stock or other ownership or profit interest by any Person,
then the aggregate amount of cash received from time to time (whether as
initial consideration or through payment or disposition of deferred
consideration) by or on behalf of such Person in connection with such
transaction after deducting therefrom only (without duplication) (a)
brokerage commissions, underwriting fees and discounts, investment banking
fees to unaffiliated third parties, legal fees, finder's fees and other
similar fees and commissions, (b) the amount of taxes (including, without
limitation, any Federal, state or local income taxes payable pursuant to
any Tax Sharing Agreement) payable in connection with or as a result of
such transaction, (c) the amount of any Debt secured by a Lien on such
asset that, by the terms of such transaction, is required to be repaid upon
such disposition, (d) (without duplication) any portion of the Net Cash
Proceeds for which the Borrower determines in good faith that a reserve
should be taken
- 16 -
under GAAP against potential liabilities incurred with the receipt of such
net proceeds (including not by way of limitation against any purchase price
adjustment or indemnity claim), in each case to the extent, but only to the
extent, that the amounts so deducted are properly attributable to such
transaction or to the asset that is the subject thereof and are, at the
time of receipt of such cash, actually paid, accrued or reserved (other
than pursuant to any Tax Sharing Agreement) to a Person that is not an
Affiliate of such Person or any Loan Party or any Affiliate of any Loan
Party and (e) an amount equal to 10% of the Consolidated assets of the
Borrower and its Subsidiaries set forth on the most recently available
Consolidated financial statements of the Borrower.
"New Subordinated Notes" has the meaning specified in Section
5.02(b)(vi).
"Non-Precise Subsidiary" means each Subsidiary of Sunderland other
than Parent and its Subsidiaries and the Borrower and its Subsidiaries.
"Nonratable Assignment" means an assignment by a Lender pursuant to
Section 8.07(a) of a portion of its rights and obligations under this
Agreement, other than an assignment of a uniform, and not a varying,
percentage of all of the rights and obligations of such Lender under and in
respect of all of the Revolving Credit Facility.
"Note" means a promissory note of the Borrower payable to the order of
any Lender, in substantially the form of Exhibit A hereto, evidencing the
aggregate indebtedness of the Borrower to such Lender resulting from the
Revolving Credit Advances made by such Lender.
"Notice of Borrowing" has the meaning specified in Section 2.02(a).
"Notice of Issuance" has the meaning specified in Section 2.03(a).
"NPL" means the National Priorities List under CERCLA.
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person on any claim, whether or
not the right of any creditor to payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured or unsecured, and whether
or not such claim is discharged, stayed or otherwise affected by any
proceeding referred to in Section 6.01(f). Without limiting the generality
of the foregoing, the Obligations of the Loan Parties under the Loan
Documents include (a) the obligation to pay principal, interest, Letter of
Credit commissions, charges, expenses, fees, attorneys' fees and
disbursements, indemnities and other amounts payable by any Loan Party
under any Loan Document and (b) the obligation of any Loan Party to
reimburse any amount in respect of any of the foregoing that any Lender, in
its reasonable discretion, may elect to pay or advance on behalf of such
Loan Party.
- 17 -
"OECD" means the Organization for Economic Cooperation and
Development.
"Offering Memorandum" means the final offering memorandum, dated June
10, 1997, provided to the Agent by the Borrower prior to the Effective
Date.
"Open Year" has the meaning specified in Section 4.01(y).
"Other Taxes" has the meaning specified in Section 2.12(b).
"Parent" has the meaning specified in the recital of parties to this
Agreement.
"Parent Guaranty" has the meaning specified in 3.01(g)(ix).
"Parent Shareholders Agreement" means the shareholders agreement,
dated as of March 29, 1996, as amended, among Parent, Sunderland, ▇▇▇▇▇▇▇▇
Holdings Ltd. Corporation, Delaware State Employees' Retirement Fund,
Declaration of Trust for Defined Benefit Plans of Zeneca Holdings Inc.,
Declaration of Trust for Defined Benefit Plans of ICI American Holdings
Inc., Rice Partners II, L.P. and ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life Insurance
Company, with respect to certain securities of Parent.
"PBGC" means the Pension Benefit Guaranty Corporation as established
and maintained pursuant to Title IV of ERISA.
"Pension Plan" means any Plan that is an "employee pension benefit
plan" as defined in Section 3(2) of ERISA.
"Permitted Acquisition" means the acquisition by the Borrower or any
of its Wholly-Owned Subsidiaries of assets constituting an entire business,
division or product line of any Person engaged in the Business not already
a Subsidiary of the Borrower or 100% of the capital stock of such Person in
accordance with the requirements of this Agreement.
"Permitted Holders" means (i) Sunderland, (ii) any Principal and (iii)
(A) any spouse or immediate family member of either Principal and any child
or spouse of any spouse or immediate family member of such Principal, (B) a
trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or Persons beneficially holding, directly or
indirectly, a controlling interest of which consist of any of such
Principal and/or such other Persons referred to in the immediately
preceding clause (A), or (C) the trustees of any trust referred to in
clause (B).
"Permitted Liens" means (a) Liens in favor of any Loan Party or any of
its Subsidiaries; (b) Liens placed upon assets of a Person to be used in
the ordinary course of business of the Borrower or any Wholly-Owned
Subsidiary of the Borrower existing at the time such Person is merged into
or consolidated with the Borrower or any Wholly-Owned Subsidiary of the
Borrower in compliance with this Agreement, provided that (1)
- 18 -
the aggregate outstanding principal amount of all Debt secured by Liens
permitted by this clause (b) shall not at any time exceed the amount
permitted by Section 5.02(b)(iii) and (2) in all events, the Lien
encumbering such assets does not encumber any other asset, any inventory or
any receivables of the Borrower or such Subsidiary; (c) Liens to secure the
performance of statutory obligations, surety or appeal bonds, performance
bonds or other obligations of a like nature incurred in the ordinary course
of business; (d) Liens for taxes, assessments or governmental charges or
claims arising as a matter of law that are not yet delinquent or that are
being contested in good faith by appropriate proceedings promptly
instituted and diligently concluded, provided that any reserve or other
appropriate provision as shall be required in conformity with GAAP shall
have been made therefor; (e) statutory Liens or landlords', carriers',
warehousemens', mechanics', suppliers' or similar Liens incurred in the
ordinary course of business of any Loan Party or any of its Subsidiaries
which do not secure Debt for borrowed money and (x) which do not in the
aggregate materially detract from the value of the property or assets of
the Borrower and its Subsidiaries taken as a whole or materially impair the
operation of the business of the Borrower and its Subsidiaries taken as a
whole or (y) which are being contested in good faith by appropriate
proceedings, which proceedings have the effect of preventing the forfeiture
or sale of the property or assets subject to any such Lien; (f) easements,
minor title defects, irregularities in title or other charges or
encumbrances on property, in each case whether now or hereafter in
existence, not securing Debt and, in the reasonable opinion of the Agent,
not interfering in any material respect with the use of such property by
any Loan Party or any of its Subsidiaries; (g) Liens incurred or deposits
made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security
(exclusive of obligations in respect of the payment for borrowed money);
(h) Liens securing industrial revenue bonds or other tax-favored financing;
(i) deposit arrangements entered into in connection with acquisitions
permitted by this Agreement or in the ordinary course of business; (j)
Liens not otherwise permitted by the foregoing clauses (a) through (k)
securing obligations incurred in the ordinary course of business which
obligations do not exceed in the aggregate $2,000,000 at any time
outstanding; and (k) any extensions, substitutions, replacements or
renewals of the foregoing, provided that (x) the aggregate principal amount
of the Debt, if any, secured by such Liens does not increase from that
amount outstanding at the time of any such renewal or extension and (y) any
such renewal or extension does not encumber any additional assets or
properties of the Borrower or any of its Subsidiaries.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government
or any political subdivision or agency thereof.
"Plan" means any employee benefit plan within the meaning of Section
3(3) of ERISA and any other similar plans, policies, programs, practices,
agreements, understandings or arrangements (written or oral), established
or maintained by any Loan Party or any ERISA Affiliate or under which any
Loan Party or any ERISA Affiliate has
- 19 -
or could have any obligation or liability, actual or contingent, other than
a Multiemployer Plan, including, without limitation, all incentive, bonus,
deferred compensation, stock option, stock purchase, pension, medical,
severance, profit sharing and retirement plans, policies, programs,
practices, agreements, understandings or arrangements.
"Plan Asset Regulations" has the meaning specified in Section 2.15.
"Plant and Equipment" means all Plant and Equipment referred to in
Section 1(a) of the Security Agreement.
"Pledged Debt" means all Pledged Debt referred to in the Preliminary
Statement to the Security Agreement.
"Pledged Shares" means all Pledged Shares referred to in the
Preliminary Statement to the Security Agreement.
"Preferred Stock" means, with respect to any corporation, capital
stock issued by such corporation that is entitled to a preference or
priority over any other capital stock issued by such corporation upon any
distribution of such corporation's assets, whether by dividend or upon
liquidation.
"Principal" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and/or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
"Pro Forma Basis" means, with respect to any incurrence of Debt or
Permitted Acquisition, the calculation of the Consolidated results of the
Borrower and its Subsidiaries otherwise determined in accordance with this
Agreement as if the respective Debt or Permitted Acquisition (and all other
Debt incurred or Permitted Acquisitions effected during the respective
Calculation Period or thereafter and on or prior to the date of
determination) (each such date, a "Determination Date") had been effected
on the first day of the respective Calculation Period; provided that all
such calculations shall take into account the following assumptions:
(i) pro forma effect shall be given to (1) any Debt incurred
subsequent to the end of the Calculation Period and prior to the
Determination Date, (2) any Debt incurred during such period to the
extent such Debt is outstanding at the Determination Date and (3) any
Debt to be incurred on the Determination Date, in each case as if such
Debt had been incurred on the first day of such Calculation Period and
after giving effect to the application of the proceeds thereof;
(ii) interest expense attributable to interest on any Debt
(whether existing or being incurred) bearing a floating interest rate
shall be computed as if the rate in effect on the date of computation
had been the applicable rate for the entire period;
- 20 -
(iii) there shall be excluded from interest expense any interest
expense related to any amount of Debt that was outstanding during such
Calculation Period or thereafter but that is not outstanding or is to
be permanently repaid on the Determination Date; and
(iv) pro forma effect shall be given to all Permitted
Acquisitions that occur during such Calculation Period or thereafter
and on or prior to the Determination Date (including any Debt assumed
or acquired in connection therewith) as if they had occurred on the
first day of such Calculation Period.
"Pro Rata Share" of any amount means, with respect to any Lender at
any time, the product of such amount times a fraction the numerator of
which is the amount of such Lender's Revolving Credit Commitment at such
time and the denominator of which is the Revolving Credit Facility at such
time.
"PTCE 90-1" has the meaning specified in Section 2.15.
"PTCE 91-38" has the meaning specified in Section 2.15.
"PTCE 95-60" has the meaning specified in Section 2.15.
"PTCE 96-23" has the meaning specified in Section 2.15.
"QPAM" has the meaning specified in Section 2.15.
"QPAM Exemption" has the meaning specified in Section 2.15.
"RCRA" means the Resource Conservation and Recovery Act, as the same
may be amended from time to time, 42 U.S.C. ss. 6901 et seq.
"Receivables" means all Receivables referred to in Section 1(c) of the
Security Agreement.
"Recovery Payment" has the meaning set forth in the definition of
"Extraordinary Receipt."
"Redeemable" means, with respect to any capital stock or other
ownership or profit interest, Debt or other right or Obligation, any such
right or Obligation that (a) the issuer has undertaken to redeem at a fixed
or determinable date or dates, whether by operation of a sinking fund or
otherwise, or upon the occurrence of a condition not solely within the
control of the issuer or (b) is redeemable at the option of the holder.
"Refinancing Transactions" collectively refers to the transactions set
forth in Section 3.01(e).
- 21 -
"Register" has the meaning specified in Section 8.07(e).
"Registration Rights Agreement" means the Registration Rights
Agreement by and among the Borrower, the Subsidiary Guarantors and the
Initial Purchasers named therein substantially in the form of Exhibit J
hereto.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Required Lenders" means at any time Lenders owed or holding in excess
of 50% of the sum of (a) the aggregate principal amount of the Revolving
Credit Advances outstanding at such time, (b) the aggregate Available
Amount of all Letters of Credit outstanding at such time and (c) the
aggregate Unused Revolving Credit Commitments at such time. For purposes of
this definition, the aggregate principal amount of Letter of Credit
Advances owing to the Issuing Bank and the Available Amount of each Letter
of Credit shall be considered to be owed to the Lenders ratably in
accordance with their respective Revolving Credit Commitments.
"Responsible Officer" means any executive officer of any Loan Party or
any Subsidiary of any Loan Party.
"Revolving Credit Advance" has the meaning specified in Section
2.01(a).
"Revolving Credit Commitment" means, with respect to any Revolving
Credit Lender at any time, the amount set forth opposite such Lender's name
on Schedule I hereto under the caption "Revolving Credit Commitment" or, if
a Lender has entered into one or more Assignments and Acceptances, the
aggregate amount set forth for such Lender in the Register maintained by
the Agent pursuant to Section 8.07(e) as such Lender's "Revolving Credit
Commitment", as such amount may be reduced at or prior to such time
pursuant to Section 2.05.
"Revolving Credit Facility" means, at any time, the aggregate amount
of the Lenders' Revolving Credit Commitments at such time.
"Rolling Period" means with respect to any month, the consecutive
twelve month period ending on the last day of such month.
"S&P" means Standard & Poors Ratings Group.
"Secured Obligations" has the meaning specified in the Security
Agreement.
"Secured Parties" means the Collateral Agent, the Agent, the Lenders,
the Hedge Banks and the other Persons the Obligations owing to which are or
are purported to be secured by the Collateral under the terms of the
Collateral Documents.
- 22 -
"Security Agreement" has the meaning specified in Section
3.01(g)(vii).
"Senior Debt" of any Person means all Funded Debt of such Person other
than Debt outstanding under the Senior Subordinated Notes.
"Senior Leverage Ratio" means, with respect to any Person at any date
of determination, the ratio of (a) Total Senior Debt (other than contingent
obligations of the type described in clause (f) or (h) of the definition of
"Debt") of such Person at such date to (b) EBITDA of such Person and its
Subsidiaries for the then most recent twelve month period ending on such
date.
"Senior Subordinated Note Documents" means the Senior Subordinated
Notes, the Senior Subordinated Notes Indenture, the Registration Rights
Agreement, the Senior Subordinated Notes Guaranty and all other documents
and agreements executed and delivered in connection therewith.
"Senior Subordinated Notes" means the Company's senior subordinated
notes due 2007 in the aggregate principal amount of $75,000,000 issued by
the Borrower pursuant to the Senior Subordinated Notes Indenture, including
any notes offered in the Exchange Offer (as defined in the Offering
Memorandum).
"Senior Subordinated Notes Guaranty" means the Guaranty provided by
the Subsidiary Guarantors pursuant to the terms of the Senior Subordinated
Notes Indenture substantially in the form of Exhibit I hereto.
"Senior Subordinated Notes Indenture" means the Indenture between the
Borrower, as issuer, and Marine Midland Bank, as trustee, substantially in
the form of Exhibit H hereto.
"Shareholders' Agreements" has the meaning specified in Section
3.01(g)(xviii)(A).
"Solvent" and "Solvency" mean, 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,
without limitation, 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 such debts and liabilities as they mature and
(d) such Person is not engaged in business or a transaction, and 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.
- 23 -
"Source" has the meaning specified in Section 2.15.
"Stock Option Plan" means the Sunderland Industrial Holdings
Corporation 1997 Key Employee Nonqualified Stock Option Plan established by
Sunderland in April 1997.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which)
more than 50% of (a) the issued and 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), (b) the interest in the capital or
profits of such limited liability company, partnership or joint venture or
(c) the beneficial interest in such trust or estate is at the time directly
or indirectly owned or controlled by such Person, by such Person and one or
more of its other Subsidiaries or by one or more of such Person's other
Subsidiaries.
"Subsidiary Guarantor" has the meaning specified in the recital of
parties to this Agreement, all such Subsidiary Guarantors are Wholly-Owned
Subsidiaries of the Borrower.
"Subsidiary Guaranty" has the meaning specified in Section 3.01(g)(x).
"Sunderland" means Sunderland Industrial Holdings Corporation, a
Delaware corporation.
"Tax Sharing Agreements" has the meaning specified in Section
3.01(g)(xviii)(E).
"Taxes" has the meaning specified in Section 2.12(a).
"TMP" means Precise TMP, Inc. (formerly known as Tredegar Molded
Products Company), a Virginia corporation and a Wholly-Owned Subsidiary of
the Borrower.
"Total Leverage Ratio" means, with respect to any Person at any date
of determination, the ratio of (a) Funded Debt (other than contingent
obligations of the type described in clause (f) or (h) in the definition of
"Debt") of such Person at such date to (b) EBITDA of such Person and its
Subsidiaries for the then most recent twelve month period ending on such
date.
"Total Senior Debt" means, for any period, the aggregate outstanding
principal amount of all Senior Debt on any date of determination thereof.
"Type" refers to the distinction between Advances bearing interest at
the Base Rate and Advances bearing interest at the Eurodollar Rate.
- 24 -
"UCC" means the Uniform Commercial Code as from time to time in effect
in the relevant jurisdiction.
"Unused Revolving Credit Commitment" means, with respect to any Lender
at any time, (a) such Lender's Revolving Credit Commitment at such time
minus (b) the sum of (i) the aggregate principal amount of all Advances
made by such Lender (in its capacity as a Lender) and outstanding at such
time, plus (ii) such Lender's Pro Rata Share of (A) the aggregate Available
Amount of all Letters of Credit outstanding at such time and (B) the
aggregate principal amount of all Letter of Credit Advances made by the
Issuing Bank, in its capacity as Issuing Bank, outstanding at such time.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening of
such a contingency.
"Warrant Agreement" means the warrant agreement, dated as of March 29,
1996, as amended, among Parent, Rice Partners II, L.P., ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual
Life Insurance Company, Delaware State Employees' Retirement Fund,
Declaration of Trust for Defined Benefit Plans of Zeneca Holdings Inc. and
Declaration of Trust for Defined Benefit Plans of ICI American Holdings
Inc., with respect to certain warrants of Parent.
"Warrant Payments" means the interest payments required to be made by
Parent pursuant to and arising in accordance with the Warrant Agreement
and/or the Parent Shareholders Agreement.
"Wholly-Owned Subsidiary" means, as to any Person, (i) any corporation
100% of whose capital stock is at the time owned by such Person and/or one
or more Wholly-Owned Subsidiaries of such Person and (ii) any partnership,
association, joint venture or other entity in which such Person and/or one
or more Wholly-Owned Subsidiaries of such Person has a 100% equity interest
at such time.
"Withdrawal Liability" has the meaning specified in Part I of Subtitle
E of Title IV of ERISA.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding".
SECTION 1.03. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the
financial statements referred to in Section 4.01(f) ("GAAP").
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SECTION 1.04. Construction. References to a Section, subsection, Schedule
or Exhibit mean a Section or subsection of or a Schedule or Exhibit to this
Agreement, unless otherwise specified, and the word "including" means
"including, without limitation," whether so stated or not.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT
SECTION 2.01. The Advances. (a) The Revolving Credit Advances. Each Lender
severally agrees, on the terms and conditions hereinafter set forth, to make
advances (each a "Revolving Credit Advance") to the Borrower from time to time
on any Business Day during the period from the Effective Date until the Final
Maturity Date in an amount for each such Advance not to exceed such Lender's
Unused Revolving Credit Commitment at such time after giving effect to any
repayment of Letter of Credit Advances from proceeds of such Revolving Credit
Advances, which Revolving Credit Advances shall, at the option of the Borrower,
be Base Rate Advances or Eurodollar Rate Advances. Each Borrowing of (x) Base
Rate Advances shall be in an aggregate amount of $100,000 or any whole multiple
thereof and (y) Eurodollar Rate Advances shall be in an aggregate amount of
$300,000 or an integral multiple of $100,000 in excess thereof, (other than a
Borrowing the proceeds of which shall be used solely to repay or prepay in full
outstanding Letter of Credit Advances made by the Issuing Bank) and shall
consist of Revolving Credit Advances made simultaneously by the Lenders ratably
according to their Revolving Credit Commitments. Within the limits of each
Lender's Unused Revolving Credit Commitment in effect from time to time, the
Borrower may borrow under this Section 2.01(a), prepay pursuant to Section
2.06(a) and reborrow under this Section 2.01(a).
(b) Letters of Credit. The Issuing Bank agrees, on the terms and conditions
hereinafter set forth, to issue letters of credit (the "Letters of Credit") for
the account of the Borrower from time to time on any Business Day during the
period from the Effective Date until 60 days before the Final Maturity Date (i)
in an aggregate Available Amount for all Letters of Credit issued by the Issuing
Bank not to exceed at any time the Letter of Credit Commitment at such time and
(ii) in an Available Amount for each such Letter of Credit not to exceed the
lesser of (x) the Letter of Credit Facility at such time and (y) the aggregate
Unused Revolving Credit Commitments of the Lenders at such time. No Letter of
Credit shall have an expiration date (including all rights of the Borrower or
the beneficiary to require renewal) later than the earlier of 60 days before the
Final Maturity Date and one year after the date of issuance thereof. Within the
limits of the Letter of Credit Facility, and subject to the limits referred to
above, the Borrower may request the issuance of Letters of Credit under this
Section 2.01(b), repay any Letter of Credit Advances resulting from drawings
thereunder pursuant to Section 2.03(c) and request the issuance of additional
Letters of Credit under this Section 2.01(b). The Letter of Credit Advances
shall not exceed $2,000,000 in the aggregate at any one time outstanding.
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SECTION 2.02. Making the Advances. (a) Except as otherwise provided in
Section 2.03, each Borrowing shall be made on notice, given not later than 11:00
A.M. (New York City time) on the second Business Day prior to the date of the
proposed Borrowing in the case of a Borrowing consisting of Eurodollar Rate
Advances or on the same Business Day in the case of a Borrowing consisting of
Base Rate Advances, by the Borrower to the Agent, which shall give to each
Appropriate Lender prompt notice thereof by telex or telecopier. Each such
notice by the Borrower of a Borrowing (a "Notice of Borrowing") shall be in
writing, or telex or telecopier, in substantially the form of Exhibit B hereto,
specifying therein the requested (i) date of such Borrowing, (ii) Type of
Advances comprising such Borrowing, (iii) aggregate amount of such Borrowing and
(iv) in the case of a Borrowing consisting of Eurodollar Rate Advances, initial
Interest Period for each such Advance. Each Appropriate Lender shall, before
1:00 P.M. (New York City time) on the date of such Borrowing, make available for
the account of its Applicable Lending Office to the Agent at the Agent's
Account, in same day funds, such Lender's ratable portion of such Borrowing in
accordance with the respective Commitments under the Revolving Credit Facility
of such Lender and the other Appropriate Lenders. After the Agent's receipt of
such funds and upon fulfillment of the applicable conditions set forth in
Article III, the Agent shall first make a portion of such funds equal to the
aggregate principal amount of any Letter of Credit Advances made by the Issuing
Bank and by any other Lender and outstanding on the date of such Borrowing, plus
interest accrued and unpaid thereon to and as of such date, available to the
Issuing Bank and such other Lenders for repayment of such Letter of Credit
Advances.
(b) Anything in subsection (a) of this Section 2.02 to the contrary
notwithstanding, (i) the Borrower may not select Eurodollar Rate Advances for
the initial Borrowing or for any Borrowing if the aggregate amount of such
Borrowing is less than $300,000 and any integral multiple of $100,000 in excess
thereof or if the obligation of the Appropriate Lenders to make Eurodollar Rate
Advances shall then be suspended pursuant to Section 2.09 or Section 2.10 and
(ii) with respect to Borrowings consisting of Eurodollar Rate Advances, such
Eurodollar Rate Advances may not be outstanding as part of more than six
separate Borrowings in the aggregate.
(c) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Borrowing that the related Notice of Borrowing
specifies is to be comprised of Eurodollar Rate Advances, the Borrower shall
indemnify each Appropriate Lender against any loss, cost or expense incurred by
such Lender as a result of any failure to fulfill on or before the date
specified in such Notice of Borrowing for such Borrowing the applicable
conditions set forth in Article III, including, without limitation, any loss,
cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund the Advance to be made
by such Lender as part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(d) Unless the Agent shall have received notice from an Appropriate Lender
prior to the date of any Borrowing under a Facility under which such Lender has
a Commitment that such Lender will not make available to the Agent such Lender's
ratable portion of such Borrowing, the Agent may assume that such Lender has
made such portion available to the
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Agent on the date of such Borrowing in accordance with subsection (a) or (b) of
this Section 2.02 and the Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If and to the
extent that such Lender shall not have so made such ratable portion available to
the Agent, such Lender and the Borrower severally agree to repay or pay to the
Agent forthwith on demand such corresponding amount and to pay interest thereon,
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid or paid to the Agent, at (i) in the case of the
Borrower, the interest rate applicable at such time under Section 2.07 to
Advances comprising such Borrowing and (ii) in the case of such Lender, the
Federal Funds Rate. If such Lender shall pay to the Agent such corresponding
amount, such amount so paid shall constitute such Lender's Advance as part of
such Borrowing for all purposes.
(e) The failure of any Lender to make the Advance to be made by it as part
of any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of such Borrowing, but no Lender shall
be responsible for the failure of any other Lender to make the Advance to be
made by such other Lender on the date of any Borrowing.
SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters of
Credit. (a) Request for Issuance. Each Letter of Credit shall be issued upon
notice, given not later than 12:00 P.M. (New York City time) on the third
Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the Borrower to the Issuing Bank. Each such notice of issuance of a
Letter of Credit (a "Notice of Issuance") shall be by telephone, confirmed
immediately in writing, or telex or telecopier, specifying therein the requested
(A) date of such issuance (which shall be a Business Day), (B) Available Amount
of such Letter of Credit, (C) expiration date of such Letter of Credit, (D) name
and address of the beneficiary of such Letter of Credit and (E) form of such
Letter of Credit, and shall be accompanied by such application and agreement for
letter of credit as the Issuing Bank may specify to the Borrower for use in
connection with such requested Letter of Credit (a "Letter of Credit
Agreement"). If the requested form of such Letter of Credit is acceptable to the
Issuing Bank in its reasonable discretion, the Issuing Bank will, upon
fulfillment of the applicable conditions set forth in Article III, make such
Letter of Credit available to the Borrower at its office referred to in Section
8.02 or as otherwise agreed with the Borrower in connection with such issuance.
In the event and to the extent that the provisions of any Letter of Credit
Agreement shall conflict with this Agreement, the provisions of this Agreement
shall govern.
(b) Letter of Credit Reports. The Issuing Bank shall furnish to each Lender
(A) on the first Business Day of the first two months of each quarterly period a
written report summarizing issuance and expiration dates of Letters of Credit
issued by the Issuing Bank during the preceding month and drawings during such
month under all Letters of Credit issued by the Issuing Bank and (B) on the
first Business Day of each calendar quarter a written report setting forth the
average daily aggregate Available Amount during the preceding calendar quarter
of all Letters of Credit issued by the Issuing Bank.
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(c) Drawing and Reimbursement. The payment by the Issuing Bank of a draft
drawn under any Letter of Credit shall constitute for all purposes of this
Agreement the making by the Issuing Bank of a Letter of Credit Advance, which
shall be a Base Rate Advance, in the amount of such draft. In the event of any
drawing under a Letter of Credit, the Agent shall promptly notify each Lender
and each Lender shall purchase from the Issuing Bank, and the Issuing Bank shall
sell and assign to each such Lender, such Lender's Pro Rata Share of such
outstanding Letter of Credit Advance as of the date of such purchase, by making
available for the account of its Applicable Lending Office to the Agent for the
account of the Issuing Bank, by deposit to the Agent's Account, in same day
funds, an amount equal to the portion of the outstanding principal amount of
such Letter of Credit Advance to be purchased by such Lender. Promptly after
receipt thereof, the Agent shall transfer such funds to the Issuing Bank. The
Borrower hereby agrees to each such sale and assignment. Each Lender agrees to
purchase its Pro Rata Share of an outstanding Letter of Credit Advance on (i)
the Business Day on which notice of the drawing under the related Letter of
Credit is given by the Issuing Bank, provided such notice is given not later
than 12:00 P.M. (New York City time) on such Business Day or (ii) the first
Business Day next succeeding such demand if such notice is given after such
time. Upon any such assignment by the Issuing Bank to any other Lender of a
portion of a Letter of Credit Advance, the Issuing Bank represents and warrants
to such other Lender that the Issuing Bank is the legal and beneficial owner of
such interest being assigned by it, free and clear of any liens, but makes no
other representation or warranty and assumes no responsibility with respect to
such Letter of Credit Advance, the Loan Documents or any Loan Party. If and to
the extent that any Lender shall not have so made the amount of such Letter of
Credit Advance available to the Agent, such Lender agrees to pay to the Agent
forthwith on demand such amount together with interest thereon, for each day
from the date of demand by the Issuing Bank until the date such amount is paid
to the Agent, at the Federal Funds Rate for its account or the account of the
Issuing Bank, as applicable. If such Lender shall pay to the Agent such amount
for the account of the Issuing Bank on any Business Day, such amount so paid in
respect of principal shall constitute a Letter of Credit Advance made by such
Lender on such Business Day for purposes of this Agreement, and the outstanding
principal amount of the Letter of Credit Advance made by the Issuing Bank shall
be reduced by such amount on such Business Day.
(d) Failure to Make Letter of Credit Advances. The failure of any Lender to
make the Letter of Credit Advance to be made by it on the date specified in
Section 2.03(c) shall not relieve any other Lender of its obligation hereunder
to make its Letter of Credit Advance on such date, but no Lender shall be
responsible for the failure of any other Lender to make the Letter of Credit
Advance to be made by such other Lender on such date.
SECTION 2.04. Repayment of Advances. (a) Revolving Credit Advances. The
Borrower shall repay to the Agent for the ratable account of the Lenders on the
Final Maturity Date the aggregate outstanding principal amount of the Revolving
Credit Advances then outstanding.
(b) Letter of Credit Advances. (i) The Borrower shall repay to the Agent
for the account of the Issuing Bank and each other Lender that has made a Letter
of Credit Advance
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on the earlier of demand and the Final Maturity Date the outstanding principal
amount of each Letter of Credit Advance made by each of them.
(ii) The Obligations of the Borrower under this Agreement, any Letter of
Credit Agreement and any other agreement or instrument relating to any Letter of
Credit shall be unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement, such Letter of Credit Agreement and
such other agreement or instrument under all circumstances, including, without
limitation, the following circumstances:
(A) any lack of validity or enforceability of any Loan Document, any
Letter of Credit Agreement, any Letter of Credit or any other agreement,
instrument or document relating thereto (all of the foregoing being,
collectively, the "L/C Related Documents");
(B) 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 in respect of
any L/C Related Document or any other amendment or waiver of or any consent
to departure from all or any of the L/C Related Documents;
(C) the existence of any claim, set-off, defense or other right that
the Borrower may have at any time against any beneficiary or any transferee
of a Letter of Credit (or any Persons for whom any such beneficiary or any
such transferee may be acting), the Issuing Bank or any other Person,
whether in connection with the transactions contemplated by the L/C Related
Documents or any unrelated transaction;
(D) any statement under a Letter of Credit or another L/C Related
Document proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect,
provided that the Issuing Bank shall not have acted with willful misconduct
or gross negligence with respect to such statement;
(E) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or certificate that does not strictly comply with
the terms of such Letter of Credit;
(F) any exchange, release or non-perfection of any Collateral or other
collateral, or any release or amendment or waiver of or consent to
departure from any guarantee, for all or any of the Obligations of the
Borrower in respect of the L/C Related Documents; or
(G) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including, without limitation, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor.
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SECTION 2.05. Termination or Reduction of the Commitments. (a) Optional.
The Borrower may, upon at least five Business Days' notice to the Agent,
terminate in whole or reduce in part the unused portions of the Letter of Credit
Facility and the Unused Revolving Credit Commitments; provided, however, that
each partial reduction of the Revolving Credit Facility or the Letter of Credit
Facility (i) shall be in an aggregate amount of $1,000,000 or an integral
multiple of $1,000,000 in excess thereof and (ii) shall be made ratably among
the Appropriate Lenders in accordance with their Commitments with respect to
such Facility.
(b) Mandatory. (i) The Revolving Credit Facility shall terminate in its
entirety on June 30, 1997 unless the date of the Initial Extension of Credit has
occurred on or before such date.
(ii) The Revolving Credit Facility shall terminate in its entirety on the
Final Maturity Date.
(iii) The Revolving Credit Facility shall be automatically and permanently
reduced on the date on which any prepayment is required to be made pursuant to
Section 2.06(b)(i) or 2.06(b)(ii) by an amount equal to the aggregate amount of
Net Cash Proceeds required to be used to prepay the Revolving Credit Facility
under Section 2.06(b)(i) or 2.06(b)(ii).
The Letter of Credit Facility shall be automatically and permanently
reduced from time to time on the date of each reduction in the Revolving Credit
Facility by the amount, if any, by which the amount of the Letter of Credit
Facility exceeds the Revolving Credit Facility after giving effect to such
reduction of the Revolving Credit Facility.
SECTION 2.06. Prepayments. (a) Optional. The Borrower shall have the right
to prepay the outstanding aggregate principal amount of the Advances comprising
part of the same Borrowing, in whole or ratably in part, without premium or
penalty, together with accrued interest and fees to the date of such prepayment
on the aggregate principal amount prepaid on the following terms and conditions:
(i) the Borrower shall have the right to prepay Base Rate Advances on
the same day's notice but shall give at least three Business Days' notice
in the case of Eurodollar Rate Advances, in each case to the Agent
(received not later than 12:00 P.M. (New York City time)) stating the
proposed date and aggregate principal amount of the prepayment;
(ii) each partial prepayment of (x) Base Rate Advances shall be in an
aggregate principal amount of $100,000 or any whole multiple thereof and
(y) Eurodollar Rate Advances shall be in an aggregate principal amount of
$300,000 or an integral multiple of $100,000 in excess thereof, provided
that if any partial prepayment of Eurodollar Rate Advances made pursuant to
any Borrowing shall reduce the outstanding Eurodollar Rate Advances made
pursuant to such Borrowing to an amount less than the minimum borrowing
amount applicable pursuant to Section 2.02(b), then such Borrowing shall be
Converted at the end of the then current Interest Period into a Base Rate
Advance and
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any election of an Interest Period with respect thereto given by the
Borrower shall have no force or effect;
(iii) if any prepayment of a Eurodollar Rate Advance is made on a date
other than the last day of an Interest Period for such Advance the Borrower
shall also pay any amounts owing pursuant to Section 8.04(c).
(b) Mandatory. (i) The Borrower shall, on the date of receipt of the Net
Cash Proceeds by any Loan Party or any Subsidiary of any Loan Party from (A) the
sale, lease, transfer or other disposition of any assets (other than sales of
(x) Inventory or (y) equipment which, in the good faith opinion of the Borrower,
is obsolete, each in the ordinary course of business and consistent with past
practices) of such Loan Party or such Subsidiary, (B) the incurrence or issuance
by such Loan Party or such Subsidiary of any Debt (other than Debt incurred or
issued pursuant to Section 5.02(b)), or (C) any Extraordinary Receipt received
by or paid to or for the account of such Loan Party or such Subsidiary and not
otherwise included in clause (A) or (B) above, prepay an aggregate principal
amount of the Revolving Credit Advances equal to, in the case of clause (A) and
(C) above, 100% of the amount of such Net Cash Proceeds and, in the case of
Clause (B) above, 50% of such Net Cash Proceeds and to permanently reduce the
Revolving Credit Facility to the extent set forth in Section 2.05(b)(iii);
provided, however, that so long as (i) no Default or Event of Default then
exists and (ii) the Senior Leverage Ratio of the Borrower and its Subsidiaries
for the twelve month period then most recently ended is less than 2.0x, the
percentage of Net Cash Proceeds used for such prepayment from issuances of debt
described under clause (B) above shall be reduced to zero.
(ii) The Borrower shall, on the date of receipt of the Net Cash Proceeds by
any Loan Party or any Subsidiary of any Loan Party from the sale or issuance by
any Loan Party or any Subsidiary of any Loan Party of any capital stock or other
ownership or profit interest, any securities convertible into or exchangeable
for capital stock or other ownership or profit interest or any warrants, rights
or options to acquire capital stock or other ownership or profit interest
received by or paid to or for the account of such Loan Party or such Subsidiary
and not otherwise included herein (other than capital stock of the Borrower
issued in connection with a Permitted Acquisition or stock options granted to
management of the Borrower and permitted under this Agreement to acquire capital
stock of the Borrower), prepay an aggregate principal amount of the Revolving
Credit Advances equal to the amount of such Net Cash Proceeds and to permanently
reduce the Revolving Credit Facility to the extent set forth in Section
2.05(b)(iii).
(iii) The Borrower shall, on each Business Day, prepay an aggregate
principal amount of the Revolving Credit Advances comprising part of the same
Borrowings, and the Letter of Credit Advances equal to the amount by which (A)
the sum of the aggregate principal amount of (x) the Revolving Credit Advances
and (y) the Letter of Credit Advances then outstanding plus the aggregate
Available Amount of all Letters of Credit then outstanding exceeds the Revolving
Credit Facility. Each such prepayment shall be applied as set forth in Section
2.06(c).
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(iv) The Borrower shall, on each Business Day, pay to the Agent for deposit
in the L/C Cash Collateral Account an amount sufficient to cause the aggregate
amount on deposit in such Account to equal the amount by which the aggregate
Available Amount of all Letters of Credit then outstanding exceeds the Letter of
Credit Facility on such Business Day.
(v) All prepayments under this Section 2.06(b) shall be made together with
accrued interest to the date of such prepayment on the principal amount prepaid.
(c) Prepayment of Revolving Credit Facility. Each prepayment of the
Revolving Credit Facility made pursuant to Section 2.06(a) or Section 2.06(b)
shall be (1) first, applied to prepay Letter of Credit Advances then outstanding
until such Advances are paid in full, (2) second, applied to prepay Revolving
Credit Advances then outstanding comprising part of the same Borrowings in
accordance with the respective Pro Rata Share of the Lenders until such Advances
are paid in full and (3) third, deposited in the L/C Cash Collateral Account to
cash collateralize 100% of the Available Amount of the Letters of Credit then
outstanding; and, in the case of prepayments of the Revolving Credit Facility
required pursuant to Sections 2.06(b)(i) and 2.06(b)(ii), the Revolving Credit
Facility shall be permanently reduced as set forth in Section 2.05(b)(iii). Upon
the drawing of any Letter of Credit for which funds are on deposit in the L/C
Cash Collateral Account, such funds shall be applied to reimburse the Issuing
Bank or the Lenders, as applicable.
SECTION 2.07. Interest. (a) Scheduled Interest. The Borrower shall pay
interest on the unpaid principal amount of each Advance owing to each Lender
from the date of such Advance until such principal amount shall be paid in full,
at the following rates per annum:
(x) Base Rate Advances. For each Letter of Credit Advance and during
such periods as each such Revolving Credit Advance is a Base Rate Advance,
a rate per annum equal at all times to the sum of (A) the Base Rate in
effect from time to time plus (B) the Applicable Margin in effect from time
to time, payable in arrears quarterly on the last Business Day of each
March, June, September and December during such periods commencing
September 30, 1997, on the date of any prepayment thereof to the extent
required under Section 2.06 and on the Final Maturity Date.
(y) Eurodollar Rate Advances. During such periods as each such
Revolving Credit Advance is a Eurodollar Rate Advance, a rate per annum
equal at all times during each Interest Period for each such Revolving
Credit Advance to the sum of (A) the Eurodollar Rate for such Interest
Period for such Advance plus (B) the Applicable Margin, payable in arrears
on the last day of such Interest Period and, if such Interest Period has a
duration of more than three months, subject to clause (d) of the definition
of "Interest Period," on each day that occurs during such Interest Period
every three months from the first day of such Interest Period until the
date such Eurodollar Rate Advance shall be Converted or paid in full.
- 33 -
(b) Default Interest. Upon the occurrence and during the continuance of an
Event of Default under Section 6.01(c) with respect to any covenant contained in
Section 5.04 or under Section 6.01(a), the Borrower shall pay interest on (i)
the unpaid principal amount of each Advance owing to each Lender, payable in
arrears on the dates referred to in clause (a) of this Section 2.07 and on
demand, at a rate per annum equal at all times to 2% per annum above the rate
per annum required to be paid on such Advance pursuant to clause (a) of this
Section 2.07 and (ii) to the fullest extent permitted by law, the amount of any
interest, fee or other amount payable hereunder that is not paid when due, from
the date such amount shall be due until such amount shall be paid in full,
payable in arrears on the date such amount shall be paid in full and on demand,
at a rate per annum equal at all times to 2% per annum above the rate per annum
required to be paid, in the case of interest, on the Type of Advance on which
such interest has accrued pursuant to clause (a) of this Section 2.07.
(c) Notice of Interest Rate. Promptly after receipt of a Notice of
Borrowing pursuant to Section 2.02(a), the Agent shall give notice to the
Borrower and each Lender of the applicable interest rate determined by the Agent
for purposes of clause (a) of this Section 2.07.
SECTION 2.08. Fees. (a) Commitment Fee. The Borrower shall pay to the Agent
for the account of the Lenders a commitment fee, from the date hereof in the
case of the Agent and the Lenders named herein and from the effective date
specified in the Assignment and Acceptance pursuant to which it became a Lender
in the case of each other Lender until the Final Maturity Date, payable in
arrears quarterly on the last Business Day of each March, June, September and
December, commencing September 30, 1997, and on the Final Maturity Date, at the
rate of 1/2 of 1% per annum on the average daily Unused Revolving Credit
Commitment of such Lender.
(b) Letter of Credit Fees, Etc. (i) The Borrower shall pay to the Agent for
the account of each Lender a Letter of Credit fee, payable in arrears quarterly
on the last Business Day of each March, June, September and December, commencing
September 30, 1997, and on the Final Maturity Date, at the rate of 2.25% per
annum on such Lender's Pro Rata Share of the average daily aggregate Available
Amount during such quarter of all Letters of Credit outstanding from time to
time.
(ii) The Borrower shall pay to the Issuing Bank, for its own account, a
facing fee in respect of each Letter of Credit issued by it hereunder, payable
in arrears on the last Business Day of each March, June, September and December,
commencing September 30, 1997, and on the Final Maturity Date, at the rate of
1/4 of 1% per annum on the average daily aggregate Available Amount during such
quarter of such Letter of Credit.
(iii) In addition, the Borrower shall pay to the Issuing Bank, for its own
account, such commissions, issuance fees, fronting fees, transfer fees and other
fees and charges in connection with the issuance or administration of each
Letter of Credit as the Borrower and the Issuing Bank shall agree.
- 34 -
(c) Agent's Fees. The Borrower shall pay to the Agent for its own account
such fees as may from time to time be agreed between the Borrower and the Agent.
SECTION 2.09. Conversion of Revolving Credit Advances. (a) Optional. The
Borrower may on any Business Day, upon notice given to the Agent not later than
12:00 P.M. (New York City time) on the third Business Day prior to the date of
the proposed Conversion and subject to the provisions of Sections 2.07 and 2.10,
Convert all or any portion of the Revolving Credit Advances of one Type
comprising the same Borrowing into Revolving Credit Advances of the other Type;
provided, however, that if any Conversion of Eurodollar Rate Advances into Base
Rate Advances is made other than on the last day of an Interest Period for such
Eurodollar Rate Advances the Borrower shall also pay any amounts owing pursuant
to Section 8.04(c), any Conversion of Base Rate Advances into Eurodollar Rate
Advances shall be in an amount not less than the minimum amount specified in
Section 2.02(b), no Conversion of any Advances shall result in more separate
Borrowings than permitted under Section 2.02(b) and each Conversion of Revolving
Credit Advances comprising part of the same Borrowing shall be made ratably
among the Lenders in accordance with their Revolving Credit Commitments. Each
such notice of Conversion shall, within the restrictions specified above,
specify (i) the date of such Conversion, (ii) the Revolving Credit Advances to
be Converted and (iii) if such Conversion is into Eurodollar Rate Advances, the
duration of the initial Interest Period for such Advances. Each notice of
Conversion shall be irrevocable and binding on the Borrower.
(b) Mandatory. (i) On the date on which the aggregate unpaid principal
amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $300,000, such Advances shall
automatically Convert into Base Rate Advances.
(ii) If the Borrower shall fail to select the duration of any Interest
Period for any Revolving Credit Advances that are outstanding and have been
Converted into Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.01, the Agent will
forthwith so notify the Borrower and the Lenders, whereupon each such Eurodollar
Rate Advance will automatically, on the last day of the then existing Interest
Period therefor, Convert into a Base Rate Advance.
(iii) Upon the occurrence and during the continuance of any Event of
Default, (x) each Revolving Credit Advance that has been Converted into a
Eurodollar Rate Advance will automatically, on the last day of the then existing
Interest Period therefor, Convert into a Base Rate Advance and (y) the
obligation of the Lenders to make, or to Convert Revolving Credit Advances into,
Eurodollar Rate Advances shall be suspended.
SECTION 2.10. Increased Costs, Etc. (a) If, due to either (i) any change
in, or in the interpretation of, any law or regulation or (ii) the compliance
with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law) effective after the date
hereof, there shall be any increase in the cost to any Lender of agreeing to
make or of making, funding or maintaining Eurodollar Rate Advances or of
agreeing to issue or of issuing or maintaining Letters of Credit or of agreeing
to make or of making or
- 35 -
maintaining Letter of Credit Advances, then the Borrower shall from time to
time, upon demand by such Lender (with a copy of such demand to the Agent), pay
to the Agent for the account of such Lender additional amounts sufficient to
compensate such Lender for such increased cost. A certificate as to the amount
of such increased cost, submitted to the Borrower by such Lender, shall be
conclusive and binding for all purposes, absent manifest error.
(b) If any Lender reasonably determines that compliance with any law or
regulation or any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law) effective after
the date hereof affects or would affect the amount of capital required or
expected to be maintained by such Lender or any corporation controlling such
Lender and that the amount of such capital is increased by or based upon the
existence of such Lender's commitment to lend or to issue Letters of Credit
hereunder and other commitments of such type or the issuance or maintenance of
the Letters of Credit (or similar contingent obligations), then, upon demand by
such Lender (with a copy of such demand to the Agent), the Borrower shall pay to
the Agent for the account of such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender in the light of
such circumstances, to the extent that such Lender reasonably determines such
increase in capital to be allocable to the existence of such Lender's commitment
to lend or to issue Letters of Credit hereunder or to the issuance or
maintenance of any Letters of Credit. A certificate as to such amounts submitted
to the Borrower by such Lender shall be conclusive and binding for all purposes,
absent manifest error.
(c) If, with respect to any Eurodollar Rate Advances under any Facility,
Lenders owed at least 50% of the then aggregate unpaid principal amount thereof
notify the Agent that the Eurodollar Rate for any Interest Period for such
Advances will not adequately reflect the cost to such Lenders of making, funding
or maintaining their Eurodollar Rate Advances for such Interest Period, the
Agent shall forthwith so notify the Borrower and the Appropriate Lenders,
whereupon (i) each such Eurodollar Rate Advance under any Facility will
automatically, on the last day of the then existing Interest Period therefor,
Convert into a Base Rate Advance and (ii) the obligation of the Appropriate
Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be
suspended until the Agent shall notify the Borrower that such Lenders have
determined that the circumstances causing such suspension no longer exist.
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other Governmental
Authority shall assert that it is unlawful, for any Lender or its Eurodollar
Lending Office to perform its obligations hereunder to make Eurodollar Rate
Advances or to continue to fund or maintain Eurodollar Rate Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Agent, (i) each Eurodollar Rate Advance under each Facility under
which such Lender has a Commitment will automatically, upon such demand, Convert
into a Base Rate Advance and (ii) the obligation of the Appropriate Lenders to
make, or to Convert Advances into, Eurodollar Rate Advances shall be suspended
until the Agent shall notify the Borrower that such Lender has determined that
the circumstances causing such suspension no longer exist.
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SECTION 2.11. Payments and Computations. (a) The Borrower shall make each
payment hereunder and under the Notes, irrespective of any right of counterclaim
or set-off, not later than 11:00 A.M. (New York City time) on the day when due
in U.S. dollars to the Agent at the Agent's Account in same day funds. The Agent
will promptly thereafter cause like funds to be distributed (i) if such payment
by the Borrower is in respect of principal, interest, commitment fees or any
other Obligation then payable hereunder and under the Notes to more than one
Lender, to such Lenders for the account of their respective Applicable Lending
Offices ratably in accordance with the amounts of such respective Obligations
then payable to such Lenders and (ii) if such payment by the Borrower is in
respect of any Obligation then payable hereunder to one Lender, to such Lender
for the account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 8.07(e), from and after the effective date of
such Assignment and Acceptance, the Agent shall make all payments hereunder and
under the Notes in respect of the interest assigned thereby to the Lender
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.
(b) If the Agent receives funds for application to the Obligations under
the Loan Documents under circumstances for which the Loan Documents do not
specify the Advances or the Facility to which, or the manner in which, such
funds are to be applied, the Agent may, but shall not be obligated to, elect to
distribute such funds to each Lender ratably in accordance with such Lender's
proportionate share of the principal amount of all outstanding Advances and the
Available Amount of all Letters of Credit then outstanding, in repayment or
prepayment of such of the outstanding Advances or other Obligations owed to such
Lender as the Agent shall direct.
(c) The Borrower hereby authorizes each Lender, if and to the extent
payment owed to such Lender is not made when due hereunder or, in the case of a
Lender, under the Note held by such Lender, to charge from time to time against
any or all of the Borrower's accounts with such Lender any amount so due.
(d) All computations of interest, fees and Letter of Credit commissions
shall be made by the Agent on the basis of a year of 360 days, in each case for
the actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest, fees or commissions are
payable. Each determination by the Agent of an interest rate, fee or commission
hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(e) Whenever any payment hereunder or under the Notes shall be stated to be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment fee, as the
case may be; provided, however, that, if such extension would cause payment of
interest on or principal of Eurodollar Rate Advances to be
- 37 -
made in the next following calendar month, such payment shall be made on the
next preceding Business Day.
(f) Unless the Agent shall have received notice from the Borrower prior to
the date on which any payment is due to any Lender hereunder that the Borrower
will not make such payment in full, the Agent may assume that the Borrower has
made such payment in full to the Agent on such date and the Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have so made such payment in full to the Agent,
each such Lender shall repay to the Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Agent, at the Federal Funds Rate.
SECTION 2.12. Taxes. (a) Subject to Sections 2.12(e) and (f), any and all
payments by the Borrower hereunder or under the Notes shall be made, in
accordance with Section 2.11, free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings imposed by a Governmental Authority, and all liabilities with
respect thereto, excluding, in the case of each Lender and the Agent, net income
taxes that are imposed by the United States and franchise taxes and net income
taxes that are imposed on such Lender or the Agent by the state or foreign
jurisdiction under the laws of which such Lender or the Agent (as the case may
be) is organized or any political subdivision thereof and, in the case of each
Lender, franchise taxes and net income taxes that are imposed on such Lender by
the state or foreign jurisdiction of such Lender's Applicable Lending Office or
any political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note to any Lender or
the Agent, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.12) such Lender or the Agent (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or the
Notes (hereinafter referred to as "Other Taxes").
(c) The Borrower shall indemnify each Lender and the Agent for the full
amount of Taxes and Other Taxes, and for the full amount of taxes imposed by any
jurisdiction on amounts payable under this Section 2.12, paid by such Lender or
the Agent (as the case may be) and any liability (including penalties, additions
to Tax, interest and expenses) arising
- 38 -
therefrom or with respect thereto. This indemnification shall be made within 30
days from the date such Lender or the Agent (as the case may be) makes written
demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the Borrower
shall furnish to the Agent, at its address referred to in Section 8.02, the
original receipt of payment thereof or a certified copy of such receipt. In the
case of any payment hereunder or under the Notes by or on behalf of the Borrower
through an account or branch outside the United States or on behalf of the
Borrower by a payor that is not a United States person, if the Borrower
determines that no Taxes are payable in respect thereof, the Borrower shall
furnish, or shall cause such payor to furnish, to the Agent, at such address, an
opinion of counsel acceptable to the Agent stating that such payment is exempt
from Taxes. For purposes of this subsection (d) and subsection (e), the terms
"United States" and "United States person" shall have the meanings specified in
Section 7701 of the Internal Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction outside the
United States shall, on or prior to the date of its execution and delivery of
this Agreement in the case of each Lender or the Issuing Bank, as the case may
be, and on the date of the Assignment and Acceptance pursuant to which it became
a Lender in the case of each other Lender, and from time to time thereafter if
requested in writing by the Borrower or the Agent (but only so long thereafter
as such Lender remains lawfully able to do so), provide the Agent and the
Borrower with Internal Revenue Service form 1001 or 4224, as well as form W-9 or
W-8, as appropriate, or any successor form prescribed by the Internal Revenue
Service, certifying that such Lender is exempt from or is entitled to a reduced
rate of United States withholding tax on payments under this Agreement or the
Notes. If the form provided by a Lender at the time such Lender first becomes a
party to this Agreement indicates a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered excluded
from Taxes unless and until such Lender provides the appropriate form certifying
that a lesser rate applies, whereupon withholding tax at such lesser rate only
shall be considered excluded from Taxes for periods governed by such form;
provided, however, that, if at the date of the Assignment and Acceptance
pursuant to which a Lender becomes a party to this Agreement, the Lender
assignor was entitled to payments under subsection (a) of this Section 2.12 in
respect of United States withholding tax with respect to interest paid at such
date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts otherwise
includable in Taxes) United States withholding tax, if any, applicable with
respect to the Lender assignee on such date. If any form or document referred to
in this subsection (e) of this Section 2.12 requires the disclosure of
information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service form 1001 or
4224, that the Lender reasonably considers to be confidential, the Lender shall
give notice thereof to the Borrower and shall not be obligated to include in
such form or document such confidential information. Notwithstanding anything to
the contrary contained herein, if the withholding taxes applicable to any
payment under any Note or under this Agreement to a Lender or Lender assignor
shall be increased from that which would have otherwise been applicable at the
time of the execution and delivery by such Lender of this Agreement or the date
of the Assignment and Acceptance pursuant to which it became a Lender, as the
case may be, due to (i) a change in the manner in which such Lender or Lender
assignor
- 39 -
holds its interest in the Note, or (ii) an audit of the Internal Revenue Service
indicating that such Lender or Lender assignor is not entitled to an exemption
from, or a reduced rate for, such withholding taxes at the date of the execution
and delivery by such Lender of this Agreement or the date of the Assignment and
Acceptance pursuant to which it became a Lender then any withholding taxes
resulting therefrom shall be considered excluded from Taxes.
(f) For any period with respect to which a Lender has failed to provide the
Borrower with the appropriate form described in subsection (e) of this Section
2.12 (other than if such failure is due to a change in law occurring after the
date on which a form originally was required to be provided or if such form
otherwise is not required under subsection (e) of this Section 2.12), such
Lender shall not be entitled to indemnification under subsection (a) or (c) of
this Section 2.12 with respect to Taxes imposed by the United States; provided,
however, that should a Lender become subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Lender shall reasonably request to assist such Lender to recover such Taxes.
SECTION 2.13. Sharing of Payments, Etc. If any Lender shall obtain at any
time any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) (a) on account of Obligations due and payable to
such Lender hereunder and under the Notes at such time in excess of its ratable
share (according to the proportion of (i) the amount of such Obligations due and
payable to such Lender at such time to (ii) the aggregate amount of the
Obligations due and payable to all Lenders hereunder and under the Notes at such
time) of payments on account of the Obligations due and payable to all Lenders
hereunder and under the Notes at such time obtained by all the Lenders at such
time or (b) on account of Obligations owing (but not due and payable) to such
Lender hereunder and under the Notes at such time in excess of its ratable share
(according to the proportion of (i) the amount of such Obligations owing to such
Lender at such time to (ii) the aggregate amount of the Obligations owing (but
not due and payable) to all Lenders hereunder and under the Notes at such time)
of payments on account of the Obligations owing (but not due and payable) to all
Lenders hereunder and under the Notes at such time obtained by all of the
Lenders at such time, such Lender shall forthwith purchase from the other
Lenders such participations in the Obligations due and payable or owing to them,
as the case may be, as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each of them; provided, however, that if
all or any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each other Lender shall be rescinded and
such other Lender shall repay to the purchasing Lender the purchase price to the
extent of such Lender's ratable share (according to the proportion of (i) the
purchase price paid to such Lender to (ii) the aggregate purchase price paid to
all Lenders) of such recovery together with an amount equal to such Lender's
ratable share (according to the proportion of (i) the amount of such other
Lender's required repayment to (ii) 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 2.13 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
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SECTION 2.14. Use of Proceeds. The proceeds of the Advances and issuances
of Letters of Credit shall be available (and the Borrower agrees that it shall
use such proceeds and Letters of Credit) solely to (i) effect the Refinancing
Transactions, (ii) furnish working capital, (iii) fund the Permitted
Acquisitions and certain general corporate requirements of the Borrower and its
Subsidiaries and (iv) pay transaction fees and expenses in connection with the
transactions contemplated hereby.
SECTION 2.15. Source of Funds. To the extent any Advance hereunder is made
by or on behalf of an insurance company, bank, or an entity deemed to hold
assets of any employee benefit plan subject to ERISA or other plan as defined in
and subject to the prohibited transaction provisions of Section 4975 of the
Internal Revenue Code pursuant to applicable Department of Labor regulations
(the "Plan Asset Regulations"), or any such plan acting on its own behalf, such
insurance company, bank, entity or plan warrants and represents that at least
one of the following statements is an accurate representation as to each source
of funds (a "Source") to be used by such insurance company, bank, entity or plan
to make any Advance hereunder:
(a) the Source consists of plan assets subject to the discretionary
authority or control of an in-house asset manager as such term is defined in
Section IV(a) of Prohibited Transaction Class Exemption 96-23 (issued April 10,
1996) ("PTCE 96-23"), and any Advance hereunder is exempt under the provisions
of PTCE 96-23; or
(b) the Source is an "insurance company general account" as such term is
defined in section V(e) of Prohibited Transaction Class Exemption 95-60 (issued
July 12, 1995) ("PTCE 95-60"), and any Advance hereunder is exempt under the
provisions of PTCE 95-60; or
(c) the Source is either (x) an insurance company pooled separate account,
within the meaning of Prohibited Transaction Class Exemption 90-1 (issued
January 29, 1990) ("PTCE 90-1") or (y) a bank collective investment fund, within
the meaning of Prohibited Transaction Class Exemption 91-38 (issued July 12,
1991) ("PTCE 91-38") and, except as such insurance company or bank has disclosed
to the Borrower in writing pursuant to this paragraph (c), no plan or group of
plans maintained by the same employer or employee organization, beneficially
owns more than 10% of all assets allocated to such pooled separate account or
collective investment fund; and, in either such case, all records necessary to
establish the availability of each exemption by reason thereof will be
maintained and made available as required by the terms of such exemption; or
(d) the Source is an "investment fund" (within the meaning of Part V of
Prohibited Transaction Class Exemption 84-14 (issued March 13, 1984) (the "QPAM
Exemption") managed by a "qualified professional asset manager" ("QPAM") within
the meaning of Part V of the QPAM exemption) which has been identified pursuant
to this paragraph (d), such that the Advances by or on behalf of such investment
fund are exempt from the application of the prohibited transaction rules of
ERISA and Section 4975 of the Internal Revenue Code, provided that no party to
the transactions described in this Credit Agreement and
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no affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of
such party has, or at any time during the immediately preceding year exercised,
the authority to appoint or terminate the identified QPAM as manager of the
assets of any employee benefit plan that has an interest in such investment fund
(which plans have been identified pursuant to this paragraph (d)) or to
negotiate the terms of said QPAM's management agreement on behalf of any such
identified plan; or
(e) the Source is a "governmental plan" as defined in Title I, Section
3(32) of ERISA; or
(f) the Source is one or more "employee benefit plans" (or other plan as
defined in and subject to Section 4975 of the Internal Revenue Code) or a
separate account, trust fund, or other entity comprising one or more such plans
(determined after giving effect to the Plan Asset Regulations) each of which has
been identified to the Borrower in writing pursuant to this paragraph (f); or
(g) the Source does not include assets of any employee benefit plan or
other plan, other than a plan exempt from coverage under ERISA and from the
prohibited transactions of Section 4975 of the Internal Revenue Code.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to Initial Extension of Credit. The
obligation of each Lender to make an Advance or of the Issuing Bank to issue a
Letter of Credit on the occasion of the Initial Extension of Credit hereunder is
subject to the satisfaction of the following conditions precedent before or
concurrently with the Initial Extension of Credit:
(a) The Lenders shall be satisfied with the corporate and legal
structure and capitalization of Parent and the Loan Parties, including the
terms and conditions of the charter, bylaws and each class of capital stock
of Parent and the Loan Parties and of each agreement or instrument relating
to such structure or capitalization.
(b) There shall not have occurred (and the Lenders shall not have
become aware of) any facts, conditions or other information not previously
known which the Lenders shall determine has, or would reasonably be
expected to have, (x) a material adverse effect on the rights or remedies
of the Agent or the Lenders, or on the ability of Parent or any Loan Party
to perform its obligations to the Agent and the Lenders or (y) a Material
Adverse Effect.
(c) All material governmental (domestic and foreign) and third party
approvals and/or consents necessary in connection with the consummation of
the Refinancing Transactions and the other transactions contemplated hereby
shall have been (or will,
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within the time frame required, be) obtained and remain in full effect, and
all applicable waiting periods shall have expired without any action being
taken by any competent authority which restrains, prevents or imposes
materially adverse conditions upon the consummation of the Refinancing
Transactions and the other transactions contemplated by this Agreement and
the other Documents or otherwise referred to herein or therein.
Additionally, there shall not exist any judgment, order, injunction or
other restraint issued or filed by any court of competent jurisdiction or a
hearing seeking injunctive relief or other legal restraint pending or
notified in such court prohibiting or imposing materially adverse
conditions upon the consummation of the transactions contemplated by this
Agreement, the Notes or any other Documents.
(d) There shall exist no action, suit, investigation, litigation or
proceeding affecting Parent, any Loan Party or any of its properties or any
Subsidiary of any Loan Party or any of their respective properties pending
or threatened before any court, governmental agency or arbitrator that
purports to affect the legality, validity or enforceability of this
Agreement, the Notes, any other Document or the consummation of the
transactions contemplated hereby or thereby or which the Agent shall
determine has, or would reasonably be expected to have, a Material Adverse
Effect.
(e) (i) The Lenders shall have received evidence, in form, scope and
substance satisfactory to them, that all Debt under the Existing
Precise Credit Agreement and the Existing Precise Subordinated Notes
has been or will be, simultaneously with the transactions contemplated
herein, prepaid, redeemed or defeased in full or otherwise satisfied
and extinguished, together with all interest thereon and all other
amounts owing pursuant thereto. In addition, the creditors under the
Existing Precise Credit Agreement and the Existing Precise
Subordinated Notes shall have terminated and released all pledges of
and security interests in and Liens (if any) on the stock, assets and
properties owned by each Loan Party and any of its Subsidiaries and
the Agent shall have received such releases of security interests in
and Liens on the stock, assets and properties owned by each Loan Party
and its Subsidiaries, which releases shall be in form, scope and
substance satisfactory to the Agent. Without limiting the foregoing,
there shall have been delivered (A) proper termination statements
(Form UCC-3 or the appropriate equivalent) for filing under the UCC of
each jurisdiction where a financing statement (Form UCC-1 or the
appropriate equivalent) was filed with respect to each Loan Party and
its Subsidiaries in connection with the security interests created
with respect to such Debt and the documentation related thereto, (B)
terminations or assignments of any security interest in, or Lien on,
any patents, trademarks, copyrights, or similar interests of each Loan
Party or any of its Subsidiaries on which filings have been made and
(C) terminations of all mortgages, leasehold mortgages and deeds of
trust created with respect to the property of each Loan Party or any
of its Subsidiaries, all of which shall be in form, scope and
substance satisfactory to the Agent. All accrued fees and expenses of
the Agent and the Lenders (including the accrued fees and expenses of
counsel to the Agent and of local counsel to the Lenders) shall have
been paid.
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(ii) The Borrower shall or will simultaneously with the
transactions contemplated herein have repurchased, retired or redeemed
all of the outstanding Existing Precise Subordinated Notes in
accordance with their terms, or on such other terms and conditions as
may be satisfactory to the Agent and the Required Lenders and all
securities and note purchase agreements pursuant to which the Existing
Precise Subordinated Notes were issued shall have been terminated and
be of no further force or effect. Notwithstanding anything to the
contrary contained in the foregoing, the prepayment premium, if any,
in connection with the repurchase, retirement or redemption of the
Existing Precise Subordinated Notes shall not exceed, in the
aggregate, $2,200,000.
(iii) The Borrower shall or will simultaneously with the
transactions contemplated herein have redeemed the Existing Precise
Redeemable Preferred Stock for an aggregate principal amount not to
exceed $8,300,000.
(iv) The Borrower shall or will simultaneously with the
transactions contemplated herein have repurchased 124 shares of common
stock of the Borrower from Parent for an aggregate principal amount
not to exceed $3,500,000.
(v) The Borrower shall or will simultaneously with the
transactions contemplated herein have made a distribution to Parent in
an aggregate amount not to exceed $6,500,000.
(vi) The Agent shall or will simultaneously with the transactions
contemplated herein have received evidence, in form, scope and
substance satisfactory to it, that the matters set forth in this
Section 3.01(e) have been satisfied on such date.
(f) (i) The Borrower shall or will simultaneously with the
transactions contemplated herein have received gross cash proceeds in
an aggregate principal amount of $75,000,000 from the issuance by the
Borrower of a like principal amount of the Senior Subordinated Notes
on terms substantially as set forth in the Senior Subordinated Notes
Indenture. On the date of the Initial Extension of Credit, and
concurrently with the incurrence of Advances on such date, the
Borrower shall or will simultaneously with the transactions
contemplated herein have utilized the net cash proceeds from the
issuance of the Senior Subordinated Notes to effect, in part, the
Refinancing Transactions.
(ii) All terms of, and documentation for, the Senior Subordinated
Notes and the other Senior Subordinated Note Documents (including,
without limitation, amortization, maturities, interest rates,
covenants, defaults, remedies, sinking fund provisions, subordination
provisions and other terms) shall be required to be satisfactory in
scope, form and substance to the Agent, it being understood and agreed
that in any event the Senior Subordinated Notes shall be unsecured but
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may be guaranteed on a senior subordinated basis by the Subsidiaries
of the Borrower. On the date of the Initial Extension of Credit, there
shall have been delivered to the Agent true and complete copies of all
Senior Subordinated Note Documents.
(g) The Agent shall have received on or before the day of the Initial
Extension of Credit (unless otherwise specified) the following, each dated
such day (unless otherwise specified), in form and substance satisfactory
to the Agent (unless otherwise specified) and (except for the Notes) in
sufficient copies for each Lender:
(i) The Notes payable to the order of the Lenders.
(ii) Certified copies of the resolutions of the Board of
Directors of the Borrower, each Guarantor and each other Loan Party
approving this Agreement, the Notes, the Mortgages and each other
Document to which it is or is to be a party, and of all documents
evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Agreement, the Notes and each
other Document.
(iii) A copy of a certificate of the Secretary of State of the
jurisdiction of incorporation of the Borrower, each Guarantor and each
other Loan Party, dated on or reasonably near the date of the Initial
Extension of Credit, in each case listing the charter of such Person
and each amendment thereto on file in his office and certifying that
(A) such charter is a true and correct copy thereof, (B) such
amendments are the only amendments to such charter on file in his
office, (C) such Person has paid all franchise taxes to the date of
such certificate and (D) such Person is duly incorporated and in good
standing under the laws of the State of the jurisdiction of its
incorporation.
(iv) A copy of a certificate of the Secretary of State of the
States of New York, Pennsylvania, Illinois, Indiana, Florida,
Massachusetts and Missouri dated on or reasonably near the date of the
Initial Extension of Credit, stating that each Loan Party that does
business in such state is duly qualified and in good standing as a
foreign corporation in such state and has filed all annual reports
required to be filed to the date of such certificate.
(v) A certificate of the Borrower, each Guarantor and each other
Loan Party, signed on behalf of such Person by its President or Vice
President and its Secretary or Assistant Secretary, dated the date of
the Initial Extension of Credit (the statements made in which
certificate shall be true on and as of the date of the Initial
Extension of Credit), certifying as to (A) the absence of any
amendments to the charter of such Person since the date of the
Secretary of State's certificate referred to in Section 3.01(g)(iii),
(B) a true and correct copy of the bylaws of such Person as in effect
on the date of the Initial Extension of Credit, (C) the due
incorporation and good standing of such Person as a corporation
organized under
- 45 -
the laws of the jurisdiction of its incorporation and the absence of
any proceeding for the dissolution or liquidation of such Person, (D)
the completeness and accuracy of the representations and warranties
contained in the Documents as though made on and as of the date of the
Initial Extension of Credit and (E) the absence of any event occurring
and continuing, or resulting from the Initial Extension of Credit,
that constitutes a Default.
(vi) A certificate of the Secretary or Assistant Secretary of the
Borrower, each Guarantor and each other Loan Party certifying the
names and true signatures of the officers of such Persons authorized
to sign this Agreement, the Notes and each other Document to which
they are or are to be parties and the other documents to be delivered
hereunder and thereunder.
(vii) (A) A pledge and security agreement in substantially the
form of Exhibit D-1, duly executed by each Loan Party and (B) a pledge
and security agreement in substantially the form of Exhibit D-2, duly
executed by Parent (together with each other pledge and security
agreement delivered pursuant to Section 5.01(m) or 5.01(n), in each
case as amended, supplemented or otherwise modified from time to time
in accordance with its terms, collectively, the "Security Agreement"),
together with:
(1) certificates representing the Pledged Shares and the
Pledged Debt referred to therein accompanied, in the case of the
Pledged Shares, by undated stock powers executed in blank,
(2) acknowledgment copies or stamped receipt copies of
proper financing statements, to be duly filed on or within a
short time after the day of the Initial Extension of Credit under
the UCC of the States of New York, Pennsylvania, Illinois,
Indiana, Delaware, Florida, Massachusetts and Missouri and all
other jurisdictions that the Collateral Agent may deem necessary
or desirable in order to perfect and protect the Liens created
under the Collateral Documents, covering the Collateral described
in the Security Agreement,
(3) completed requests for information, dated on or before
the date of the Initial Extension of Credit, listing the
financing statements referred to in clause (2) next above and all
other effective financing statements filed in the jurisdictions
referred to in clause (2) next above that name each Loan Party as
debtor, together with copies of such other financing statements,
(4) duly executed copies in proper form to be filed of all
recordings and filings of or with respect to the Security
Agreement that the Collateral Agent may deem necessary or
desirable in order to perfect and protect the Liens created
thereby,
- 46 -
(5) evidence of the insurance required by the terms of the
Security Agreement,
(6) unless already provided pursuant to Section 3.01(e),
executed termination statements (Form UCC-3 or a comparable
form), in proper form to be duly filed on the date of the Initial
Extension of Credit under the UCC of all jurisdictions that the
Collateral Agent may deem desirable in order to terminate or
amend existing Liens on the Collateral described in the Security
Agreement except for Permitted Liens, and
(7) evidence that all other action that the Collateral Agent
may reasonably deem necessary or desirable in order to perfect
and protect the Liens and security interests created under the
Security Agreement has been taken.
(viii) (A) fully executed counterparts of Mortgages in form and
substance reasonably satisfactory to the Agent, which Mortgages
shall cover such of the real property owned by any Loan Party as
are designated as such on Schedule 4.01(dd) (each a "Mortgaged
Property" and, collectively, the "Mortgaged Properties"),
together with evidence that counterparts of the Mortgages have
been delivered to the title insurance company insuring the lien
of such Mortgages for recording in all places to the extent
necessary or, in the reasonable opinion of the Agent desirable,
to effectively create a valid and enforceable first priority
mortgage lien on each Mortgaged Property (subject to only
Permitted Liens) in favor of the Agent for the benefit of the
Secured Parties, and
(B) mortgage policies on each Mortgaged Property issued by
such title insurers reasonably satisfactory to the Agent and in
amounts satisfactory to the Agent assuring the Agent that the
Mortgages on the Mortgaged Properties are valid and enforceable
first priority mortgage liens on the respective Mortgaged
Properties, free and clear of all defects, interests and
encumbrances except Permitted Liens, and such Mortgage Policies
shall otherwise be in form and substance reasonably satisfactory
to the Agent (including all endorsements thereto), and shall
include, as appropriate, an endorsement for future advances under
this Agreement and the Notes and for any other matter that the
Agent in its discretion may reasonably request, shall not include
an exception for mechanics' liens or creditors' rights, and shall
provide for affirmative insurance and such reinsurance as the
Agent in its discretion may reasonably request.
(ix) A guaranty in substantially the form of Exhibit F-1 (as
amended, supplemented or otherwise modified from time to time in
accordance with its terms, the "Parent Guaranty"), duly executed by
Parent.
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(x) A guaranty in substantially the form of Exhibit F-2 (as
amended, supplemented or otherwise modified from time to time in
accordance with its terms, the "Subsidiary Guaranty" and, together
with the Parent Guaranty and with each other guaranty delivered
pursuant to Section 5.01(m), in each case as amended, supplemented or
otherwise modified from time to time in accordance with its terms, the
"Guaranties"), duly executed by each Subsidiary Guarantor.
(xi) Such financial, business and other information regarding
each Loan Party and its Subsidiaries as the Lenders shall have
reasonably requested, including, without limitation, information as to
possible contingent liabilities, tax matters, environmental matters,
obligations under Plans, collective bargaining agreements and other
arrangements with employees, audited annual financial statements for
the years ended December 31, 1994, December 31, 1995 and December 31,
1996, interim financial statements for the three month period ended
March 31, 1996 and March 31, 1997 and detailed forecasts prepared by
management, in form and substance satisfactory to the Agent, of
balance sheets, income statements and cash flow statements on a
monthly basis for the first year following the day of the Initial
Extension of Credit and on an annual basis for each year thereafter
until the Final Maturity Date.
(xii) A solvency opinion from Corporate Valuation Advisors, Inc.
addressed to the Agent and each of the Lenders and dated the date of
the Initial Extension of Credit and supporting the conclusions that,
after giving effect to the consummation of the Refinancing
Transactions, including the issuance of the Senior Subordinated Notes
and the incurrence of all financings contemplated herein, each of the
Borrower and its Subsidiaries taken as a whole are not insolvent and
will not be rendered insolvent by the indebtedness incurred in
connection herewith, will not be left with unreasonably small capital
with which to engage in their respective businesses and will not have
incurred debt beyond their ability to pay such debts as they mature
and become due, which solvency opinion shall be in form and substance
satisfactory to the Agent.
(xiii) Environmental assessment reports, in form and substance
satisfactory to the Lenders.
(xiv) Evidence of insurance (including, without limitation,
business interruption insurance) naming the Collateral Agent as
additional insured and loss payee with such responsible and reputable
insurance companies or associations, and in such amounts and covering
such risks, as is reasonably satisfactory to the Collateral Agent.
(xv) An intellectual property security agreement in substantially
the form of Exhibit E (together with each other intellectual property
security agreement delivered pursuant to Section 5.01(m) or Section
5.01(n), in each case as amended, supplemented or otherwise modified
from time to time in accordance
- 48 -
with its terms, the "Intellectual Property Security Agreement"), duly
executed by each Loan Party, together with evidence that all action
that the Collateral Agent may deem necessary or desirable in order to
perfect and protect the liens and security interests created under the
Intellectual Property Security Agreement has been taken.
(xvi) A favorable opinion of Winston & ▇▇▇▇▇▇, counsel for the
Borrower, in substantially the form of Exhibit G hereto.
(xvii) A favorable opinion of (A) ▇▇▇▇ & Genauer, P.A., Florida
counsel to the Borrower and each Guarantor,
(B) Winston & ▇▇▇▇▇▇, Illinois counsel to the Borrower and
each Guarantor,
(C) Bose, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇▇▇▇▇ counsel to the Borrower
and each Guarantor,
(D) Goulston & Storrs, Massachusetts counsel to the Borrower
and each Guarantor,
(E) Gallop, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, ▇.▇., Missouri counsel to the
Borrower and each Guarantor, and
(F) Klett, Lieber, Rooney & ▇▇▇▇▇▇▇▇▇, Pennsylvania counsel
to the Borrower and each Guarantor,
each in form and substance acceptable to the Agent.
(xviii) (A) all existing agreements entered into by any Loan
Party governing the terms and relative rights of its capital
stock and any agreements entered into by shareholders relating to
any such entity with respect to its capital stock (collectively,
the "Shareholders' Agreements");
(B) all existing Plans and Multiemployer Plans;
(C) all agreements evidencing or relating to Debt (other
than in respect of Obligations under Capitalized Leases) of any
Loan Party if the outstanding principal amount thereof exceeds
(or upon the utilization of any unused commitments may exceed)
$100,000 (collectively, the "Debt Agreements");
(D) all existing management, consulting and similar
agreements (other than employment agreements) entered into by
each Loan Party with any of their respective Affiliates
(including, without limitation, the
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Mentmore Management Agreement) (collectively, the "Management
Agreements");
(E) all existing tax sharing, all allocation and other
similar agreements entered into by each Loan Party (collectively,
the "Tax Sharing Agreements"); and
(F) all existing agreements evidencing or relating to any
Investments if the amount theretofore invested exceeded (or if
any requirement to make additional investments would exceed)
$100,000 (other than Cash Equivalents) (collectively, the
"Investment Agreements");
all of which Shareholders' Agreements, Plans, Multiemployer Plans, Debt
Agreements, Management Agreements, Tax Sharing Agreements and Investment
Agreements shall be in form and substance reasonably satisfactory to the
Agent and shall be in full force and effect on the date of the Initial
Extension of Credit.
SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance. The
obligation of each Lender to make a Revolving Credit Advance on the occasion of
each Borrowing (including the Initial Extension of Credit), and the obligation
of the Issuing Bank to issue a Letter of Credit (including the initial
issuance), shall be subject to the conditions precedent that on the date of such
Borrowing or issuance (a) the following statements shall be true (and each of
the giving of the applicable Notice of Borrowing, Notice of Issuance and the
acceptance by the Borrower of the proceeds of such Borrowing or of such Letter
of Credit shall constitute a representation and warranty by the Borrower that
both on the date of such notice and on the date of such Borrowing or issuance
such statements are true):
(i) the representations and warranties contained in each Document are
correct on and as of such date, before and after giving effect to such
Borrowing or issuance and to the application of the proceeds therefrom, as
though made on and as of such date other than any such representations or
warranties that, by their terms, refer to a specific date other than the
date of such Borrowing or issuance, in which case as of such specific date;
and
(ii) no event has occurred and is continuing, or would result from
such Borrowing or issuance or from the application of the proceeds
therefrom, that constitutes a Default;
and (b) the Agent shall have received such other approvals, opinions or
documents as any Lender through the Agent may reasonably request.
SECTION 3.03. Certain Requirements with respect to Permitted Acquisitions.
Prior to the making of any Revolving Credit Advance the proceeds of which are to
be used to acquire a Business or Businesses in accordance with the requirements
of this Agreement, (i) the Lenders shall have received a certificate from an
authorized financial officer of the Borrower
- 50 -
certifying the specific uses to be made of the proceeds thereof (broken down by
Permitted Acquisition) which certificate shall be in form and detail reasonably
satisfactory to the Agent, (ii) neither the Agent nor the Required Lenders shall
have become aware of any negative facts, conditions or other information which
would reasonably lead the Agent or the Required Lenders to believe that (A) the
information provided in any Information Package with respect to any Permitted
Acquisition is not true and accurate in all material respects (or was not true
and accurate in all material respects at the time such Information Package was
furnished pursuant to this Agreement) or is incomplete by omitting to state any
fact necessary to make such information not misleading in any material respect
(or was incomplete by omitting to state any fact necessary to make such
information not misleading in any material respect at the time such Information
Package was furnished pursuant to this Agreement) and neither the Agent nor the
Required Lenders shall have so informed the Borrower in writing thereof or (B)
the representations and warranties made in any of Sections 4.01(t), 4.01(u),
4.01(v) and 4.01(jj) are (or were) untrue in any material respect at the time
such representations and warranties are (or were) made or deemed made and
neither the Agent nor the Required Lenders shall have so informed the Borrower
in writing thereof, (iii) the Borrower shall have satisfied the relevant
requirements of Sections 5.01(k) and 5.02(d)(iv) and (iv) the Borrower shall
have delivered to the Agent evidence, in form and substance satisfactory to the
Agent, demonstrating that all documentation necessary to maintain the priority
and/or enforceability of the security interests in or Liens upon the Collateral
for the benefit of the Collateral Agent and the Secured Parties with respect to
the Business being acquired and the Revolving Credit Advance to be made and as
may be necessary under applicable law to maintain the priority of the security
interests in such Collateral.
SECTION 3.04. Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Sections 3.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Agent responsible for the transactions contemplated by the Documents
shall have received notice from such Lender prior to the Initial Extension of
Credit specifying its objection thereto and if the Initial Extension of Credit
consists of a Borrowing, such Lender shall not have made available to the Agent
such Lender's ratable portion of such Borrowing.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties. In order to induce the
Lenders to enter into this Agreement and to make the Revolving Credit Advances,
and issue (or participate in) the Letters of Credit as provided herein, each of
Parent (but only to the extent each such representation or warranty applies
specifically to Parent), the Borrower and each other Loan Party makes the
following representations, warranties and agreements, in each case after giving
effect to the Refinancing Transactions, all of which shall survive the execution
and
- 51 -
delivery of this Agreement and the other Documents and the making of the
Revolving Credit Advances and issuance of the Letters of Credit, with the
occurrence of each Borrowing and issuance of a Letter of Credit on or after the
date of the Initial Extension of Credit being deemed to constitute a
representation and warranty that the matters specified in this Article IV are
true and correct on and as of the date of the Initial Extension of Credit and on
the date of each such Borrowing and issuance of a Letter of Credit (it being
understood and agreed that any representation or warranty which by its terms is
made as of a specified date shall be required to be true and correct in all
material respects only as of such specified date).
(a) Each of Parent and the Borrower (i) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified and in good
standing as a foreign corporation in each other jurisdiction in which it
owns or leases property or assets or in which the conduct of its business
requires it to so qualify or be licensed, except where the failure to be so
qualified would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect and (iii) has all requisite
corporate power and authority (including, without limitation, all material
governmental licenses, permits and other approvals) to own or lease and
operate its properties and assets and to carry on its business as now
conducted and as presently proposes to be conducted. On the date of the
Initial Extension of Credit and upon the completion of the Refinancing
Transactions, the authorized capital stock of the Borrower consists of
1,000 shares of common stock, no par value per share, of which 1 (one)
share is issued and outstanding. All of the outstanding capital stock of
the Borrower has been validly issued free of pre-emptive rights, is fully
paid and non-assessable and, is owned by Parent in the amounts and types
specified in Schedule 4.01(a) free and clear of all Liens. Except as set
forth on Schedule 4.01(a), the Borrower has no outstanding securities
convertible into or exchangeable for its capital stock or outstanding any
rights to subscribe for or to purchase, or any options or warrants for the
purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character
relating to, its capital stock.
(b) Set forth on Schedule 4.01(b) hereto is a complete and accurate
list, as of the date hereof, of all Subsidiaries of each of Parent and the
Borrower, showing as of the date hereof (as to each such Subsidiary) the
jurisdiction of its incorporation, the number of shares of each class of
capital stock authorized, and the number outstanding, on the date hereof
and the percentage of the outstanding shares of each such class owned
(directly or indirectly) by each of Parent and the Borrower and the number
of shares covered by all outstanding options, warrants, rights of
conversion or purchase and similar rights at the date hereof. All of the
outstanding capital stock of such Subsidiaries has been validly issued free
of pre-emptive rights, is fully paid and non-assessable and is owned by the
Borrower or one or more of its Subsidiaries free and clear of all Liens,
except those created under the Loan Documents. Each such Subsidiary (i) is
a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation, (ii) is duly qualified
and in good standing as a foreign corporation in each other jurisdiction in
which it owns or leases property or assets or in
- 52 -
which the conduct of its business requires it to so qualify or be licensed,
except where the failure to be so qualified would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect and
(iii) has all requisite corporate power and authority (including, without
limitation, all material governmental licenses, permits and other
approvals) to own or lease and operate its properties and assets and to
carry on its business as now conducted and as presently proposes to be
conducted. Except as set forth on Schedule 4.01(b), no Subsidiary of the
Borrower or the Borrower has outstanding any securities convertible into or
exchangeable for its capital stock or outstanding any rights to subscribe
for or to purchase, or any options or warrants for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital
stock.
(c) The execution, delivery and performance by Parent and each Loan
Party of this Agreement, the Notes and each other Document to which it is a
party, the consummation of the transactions contemplated hereby and thereby
and the compliance by it with the terms and provisions hereof and thereof,
are within Parent's and such Loan Party's corporate powers, have been duly
authorized by all necessary corporate action, and do not (i) contravene
Parent's or any Loan Party's charter or bylaws (or equivalent
organizational documentation), (ii) violate any law (including, without
limitation, the Exchange Act and the Racketeer Influenced and Corrupt
Organizations Chapter of the Organized Crime Control Act of 1970), rule,
regulation (including, without limitation, Regulation X of the Board of
Governors of the Federal Reserve System), order, writ, judgment,
injunction, decree, determination or award, (iii) conflict with or result
in the breach of, or constitute a default under, any material contract,
loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting Parent or any Loan Party, any of their
respective Subsidiaries or any of their respective properties or assets or
(iv) except for the Liens created under the Loan Documents, result in or
require the creation or imposition of any Lien upon or with respect to any
of the properties or assets of Parent or any Loan Party or any of their
Subsidiaries. Neither Parent nor any Loan Party nor any of their
Subsidiaries is in violation of any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award or in breach of
any such contract, loan agreement, indenture, mortgage, deed of trust,
lease or other instrument, in each case where such breach, requirement or
imposition would, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
(d) No authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority or regulatory body or any other
third party is required for (i) the due execution, delivery, recordation,
filing or performance by Parent or any Loan Party of this Agreement, or any
other Document to which it is a party, or for the consummation of the
transactions contemplated hereby or thereby, (ii) the grant by Parent or
any Loan Party of the Liens granted by it pursuant to the Collateral
Documents, (iii) the perfection or maintenance of the Liens created by the
Collateral Documents (including the first priority nature thereof) or (iv)
the exercise by the Agent, the Collateral Agent or any Lender of its rights
under the Loan Documents or the remedies
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in respect of the Collateral pursuant to the Collateral Documents, except
for the authorizations, approvals, actions, notices and filings listed on
Schedule 4.01(d), all of which have been duly obtained, taken, given or
made and are in full force and effect. All applicable waiting periods in
connection with the transactions contemplated hereby have expired without
any action having been taken by any competent authority restraining,
preventing or imposing materially adverse conditions upon the rights of
Parent, the Loan Parties or their Subsidiaries freely to transfer or
otherwise dispose of, or to create any Lien on, any properties or assets
now owned or hereafter acquired by any of them.
(e) This Agreement has been, and each of the other Documents when
delivered hereunder will have been, duly executed and delivered by Parent
and each Loan Party thereto. This Agreement and each other Document is the
legal, valid and binding obligation of Parent and each Loan Party that is a
party thereto, enforceable against Parent and such Loan Party in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
limiting creditors' rights or by equitable principles generally (regardless
of whether enforcement is sought in equity or at law).
(f) The Consolidated balance sheet of the Borrower and its
Subsidiaries as at December 31, 1994, December 31, 1995 and December 31,
1996, and the Consolidated related statements of income and cash flows and
the notes thereto of the Borrower and its Subsidiaries for the Fiscal Year
then ended, accompanied by an opinion of Ernst & Young LLP, independent
public accountants, and the Consolidated balance sheets of TMP and its
Subsidiaries as at December 31, 1994 and December 31, 1995, and the related
Consolidated statements of income and cash flows and the notes thereto of
TMP and its Subsidiaries for the Fiscal Year then ended, duly certified by
the chief financial officer of the Borrower, copies of which have been
furnished to each Lender, fairly present, the financial condition of the
Borrower and its Subsidiaries and TMP and its Subsidiaries as at such dates
and the results of the operations and cash flow of the Borrower and its
Subsidiaries and TMP and its Subsidiaries for the periods ended on such
dates, all in accordance with GAAP applied on a consistent basis, and since
December 31, 1996 there has been no Material Adverse Change. Except as
fully disclosed in such financial statements, there were as of the date of
such balance sheets referred to in this Section 4.01(f) no liabilities or
obligations with respect to any Loan Party or any of their respective
Subsidiaries of any nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether or not due) which, either individually
or in aggregate, would reasonably be expected to have a Material Adverse
Effect on such Loan Party or any of its Subsidiaries (other than any such
liabilities or obligations which arise in the ordinary course of business
in connection with contracts entered into by any such Person). As of such
balance sheet date, no Loan Party knows of any basis for the assertion
against it or any of its Subsidiaries of any liability or obligation of any
nature whatsoever that is not fully disclosed in such financial statements
which, either individually or in the aggregate, would be expected to have a
Material Adverse Effect on such Loan Party or any of its Subsidiaries. All
information contained in each
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Information Package furnished to the Lenders pursuant to Section 5.01(k)
(with respect to subsequently acquired Businesses) is, to the best
knowledge of the Borrower, true and accurate in all material respects and
not incomplete by omitting to state any fact necessary to make such
information not misleading in any material respect.
(g) The Consolidated and consolidating forecasted balance sheets,
income statements and cash flows statements and the notes thereto of the
Borrower and its Subsidiaries delivered to the Lenders pursuant to Section
3.01(g)(xi) or 5.03 were prepared in good faith on a basis consistent with
the financial statements referred to in Section 4.01(f), and there are no
statements or conclusions therein which are based upon or include
information known to the Borrower to be misleading in any material respect
or which fail to take into account material information regarding the
matters reported therein. On the date of the Initial Extension of Credit,
the Borrower believed that such forecasts were reasonable.
(h) Any information, exhibit or report (including, without limitation,
the Offering Memorandum and all information contained in the Documents but
excluding any financial projections) prepared and furnished by Parent, any
Loan Party or their respective agents to the Agent or any Lender for
purposes of or in connection with this Agreement, the other Documents or
any transaction contemplated hereby or thereby is, and all other such
information hereafter prepared and furnished by or on behalf of Parent, any
Loan Party or any of their respective Subsidiaries in writing to the Agent
or any Lender, will be, true and accurate in all material respects on the
date as of which such information is dated or certified and not incomplete
by omitting to state any fact necessary to make such information not
misleading in any material respect at such time in light of the
circumstances under which such information was provided.
(i) There is no action, suit, investigation, litigation or proceeding
affecting Parent, any Loan Party or any of their Subsidiaries, including
any Environmental Claim, pending or threatened before any court,
governmental agency or arbitrator (i) that affects or purports to affect
the legality, validity or enforceability of this Agreement or any other
Document or the consummation of the transactions contemplated hereby or
thereby, (ii) with respect to any material Debt of Parent, any Loan Party
or any of their respective Subsidiaries or (iii) that would reasonably be
expected to have a Material Adverse Effect.
(j) No proceeds of any Advance or drawings under any Letter of Credit
will be used to acquire any equity security of a class that is registered
pursuant to Section 12 of the Exchange Act.
(k) Neither Parent nor any Loan Party is engaged in the business of
extending credit for the purpose of purchasing or carrying Margin Stock,
and no proceeds of any Advance or drawings under any Letter of Credit will
be used to purchase or carry any Margin Stock or to extend credit to others
for the purpose of purchasing or carrying any Margin Stock.
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(l) Set forth on Schedule 4.01(l) hereto is a complete and accurate
list of all Plans and Multiemployer Plans. No ERISA Event has occurred or
is reasonably expected to occur with respect to any Plan or Multiemployer
Plan. Each Plan and each Multiemployer Plan (i) is in substantial
compliance with ERISA and the Internal Revenue Code, (ii) has been
maintained in substantial compliance with its terms and with the
requirements of any and all applicable laws, statutes, rules, regulations
and orders and (iii) has been maintained, where required, in good standing
with applicable regulatory authorities. As of the last annual actuarial
valuation date, the funded current liability percentage, as defined in
Section 302(d)(8) of ERISA, of each Pension Plan is at least 90% and there
has been no material adverse change in the funding status of any such Plan
since such date.
(m) To the best knowledge of the Borrower, Schedule B (Actuarial
Information) to the most recent annual report (Form 5500 Series) for each
Plan (where applicable), copies of which have been filed with the Internal
Revenue Service and furnished to the Lenders, is complete and accurate and
fairly presents the funding status of such Plan, and since the date of such
Schedule B there has been no material adverse change in such funding
status.
(n) Neither Parent nor any Loan Party nor any ERISA Affiliate has
incurred or is reasonably expected to incur any Withdrawal Liability to any
Multiemployer Plan. Neither Parent nor any Loan Party nor any ERISA
Affiliate has been notified by the sponsor of a Multiemployer Plan that
such Multiemployer Plan is in reorganization or has been terminated, within
the meaning of Title IV of ERISA, and no such Multiemployer Plan, to the
best knowledge of the Borrower, is reasonably expected to be in
reorganization or to be terminated, within the meaning of Title IV of
ERISA.
(o) Neither Parent nor any Loan Party, nor any Plan, nor any trust
created thereunder, nor any trustee or administrator thereof, has engaged
in a transaction in connection with which any Loan Party, any Plan or, such
trust, could be subject to either a material civil penalty assessed
pursuant to Section 409 or 502(i) of ERISA or a material tax imposed
pursuant to Section 4975 or 4976 of the Internal Revenue Code. No Plan
which is subject to Section 302 of ERISA or Section 412 of the Internal
Revenue Code has incurred an "accumulated funding deficiency" as defined in
either of such Sections, whether or not waived, nor has requested or
obtained any extension of any applicable amortization period. No Plan is a
plan described in Section 4063(a) of ERISA.
(p) Neither Parent nor any of the Loan Parties have liability under
any employee benefit plan, within the meaning of Section 3(3) of ERISA,
other than plans maintained by the Loan Parties. Each Plan that is subject
to Parts 1, 2 and 4 of Subtitle B of Title I of ERISA is "qualified" within
the meaning of Section 401(a) of the Internal Revenue Code and has been
determined by the Internal Revenue Service to be so qualified, the trusts
maintained thereunder have been determined by the Internal Revenue Service
to be exempt from taxation under Section 501(a) of the Internal Revenue
Code, and all required submissions have been made to the Internal Revenue
Service with respect
- 56 -
to maintaining the "qualified" status of each such Plan under Section
401(a) of the Internal Revenue Code.
(q) Except as set forth in the financial statements referred to in
this Section 4.01 and in Section 5.03, neither Parent nor any of the Loan
Parties and their respective Subsidiaries have material liability with
respect to "expected post retirement benefit obligations" within the
meaning of Statement of Financial Accounting Standards No. 106, and no Plan
provides benefits, including without limitation death or medical benefits
(whether or not insured), with respect to current or former employees or
dependents thereof of Parent or any Loan Party beyond their retirement or
other termination of service (other than (i) coverage mandated by
applicable law, (ii) death benefits or retirement benefits under any
Pension Plan, (iii) deferred compensation benefits accrued as liabilities
on the books of Parent or any Loan Party or (iv) benefits the full cost of
which is borne by the current or former employee (or his or her dependents
or beneficiaries)). All reports, notices and other disclosure relating to
Plans required to be filed with, or furnished to, government entities, plan
participants or plan beneficiaries have been timely filed and furnished in
all material respects in accordance with applicable law. With respect to
each applicable Plan, Parent, the Loan Parties and all ERISA Affiliates
have complied in all material respects with the provisions of Section
4980B(f) of the Internal Revenue Code.
(r) Neither Parent nor any of the Loan Parties have received or are
aware of any material actions, claims (other than routine claims for
benefits), lawsuits or arbitrations pending or, threatened with respect to
any Plan or against any fiduciary of any Plan, and neither Parent nor the
Loan Parties have knowledge of any facts that could give rise to any such
actions, claims, lawsuits or arbitrations. Neither Parent nor any Loan
Party nor any ERISA Affiliate has ever contributed to, or withdrawn in a
partial or complete withdrawal (within the meaning of Sections 4205 or 4203
of ERISA, respec tively) from, any Multiemployer Plan or has any fixed or
contingent liability under Section 4204 of ERISA.
(s) The use of the proceeds of any Advance or drawings under any
Letter of Credit will not be a prohibited transaction within the meaning of
Section 406 of ERISA.
(t) The operations and properties of each Loan Party and each of its
Subsidiaries comply in all material respects with all applicable
Environmental Laws, and each Loan Party and each of its Subsidiaries have
obtained, maintain and comply with all material Environmental Permits
necessary for their respective businesses, operations and properties, all
past Environmental Claims have been resolved without ongoing material
obligations or costs, and no facts or circumstances exist that would (i)
form the basis of an Environmental Claim against any Loan Party or any of
its Subsidiaries or any of their respective properties, (ii) cause any such
property to be subject to any restrictions on ownership, occupancy, use or
transferability under any Environmental Law, or (iii) give rise to
Environmental Costs and Liabilities, except for such of the
- 57 -
foregoing which would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(u) No Loan Party nor any of its Subsidiaries has received (i) any
notice or claim to the effect that it is or may be liable to any Person or
Governmental Authority as a result of or in connection with any Hazardous
Materials or (ii) any letter or request for information under CERCLA or
comparable state laws, and, none of the current or former operations of the
Loan Party or any of its Subsidiaries is the subject of any Federal or
state investigation relating to or in connection with any Hazardous
Materials or Environmental Claims at any location, except for such of the
foregoing which would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(v) No Loan Party nor any of its Subsidiaries nor any of their
respective facilities or operations are subject to any outstanding written
order or agreement with any Governmental Authority or private party
relating to (i) any actual or potential violation of or liability under
Environmental Laws or (ii) any Environmental Claims, except for such of the
foregoing which would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(w) (i) The provisions of the Collateral Documents are effective to
create in favor of the Collateral Agent for the benefit of the Secured
Parties a legal, valid and enforceable security interest in all right,
title and interest of each Loan Party and Parent in the Collateral, and the
Collateral Documents, upon the filing of Form UCC-1 financing statements or
the appropriate equivalent (which filings, if this representation and
warranty is made on or after the tenth day after the date of the Initial
Extension of Credit, have been made), creates a fully perfected first
priority lien on, and security interest in, all right, title and interest
in all of the Collateral, subject to no other Liens (other than Permitted
Liens). Each of Parent and each Loan Party to the Collateral Documents has
good and valid title to all Collateral owned by it, free and clear of all
Liens except Permitted Liens.
(ii) The Mortgages create, upon recording thereof, as security for the
obligations to be secured thereby, a valid and enforceable first priority
perfected security interest in and mortgage lien on all of the Mortgaged
Properties in favor of the Collateral Agent for the benefit of the Secured
Parties and subject to no other Liens (other than Permitted Liens). Each
Loan Party has good and marketable title to all fee-owned Mortgaged
Properties owned by such Loan Party free and clear of all leases, occupancy
interests and all Liens except Permitted Liens.
(x) Parent, each Loan Party and each of their respective Subsidiaries
has filed, has caused to be filed or has been included in all tax returns
(Federal, state, local and foreign) required to be filed and has paid all
taxes shown thereon to be due, together with applicable interest and
penalties on or before the due dates thereof.
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(y) Set forth on Schedule 4.01(y) hereto is a complete and accurate
list, as of the date hereof, of each taxable year of Parent, each Loan
Party and each of their respective Subsidiaries and Affiliates for which
Federal income tax returns have been filed and for which the expiration of
the applicable statute of limitations for assessment or collection has not
occurred by reason of extension or otherwise (an "Open Year").
(z) There is no unpaid amount, as of the date hereof, of adjustments
to the Federal income tax liability of Parent, each Loan Party and each of
their respective Subsidiaries proposed by the Internal Revenue Service with
respect to Open Years. No issues have been raised by the Internal Revenue
Service in respect of Open Years that, either individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
There is no unpaid amount, as of the date hereof, of adjustments to the
state, local and foreign tax liability of Parent, each Loan Party and their
respective Subsidiaries and Affiliates proposed by all state, local and
foreign taxing authorities (other than amounts arising from adjustments to
Federal income tax returns, if any that, either individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect).
No issues have been raised by such taxing authorities that, could have a
Material Adverse Effect.
(aa) Neither Parent nor any Loan Party nor any of their respective
Subsidiaries is an "investment company," or an "affiliated person" of, or
"promoter" or "principal underwriter" for, an "investment company," as such
terms are defined in the Investment Company Act of 1940, as amended.
Neither the making of any Advances, nor the issuance of any Letters of
Credit, nor the application of the proceeds or repayment thereof by the
Borrower, nor the consummation of the other transactions contemplated
hereby, will violate any provision of such Act or any rule, regulation or
order of the Securities and Exchange Commission thereunder.
(bb) The Borrower and its Subsidiaries (taken as a whole) are, and
after the consummation of the Refinancing Transactions and the transactions
contemplated by this Agreement and the other Documents and receipt and
application by the Borrower of the proceeds of the Borrowings in accordance
with the terms of this Agreement will be, Solvent.
(cc) (i) Set forth on Schedule 4.01(cc) hereto is a complete and
accurate list, as of the date hereof, of all Debt of, each of Parent,
each Loan Party and each of their respective Subsidiaries which is to
remain outstanding after giving effect to the Refinancing Transactions
and the other transactions contemplated herein (excluding the Advances
and the Letters of Credit, collectively, the "Existing Debt") in each
case showing the aggregate principal amount thereof and the name of
the respective borrower and Parent or any Loan Party or any of its
Subsidiaries or any other entity which directly or indirectly
guaranteed such debt.
(ii) Neither Parent nor any Loan Party nor any of their
respective Subsidiaries is liable for any Debt or other obligations of
any nature whatsoever
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(whether absolute, accrued, contingent or otherwise and whether or not
due) of any Non-Precise Subsidiaries, but excluding such obligations
in which Parent, the Borrower and its Subsidiaries are jointly and
severally liable as a matter of law.
(iii) The subordination provisions contained in the Senior
Subordinated Notes and the other Senior Subordinated Note Documents
are enforceable against the Borrower and its Subsidiaries, the
respective guarantors thereunder and the holders of the Senior
Subordinated Notes, and all Obligations of Parent and the Loan Parties
under the Loan Documents are the within the definition of "Senior
Debt" included in such subordination provisions.
(iv) At the time of consummation thereof, the issuance of the
Senior Subordinated Notes shall have been consummated, and all actions
taken by Parent, each Loan Party or any of their respective
Subsidiaries pursuant to or in furtherance of the issuance of the
Senior Subordinated Notes shall have been taken, in accordance with
the terms of the Senior Subordinated Note Documents and all applicable
United States and other laws. At the time of consummation thereof, all
consents, approvals of and permits for, and filings and registrations
with, and all other actions in respect of, all Governmental Agencies,
authorities or instrumentalities required in order to make or
consummate the issuance of the Senior Subordinated Notes have been (or
will, within the time frame required, be) obtained, given, filed or
taken and are or will be in full force and effect (or effective
judicial relief with respect thereto has been obtained). Any
applicable waiting periods with respect to the issuance of the Senior
Subordinated Notes shall have expired without any action being taken
by any competent authority which restrains, prevents or imposes
material adverse conditions upon the issuance of the Senior
Subordinated Notes. Additionally, there does not exist any judgment,
order or injunction prohibiting or imposing material adverse
conditions upon the issuance of the Senior Subordinated Notes or the
occurrence of any Borrowing or the performance by Parent, any Loan
Party or any of their respective Subsidiaries of their obligations
under the respective Documents.
(dd) Set forth on Schedule 4.01(dd) hereto is a complete and accurate
list of all real property as of the date hereof owned by any Loan Party or
any of its Subsidiaries, showing the street address, county or other
relevant jurisdiction, state, record owner and book and fair value thereof.
Each Loan Party or such Subsidiary has good, marketable and insurable fee
simple title to such real property, free and clear of all Liens, other than
Permitted Liens.
(ee) Set forth on Schedule 4.01(ee) hereto is a complete and accurate
list of all leases as of the date hereof of real property under which any
Loan Party or any of its Subsidiaries is the lessee, showing the street
address, county or other relevant jurisdiction, state, lessor, lessee,
expiration date and annual rental cost thereof. Each such lease is the
legal, valid and binding obligation of the lessor thereof, enforceable in
accordance with its terms.
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(ff) Set forth on Schedule 4.01(ff) hereto is a complete and accurate
list of all Investments as of the date hereof held by any Loan Party or any
of its Subsidiaries having a fair market value in excess of $50,000,
showing the amount, obligor or issuer and maturity, if any, thereof. Parent
has no Subsidiaries other than those Subsidiaries of Parent listed on
Schedule 4.01(b) hereto. The Borrower has no Subsidiaries other than those
Subsidiaries of the Borrower listed on Schedule 4.01(b) hereto.
(gg) Set forth on Schedule 4.01(gg) hereto is a complete and accurate
list as of the date hereof of all patents, trademarks, trade names, service
marks and copyrights, and all applications therefor and licenses thereof,
of each Loan Party or any of its Subsidiaries, showing as of the date
hereof the jurisdiction in which registered, the registration number, the
date of registration and the expiration date.
(hh) Each Loan Party and each of its Subsidiaries has good, marketable
and valid title to all assets owned by it, including, without limitation,
all property reflected as owned by it in the balance sheets of each Loan
Party referred to in Section 4.01(f) (except as sold or otherwise disposed
of since the date of such balance sheets pursuant to any transactions not
prohibited under this Agreement), free and clear of all Liens, other than
(i) as referred to in the balance sheets or in the notes thereto or (ii)
Permitted Liens.
(ii) Neither Parent nor any Loan Party nor any Subsidiary of any Loan
Party is (A) engaged in any unfair labor practice that would reasonably be
expected to have a Material Adverse Effect or (B) a party to a collective
bargaining agreement as of the date hereof, except as set forth in Schedule
4.01(ii). The Loan Parties and Parent are in compliance in all material
respects with all applicable laws, agreements and contracts relating to
employment, employment practices, wages, hours and terms and conditions of
employment, including, but not limited to, employee compensation matters.
There is (i) no unfair labor practice complaint or unlawful employment
practice charge pending against Parent, any Loan Party or any Subsidiary of
any Loan Party or, to the best of Parent's, the Borrower's and each other
Loan Party's knowledge, threatened against any of them, and no grievance or
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against Parent, any Loan Party or any Subsidiary of
any Loan Party or, threatened against any of them, (ii) no strike, labor
dispute, slowdown or stoppage pending against Parent, any Loan Party or any
Subsidiary of any Loan Party or, to the best of Parent's, the Borrower's
and each other Loan Party's knowledge, threatened against any of them,
(iii) no union representation proceeding pending with respect to the
employees of Parent, any Loan Party or any Subsidiary of any Loan Party and
(iv) neither Parent nor any Loan Party nor any Subsidiary of any Loan Party
has received notice of the intent of any Federal, state, local or foreign
agency responsible for the enforcement of labor or employment laws to
conduct an investigation with respect to or relating to Parent, any Loan
Party or any Subsidiary of any Loan Party and no such investigation is in
progress except (with respect to any matter specified in clause (i), (ii),
(iii) or (iv) above, either individually or in the aggregate) such as would
not reasonably be expected to have a Material Adverse Effect.
- 61 -
(jj) Each of Parent, each Loan Party and each of their respective
Subsidiaries is in compliance with all applicable statues, laws,
ordinances, codes, rules, regulations and orders of, and all applicable
restrictions imposed by, all governmental bodies, domestic or foreign, in
respect of the conduct of its business and the ownership of its property
and assets (including applicable statues, regulations, orders and
restrictions relating to environmental standards and controls) to the
extent required as of the date of the Initial Extension of Credit, except
such instances of noncompliance as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
Neither the business nor the properties of any Loan Party or any of its
Subsidiaries is affected by any fire, explosion, accident, strike, lockout
or other labor dispute, drought, storm, hail, earthquake, embargo, act of
God or of the public enemy or other casualty (whether or not covered by
insurance) that would reasonably be expected to have a Material Adverse
Effect.
(kk) Neither Parent, any Loan Party nor any of its Subsidiaries is in
default under any contract, document or agreement to which it is a party,
and no event, condition or occurrence currently exists, or will result from
the execution, delivery and performance by Parent or such Loan Party of
this Agreement or any of the Documents to which it is a party and the
transactions contemplated hereby and thereby, which, after notice or lapse
of time, or both, will constitute such a default by Parent or such Loan
Party under any contract, document or agreement to which its a party, in
each case which, either individually or in the aggregate, would reasonably
be expected to have a Material Adverse Effect.
(ll) On the date of the Initial Extension of Credit, all
representations and warranties made by Parent and any Loan Party in the
Senior Subordinated Note Documents were true and correct in all material
respects as at the time as of which such representations and warranties
were made (or deemed made). On the date of the Initial Extension of Credit,
all representations and warranties contained in the other Loan Documents
shall be true and correct in all material respects as if made on such date.
ARTICLE V
COVENANTS
SECTION 5.01. Affirmative Covenants. So long as any Advance, any fees or
any other Obligations owing hereunder shall remain unpaid, any Letter of Credit
shall be outstanding or any Lender shall have any Commitment hereunder, each
Loan Party, and, to the extent expressly made applicable, Parent will:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, and Parent will comply, with all applicable laws,
rules, regulations and orders, such compliance to include, without
limitation, compliance with ERISA and the Racketeer Influenced and Corrupt
Organizations Chapter of the Organized Crime Control
- 62 -
Act of 1970, except for such instances of non-compliance as would not
reasonably be expected to have a Material Adverse Effect.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, and Parent will pay and discharge,
before the same shall become delinquent, (i) all Taxes, assessments and
governmental charges or levies imposed upon it or upon its property that,
either individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect and (ii) all lawful claims that, if unpaid,
might by law become a Lien upon its property that, either individually or
in the aggregate, would reasonably be expected to have a Material Adverse
Effect; provided, however, that each Loan Party shall not be required to
pay or discharge any such Tax, assessment, charge or claim that is being
contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained, unless and until any Lien
resulting therefrom attaches to its property and becomes enforceable
against its other creditors.
(c) Compliance with Environmental Laws. Comply, and cause each of its
Subsidiaries to comply, and will use its best efforts to cause all lessees
and other Persons operating or occupying its owned and leased properties to
comply with all applicable Environmental Laws and Environmental Permits;
obtain and renew, and cause each of its Subsidiaries to obtain and renew,
all Environmental Permits necessary for its operations and properties; and
conduct, and cause each of its Subsidiaries to conduct, any investigation,
study, sampling and testing, and undertake any cleanup, removal, remedial
or other action necessary to remove and clean up all Hazardous Materials
from any of its properties, in accordance with the requirements of all
Environmental Laws, except for such instances of non-compliance as would
not, either individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(d) Maintenance of Properties and Assets; Insurance. Each Loan Party
will, and cause each of its Subsidiaries to, (i) keep all property and
assets necessary in its business in good working order and condition
(ordinary wear and tear excepted), (ii) maintain insurance against loss or
damage of the kinds customarily insured against by corporations similarly
situated and owning properties and engaged in like businesses, with
reputable insurers or with the government of the United States of America
or any agency or instrumentality thereof, in such amounts (giving effect to
self insurance) with such deductibles and by such methods as shall be
customary for corporations similarly situated in the industry, (iii)
maintain public liability insurance with financially sound and reputable
insurance companies in such amounts and coverage as determined in good
faith by senior management of each Loan Party to be appropriate for each
Loan Party and their respective Subsidiaries and (iv) maintain workers'
compensation insurance with financially sound and reputable insurance
companies as statutorily required by each applicable locale.
(e) Preservation of Corporate Existence, Etc. Preserve and maintain,
and cause each of its Subsidiaries to preserve and maintain, and Parent
will preserve and
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maintain its corporate existence, rights (charter and statutory), and its
material permits, licenses, approvals, privileges and franchises except as
otherwise permitted under Section 5.02(c).
(f) Visitation Rights. At any reasonable time and from time to time
upon prior notice and at the Borrower's expense permit the Agent or any of
the Lenders or any agents or representatives thereof, to (i) examine, audit
and make copies of and abstracts from the records and books of account of,
(ii) visit the properties of, any Loan Party or any of its Subsidiaries,
and (iii) discuss the affairs, finances and accounts of any Loan Party or
any of its Subsidiaries with any of their officers or directors and with
their independent certified public accountants; it being understood however
that, unless an Event of Default has occurred or is continuing, each Lender
shall bear its own cost with respect to the exercise of its visitation
rights under this Section 5.01(f) in excess of one such visit per annum.
(g) Preparation of Environmental Reports. At the request of the Agent
at the following times: (i) upon the receipt of a notice under Section
5.03(q) of this Agreement, (ii) upon the acquisition of real property by
any Loan Party or any of its Subsidiaries and (iii) upon the occurrence or
continuance of an Event of Default arising from any environmental matters
connected with any property owned, leased or operated by any Loan Party,
provide to the Lenders within 60 days after such request, at the expense of
the Borrower, a Phase I environmental site assessment report for any of its
properties described in such request, prepared by a nationally recognized
environmental consulting firm (and, if based upon the reasonable
recommendation of such environmental consulting firm, a Phase II
environmental site assessment report) indicating the presence or absence of
Hazardous Materials and the estimated cost of any compliance, removal or
remedial action required under applicable Environmental Law or by any
Governmental Authority in connection with any Hazardous Materials on such
properties. Such Phase I environmental assessment report shall have been
dated within: (A) six months of the date of the event described in (i) or
(iii), above, or, in the case of an acquisition described in (ii) above,
the earlier of the date of a purchase agreement entered into with respect
to such acquisition or the date of any Information Package delivered to the
Agent in connection therewith; or (B) twelve months of the applicable date
described in (A) if supplemented with a review report prepared by a
nationally recognized environmental consulting firm.
(h) Keeping of Books. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which true, full and correct
entries shall be made of all financial dealings and transactions and the
assets and business of each Loan Party and each of its Subsidiaries
sufficient to enable financial statements for each Loan Party to be
prepared in accordance with generally accepted accounting principles.
(i) Compliance with Terms of Leaseholds. Make all payments and
otherwise perform all obligations in respect of all leases of real property
to which any Loan Party or any of its Subsidiaries is a party, keep such
leases in full force and effect and not
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allow such leases to lapse or be terminated or any rights to renew such
leases to be forfeited or cancelled, notify the Agent of any material
default by any party with respect to such leases and cooperate with the
Agent in all respects to cure any such default, except for such instances
of noncompliance with this clause (i) as would not reasonably be expected
to have a Material Adverse Effect.
(j) Performance of Obligations. Perform, and cause each of its
Subsidiaries to perform, and Parent will perform, all of its obligations
under the terms of each mortgage, indenture, security agreement, loan
agreement, credit agreement or any other agreement, contract or instrument
by which it is bound, except such non-performance as would not, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. In addition to the requirements of the immediately
preceding sentence, the Borrower will perform all of its obligations under
the terms of the Senior Subordinated Note Documents and the Mentmore
Management Agreement.
(k) Certain Requirements with respect to Permitted Acquisitions.
Unless the Required Lenders otherwise agree in writing with respect to any
Business acquired after the Effective Date, prior to (and within any time
requirements specified below) any acquisition (or concurrently with the
consummation thereof as specified below) by the Borrower or any of its
Wholly-Owned Subsidiaries of a Business, the Borrower shall furnish to the
Agent (with sufficient copies for each of the Lenders, and the Agent will
promptly forward to each of the Lenders):
(i) at least twenty (20) Business Days prior to the acquisition
of the respective Business, the Information Package relating to such
Business;
(ii) concurrently with the acquisition of such Business and to
the extent required by the Agent, fully executed counterparts of a
Mortgage, in form and substance reasonably satisfactory to the Agent,
which Mortgage shall cover the owned property of the Business to be
acquired, together with evidence that counterparts of such Mortgage
have been delivered to the title insurance company insuring the lien
on such property for recording in all places to the extent necessary
or, in the reasonable opinion of the Agent, desirable to effectively
create a valid and enforceable first priority mortgage lien on such
property in favor of the Collateral Agent (or such other trustee as
may be required or desired under local law) for the benefit of the
Secured Parties;
(iii) concurrently with the acquisition of such Business and to
the extent required by the Agent, a Mortgage Policy on the owned real
property associated with such Business issued by title insurers
reasonably satisfactory to the Agent in amounts reasonably
satisfactory to the Agent assuring the Agent that the Mortgage on such
property is a valid and enforceable first priority mortgage lien on
such property, free and clear of all defects and encumbrances except
Permitted Liens and such Mortgage Policy shall otherwise be in form
and substance reasonably satisfactory to the Agent;
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(iv) in the case of any property that is a leasehold,
concurrently with the acquisition of such property and to the extent
required by the Agent, a true and correct copy of the lease for such
property;
(v) concurrently with the acquisition of such Business, an
opinion of local counsel reasonably satisfactory to the Agent, which
shall cover the perfection of the security interests granted pursuant
to such Mortgage and such other matters incident to the transaction
contemplated thereby as the Agent may reasonably request; and
(vi) an officer's certificate of the Borrower certifying the
proposed sources and uses of funds contemplated in connection with the
acquisition of the respective Business.
(l) Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the
Loan Documents with any of their Affiliates on terms that are fair and
reasonable and no less favorable to such Loan Party or such Subsidiary than
it would obtain in a comparable arm's-length transaction with a Person not
an Affiliate; provided that, so long as no Default or Event of Default
exists or would result therefrom, the foregoing restriction shall not apply
to (i) any payments under the Tax Sharing Agreement permitted by Section
5.02(f) hereof and (ii) the payment by the Borrower of management fees to
Mentmore under the Mentmore Management Agreement in an aggregate amount not
to exceed amounts permitted under the Senior Subordinated Notes Indenture;
provided, further, that the payment of any such fees in excess of $300,000
per annum would be permitted under Section 5.04 hereof.
(m) Covenant to Give Security. In addition to the requirements of
Section 5.01(n), upon the request of the Collateral Agent following the
occurrence and during the continuance of an Event of Default, and at the
expense of the Borrower, (i) within 10 days after such request, furnish to
the Collateral Agent a description of the real and personal properties of
each Loan Party and each of its Subsidiaries in detail satisfactory to the
Collateral Agent, (ii) within 15 days after such request, duly execute and
deliver to the Collateral Agent mortgages, pledges, assignments and other
security agreements, as specified by and in form and substance satisfactory
to the Collateral Agent, securing payment of all the Obligations of each
Loan Party under the Loan Documents and constituting Liens on all such
properties, (iii) within 30 days after such request, take whatever action
(including, without limitation, the recording of mortgages, the filing of
UCC financing statements, the giving of notices and the endorsement of
notices on title documents) may be necessary or advisable in the opinion of
the Collateral Agent to vest in the Collateral Agent (or in any
representative of the Agent designated by it) valid and subsisting Liens on
the properties purported to be subject to the security agreements delivered
pursuant to this Section 5.01(m), enforceable against all third parties in
accordance with their terms, (iv) within 60 days after such request,
deliver to the Collateral Agent a signed copy of a favorable opinion,
addressed to the Collateral Agent, of counsel for the Borrower acceptable
to the Collateral Agent as to the matters contained
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in clauses (i), (ii) and (iii) of this Section 5.01(m), as to such security
agreements being legal, valid and binding obligations of each Loan Party
enforceable in accordance with their terms and as to such other matters as
the Collateral Agent may request and (v) at any time and from time to time,
promptly execute and deliver any and all further instruments and documents
and take all such other action as the Collateral Agent may deem desirable
in obtaining the full benefits of, or in preserving the Liens of, such
security agreements.
(n) Additional Loan Parties. Cause any newly organized or acquired
direct or indirect Subsidiary of the Borrower to execute and deliver to the
Agent as promptly as practicable and in any event within 30 days after the
organization or acquisition of such Subsidiary (A) a security agreement
supplement in the form of Exhibit A to the Security Agreement, (B) a
guaranty in form and substance satisfactory to the Agent and (C) such other
documents, agreements, certificates or instruments as the Agent may
reasonably request, in each case in form and substance satisfactory to the
Agent, and to take all such other actions that may be necessary or that the
Agent may deem desirable in order to perfect and protect any pledge,
assignment or security interest granted by such security agreement
(granting a security interest in the receivables, inventory, deposit
accounts, equipment, intellectual property and other assets of such
Subsidiary) of such Subsidiary to the Agent for the benefit of the Lenders
or to enable the Agent to exercise and enforce its rights and remedies
thereunder.
(o) Transfer of Blocked Accounts. The Borrower will notify all of its
account debtors of the transfer of all of the Existing Accounts to Fleet
and will arrange to have all amounts owing by such account debtors to the
Borrower to be paid into the blocked accounts to be maintained by the
Borrower with Fleet as soon as practicable after the Effective Date but in
any event no later than six months from the Effective Date.
SECTION 5.02. Negative Covenants. So long as any Advance, together with
interest, fees and all other Obligations incurred hereunder and under the Notes
shall remain unpaid, any Letter of Credit shall be outstanding or any Lender
shall have any Commitment hereunder, each of Parent (to the extent expressly
made applicable) and each Loan Party covenants and agrees that it will not, at
any time:
(a) Liens, Etc. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, or
Parent will not create, incur, assume or suffer to exist, any Lien on or
with respect to any of its properties of any character (including, without
limitation, accounts) whether now owned or hereafter acquired, or sign or
file or suffer to exist under the UCC of any jurisdiction, a financing
statement that names any Loan Party or any of its Subsidiaries as debtor,
or sign or suffer to exist any security agreement authorizing any secured
party thereunder to file such financing statement, or assign any accounts
or other right to receive income, excluding, however, from the operation of
the foregoing restrictions the following:
(i) Liens created under the Loan Documents;
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(ii) Permitted Liens;
(iii) Liens existing on the Effective Date and described on
Schedule 5.02(a)(iii) hereto;
(iv) Liens arising in connection with Capitalized Leases
permitted under Section 5.02(b)(ii); provided that no such Lien shall
extend to or cover any Collateral or assets other than the assets
subject to such Capitalized Leases;
(v) purchase money Liens upon or in real property or equipment
acquired or held by the Borrower in the ordinary course of business to
secure the purchase price of such real property or equipment or to
secure Debt incurred solely for the purpose of financing the
acquisition of any such real property or equipment to be subject to
such Liens, or Liens existing on any such real property or equipment
at the time of acquisition (other than any such Liens created in
contemplation of such acquisition that do not secure the purchase
price), or extensions, renewals or replacements of any of the
foregoing for the same or a lesser amount; provided, however, that no
such Lien shall extend to or cover any property other than the
property or equipment being acquired, and no such extension, renewal
or replacement shall extend to or cover any property not theretofore
subject to the Lien being extended, renewed or replaced; and provided
further that the aggregate principal amount of the Debt secured by
Liens permitted by this clause (v) shall not exceed the amount
permitted under Section 5.02(b)(iii) at any time outstanding and that
any such Debt shall not otherwise be prohibited by the terms of the
Loan Documents;
(vi) the filing of financing statements solely as a precautionary
measure in connection with operating leases;
(vii) the replacement, extension or renewal of any Lien permitted
by clause (iii) of this Section 5.02(a) upon or in the same property
theretofore subject thereto or the replacement, extension or renewal
(without increase in the amount or change in any direct or contingent
obligor) of the Debt secured thereby; and
(viii) Liens of the Borrower permitted under the terms of the
Senior Subordinated Notes Indenture.
(b) Debt. Create, incur or assume, or permit any of its Subsidiaries
to create, incur or assume, or Parent will not create, incur or assume, any
Debt other than:
(i) Debt in respect of Hedge Agreements designed to hedge against
fluctuations in interest rates or foreign exchange rates incurred in
the ordinary course of business and consistent with prudent business
practice;
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(ii) Obligations under Capitalized Leases so long as the
aggregate principal amount of such Obligations shall not exceed the
aggregate principal amount of Capitalized Leases outstanding on the
Effective Date plus $15,000,000 at any time outstanding;
(iii) Debt secured by Liens permitted by Section 5.02(a)(v) and
clause (b) of the definition of "Permitted Liens" and Debt (other than
subordinated Debt incurred pursuant to Section 5.02(b)(vi)) assumed or
acquired in connection with a Permitted Acquisition as permitted under
this Agreement, so long as the aggregate principal amount of all such
Debt shall not exceed $25,000,000 at any time outstanding;
(iv) Debt of the Borrower pursuant to the Senior Subordinated
Notes in an aggregate principal amount not to exceed $75,000,000;
(v) Debt under the Loan Documents;
(vi) unsecured subordinated Debt of the Borrower (the "New
Subordinated Notes") so long as (1) the aggregate outstanding
principal amount thereof does not exceed $25,000,000, (2) at least
twenty (20) Business Days prior to the issuance thereof, the Borrower
shall have delivered to each of the Lenders substantially final drafts
of the documents pursuant to which the New Subordinated Notes are to
be issued and with any changes thereto made after the initial delivery
of such documents to be delivered to the Agent and with any
significant changes thereto made after such initial delivery to be
delivered to each of the Lenders at least five (5) Business Days prior
to the issuance of such New Subordinated Notes, (3) the final maturity
date thereof is at least one year beyond the Final Maturity Date, (4)
there are no required amortization, mandatory redemption or sinking
fund provisions prior to the one-year anniversary of the Final
Maturity Date, (5) all other terms and conditions thereof (excluding
interest rates but including, without limitation, covenants, defaults,
remedies and subordination provisions) are no less favorable to the
Agent than the Senior Subordinated Notes, and the Required Lenders
have not informed the Borrower in writing prior to the end of such
twenty (20) Business Days that the terms of the New Subordinated Notes
are not reasonably acceptable to them, (6) no Default or Event of
Default then exists or would result therefrom, (7) based on
calculations made by the Borrower on a Pro Forma Basis as if the
incurrence of such Debt had occurred on the first day of the
respective Calculation Period relating to such incurrence, no Default
or Event of Default will exist under, or would have existed during the
period beginning on the first day of the respective Calculation Period
and ended on the Determination Date under, the financial covenants
contained in Section 5.04, (8) based on good faith projections
prepared by the Borrower for the period from the date of the Debt to
the date which is one year thereafter, the level of financial
performance measured by the covenants set forth in Section 5.04, shall
be better than or equal to such level as would be
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required to provide that no Default or Event of Default will exist
under the financial covenants contained in Section 5.04, as compliance
with such covenants will be required through the date which is one
year from the date of the incurrence of such Debt, (9) the Borrower
shall have delivered to the Agent an officer's certificate executed by
an authorized financial officer of the Borrower, certifying to the
best of such officer's knowledge, compliance with the requirements of
this Section 5.02(b)(vi) and containing the calculations required by
the preceding clauses (7) and (8), (10) the net cash proceeds thereof
shall be used (A) for the same purposes as Revolving Credit Advances
or (B) to make a voluntary prepayment of Advances and (11) until such
proceeds are so used, the Borrower shall deposit such proceeds with
the Agent pursuant to a cash collateral arrangement reasonably
satisfactory to the Agent whereby such proceeds shall be disbursed to
the Borrower from time to time for the purposes described in clause
(A) or (B) of the immediately preceding clause (10), with such
proceeds to be so disbursed to the Borrower upon (x) written
certification by an authorized officer of the Borrower that no Default
or Event of Default then exists or would result from the use of such
proceeds and as to the intended use of such proceeds and (y)
compliance by the Borrower with the applicable terms of this Agreement
with respect to the use of such proceeds, provided that at any time
while an Event of Default has occurred and is continuing, the Required
Lenders may direct the Agent (in which case the Agent shall, and is
hereby authorized by the Borrower to, follow said directions) to apply
any or all proceeds then on deposit in such cash collateral account to
the repayment of Obligations hereunder;
(vii) indorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(viii) Existing Debt to the extent the same is listed on Schedule
4.01(cc), and refinancings or renewals of such Existing Debt shall be
permitted so long as (A) such refinancings and renewals shall not be
in excess of the respective amounts set forth on Schedule 4.01(cc) and
(B) any such renewal or extension does not encumber any additional
assets or properties of the Borrower or any of its Subsidiaries;
(ix) intercompany Debt among the Borrower and its Wholly-Owned
Subsidiaries to the extent permitted by Section 5.02(e)(xi);
(x) Debt of the Borrower and its Subsidiaries consisting of
accrued expenses and trade payables incurred in the ordinary course of
business; and
(xi) Debt of the Borrower and its Subsidiaries not otherwise
permitted under this Section 5.02(b) in an aggregate principal amount
not to exceed $2,000,000 at any one time outstanding.
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(c) Mergers, Etc. Merge into or consolidate with any Person or permit
any Person to merge into it, or permit any of its Subsidiaries to do so,
except (A) so long as no Default or Event of Default then exists or would
result therefrom, the Borrower or any Wholly-Owned Subsidiary of the
Borrower may be merged into or consolidated with the Borrower (so long as
the Borrower is the surviving corporation of such merger) or any other
Wholly-Owned Subsidiary of the Borrower and (B) the Borrower and its
Wholly-Owned Subsidiaries shall be permitted to merge with another Person
(so long as such Borrower or Subsidiary is the surviving corporation) and
so long as such merger is used to effect a Permitted Acquisition in
compliance with Section 5.02(d)(iv).
(d) Purchases, Sales, Etc. of Assets. Sell, lease, transfer or
otherwise dispose of, any property or assets, or purchase or otherwise
acquire (in one or a series of related transactions) any part of the
property or assets of any Person, or grant any option or other right to
purchase, lease or otherwise acquire any property or assets (other than
purchases or other acquisitions of Inventory and materials in the ordinary
course of its business) or permit any of its Subsidiaries to do so, except:
(i) (A) sales of Inventory, (B) proceeds from condemnation,
casualty losses and other similar dispositions and (C) sales of
Inventory and other assets which, in the reasonable opinion of the
Borrower, are obsolete, uneconomic or no longer useful in the conduct
of its business, in each case in the ordinary course of its business
consistent with past practices;
(ii) sales of equipment to a customer of the Borrower or any of
its Subsidiaries approved by the Agent pursuant to terms that are (x)
ancillary to an agreement to supply such customer with products of the
Borrower or any such Subsidiary which is entered into after the date
hereof on an arm's-length basis and (y) commercially reasonable in the
context of such supply agreement, so long as (a) the equipment sold is
used in the production of such products for such customer and (b) the
fair market value of all equipment disposed of pursuant to this clause
(ii) after the date hereof does not exceed $1,500,000 in the
aggregate;
(iii) sales of other assets for cash and for fair market value in
an aggregate amount for all Loan Parties not to exceed $2,000,000 in
any Fiscal Year; and
(iv) the Borrower and each of its Wholly-Owned Subsidiaries may
make Permitted Acquisitions so long as (1) as a result of the
respective Permitted Acquisition, such Businesses are wholly-owned by
the Borrower or such Wholly-Owned Subsidiary, (2) such Businesses are
located in the United States or such other location satisfactory to
the Agent, (3) the Collateral Agent is able to obtain a first priority
perfected security interest in and lien upon the assets and properties
of such Businesses so acquired with rights and remedies of the Lenders
comparable to those available in this Agreement (subject only to
Permitted Liens) and the Borrower or such Subsidiary shall have taken
all of the actions specified
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in Section 5.01(k) with respect thereto, (4) at least twenty (20)
Business Days prior to the consummation of any Permitted Acquisition
of any Business, the Borrower shall have delivered to each of the
Lenders the Information Package for the respective Business or
Businesses and the certificate required pursuant to Section 5.01(k),
(5) any Permitted Acquisition of (x) any one Business in which the
total consideration exceeds $20,000,000 or (y) any Businesses in which
the total consideration exceeds $40,000,000, shall be subject to the
prior written consent of the Agent and the Required Lenders and (6)
the Borrower shall have delivered to the Agent an officer's
certificate executed by an authorized financial officer of the
Borrower, certifying (i) that based on calculations made by the
Borrower on a Pro Forma Basis after giving effect to the respective
Permitted Acquisition, no Default or Event of Default will exist
under, or would have existed during the period of four consecutive
fiscal quarters last reported (or required to be reported pursuant to
Section 5.03(c) or (d), as the case may be) prior to the date of the
respective Permitted Acquisition, the financial covenants contained in
Section 5.04, and (ii) to the best of such officer's knowledge,
compliance with the requirements of preceding causes (1) through (5).
Notwithstanding anything contained in this Section 5.02(d) to the contrary,
Capital Expenditures shall be permitted to the extent such Capital
Expenditures are not in violation of Section 5.04(e).
(e) Investments in Other Persons. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person other than:
(i) loans and advances by the Borrower to its employees in the
ordinary course of its business as presently conducted in an aggregate
principal amount (determined without regard to any writedowns or
write-offs of such loans or advances) not to exceed $250,000 at any
time outstanding;
(ii) Investments by the Borrower and its Subsidiaries in cash and
Cash Equivalents;
(iii) Investments by the Borrower in Hedge Agreements permitted
under Section 5.02(b)(i);
(iv) Investments existing on the Effective Date and described on
Schedule 4.01(ff) hereto;
(v) Parent, the Borrower and the Borrower's Wholly-Owned
Subsidiaries may hold the stock in their respective Wholly-Owned
Subsidiaries;
(vi) extensions of trade credit in the ordinary course of
business and payable or dischargeable in accordance with customary
terms;
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(vii) the Borrower and its Subsidiaries may acquire and own
investments (including notes or other debt obligations or securities)
received in connection with the bankruptcy or reorganization of their
suppliers and customers and in settlement of delinquent obligations
of, or disputes with, their customers or suppliers in the ordinary
course of business;
(viii) Investments in the Borrower or in a Wholly-Owned
Subsidiary of the Borrower provided such Wholly-Owned Subsidiary has
delivered a Guarantee in form and substance satisfactory to the Agent;
(ix) any Investment by any Loan Party in a Person, if as a result
of such Investment (A) such Person becomes a Wholly-Owned Subsidiary
of such Loan Party and a Subsidiary Guarantor or (B) such Person is
merged, consolidated or amalgamated with or into, or transfers or
conveys substantially all of its assets to, or is liquidated into,
such Loan Party or a Wholly-Owned Subsidiary of such Loan Party
provided such Wholly-Owned Subsidiary has delivered a Guarantee in
form and substance satisfactory to the Agent;
(x) Investments made as a result of the receipt of non-cash
consideration from an asset sale that was made pursuant to and in
compliance with Section 5.02(d) hereof;
(xi) any Subsidiary of the Borrower may make intercompany loans
to the Borrower or to any Wholly-Owned Subsidiary of the Borrower, and
the Borrower may make intercompany loans to its Wholly-Owned
Subsidiaries;
(xii) any acquisition of assets solely in exchange for the
issuance of capital stock, or warrants, options and other rights to
acquire capital stock (but excluding any debt security that is
convertible into, or exchangeable for, capital stock), of any Loan
Party or any of its Subsidiaries; and
(xiii) other Investments in any Person having an aggregate fair
market value (measured on the date each such Investment was made and
without giving effect to subsequent changes in value), when taken
together with all other Investments made pursuant to this clause
(xiii) that are at any time outstanding, not to exceed $1,000,000 in
the aggregate.
(f) Dividends, Etc. Declare or pay any dividends, purchase, redeem,
retire, defease or otherwise acquire for value any of its, or its direct or
indirect parent corporation's, capital stock or any warrants, rights or
options to acquire such capital stock, now or hereafter outstanding, return
any capital to its stockholders as such, make any distribution of assets,
capital stock, warrants, rights, options, obligations or securities to its
stockholders as such or issue or sell any capital stock or any warrants,
rights or options to acquire such capital stock, or permit its Subsidiaries
to do any of the foregoing, except that any Subsidiary of the Borrower may
pay Dividends to the
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Borrower or any Wholly-Owned Subsidiary of the Borrower. Notwithstanding
the foregoing, so long as there shall exist no Default or Event of Default
(both before and after giving effect to the payment thereof), (i) the
Borrower may make any payment required to be made under any Tax Sharing
Agreement, (ii) the Borrower may pay cash Dividends to Sunderland at the
times and in the amounts necessary to enable Sunderland to repurchase
outstanding shares of Sunderland's common stock following the death,
disability or termination of employment of ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇ or any other eligible participant (who was a regular, full-time
employee of Borrower at the time of his or her death, disability or
termination of employment) pursuant to and in accordance with the Stock
Option Plan, provided that the aggregate amount of cash Dividends paid by
the Borrower to Sunderland pursuant to this clause (ii) shall not exceed
$1,000,000 in any Fiscal Year of the Borrower and Sunderland immediately
uses such Dividends to make such payments and (iii) the Borrower may pay
cash Dividends to Parent at the times and in the amounts necessary to
enable Parent to make the Warrant Payments so long as (A) Parent
immediately uses such proceeds to make such payments, (B) if, after giving
pro forma effect to any Warrant Payments by the Borrower, the Interest
Coverage Ratio for the Borrower's most recently ended four full fiscal
quarters for which financial statements are available immediately preceding
the date of on which such Warrant Payments are made is greater than 3.25 to
1 and (C) the Borrower is in pro forma compliance with the covenants set
forth in Section 5.04.
(g) Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any change in the nature of its business as carried
on at the Effective Date. Notwithstanding anything to the contrary
contained in this Agreement, (i) Parent will not engage in any business,
will have no material assets other than its ownership interest in the
Borrower and its Subsidiaries and will have no significant liabilities
other than those in connection with this Agreement and the other Loan
Documents and (ii) each of the Borrower and each Subsidiary Guarantor will
not engage in any business other than the business in which the Borrower
and such Subsidiary Guarantor is engaged on the Effective Date. Parent will
at all times own 100% of the capital stock of the Borrower.
(h) Amendments to Charter and Certain Other Agreements. Amend, modify
or change, or permit any of its Subsidiaries to amend, modify or change, or
Parent will not amend, modify or change, (i) its charter, certificate of
incorporation (including, without limitation, by the filing or modification
of any certificate of designation) or bylaws (or equivalent organizational
documentation) (except as necessary in connection with a transaction
permitted under Section 5.02(c) so long as any such amendment, modification
or change is not materially adverse in any respect to the interests of the
Lenders and is not otherwise prohibited by the terms of this Agreement),
(ii) any agreement entered into by it with respect to its capital stock, or
enter into any new agreement with respect to its capital stock (including,
but not limited to, the Parent Shareholders Agreement), and any provision
of the Mentmore Management Agreement or the Warrant Agreement, other than
amendments, modifications or changes thereto or to such new agreements
which are not materially adverse in any respect to the interests of the
Lenders and are not otherwise prohibited by the terms of this Agreement (in
the
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case of each of clauses (i) and (ii) other than in connection with any
issuance of any capital stock not prohibited by the terms of this
Agreement), (iii) any provision of any Tax Sharing Agreement, or enter into
any new tax sharing agreement (except where the entry into a new tax
sharing agreement would not reasonably be expected to have a Material
Adverse Effect and the terms of which would not be materially adverse in
any respect to the interests of the Lenders, and would not otherwise be
prohibited by the terms of this Agreement), or (iv) any of the covenants
contained in the Senior Subordinated Notes Indenture, the Senior
Subordinated Notes Guaranty or the documentation relating to the New
Subordinated Notes or any of the subordination provisions (including any
definition referred to therein) of the Senior Subordinated Notes Indenture,
the Senior Subordinated Notes Guaranty or the documentation relating to the
New Subordinated Notes or add any additional covenants by the Borrower in
the Senior Subordinated Notes Indenture or by Parent or any guarantor in
the Senior Subordinated Notes Guaranty or otherwise amend or modify any of
the Senior Subordinated Note Documents (including, but not limited to, the
Registration Rights Agreement) or any documentation relating to the New
Subordinated Notes in a manner that the Agent reasonably deems material.
(i) Limitation on Certain Restrictions on Subsidiaries. Create or
otherwise cause or suffer to exist or become effective, or permit any of
its Subsidiaries to create or otherwise cause or suffer to exist or become
effective, directly or indirectly, any encumbrance or restriction on the
ability of any Subsidiary of the Borrower to (a) pay dividends or make any
other distributions on its capital stock or any other interest or
participation in its profits owned by the Borrower or any of its
Subsidiaries, or pay any Debt owed to the Borrower or any Subsidiary of the
Borrower, (b) make loans or advances to the Borrower or any Subsidiary of
the Borrower or (c) transfer any of its properties or assets to the
Borrower, except in each case for such encumbrances or restrictions
existing under or by reason of (i) applicable law, (ii) this Agreement and
the other Documents, (iii) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of the Borrower or
any Subsidiary of the Borrower, (iv) customary provisions restricting
assignment of any licensing agreement entered into by the Borrower or any
Subsidiary of the Borrower in the ordinary course of business, (v)
customary provisions restricting the transfer of assets subject to Liens
permitted under Section 5.02(a)(v) or (vi), (vi) Existing Debt, (vii) any
instrument governing Debt or capital stock of a Person acquired by such
Loan Party or any of its Subsidiaries as in effect at the time of such
acquisition (except to the extent such Debt was incurred in connection with
or in contemplation of such acquisition), which encumbrance or restriction
is not applicable to any Person, or the properties of any Person, other
than the Person, or property or assets of the Person (including any
Subsidiary of the Person), so acquired, provided that, in the case of Debt,
such Debt was permitted by the terms of this Agreement to be incurred,
(viii) refinancings or renewals of Existing Debt permitted under Section
5.02(b)(viii) hereof, (ix) customary restrictions in Capitalized Leases,
security agreements or mortgages securing Debt of such Loan Party or any of
its Subsidiaries to the extent such restrictions restrict the transfer of
the property subject to such Capitalized Lease, security agreement or
mortgage, (x) customary restrictions with
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respect to an agreement that has been entered into for the sale or
disposition of assets or capital stock held by such Loan Party or any of
its Subsidiaries, (xi) customary restrictions contained in any agreements
or documentation governing Debt permitted under Section 5.02(b)(xi) hereof
or governing the issuance of Preferred Stock permitted under Section
5.02(m) hereof, and (xii) (A) the Warrant Agreement, as amended, and (B)
the Parent Shareholder Agreement, as amended.
(j) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in (i) accounting policies or
reporting practices, except as required by generally accepted accounting
principles or (ii) Fiscal Year.
(k) Prepayments, Etc. of Debt. Make (or give any notice in respect of)
any voluntary or optional payment or prepayment on or redemption or
acquisition for value of, or any prepayment or redemption as a result of
any change of control or similar event of, including, in each case without
limitation, by way of depositing with the trustee with respect thereto
money or securities before due for the purpose of paying when due, or make
any payment in violation of any subordination terms of, any Debt the
aggregate principal amount of which is in excess of $100,000 at any one
time outstanding, other than (i) the prepayment of the Advances in
accordance with the terms of this Agreement or (ii) any refinancing or
renewal of Debt as permitted by Sections 5.02(b)(i), (ii), (iii), (vii),
(viii), (ix), (x) and (xi), or permit any of its Subsidiaries to do any of
the foregoing.
(l) Creation of Subsidiaries. Establish, create or acquire, or permit
any of its Subsidiaries to establish, create or acquire, or Parent shall
not establish, create or acquire, any Subsidiaries after the Effective Date
without the prior written consent of the Agent in its sole discretion,
except for the creation by the Borrower of a Wholly-Owned Subsidiary of the
Borrower in connection with a Permitted Acquisition if (i) 100% of the
assets and capital stock of such new Subsidiary are pledged in a first
priority basis to the Collateral Agent pursuant to the Security Agreement
and the certificates representing such stock, together with stock powers
duly executed in blank, are delivered to the Collateral Agent and (ii) such
new Subsidiary executes and delivers to the Agent a counterpart of the
Subsidiary Guaranty and the Security Agreement. In addition, each new
Subsidiary shall execute and deliver all other relevant documentation of
the type described in Article III hereof as such new Subsidiary would have
had to deliver if such new Subsidiary were a Subsidiary and/or a Subsidiary
Guarantor on the Effective Date.
(m) Issuance of Capital Stock. Issue after the date hereof, or permit
any of its Subsidiaries to issue after the date hereof (i) any class of
capital stock with mandatory redemption rights maturing earlier than June
30, 2003 or (ii) options or warrants to purchase or securities convertible
into, capital stock of the type described in clause (i) above, except (w)
options, registration rights or repurchase obligations under the
Shareholders Agreement to the extent permitted under this Agreement, (x)
transfers and replacements of then outstanding shares of capital stock, (y)
stock splits, stock dividends and similar issuances of shares of common
stock which do not decrease the percentage
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ownership of any Loan Party or any of its Subsidiaries in any class of the
capital stock of such Subsidiary and (z) to qualify directors to the extent
required by applicable law.
(n) Negative Pledge. Enter into or suffer to exist, or permit any of
its Subsidiaries to enter into or suffer to exist, any agreement
prohibiting or conditioning the creation or assumption of any Lien upon any
of its property or assets other than (i) in favor of the Secured Parties or
(ii) in connection with (A) the Senior Subordinated Notes or (B) any Debt
secured by purchase money Liens and Capitalized Leases, in each case, to
the extent permitted under Sections 5.02(b)(ii) and (iii), respectively.
Parent will not create, incur, assume or suffer any Lien upon, or with
respect to, the capital stock of the Borrower, and will not sell, transfer,
assign, pledge, hypothecate or otherwise convey any interest in the capital
stock of the Borrower to any Person.
(o) Partnerships. Become a general partner in any general or limited
partnership or joint venture, or permit any of its Subsidiaries to do so.
(p) Other Transactions. Engage, or permit any of its Subsidiaries to
engage, in any transaction involving commodity options or futures contracts
or any similar speculative transactions (including, without limitation,
take-or-pay contracts) except for Hedge Agreements permitted under Section
5.02(b)(i).
(q) Hazardous Material. (i) Operate in violation of or allow any of
its Subsidiaries or any Person occupying any of the property owned or
leased by any Loan Party or any of its Subsidiaries to operate in violation
of, any Environmental Law, or (ii) store, manage or dispose of, or permit
or allow, or permit any of its Subsidiaries to permit or allow, any Person
operating or occupying any of its properties to store, manage or dispose
of, any Hazardous Material at, on, in, under or near any such property in
violation of any Environmental Law, except where such instances of
non-compliance with this Section 5.02(q) would, either individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
(r) ERISA. Directly or indirectly:
(i) engage in any transaction, or permit any of its ERISA
Affiliates to engage in any transaction, in connection with which the
Borrower could be subject to either a tax imposed by Section 4975(a)
of the Internal Revenue Code or the corresponding civil penalty
assessed pursuant to Section 502(i) of ERISA, which penalties and
taxes for all such transactions could be expected to have, in the
aggregate, a Material Adverse Effect;
(ii) permit to exist, or permit any of its ERISA Affiliates to
permit to exist, any accumulated funding deficiency, for which a
waiver has not been obtained from the Internal Revenue Service, with
respect to any Pension Plan;
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(iii) permit to exist, or permit any of its ERISA Affiliates to
permit to exist, any failure to make contributions or any unfunded
benefits liability which creates, or with the passage of time and any
failure to make contributions would create, a statutory lien or
requirement to provide security under ERISA or the Internal Revenue
Code in favor of the PBGC or any Pension Plan, Multiemployer Plan or
other entity;
(iv) permit, or permit any of its ERISA Affiliates to permit, the
sum of the amount of unfunded benefit liabilities (determined in
accordance with Statement of Financial Accounting Standards No. 87)
under all Pension Plans (excluding each Pension Plan with an amount of
unfunded benefit liabilities of zero or less) to exceed $500,000;
(v) fail to make any payment, or permit any of its ERISA
Affiliates to fail to make any payment, to any Multiemployer Plan that
it or any if its ERISA Affiliates may be required to make under such
Multiemployer Plan, any agreement relating to such Multiemployer Plan,
or any law pertaining thereto that could reasonably be expected to
have, in the aggregate, a Material Adverse Effect; or
(vi) withdraw, or permit any of its ERISA Affiliates to withdraw,
from any Multiemployer Plan where such withdrawal is likely to result
in any liability which could be expected to have, in the aggregate, a
Material Adverse Effect.
SECTION 5.03. Reporting Requirements. So long as any Advance shall remain
unpaid, any Letter of Credit shall be outstanding or any Lender shall have any
Commitment hereunder, each Loan Party will furnish to the Lenders, to the extent
the following provisions are applicable:
(a) Default Notice. As soon as possible and in any event within two
(2) days after any Loan Party obtains knowledge of the occurrence of each
Default or any event, development or occurrence reasonably likely to have a
Material Adverse Effect continuing on the date of such statement, a
statement of the chief financial officer of the Borrower setting forth
details of such Default, event, development or occurrence and the action
that the Borrower has taken and proposes to take with respect thereto.
(b) Monthly Financials. As soon as available and in any event within
thirty (30) days after the end of each month, a Consolidated and
consolidating balance sheet of the Borrower and its Subsidiaries as of the
end of such month and Consolidated and consolidating statements of income
and Consolidated statements of cash flows of the Borrower and its
Subsidiaries for the period commencing at the end of the previous month and
ending with the end of such month and Consolidated and consolidating
statements of income and Consolidated statements of cash flows of the
Borrower and its Subsidiaries for the period commencing at the end of the
previous Fiscal Year and ending with the end of such month, setting forth
in each case in comparative form the corresponding figures for the
corresponding month of the preceding Fiscal Year, all in reasonable detail
and duly certified by the chief financial officer of the Borrower,
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together with (i) a certificate of said officer stating that no Default has
occurred and is continuing or, if a Default has occurred and is continuing,
a statement as to the nature thereof and the action that the Borrower has
taken and proposes to take with respect thereto, (ii) a schedule in form
satisfactory to the Agent of the computations used by the Borrower in
determining compliance with the covenants contained in Sections 5.04(a)
through (d) and, (iii) in the event of any change from GAAP in the
generally accepted accounting principles used in the preparation of such
financial statements, a statement of reconciliation conforming such
financial statements to GAAP.
(c) Quarterly Financials. As soon as available and in any event within
forty-five (45) days after the end of each of the first three quarters of
each Fiscal Year, Consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries as of the end of such quarter and
Consolidated and consolidating statements of income and a Consolidated
statement of cash flows of the Borrower and its Subsidiaries for the period
commencing at the end of the previous fiscal quarter and ending with the
end of such fiscal quarter and Consolidated and consolidating statements of
income and a Consolidated statement of cash flows of the Borrower and its
Subsidiaries for the period commencing at the end of the previous Fiscal
Year and ending with the end of such quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding period of
the preceding Fiscal Year, all in reasonable detail and duly certified
(subject to year-end audit adjustments) by the chief financial officer of
the Borrower as having been prepared in accordance with generally accepted
accounting principles consistent with those applied in the most recent
annual audit, together with (i) a certificate of said officer stating that
no Default has occurred and is continuing or, if a Default has occurred and
is continuing, a statement as to the nature thereof and the action that the
Borrower has taken and proposes to take with respect thereto, (ii) a
schedule in form satisfactory to the Agent of the computations used by the
Borrower in determining compliance with the covenants contained in Sections
5.04(a) through (d) and (iii) in the event of any change from GAAP in the
generally accepted accounting principles used in the preparation of such
financial statements, a statement of reconciliation conforming such
financial statements to GAAP.
(d) Annual Financials. As soon as available and in any event within
ninety (90) days after the end of each Fiscal Year, a copy of the annual
audit report for such year for Parent and its Subsidiaries, including
therein Consolidated and consolidating balance sheets of Parent and its
Subsidiaries as of the end of such Fiscal Year and Consolidated and
consolidating statements of income and a Consolidated statement of cash
flows of the Borrower and its Subsidiaries for such Fiscal Year, in each
case accompanied by an opinion acceptable to the Required Lenders of Ernst
& Young LLP or other independent public accountants of recognized standing
acceptable to the Required Lenders, together with (i) a certificate of such
accounting firm to the Lenders stating that in the course of the regular
audit of the business of the Borrower and its Subsidiaries, which audit was
conducted by such accounting firm in accordance with generally accepted
auditing standards, such accounting firm has obtained no knowledge that a
Default has occurred and is continuing, or if, in the opinion of such
accounting firm, a
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Default has occurred and is continuing, a statement as to the nature
thereof, (ii) a schedule in form satisfactory to the Agent of the
computations used by such accountants in determining, as of the end of such
Fiscal Year, compliance with the covenants contained in Sections 5.04(a)
through (d), (iii) a certificate of the chief financial officer of the
Borrower stating that no Default has occurred and is continuing or, if a
default has occurred and is continuing, a statement as to the nature
thereof and the action that the Borrower has taken and proposes to take
with respect thereto and (iv) in the event of any change from GAAP in the
generally accepted accounting principles used in the preparation of such
financial statements, a statement of reconciliation conforming such
financial statements to GAAP.
(e) Forecasts. As soon as available and in any event no later than
fifteen (15) days after the end of each Fiscal Year, forecasts prepared by
management of the Borrower and each Subsidiary of the Borrower, in form and
detail satisfactory to the Agent, of balance sheets, income statements and
cash flow statements on a monthly basis for the Fiscal Year following such
Fiscal Year then ended and on an annual basis for each Fiscal Year
thereafter until the Final Maturity Date.
(f) Plan Adoptions, Etc. Promptly after (i) the adoption or formal
commitment to the adoption thereof, a copy of any new Plan or Multiemployer
Plan of any Loan Party or ERISA Affiliate and (ii) any amendment or formal
commitment to any amendment thereof, a copy of such amendment to any Plan
or Multiemployer Plan of any Loan Party or ERISA Affiliate.
(g) ERISA Events and ERISA Reports. (i) Promptly and in any event
within ten (10) days after any Loan Party or any ERISA Affiliate knows or
has reason to know that any ERISA Event has occurred, a statement of the
chief financial officer of the Borrower describing such ERISA Event and the
action, if any, that such Loan Party or such ERISA Affiliate has taken and
proposes to take with respect thereto and (ii) on the date any records,
documents or other information must be furnished to the PBGC with respect
to any Plan pursuant to Section 4010 of ERISA, a copy of such records,
documents and information.
(h) Plan Terminations. Promptly and in any event within two (2) days
after receipt thereof by any Loan Party or any ERISA Affiliate, copies of
each notice from the PBGC stating its intention to terminate any Plan or to
have a trustee appointed to administer any Plan.
(i) Actuarial Reports. Promptly upon receipt thereof by any Loan Party
or any ERISA Affiliate, a copy of the annual actuarial valuation report of
each Plan the funded current liability percentage (as defined in Section
302(d)(8) of ERISA) of which is less than 100%.
(j) Plan Annual Reports. Promptly and in any event within thirty (30)
days after the filing thereof with the Internal Revenue Service, copies of
each Schedule B
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(Actuarial Information) to the annual report (Form 5500 Series) with
respect to each Plan.
(k) Multiemployer Plan Notices. Promptly and in any event within five
(5) days after receipt thereof by any Loan Party or any ERISA Affiliate
from the sponsor of a Multiemployer Plan, copies of each notice concerning
(i) the imposition of Withdrawal Liability by any such Multiemployer Plan,
(ii) the reorganization or termination, within the meaning of Title IV of
ERISA, of any such Multiemployer Plan or (iii) the amount of liability
incurred, or that may be incurred, by such Loan Party or any ERISA
Affiliate in connection with any event described in clause (i) or (ii).
(l) Litigation. Promptly after the commencement thereof, notice of all
actions, suits, investigations, litigation and proceedings before any court
or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting Parent, any Loan Party or
any of their respective Subsidiaries of the type described in Section
4.01(i).
(m) Securities Reports. Promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports that any
Loan Party or any of their respective Subsidiaries sends to its
stockholders, and copies of all regular, periodic and special reports, and
all registration statements, that any Loan Party or any of their respective
Subsidiaries files with the Securities and Exchange Commission or any
Governmental Authority that may be substituted therefor, or with any
national securities exchange.
(n) Creditor Reports. Promptly after the furnishing thereof, copies of
any statement or report furnished to the holders of the Senior Subordinated
Notes or to any other holder of the securities of any Loan Party or of any
of its Subsidiaries pursuant to the terms of any indenture, loan, credit or
similar agreement and not otherwise required to be furnished to the Lenders
pursuant to any other clause of this Section 5.03.
(o) Agreement Notices. Promptly upon receipt thereof, copies of all
notices, requests and other documents received by Parent, any Loan Party or
any of their respective Subsidiaries under or pursuant to any indenture,
loan, credit or similar agreement regarding or related to any breach or
default by any party thereto or any other event that could materially
impair the value of the interests or the rights of Parent, any Loan Party
or any of their respective Subsidiaries or otherwise have a Material
Adverse Effect and copies of any amendment, modification or waiver of any
provision of any indenture, loan, credit or similar agreement as the Agent
may reasonably request.
(p) Tax Certificates. Within thirty days after the Borrower (or the
common parent corporation of the affiliated group (within the meaning of
Section 1504(a)(1) of the Internal Revenue Code) of which the Borrower is a
member) has filed its final Federal income tax return in respect of a
taxable year, a certificate, signed by the President or the chief financial
officer of the Borrower (or the common parent
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corporation), stating that the common parent corporation has filed its
Federal income tax return and paid the full amount of taxes reported
thereon as being due by such affiliated group.
(q) Environmental Conditions. Promptly, and in no event more than
three (3) days, after the assertion or occurrence thereof, notice of any
Environmental Claim against or of any condition or occurrence on any
property of any Loan Party or any of its Subsidiaries that (i) could be
reasonably expected to result in Environmental Costs and Liabilities equal
to or in excess of $500,000 in the aggregate or (ii) causes such property
to be subject to any restrictions on the ownership, occupancy, use or
transferability by any Loan Party of such property under any Environmental
Law. All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial action
and such Loan Party's response thereto. In addition, such Loan Party will
provide the Lenders with copies of all written communications with any
government or governmental agency relating to material capital expenditures
required under Environmental Law or with any Person relating to any
Environmental Claim of which notice is required to be given pursuant to
this Section 5.03(q), and such detailed reports of any such Environmental
Claim as may be requested by the Agent; provided that in any event such
Persons shall deliver to each Lender all notices received by them from any
government or governmental agency under, or pursuant to, CERCLA.
(r) Real Property. As soon as available and in any event within thirty
(30) days after the end of each Fiscal Year, a report supplementing
Schedules 4.01(dd) and 4.01(ee) hereto, including an identification of all
real and leased property disposed of by the Borrower during such Fiscal
Year, a list and description (including the street address, county or other
relevant jurisdiction, state, record owner, book value thereof, and in the
case of leases of property, lessor, lessee, expiration date and annual
rental cost thereof) of all real property acquired or leased during such
Fiscal Year and a description of such other changes in the information
included in such Schedules as may be necessary for such Schedules to be
accurate and complete.
(s) Insurance. As soon as available, and in any event within thirty
(30) days after the end of each Fiscal Year, a report summarizing the
insurance coverage (specifying type, amount and carrier) in effect for each
Loan Party and containing such additional information as any Lender
(through the Agent) may reasonably specify.
(t) Other Information. Such other information respecting the assets,
business, condition (financial or otherwise), operations, performance or
properties of Parent, any Loan Party or any of their respective
Subsidiaries as any Lender (through the Agent) may from time to time
request.
SECTION 5.04. Financial Covenants. So long as any Advance or any other
Obligations hereunder or under any Note shall remain unpaid, any Letter of
Credit shall be outstanding or any Lender shall have any Commitment hereunder,
the Borrower and its Subsidiaries (on a Consolidated basis) will:
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(a) (i) Total Leverage Ratio. Maintain a Total Leverage Ratio for each
period set forth below of not more than the amount set forth below for
such period:
Fiscal Quarter Ending Ratio
--------------------- -----
03/31/1998 5.625:1
06/30/1998 5.25:1
09/30/1998 5.00:1
12/31/1998 4.75:1
03/31/1999 4.60:1
06/30/1999 4.40:1
09/30/1999 4.30:1
12/31/1999 4.05:1
03/31/2000 4.05:1
06/30/2000 4.05:1
09/30/2000 4.05:1
12/31/2000 3.35:1
03/31/2001 3.35:1
06/30/2001 3.35:1
09/30/2001 3.35:1
12/31/2001 3.00:1
and thereafter
(ii) Senior Leverage Ratio. Maintain a Senior Leverage Ratio at
September 30, 1997 and December 31, 1997 of 1.80:1.
(b) Fixed Charge Coverage Ratio. Maintain a Fixed Charge Coverage
Ratio for each Rolling Period set forth below of not less than the amount
set forth below for such Rolling Period:
Rolling Period Ending Ratio
--------------------- -----
09/30/1997 1.05:1
12/31/1997 1.05:1
03/31/1998 1.05:1
06/30/1998 1.05:1
09/30/1998 1.15:1
12/31/1998 1.15:1
03/31/1999 1.25:1
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06/30/1999 1.30:1
09/30/1999 1.35:1
12/31/1999 1.40:1
03/31/2000 1.40:1
06/30/2000 1.40:1
09/30/2000 1.40:1
12/31/2000 1.50:1
and thereafter
(c) Interest Coverage Ratio. Maintain an Interest Coverage Ratio for
each Rolling Period set forth below of not less than the amount set forth
below for such Rolling Period:
Rolling Period Ending Ratio
09/30/1997 1.60:1
12/31/1997 1.60:1
03/31/1998 1.60:1
06/30/1998 1.60:1
09/30/1998 1.60:1
12/31/1998 1.90:1
03/31/1999 1.90:1
06/30/1999 1.90:1
09/30/1999 1.90:1
12/31/1999 2.20:1
03/31/2000 2.20:1
06/30/2000 2.20:1
09/30/2000 2.20:1
12/31/2000 2.60:1
03/31/2001 2.60:1
06/30/2001 2.60:1
09/30/2001 2.60:1
12/31/2001 3.00:1
and thereafter
(d) Minimum Net Worth. Maintain at all times an excess of total assets
over total liabilities (excluding all subordinated Debt of the Borrower and
its Subsidiaries), in each case, of the Borrower and its Subsidiaries (on a
Consolidated basis) not less than an aggregate amount of $54,000,000 on the
date of Initial Extension of Credit, which amount is subject to increase at
a rate of 80% of Consolidated net income of the Borrower and its
Subsidiaries.
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(e) Capital Expenditures. Not make any Capital Expenditures that would
cause the aggregate of all such Capital Expenditures made by the Borrower
in any Fiscal Year set forth below to exceed the amount set forth below for
such Fiscal Year:
Fiscal Year Amount
----------- ------
1997 $5,000,000
1998 $5,000,000
1999 $2,000,000
2000 $2,000,000
2001 $2,000,000
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events ("Events of
Default") shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of, or interest on,
any Advance, or Parent or any Loan Party shall fail to make any other
payment under any Loan Document, in each case when the same becomes due and
payable and such default with respect to a payment of interest shall
continue unremedied for a period of four days; or
(b) any representation or warranty made by Parent or any Loan Party
(or any of its officers) under or in connection with any Loan Document
shall prove to have been incorrect in any material respect when made; or
(c) Parent, the Borrower or any other Loan Party shall fail to perform
or observe any term, covenant or agreement contained in Sections 2.14,
5.01(e), (k), (m) or (n), 5.02 or 5.04; or
(d) Parent or any Loan Party shall fail to perform any other term,
covenant or agreement contained in any Loan Document on its part to be
performed or observed if such failure shall remain unremedied for 15
Business Days after the earlier of the date on which (A) a Responsible
Officer of the Borrower becomes aware of such failure or (B) written notice
thereof shall have been given to the Borrower by the Agent or any Lender;
or
(e) Parent or any Loan Party or any of their respective Subsidiaries
shall fail to pay any principal of, premium or interest on or any other
amount payable in respect of any Debt that is outstanding in a principal or
notional amount of at least $1,500,000 either individually or in the
aggregate (but excluding Debt outstanding hereunder) of
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Parent, such Loan Party or such Subsidiary (as the case may be), when the
same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or any other event shall
occur or condition shall exist under any agreement or instrument relating
to any such Debt and shall continue after the applicable grace period, if
any, specified in such agreement or instrument, if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the
maturity of such Debt or otherwise to cause, or to permit the holder
thereof (or a trustee with respect thereto) to cause, such Debt to mature;
or any such Debt shall be declared to be due and payable or required to be
prepaid or redeemed (other than by a regularly scheduled required
prepayment or redemption), purchased or defeased, or an offer to prepay,
redeem, purchase or defease such Debt shall be required to be made, in each
case prior to the stated maturity thereof; or
(f) Parent, any Loan Party or any of their respective Subsidiaries
shall generally not pay its debts as such debts become due, or shall admit
in writing its inability to pay its debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against Parent, any Loan Party or any of their respective
Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors,
or seeking the entry of an order for relief or the appointment of a
receiver, trustee, or other similar official for it or for any substantial
part of its property and, in the case of any such proceeding instituted
against it (but not instituted by it) that is being diligently contested by
it in good faith, either such proceeding shall remain undismissed or
unstayed for a period of 30 days or any of the actions sought in such
proceeding (including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other
similar official for, it or any substantial part of its property) shall
occur; or Parent, any Loan Party or any of their respective Subsidiaries
shall take any corporate action to authorize any of the actions set forth
above in this subsection (f); or
(g) any judgment or order for the payment of money in excess of
$500,000 (to the extent not fully paid or discharged) shall be rendered
against Parent, any Loan Party or any of their respective Subsidiaries and
either (i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order or (ii) there shall be any period of
30 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;
or
(h) any non-monetary judgment or order that would reasonably be
expected to have a Material Adverse Effect shall be rendered against
Parent, any Loan Party or any of their respective Subsidiaries, and there
shall be any period of 30 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; or
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(i) any provision of any Loan Document after delivery thereof pursuant
to Section 3.01 or 5.01(m) shall for any reason cease to be in full force
and effect and cease to be valid and binding on or enforceable against
Parent or any Loan Party party to it, or any such Loan Party shall so state
in writing; or
(j) any Collateral Document after delivery thereof pursuant to Section
3.01 or 5.01(m) shall for any reason (other than pursuant to the terms
thereof) cease to create a valid and perfected first priority lien on and
security interest in any portion of Collateral purported to be covered
thereby; or
(k) any ERISA Event shall have occurred with respect to a Pension Plan
or a Multiemployer Plan and the sum (determined as of the date of
occurrence of such ERISA Event) of the Insufficiency of such Plan and the
Insufficiency of any and all other Pension Plans and Multiemployer Plans
with respect to which an ERISA Event shall have occurred and then exist (or
the liability of Parent, the Loan Parties and the ERISA Affiliates related
to such ERISA Event) exceeds $500,000; or
(l) Parent, any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred
Withdrawal Liability to such Multiemployer Plan in an amount that, when
aggregated with all other amounts required to be paid to Multiemployer
Plans by Parent, the Loan Parties and the ERISA Affiliates as Withdrawal
Liability (determined as of the date of such notification), exceeds
$500,000; or
(m) Parent, any Loan Party or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such Multiemployer
Plan is in reorganization or is being terminated, within the meaning of
Title IV of ERISA, and as a result of such reorganization or termination
the aggregate annual contributions of Parent, the Loan Parties and the
ERISA Affiliates to all Multiemployer Plans that are then in reorganization
or being terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans for the plan years of such
Multiemployer Plans immediately preceding the plan year in which such
reorganization or termination occurs by an amount exceeding $250,000 in the
aggregate; or
(n) a Change of Control shall occur;
then, and in any such event, the Agent (i) shall at the request, or may with the
consent, of the Required Lenders, by notice to the Borrower, declare the
obligation of each Appropriate Lender to make Advances (other than Letter of
Credit Advances by an Issuing Bank or a Revolving Credit Lender pursuant to
Section 2.03(c)) and of each Issuing Bank to issue Letters of Credit to be
terminated, whereupon the same shall forthwith terminate, and (ii) shall at the
request, or may with the consent, of the Required Lenders, by notice to the
Borrower, declare the Notes, all interest thereon and all other amounts payable
under this Agreement and the other Loan Documents to be forthwith due and
payable, whereupon the Notes, all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest
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or further notice of any kind, all of which are hereby expressly waived by the
Borrower; provided, however, that in the event of an actual or deemed entry of
an order for relief with respect to any Loan Party or any of its Subsidiaries
under the Federal Bankruptcy Code, (x) the obligation of each Lender to make
Advances (other than Letter of Credit Advances by the Issuing Bank or a
Revolving Credit Lender pursuant to Section 2.03(c)) and of the Issuing Bank to
issue Letters of Credit shall automatically be terminated and (y) the Notes, all
such interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.
SECTION 6.02. Actions in Respect of the Letters of Credit upon Default. If
any Event of Default shall have occurred and be continuing, the Agent may,
irrespective of whether it is taking any of the actions described in Section
6.01 or otherwise, make demand upon the Borrower to, and forthwith upon such
demand the Borrower will, pay to the Agent on behalf of the Lenders in same day
funds at the Agent's office designated in such demand, for deposit in the L/C
Cash Collateral Account, an amount equal to the aggregate Available Amount of
all Letters of Credit then outstanding. If at any time the Agent determines that
any funds held in the L/C Cash Collateral Account are subject to any right or
claim of any Person other than the Agent and the Lenders or that the total
amount of such funds is less than the aggregate Available Amount of all Letters
of Credit, the Borrower will, forthwith upon demand by the Agent, pay to the
Agent, as additional funds to be deposited and held in the L/C Cash Collateral
Account, an amount equal to the excess of (a) such aggregate Available Amount
over (b) the total amount of funds, if any, then held in the L/C Cash Collateral
Account that the Agent determines to be free and clear of any such right and
claim.
ARTICLE VII
THE AGENT
SECTION 7.01. Authorization and Action. Each Lender (in its capacities as a
Lender, the Issuing Bank (if applicable) and a potential Hedge Bank) hereby
appoints and authorizes the Agent (for purposes of this Article VII, the term
"Agent" shall include Fleet (and/or any of its affiliates) in its capacity as
Collateral Agent pursuant to any of the Collateral Documents where it at any
time acts as such) to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement and the other Loan Documents as
are delegated to the Agent by the terms hereof and thereof, together with such
powers and discretion as are reasonably incidental thereto. As to any matters
not expressly provided for by the Loan Documents (including, without limitation,
enforcement or collection of the Notes), the Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lenders and all holders of Notes;
provided, however, that the Agent shall not be required to take any action that
exposes the Agent to personal liability or that is contrary to this Agreement or
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applicable law. The Agent agrees to give to each Lender prompt notice of each
notice given to it by the Borrower pursuant to the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with the Loan
Documents, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent: (a) may treat
the payee of any Note as the holder thereof until the Agent receives and accepts
an Assignment and Acceptance entered into by the Lender that is the payee of
such Note, as assignor, and an Eligible Assignee, as assignee, as provided in
Section 8.07; (b) may consult with legal counsel (including counsel for any Loan
Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (c)
makes no warranty or representation to any Lender and shall not be responsible
to any Lender for any statements, warranties or representations (whether written
or oral) made in or in connection with the Loan Documents; (d) shall not have
any duty to ascertain or to inquire as to the performance or observance of any
of the terms, covenants or conditions of any Loan Document on the part of any
Loan Party or to inspect the property (including the books and records) of any
Loan Party; (e) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any Lien or security interest created or purported to
be created under or in connection with, any Loan Document or any other
instrument or document furnished pursuant thereto; and (f) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by telegram,
telecopy or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
SECTION 7.03. Fleet and Affiliates. With respect to its Commitments, the
Advances made by it and the Notes issued to it, Fleet (and any successor Agent)
shall have the same rights and powers under the Loan Documents as any other
Lender and may exercise the same as though it were not the Agent; and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated, include Fleet
in its individual capacity. Fleet and its Affiliates may accept deposits from,
lend money to, act as trustee under indentures of, accept investment banking
engagements from and generally engage in any kind of business with, any Loan
Party, any of its Subsidiaries, any of their respective Affiliates and any
Person who may do business with or own securities of any Loan Party or any such
Subsidiary, all as if Fleet were not the Agent and without any duty to account
therefor to the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements referred to in Section 4.01 and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it has
and will, independently and without reliance upon the Agent or any other Lender
and based on such documents and information as it shall deem appropriate at the
time, has made and will continue to make its own credit decisions in entering
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into this Agreement and the other Loan Documents and in taking or not taking
action under this Agreement or under the other Loan Documents.
SECTION 7.05. Indemnification. (a) Each Lender severally agrees to
indemnify the Agent (to the extent not promptly reimbursed by the Borrower) from
and against such Lender's ratable share (determined as provided below) of any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (including, without limitation, fees and expenses of counsel) that
may be imposed on, incurred by, or asserted against the Agent in any way
relating to or arising out of the Loan Documents or any action taken or omitted
by the Agent under the Loan Documents; provided, however, that no Lender shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Agent's gross negligence or willful misconduct. Without limitation of
the foregoing, each Lender agrees to reimburse the Agent promptly upon demand
for its ratable share of any costs and expenses (including, without limitation,
fees and expenses of counsel) payable by the Borrower under Section 8.04, to the
extent that the Agent is not promptly reimbursed for such costs and expenses by
the Borrower. For purposes of this Section 7.05, the Lenders' respective ratable
shares of any amount shall be determined, at any time, according to the sum of
(a) the aggregate principal amount of the Advances outstanding at such time and
owing to the respective Lenders, (b) their respective Pro Rata Shares of the
aggregate Available Amount of all Letters of Credit outstanding at such time and
(c) their respective Unused Revolving Credit Commitments at such time. The
failure of any Lender to reimburse the Agent promptly upon demand for its
ratable share of any amount required to be paid by the Lender to the Agent as
provided herein shall not relieve any other Lender of its obligation hereunder
to reimburse the Agent for its ratable share of such amount, but no Lender shall
be responsible for the failure of any other Lender to reimburse the Agent for
such other Lender's ratable share of such amount. Without prejudice to the
survival of any other agreement of any Lender hereunder, the agreement and
obligations of each Lender contained in this Section 7.05(a) shall survive the
payment in full of principal, interest, fees and all other amounts payable
hereunder and under the other Loan Documents.
(b) Each Lender severally agrees to indemnify the Issuing Bank (to the
extent not promptly reimbursed by the Borrower) from and against such Lender's
ratable share (determined as provided below) of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever (including, without
limitation, fees and expenses of counsel) that may be imposed on, incurred by,
or asserted against the Issuing Bank in any way relating to or arising out of
the Loan Documents or any action taken or omitted by the Issuing Bank under the
Loan Documents; provided, however, that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
Issuing Bank's gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender agrees to reimburse the Issuing Bank promptly upon demand
for its ratable share of any costs and expenses (including, without limitation,
fees and expenses of counsel) payable by the Borrower under Section 8.04, to the
extent that the Issuing Bank is not promptly reimbursed for such costs and
expenses by the Borrower. For purposes of this
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Section 7.05(b), the Lenders' respective ratable shares of any amount shall be
determined, at any time, according to the sum of (a) the aggregate principal
amount of the Advances outstanding at such time and owing to the respective
Lenders, (b) their respective Pro Rata Shares of the aggregate Available Amount
of all Letters of Credit outstanding at such time and (c) their respective
Unused Revolving Credit Commitments at such time. The failure of any Lender to
reimburse the Issuing Bank promptly upon demand for its ratable share of any
amount required to be paid by the Lenders to the Issuing Bank as provided herein
shall not relieve any other Lender of its obligation hereunder to reimburse the
Issuing Bank for its ratable share of such amount, but no Lender shall be
responsible for the failure of any other Lender to reimburse the Issuing Bank
for such other Lender's ratable share of such amount. Without prejudice to the
survival of any other agreement of any Lender hereunder, the agreement and
obligations of each Lender contained in this Section 7.05(b) shall survive the
payment in full of principal, interest, fees and all other amounts payable
hereunder and under the other Loan Documents.
SECTION 7.06. Successor Agents. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower and may be removed at any
time with or without cause by the Required Lenders. Upon any such resignation or
removal, the Required Lenders shall have the right to appoint a successor Agent.
If no successor Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the retiring Agent's
giving of notice of resignation or the Required Lenders' removal of the retiring
Agent, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent, which shall be a commercial bank organized under the laws of
the United States or of any State thereof and having a combined capital and
surplus of at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent and upon the execution and filing or
recording of such financing statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Required
Lenders may request, in order to continue the perfection of the Liens granted or
purported to be granted by the Collateral Documents, such successor Agent shall
succeed to and become vested with all the rights, powers, discretion, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under the Loan Documents. After any retiring
Agent's resignation or removal hereunder as Agent, the provisions of this
Article VII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment, forbearance or waiver of any
provision of this Agreement or the Notes or any other Loan Document, nor consent
to any departure by the Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed (or, in the case of the
Collateral Documents, consented to) by the Required Lenders, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that (a) no amendment,
waiver or
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consent shall, unless in writing and signed by all of the Lenders, do any of the
following at any time: (i) waive any of the conditions specified in Section 3.01
or 3.02 or, in the case of the Initial Extension of Credit, Section 3.03, (ii)
change the number of Lenders or the percentage of (x) the Commitments, (y) the
aggregate unpaid principal amount of the Advances or (z) the aggregate Available
Amount of outstanding Letters of Credit that, in each case, shall be required
for the Lenders or any of them to take any action hereunder, (iii) release a
substantial part of the Collateral in any transaction or series of related
transactions or permit the creation, incurrence, assumption or existence of any
Lien on all or substantially all of the Collateral in any transaction or series
of related transactions to secure any Obligations other than Obligations owing
to the Secured Parties under the Loan Documents or (iv) amend this Section 8.01
and (b) no amendment, waiver or consent shall, unless in writing and signed by
all of the Lenders if affected by such amendment, waiver or consent, (i)
increase the Commitments of such Lender or subject such Lender to any additional
obligations, (ii) reduce the principal of, or interest on, the Notes held by
such Lender or any fees or other amounts payable hereunder to such Lender, (iii)
postpone any date fixed for any payment of principal of, or interest on, the
Notes held by such Lender or any fees or other amounts payable hereunder to such
Lender or (iv) change the order of application of any prepayment set forth in
Section 2.06 in any manner that materially affects such Lender; provided further
that no amendment, waiver or consent shall, unless in writing and signed by the
Issuing Bank, in addition to the Lenders required above to take such action,
affect the rights or obligations of the Issuing Bank under this Agreement; and
provided further that no amendment, waiver or consent shall, unless in writing
and signed by the Agent in addition to the Lenders required above to take such
action, affect the rights or duties of the Agent under this Agreement.
SECTION 8.02. Notices, Etc. All notices and other communications provided
for hereunder shall be in writing (including telegraphic, telecopy or telex
communication) and mailed, telegraphed, telecopied, telexed or delivered, if to
Parent or the Borrower, at its address at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, telecopier number (412)
823-4110, with copies to (a) Mentmore Holdings Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, telecopier number
(▇▇▇) ▇▇▇-▇▇▇▇ and (b) Winston & ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, telecopier number (▇▇▇) ▇▇▇-▇▇▇▇; if to any Lender,
at its Domestic Lending Office specified in the Assignment and Acceptance
pursuant to which it became a Lender; and if to the Agent or the Issuing Bank,
at its address at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇
▇▇▇▇▇▇▇▇▇, telecopier number (▇▇▇) ▇▇▇-▇▇▇▇; or, as to each party, at such other
address as shall be designated by such party in a written notice to the other
parties. All such notices and communications shall, when mailed, telegraphed,
telecopied or telexed, be effective when deposited in the mails, delivered to
the telegraph company, transmitted by telecopier or confirmed by telex
answerback, respectively, except that notices and communications to the Agent
pursuant to Article II, III or VII shall not be effective until received by the
Agent. Delivery by telecopier of an executed counterpart of any amendment or
waiver of any provision of this Agreement or the Notes or of any Exhibit hereto
to be executed and delivered hereunder shall be effective as delivery of a
manually executed counterpart thereof.
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SECTION 8.03. No Waiver; Remedies. No failure on the part of any Lender or
the Agent to exercise, and no delay in exercising, any right hereunder or under
any Note shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right 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 8.04. Costs and Expenses. (a) The Borrower agrees to pay on demand
(i) all reasonable costs and expenses of the Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of
the Loan Documents (including, without limitation, (A) all due diligence,
collateral review, syndication, transportation, computer, duplication,
appraisal, audit, insurance, consultant, search, filing and recording fees and
out-of-pocket expenses and (B) the reasonable fees and expenses of counsel for
the Agent with respect thereto, with respect to advising the Agent as to its
rights and responsibilities, or the perfection, protection or preservation of
rights or interests, under the Loan Documents, with respect to negotiations with
any Loan Party or with other creditors of any Loan Party or any of its
Subsidiaries arising out of any Default or any events or circumstances that may
give rise to a Default and with respect to presenting claims in or otherwise
participating in or monitoring any bankruptcy, insolvency or other similar
proceeding involving creditors' rights generally and any proceeding ancillary
thereto) and (ii) all reasonable costs and expenses of the Agent and the Lenders
in connection with the enforcement of the Loan Documents, whether in any action,
suit or litigation, any bankruptcy, insolvency or other similar proceeding
affecting creditors' rights generally (including, without limitation, the
reasonable fees and expenses of counsel for the Agent (which fees and expenses
shall include, without limitation, support staff costs and amounts expended in
litigation preparation and computerized research, telephone and telefax
expenses, mileage, depositions, postage, photocopies, process service, video
tapes and each Lender with respect thereto).
(b) The Borrower agrees to indemnify and hold harmless the Agent, each
Lender and each of their Affiliates and their respective officers, directors,
employees, agents and advisors (each, an "Indemnified Party") from and against
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising out of
or in connection with or by reason of, or in connection with the preparation for
a defense of, any investigation, litigation or proceeding arising out of,
related to or in connection with (i) the Facilities, the actual or proposed use
of the proceeds of the Advances or the Letters of Credit, the Loan Documents or
any of the transactions contemplated hereby or thereby or (ii) the actual or
alleged presence of Hazardous Materials on any property of any Loan Party or any
of its Subsidiaries or any Environmental Claim relating in any way to any Loan
Party or any of its Subsidiaries, in each case whether or not such
investigation, litigation or proceeding is brought by any Loan Party, its
directors, shareholders or creditors or an Indemnified Party or any Indemnified
Party is otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated, except to the extent such claim, damage,
loss, liability or expense is proven to have resulted solely from such
Indemnified Party's gross negligence or willful misconduct. The Borrower also
agrees not to assert any claim against the Agent, any Lender or any of their
Affiliates, or any of their respective officers, directors, employees, attorneys
and
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agents, on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to the Facilities, the
actual or proposed use of the proceeds of the Advances or the Letters of Credit,
the Loan Documents or any of the transactions contemplated thereby.
(c) If any payment of principal of, or Conversion of, any Eurodollar Rate
Advance is made by the Borrower to or for the account of a Lender other than on
the last day of the Interest Period for such Advance, as a result of a payment
or Conversion pursuant to Section 2.09(b)(i) or 2.10(d), acceleration of the
maturity of the Notes pursuant to Section 6.01 or for any other reason or by an
Eligible Assignee to a Lender other than on the last day of the Interest Period
for such Advance upon an assignment of rights and obligations under this
Agreement pursuant to Section 8.07 as a result of a demand by the Borrower
pursuant to Section 8.07(a), the Borrower shall, upon demand by such Lender
(with a copy of such demand to the Agent), pay to the Agent for the account of
such Lender any amounts required to compensate such Lender for any additional
losses, costs or expenses that it may reasonably incur as a result of such
payment, including, without limitation, any loss (including loss of anticipated
profits), cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by any Lender to fund or maintain such
Advance.
(d) If any Loan Party fails to pay when due any costs, expenses or other
amounts payable by it under any Loan Document, including, without limitation,
fees and expenses of counsel and indemnities, such amount may be paid on behalf
of such Loan Party by the Agent or any Lender, in its sole discretion.
(e) Without prejudice to the survival of any other agreement of any Loan
Party hereunder or under any other Loan Document, the agreements and obligations
of the Borrower contained in Sections 2.10 and 2.12 and this Section 8.04 shall
survive the indefeasible and irrevocable payment in full of principal, interest,
fees and all other amounts payable hereunder and under any of the other Loan
Documents.
SECTION 8.05. Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the Agent to
declare the Notes due and payable pursuant to the provisions of Section 6.01,
each Lender and each of its respective Affiliates is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and otherwise apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender or such Affiliate to or for the credit or the account of the
Borrower against any and all of the Obligations of the Borrower now or hereafter
existing under this Agreement and the Note or Notes (if any) held by such
Lender, irrespective of whether such Lender shall have made any demand under
this Agreement or such Note or Notes and although such obligations may be
unmatured. Each Lender agrees promptly to notify the Borrower after any such
set-off and application; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Lender and its respective Affiliates under this Section are in
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addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Lender and its respective Affiliates may have.
SECTION 8.06. Binding Effect. This Agreement shall become effective on the
date (the "Effective Date") on which each of Parent, the Borrower and the Agent
have signed a counterpart hereof (whether the same or different counterparts)
and Parent and the Borrower shall have delivered the same to the Agent and
thereafter shall be binding upon and inure to the benefit of Parent, the
Borrower and the Agent and their respective successors and assigns, except that
neither Parent nor the Borrower shall have the right to assign their respective
rights hereunder or any interest herein without the prior written consent of the
Lenders.
SECTION 8.07. Assignments and Participations. (a) Each Lender may and, if
demanded by the Borrower (following a demand by such Lender pursuant to Section
2.10 or 2.12) upon at least 5 Business Days' notice to such Lender and the
Agent, shall assign to one or more Eligible Assignees all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Commitment or Commitments, the Advances owing to it and the
Note or Notes held by it); provided, however, that (i) each such assignment
shall be of a uniform, and not a varying, percentage of all rights and
obligations under and in respect of one or more Facilities, (ii) except in the
case of an assignment to a Person that, immediately prior to such assignment,
was a Lender or an assignment of all of a Lender's rights and obligations under
this Agreement, the amount of the Commitment of the assigning Lender being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than the lesser of (x) $5,000,000 in the aggregate and (y) the total amount
of such assigning Lender's Commitment hereunder, (iii) each such assignment
shall be to an Eligible Assignee, (iv) each such assignment made as a result of
a demand by the Borrower pursuant to this Section 8.07(a) shall be arranged by
the Borrower after consultation with the Agent, shall be either an assignment of
all of the rights and obligations of the assigning Lender under this Agreement
or an assignment of a portion of such rights and obligations made concurrently
with another such assignment or other such assignments that together cover all
of the rights and obligations of the assigning Lender under this Agreement and
shall be to one or more Eligible Assignees that are not then claiming the
amounts demanded by the assigning Lender under Section 2.10 or 2.11, (v) no
Lender shall be obligated to make any such assignment as a result of a demand by
the Borrower pursuant to this Section 8.07(a) unless and until such Lender shall
have received one or more payments from either the Borrower or one or more
Eligible Assignees in an aggregate amount at least equal to the aggregate
outstanding principal amount of the Advances owing to such Lender, together with
accrued interest thereon to the date of payment of such principal amount and all
other amounts payable to such Lender under this Agreement, (vi) no such
assignments to any Person that is not a Lender or an Affiliate of a Lender shall
be permitted without the consent of the Agent (until the Agent shall have
notified the Lenders that syndication of the Commitments hereunder has been
completed) and the Borrower (such consent of the Borrower shall not be
unreasonably withheld or delayed) provided that no consent of the Borrower shall
be required upon the occurrence and the continuance of an Event of Default, and
(vii) the parties to each such assignment shall execute and deliver to the
Agent, for its
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acceptance and recording in the Register, an Assignment and Acceptance, together
with any Note or Notes subject to such assignment and a processing and
recordation fee of $3,500.
(b) The Issuing Bank may assign to an Eligible Assignee all of its rights
and obligations under the undrawn portion of its Letter of Credit Commitment at
any time; provided, however, that (i) each such assignment shall be to an
Eligible Assignee and (ii) the parties to each such assignment shall execute and
deliver to the Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with a processing and recordation fee of
$3,500.
(c) Upon such execution, delivery, acceptance and recording, from and after
the effective date specified in such Assignment and Acceptance, (x) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender or the Issuing Bank, as
the case may be, hereunder and (y) the Lender or the Issuing Bank assignor
thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under this Agreement (and, in the case of
an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's or the Issuing Bank's rights and obligations under this
Agreement, such Lender or the Issuing Bank shall cease to be a party hereto).
(d) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
any other Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any lien
or security interest created or purported to be created under or in connection
with, this Agreement or any other Loan Document or any other instrument or
document furnished pursuant hereto or thereto; (ii) such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any other Loan Party or the performance
or observance by any Loan Party of any of its obligations under any Loan
Document or any other instrument or document furnished pursuant thereto; (iii)
such assignee confirms that it has received a copy of this Agreement, together
with copies of the financial statements referred to in Section 4.01, and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Acceptance; (iv)
such assignee will, independently and without reliance upon the Agent, such
assigning Lender or any other Lender and based on such documents and information
as it shall deem appropriate at the time, make and continue to make its own
credit decisions entering into such Assignment and Acceptance and thereafter in
taking or not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers and
discretion under the Loan Documents as are delegated to the Agent by the terms
hereof, together with such powers and discretion as are reasonably incidental
thereto; and (vii) such
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assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement and the other Loan Documents
are required to be performed by it as a Lender or Issuing Bank, as the case may
be.
(e) The Agent shall maintain at its address referred to in Section 8.02 a
copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the
Commitment under each Facility of, and principal amount of the Advances owing
under each Facility to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee, together with any Note or Notes subject to
such assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit C hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Borrower. In the case of
any assignment by a Lender, within five Business Days after its receipt of such
notice, the Borrower, at its own expense, shall execute and deliver to the Agent
in exchange for the surrendered Note or Notes a new Note to the order of such
Eligible Assignee in an amount equal to the Commitment assumed by it under a
Facility pursuant to such Assignment and Acceptance and, if the assigning Lender
has retained a Commitment hereunder under such Facility, a new Note to the order
of the assigning Lender in an amount equal to the Commitment retained by it
hereunder. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or Notes, shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of Exhibit A hereto, as the case may be.
(g) Each Lender may sell participations in or to all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Commitments, the Advances owing to it and the Note or Notes
(if any) held by it) to any Person other than any Loan Party or any Subsidiary
or Affiliate of a Loan Party (subject to the consent of the Borrower, such
consent not to be unreasonably withheld or delayed); provided, however, that (i)
such Lender's obligations under this Agreement (including, without limitation,
its Commitments) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of any such Note for all purposes of
this Agreement, (iv) the Borrower, the Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement, (v) no participant under
any such participation shall have any right to approve any amendment or waiver
of any provision of any Loan Document, or any consent to any departure by any
Loan Party therefrom, except to the extent that such amendment, waiver or
consent would reduce the principal of, or interest on, the Notes or any fees or
other amounts payable hereunder, in each case to the extent subject to such
- 97 -
participation, postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, or release all or
substantially all of the Collateral.
(h) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 8.07, disclose to
the assignee or participant or proposed assignee or participant any information
relating to the Borrower furnished to such Lender by or on behalf of the
Borrower; provided, however, that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree to preserve the
confidentiality of any Confidential Information received by it from such Lender.
(i) Notwithstanding any other provision contained in this Agreement, any
Lender may at any time create a security interest in all or any portion of its
rights under this Agreement (including, without limitation, the Advances owing
to it and the Note or Notes held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System.
SECTION 8.08. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery of an executed counterpart of a signature page to this Agreement by
telecopier shall be effective as delivery of a manually executed counterpart of
this Agreement.
SECTION 8.09. No Liability of the Issuing Bank. The Borrower assumes all
risks of the acts or omissions of any beneficiary or transferee of any Letter of
Credit with respect to its use of such Letter of Credit. Neither the Issuing
Bank nor any of its officers or directors shall be liable or responsible for:
(a) the use that may be made of any Letter of Credit or any acts or omissions of
any beneficiary or transferee in connection therewith; (b) the validity,
sufficiency or genuineness of documents, or of any endorsement thereon, even if
such documents should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (c) payment by the Issuing Bank against presentation of
documents that do not comply with the terms of a Letter of Credit, including
failure of any documents to bear any reference or adequate reference to the
Letter of Credit; or (d) any other circumstances whatsoever in making or failing
to make payment under any Letter of Credit, except that the Borrower shall have
a claim against the Issuing Bank, and the Issuing Bank shall be liable to the
Borrower, to the extent of any direct, but not consequential, damages suffered
by the Borrower that the Borrower proves were caused by (i) the Issuing Bank's
willful misconduct or gross negligence in determining whether documents
presented under any Letter of Credit comply with the terms of the Letter of
Credit or (ii) the Issuing Bank's willful failure to make lawful payment under a
Letter of Credit after the presentation to it of a draft and certificates
strictly complying with the terms and conditions of the Letter of Credit. In
furtherance and not in limitation of the foregoing, the Issuing Bank may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary.
- 98 -
SECTION 8.10. Confidentiality. Neither the Agent nor any Lender shall
disclose any Confidential Information to any Person without the consent of the
Borrower, other than (a) to the Agent's or such Lender's Affiliates and their
respective officers, directors, employees, agents and advisors and to actual or
prospective Eligible Assignees and participants, and then only on a confidential
basis, (b) as required by any law, rule or regulation or judicial process and
(c) as requested or required by any state, Federal or foreign authority or
examiner regulating banks or banking.
SECTION 8.11. Jurisdiction, Etc. (a) THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF
NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY IN SUCH
STATE. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF
NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY TO THIS
AGREEMENT HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH
SUCH PARTY HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURT LACKS
PERSONAL JURISDICTION OVER SUCH PARTY, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS, THAT SUCH COURT LACK PERSONAL
JURISDICTION OVER SUCH PARTY. EACH SUCH PARTY FURTHER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO SUCH PARTY AT ITS ADDRESS SET FORTH IN SECTION 8.02 OR
ON SCHEDULE I, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH
SUCH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS
AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR
PROCEEDING COMMENCED HEREUNDER OR UNDER ANY LOAN DOCUMENT THAT SERVICE OF
PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE AGENT, THE COLLATERAL AGENT, ANY LENDER OR THE HOLDER OF ANY NOTE
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PARTY IN ANY OTHER JURISDICTION.
(b) EACH PARTY TO THIS AGREEMENT HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW ANY
OBJECTION WHICH IT MAY NOW
- 99 -
OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
- 100 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
PRECISE HOLDING CORPORATION
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
PRECISE TECHNOLOGY, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
PRECISE TECHNOLOGY OF DELAWARE, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
PRECISE TECHNOLOGY OF ILLINOIS, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Vice President
PRECISE TMP, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
[Signature Page to the Credit Agreement]
PRECISE POLESTAR, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ TOOL, MOLD & DIE, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
FLEET NATIONAL BANK, as Agent and as
Issuing Bank
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
[Signature Page to the Credit Agreement]
LENDERS:
FLEET NATIONAL BANK
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
CREDITANSTALT-BANKVEREIN
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
By /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
SCHEDULE I
COMMITMENTS AND APPLICABLE LENDING OFFICES
Letter of Domestic Eurodollar
Name of Initial Revolving Credit Credit Lending Lending
Lender Commitment Commitment Office Office
Fleet National Bank $15,000,000 $2,000,000 Credit Matters Credit Matters
-------------- --------------
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇)▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇ Attn: ▇▇▇ ▇▇▇▇▇▇
One Federal Street One Federal Street
Boston, MA 02110 ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Operations Operations
---------- ----------
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ One Federal Street
Boston, MA 02110 ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇ Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Payments Payments
-------- --------
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ One Federal Street
Boston, MA 02110 ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇ Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
ABA No.: ▇▇▇-▇▇▇-▇▇▇ ABA No.: ▇▇▇-▇▇▇-▇▇▇
Acct. No.: Acct. No.:
151035103156 151035103156
Reference: Precise Reference: Precise
Technology, Inc. Technology, Inc.
Letter of Domestic Eurodollar
Name of Initial Revolving Credit Credit Lending Lending
Lender Commitment Commitment Office Office
Creditanstalt $15,000,000 $0 Credit Matters Credit Matters
Corporate Finance, -------------- --------------
Inc. Two Greenwich Plaza Two Greenwich Plaza
Greenwich, CT 06830 ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇ Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. Attn: ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Operations Operations
---------- ----------
Two Greenwich Plaza Two Greenwich Plaza
Greenwich, CT 06820 ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ Attn: ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Payments Payments
-------- --------
Two Greenwich Plaza Two Greenwich Plaza
Greenwich, CT 06830 ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇ Attn: ▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ Attn: ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
ABA No.: 021 000 021 ABA No.: 021 000 021
Acct. No.: 544-7- Acct. No.: 544-7-
73095 73095
Reference: Precise Reference: Precise
Technology, Inc. Technology, Inc.
Total $30,000,000 $2,000,000
SCHEDULE II
EXISTING ACCOUNTS
Account # Account Title/Address Bank Purpose ABA #
--------- --------------------- ---- ------- -----
Name/Address
------------
Corp.
-----
Accounts
--------
0101199488 Precise Technology, Inc. Nationsbank Controlled Disb A/C 061112788
Attn ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Charlotte, NC Precise Technology, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
3750637364 Precise Technology, Inc. Nationsbank TMP & Polestar Lockbox A/C, 111000012
Attn ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Atlanta, GA Precise EFT Customers &
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Master Account (Wire Trfs,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Controlled Disb Funding)
029-6411 Precise Technology, Inc. for Mellon Bank (West) Lockbox A/C ▇▇▇▇▇▇▇▇▇
Nationsbank N.A. as Agent Pittsburgh, PA (Opened 4/01/96)
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
170-4149 Precise Technology, Inc. Mellon Bank, N.A. Pittsburgh Hourly Payroll ▇▇▇▇▇▇▇▇▇
Hourly Payroll 3 Mellon Bank Center
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
032-8022 Precise Technology, Inc. Mellon Bank, N.A. PGH Tool Shop Hourly Payroll ▇▇▇▇▇▇▇▇▇
Tool Shop Hourly Payroll 3 Mellon Bank Center
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇-▇▇▇▇▇-▇ Precise Technology, Inc. Marine Midland Bank Rochester Hourly Payroll ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
094-2516 Precise Technology, Inc. Mellon Bank, N.A. Layayette Hourly Payroll ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Room 153-3502
PGH, PA 15259-0001
170-4288 Precise Technology, Inc. Mellon Bank, N.A. Salary Payroll-Precise ▇▇▇▇▇▇▇▇▇
Attn ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 3 Mellon Bank Center Technology, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
140-6512 Precise Technology, Inc. Mellon Bank, N.A. Corporate ▇▇▇▇▇ Cash A/C ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ Cash Fund 3 Mellon Bank Center
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇-▇▇▇▇▇-▇ Precise Technology, Inc. Marine Midland Bank Misc. (P/R Corrections, C.O.D., ▇▇▇▇▇▇▇▇▇
Special Account ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Etc.)
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Account # Account Title/Address Bank Purpose ABA #
--------- --------------------- ---- ------- -----
Name/Address
------------
3750067358 Precise Technology, Inc. Nationsbank PGH Plant ▇▇▇▇▇ Cash 111000013
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
3750067361 Precise Technology, Inc. Nationsbank ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Cash 111000012
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
West ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Delaware
--------
Acct:
-----
0101199496 Precise Technology of DE Inc. Nationsbank Controlled Disb A/C 061112788
Attn ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Charlotte, NC Precise Technology of
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
145-3010 Precise Technology of DE Inc. Mellon Bank, N.A. Delaware Hourly Payroll ▇▇▇▇▇▇▇▇▇
Salary/Hourly Payroll AC 3 Mellon Bank Center (Hourly & Salary)
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ PGH, PA 15259-0001
3750805497 Precise Technology of DE Inc. Nationsbank Delaware ▇▇▇▇▇ Cash 111000012
▇▇▇▇▇ Cash Account Charlotte, NC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Unity Acct:
-----------
0101199504 Precise Technology of DE Inc. Nationsbank Controlled Disb A/C 061112788
Attn ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Charlotte, NC Precise Technology of Illinois,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
005-67925 Precise Tech of Illinois, Inc. Mellon Bank, N.A. Unity Payroll ▇▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇▇ Center (Hourly & Salary)
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ Room 153-3502 (Opened 7/01/96)
Attn: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
3750067345 Precise Tech of Illinois, Inc. Nationsbank Unity ▇▇▇▇▇ Cash 111000012
▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
TMP Acct:
---------
3750054824 Precise TMP, Inc. Nationsbank Precise TMP, Inc. 111000012
Attn ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Charlotte, NC Salary Payroll
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Account # Account Title/Address Bank Purpose ABA #
--------- --------------------- ---- ------- -----
Name/Address
------------
3750054811 Precise TMP, Inc. Nationsbank Hourly Payroll 111000012
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
3750054808 Precise TMP, Inc. Nationsbank Hourly Payroll 111000012
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ St ▇▇▇▇ Tool
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
44846330 Precise TMP, Inc. Bay Bank Hourly Payroll ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
280154004192 Precise TMP, Inc. Boatmen's 1st Nat'l Hourly Payroll 101000035
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank of Kansas City Excelsior Springs
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Excelsior Springs, MO
0101199512 Precise TMP, Inc. Nationsbank Controlled Disb A/C 061112788
Attn ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Charlotte, NC Precise TMP, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
3750067374 Precise TMP, Inc. Nationsbank Excelsior Springs 111000012
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Cash
Excelsior Springs, MO 640??
Attn: ▇▇ ▇▇▇▇▇▇▇▇
3750067390 Precise TMP, Inc. Nationsbank South Grafton 111000012
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Cash
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
3750067400 Precise TMP, Inc. Nationsbank St. ▇▇▇▇ Molding 111000012
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Cash
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
3750067413 Precise TMP, Inc. Nationsbank ▇▇▇▇▇▇ ▇▇▇▇▇ Cash 111000012
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Polestar Acct:
--------------
0101199520 Precise Polestar, Inc. Nationsbank Controlled Disb A/C 061112788
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Charlotte, NC Precise Polestar, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
005-6741 Precise Polestar, Inc. Mellon Bank, N.A. Polestar Payroll ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 3 Mellon Bank Center (Hourly & Salary)
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Room 153-3502 (Opened 7/01/96)
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Account # Account Title/Address Bank Purpose ABA #
--------- --------------------- ---- ------- -----
Name/Address
------------
▇▇▇▇▇▇▇▇▇▇ Precise Polestar, Inc. Nationsbank Polestar ▇▇▇▇▇ Cash 111000012
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
SCHEDULE 4.01(a)
SHARE OWNERSHIP
Borrower's Capital Stock owned by Parent:
-----------------------------------------
o 1,000 shares of Common Stock authorized, no par value, of which 1
share is issued and outstanding.
SCHEDULE 4.01(b)
SUBSIDIARIES OF PARENT AND BORROWER
Jurisdiction No. Of Shares
------------ -------------
Subsidiary of Incorporation Authorized Outstanding Ownership Rights
---------- ---------------- ---------- ----------- --------- ------
Borrower
--------
Precise Technology Delaware 3,000 1000 100% by Borrower None
of Delaware, Inc.
Precise Technology Delaware 1,500 100 100% by Borrower None
of Illinois, Inc.
Precise TMP, Inc. Virginia 4,500(1) 1,000(2) 100% by Borrower None
Precise Polestar, Inc. Virginia 100 10 100% by Precise TMP None
▇▇▇▇▇▇ Tool, Mold Florida 100 10 100% by Precise TMP None
& Die, Inc.
Parent
------
Borrower Delaware 1,500(3) 1(4) 100% by Parent None
(1) 2,000 shares of Common Stock and 2,500 shares of Serial Preferred Stock
(2) 1,000 shares of Common Stock
(3) 1,000 shares of Common Stock and 500 shares of 9-1/2% Preferred Stock
(4) 1 share of Common Stock
SCHEDULE 4.01(d)
AUTHORIZATIONS, APPROVALS, ACTIONS, NOTICES AND FILINGS
UCC-1 Financing Statements:
---------------------------
Company Filing Locations
------- ----------------
Precise Technology, Inc. Delaware Secretary of State
New Castle County, DE
Florida Secretary of State
Pinellas County, FL
Illinois Secretary of State
▇▇▇▇ County, IL
Massachusetts Secretary of the Commonwealth
Town of Grafton, MA
Missouri Secretary of State
Clay County, MO
Pennsylvania Secretary of the Commonwealth
Allegheny County (PA) Prothonotary
Centre County (PA) Prothonotary
Indiana Secretary of State
Tippecanoe County, IN
New York Secretary of State
New York County, NY
Precise TMP, Inc. Florida Secretary of State
Pinellas County, FL
Massachusetts Secretary of the Commonwealth
Worcester District, MA
Town of Grafton, MA
Northbridge (MA) Town Clerk
Clay County, MO
Clay County Recorder, MO
Virginia State Corporation Commission
Chesterfield County, VA
Missouri Secretary of State
Virginia Secretary of State
City of Richmond, VA
Precise Technology of Delaware, Inc. Delaware Secretary of State
New Castle County, DE
Company Filing Locations
------- ----------------
Precise Technology of Illinois, Inc. Delaware Secretary of State
New Castle County, DE
Illinois Secretary of State
▇▇▇▇ County, IL
Precise Polestar, Inc. Pennsylvania Secretary of the Commonwealth
Centre County (PA) Prothonotary
Virginia Secretary of State
City of Richmond, VA
▇▇▇▇▇▇ Tool, Mold & Die, Inc. Florida Secretary of State
Pinellas County, FL
Precise Holding Corporation Delaware Secretary of State
New Castle County, DE
New York Secretary of State
New York County, NY
UCC-3 Termination Statements:
-----------------------------
Company Filing Locations
------- ----------------
Precise Technology, Inc. Pennsylvania Secretary of the Commonwealth
Allegheny County (PA) Prothonotary
Allegheny County (PA) Recorder
Indiana Secretary of State
Tippecanoe County, IN
New York Secretary of State
▇▇▇▇▇▇▇▇▇▇ County, NY
Precise TMP, Inc. Pennsylvania Secretary of the Commonwealth
Allegheny County (PA) Prothonotary
Florida Secretary of State
Pinellas County, FL
Massachusetts Secretary of the Commonwealth
Worcester Count (Worcester District), MA
Grafton (MA) Town Clerk
Northbridge (MA) Town Clerk
Missouri Secretary of State
Clay County, MO
Clay County Recorder, MO
North Carolina Secretary of State
Company Filing Locations
------- ----------------
Precise TMP, Inc. Alamance County, NC
Virginia State Corporation Commission
Chesterfield County, VA
Ohio Secretary of State
Precise Technology of Delaware, Inc. Pennsylvania Secretary of the Commonwealth
Allegheny County (PA) Prothonotary
Delaware Secretary of State
New Castle County, DE
Precise Technology of Illinois, Inc. Pennsylvania Secretary of the Commonwealth
Allegheny County (PA) Prothonotary
Precise Polestar, Inc. Pennsylvania Secretary of the Commonwealth
Allegheny County (PA) Prothonotary
Centre County (PA) Prothonotary
Centre County (PA) Recorder
▇▇▇▇▇▇ Tool, Mold & Die, Inc. Pennsylvania Secretary of the Commonwealth
Allegheny County (PA) Prothonotary
Unity Mold Corporation Illinois Secretary of State
▇▇▇▇ County, IL
Pennsylvania Secretary of the Commonwealth
Allegheny County (PA) Prothonotary
Precise Holding Corporation New York Secretary of State
New York County, NY
Mortgage Filings:
-----------------
Company Filing Locations
------- ----------------
Precise TMP, Inc. Clerk of the Circuit Court of Pinellas County, Fla.
Worcester County (Worcester District) Registry of Deeds
Worcester County (Worcester District) Registry District of the
Land Court
Recorder of Deeds of Clay County, MO
Unity Mold Corporation The Office of the Recorder of Deeds of ▇▇▇▇ County, IL
Precise Technology, Inc. ▇▇▇▇▇▇▇▇▇▇ County Clerk
Company Filing Locations
------- ----------------
Precise Technology, Inc. Recorder of Deeds of Allegheny County, Pennsylvania
Recorder of Deeds of Centre County, Pennsylvania
Office of the Recorder for Tippecanoe County, IN
Mortgage Releases:
------------------
See Mortgage Filings
SCHEDULE 4.01(l)
PLANS AND MULTIEMPLOYER PLANS
1. Precise Technology, Inc. Employee Retirement Benefit Plan
2. Precise Technology, Inc. Pension Plan U.E.
3. Precise TMP/Unity Savings Plan
4. Sunderland Industrial Holdings Corporation 1997 Key Employee
Nonqualified Stock Option Plan
SCHEDULE 4.01(y)
OPEN YEARS*/
1. Sunderland Industrial Holdings Corp. & Subs., 1995.
2. Sunderland Industrial Holding Corp. & Subs., 1994.
3. Precise Technology, Inc. & Subsidiary, 1993.
4. Precise Technology, Inc. (Formerly Precise Plastic Products, Inc.),
1992.
5. Precise Plastics Products, Inc. ▇/▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇., ▇▇▇▇.
--------
*/Year references are to calendar years.
SCHEDULE 4.01(cc)
EXISTING DEBT
1. 11 1/8% Senior Subordinated Notes due 2007 $75,000,000
2. Amounts owed under that certain Equipment Lease Agreement dated
March 17, 1993 by and between ▇▇▇▇▇▇ Financial Leasing, Inc. and
Borrower as amended, pursuant to:
Rental Schedule No. 1 dated March 17, 1993 in the original $57,285*
amount of $180,880.00 in connection with the purchase of one
Nissei FS360S100ASE Injection Molding Machine, Serial No.
S36NO20.
Rental Schedule No. 2 dated March 17, 1993 in the original $70,088*
amount of $180,880.00 in connection with the purchase of one
Nissei FS360S100ASE Injection Molding Machine, Serial No.
S36NO38.
Rental Schedule No. 3 dated March 17, 1993 in the original $67,143*
amount of $173,280.00 in connection with the purchase of one
Nissei FS360S100ASE Injection Molding Machine, Serial No.
S36NO37.
Rental Schedule No. 4 dated March 17, 1993 in the original $67,143*
amount of $173,280.00 in connection with the purchase of one
Nissei FS360S100ASE Injection Molding Machine, Serial No.
S36NO32.
Rental Schedule No. 5 dated March 17, 1993 in the original $53,449*
amount of $137,940.00 in connection with the purchase of one
Nissei FS260S71ASE Injection Molding Machine, Serial No.
S26NO39.
Rental Schedule No. 6 dated March 17, 1993 in the original $53,449*
amount of $137,940.00 in connection with the purchase of one
Nissei FS260S71ASE Injection Molding Machine, Serial No.
S26NO40.
Rental Schedule No. 7 dated March 17, 1993 in the original $48,222*
amount of $124,450.00 in connection with the purchase of one
Nissei FS210S50ASE Injection Molding Machine, Serial No.
S21NO26.
Rental Schedule No. 8 dated March 17, 1993 in the original $48,222*
amount of $124,450.00 in connection with the purchase of one
Nissei FS210S50ASE Injection Molding Machine, Serial No.
S21NO27.
Rental Schedule No. 9 dated March 17, 1993 in the original $48,222*
amount of $124,450.00 in connection with the purchase of one
Nissei FS210S50ASE Injection Molding Machine, Serial No.
S21NO31.
Rental Schedule No. 10 dated March 17, 1993 in the original $48,222*
amount of $124,450.00 in connection with the purchase of one
Nissei FS210S50ASE Injection Molding Machine, Serial No.
S21NO32.
Rental Schedule No. 11 dated March 17, 1993 in the original $48,222*
amount of $124,450.00 in connection with the purchase of one
Nissei FS210S50ASE Injection Molding Machine, Serial No.
S21NO33.
Rental Schedule No. 12 dated March 17, 1993 in the original $48,222*
amount of $124,450.00 in connection with the purchase of one
Nissei FS210S50ASE Injection Molding Machine, Serial No.
S21NO35.
Rental Schedule No. 13 dated March 17, 1993 in the original $48,222*
amount of $124,450.00 in connection with the purchase of one
Nissei FS210S50ASE Injection Molding Machine, Serial No.
S21NO36.
Rental Schedule No. 14 dated September 15, 1995, in the original $71,897*
amount of $115,884.00 in connection with the purchase of one
Nissei FS160S36ASE Injection Molding Machine, Serial
No.S16Q044.
3. Amounts owed under that certain Master Equipment Lease dated July 17, $40,081*
1995 by and between Iron and Glass Bank and Borrower in the original
amount of $98,885.00 in connection with the purchase of software and
related items.
4. Amounts owed under that certain Lease No. 5293 dated March 11, 1994 by $186,928*
and between P.C. Leasing, a division of Phoenixcor, Inc. and Precise
Technology of Delaware, Inc. in the original amount of $314,427.00 in
connection with the purchase of one Netstal model HP3500/1650 Injection
Molding Machine, Serial No. 9N93309 (Guaranteed by Borrower).
5. Amounts owed under that certain Lease No. 5163 dated December 17, 1993 $147,459*
by and between P.C. leasing, a division of Phoenixcor, Inc. and Precise
Technology of Delaware, Inc. in the original amount of $265,660.00 in
connection with the purchase of one HP2400/870 Injection Molding Machine,
Serial No. 93303 (Guaranteed by Borrower).
6. Amounts owed under that certain Lease No. 4814 dated March 12, 1994 by $142,398*
and between P.C. Leasing, a division of Phoenixcor, Inc. and Precise
Technology of Delaware, Inc. in the original amount of $265,660.00 in
connection with the purchase of one Netstal model HP2400/870 Injection
Molding Machine, Serial No. 93304 (Guaranteed by Borrower).
7. Amounts owed under that certain Lease No. 5104 dated December 20, 1993 $168,539*
by and between P.C. Leasing, a division of Phoenixcor, Inc. and Precise
Technology of Delaware, Inc. in the original amount of $314,427.00 in
connection with the purchase of one HP3500/1650 Injection Molding
Machine, Serial No. 93306 (Guaranteed by Borrower).
8. Amounts owed under that certain Lease No. 4812 dated March 10, 1994 by $174,530*
and between P.C. Leasing, a division of Phoenixcor, Inc. and Precise
Technology of Delaware, Inc. in the original amount of $314,427.00 in
connection with the purchase of one Netstal model HP3500/1650 Injection
Molding Machine, Serial No. 93307 (Guaranteed by Borrower).
9. Amounts owed under that certain Lease No. 4813 dated December 21, 1993 $180,895*
by and between P.C. Leasing, a division of Phoenixcor, Inc. and Precise
Technology of Delaware, Inc. in the original amount of $314,427.00 in
connection with the purchase of one HP3500/1650 Injection Molding
Machine, Serial No. 93308 (Guaranteed by Borrower).
10. Amounts owed under that certain Lease No. 5911 dated December 19, 1995 $183,489*
by and between P.C. Leasing, a division of Phoenixcor, Inc. and Precise
Technology of Delaware, Inc. in the original amount of $276,888.20 in
connection with the purchase of one Netstal HP4000/1650 Sycap Injection
Molding Machine, Serial No. 9N95193 (Guaranteed by Borrower).
11. Amounts owed under that certain lease dated December 22, 1993 by and $81,293*
between P.C. Leasing, a division of Phoenixcor, Inc. And Borrower in the
original amount of $271,105.00 in connection with the purchase of various
equipment including two special hot stamping systems.
12. Amounts owed under that certain Lease Agreement dated January 6, 1995 by $3,032*
and between Vision Financial Group, Inc. and Borrower in the original
amount of $16,250.00 in connection with the purchase of one Hyster
Spacesaver model S50XL2 Fork Lift Truck, Serial No. C187V10385R.
13. Amounts owed under that certain Loan and Security Agreement dated as of $112,604*
December 1, 1994 by and among The Delaware Economic Development Authority,
Precise Technology of Delaware, Inc. And Borrower (as guarantor) in the
original amount of $200,000.00 in connection with the purchase of certain
machinery and equipment
14. Amounts owed under that certain Master Equipment Lease dated January 6, $21,000*
1996 by and between Tredegar and Iron and Glass Bank in the original
amount of $30,000.00 in connection with the purchase of software.
15. Amounts owed under that certain Promissory Note by Borrower to Concord $186,296*
Commercial, Division of Marine Midland Business Loans, Inc. ("Concord")
dated March 26, 1996 and that certain Security Agreement by and between
Borrower and Concord dated March 26, 1996 in the original amount of
$272,040.00 in connection with the purchase of one Charmilles Roboform
Model 2000 EDM Machining Center, Serial No. 125129 and one Roboform Model
C200 EDM Machining Center, Serial No. 26155.
16. Amounts owed under that certain Equipment Lease No. 2464 by and between $1,144,669*
Borrower and Toshiba Machine Company, America dated as of March 22,
1996 in the original amount of $1,460,060 in connection with the purchase of
eight Toshiba Plastic Injection Molding Machines.
17. Amounts owed under that certain Equipment Lease No. 2470 by and between $129,627*
Borrower and Toshiba Machine Company, America dated as of May 29,
1996 in the original amount or $145,035 in connection with the purchase of a
Toshiba Plastic Injection Molding Machine, Serial #625102.
18. Amounts owed under that certain Equipment Lease No. 2503 by and between $134,847*
Borrower and Toshiba Machine Company, America dated as of July 30, 1996
in the original amount or $144,810 in connection with the purchase of a
Toshiba Plastic Injection Molding Machine, Serial # 625303.
19. Amounts owed under that certain Equipment Lease No. 2518 by and between $134,989*
Borrower and Toshiba Machine Company, America dated as of July 30, 1996
in the original amount or $144,810 in connection with the purchase of a
Toshiba Plastic Injection Molding Machine, Serial # 625202.
20. Amounts owed under that certain Equipment Lease No. 2537 by and between $130,492*
Borrower and Toshiba Machine Company, America dated as of September
30, 996 in the original amount or $144,810 in connection with the purchase
of a Toshiba Plastic Injection Molding Machine, Serial # 627404.
21. Amounts owed under that certain Equipment Lease No. 2552 by and between $132,798*
Borrower and Toshiba Machine Company, America dated as of October 31,
1996 in the original amount of $144,810 in connection with the purchase of a
Toshiba Plastic Injection Molding Machine, Serial # 627604.
22. Amounts owed under that certain Equipment Lease No. 2553 by and between $132,798*
Borrower and Toshiba Machine Company, America dated as of October 31,
1996 in the original amount of $144,810 in connection with the purchase of a
Toshiba Plastic Injection Molding Machine, Serial # 628204.
23. Amounts owed under that certain Equipment Lease No. 2561 by and between $131,826*
Borrower and Toshiba Machine Company, America dated as of December
31, 1996 in the original amount of $144,810 in connection with the purchase
of a Toshiba Plastic Injection Molding Machine, Serial # 636610.
24. Amounts owed under that certain Equipment Lease No. 2570 by and between $125,675*
Borrower and Toshiba Machine Company, America dated as of January 31,
1997 in the original amount of $144,810 in connection with the purchase of a
Toshiba Plastic Injection Molding Machine, Serial # 628304.
25. Amounts owed under that certain Equipment Lease No. 2574 by and between $188,842*
Borrower and Toshiba Machine Company, America dated as of January 31,
1997 in the original amount of $217,575 in connection with the purchase of a
Toshiba Plastic Injection Molding Machine, Serial # 521309.
26. Amounts owed under that certain Equipment Lease No. 2589 by and between $133,042*
Borrower and Toshiba Machine Company, America dated as of March 31,
1997 in the original amount of $144,810 in connection with the purchase of a
Toshiba Plastic Injection Molding Machine, Serial # 641212.
27. Amounts owed under that certain Promissory Note (A/C #28470-3) by and $171,942*
between Precise TMP, Inc. and Concord Commercial Corp., dated as of May
2, 1996 in the original amount of $215,000 in connection with the purchase
of a Charmilles Roboform EDM Machine, Serial #600452.
28. Amounts owed under that Certain Lease Agreement #28470-4 by and $225,710*
between Precise TMP, Inc. and Concord Commercial Corp., dated as of
August 29, 1996 in the original amount of $269,300 in connection with the
purchase of a Sumitomo Plastic Injection Molding Machine, Serial #
MOEN0012.
29. Amounts owed under that certain Lease Agreement #28470-7 by and between $182,607*
Precise TMP, Inc. and Concord Commercial Corp., dated as of November 15,
1996 in the original amount of $204,550 in connection with the purchase of a
Sumitomo Plastic Injection Molding Machine, Serial #MOEQ0080.
30. Amounts owed under that certain Lease Agreement #28470-8 by and between $271,015*
Borrower and Concord Commercial Corp., dated as of December 2, 1996 in
the original amount of $354,019 in connection with the purchase of various
equipment including a Special Robotics System for Tobacco, a Fork Truck,
an Optical Measuring Machine and Pro-Engineer Software and a
Workstation.
31. Amounts owed under that certain Lease Agreement #28470-10 by and $60,357*
between Borrower and Concord Commercial Corp., dated as of February 11,
1997 in the original amount of $68,268 in connection with the purchase of a
Okamoto Automatic Surface Grinder, Serial #75003.
32. Amounts owed under that certain Lease Agreement #28470-11 by and $151,623*
between Borrower and Concord Commercial Corp., dated as of March 18,
1997 in the original amount of $164,300 in connection with the purchase of a
Bostomatic CNC Milling and Drilling Machine, Serial #32-311.
33. Amounts owed under that certain Lease Agreement #28470-12 by and $123,886*
between Precise Technology of Illinois, Inc. and Concord Commercial Corp.,
dated as of April 9, 1997 in the original amount of $128,798 in connection
with the purchase of a Charmilles Roboform EDM Machine, Serial #DD3008.
34. Amounts owed under that certain Lease Agreement #28470-13 by and $223,410*
between Precise TMP, Inc. and Concord Commercial Corp., dated as of May
28, 1997 in the original amount of $223,410 in connection with the purchase
of a Okamoto Surface Grinding Machine, Serial #S8121.
35. Amounts owed under that certain Lease Agreement #16113-12470 by and $382,965*
between Precise Polestar, Inc. and U.S. Bancorp Leasing & Financial, dated
as of June 3, 1996 in the original amount of $470,000 in connection with
the purchase of (3) Sumitomo Plastic Injection Molding Machines.
*Outstanding as of May 31, 1997
SCHEDULE 4.01(dd)
OWNED REAL PROPERTY
Owned Properties Book Value Fair Market Value
---------------- ---------- -----------------
1. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ $2,320,113 $2,200,000(1)
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Parcel 3A and 3B,
CTIC Policy FL5097 107 20701
County: Pinellas County
Owner: Precise TMP, Inc.
2. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ $1,245,833 $1,917,100(2)
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Parcel 1, CTIC Policy FL5097 107 20701
County: Pinellas County
Owner: Precise TMP, Inc.
3. Anvil Street Parking Lot Amount included in $80,000(2)
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ book value of No. 2
Parcel 2, CTIC Policy FL5097 107 20701
County: Pinellas County
Owner: Precise TMP, Inc.
4. ▇▇▇-▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ $869,667 $1,200,000(1)
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
CTIC Policy 9751-00428
County: Worcester District
Owner: Precise TMP, Inc.
5. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ $1,207,708 $843,100(2)
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
CTIC Policy 26-908-107-9720391
County: Clay County
Owner: Precise TMP, Inc.
6. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ $1,695,629 $2,000,000(3)
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇
CTIC Policy 97-418
County: Allegheny County
Owner: Borrower
Owned Properties Book Value Fair Market Value
---------------- ---------- -----------------
7. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ $1,337,425 $940,000(3)
▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
CTIC Commitment 97-1273
County: Tippecanoe County
Owner: Borrower
8. ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ $679,478 $600,000(4)
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
CTIC Policy 1401 007661779 D1
County: ▇▇▇▇ County
Owner: Precise Technology of Illinois, Inc.
-----------------------------
(1) Based on appraisals received in 1996.
(2) Based on tax values of each property.
(3) Based on appraisals received in 1992.
(4) Based on appraisals received in 1995.
SCHEDULE 4.01(ee)
LEASED REAL PROPERTY
Leased Properties Expiration Date Annual Rental
----------------- --------------- -------------
1. One Main Street June 30, 1998 $144,000
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
County: Worcester District
Lessee: Precise TMP, Inc.
Lessor: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Trustee of
Whitinsville Redevelopment Trust
2. Industrial Drive June 2001; $183,750
Holden, Massachusetts one 2-year renewal option
County: Worcester County
Lessee: Precise TMP, Inc.
Lessor: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Trustee of
▇▇▇▇▇▇▇ Realty Trust
3. ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ July 30, 2003; $217,000
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ two 5-year renewal options
County: Centre County
Lessee: Precise Polestar, Inc.
Lessor: Partners Plus
4. Moshannon Valley Enterprise Center April 1, 2002 $68,351
North ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ option for additional
County: Centre County 5 year term at
Lessee: Precise Polestar, Inc. negotiated rent
Lessor: Moshannon Valley Economic
Development Partnership, Inc.
5. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ December 31, 1999 $192,264
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ 2 five year
County: New Castle County renewal options
Lessee: Precise Technology of
Delaware, Inc.
Lessor: Pencader Hundred-OP&F, Inc.
Leased Properties Expiration Date Annual Rental
----------------- --------------- -------------
6. ▇▇/▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ July 31, 1997; currently $79,416.96 plus
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ negotiating 2-year extension CPI adjustment
County: ▇▇▇▇ County
Lessee: Precise Technology
of Illinois, Inc.
Lessor: Water Saver Faucet Co.
7. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ July 31, 1997 $30,959
Cincinnati, Ohio Vacant and will
County: ▇▇▇▇▇▇▇▇ County not be renewed
Lessee: Precise TMP, Inc.
Lessor: Spectrum Office Tower
8. Richmond Sales Office April 1998 $16,125
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
County: Independent City
Lessee: Precise Technology, Inc.
Lessor: H.S.K. Associates, Inc.
9. ▇▇▇▇ ▇▇▇ ▇▇▇▇ December 2005 $237,200.04
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
County: Alamance County
Lessee: Precise TMP, Inc.
Lessor: Riverbend Associates
10. ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ October 31, 1997 $112,000
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
County: Pinellas County
Lessee: Precise TMP, Inc.
Lessor: Ram Industries, Inc.
SCHEDULE 4.01(ff)
INVESTMENTS
Amount Obligor/Issuer Maturity
------ -------------- --------
Borrower:
---------
1,000 shares of Common Stock Precise Technology of Delaware, Inc. N/A
100 shares of Common Stock Precise Technology of Illinois, Inc. N/A
1,000 shares of Common Stock Precise TMP, Inc. N/A
Parent:
-------
1 share of Common Stock Borrower N/A
Subsidiary Guarantors:
----------------------
10 shares of Common Stock Precise Polestar, Inc. N/A
held by Precise TMP, Inc.
10 shares of Common Stock ▇▇▇▇▇▇ Tool, Mold & Die, Inc. N/A
held by Precise TMP, Inc.
SCHEDULE 4.01(gg)
INTELLECTUAL PROPERTY
Jurisdiction Registration Date of Expiration Date
------------ ------------ ------- ---------------
Number Registration
Patents
-------
Precise TMP, Inc.
-----------------
Squeeze Bottle Atomizer U.S. Patent & 4,223,842 9/23/80 9/23/97
Trademark Office
Squeeze Bottle Dispenser U.S. Patent & 4,226,367 10/7/80 10/7/97
Trademark Office
Dispenser U.S. Patent & 4,235,557 11/25/80 11/25/97
Trademark Office
Tablet Dispenser U.S. Patent & 5,275,291 1/4/94 1/4/11
Trademark Office
Precise Technology, Inc.
------------------------
Hand-Held Cap Opener U.S. Patent & 4,770,069 9/13/88 9/13/05
for Child Resistant Containers Trademark Office
Trademarks
----------
Precise TMP, Inc.
-----------------
For aerosol and spray pump U.S. Patent & 1,123,729 8/7/79 8/7/99
actuators and valves, all being Trademark Office
parts and fittings for containers.
SCHEDULE 4.01(ii)
LABOR MATTERS
1. Precise Technology, Inc. and United Electrical, Radio and Machine
Workers of America (U.E.) and Local 645, United Electrical, Radio and
Machine Workers of America (U.E.).
SCHEDULE 5.02(iii)
EXISTING LIENS
Uniform Commercial Code Filings: None, Except:
Precise Technology, Inc.
Filing Filing Filing Description Comments
Secured Party Location Date Number of Collateral
▇▇▇▇▇▇ Financial, Inc. S/S Pennsylvania 4/5/93 21801581 Thirteen (13) Leased
Nissei Equipment
Injection Molding
Machines
Concord Commercial S/S Pennsylvania 5/13/93 21930269 One (1) Leased Nissei
Corporation Injection Molding
Machine
Siemens Credit S/S Pennsylvania 5/20/93 21950740 One (1) Leased
Corporation ROLM 9200 Phone
and Phonemail
System
Copelco Credit S/S Pennsylvania 8/9/93 22281608 Leased Copier
Corporation (assignee of Equipment
Van Dyk Business
Systems)
P.C. Leasing, a Division S/S Pennsylvania 1/27/94 22791021 Two (2) Leased USI
of Phoenixcor, Inc. Hot Stamping
Systems and one (1)
Zellerbach Heat
Tunnel
Citicorp Dealer Finance S/S Pennsylvania 5/24/94 23160818 One (1) 530XL
(assignee of Equipco, Forklift bearing serial
Division ▇▇▇▇▇▇▇▇ Corp.) no. B010B9223P
Citicorp Dealer Finance S/S Pennsylvania 7/11/94 23310056 One (1) 530XL
(assignee of Equipco, Forklift bearing serial
Division ▇▇▇▇▇▇▇▇ Corp.) no. B010B09582R
Vision Financial Group, S/S Pennsylvania 2/2/95 23960465 One (1) Hyster Fork
Inc. Truck bearing serial
no. C187V10385R
Siemens Credit S/S Pennsylvania 2/28/95 24031158 One (1) Leased
Corporation ROLM 9600 Phone
and Phonemail
System
Precise Technology, Inc. (cont'd)
Filing Filing Filing Description Comments
Secured Party Location Date Number of Collateral
The DuPont Merck S/S Pennsylvania 2/28/95 24040299 DuPont
Pharmaceutical Company Merck/DuPont Parts
bearing supplier
identification nos.
4280, 4284, 4281,
4283, 4341, 4342 and
▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇/▇ ▇▇▇▇▇▇▇▇▇▇▇▇ 2/28/95 24040301 DuPont
Medical Product Division Merck/DuPont Parts
bearing supplier
identification nos.
4352B, 4352A, 4350,
4351, 4373, 4340,
4438, 4377, 4377A,
4375, 4376, 4374,
4378, 4348, 4373,
4344, 4343, 4337,
4338 and 4429
Iron and Glass Bank S/S Pennsylvania 7/7/95 24450799 Computer Software
and Demonstration
Station
▇▇▇▇▇▇ Financial Leasing, S/S Pennsylvania 9/22/95 24690963 One (1) Nessei
Inc. Injection Molding
Machine
Toshiba Machine S/S Pennsylvania 11/6/95 24831054 One (1) Toshiba
Company, America Plastic Injection
Molding Machine
bearing serial no.
509707
Business Credit Leasing S/S Pennsylvania 3/4/96 25211497 Equipment under
Lease no. 564472
TM Acceptance Corp. S/S Pennsylvania 3/25/96 25281420 One (1) Toshiba
Plastic Injection
Molding Machine
bearing serial no.
620301
Precise Technology, Inc. (cont'd)
Filing Filing Filing Description Comments
Secured Party Location Date Number of Collateral
Concord Commercial, a S/S Pennsylvania 4/21/92 20730254 One (1) Roboform 1) Amendment
division of HSBC Model C200 EDM filing - 5/13/93 -
Business Loans, Inc. Machining Center change of name of
(assignee of Concord the Debtor from
Commercial Corporation) Precise Plastic
Products, Inc. to
Precise Technology,
Inc.
2) Assignment filing
to Concord
Commercial: 4/1/96
3) Continuation
filing: 1/17/97
Concord Commercial, a S/S Pennsylvania 4/1/96 25310583 One (1) Charmilles
division of HSBC Roboform Model
Business Loans, Inc. 2000 EDM Machining
(assignee of Concord Center
Commercial Corporation)
▇▇▇▇▇▇ Financial, Inc. S/S Pennsylvania 4/17/96 25361129 One (1) Toshiba Assignment Filing
(assignee of TM Plastic Injection to ▇▇▇▇▇▇ Financial
Acceptance Corp.) Molding Machine Leasing, Inc.:
bearing serial no. 6/26/96
625102
U.S. Bancorp Leasing & S/S Pennsylvania 6/18/96 25570326 Three (3) Sumitomo
Financial - Machine Tool Plastic Injection
Finance Group Molding Machines
with all accessories
and attachments
▇▇▇▇▇▇ Financial Leasing, S/S Pennsylvania 1/12/96 25060183 One (1) Toshiba Assignment filing to
Inc. (assignee of TM Plastic Injection ▇▇▇▇▇▇ Financial
Acceptance Corp.) Molding Machine Leasing, Inc.:
bearing serial no. 6/26/96
509707
▇▇▇▇▇▇ Financial Leasing, S/S Pennsylvania 1/12/96 25060184 One (1) Toshiba Assignment filing to
Inc. (assignee of TM Plastic Injection ▇▇▇▇▇▇ Financial
Acceptance Corp.) Molding Machine Leasing, Inc.:
bearing serial no. 6/26/96
517811
▇▇▇▇▇▇ Financial Leasing, S/S Pennsylvania 3/18/96 25260389 One (1) Toshiba Assignment filing to
Inc. (assignee of TM Plastic Injection ▇▇▇▇▇▇ Financial
Acceptance Corp.) Molding Machine Leasing, Inc.:
bearing serial no. 6/26/96
520507
Precise Technology, Inc. (cont'd)
Filing Filing Filing Description Comments
Secured Party Location Date Number of Collateral
▇▇▇▇▇▇ Financial Leasing, S/S Pennsylvania 3/27/96 25300089 One (1) Toshiba Assignment filing to
Inc. (assignee of TM Plastic Injection ▇▇▇▇▇▇ Financial
Acceptance Corp.) Molding Machine Leasing, Inc.:
bearing serial no. 6/26/96
620301
▇▇▇▇▇▇ Financial Leasing, S/S Pennsylvania 2/7/96 25140369 One (1) Toshiba Assignment filing to
Inc. (assignee of TM Plastic Injection ▇▇▇▇▇▇ Financial
Acceptance Corp.) Molding Machine Leasing, Inc.:
bearing serial no. 6/28/96
519211
▇▇▇▇▇▇ Financial Leasing, S/S Pennsylvania 2/20/96 25171277 One (1) Toshiba Assignment filing to
Inc. (assignee of TM Plastic Injection ▇▇▇▇▇▇ Financial
Acceptance Corp.) Molding Machine Leasing, Inc.:
bearing serial no. 6/28/96
517706
▇▇▇▇▇▇ Financial Leasing, S/S Pennsylvania 2/20/96 25171278 One (1) Toshiba Assignment filing to
Inc. (assignee of TM Plastic Injection ▇▇▇▇▇▇ Financial
Acceptance Corp.) Molding Machine Leasing, Inc.:
bearing serial no. 6/28/96
517205
▇▇▇▇▇▇ Financial Leasing, S/S Pennsylvania 3/18/96 25260390 One (1) Toshiba Assignment filing to
Inc. (assignee of TM Plastic Injection ▇▇▇▇▇▇ Financial
Acceptance Corp.) Molding Machine Leasing, Inc.:
bearing serial no. 6/28/96
520807
▇▇▇▇▇▇ Financial Leasing, S/S Pennsylvania 7/3/96 25620444 One (1) Toshiba Assignment filing to
Inc. (assignee of TM Plastic Injection ▇▇▇▇▇▇ Financial
Acceptance Corp.) Molding Machine Leasing, Inc.:
bearing serial no. 9/30/96
625303
▇▇▇▇▇▇ Financial Leasing, S/S Pennsylvania 11/6/95 24831053 One (1) Toshiba Assignment filing to
Inc. (assignee of TM Plastic Injection ▇▇▇▇▇▇ Financial
Acceptance Corp.) Molding Machine Leasing, Inc.:
bearing serial no. 7/10/96
509707
▇▇▇▇▇▇ Financial Leasing, S/S Pennsylvania 7/24/96 25690165 One (1) Toshiba Assignment filing to
Inc. (assignee of TM Plastic Injection ▇▇▇▇▇▇ Financial
Acceptance Corp.) Molding Machine Leasing, Inc.:
bearing serial no. 9/30/96
625202
Precise Technology, Inc. (cont'd)
Filing Filing Filing Description Comments
Secured Party Location Date Number of Collateral
▇▇▇▇▇▇ Financial Leasing, S/S Pennsylvania 9/19/96 25870479 One (1) Toshiba
Inc. (assignee of TM Plastic Injection
Acceptance Corp.) Molding Machine
bearing serial no.
521309
▇▇▇▇▇▇ Financial Leasing, S/S Pennsylvania 9/19/96 25870480 One (1) Toshiba
Inc. (assignee of TM Plastic Injection
Acceptance Corp.) Molding Machine
bearing serial no.
627404
TM Acceptance Corp. S/S Pennsylvania 10/28/96 26000485 One (1) Toshiba
Plastic Injection
Molding Machine
bearing serial no.
628204
TM Acceptance Corp. S/S Pennsylvania 10/28/96 26000486 One (1) Toshiba
Plastic Injection
Molding Machine
bearing serial no.
627604
Concord Commercial, a S/S Pennsylvania 11/8/96 26050111 One (1) Charmilles
division of HSBC Robofil Injection
Business Loans, Inc. Molding Machine
TM Acceptance Corp. S/S Pennsylvania 11/26/96 26101263 One (1) Toshiba
Plastic Injection
Molding Machine
bearing serial no.
628304
Concord Commercial, a S/S Pennsylvania 11/27/96 26110311 One (1) each model
division of HSBC L290 Special System
Business Loans, Inc. for Tobacco, Optical
Measuring Machine
and Pro Engineer and
Workstation including
attachments and
accessories
Siemens Credit S/S Pennsylvania 12/18/96 26180018 Two Siemens 9230
Corporation Phone Systems
TM Acceptance Corp. S/S Pennsylvania 12/24/96 26201145 One (1) Toshiba
Plastic Injection
Molding Machine
bearing serial no.
636610
Precise Technology, Inc. (cont'd)
Filing Filing Filing Description Comments
Secured Party Location Date Number of Collateral
Concord Commercial, S/S Pennsylvania 2/21/97 26390180 One (1) Okamoto
division of HSBC Automatic Surface
Business Loans, Inc. Grinder
TM Acceptance Corp. S/S Pennsylvania 2/24/97 26400298 One (1) Toshiba
Plastic Injection
Molding Machine
bearing serial no.
641212
Concord Commercial, S/S Pennsylvania 3/11/97 26450152 One (1) Bostomatic
division of HSBC CNC Bed Type
Business Loans, Inc. Precision Milling,
Drilling, Boring and
Container Machine
General Electric Capital Allegheny County 2/15/91 91-01467 Machine Tools to 1) Amendment
Corporation (Prothonotary), PA include One (1) filing - 10/25/93 -
Cincinnati Milacron change of name of
bearing serial no. Debtor from Precise
4036A61/91-26 Plastic Products,
Inc. to Precise
Technology, Inc.
2) Continuation
Filing: 10/2/95
Concord Commercial, Allegheny County 4/21/92 92-02883 One (1) Roboform 1) Amendment
division of HSBC (Prothonotary), PA C200 EDM filing - 5/7/93 -
Business Loans, Inc. Machining Center change of name of
(assignee of Concord Debtor from Precise
Commercial Corporation) Plastic Products,
Inc. to Precise
Technology, Inc.
2) Assignment filing
to HSBC: 4/8/96
3) Continuation
Filing: 1/24/97
Concord Commercial, Allegheny County 4/2/96 96-2213 One (1) Charmilles
division of HSBC (Prothonotary), PA Roboform EDM
Business Loans, Inc. Machining Center
▇▇▇▇▇▇ Financial, Inc. Allegheny County 4/5/93 02252 Thirteen (13) Leased
(Prothonotary), PA Nissei Equipment
Injection Molding
Machines
Concord Commercial Allegheny County 5/7/93 03072 One (1) Leased Nissei
Corporation (Prothonotary), PA Model FS260S71ASE
Injection Molding
Machine with NC-
90006 Controls
Precise Technology, Inc. (cont'd)
Filing Filing Filing Description Comments
Secured Party Location Date Number of Collateral
Siemens Credit Allegheny County 5/19/93 03339 One (1) Leased
Corporation (Prothonotary), PA ROLM 9200 Model
230 Phone and
Phonemail System
Copelco Capital, Inc. Allegheny County 8/10/93 05379 Leased Copier Amendment filing-
(assignee of Van Dyk (Prothonotary), PA Equipment 4/8/96 - change
Business Systems) name of secured
party from Copelco
Credit Corporation
to Copelco Credit,
Inc.
P.C. Leasing, a Division Allegheny County 1/27/94 00470 Two (2) Leased USI
of Phoenixcor, Inc. (Prothonotary), PA Hot Stamping
Systems and one (1)
Zellerbach Heat
Tunnel
Citicorp Dealer Finance Allegheny County 5/23/94 03371 One (1) 530XL
(assignee of Equipco, (Prothonotary), PA Forklift bearing serial
Division ▇▇▇▇▇▇▇▇ Corp.) no. B010B9223P
Citicorp Dealer Finance Allegheny County 7/8/94 04570-94 One (1) 530XL
(assignee of Equipco, (Prothonotary), PA Forklift bearing serial
Division ▇▇▇▇▇▇▇▇ Corp.) no. B010B09582R
Vision Financial Group, Allegheny County 2/2/95 95-00756 One (1) Hyster Fork
Inc. (Prothonotary), PA Truck bearing serial
no. C187V10385R
Siemens Credit Allegheny County 2/28/95 95-001325 One (1) Leased
Corporation (Prothonotary), PA ROLM 9600 Model
210 Phone and
Phonemail System
▇▇▇▇▇▇ Financial, Inc. Allegheny County 4/17/96 002694 One (1) Toshiba Assignment filing to
(assignee of TM (Prothonotary), PA Plastic Injection ▇▇▇▇▇▇ Financial
Acceptance Corp.) Molding Machine Leasing, Inc.:
bearing serial no. 6/26/96
625102
▇▇▇▇▇▇ Financial Leasing, Allegheny County 1/16/96 96-00317 One (1) Toshiba Assignment filing to
Inc. (assignee of TM (Prothonotary), PA Plastic Injection ▇▇▇▇▇▇ Financial
Acceptance Corp.) Molding Machine Leasing, Inc.:
bearing serial no. 6/26/96
509707
Precise Technology, Inc. (cont'd)
Filing Filing Filing Description Comments
Secured Party Location Date Number of Collateral
▇▇▇▇▇▇ Financial Leasing, Allegheny County 1/16/96 96-318 One (1) Toshiba Assignment filing to
Inc. (assignee of TM (Prothonotary), PA Plastic Injection ▇▇▇▇▇▇ Financial
Acceptance Corp.) Molding Machine Leasing, Inc.:
bearing serial no. 6/26/96
517811
Iron and Glass Bank Allegheny County 7/10/95 95-04538 Computer Software
(Prothonotary), PA and Demonstration
Station
▇▇▇▇▇▇ Financial Leasing, Allegheny County 9/22/95 95-06371 One (1) Nessei
Inc. (Prothonotary), PA Injection Molding
Machine
TM Acceptance Corp. Allegheny County 11/21/95 95-07568 One (1) Toshiba
(Prothonotary), PA Plastic Injection
Molding Machine
bearing serial no.
509707
▇▇▇▇▇▇ Financial Leasing, Allegheny County 3/27/96 96-002113 One (1) Toshiba Assignment filing to
Inc. (assignee of TM (Prothonotary), PA Plastic Injection ▇▇▇▇▇▇ Financial
Acceptance Corp.) Molding Machine Leasing, Inc.:
bearing serial no. 6/26/96
620301
TM Acceptance Corp. Allegheny County 4/2/96 002270 One (1) Toshiba
(Prothonotary), PA Plastic Injection
Molding Machine
bearing serial no.
620301
▇▇▇▇▇▇ Financial Leasing, Allegheny County 2/9/96 96-000960 One (1) Toshiba Assignment filing to
Inc. (assignee of TM (Prothonotary), PA Plastic Injection ▇▇▇▇▇▇ Financial
Acceptance Corp.) Molding Machine Leasing, Inc.: 7/2/96
bearing serial no.
519211
▇▇▇▇▇▇ Financial Leasing, Allegheny County 2/20/96 96-001190 One (1) Toshiba Assignment filing to
Inc. (assignee of TM (Prothonotary), PA Plastic Injection ▇▇▇▇▇▇ Financial
Acceptance Corp.) Molding Machine Leasing, Inc.: 7/2/96
bearing serial no.
517205
▇▇▇▇▇▇ Financial Leasing, Allegheny County 2/20/96 96-001191 One (1) Toshiba Assignment filing to
Inc. (assignee of TM (Prothonotary), PA Plastic Injection ▇▇▇▇▇▇ Financial
Acceptance Corp.) Molding Machine Leasing, Inc.: 7/2/96
bearing serial no.
517706
Precise Technology, Inc. (cont'd)
Filing Filing Filing Description Comments
Secured Party Location Date Number of Collateral
▇▇▇▇▇▇ Financial Leasing, Allegheny County 3/20/96 96-001926 One (1) Toshiba Assignment filing to
Inc. (assignee of TM (Prothonotary), PA Plastic Injection ▇▇▇▇▇▇ Financial
Acceptance Corp.) Molding Machine Leasing, Inc.: 7/2/96
bearing serial no.
520807
▇▇▇▇▇▇ Financial Leasing, Allegheny County 3/20/96 96-1928 One (1) Toshiba Assignment filing to
Inc. (assignee of TM (Prothonotary), PA Plastic Injection ▇▇▇▇▇▇ Financial
Acceptance Corp.) Molding Machine Leasing, Inc.:
bearing serial no. 6/26/96
520507
▇▇▇▇▇▇ Financial Leasing, Allegheny County 7/16/96 96-5081 One (1) Toshiba Assignment filing to
Inc. (assignee of TM (Prothonotary), PA Plastic Injection ▇▇▇▇▇▇ Financial
Acceptance Corp.) Molding Machine Leasing, Inc.:
bearing serial no. 10/1/96
625303
▇▇▇▇▇▇ Financial Leasing, Allegheny County 7/29/96 96-5407 One (1) Toshiba Assignment filing to
Inc. (assignee of TM (Prothonotary), PA Plastic Injection ▇▇▇▇▇▇ Financial
Acceptance Corp.) Molding Machine Leasing, Inc.:
bearing serial no. 10/1/96
625202
TM Acceptance Corp. Allegheny County 9/23/96 96-006788 One (1) Toshiba
(Prothonotary), PA Plastic Injection
Molding Machine
bearing serial no.
521309
TM Acceptance Corp. Allegheny County 9/23/96 96-6789 One (1) Toshiba
(Prothonotary), PA Plastic Injection
Molding Machine
bearing serial no.
627404
Concord Commercial, a Allegheny County 11/14/96 96-8109 One (1) Charmilles
division of HSBC (Prothonotary), PA Robofil Injection
Business Loans, Inc. Molding Machine
TM Acceptance Corp. Allegheny County 12/4/96 96-8624 One (1) Toshiba
(Prothonotary), PA Plastic Injection
Molding Machine
bearing serial no.
628304
Siemens Credit Allegheny County 12/27/96 96-9346 Two Siemens 9230
Corporation (Prothonotary), PA Phone Systems
Precise Technology, Inc. (cont'd)
Filing Filing Filing Description Comments
Secured Party Location Date Number of Collateral
TM Acceptance Corp. Allegheny County 12/30/96 96-9366 One (1) Toshiba
(Prothonotary), PA Plastic Injection
Molding Machine
bearing serial no.
636610
Concord Commercial, Allegheny County 2/21/97 97-001198 One (1) Okamoto
division of HSBC (Prothonotary), PA Automatic Surface
Business Loans, Inc. Grinder
Concord Commercial, Allegheny County 3/11/97 97-001715 One (1) Bostomatic
division of HSBC (Prothonotary), PA Model 32 CNE Bed
Business Loans, Inc. Type Precision
Milling, Drilling,
Boring and
Contouring Machine
General Electric Capital Allegheny County 2/15/91 45473 Machine Tools to 1) Amendment
Corporation (Real Estate Records), include One (1) filing - 10/25/93 -
PA Cincinnati Milacron change of name of
bearing serial no. Debtor from Precise
4036A61/91-26 Plastic Products,
Inc. to Precise
Technology, Inc.
2) Continuation
Filing: 9/27/95
Concord Commercial, Allegheny County 4/30/92 47557 One (1) Roboform 1) Amendment
division of HSBC (Real Estate Records), EDM Machining filing - 5/13/93 -
Business Loans, Inc. PA Center change of name of
(assignee of Concord Debtor from Precise
Commercial Corporation) Plastic Products,
Inc. to Precise
Technology, Inc.
2) Assignment filing
to HSBC: 4/1/96
3) Continuation
filing: 2/3/97
Concord Commercial Allegheny County 5/13/93 49199 One (1) Nissei
Corporation (Real Estate Records), Injection Molding
PA Machine
Concord Commercial Allegheny County 11/8/93 49746 One (1) Nissei
Corporation (Real Estate Records), Injection Molding
PA Machine
Concord Commercial, Allegheny County 4/1/96 52494 One (1) Charmilles
division of HSBC (Real Estate Records), Roboform EDM
Business Loans, Inc. PA Machining Center
Precise Technology, Inc. (cont'd)
Filing Filing Filing Description Comments
Secured Party Location Date Number of Collateral
TM Acceptance Corp. Allegheny County 11/6/96 53266 One (1) Toshiba
(Real Estate Records), Plastic Injection
PA Molding Machine
bearing serial no.
628204
TM Acceptance Corp. Allegheny County 11/6/96 53267 One (1) Toshiba
(Real Estate Records), Plastic Injection
PA Molding Machine
bearing serial no.
627604
U.S. Bancorp Leasing & Centre County 6/17/96 96-575 Three (3) Sumitomo
Financial - Machine Tool (Prothonotary), PA Plastic Injection
Finance Group Molding Machine and
all accessories and
attachments
Citicorp Dealer Finance S/S Delaware 5/23/94 9406975 One (1) S30XL
(assignee of Equipco, Forklift bearing serial
Division of ▇▇▇▇▇▇▇▇ Corp.) no. B010B9223P
Citicorp Dealer Finance S/S Delaware 7/12/94 9409357 One (1) S30XL
(assignee of Equipco, Forklift bearing serial
Division of ▇▇▇▇▇▇▇▇ Corp.) no. B010B9582R
Ashland Chemical S/S Delaware 6/10/96 96-15916 Purchase Money
Company Security Interest in
plastic resin Montell
Polypropylene SD 242
Business Credit Leasing S/S Florida 6/3/96 960000114220 One (1) Leased Sharp
(assignee of Van Dyk Copier bearing serial
Business Systems) no. 66200431
Siemens Credit S/S Florida 12/18/96 960000264312 One (1) ▇▇▇▇▇▇ 9230
Corporation Phone System
▇▇▇▇▇▇ Financial, Inc. S/S Indiana 4/5/93 1837987 Thirteen (13) Leased
Nissei Injection
Molding Machines
P.C., Leasing, a division S/S Indiana 3/18/94 1901496 Two USI Special Hot
of Phoenixcor, Inc. Stamping Systems
bearing serial nos.
12994507931 and
12994507932 and one
(1) Zellerbach
Hanagata Auto L-
Sealer
Precise Technology, Inc. (cont'd)
Filing Filing Filing Description Comments
Secured Party Location Date Number of Collateral
American National Bank S/S Indiana 9/16/94 1937693 All molds of Outer
and Trust Company of Circle Products, Ltd.
Chicago (assignee of delivered to, and used
Outer Circle Products, by, Precise
Ltd.) Technology, Inc.
Siemens Credit S/S Indiana 4/1/95 1970345 One (1) Rolm 9200
Corporation Phone and Phonemail
System
▇▇▇▇▇▇ Financial Leasing, S/S Indiana 9/26/95 2010880 One (1) Nissei
Inc. Injection Molding
Machine
Associates Leasing Inc. S/S New York 6/20/94 126101 One (1) Hyster
(assignee of Liftech Forklift bearing serial
Handling Inc.) no. B010B09573R
The ▇▇▇▇▇▇ ▇▇▇▇▇ S/S New York 3/1/95 042367 ▇▇▇▇▇▇ ▇▇▇▇▇/
Pharmaceutical Company DuPont parts bearing
supplier identification
no. 4339
Ashland Chemical S/S New York 5/24/96 104773 Purchase Money
Company Security Interest in
plastic resin - Montell
Polypropane SD 242
B. Precise Technology of Delaware, Inc.
Filing Filing Filing Description Comments
Secured Party Location Date Number of Collateral
P.C. Leasing, a division S/S Delaware 2/9/94 9401759 One (1) HP Amended: 10/11/94
of Phoenixcor, Inc. 3500/1650 Injection
Molding Machine
P.C. Leasing, a division S/S Delaware 2/9/94 9401760 One (1) HP 2900/870 Amended: 10/11/94
of Phoenixcor, Inc. Injection Molding
Machine
P.C. Leasing, a division S/S Delaware 2/9/94 9401761 One (1) HP
of Phoenixcor, Inc. 3500/1650 Injection
Molding Machine
P.C. Leasing, a division S/S Delaware 3/25/94 9404060 One (1) Netstal
of Phoenixcor, Inc. Model HP 3500/1650
Injection Molding
Machine
P.C. Leasing, a division S/S Delaware 3/25/94 9404061 One (1) Netstal Amended: 10/11/94
of Phoenixcor, Inc. Model HP 3500/1650
Injection Molding
Machine
P.C. Leasing, a division S/S Delaware 3/25/94 9404062 One (1) Netstal
of Phoenixcor, Inc. Model HP 3500/1650
Injection Molding
Machine
P.C. Leasing, a division S/S Delaware 3/25/94 9404063 One (1) Netstal Amendment filing-
of Phoenixcor, Inc. Model HP 3500/1650 8/31/94 - addition
Injection Molding of serial no.
Machine bearing
serial no. 93304
Precise Technology of Delaware, Inc. (cont'd)
Filing Filing Filing Description Comments
Secured Party Location Date Number of Collateral
Delaware Economic S/S Delaware 1/3/95 25904 Various equipment to
Development Authority include Seven (7)
Conveyor Systems
bearing serial nos.
2385, 2384, 2366,
2387, 2386, 2383 and
2367; and one (1)
Five-Ton Bridge
Crane bearing serial
no. 9406116B; and
Air Compressor
bearing serial no.
F9417U94054; one
(1) Dryer bearing
serial no. 941TM711;
one (1) Granulator
bearing serial no.
120-1414; and
BRP/Rico Equipment
Pallet Truck bearing
serial no. 11588
Precise Technology of Delaware, Inc. (cont'd)
Filing Filing Filing Description Comments
Secured Party Location Date Number of Collateral
Phoenixcor, Inc. S/S Delaware 1/11/96 96-00859 One (1) Netstal HP
4000/1650 Sycap
Injection Molding
Machine
Delaware Economic New Castle, DE 1/3/95 9500025 Various equipment to
Development Authority include Seven (7)
Conveyor Systems
bearing serial nos.
2385, 2384, 2366,
2387, 2386, 2383 and
2367; and one (1)
Five-Ton Bridge
Crane bearing serial
no. 9406116B; and
Air Compressor
bearing serial no.
F9417U94054; one
(1) Dryer bearing
serial no. 941TM711;
one (1) Granulator
bearing serial no.
120-1414; and
BRP/Rico Equipment
Pallet Truck bearing
serial no. 11588
C. Precise Technology of Illinois, Inc.
Filing Filing Filing Description Comments
Secured Party Location Date Number of Collateral
Concord Commercial, S/S Illinois 4/15/97 3677416 One Roboform
division of HSBC Injection Molding
Business Loans, Inc. Machine
D. Precise TMP, Inc.
Filing Filing Filing Description Comments
Secured Party Location Date Number of Collateral
Concord Commercial, S/S Florida 11/8/96 960000236395 One (1) CMS
division of HSBC Machining Center
Business Loans, Inc.
Concord Commercial, S/S Florida 7/9/96 960000141962 One (1) Charmilles
division of HSBC Roboform 40 Die
Business Loans, Inc. Sinking EDM
Machine
Concord Commercial, Pinellas County, FL 6/28/96 96-177096 One (1) Charmilles
division of HSBC Book 9387 Roboform 40 Die
Business Loans, Inc. Page 526 Sinking EDM
Machine
Concord Commercial, S/S Massachusetts 8/26/96 412714 One (1) Sumitomo
division of HSBC Injection Molding
Business Loans, Inc. Machine
Toyota Motor Credit S/S Massachusetts 9/30/96 419637 One (1) Toyota
Corp. (assignee of ▇▇▇▇▇▇, Forklift bearing serial
Inc.) no. 65664
Concord Commercial, S/S Massachusetts 11/20/96 430911 One (1) Sumitomo
division of HSBC Injection Molding
Business Loans, Inc. Machine
Concord Commercial, Town of Grafton, MA 8/27/96 8047 One (1) Sumitomo
division of HSBC Injection Molding
Business Loans, Inc. Machine
Toyota Motor Credit Town of Grafton, MA 10/1/96 8056 One (1) Toyota
Corp. (assignee of ▇▇▇▇▇▇, Forklift bearing serial
Inc.) no. 65664
Concord Commercial, Town of Grafton, MA 11/21/96 8069 One (1) Sumitomo
division of HSBC Injection Molding
Business Loans, Inc. Machine
E. Precise Polestar, Inc.
Filing Filing Filing Description Comments
Secured Party Location Date Number of Collateral
U.S. Bancorp Leasing & S/S Pennsylvania 6/18/96 25570328 Three (3) Sumitomo
Financial - Machine Tool Plastic Injection
Finance Group Molding Machines
Ethicon-Endo-Surgery, S/S Pennsylvania 12/19/96 26180869 Equipment of Secured
Inc. Party (the "Owner")
supplied to Debtor
U.S. Bancorp Leasing & Centre County 6/17/96 96-574 Three (3) Sumitomo
Financial - Machine Tool (Prothonotary), PA Plastic Injection
Finance Group Molding Machines
Ethicon-Endo-Surgery, Centre County 12/18/96 96-1214 Equipment of Secured
Inc. (Prothonotary, PA), Party (the "Owner")
PA supplied to Debtor
▇. ▇▇▇▇▇▇ Mold, Tool & Die, Inc.
Filing Filing Filing Description Comments
Secured Party Location Date Number of Collateral
NONE
G. Precise Holding Corporation
Filing Filing Filing Description Comments
Secured Party Location Date Number of Collateral
NONE
EXHIBIT A TO THE
CREDIT AGREEMENT
REVOLVING CREDIT NOTE
New York, New York
$____________ Dated:____________
FOR VALUE RECEIVED, the undersigned, PRECISE TECHNOLOGY, INC., a Delaware
corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
____________________ or its registered assigns (the "Lender") for the account of
its Applicable Lending Office (as defined in the Credit Agreement referred to
below) the aggregate principal amount of the Revolving Credit Advances (as
defined below) owing to the Lender by the Borrower pursuant to the Credit
Agreement dated as of June 13, 1997 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"; terms defined therein being
used herein as therein defined) among Precise Holding Corporation, the Borrower,
certain subsidiaries of the Borrower, the lenders from time to time party
thereto (including the Lender) and Fleet National Bank, as Agent for the Lender
and such other lenders on the Final Maturity Date.
The Borrower promises to pay interest on the unpaid principal amount of
each Revolving Credit Advance from the date of such Revolving Credit Advance
until such principal amount is paid in full, at such interest rates, and payable
at such times, as are specified in the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Fleet National Bank, as Agent, at Fleet National Bank, ABA
No. ▇▇▇-▇▇▇-▇▇▇, for further credit to Account No. 151035103156, in same day
funds. Each Revolving Credit Advance owing to the Lender by the Borrower and the
maturity thereof, and all payments made on account of principal thereof, shall
be recorded by the Lender and, prior to any transfer hereof, endorsed on the
grid attached hereto, which is part of this Note.
This Note is one of the Notes referred to in, and is entitled to the
benefits of, the Credit Agreement. The Credit Agreement, among other things, (i)
provides for the making of advances (the "Revolving Credit Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed at
any time outstanding the U.S. dollar amount first above mentioned, the
indebtedness of the Borrower resulting from each such Revolving Credit Advance
being evidenced by this Note, and (ii) contains provisions for acceleration of
the maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal
KL2:197205.2
2
hereof prior to the maturity hereof upon the terms and conditions therein
specified. The obligations of the Borrower under this Note, and the obligations
of the other Loan Parties under the Loan Documents, are secured by the
Collateral as provided in the Loan Documents. All payments made by the Borrower
under this Note shall be made without relief from valuation and appraisement
laws.
The Borrower waives presentment, protest and demand, and also notice of
protest, of demand, of nonpayment, of dishonor and of maturity. No single or
partial exercise of any power hereunder shall preclude other or further exercise
thereof or the exercise of any other power. This Note may not be changed orally,
but only by an agreement in writing which is signed by the party or parties
against which enforcement of any waiver, change, modification or discharge is
sought.
THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE. ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS NOTE MAY BE BROUGHT IN ▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ SITTING IN NEW YORK CITY OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
NOTE, THE BORROWER IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER THE BORROWER. THE
BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK
PERSONAL JURISDICTION OVER SUCH PARTY, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS NOTE BROUGHT IN ANY OF THE
AFORESAID COURTS. THE BORROWER WAIVES TRIAL BY JURY AND ALL OTHER NOTICES OR
DEMANDS IN CONNECTION WITH THE DELIVERY, ACCEPTANCE, PERFORMANCE, DEFAULT OR
ENFORCEMENT OF PAYMENT OF THIS NOTE.
PRECISE TECHNOLOGY, INC.
By____________________________________
Name:
Title:
KL2:197205.2
3
ADVANCES AND PAYMENTS OF PRINCIPAL
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Amount of
Revolving Amount of Unpaid
Credit Principal Paid Principal Notation
Date Advance or Prepaid Balance Made By
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EXHIBIT B TO THE
CREDIT AGREEMENT
NOTICE OF BORROWING
Fleet National Bank,
as Agent under the Credit
Agreement referred to below
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ [Date]
Attention:
Ladies and Gentlemen:
The undersigned, PRECISE TECHNOLOGY, INC., a Delaware corporation (the
"Borrower"), refers to the Credit Agreement, dated as of June 13, 1997 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement", the terms defined therein being used herein as therein defined)
among Precise Holding Corporation, the Borrower, certain subsidiaries of the
Borrower, the lenders from time to time party thereto (including the Lender) and
Fleet National Bank, as Agent for the Lender, and hereby gives you notice,
irrevocably, pursuant to Section 2.02 of the Credit Agreement that the Borrower
hereby requests a Borrowing under the Credit Agreement, and in that connection
sets forth below the information relating to such Borrowing (the "Proposed
Borrowing") as required by Section 2.02(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is _________ __, ____.
(ii) The Type of Advances comprising the Proposed Borrowing is [Base
Rate Advances] [Eurodollar Rate Advances].
(iii) The aggregate amount of the Proposed Borrowing is $__________.
(iv) The initial Interest Period for each Eurodollar Rate Advance made
as part of the Proposed Borrowing is __________ month[s].
KL2:197646.4
The Borrower hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in each Document are
true and correct on and as of such date, before and after giving effect to
such Proposed Borrowing and to the application of the proceeds therefrom,
as though made on and as of such date other than any such representations
or warranties that, by their terms, refer to a specific date other than the
date of such Borrowing, in which case as of such specific date; and
(B) no event has occurred and is continuing, or would result from such
Proposed Borrowing or from the application of the proceeds therefrom, that
constitutes a Default.
Very truly yours,
PRECISE TECHNOLOGY, INC.
By:___________________________________
Name:
Title:
KL2:197646.4
EXHIBIT C TO THE
CREDIT AGREEMENT
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of June 13, 1997 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement") among Precise Holding Corporation, Precise Technology, Inc. (the
"Borrower"), certain subsidiaries of the Borrower, the Lenders (as defined in
the Credit Agreement) and Fleet National Bank, as agent for the Lenders (the
"Agent"). Terms defined in the Credit Agreement are used herein with the same
meaning.
The "Assignor" and the "Assignee" referred to on Schedule 1 hereto hereby
agree as follows:
1. The Assignor hereby sells, assigns and delivers to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, an interest in and to
the Assignor's rights and obligations under the Credit Agreement as of the date
hereof equal to the percentage interest specified on Schedule 1 hereto of all
outstanding rights and obligations under the Credit Agreement Facility specified
on Schedule 1 hereto. After giving effect to such sale and assignment, the
Assignee's Commitment and the amount of the Advances owing to the Assignee will
be as set forth on Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim placed thereon by the Assignor;
(ii) makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with the Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, the Loan Documents or any other instrument or
document furnished pursuant thereto; (iii) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of Parent,
the Borrower or any other Loan Party or the performance or observance by Parent,
the Borrower or any other Loan Party of any of their respective obligations
under any Loan Document to which they are a party or any other instrument or
document furnished pursuant thereto; and (iv) attaches the Note held by the
Assignor and requests that the Agent exchange such Note for a new Note payable
to the order of the Assignee in an amount equal to the Commitment assumed by the
Assignee pursuant hereto or new Note payable to the order of the Assignee in an
amount equal to the Commitment assumed by the Assignee pursuant hereto and to
the order of the
KL2:201527.1
Assignor in an amount equal to the Commitment retained by the Assignor under the
Credit Agreement, respectively, as specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.01(f) thereof, the other Loan Documents and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (ii) agrees that it has
and will, independently and without reliance upon the Agent, the Assignor or any
other Lender and based on such documents and information as it has deemed or
shall deem appropriate at the time, make and continue to make its own credit
decisions in entering into this Assignment and Acceptance and in taking or not
taking action under the Credit Agreement; (iii) confirms that it is an Eligible
Assignee; (iv) appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers and discretion under the Loan Documents
as are delegated to the Agent by the terms thereof, together with such powers
and discretion as are reasonably incidental thereto; [and] (v) agrees that it
will perform in accordance with their terms all of the obligations that by the
terms of the Credit Agreement and the other Loan Documents are required to be
performed by it as a Lender[; and (vi) to the extent legally entitled to do so,
attaches the U.S. Internal Revenue Service forms required under Section 2.12(e)
of the Credit Agreement].
4. Following the execution of this Assignment and Acceptance by the
Assignor and Assignee, an executed original hereof (together with attachments)
will be delivered to the Agent for acceptance and recording by the Agent. The
effective date for this Assignment and Acceptance (the "Assignment Effective
Date") shall be the date of acceptance hereof by the Agent and the receipt by
the Agent of the processing and recordation fee referred to in Section 8.07(a)
of the Credit Agreement, unless otherwise specified on Schedule 1 hereto.
5. Upon such acceptance and recording by the Agent, as of the Assignment
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and under the other Loan Documents, and (ii)
the Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement and the other Loan Documents.
6. Upon such acceptance and recording by the Agent, from and after the
Assignment Effective Date, the Agent shall make all payments under the Credit
Agreement and the Notes in respect of the interest assigned hereby (including,
without limitation, all payments of principal, interest and commitment fees with
respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the Notes for
periods prior to the Assignment Effective Date directly between themselves.
--------
(1) Include if the Assignee is organized under the laws of a jurisdiction
outside of the United States.
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule 1 to
this Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date specified thereon.
KL2:201527.1
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
As to the Revolving Credit Facility in respect of which an interest is being
assigned:
Percentage interest assigned: _______%
Assignee's Commitment: $_______
[Assignor's Retained Commitment: $_______]
Aggregate outstanding principal amount of Advances assigned: $_______
Principal amount of _________Note payable to Assignee: $_______
Principal amount of _________Note payable to Assignor: $_______
Assignment Effective Date (if other than date of acceptance by Agent):
_________ __, ____
Payment Instructions:
ASSIGNOR:
_______________
_______________
_______________
Attention:
Reference:
ASSIGNEE:
_______________
_______________
_______________
Attention:
Reference:
KL2:201527.1
Domestic Lending Office of Assignee: Eurodollar Lending Office of Assignee:
___________________________________ ______________________________________
Attention: Attention:
Tel.: Tel.:
Fax: Fax:
[NAME OF ASSIGNOR], as Assignor
By____________________________________
Name:
Title:
Dated: ______________________ , ____
[NAME OF ASSIGNEE], as Assignee
By____________________________________
Name:
Title:
Dated: ______________________ , ____
KL2:201527.1
Accepted and Approved this ____ day of ___________,
FLEET NATIONAL BANK,
as Agent
By_____________________________
Name:
Title:
EXHIBIT D-1 TO THE
CREDIT AGREEMENT
PLEDGE AND SECURITY AGREEMENT
Dated June 13, 1997
From
PRECISE TECHNOLOGY, INC.,
and
VARIOUS SUBSIDIARIES OF PRECISE TECHNOLOGY, INC.,
as Grantors,
to
FLEET NATIONAL BANK,
as Collateral Agent
T A B L E O F C O N T E N T S
Section Page
1. Grant and Pledge of Security ........................................... 2
2. Security for Obligations ............................................... 5
3. Grantors Remain Liable ................................................. 5
4. Delivery of Security Collateral and Account Collateral ................. 5
5. Maintaining the L/C Cash Collateral Account ............................ 6
6. Maintaining the Blocked Accounts ....................................... 6
7. Investing of Amounts in the L/C Cash Collateral Account ................ 7
8. Representations, Warranties and Covenants .............................. 7
9. Further Assurances ..................................................... 9
10. As to Plant and Equipment and Inventory ............................... 10
11. Insurance ............................................................. 11
12. Place of Perfection; Records; Collection of Receivables ............... 12
13. Voting Rights; Dividends; Etc. ........................................ 13
14. [Intentionally Omitted] ............................................... 14
15. [Intentionally Omitted] ............................................... 14
16. Transfer and Other Liens; Additional Shares ........................... 14
17. Collateral Agent Appointed Attorney-in-Fact ........................... 14
18. Collateral Agent May Perform .......................................... 15
19. Remedies .............................................................. 15
20. Registration Rights ................................................... 17
Section Page
21. Collateral Agent ...................................................... 18
22. Indemnity and Expenses ................................................ 22
23. Security Interest Absolute ............................................ 22
24. Amendments; Waivers; Etc. ............................................. 23
25. Addresses for Notices ................................................. 24
26. Continuing Security Interest; Assignments under the Credit Agreement .. 24
27. Release and Termination ............................................... 24
28. Jurisdiction, Etc. .................................................... 25
Schedule I - Pledged Shares and Pledged Debt
Schedule II - Assigned Agreements
Schedule III - Locations of Plant and Equipment and Inventory
Schedule IV - Inventory Schedule for Section 8(d)
Schedule V - Blocked Accounts
Schedule VI - Trade Names
Exhibit A - Form of Blocked Account Letter
Exhibit B - Form of Pledge and Security Agreement Supplement
Exhibit C - Form of Consent and Agreement
PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this "Agreement"), dated June 13, 1997, made by and
among PRECISE TECHNOLOGY, INC., a Delaware corporation (the "Borrower"), each of
the other Persons listed on the signature page hereof and the Additional
Collateral Grantors (as defined in Section 24(c)) (the Borrower, such other
Persons and such Additional Collateral Grantors collectively referred to herein
as the "Grantors", and each individually, a "Grantor") to FLEET NATIONAL BANK
("Fleet"), as collateral agent (together with any successor collateral agent
appointed pursuant to Section 21, the "Collateral Agent") for the Secured
Parties, as custodian for the Hedge Banks and as Issuing Bank.
PRELIMINARY STATEMENTS.
(1) Precise Holding Corporation, a Delaware corporation, the Borrower and
each Subsidiary Guarantor have entered into a Credit Agreement, dated as of June
13, 1997, (said Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, being the "Credit Agreement", the terms
defined therein and not otherwise defined herein being used herein as therein
defined) with Fleet, as agent (together with any successor agent appointed
pursuant to Article VII of the Credit Agreement, the "Agent"), and the Lenders
from time to time party thereto.
(2) Pursuant to the Subsidiary Guaranty, each Subsidiary Guarantor has
guaranteed to the Lenders the payment when due of all obligations and
liabilities of the Borrower under or with respect to the Loan Documents.
(3) Each Grantor is the record owner of all stock at any time pledged or
required to be pledged hereunder, including without limitation the shares of
stock described in Part I of Schedule I hereto and issued by the corporations
named therein (the "Pledged Shares") and of the indebtedness described in Part
II of said Schedule I and issued by the obligors named therein (the "Pledged
Debt").
(4) It is a condition precedent to the making of Advances by the Lenders
and the issuance of Letters of Credit by the Issuing Bank under the Credit
Agreement and the entry by the Hedge Banks into the Bank Hedge Agreements with
the Borrower from time to time that each Grantor shall have granted the
assignment and security interest and made the pledge and assignment contemplated
by this Agreement.
(5) Each Grantor will obtain benefits from the incurrence of Advances and
the issuance of Letters of Credit under the Credit Agreement and the entering
into of Bank Hedge Agreements with the Hedge Banks and, accordingly, each
Grantor desires to execute this Agreement to satisfy the conditions described in
the preceding paragraph (4).
NOW, THEREFORE, in consideration of the premises and in order to induce the
Lenders to make Advances and the Issuing Bank to issue Letters of Credit under
the Credit Agreement and to induce the Hedge Banks to enter into Bank Hedge
Agreements with the
KL2:194292.6
Borrower from time to time, each Grantor hereby agrees with the Collateral Agent
for the ratable benefit of the Secured Parties as follows:
Section 1. Grant and Pledge of Security. Each Grantor hereby assigns and
pledges to the Collateral Agent for the ratable benefit of the Secured Parties,
and hereby grants to the Collateral Agent for the ratable benefit of the Secured
Parties a security interest in, the following, in each case, as to each type of
property described below, whether now owned or hereafter owned or acquired,
wherever located and whether now or hereafter existing (collectively, the
"Collateral"):
(a) all of such Grantor's right, title and interest in and to all
"equipment", as such term is defined in the Uniform Commercial Code as in
effect on the date hereof in the State of New York (the "New York UCC"),
now or hereafter owned by such Grantor and, in any event, shall include,
but shall not be limited to, all machinery, plant, equipment, furnishings,
movable trade fixtures and vehicles and any or all additions, substitutions
and replacements of any of the foregoing, wherever located, together with
all attachments, components, parts, equipment and accessories installed
thereon or affixed thereto, together with all condemnation awards,
materials, appurtenances, rights and other property interests now or at any
time hereafter owned by each Grantor in the property (such property
hereinafter referred to as the "Property") (any and all such machinery,
plant, Property, equipment, furnishings, fixtures, attachments, components,
parts and accessions being the "Plant and Equipment");
(b) all of such Grantor's right, title and interest in and to all
merchandise, inventory and goods in all of its forms, including, without
limitation, (i) all raw materials, work in process therefor, parts,
components, assemblies, supplies, materials, finished products and other
goods and materials used or consumed in the manufacture or production
thereof (including, without limitation, all wrapping, packaging,
advertising, shipping materials, labels and other devices, names or marks
affixed or to be affixed thereto for purposes of selling or of identifying
the same or the seller or manufacturer thereof owned, consumed, used or
held for use or sale, directly or indirectly, by, or on behalf of or for
the account of such Grantor), (ii) goods in which such Grantor has an
interest in mass or a joint or other interest or right of any kind
(including, without limitation, goods in which such Grantor has an interest
or right as consignee), (iii) goods that are returned to or repossessed by
such Grantor and (iv) all "inventory" as such term is defined in the New
York UCC and all additions, substitutions and replacements thereof, and all
accessions thereto and products thereof and documents therefor (any and all
such inventory, accessions, products and documents being the "Inventory");
(c) all of such Grantor's right, title and interest in and to any
"account" and "general intangibles" as each such term is defined in the New
York UCC and, in any event, shall include, but shall not be limited to, all
accounts, contract rights, "chattel paper" (as defined in the New York
KL2:194292.6
2
UCC and hereinafter referred to as "Chattel Paper"), instruments, deposit
accounts, general intangibles and other rights and obligations of any kind,
whether or not arising out of or in connection with the sale or lease of
goods or the rendering of services, and all rights now or hereafter
existing in and to all security agreements, leases and other contracts and
"documents" (as defined in the New York UCC and hereinafter referred to as
"Documents"), and all guaranties, endorsements and indemnifications on, or
of, any of the foregoing, securing or otherwise relating to any such
accounts, contract rights, Chattel Paper, instruments, deposit accounts,
general intangibles, rights or obligations (any and all such accounts,
contract rights, Chattel Paper, instruments, deposit accounts, general
intangibles, rights and obligations, to the extent not referred to in
clause (d), (e), (f) or (g) below, being the "Receivables", and any and all
such leases, security agreements and other contracts and Documents being
the "Related Contracts");
(d) all of the following (the "Security Collateral"):
(i) the Pledged Shares and the certificates representing the
Pledged Shares, and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the Pledged
Shares;
(ii) the Pledged Debt and the instruments evidencing the Pledged
Debt, and all interest, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the Pledged Debt;
(iii) all additional shares of stock from time to time acquired
by such Grantor in any manner, and the certificates representing such
additional shares, and all dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such
shares; and
(iv) all additional indebtedness from time to time owed to such
Grantor and the instruments evidencing such indebtedness, and all
interest, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in
exchange for any or all of such indebtedness;
(e) all of such Grantor's right, title and interest in and to each of
the agreements listed on Schedule II, and each Bank Hedge Agreement to
which such Grantor is or may hereafter become a party, in each case as such
agreements may be amended or otherwise modified from time to time
(collectively, the "Assigned Agreements"), including, without limitation,
(i) all rights of such Grantor to receive moneys due and to become due
under or pursuant to the Assigned Agreements, (ii) all rights of such
Grantor to receive proceeds of any insurance, indemnity, warranty or
guaranty with respect to the Assigned Agreements, (iii) claims of such
Grantor for damages arising out of or for breach of or default under the
Assigned Agreements and (iv) the right of such Grantor to terminate the
Assigned Agreements, to perform thereunder and to compel performance and
otherwise exercise all remedies thereunder (all such Collateral being the
"Agreement Collateral");
(f) all of the following (collectively, the "Account Collateral"):
KL2:194292.6
3
(i) the L/C Cash Collateral Account, all funds held therein and
all certificates and instruments, if any, from time to time
representing or evidencing the L/C Cash Collateral Account;
(ii) all other deposit accounts of such Grantor, all funds held
therein and all certificates and instruments, if any, from time to
time representing or evidencing such deposit accounts;
(iii) all Collateral Investments (as hereinafter defined) from
time to time and all certificates and instruments, if any, from time
to time representing or evidencing the Collateral Investments;
(iv) all notes, certificates of deposit, deposit accounts, checks
and other instruments from time to time hereafter delivered to or
otherwise possessed by the Collateral Agent for or on behalf of such
Grantor in substitution for or in addition to any or all of the then
existing Account Collateral; and
(v) all interest, dividends, cash, instruments and other property
from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the then existing Account
Collateral;
(g) all of such Grantor's right, title and interest in and to all
general intangibles of such Grantor (other than general intangibles for
money due or to become due and described in clause (c) above), including,
without limitation, all trademarks, trade names, trade styles, trade
secrets, service marks, logos, copyrights, patents, patent applications,
computer programs and all permits, licenses (written or oral), license
applications, registrations and goodwill relating to or associated with any
of the foregoing; and
(h) all proceeds of any and all of the foregoing Collateral
(including, without limitation, proceeds that constitute property of the
types described in clauses (a) through (g) of this Section 1 and all
accessions and additions to, all substitutions for and all proceeds,
products, substitutions and replacement of any and all of the foregoing)
and, to the extent not otherwise included, all (i) payments under insurance
(whether or not the Collateral Agent is the loss payee thereof), or any
indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise and any and all other products of, or any rents, profits or other
amounts from time to time paid or payable with respect to any of the
foregoing Collateral and (ii) cash.
Notwithstanding clauses (a) through (h), the payment and performance of
each Grantor's obligations shall not be secured by more than 66% of the total
combined voting power of all classes of capital stock owed by such Grantor of
any foreign Subsidiary entitled to vote. Following a change in the relevant
provisions of the Internal Revenue Code or the regulations, published rules,
published rulings, notices or other official pronouncements issued or
promulgated thereunder, if the Collateral Agent or the Required Lenders request
a pledge of additional stock of any foreign Subsidiary of a Grantor, all of the
stock of which foreign Subsidiary has not already been pledged pursuant to this
Agreement, then within 90 days after
KL2:194292.6
4
such request the relevant Grantor shall either (i) pledge such additional stock
of such foreign Subsidiary or (ii) deliver to the Collateral Agent an opinion of
the counsel of the respective Grantor, which counsel shall be reasonably
acceptable to the Collateral Agent, that the requested pledge of such additional
stock is more likely than not to cause the undistributed earnings of such
foreign Subsidiary to be treated as a deemed dividend to such foreign
Subsidiary's United States parent for Federal income tax purposes.
Section 2. Security for Obligations. This Agreement secures (i) the full
and prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations and liabilities (including, without limitation,
the principal of and interest on the Notes issued by, and Advances made to, the
Borrower under the Credit Agreement, and all indemnities, fees and interest
thereon or owed thereunder) of each Grantor to the Secured Parties, whether now
existing or hereafter incurred under, arising out of or in connection with any
Loan Document (including, without limitation, in the case of each Subsidiary
Guarantor, all of its obligations and liabilities under the Subsidiary Guaranty)
to which such Grantor is a party and the due performance and compliance by each
Grantor with all of the terms, conditions and agreements contained in the Credit
Agreement and such other Loan Documents (all such principal, interest,
indemnities, fees, obligations and liabilities being herein collectively called
the "Credit Agreement Obligations"); (ii) to the extent that any Bank Hedge
Agreement is entitled to the benefits of this Agreement, the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of all obligations and liabilities of each Grantor to the Hedge Banks, whether
now existing or hereafter incurred under, arising out of or in connection with
any such Bank Hedge Agreement and the due performance and compliance by such
Grantor with all the terms, conditions and agreements contained in such Bank
Hedge Agreement (all such obligations and liabilities described in this clause
(ii) being herein collectively called the "Other Obligations", and together with
the Credit Agreement Obligations, collectively the "Secured Obligations").
Without limiting the generality of the foregoing, this Agreement secures the
payment of all amounts that constitute part of the Secured Obligations and would
be owed by such Grantor to the Secured Parties under the Loan Documents but for
the fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving such Grantor.
Section 3. Grantors Remain 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 to perform
all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (b) the exercise by the Collateral Agent of any
of the rights hereunder shall not release any Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral and
(c) no Secured Party shall have any obligation or liability under the contracts
and agreements included in the Collateral by reason of this Agreement or any
other Loan Document, nor shall any 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 4. Delivery of Security Collateral and Account Collateral. All
certificates or instruments representing or evidencing Security Collateral or
Account Collateral shall be delivered to and held by or on behalf of the
Collateral Agent pursuant hereto and shall be in
KL2:194292.6
5
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Collateral Agent. Upon the occurrence and during the
continuance of an Event of Default and upon acceleration of all Borrowings under
the Credit Agreement, the Collateral Agent shall have the right, at any time in
its discretion and without notice to any Grantor, to transfer to or to register
in the name of the Collateral Agent or any of its nominees any or all of the
Security Collateral and Account Collateral, subject only to the revocable rights
specified in Section 13(a). In addition, the Collateral Agent shall have the
right at any time to exchange certificates or instruments representing or
evidencing Security Collateral or Account Collateral for certificates or
instruments of smaller or larger denominations.
Section 5. Maintaining the L/C Cash Collateral Account. So long as any
Advance or any other Secured Obligation shall remain unpaid, any Letter of
Credit or Bank Hedge Agreement shall be outstanding or any Lender shall have any
Commitment under the Credit Agreement:
(a) The Borrower will maintain the L/C Cash Collateral Account with
the Collateral Agent; and
(b) It shall be a term and condition of the L/C Cash Collateral
Account, notwithstanding any term or condition to the contrary in any other
agreement relating to the L/C Cash Collateral Account, as the case may be,
and except as otherwise provided by the provisions of Section 19, that no
amount (including, without limitation, interest on Collateral Investments)
shall be paid or released to or for the account of, or withdrawn by or for
the account of, the Borrower or any other Person from the L/C Cash
Collateral Account and shall be funded in accordance with the terms of the
Credit Agreement.
The L/C Cash Collateral Account shall be subject to such applicable laws, and
such applicable regulations of the Board of Governors of the Federal Reserve
System and of any other appropriate banking or governmental authority, as may
now or hereafter be in effect.
Section 6. Maintaining the Blocked Accounts. So long as any Advance shall
remain unpaid, any Letter of Credit or Bank Hedge Agreement shall be outstanding
or any Lender shall have any Commitment under the Credit Agreement:
(a) Each Grantor shall maintain blocked deposit accounts ("Blocked
Accounts") only with banks ("Blocked Account Banks") that have entered into
letter agreements in substantially the form of Exhibit A (or such other
form as the Collateral Agent shall agree) with such Grantor and the
Collateral Agent ("Blocked Account Letters"). After the Initial Extension
of Credit and in accordance with Section 5.01(o) of the Credit Agreement,
the Borrower shall deliver each Blocked Account Letter to the Collateral
Agent, duly executed by each Grantor, the Collateral Agent and the Blocked
Account Bank party thereto.
(b) Each Grantor shall immediately instruct each Person obligated at
any time to make any payment to such Grantor for any reason (an "Obligor")
to make such
KL2:194292.6
6
payment to a Blocked Account and, if an Event of Default shall have
occurred and be continuing, shall, at the request of the Collateral Agent,
pay to the Collateral Agent for application as provided by the terms of the
Credit Agreement, at the end of each Business Day, all proceeds of
Collateral. So long as an Event of Default shall not have occurred and be
continuing or if the Collateral Agent shall not have given the notice
referred to in the immediately preceding sentence, such Grantor may operate
the Blocked Account in accordance with its past business practice.
(c) Upon any termination of any Blocked Account Letter or other
agreement with respect to the maintenance of a Blocked Account by such
Grantor or any Blocked Account Bank, such Grantor shall immediately notify
all Obligors that were making payments to such Blocked Account to make all
future payments to another Blocked Account. Such Grantor agrees to
terminate any or all Blocked Accounts and Blocked Account Letters upon
request by the Collateral Agent.
Section 7. Investing of Amounts in the L/C Cash Collateral Account. If
requested by the Borrower, the Collateral Agent will, subject to the provisions
of Section 19, from time to time (a) invest amounts on deposit in the L/C Cash
Collateral Account in such Cash Equivalents in the name of the Collateral Agent
as the Borrower may select subject to approval of the Collateral Agent and (b)
invest interest paid on the Cash Equivalents referred to in clause (a) above,
and reinvest other proceeds of any such Cash Equivalents that may mature or be
sold, in each case in such Cash Equivalents in the name of the Collateral Agent
as the Borrower may select subject to approval of the Collateral Agent (the Cash
Equivalents referred to in clauses (a) and (b) above being collectively
"Collateral Investments"). Interest and proceeds that are not invested or
reinvested in Collateral Investments as provided above shall be deposited and
held in the L/C Cash Collateral Account.
Section 8. Representations, Warranties and Covenants. Each Grantor
represents, warrants, agrees and covenants as to itself and its Collateral,
which representations, warranties, agreements and covenants shall survive
execution and delivery of this Agreement, as follows:
(a) All of the Plant and Equipment is located at the places specified
beneath such Grantor's name on Part I of Schedule III hereto. All of the
Inventory is located at the places specified beneath such Grantor's name on
Part II of Schedule III hereto. The chief place of business and chief
executive office of such Grantor and the office where such Grantor keeps
its records concerning the Receivables, and the original copies of each
Assigned Agreement and all originals of all Chattel Paper that evidence
Receivables, are located at the address listed below the name of such
Grantor on the signature pages hereof or, in the case of any Additional
Collateral Grantor, at the address listed below the name of such Additional
Collateral Grantor on its Pledge and Security Agreement Supplement (as
defined in Section 24(c)). A complete copy of each Assigned Agreement has
been delivered to the Collateral Agent. None of the Receivables or
Agreement Collateral is evidenced by a promissory note or other instrument.
(b) Such Grantor is the legal and beneficial owner of the Collateral
free and clear of any Lien or other right, title or interest of any Person
except for the security interest created under this Agreement and Liens
permitted by Section 5.02(a) of the Credit
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Agreement, and such Grantor shall defend the Collateral against all claims
and demands of all Persons at any time claiming the same or any interest
therein adverse to the Collateral Agent. No effective financing statement
or other instrument similar in effect covering or purporting to cover 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 Collateral Agent relating to
this Agreement and those Liens permitted under Section 5.02(a) of the
Credit Agreement.
(c) Set forth on Schedule VI hereto a complete and accurate list as of
the date hereof of all names under which the Grantor is doing business,
including, without limitation, trade names, division names and fictitious
names.
(d) Such Grantor has exclusive possession and control of the Plant and
Equipment and the Inventory, except for such Inventory as shall have been
consigned by the Grantor in the ordinary course of business to its
customers and subcontractors or as described on Schedule IV hereto.
(e) All of the shares of stock that constitute Pledged Shares have
been duly authorized and validly issued and are fully paid and
non-assessable and each Grantor is the legal, record and beneficial owner
of, and has good and marketable title to, such Pledged Shares, subject to
no pledge, lien, mortgage hypothetication, security interest, charge,
option or other encumbrance whatsoever except the liens and security
interests created by this Agreement. The Pledged Debt has been duly
authorized, authenticated or issued and delivered, is the legal, valid and
binding obligation of the issuers thereof, enforceable in accordance with
its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
limiting creditors' rights or by equitable principles generally (regardless
of whether enforcement is sought in equity or at law), and is not in
default. Each Grantor has full power, authority and legal right to pledge
the Pledged Shares and Pledged Debt pledged by it pursuant to this
Agreement.
(f) As of the date hereof, the Pledged Shares constitute the
percentage of the issued and outstanding shares of stock of the issuers
thereof indicated on Part I of Schedule I hereto. As of the date hereof,
the Pledged Debt is outstanding in the principal amount indicated on Part
II of Schedule I hereto.
(g) The Assigned Agreements, true and complete copies of which have
been furnished to each Lender, have been duly authorized, executed and
delivered by the Grantors and, to the best knowledge of the Grantors, all
other parties thereto, have not been amended or otherwise modified, are in
full force and effect and are binding upon and enforceable against the
Grantor in accordance with their terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or limiting creditors' rights or by equitable principles
generally (regardless of whether enforcement is sought in equity or at
law). There exists no default under any Assigned Agreement by the Grantors
and, to the best knowledge of the Grantors, any other party thereto. Each
party (other than any Loan Party) to any Assigned Agreement (other than the
Bank Hedge Agreements) has executed and delivered to such Grantor a
consent, in substantially the form of Exhibit C hereto (or such other form
as the Collateral
KL2:194292.6
8
Agent shall agree), to the assignment of the Agreement Collateral to the
Collateral Agent pursuant to this Agreement.
(h) No Grantor has Blocked Accounts or other deposit accounts other
than those listed on Schedule V hereto.
(i) All filings and other actions necessary or desirable to perfect
and protect the security interest in the Collateral taken as a whole
created under this Agreement have been duly made or taken, and this
Agreement, the pledge of the Security Collateral pursuant hereto and the
pledge and assignment of the Account Collateral pursuant hereto, together
with such filings and other actions, create a valid and perfected first
priority security interest in the Collateral taken as a whole, securing the
payment of the Secured Obligations, except for Collateral subject to Liens
permitted pursuant to Section 5.02(a) of the Credit Agreement.
(j) No consent of any other Person and no authorization, approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body or other third party is required (i) for the
grant by such Grantor of the assignment and security interest granted
hereunder, for the pledge by such Grantor of the Security Collateral
pursuant hereto or for the execution, delivery or performance of this
Agreement by such Grantor, (ii) for the perfection or maintenance of the
pledge, assignment and security interest created hereunder (including the
first priority nature of such pledge, assignment or security interest),
except for the filing of financing and continuation statements under the
UCC, which financing statements have been duly filed and are effective,
under applicable law, to perfect the security interest granted to the
Collateral Agent herein, or (iii) for the exercise by the Collateral Agent
of its voting or other rights provided for in this Agreement or the
remedies in respect of the Collateral pursuant to this Agreement, except
where the failure to obtain such consent or authorization would not, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(k) The Inventory has been produced by each Grantor in compliance in
all material respects with all requirements of the Fair Labor Standards
Act.
(l) This Agreement is made with full recourse to each Grantor
(including, without limitation, with full recourse to all assets of such
Grantor) and pursuant to and upon all warranties, representations,
covenants and agreements on the part of such Grantor contained herein, in
the other Collateral Documents and otherwise in writing in connection
herewith or therewith.
Section 9. Further Assurances. (a) Each Grantor agrees that from time to
time, at its own expense, it shall promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that the Collateral Agent may reasonably request, in order to
perfect and protect any pledge, assignment or security interest granted or
purported to be granted hereby or to enable the Collateral Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, each Grantor will: (i) upon
the occurrence and during the
KL2:194292.6
9
continuance of an Event of Default and upon the acceleration of all Borrowings
under the Credit Agreement, if the Collateral Agent so directs, legend, in form
and manner satisfactory to the Collateral Agent, its Receivables and the Related
Contracts, as well as books, records and documents (if any) of such Grantor
evidencing or pertaining to such Receivables and Related Contracts with an
appropriate reference to the fact that such Receivables and Related Contracts
have been assigned to the Collateral Agent and that the Collateral Agent has a
security interest therein; (ii) if any Collateral shall be evidenced by a
promissory note or other instrument or Chattel Paper, deliver and pledge to the
Collateral Agent hereunder such note or instrument duly indorsed and accompanied
by duly executed instruments of transfer or assignment, all in form and
substance satisfactory to the Collateral Agent; and (iii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Collateral
Agent may reasonably request, in order to perfect and preserve the pledge,
assignment and security interest granted or purported to be granted hereunder.
(b) Each Grantor hereby authorizes the Collateral Agent to file one or more
financing or continuation statements, and amendments thereto, relating to all or
any part of the Collateral without the signature of such Grantor where permitted
by law. A photocopy or other reproduction of this Agreement or any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law.
(c) Each Grantor shall furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Collateral Agent may
reasonably request, all in reasonable detail.
(d) Each Grantor shall promptly notify the Collateral Agent (but in any
event, within 2 Business Days) after it acquires beneficial ownership of real
property and, within 15 Business Days after the Collateral Agent's request, such
Grantor shall issue a mortgage to the Collateral Agent for the benefit of the
Secured Parties, in form and substance satisfactory to the Collateral Agent.
Section 10. As to Plant and Equipment and Inventory. (a) Each Grantor shall
keep the Plant and Equipment and the Inventory (other than Plant and Equipment
and Inventory sold in the ordinary course of business) at the places therefor
specified in Section 8(a) or, upon 30 days' prior written notice to the
Collateral Agent, at such other places in a jurisdiction where all action
required by Section 9 shall have been taken with respect to the Plant and
Equipment and the Inventory and, at the request of the Collateral Agent, an
opinion of counsel acceptable to the Collateral Agent shall have been furnished
to the Collateral Agent prior to any such change of location to the effect that
all financing or continuation statements and amendment or supplements thereto
have been filed in the appropriate filing office or offices, and all other
actions have been taken, in order to perfect (and maintain the perfection of)
the security interest granted hereby in respect of the types of Collateral.
(b) Each Grantor shall cause the Plant and Equipment to be maintained and
preserved in the same condition, repair and working order as when new, ordinary
wear and tear excepted, and in accordance with any manufacturer's manual where
applicable, and shall
KL2:194292.6 10
10
forthwith, or in the case of any loss or damage to any of the Plant and
Equipment as quickly as practicable after the occurrence thereof, make or cause
to be made all repairs, replacements and other improvements in connection
therewith that are necessary or desirable to such end. Notwithstanding the
foregoing, no Grantor shall be required to maintain, preserve, repair, replace
or improve any Plant or Equipment if the Board of Directors or senior executive
officers of such Grantor shall determine in the reasonable business judgement of
such Board of Directors or senior executive officers, as the case may be, that
not doing so is in the best interests of such Grantor. Each Grantor shall
promptly furnish to the Collateral Agent a statement respecting any material
loss or damage to any of the Plant and Equipment.
(c) Each Grantor shall pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all claims
(including, without limitation, claims for labor, materials and supplies)
against, the Plant and Equipment and Inventory, except those being contested
diligently in good faith. In producing the Inventory, each Grantor shall comply
in all material respects with all requirements of the Fair Labor Standards Act.
Section 11. Insurance. (a) Each Grantor shall, at its own expense, maintain
insurance with respect to the Plant and Equipment and the Inventory against loss
or damage of the kinds customarily insured against by corporations similarly
situated and owning properties and engaged in like businesses, with reputable
insurers or with the government of the United States of America or any agency or
instrumentality thereof, in such amounts (giving effect to self insurance) with
such deductibles and by such methods as shall be customary for corporations
similarly situated in the industry. Each policy for liability insurance shall
provide for all losses to be paid on behalf of the Collateral Agent and such
Grantor as their interests may appear, and each policy for property damage
insurance shall provide for all losses to be paid directly to the Collateral
Agent, for the ratable benefit of the Secured Parties and, in certain
circumstances, to the Borrower in accordance with, and as permitted by, the
terms of the Credit Agreement. Each such policy shall in addition (i) name such
Grantor and the Collateral Agent as insured parties thereunder (without any
representation or warranty by or obligation upon the Collateral Agent) as their
interests may appear, (ii) provide that there shall be no recourse against the
Collateral Agent for payment of premiums or other amounts with respect thereto
and (iii) provide that at least 10 days' prior written notice of cancellation or
of lapse shall be given to the Collateral Agent by the insurer. Each Grantor
shall, as often as the Collateral Agent reasonably requests, deliver to the
Collateral Agent original or duplicate policies of such insurance and a report
of a reputable insurance broker with respect to such insurance. Further, each
Grantor shall, at the request of the Collateral Agent, duly execute and deliver
instruments of assignment of such insurance policies to comply with the
requirements of Section 9 and cause the insurers to acknowledge notice of such
assignment.
(b) Reimbursement under any liability insurance maintained by any Grantor
pursuant to this Section 11 may be paid directly to the Person who shall have
incurred liability covered by such insurance. In case of any loss involving
damage to the Plant and Equipment or the Inventory when subsection (c) of this
Section 11 is not applicable, such Grantor shall make or cause to be made the
necessary repairs to or replacements of such Plant and Equipment or such
Inventory, and any proceeds of insurance maintained by such Grantor pursuant to
this Section 11 shall be applied pursuant to and in accordance with the Credit
Agreement.
KL2:194292.6 11
11
Notwithstanding the foregoing, no Grantor shall be required to repair or replace
any Plant or Equipment if the Board of Directors or senior executive officers of
such Grantor shall determine in the reasonable business judgment of such Board
of Directors or senior executive officers, as the case may be, that not doing so
is in the best interests of such grantor.
(c) Upon the occurrence and during the continuance of any Event of Default,
all insurance payments in respect of such Plant and Equipment or such Inventory
shall be paid to and applied by the Collateral Agent as specified in Section
19(b).
Section 12. Place of Perfection; Records; Collection of Receivables. (a)
Each Grantor shall keep its chief place of business and chief executive office
and the office where it keeps its records concerning the Collateral, and the
original copies of the Assigned Agreements and all originals of all Chattel
Paper that evidence Receivables, at the location therefor specified in Section
8(a) or, upon 30 days' prior written notice to the Collateral Agent, at such
other locations in a jurisdiction where all actions required by Section 9 shall
have been taken with respect to the Collateral and, at the request of the
Collateral Agent, an opinion of counsel acceptable to the Collateral Agent shall
have been furnished to the Collateral Agent prior to any such change of location
to the effect that all financing or continuation statements and amendment or
supplements thereto have been filed in the appropriate filing office or offices,
and all other actions have been taken, in order to perfect (and maintain the
perfection of) the security interest granted hereby in respect of the types of
Collateral. Each Grantor will hold and preserve such records, Assigned
Agreements and Chattel Paper and will permit representatives of the Collateral
Agent at any and all reasonable times to inspect and make abstracts from such
records and Chattel Paper.
(b) Except as otherwise provided in this subsection (b), each Grantor shall
continue to collect, at its own expense, all amounts due or to become due such
Grantor under the Receivables. Upon the occurrence and during the continuance of
any Event of Default, in connection with such collections, each Grantor may take
(and, at the Collateral Agent's direction, shall take) such action as such
Grantor or the Collateral Agent may deem necessary or advisable to enforce
collection of the Receivables; provided, however, that the Collateral Agent
shall have the right upon the occurrence and during the continuance of an Event
of Default, upon notice to such Grantor of its intention to do so, to notify the
obligors under any Receivables of the assignment of such Receivables to the
Collateral Agent and to direct such obligors to make payment of all amounts due
or to become due to such Grantor thereunder directly to the Collateral Agent
and, upon such notification and at the expense of such Grantor, to enforce
collection of any such Receivables, and to adjust, settle or compromise the
amount or payment thereof, in the same manner and to the same extent as such
Grantor might have done. After receipt by any Grantor of the notice from the
Collateral Agent referred to in the proviso to the immediately preceding
sentence, (i) all amounts and proceeds (including instruments) received by such
Grantor in respect of the Receivables shall be received in trust for the benefit
of the Collateral Agent hereunder, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the Collateral Agent in the same
form as so received (with any necessary indorsement) to be applied as provided
by Section 19(b) of this Agreement and (ii) such Grantor shall not adjust,
settle or compromise the amount or payment of any Receivable, release wholly or
partly any obligor thereof, or allow any credit or discount thereon.
KL2:194292.6
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Section 13. Voting Rights; Dividends; Etc. (a) So long as no Event of
Default shall have occurred and be continuing:
(i) Each Grantor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Security Collateral or any part
thereof for any purpose not inconsistent with the terms of this Agreement
or the other Documents; provided, however, that such Grantor shall not
exercise or refrain from exercising any such right if such action (a) would
reasonably be expected to have a material adverse effect on the value of
the Security Collateral or any part thereof or (b) would violate or be
inconsistent with any of the terms of this Agreement, the Credit Agreement,
any other Loan Document or any Bank Hedge Agreement;
(ii) Each Grantor shall be entitled to receive and retain any and all
dividends and interest paid in respect of the Security Collateral permitted
by the Credit Agreement; provided, however, that any and all
(A) dividends and interest paid or payable other than in cash in
respect of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, such Security
Collateral, and
(B) dividends and other distributions paid or payable in cash in
respect of such Security Collateral in connection with a partial or
total liquidation or dissolution
shall be, and shall be forthwith delivered to the Collateral Agent to hold
as, Security Collateral and shall, if received by such Grantor, be received
in trust for the benefit of the Collateral Agent, be segregated from the
other property or funds of such Grantor and be forthwith delivered to the
Collateral Agent as Security Collateral in the same form as so received
(with any necessary indorsement). Notwithstanding the foregoing, it is
understood that any and all dividends and other distributions paid or
payable in cash in respect of such Security Collateral in connection with a
reduction of capital, capital surplus or paid-in-surplus and any and all
cash paid, payable or otherwise distributed in respect of principal of, or
in redemption of, or in exchange for, such Security Collateral shall be
forthwith delivered to the Blocked Accounts by such Grantor.
(iii) The Collateral Agent shall execute and deliver (or cause to
be executed and delivered) to each Grantor all such proxies and other
instruments as such Grantor may reasonably request for the purpose of
enabling such Grantor to exercise the voting and other rights that it
is entitled to exercise pursuant to paragraph (i) above and to receive
the dividends or interest payments that it is authorized to receive
and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) All rights of each Grantor (x) to exercise or refrain from
exercising the voting and other consensual rights that it would
otherwise be entitled to exercise pursuant to Section 13(a)(i) shall,
upon notice to such Grantor by the Collateral Agent, cease and
KL2:194292.6 13
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(y) to receive the dividends and interest payments that it would
otherwise be authorized to receive and retain pursuant to Section
13(a)(ii) shall automatically cease, and all such rights shall
thereupon become vested in the Collateral Agent, which shall thereupon
have the sole right to exercise or refrain from exercising such voting
and other consensual rights and to receive and hold as Security
Collateral such dividends and interest payments.
(ii) All dividends and interest payments that are received by any
Grantor contrary to the provisions of paragraph (i) of this Section
13(b) shall be received in trust for the benefit of the Collateral
Agent, shall be segregated from other funds of such Grantor and shall
be forthwith paid over to the Collateral Agent as Security Collateral
in the same form as so received (with any necessary indorsement).
Section 14. [Intentionally Omitted]
Section 15. [Intentionally Omitted]
Section 16. Transfers and Other Liens; Additional Shares. (a) Each Grantor
agrees not (i) to sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, any of the Collateral, except
sales, assignments and dispositions otherwise permitted under the Credit
Agreement, or (ii) to create or suffer to exist any Lien upon or with respect to
any of the Collateral except for the pledge, assignment and security interest
created under this Agreement and the Liens permitted under Section 5.02(a) of
the Credit Agreement.
(b) Each Grantor shall (i) for the Pledged Shares and all other shares of
stock pledged hereunder that are issued by issuers which are controlled by such
Grantor, cause each issuer of the Pledged Shares and each issuer of all other
shares of stock pledged hereunder not to issue any stock or other securities in
addition to or in substitution for the Pledged Shares or such other shares
issued by any such issuer, except to such Grantor, and (ii) pledge hereunder,
immediately upon its acquisition (directly or indirectly) thereof, any and all
additional shares of stock or other securities.
Section 17. Collateral Agent Appointed Attorney-in-Fact. Each Grantor
hereby irrevocably appoints the Collateral Agent, effective upon the occurrence
and during the continuation of any Event of Default, 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 Collateral
Agent's discretion and upon notice to such Grantor, to take any action and to
execute any instrument that the Collateral Agent may deem necessary or advisable
to accomplish the purposes of this Agreement, including, without limitation:
(a) to obtain and adjust insurance required to be paid to the
Collateral Agent pursuant to Section 11,
(b) to ask for, 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,
KL2:194292.6
14
(c) to receive, indorse and collect any drafts or other instruments,
documents and Chattel Paper, in connection with clause (a) or (b) above,
and
(d) to file any claims or take any action or institute any proceedings
that the Collateral Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce compliance with
the terms and conditions of any Assigned Agreement or the rights of the
Collateral Agent with respect to any of the Collateral.
Section 18. Collateral Agent May Perform. If any Grantor fails to perform
any agreement contained herein, the Collateral Agent may itself perform, or
cause performance of, such agreement, and the expenses of the Collateral Agent
incurred in connection therewith shall be payable by such Grantor under Section
22(b).
Section 19. Remedies. If any Event of Default shall have occurred and be
continuing:
(a) The Collateral 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 upon
default under the New York UCC (whether or not the New York UCC applies to
the affected Collateral) and also may (i) require each Grantor to, and each
Grantor hereby agrees that it will at its expense and upon request of the
Collateral Agent forthwith, assemble all or part of the Collateral as
directed by the Collateral Agent and make it available to the Collateral
Agent at a place and time to be designated by the Collateral Agent 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
Collateral Agent's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Collateral Agent may deem
commercially reasonable. Each Grantor agrees that, to the extent notice of
sale shall be required by law, at least ten days' 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 Collateral
Agent shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given. The Collateral 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) (i) All cash proceeds received by the Collateral 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 Collateral Agent, be held
by the Collateral Agent as collateral for, and/or then or at any time
thereafter applied (after payment of any amounts payable to the Collateral
Agent pursuant to Section 22) shall be applied as follows:
(A) first, to the extent proceeds remain after the application of
any amounts pursuant to Section 22, an amount equal to the outstanding
Primary Obligations (as defined in Section 19(b)(ii)) shall be paid to
the Secured Parties as provided in Section 19(b)(iv) hereof, with each
Secured Party receiving an amount equal to such outstanding Primary
Obligations
KL2:194292.6
15
(as defined in Section 19(b)(ii)) or, if the proceeds are insufficient
to pay in full all such Primary Obligations, its Pro Rata Share of the
amount remaining to be distributed;
(B) second, to the extent proceeds remain after the application
pursuant to the preceding clause (A), an amount equal to the
outstanding Secondary Obligations (as defined in Section 19(b)(ii))
shall be paid to the Secured Parties as provided in Section 19(b)(iv)
hereof, with each Secured Party receiving an amount equal to its
outstanding Secondary Obligations, or, if the proceeds are
insufficient to pay in full all such Secondary Obligations, its Pro
Rata Share (as defined in Section 19(b)(ii)) of the amount remaining
to be distributed; and
(C) third, to the extent proceeds remain after the application
pursuant to the preceding clauses (A) and (B), and following the
termination of this Agreement pursuant to Section 27 hereof, to the
relevant Grantor or to whomever may be lawfully entitled to receive
such surplus.
(ii) For purposes of this Agreement (x) "Pro Rata Share" shall
mean, when calculating a Secured Party's portion of any distribution
or amount, that amount (expressed as a percentage) equal to a fraction
the numerator of which is the then unpaid amount of such Secured
Party's Primary Obligations or Secondary Obligations, as the case may
be, and the denominator of which is the then outstanding amount of all
Primary Obligations or Secondary Obligations, as the case may be, (y)
"Primary Obligations" shall mean (i) in the case of the Credit
Agreement Obligations, all principal of, and interest on, all
Advances, and all fees and (ii) in the case of the Other Obligations
that are secured by this Agreement or any other Collateral Document,
all amounts due under such Bank Hedge Agreements and (z) "Secondary
Obligations" shall mean all Secured Obligations other than Primary
Obligations.
(iii) When payments to Secured Parties are based upon their
respective Pro Rata Shares, the amounts received by such Secured
Parties hereunder shall be applied (for purposes of making
determinations under this Section 19(b) only) (i) first, to their
Primary Obligations and (ii) second, to their Secondary Obligations.
If any payment to any Secured Party of its Pro Rata Share of any
distribution would result in overpayment to such Secured Party, such
excess amount shall instead be distributed in respect of the unpaid
Primary Obligations or Secondary Obligations, as the case may be, of
the other Secured Parties, with each Secured Party whose Primary
Obligations or Secondary Obligations, as the case may be, have not
been paid in full to receive an amount equal to such excess amount
multiplied by a fraction the numerator of which is the unpaid Primary
Obligations or Secondary Obligations, as the case may be, of such
Secured Party and the denominator of which is the unpaid Primary
Obligations or Secondary Obligations, as the case may be, of all
Secured Parties entitled to such distribution.
KL2:194292.6
16
(iv) All payments required to be made hereunder shall be made (x)
if to the Lenders, to the Collateral Agent under the Credit Agreement
for the account of the Lenders, and (y) if to the Hedge Banks, to the
trustee, paying agent or other similar representative (each a
"Representative") for the Hedge Banks or, in the absence of such a
Representative, directly to the Hedge Banks, as their interests may
appear.
(v) For purposes of applying payments received in accordance with
this Section 19(b), the Collateral Agent shall be entitled to rely
upon the Representative for the Hedge Banks or, in the absence of such
a Representative, upon the Hedge Banks for a determination (which each
Representative for any Hedge Banks and the Lenders agree (or shall
agree) to provide upon request of the Collateral Agent) of the
outstanding Primary Obligations and Secondary Obligations owed to the
Lenders or the Hedge Banks, as the case may be. Unless it has actual
knowledge (including by way of written notice from a Lender or a Hedge
Bank) to the contrary, each Representative, in furnishing information
pursuant to the preceding sentence, and the Collateral Agent, in
acting hereunder, shall be entitled to assume that no Secondary
Obligations are outstanding. Unless it has actual knowledge (including
by way of written notice from a Hedge Bank) to the contrary, the
Collateral Agent, in acting hereunder, shall be entitled to assume
that no Bank Hedge Agreements are in existence.
(vi) It is understood that the Grantors shall remain jointly and
severally liable to the extent of any deficiency between the amount of
the proceeds of the Collateral and the aggregate amount of the Secured
Obligations.
(c) The Collateral Agent may exercise any and all rights and remedies
of the Grantors under or in connection with the Assigned Agreements or
otherwise in respect of the Collateral, including, without limitation, any
and all rights of any Grantor to demand or otherwise require payment of any
amount under, or performance of any provision of, any Assigned Agreement.
(d) All payments received by any Grantor under or in connection with
any Assigned Agreement or otherwise in respect of the Collateral shall be
received in trust for the benefit of the Collateral Agent, shall be
segregated from other funds of such Grantor and shall be forthwith paid
over to the Collateral Agent in the same form as so received (with any
necessary indorsement).
(e) The Collateral Agent may, without notice to any Grantor except as
required by law and at any time or from time to time, charge, set-off and
otherwise apply all or any part of the Secured Obligations against the L/C
Cash Collateral Account or any part thereof.
Section 20. Registration Rights. If the Collateral Agent shall determine to
exercise its right to sell all or any of the Security Collateral pursuant to
Section 19, each Grantor agrees that, upon request of the Collateral Agent, such
Grantor will, at its own expense:
KL2:194292.6
17
(a) execute and deliver, and cause each issuer of the Security
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 Collateral Agent, advisable to register such Security
Collateral under the provisions of the Securities Act of 1933, as amended
from time to time (the "Securities Act"), 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 that,
in the opinion of the Collateral 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;
(b) use its best efforts to qualify the Security Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Security Collateral, as
requested by the Collateral Agent;
(c) 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;
(d) provide the Collateral Agent with such other information
(including, without limitation, forward looking information) as may be
necessary or, in the opinion of the Collateral Agent, advisable to enable
the Collateral Agent to effect the sale of such Security Collateral; and
(e) do or cause to be done all such other acts and things as may be
necessary to make such sale of the Security Collateral or any part thereof
valid and binding and in compliance with applicable law.
Notwithstanding anything contained in this Agreement, the Collateral Agent
may sell all or any of the Security Collateral at a private sale without
registering such Security Collateral under the provisions of the Securities Act
and the Collateral Agent is not liable for any reduced value of such Security
Collateral received by the Collateral Agent as a result of such sale. The
Collateral Agent is authorized, in connection with any sale of the Security
Collateral pursuant to Section 19, to deliver or otherwise disclose to any
prospective purchaser of the Security Collateral (i) any registration statement
or prospectus, and all supplements and amendments thereto, prepared pursuant to
clause (a) above, (ii) any information and projections provided to it pursuant
to clause (d) above and (iii) any other information in its possession relating
to the Security Collateral.
Section 21. The Collateral Agent. (a) The Secured Parties, by their
acceptance of the benefits of this Agreement and the other Loan Documents,
hereby irrevocably designate Fleet to act as the Collateral Agent with respect
to this Agreement and as specified in the other Loan Documents. Each Secured
Party hereby irrevocably authorizes, and each holder of any Note by the
acceptance of such Note and by the acceptance of the benefits of this Agreement
and the other Loan Documents shall be deemed irrevocably to authorize, the
Collateral Agent to take
KL2:194292.6 18
18
such action on its behalf under the provisions of this Agreement and the other
Loan Documents and any other instruments and agreements referred to herein or
therein and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of the Collateral Agent
by the terms hereof or thereof and such other powers as are reasonably
incidental thereto. The Collateral Agent may perform any of its duties hereunder
and under the other Loan Documents by or through its authorized agents or
employees.
(b) The Collateral Agent shall have no duties or responsibilities except
those expressly set forth in this Agreement and in the other Loan Documents. The
duties of the Collateral Agent shall be mechanical and administrative in nature;
the Collateral Agent shall not have by reason of this Agreement, any other Loan
Document or any Bank Hedge Agreement a fiduciary relationship in respect of any
Secured Party; and nothing in this Agreement, any other Loan Document or any
Bank Hedge Agreement, expressed or implied, is intended to or shall be so
construed as to impose upon the Collateral Agent any obligations in respect of
this Agreement or any other Loan Document except as expressly set forth herein
or therein.
(c) The Collateral Agent shall not be responsible for insuring the
Collateral hereunder or any collateral under the other Collateral Documents or
for the payment of taxes, charges or assessments or discharging of Liens upon
the Collateral hereunder or any collateral under the Collateral Documents or
otherwise as to the maintenance of the Collateral hereunder or any collateral
under the Collateral Documents. The Collateral Agent shall not be required to
ascertain or inquire as to the performance by any Grantor of any of the
covenants or agreements contained in this Agreement or any other Loan Document
or any Bank Hedge Agreement.
(d) The Collateral Agent shall be under no obligation or duty to take any
action under this Agreement or any other Loan Document if taking such action (i)
would subject the Collateral Agent to a tax in any jurisdiction where it is not
then subject to a tax or (ii) would require the Collateral Agent to qualify to
do business in any jurisdiction where it is not then so qualified, unless the
Collateral Agent receives security or indemnity satisfactory to it against such
tax (or equivalent liability), or any liability resulting from such
qualification, in each case as results from the taking of such action under this
Agreement or any other Loan Document or (iii) would subject the Collateral Agent
to in personam jurisdiction in any locations where it is not then so subject.
Notwithstanding any other provision of this Agreement or any other Loan
Document, neither the Collateral Agent nor any of its officers, directors,
employees, affiliates or agents shall, in its individual capacity, be personally
liable for any action taken or omitted to be taken by it in accordance with this
Agreement or any other Loan Document except for its own gross negligence or
willful misconduct.
(e) Independently and without reliance upon the Collateral Agent, each
Secured Party, to the extent it deems appropriate, has made and shall continue
to make (i) its own independent investigation of the financial condition and
affairs of each Grantor in connection with the making and the continuance of the
Obligations and the taking or not taking of any action in connection therewith,
and (ii) its own appraisal of the creditworthiness of each Grantor, and the
Collateral Agent shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Secured Party with any credit or other
information with respect thereto, whether coming into its possession before the
extension of any Obligations or the purchase of any Notes or at any time or
times thereafter. The Collateral Agent shall not be responsible in any manner
KL2:194292.6 19
19
whatsoever to any Secured Party for the correctness of any recitals, statements,
information, representations or warranties in any Document or in any document,
certificate or other writing delivered in connection therewith or for the
execution, effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of this Agreement or the other Documents
or the security interests granted hereunder or thereunder or the financial
condition of any Grantor or be required to make any inquiry concerning either
the performance or observance of any of the terms, provisions or conditions of
this Agreement or any other Loan Document, or the financial condition of any
Grantor, or the existence or possible existence of any Default or Event of
Default. The Collateral Agent makes no representations as to the value or
condition of the Collateral hereunder or the collateral under any other
Collateral Document or any part thereof, or as to the title of any Grantor
thereto or as to the security afforded by this Agreement or the other Collateral
Documents.
(f) (i) No Secured Party shall have the right to cause the Collateral Agent
to take any action with respect to the Collateral hereunder or the collateral
under any other Collateral Document, with only the Required Lenders (or after
the repayment in full of all Credit Agreement Obligations, the holders of a
majority of the outstanding Other Obligations) having the right to direct the
Collateral Agent to take any such action. If the Collateral Agent shall request
instructions from the Required Lenders (or after the repayment in full of all
Credit Agreement Obligations, the holders of a majority of the outstanding Other
Obligations), with respect to any act or action (including failure to act) in
connection with this Agreement or any other Collateral Document, the Collateral
Agent shall be entitled to refrain from such act or taking such action unless
and until it shall have received instructions from the Required Lenders (or
after the repayment in full of all Credit Agreement Obligations, the holders of
a majority of the outstanding Other Obligations) and to the extent requested,
appropriate indemnification in respect of actions to be taken, and the
Collateral Agent shall not incur liability to any Person by reason of so
refraining. Without limiting the foregoing, no Secured Party shall have any
right of action whatsoever against the Collateral Agent as a result of the
Collateral Agent acting or refraining from acting hereunder in accordance with
the instructions of the Required Lenders (or after the repayment in full of all
Credit Agreement Obligations, the holders of a majority of the outstanding Other
Obligations).
(ii) The Collateral Agent shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement or any other Loan Document
at the request or direction of any of the Secured Parties, unless such Secured
Parties shall have offered to the Collateral Agent reasonable security or
indemnity against the costs, expenses and liabilities that might be incurred by
it in compliance with such request or direction.
(g) The Collateral Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, radiogram, order
or other document or telephone message signed, sent or made by the proper Person
or entity, and, with respect to all legal matters pertaining to this Agreement
or any other Document and its duties hereunder or thereunder, upon advice of
counsel selected by it.
(h) To the extent the Collateral Agent is not reimbursed and indemnified by
any Grantor under this Agreement or any other Loan Document, the Secured Parties
will reimburse
KL2:194292.6
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and indemnify the Collateral Agent, in proportion to their respective
outstanding principal amounts (including, for this purpose, any unpaid Primary
Obligations in respect of Bank Hedge Agreements, as outstanding principal) of
Obligations, for and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by or
asserted against the Collateral Agent in performing its duties hereunder or
under any other Loan Document, or in any way relating to or arising out of its
actions as Collateral Agent in respect of this Agreement or under any other Loan
Document (including any amounts required to be returned by the Collateral Agent
in respect of Collateral hereunder or collateral under any other Collateral
Document) except for those resulting solely from the Collateral Agent's own
gross negligence or willful misconduct. The indemnities set forth in this
Section 21(h) shall survive the repayment of all Obligations, with the
respective indemnification at such time to be based upon the outstanding
principal amounts (determined as described above) of Obligations at the time of
the respective occurrence upon which the claim against the Collateral Agent is
based or, if same is not reasonably determinable, based upon the outstanding
principal amounts (determined as described above) of Obligations as in effect
immediately prior to the termination of this Agreement. The indemnities set
forth in this Section 21(h) are in addition to any indemnities provided by the
Lenders to the Collateral Agent pursuant to the Credit Agreement, with the
effect being that the Lenders shall be responsible for indemnifying the
Collateral Agent to the extent the Collateral Agent does not receive payments
pursuant to this Section 21(h) from the Secured Parties (although in such event,
and upon the payment in full of all such amounts owing to the Collateral Agent,
the respective Lenders who paid same shall be subrogated to the rights of the
Collateral Agent to receive payment from the Secured Parties).
(i) With respect to its obligations as a lender under the Credit Agreement
and any other Loan Documents to which the Collateral Agent is a party, and to
act as agent under one or more of such Loan Documents, the Collateral Agent
shall have the rights and powers specified therein and herein for a "Lender" or
an "Collateral Agent", as the case may be, and may exercise the same rights and
powers as though it were not performing the duties specified herein; and the
terms "Lender," "Required Lenders," "holders of Notes," or any similar terms
shall, unless the context clearly otherwise indicates, include the Collateral
Agent in its individual capacity. The Collateral Agent may accept deposits from,
lend money to, and generally engage in any kind of banking, trust or other
business with any Grantor or any Affiliate or Subsidiary of any Grantor as if it
were not performing the duties specified herein or in the other Loan Documents,
and may accept fees and other consideration from any Grantor for services in
connection with the Credit Agreement, the other Loan Documents and otherwise
without having to account for the same to the Secured Parties.
(j) The Collateral Agent may deem and treat the payee of any Note as the
owner thereof for all purposes hereof unless and until written notice of the
assignment, transfer or endorsement thereof, as the case may be, shall have been
filed with the Collateral Agent. Any request, authority or consent of any person
or entity who, at the time of making such request or giving such authority or
consent, is the holder of any Note, shall be final and conclusive and binding on
any subsequent holder, transferee, assignee or endorsee, as the case may be, of
such Note or of any Note or Notes issued in exchange therefor.
KL2:194292.6
21
(k) The Collateral Agent may resign from the performance of all of its
functions and duties under this Agreement at any time by giving 20 Business
Days' prior or written notice to each Grantor and the Secured Parties. Such
resignation shall take effect upon the appointment of a successor Collateral
Agent pursuant to clause (ii) or (iii) of this Section 21(k).
(ii) If a successor Collateral Agent shall not have been appointed
within said 20 Business Day period by the Required Lenders, the Collateral
Agent, with the consent of each Grantor, which consent shall not be
unreasonably withheld or delayed, shall then appoint a successor Collateral
Agent who shall serve as Collateral Agent hereunder until such time, if
any, as the Required Lenders appoint a successor Collateral Agent as
provided above.
(iii) If no successor Collateral Agent has been appointed pursuant to
clause (ii) of this Section 21(k) by the 20th Business Day after the date
of such notice of resignation was given by the Collateral Agent, the
Required Lenders shall then appoint a successor Collateral Agent who shall
serve as Collateral Agent hereunder until such time, if any, as the
Required Lenders appoint a successor Collateral Agent as provided above.
(l) Each Grantor (by its execution and delivery hereof) hereby agrees that
it shall pay to Fleet as the Collateral Agent, such fees as have been separately
agreed to in writing with Fleet for acting as Collateral Agent hereunder and
under the other Collateral Documents. In the event a successor Collateral Agent
is appointed pursuant to Section 21(k), each Grantor hereby agrees to pay such
successor Collateral Agent such fees for acting as such as would customarily be
charged by such Collateral Agent for acting in such capacity in similar
situations.
Section 22. Indemnity and Expenses. (a) Each of the Grantors jointly and
severally agrees to indemnify each Secured Party from and against any and all
claims, losses and liabilities growing out of or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except claims,
losses or liabilities found in a final, appealable judgment by a court of
competent jurisdiction to have resulted solely from such Secured Party's gross
negligence or wilful misconduct.
(b) Each Grantor jointly and severally agrees to pay to the Collateral
Agent, upon demand, the amount of any and all reasonable costs and expenses,
including, without limitation, the reasonable fees and expenses of its counsel
and of any experts and agents (including, without limitation, the following
costs of such counsel: support staff, litigation preparation, computerized
research, telephone, telefax, mileage, deposition, postage, photocopy, process
service, video tape and other similar costs), that the Collateral Agent may
incur in connection with (i) the administration of this Agreement, (ii) the
custody, preservation, use or operation of, or the sale of, collection from or
other realization upon, any of the Collateral, (iii) the exercise or enforcement
of any of the rights of the Collateral Agent or any other Secured Party
hereunder or (iv) the failure by such Grantor to perform or observe any of the
provisions hereof.
Section 23. Security Interest Absolute. The obligations of each Grantor
under this Agreement are independent of the Secured Obligations, and a separate
action or actions may be
KL2:194292.6
22
brought and prosecuted against such Grantor to enforce this Agreement,
irrespective of whether any action is brought against the other Grantors or
whether the other Grantors are joined in any such action or actions. All rights
of the Collateral Agent and the pledge, assignment and security interest
hereunder, and all obligations of each Grantor hereunder, shall be absolute and
unconditional, irrespective of:
(i) any lack of validity or enforceability of any Loan Document, any
Bank Hedge Agreement or any other agreement or instrument relating thereto;
(ii) 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
amendment or waiver of or any consent to any departure from any Loan
Document or any Bank Hedge Agreement, including, without limitation, any
increase in the Secured Obligations resulting from the extension of
additional credit to any Grantor or any of its Subsidiaries or otherwise;
(iii) any taking, exchange, release or nonperfection of any other
collateral, or any taking, release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured Obligations;
(iv) any manner of application of collateral, or proceeds thereof, to
all or any of the Secured Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Secured Obligations or
any other assets of any Grantor or any of its Subsidiaries;
(v) any change, restructuring or termination of the corporate
structure or existence of any Grantor or any of its Subsidiaries; or
(vi) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, such Grantor or a third-party grantor of a
security interest.
Section 24. Amendments; Waivers; Etc. (a) No amendment or waiver of any
provision of this Agreement, and no 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 Collateral Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
(b) No failure on the part of the Collateral Agent, any Lender or any Hedge
Bank to exercise, and no delay in exercising, any right, power or privilege
hereunder shall operate as a waiver thereof or consent thereto; nor shall any
single or partial exercise of any such right, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.
(c) Upon the execution and delivery by any Person of a security agreement
supplement in substantially the form of Exhibit B hereto (each a "Pledge and
Security Agreement Supplement"), (i) such Person shall be referred to as an
"Additional Collateral Grantor" and shall be and become a Grantor, and each
reference in this Agreement to "Grantor" shall also mean and be a reference to
such Additional Collateral Grantor and (ii) the supplements attached to each
KL2:194292.6
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Pledge and Security Agreement Supplement shall be incorporated into and become a
part of and supplement Schedules I through VII hereto, as appropriate, and the
Collateral Agent may attach such supplements to such Schedules, and each
reference to such Schedules shall mean and be a reference to such Schedules, as
supplemented pursuant hereto.
Section 25. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic or
telex communication) and mailed, telecopied, telegraphed, telexed, cabled or
delivered, if to any Grantor, addressed to it at the address set forth below the
name of such Grantor on the signature pages hereof (or, in the case of any
Additional Collateral Grantor, at the address set forth below the name of such
Additional Collateral Grantor on the signature page of its Pledge and Security
Agreement Supplement), and if to the Collateral Agent, any Lender, the Issuing
Bank or any Hedge Bank, addressed to it at its address set forth in Section 8.02
of 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 each other party complying
as to delivery with the terms of this Section 25. All such notices and other
communications shall, when mailed, telecopied, telegraphed or telexed, be
effective when deposited in the mails, delivered to the telegraph company,
transmitted by telecopier or confirmed by telex answerback, respectively,
addressed as aforesaid.
Section 26. Continuing Security Interest; Assignments under the Credit
Agreement. This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the latest of the
indefeasible and irrevocable payment in full in cash of the Secured Obligations,
the Final Maturity Date and the termination or expiration of all Bank Hedge
Agreements, (b) be binding upon each Grantor, its successors and assigns and (c)
inure, together with the rights and remedies of the Collateral Agent hereunder,
to the benefit of the Secured Parties and their respective successors,
transferees and assigns. Without limiting the generality of the foregoing clause
(c), any Lender may assign or otherwise transfer all or any portion of its
rights and obligations under the Credit Agreement (including, without
limitation, all or any portion of its Commitment, the Advances owing to it and
the Note or Notes held by it) to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to such
Lender herein or otherwise, in each case as provided in Section 8.07 of the
Credit Agreement.
Section 27. Release and Termination. (a) Upon any sale, lease, transfer or
other disposition of any item of Collateral in accordance with the terms of the
Loan Documents (other than sales of Inventory in the ordinary course of business
consistent with past practices), the Collateral Agent will, at the appropriate
Grantor's expense, execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted hereby; provided,
however, that (i) at the time of such request and such release no Event of
Default shall have occurred and be continuing, (ii) such Grantor shall have
delivered to the Collateral Agent, at least ten Business Days prior to the date
of the proposed release, a written request for release describing the item of
Collateral and the terms of the sale, lease, transfer or other disposition in
reasonable detail, including, without limitation, the price thereof and any
expenses in connection therewith, together with a form of release for execution
by the Collateral Agent and a certification by such Grantor to the effect that
the transaction is in compliance with the Loan Documents and as to such other
matters as the Collateral Agent may request and (iii) the Net Cash Proceeds of
any such sale,
KL2:194292.6
24
lease, transfer or other disposition required to be applied in accordance with
Section 2.06 of the Credit Agreement shall be paid to, or in accordance with the
instructions of, the Collateral Agent at the closing.
(b) Upon the latest of the indefeasible and irrevocable payment in full in
cash of the Secured Obligations, the Final Maturity Date and the termination or
expiration of all Bank Hedge Agreements, the pledge, assignment and security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the appropriate Grantor. Upon any such termination, the Collateral
Agent will, at the appropriate Grantor's expense, execute and deliver to such
Grantor such documents as such Grantor shall reasonably request to evidence such
termination.
Section 28. Jurisdiction, Etc. (a) THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
TO BE PERFORMED ENTIRELY IN SUCH STATE. UNLESS OTHERWISE DEFINED HEREIN OR IN
THE CREDIT AGREEMENT, TERMS USED IN ARTICLE 9 OF THE NEW YORK UCC ARE USED
HEREIN AS THEREIN DEFINED. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT, ANY OTHER DOCUMENT OR ANY BANK HEDGE AGREEMENT MAY BE BROUGHT IN ▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ SITTING IN NEW YORK CITY OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION
OF THE AFORESAID COURTS. EACH SUCH PARTY HEREBY FURTHER IRREVOCABLY WAIVES ANY
CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH PARTY, AND
AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT, ANY OTHER DOCUMENT TO WHICH IT IS A PARTY OR ANY BANK HEDGE
AGREEMENT BROUGHT IN ANY OF THE AFORESAID COURTS, THAT ANY SUCH COURTS LACK
PERSONAL JURISDICTION OVER SUCH PARTY. EACH SUCH PARTY FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH PARTY AT ITS ADDRESS SET FORTH IN
SECTION 8.02 OF THE CREDIT AGREEMENT, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS
AFTER SUCH MAILING. EACH SUCH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO
SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER
DOCUMENT OR UNDER ANY BANK HEDGE AGREEMENT THAT SERVICE OF PROCESS WAS IN ANY
WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT,
THE COLLATERAL AGENT, ANY SECURED PARTY OR ANY HEDGE BANK TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
KL2:194292.6
25
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PARTY IN ANY OTHER
JURISDICTION.
(b) EACH PARTY TO THIS AGREEMENT HERETO HEREBY IRREVOCABLY WAIVES TO THE
FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, ANY OTHER
DOCUMENT OR ANY BANK HEDGE AGREEMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE
(a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM
IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER DOCUMENTS, ANY BANK HEDGE AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
KL2:194292.6
26
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
PRECISE TECHNOLOGY, INC.,
as Grantor
By ___________________________________
Name:
Title:
PRECISE TECHNOLOGY OF DELAWARE, INC.
By ___________________________________
Name:
Title:
PRECISE TECHNOLOGY OF ILLINOIS, INC.
By ___________________________________
Name:
Title:
PRECISE TMP, INC.
By ___________________________________
Name:
Title:
PRECISE POLESTAR, INC.
By ___________________________________
Name:
Title:
[Signature Page to the General Pledge and Security Agreement]
KL2:194292.6
▇▇▇▇▇▇ TOOL, MOLD & DIE, INC.
By ___________________________________
Name:
Title:
Agreed and consented to as of
the date first above written:
FLEET NATIONAL BANK,
as Collateral Agent
By _______________________________
Name:
Title:
[Signature Page to the General Pledge and Security Agreement]
KL2:194292.6
Schedule I
Part I
PLEDGED SHARES
Percentage of
Issuing Corporation Number of Shares Shares Outstanding Par Value
------------------- ---------------- ------------------ ---------
$
Part II
PLEDGED DEBT
KL2:194292.6
Schedule II
ASSIGNED AGREEMENTS
KL2:194292.6
Schedule III
Part I
LOCATIONS OF PLANT AND EQUIPMENT
Part II
LOCATIONS OF INVENTORY
KL2:194292.6
Schedule IV
INVENTORY SCHEDULE FOR SECTION 8(a)
KL2:194292.6
Schedule V
BLOCKED ACCOUNTS
Bank Name:
Bank Address:
Contact:
1. Account Name:
Account Number:
2. Account Name:
Account Number:
3. Account Name:
Account Number:
KL2:194292.6
Schedule VI
TRADE NAMES
KL2:194292.6
EXHIBIT A
to
Pledge and Security Agreement
FORM OF BLOCKED ACCOUNT LETTER
_______________, 199_
[Bank]
[Address]
Attn: ________________
Re: [NAME OF GRANTOR]
Ladies and Gentlemen:
Reference is made to deposit accounts listed on the attached Schedule I
into which certain monies, instruments and other properties are deposited from
time to time (the "Accounts") maintained with you by ____________ (the
"Company"). Pursuant to a Pledge and Security Agreement dated June 13, 1997 (the
"Security Agreement"), the Company has granted to Fleet National Bank, as
collateral agent (the "Collateral Agent") for the Lenders referred to in the
Credit Agreement dated as of June 13, 1997 (the "Credit Agreement"; unless
otherwise defined herein, the terms defined in the Credit Agreement being used
herein as therein defined) with the Company, a security interest in certain
property of the Company, including, among other things, the following (the
"Account Collateral"): the Accounts, all funds held therein and all certificates
and instruments, if any, from time to time representing or evidencing the
Accounts, all notes, certificates of deposit, checks, interest, dividends, cash,
instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the then
existing Account Collateral and all proceeds of any and all of the foregoing
Account Collateral and, to the extent not otherwise included, all (i) payments
under insurance (whether or not the Collateral 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 Account Collateral and (ii)
cash. It is a condition to the continued maintenance of the Accounts with you
that you agree to this letter agreement.
By signing this letter agreement, you acknowledge notice of, and consent to
the terms and provisions of, the Security Agreement and confirm to the
Collateral Agent that you have received no notice of any other pledge or
assignment of the Accounts. Further, you hereby agree with the Collateral Agent
that:
KL2:194292.6
(a) Notwithstanding anything to the contrary in any other agreement
relating to the Accounts, the Accounts are and will be subject to the terms
and conditions of the Security Agreement, will be maintained solely for the
benefit of the Collateral Agent, will be entitled "_________________ " and
will be subject to written instructions only from an officer of the
Collateral Agent.
(b) Upon the written request of the Collateral Agent to you, which
request shall specify that an "Event of Default" under the Credit Agreement
has occurred and is continuing (which writing may be by telex or telecopy
and upon which you may conclusively rely, absent manifest error), you shall
immediately transfer (at the cost and expense of the Company) subject to
your usual deposit terms, all funds then or thereafter deposited in the
Accounts by wire transfer to the Collateral Agent at
__________________________, Account No. _____________, _________________.
(c) From and after the date that the Collateral Agent shall have sent
to you a written notice (which writing may be by telex or telecopy and upon
which you may conclusively rely, absent manifest error) that an "Event of
Default" under the Credit Agreement has occurred and until the date, if
any, that the Collateral Agent shall have advised you in writing (which
writing may be by telex or telecopy and upon which you may conclusively
rely, absent manifest error) that no Event of Default is continuing, you
shall not honor any withdrawal or transfer from, or any check, draft or
other item of payment on, the Accounts, other than any withdrawal,
transfer, check, draft or other item made in writing by the Collateral
Agent or bearing the written consent of the Collateral Agent, and, to the
extent of collected funds in the Accounts, you shall honor each such
withdrawal, transfer, check, draft or other item made in writing by the
Collateral Agent or bearing the written consent of the Collateral Agent.
(d) You will follow your usual operating procedures for the handling
of the Accounts, including any remittance received in the Accounts that
contains restrictive endorsements, irregularities (such as a variance
between the written and numerical amounts), undated or postdated items,
missing signatures, incorrect payees, etc.
(e) You will maintain a record of all checks and other remittance
items received in the Accounts and furnish to the Collateral Agent a
monthly statement of the Accounts.
(f) You shall furnish to the Collateral Agent, promptly upon the
reasonable written request of the Collateral Agent in each instance, the
bank statements and all other information regarding the Accounts, to the
extent the same is provided to the Company, for the period of time
specified in such written notice, and the Company hereby authorizes you to
furnish same.
(g) You agree that you will not make, and you hereby waive all of your
rights to make, any charge, debit or offset to the Accounts for any reason
whatsoever, and
KL2:194292.6
2
waive any and all liens, whether contractual or provided under law, which
you may have or hereafter acquire on the Accounts or funds therein, in each
case, other than any charge, offset, debit or lien in respect of your
customary service charges relating to the Accounts.
(h) All service charges and fees with respect to the Accounts shall be
payable by the Company.
(i) The Collateral Agent shall be entitled to exercise any and all
rights of the Company in respect of the Accounts in accordance with the
terms of the Security Agreement, and the undersigned shall comply in all
respects with such exercise.
This letter agreement shall be binding upon you and your successors and
assigns and shall inure to the benefit of the Collateral Agent, the Lenders and
their successors, transferees and assigns. You may terminate this letter
agreement only upon thirty days' prior written notice to the Company and the
Collateral Agent. Upon such termination you shall close the Accounts and
transfer all funds in the Accounts to the Company.
KL2:194292.6
3
THIS LETTER AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED ENTIRELY IN SUCH STATE.
Very truly yours,
[NAME OF GRANTOR]
By:___________________________________
Name:
Title:
FLEET NATIONAL BANK,
as Collateral Agent
By:___________________________________
Name:
Title:
Acknowledged and agreed to as of
the date first above written:
[BANK]
By:_______________________________
Name:
Title:
KL2:194292.6
4
SCHEDULE I
Accounts
1. Account Name:
Account Number:
2. Account Name:
Account Number:
3. Account Name:
Account Number:
KL2:194292.6
EXHIBIT B
to
Pledge and Security Agreement
FORM OF PLEDGE AND SECURITY AGREEMENT SUPPLEMENT
[Date]
Ladies and Gentlemen:
Reference is made to the above-captioned Pledge and Security Agreement,
dated as of June 13, 1997 (as amended, supplemented or otherwise modified, the
"Security Agreement"). Unless otherwise defined herein, terms defined in the
Security Agreement are used herein as therein defined.
The undersigned hereby agrees, as of the date first above written, to
become a Grantor under the Security Agreement as if it were an original party
thereto and agrees that each reference in the Security Agreement to a "Grantor"
shall also mean and be a reference to the undersigned.
The undersigned hereby assigns and pledges to the Collateral Agent for its
benefit, the benefit of the Issuing Bank and the ratable benefit of the Lenders
and hereby grants to the Collateral Agent for its benefit, the benefit of the
Issuing Bank and the ratable benefit of the Lenders as collateral for the
Secured Obligations a pledge and assignment of, and a security interest in, all
of the right, title and interest of the undersigned in and to its Collateral,
whether now owned or hereafter acquired, wherever located and whether now or
hereafter existing.
The undersigned has attached hereto supplements to Schedules I through VII
to the Security Agreement, and the undersigned hereby certifies that such
supplements have been prepared by the undersigned in substantially the form of
the Schedules to the Security Agreement and are accurate and complete as of the
date first above written.
The undersigned hereby makes each representation and warranty set forth in
Section 8 of the Security Agreement as to itself and as to its Collateral to the
same extent as
KL2:194292.6
each other Grantor and hereby agrees to be bound as a Grantor by all of the
terms and provisions of the Security Agreement to the same extent as all other
Grantors.
THIS LETTER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED
ENTIRELY IN SUCH STATE.
Very truly yours,
[NAME OF ADDITIONAL
GRANTOR]
By ___________________________________
Name:
Title:
Address:
KL2:194292.6
2
EXHIBIT C
to
Pledge and Security Agreement
FORM OF CONSENT AND AGREEMENT
The undersigned hereby acknowledges notice of, and consents to the terms
and provisions of, the Pledge and Security Agreement dated June 13, 1997 (the
"Security Agreement"; the terms defined therein being used herein as therein
defined) from PRECISE TECHNOLOGY, INC., (the "Borrower") and each other Grantor
party thereto to FLEET NATIONAL BANK, as collateral agent (the "Collateral
Agent") for the Secured Parties referred to therein, and hereby agrees with the
Collateral Agent that:
(a) The undersigned will make all payments to be made by it under or in
connection with the __________ Agreement dated _______________, 19__ (the
"Assigned Agreement") between the undersigned and the Borrower in accordance
with the instructions of the Collateral Agent.
(b) All payments referred to in paragraph (a) above shall be made by the
undersigned irrespective of, and without deduction for, any counterclaim,
defense, recoupment or set-off and shall be final, and the undersigned will not
seek to recover from any Secured Party for any reason any such payment once
made.
(c) The Collateral Agent shall be entitled to exercise any and all rights
and remedies of the Borrower under the Assigned Agreement in accordance with the
terms of the Security Agreement, and the undersigned shall comply in all
respects with such exercise.
(d) The undersigned will not, without the prior written consent of the
Collateral Agent, (i) cancel or terminate the Assigned Agreement or consent to
or accept any cancellation or termination thereof, (ii) amend or otherwise
modify the Assigned Agreement, or (iii) make any prepayment of amounts to become
due under or in connection with the Assigned Agreement, except as expressly
provided therein.
In order to induce the Lenders to make Advances under the Credit Agreement,
the undersigned repeats and reaffirms for the benefit of the Secured Parties the
representations and warranties made in Section _____ of the Assigned Agreement.
This Consent and Agreement shall be binding upon the undersigned and its
successors and assigns, and shall inure, together with the rights and remedies
of the Collateral Agent hereunder, to the benefit of the Secured Parties and
their successors, transferees and assigns.
KL2:194292.6
THIS CONSENT AND AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED ENTIRELY IN SUCH STATE.
IN WITNESS WHEREOF, the undersigned has duly executed this Consent and
Agreement as of the date set opposite its name below.
Dated: _______________, 19__
[NAME OF OBLIGOR]
By: __________________________________
Name:
Title:
KL2:194292.6
2
EXHIBIT D-2 TO THE
CREDIT AGREEMENT
PARENT PLEDGE AND SECURITY AGREEMENT
Dated June 13, 1997
From
PRECISE HOLDING CORPORATION,
as Grantor,
to
FLEET NATIONAL BANK,
as Collateral Agent
T A B L E O F C O N T E N T S
Section Page
1. Grant and Pledge of Security 2
2. Security for Obligations 2
3. Grantor Remains Liable 3
4. Delivery of Collateral 3
5. Representations, Warranties and Covenants 3
6. Further Assurances 4
7. Voting Rights; Dividends; Etc. 5
8. Transfers and Other Liens; Additional Shares 6
9. Collateral Agent Appointed Attorney-in-Fact 6
10. Collateral Agent May Perform 7
11. Remedies 7
12. Registration Rights 9
13. The Collateral Agent 10
14. Indemnity and Expenses 14
15. Security Interest Absolute 14
16. Amendments; Waivers; Etc 15
17. Addresses for Notices 15
18. Continuing Security Interest; Assignments under the
Credit Agreement 15
19. Release and ▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇. Jurisdiction, Etc. 16
Schedule I-Pledged Shares
PARENT PLEDGE AND SECURITY AGREEMENT
PARENT PLEDGE AND SECURITY AGREEMENT (as amended, supplemented or otherwise
modified from time to time, this "Agreement"), dated June 13, 1997, made by and
between PRECISE HOLDING CORPORATION, a Delaware corporation (the "Grantor") to
FLEET NATIONAL BANK ("Fleet"), as collateral agent (together with any successor
collateral agent appointed pursuant to Section 13, the "Collateral Agent") for
the Secured Parties, as custodian for the Hedge Banks and as Issuing Bank.
PRELIMINARY STATEMENTS.
(1) The Grantor, Precise Technology, Inc., a Delaware corporation (the
"Borrower"), and each Subsidiary Guarantor have entered into a Credit Agreement,
dated as of June 13, 1997, (said Agreement, as it may hereafter be amended,
supplemented or otherwise modified from time to time, being the "Credit
Agreement", the terms defined therein and not otherwise defined herein being
used herein as therein defined) with Fleet, as agent (together with any
successor agent appointed pursuant to Article VII of the Credit Agreement, the
"Agent"), and the Lenders from time to time party thereto.
(2) Pursuant to the Parent Guaranty, the Grantor has guaranteed to the
Lenders the payment when due of all obligations and liabilities of the Borrower
under or with respect to the Loan Documents.
(3) The Grantor is the record owner of all stock at any time pledged or
required to be pledged hereunder, including without limitation the shares of
stock described in Schedule I hereto and issued by the corporation named therein
(the "Pledged Shares").
(4) It is a condition precedent to the making of Advances by the Lenders
and the issuance of Letters of Credit by the Issuing Bank under the Credit
Agreement and the entry by the Hedge Banks into the Bank Hedge Agreements with
the Borrower from time to time that the Grantor shall have granted the
assignment and security interest and made the pledge and assignment contemplated
by this Agreement.
(5) The Grantor will obtain benefits from the incurrence of Advances and
the issuance of Letters of Credit under the Credit Agreement and the entering
into of Bank Hedge Agreements with the Hedge Banks and, accordingly, the Grantor
desires to execute this Agreement to satisfy the conditions described in the
preceding paragraph (4).
NOW, THEREFORE, in consideration of the premises and in order to induce the
Lenders to make Advances and the Issuing Bank to issue Letters of Credit under
the Credit Agreement and to induce the Hedge Banks to enter into Bank Hedge
Agreements with the Borrower from time to time, the Grantor hereby agrees with
the Collateral Agent for the ratable benefit of the Secured Parties as follows:
KL2:200855.2
Section 1. Grant and Pledge of Security. The Grantor hereby assigns and
pledges to the Collateral Agent for the ratable benefit of the Secured Parties,
and hereby grants to the Collateral Agent for the ratable benefit of the Secured
Parties a security interest in, the following, in each case, as to each type of
property described below, whether now owned or hereafter owned or acquired,
wherever located and whether now or hereafter existing (collectively, the
"Collateral"):
(a) the Pledged Shares and the certificates representing the Pledged
Shares, and all dividends, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the Pledged Shares; and
(b) all proceeds of any and all of the foregoing Collateral.
Notwithstanding clauses (a) through (c), the payment and performance of the
Grantor's obligations shall not be secured by more than 66% of the total
combined voting power of all classes of capital stock owed by the Grantor of any
foreign Subsidiary entitled to vote. Following a change in the relevant
provisions of the Internal Revenue Code or the regulations, published rules,
published rulings, notices or other official pronouncements issued or
promulgated thereunder, if the Collateral Agent or the Required Lenders request
a pledge of additional stock of any foreign Subsidiary of the Grantor, all of
the stock of which foreign Subsidiary has not already been pledged pursuant to
this Agreement, then within 90 days after such request the Grantor shall either
(i) pledge such additional stock of such foreign Subsidiary or (ii) deliver to
the Collateral Agent an opinion of the counsel of the Grantor, which counsel
shall be reasonably acceptable to the Collateral Agent, that the requested
pledge of such additional stock is more likely than not to cause the
undistributed earnings of such foreign Subsidiary to be treated as a deemed
dividend to such foreign Subsidiary's United States parent for Federal income
tax purposes.
Section 2. Security for Obligations. This Agreement secures (i) the full
and prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations and liabilities (including, without limitation,
the principal of and interest on the Notes issued by, and Advances made to, the
Borrower under the Credit Agreement, and all indemnities, fees and interest
thereon or owed thereunder) of the Grantor to the Secured Parties, whether now
existing or hereafter incurred under, arising out of or in connection with any
Loan Document (including, without limitation, all of the Grantor's obligations
and liabilities under the Parent Guaranty) to which the Grantor is a party and
the due performance and compliance by the Grantor with all of the terms,
conditions and agreements contained in the Credit Agreement and such other Loan
Documents (all such principal, interest, indemnities, fees, obligations and
liabilities being herein collectively called the "Credit Agreement
Obligations"); (ii) to the extent that any Bank Hedge Agreement is entitled to
the benefits of this Agreement, the full and prompt payment when due (whether at
the stated maturity, by acceleration or otherwise) of all obligations and
liabilities of the Grantor to the Hedge Banks, whether now existing or hereafter
incurred under, arising out of or in connection with any such Bank Hedge
Agreement and the due performance and compliance by the Grantor with all the
terms, conditions and agreements contained in such Bank Hedge Agreement (all
such obligations and liabilities described in this clause (ii) being herein
collectively called the "Other Obligations", and together with the Credit
KL2:200855.2
2
Agreement Obligations, collectively the "Secured Obligations"). Without limiting
the generality of the foregoing, this Agreement secures the payment of all
amounts that constitute part of the Secured Obligations and would be owed by the
Grantor to the Secured Parties under the Loan Documents but for the fact that
they are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Grantor.
Section 3. 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 to perform
all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed, (b) the exercise by the Collateral Agent of any
of the rights hereunder shall not release the Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral and
(c) no Secured Party shall have any obligation or liability under the contracts
and agreements included in the Collateral by reason of this Agreement or any
other Loan Document, nor shall any 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.
Section 4. Delivery of Collateral. All certificates or instruments
representing or evidencing Collateral shall be delivered to and held by or on
behalf of the Collateral Agent pursuant hereto and shall be in suitable form for
transfer by delivery, or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to the
Collateral Agent. Upon the occurrence and during the continuance of an Event of
Default and upon acceleration of all Borrowings under the Credit Agreement, the
Collateral Agent shall have the right, at any time in its discretion and without
notice to the Grantor, to transfer to or to register in the name of the
Collateral Agent or any of its nominees any or all of the Collateral, subject
only to the revocable rights specified in Section 8(a). In addition, the
Collateral Agent shall have the right at any time to exchange certificates or
instruments representing or evidencing Collateral for certificates or
instruments of smaller or larger denominations.
Section 5. Representations, Warranties and Covenants. The Grantor
represents, warrants, agrees and covenants as to itself and its Collateral,
which representations, warranties, agreements and covenants shall survive
execution and delivery of this Agreement, as follows:
(a) The Grantor is the legal and beneficial owner of the Collateral
free and clear of any Lien or other right, title or interest of any Person
except for the security interest created under this Agreement and Liens
permitted by Section 5.02(a) of the Credit Agreement, and the Grantor shall
defend the Collateral against all claims and demands of all Persons at any
time claiming the same or any interest therein adverse to the Collateral
Agent. No effective financing statement or other instrument similar in
effect covering or purporting to cover 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 Collateral Agent relating to this Agreement and those Liens
permitted under Section 5.02(a) of the Credit Agreement.
(b) All of the shares of stock that constitute Pledged Shares have
been duly authorized and validly issued and are fully paid and
non-assessable and the Grantor is the legal, record and beneficial owner
of, and has good and marketable title to, such Pledged
KL2:200855.2
3
Shares, subject to no pledge, lien, mortgage hypothetication, security
interest, charge, option or other encumbrance whatsoever except the liens
and security interests created by this Agreement. The Grantor has full
power, authority and legal right to pledge the Pledged Shares pledged by it
pursuant to this Agreement.
(c) As of the date hereof, the Pledged Shares constitute the
percentage of the issued and outstanding shares of stock of the issuers
thereof indicated on Part I of Schedule I hereto.
(d) All filings and other actions necessary or desirable to perfect
and protect the security interest in the Collateral taken as a whole
created under this Agreement have been duly made or taken, and this
Agreement, the pledge of the Collateral pursuant hereto, together with such
filings and other actions, create a valid and perfected first priority
security interest in the Collateral taken as a whole, securing the payment
of the Secured Obligations, except for Collateral subject to Liens
permitted pursuant to Section 5.02(a) of the Credit Agreement.
(e) No consent of any other Person and no authorization, approval or
other action by, and no notice to or filing with, any governmental
authority or regulatory body or other third party is required (i) for the
grant by the Grantor of the assignment and security interest granted
hereunder, for the pledge by the Grantor of the Collateral pursuant hereto
or for the execution, delivery or performance of this Agreement by the
Grantor, (ii) for the perfection or maintenance of the pledge, assignment
and security interest created hereunder (including the first priority
nature of such pledge, assignment or security interest), except for the
filing of financing and continuation statements under the UCC, which
financing statements have been duly filed and are effective, under
applicable law, to perfect the security interest granted to the Collateral
Agent herein, or (iii) for the exercise by the Collateral Agent of its
voting or other rights provided for in this Agreement or the remedies in
respect of the Collateral pursuant to this Agreement, except where the
failure to obtain such consent or authorization would not, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(f) This Agreement is made with full recourse to the Grantor
(including, without limitation, with full recourse to all assets of the
Grantor) and pursuant to and upon all warranties, representations,
covenants and agreements on the part of the Grantor contained herein, in
the other Collateral Documents and otherwise in writing in connection
herewith or therewith.
Section 6. Further Assurances. (a) The Grantor agrees that from time to
time, at its own expense, it shall promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that the Collateral Agent may reasonably request, in order to
perfect and protect any pledge, assignment or security interest granted or
purported to be granted hereby or to enable the Collateral 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: (i) if any
Collateral shall be evidenced by a promissory note or other instrument or
chattel paper, deliver and pledge to the Collateral Agent
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hereunder such note or instrument duly indorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
the Collateral Agent; and (ii) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or notices, as may
be necessary or desirable, or as the Collateral Agent may reasonably request, in
order to perfect and preserve the pledge, assignment and security interest
granted or purported to be granted hereunder.
(b) The Grantor hereby authorizes the Collateral Agent to file one or more
financing or continuation statements, and amendments thereto, relating to all or
any part of the Collateral without the signature of the Grantor where permitted
by law. A photocopy or other reproduction of this Agreement or any financing
statement covering the Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law.
(c) The Grantor shall furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Collateral Agent may
reasonably request, all in reasonable detail.
Section 7. Voting Rights; Dividends; Etc. (a) So long as no Event of
Default shall have occurred and be continuing:
(i) The Grantor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Collateral or any part thereof
for any purpose not inconsistent with the terms of this Agreement or the
other Documents; provided, however, that the Grantor shall not exercise or
refrain from exercising any such right if such action (a) would reasonably
be expected to have a material adverse effect on the value of the
Collateral or any part thereof or (b) would violate or be inconsistent with
any of the terms of this Agreement, the Credit Agreement, any other Loan
Document or any Bank Hedge Agreement;
(ii) The Grantor shall be entitled to receive and retain any and all
dividends and interest paid in respect of the Collateral permitted by the
Credit Agreement; provided, however, that any and all
(A) dividends and interest paid or payable other than in cash in
respect of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, such
Collateral, and
(B) dividends and other distributions paid or payable in cash in
respect of such Collateral in connection with a partial or total
liquidation or dissolution
shall be, and shall be forthwith delivered to the Collateral Agent to hold
as, Collateral and shall, if received by the Grantor, be received in trust
for the benefit of the Collateral Agent, be segregated from the other
property or funds of the Grantor and be forthwith delivered to the
Collateral Agent as Collateral in the same form as so received (with any
necessary indorsement). Notwithstanding the foregoing, it is understood
that any and all dividends and other distributions paid or payable in cash
in respect of such Collateral in
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connection with a reduction of capital, capital surplus or paid-in-surplus
and any and all cash paid, payable or otherwise distributed in respect of
principal of, or in redemption of, or in exchange for, such Collateral
shall be forthwith delivered to blocked accounts maintained by the Grantor
with Fleet.
(iii) The Collateral Agent shall execute and deliver (or cause to be
executed and delivered) to the Grantor all such proxies and other
instruments as the Grantor may reasonably request for the purpose of
enabling the Grantor to exercise the voting and other rights that it is
entitled to exercise pursuant to paragraph (i) above and to receive the
dividends or interest payments that it is authorized to receive and retain
pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an Event of
Default:
(i) All rights of the Grantor (x) to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise
be entitled to exercise pursuant to Section 7(a)(i) shall, upon notice to
the Grantor by the Collateral Agent, cease and (y) to receive the dividends
and interest payments that it would otherwise be authorized to receive and
retain pursuant to Section 7(a)(ii) shall automatically cease, and all such
rights shall thereupon become vested in the Collateral Agent, which shall
thereupon have the sole right to exercise or refrain from exercising such
voting and other consensual rights and to receive and hold as Collateral
such dividends and interest payments.
(ii) All dividends and interest payments that are received by the
Grantor contrary to the provisions of paragraph (i) of this Section 7(b)
shall be received in trust for the benefit of the Collateral Agent, shall
be segregated from other funds of the Grantor and shall be forthwith paid
over to the Collateral Agent as Collateral in the same form as so received
(with any necessary indorsement).
Section 8. Transfers and Other Liens; Additional Shares. (a) The Grantor
agrees not (i) to sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, any of the Collateral, except
sales, assignments and dispositions otherwise permitted under the Credit
Agreement, or (ii) to create or suffer to exist any Lien upon or with respect to
any of the Collateral except for the pledge, assignment and security interest
created under this Agreement and the Liens permitted under Section 5.02(a) of
the Credit Agreement.
(b) The Grantor shall (i) for the Pledged Shares and all other shares of
stock pledged hereunder that are issued by issuers which are controlled by the
Grantor, cause each issuer of the Pledged Shares and each issuer of all other
shares of stock pledged hereunder not to issue any stock or other securities in
addition to or in substitution for the Pledged Shares or such other shares
issued by any such issuer, except to the Grantor, and (ii) pledge hereunder,
immediately upon its acquisition (directly or indirectly) thereof, any and all
additional shares of stock or other securities.
Section 9. Collateral Agent Appointed Attorney-in-Fact. The Grantor hereby
irrevocably appoints the Collateral Agent, effective upon the occurrence and
during the continuation of any Event of Default, the Grantor's attorney-in-fact,
with full authority in the
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6
place and stead of the Grantor and in the name of the Grantor or otherwise, from
time to time in the Collateral Agent's discretion and upon notice to the
Grantor, to take any action and to execute any instrument that the Collateral
Agent may deem necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation:
(a) to ask for, 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, indorse and collect any drafts or other instruments,
documents and Chattel Paper, in connection with clause (a) or (b) above,
and
(c) to file any claims or take any action or institute any proceedings
that the Collateral Agent may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce compliance with
the terms and conditions of any Assigned Agreement or the rights of the
Collateral Agent with respect to any of the Collateral.
Section 10. Collateral Agent May Perform. If the Grantor fails to perform
any agreement contained herein, the Collateral Agent may itself perform, or
cause performance of, such agreement, and the expenses of the Collateral Agent
incurred in connection therewith shall be payable by the Grantor under Section
14(b).
Section 11. Remedies. If any Event of Default shall have occurred and be
continuing:
(a) The Collateral 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 upon
default under the New York UCC (whether or not the New York UCC 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
Collateral Agent forthwith, assemble all or part of the Collateral as
directed by the Collateral Agent and make it available to the Collateral
Agent at a place and time to be designated by the Collateral Agent 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
Collateral Agent's offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as the Collateral Agent may deem
commercially reasonable. The Grantor agrees that, to the extent notice of
sale shall be required by law, at least ten days' 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 Collateral
Agent shall not be obligated to make any sale of Collateral regardless of
notice of sale having been given. The Collateral 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) (i) All cash proceeds received by the Collateral Agent in respect
of any sale of, collection from, or other realization upon all or any part
of the Collateral may,
KL2:200855.2
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in the discretion of the Collateral Agent, be held by the Collateral Agent
as collateral for, and/or then or at any time thereafter applied (after
payment of any amounts payable to the Collateral Agent pursuant to Section
14) shall be applied as follows:
(A) first, to the extent proceeds remain after the application of
any amounts pursuant to Section 14, an amount equal to the outstanding
Primary Obligations (as defined in Section 11(b)(ii)) shall be paid to
the Secured Parties as provided in Section 11(b)(iv) hereof, with each
Secured Party receiving an amount equal to such outstanding Primary
Obligations (as defined in Section 11(b)(ii)) or, if the proceeds are
insufficient to pay in full all such Primary Obligations, its Pro Rata
Share of the amount remaining to be distributed;
(B) second, to the extent proceeds remain after the application
pursuant to the preceding clause (A), an amount equal to the
outstanding Secondary Obligations (as defined in Section 11(b)(ii))
shall be paid to the Secured Parties as provided in Section 11(b)(iv)
hereof, with each Secured Party receiving an amount equal to its
outstanding Secondary Obligations, or, if the proceeds are
insufficient to pay in full all such Secondary Obligations, its Pro
Rata Share (as defined in Section 11(b)(ii)) of the amount remaining
to be distributed; and
(C) third, to the extent proceeds remain after the application
pursuant to the preceding clauses (A) and (B), and following the
termination of this Agreement pursuant to Section 19 hereof, to the
Grantor or to whomever may be lawfully entitled to receive such
surplus.
(ii) For purposes of this Agreement (x) "Pro Rata Share" shall mean,
when calculating a Secured Party's portion of any distribution or amount,
that amount (expressed as a percentage) equal to a fraction the numerator
of which is the then unpaid amount of such Secured Party's Primary
Obligations or Secondary Obligations, as the case may be, and the
denominator of which is the then outstanding amount of all Primary
Obligations or Secondary Obligations, as the case may be, (y) "Primary
Obligations" shall mean (i) in the case of the Credit Agreement
Obligations, all principal of, and interest on, all Advances, and all fees
and (ii) in the case of the Other Obligations that are secured by this
Agreement or any other Collateral Document, all amounts due under such Bank
Hedge Agreements and (z) "Secondary Obligations" shall mean all Secured
Obligations other than Primary Obligations.
(iii) When payments to Secured Parties are based upon their respective
Pro Rata Shares, the amounts received by such Secured Parties hereunder
shall be applied (for purposes of making determinations under this Section
11(b) only) (i) first, to their Primary Obligations and (ii) second, to
their Secondary Obligations. If any payment to any Secured Party of its Pro
Rata Share of any distribution would result in overpayment to such Secured
Party, such excess amount shall instead be distributed in respect of the
unpaid Primary Obligations or Secondary
KL2:200855.2
8
Obligations, as the case may be, of the other Secured Parties, with each
Secured Party whose Primary Obligations or Secondary Obligations, as the
case may be, have not been paid in full to receive an amount equal to such
excess amount multiplied by a fraction the numerator of which is the unpaid
Primary Obligations or Secondary Obligations, as the case may be, of such
Secured Party and the denominator of which is the unpaid Primary
Obligations or Secondary Obligations, as the case may be, of all Secured
Parties entitled to such distribution.
(iv) All payments required to be made hereunder shall be made (x) if
to the Lenders, to the Collateral Agent under the Credit Agreement for the
account of the Lenders, and (y) if to the Hedge Banks, to the trustee,
paying agent or other similar representative (each a "Representative") for
the Hedge Banks or, in the absence of such a Representative, directly to
the Hedge Banks, as their interests may appear.
(v) For purposes of applying payments received in accordance with this
Section 11(b), the Collateral Agent shall be entitled to rely upon the
Representative for the Hedge Banks or, in the absence of such a
Representative, upon the Hedge Banks for a determination (which each
Representative for any Hedge Banks and the Lenders agree (or shall agree)
to provide upon request of the Collateral Agent) of the outstanding Primary
Obligations and Secondary Obligations owed to the Lenders or the Hedge
Banks, as the case may be. Unless it has actual knowledge (including by way
of written notice from a Lender or a Hedge Bank) to the contrary, each
Representative, in furnishing information pursuant to the preceding
sentence, and the Collateral Agent, in acting hereunder, shall be entitled
to assume that no Secondary Obligations are outstanding. Unless it has
actual knowledge (including by way of written notice from a Hedge Bank) to
the contrary, the Collateral Agent, in acting hereunder, shall be entitled
to assume that no Bank Hedge Agreements are in existence.
(vi) It is understood that the Grantor shall remain liable to the
extent of any deficiency between the amount of the proceeds of the
Collateral and the aggregate amount of the Secured Obligations.
(c) The Collateral Agent may exercise any and all rights and remedies of
the Grantor in respect of the Collateral.
(d) The Collateral Agent may, without notice to the Grantor except as
required by law and at any time or from time to time, charge, set-off and
otherwise apply all or any part of the Secured Obligations against the L/C Cash
Collateral Account or any part thereof.
Section 12. Registration Rights. If the Collateral Agent shall determine to
exercise its right to sell all or any of the Collateral pursuant to Section 11,
the Grantor agrees that, upon request of the Collateral Agent, the Grantor will,
at its own expense:
KL2:200855.2
9
(a) 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 Collateral Agent, advisable to register such Collateral under the
provisions of the Securities Act of 1933, as amended from time to time (the
"Securities Act"), 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 that, in the opinion of
the Collateral 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;
(b) 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 Collateral
Agent;
(c) 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;
(d) provide the Collateral Agent with such other information
(including, without limitation, forward looking information) as may be
necessary or, in the opinion of the Collateral Agent, advisable to enable
the Collateral Agent to effect the sale of such Collateral; and
(e) 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.
Notwithstanding anything contained in this Agreement, the Collateral Agent
may sell all or any of the Collateral at a private sale without registering such
Collateral under the provisions of the Securities Act and the Collateral Agent
is not liable for any reduced value of such Collateral received by the
Collateral Agent as a result of such sale. The Collateral Agent is authorized,
in connection with any sale of the Collateral pursuant to Section 11, to deliver
or otherwise disclose to any prospective purchaser of the Collateral (i) any
registration statement or prospectus, and all supplements and amendments
thereto, prepared pursuant to clause (a) above, (ii) any information and
projections provided to it pursuant to clause (d) above and (iii) any other
information in its possession relating to the Collateral.
Section 13. The Collateral Agent. (a) The Secured Parties, by their
acceptance of the benefits of this Agreement and the other Loan Documents,
hereby irrevocably designate Fleet to act as the Collateral Agent with respect
to this Agreement and as specified in the other Loan Documents. Each Secured
Party hereby irrevocably authorizes, and each holder of any Note by the
acceptance of such Note and by the acceptance of the benefits of this Agreement
and the other Loan Documents shall be deemed irrevocably to authorize, the
Collateral Agent to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and any other instruments and agreements
referred to herein or therein and to exercise such
KL2:200855.2
10
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Collateral Agent by the terms hereof or thereof
and such other powers as are reasonably incidental thereto. The Collateral Agent
may perform any of its duties hereunder and under the other Loan Documents by or
through its authorized agents or employees.
(b) The Collateral Agent shall have no duties or responsibilities except
those expressly set forth in this Agreement and in the other Loan Documents. The
duties of the Collateral Agent shall be mechanical and administrative in nature;
the Collateral Agent shall not have by reason of this Agreement, any other Loan
Document or any Bank Hedge Agreement a fiduciary relationship in respect of any
Secured Party; and nothing in this Agreement, any other Loan Document or any
Bank Hedge Agreement, expressed or implied, is intended to or shall be so
construed as to impose upon the Collateral Agent any obligations in respect of
this Agreement or any other Loan Document except as expressly set forth herein
or therein.
(c) The Collateral Agent shall not be responsible for the payment of taxes,
charges or assessments or discharging of Liens upon the Collateral hereunder or
any collateral under the Collateral Documents or otherwise as to the maintenance
of the Collateral hereunder or any collateral under the Collateral Documents.
The Collateral Agent shall not be required to ascertain or inquire as to the
performance by the Grantor of any of the covenants or agreements contained in
this Agreement or any other Loan Document or any Bank Hedge Agreement.
(d) The Collateral Agent shall be under no obligation or duty to take any
action under this Agreement or any other Loan Document if taking such action (i)
would subject the Collateral Agent to a tax in any jurisdiction where it is not
then subject to a tax or (ii) would require the Collateral Agent to qualify to
do business in any jurisdiction where it is not then so qualified, unless the
Collateral Agent receives security or indemnity satisfactory to it against such
tax (or equivalent liability), or any liability resulting from such
qualification, in each case as results from the taking of such action under this
Agreement or any other Loan Document or (iii) would subject the Collateral Agent
to in personam jurisdiction in any locations where it is not then so subject.
Notwithstanding any other provision of this Agreement or any other Loan
Document, neither the Collateral Agent nor any of its officers, directors,
employees, affiliates or agents shall, in its individual capacity, be personally
liable for any action taken or omitted to be taken by it in accordance with this
Agreement or any other Loan Document except for its own gross negligence or
willful misconduct.
(e) Independently and without reliance upon the Collateral Agent, each
Secured Party, to the extent it deems appropriate, has made and shall continue
to make (i) its own independent investigation of the financial condition and
affairs of the Grantor in connection with the making and the continuance of the
Obligations and the taking or not taking of any action in connection therewith,
and (ii) its own appraisal of the creditworthiness of the Grantor, and the
Collateral Agent shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Secured Party with any credit or other
information with respect thereto, whether coming into its possession before the
extension of any Obligations or the purchase of any Notes or at any time or
times thereafter. The Collateral Agent shall not be responsible in any manner
whatsoever to any Secured Party for the correctness of any recitals, statements,
information, representations or warranties in any Document or in any document,
certificate or other writing delivered in connection therewith or for the
execution, effectiveness, genuineness, validity,
KL2:200855.2
11
enforceability, perfection, collectibility, priority or sufficiency of this
Agreement or the other Documents or the security interests granted hereunder or
thereunder or the financial condition of the Grantor or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Loan Document, or the
financial condition of the Grantor, or the existence or possible existence of
any Default or Event of Default. The Collateral Agent makes no representations
as to the value or condition of the Collateral hereunder or the collateral under
any other Collateral Document or any part thereof, or as to the title of the
Grantor thereto or as to the security afforded by this Agreement or the other
Collateral Documents.
(f) (i) No Secured Party shall have the right to cause the Collateral Agent
to take any action with respect to the Collateral hereunder or the collateral
under any other Collateral Document, with only the Required Lenders (or after
the repayment in full of all Credit Agreement Obligations, the holders of a
majority of the outstanding Other Obligations) having the right to direct the
Collateral Agent to take any such action. If the Collateral Agent shall request
instructions from the Required Lenders (or after the repayment in full of all
Credit Agreement Obligations, the holders of a majority of the outstanding Other
Obligations), with respect to any act or action (including failure to act) in
connection with this Agreement or any other Collateral Document, the Collateral
Agent shall be entitled to refrain from such act or taking such action unless
and until it shall have received instructions from the Required Lenders (or
after the repayment in full of all Credit Agreement Obligations, the holders of
a majority of the outstanding Other Obligations) and to the extent requested,
appropriate indemnification in respect of actions to be taken, and the
Collateral Agent shall not incur liability to any Person by reason of so
refraining. Without limiting the foregoing, no Secured Party shall have any
right of action whatsoever against the Collateral Agent as a result of the
Collateral Agent acting or refraining from acting hereunder in accordance with
the instructions of the Required Lenders (or after the repayment in full of all
Credit Agreement Obligations, the holders of a majority of the outstanding Other
Obligations).
(ii) The Collateral Agent shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement or any other Loan Document
at the request or direction of any of the Secured Parties, unless such Secured
Parties shall have offered to the Collateral Agent reasonable security or
indemnity against the costs, expenses and liabilities that might be incurred by
it in compliance with such request or direction.
(g) The Collateral Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, radiogram, order
or other document or telephone message signed, sent or made by the proper Person
or entity, and, with respect to all legal matters pertaining to this Agreement
or any other Document and its duties hereunder or thereunder, upon advice of
counsel selected by it.
(h) To the extent the Collateral Agent is not reimbursed and indemnified by
the Grantor under this Agreement or any other Loan Document, the Secured Parties
will reimburse and indemnify the Collateral Agent, in proportion to their
respective outstanding principal amounts (including, for this purpose, any
unpaid Primary Obligations in respect of Bank Hedge Agreements, as outstanding
principal) of Obligations, for and against any and all liabilities,
KL2:200855.2
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obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Collateral Agent in performing its
duties hereunder or under any other Loan Document, or in any way relating to or
arising out of its actions as Collateral Agent in respect of this Agreement or
under any other Loan Document (including any amounts required to be returned by
the Collateral Agent in respect of Collateral hereunder or collateral under any
other Collateral Document) except for those resulting solely from the Collateral
Agent's own gross negligence or willful misconduct. The indemnities set forth in
this Section 13(h) shall survive the repayment of all Obligations, with the
respective indemnification at such time to be based upon the outstanding
principal amounts (determined as described above) of Obligations at the time of
the respective occurrence upon which the claim against the Collateral Agent is
based or, if same is not reasonably determinable, based upon the outstanding
principal amounts (determined as described above) of Obligations as in effect
immediately prior to the termination of this Agreement. The indemnities set
forth in this Section 13(h) are in addition to any indemnities provided by the
Lenders to the Collateral Agent pursuant to the Credit Agreement, with the
effect being that the Lenders shall be responsible for indemnifying the
Collateral Agent to the extent the Collateral Agent does not receive payments
pursuant to this Section 13(h) from the Secured Parties (although in such event,
and upon the payment in full of all such amounts owing to the Collateral Agent,
the respective Lenders who paid same shall be subrogated to the rights of the
Collateral Agent to receive payment from the Secured Parties).
(i) With respect to its obligations as a lender under the Credit Agreement
and any other Loan Documents to which the Collateral Agent is a party, and to
act as agent under one or more of such Loan Documents, the Collateral Agent
shall have the rights and powers specified therein and herein for a "Lender" or
a "Collateral Agent", as the case may be, and may exercise the same rights and
powers as though it were not performing the duties specified herein; and the
terms "Lender," "Required Lenders," "holders of Notes," or any similar terms
shall, unless the context clearly otherwise indicates, include the Collateral
Agent in its individual capacity. The Collateral Agent may accept deposits from,
lend money to, and generally engage in any kind of banking, trust or other
business with the Grantor or any Affiliate or Subsidiary of the Grantor as if it
were not performing the duties specified herein or in the other Loan Documents,
and may accept fees and other consideration from the Grantor for services in
connection with the Credit Agreement, the other Loan Documents and otherwise
without having to account for the same to the Secured Parties.
(j) The Collateral Agent may deem and treat the payee of any Note as the
owner thereof for all purposes hereof unless and until written notice of the
assignment, transfer or endorsement thereof, as the case may be, shall have been
filed with the Collateral Agent. Any request, authority or consent of any person
or entity who, at the time of making such request or giving such authority or
consent, is the holder of any Note, shall be final and conclusive and binding on
any subsequent holder, transferee, assignee or endorsee, as the case may be, of
such Note or of any Note or Notes issued in exchange therefor.
(k) The Collateral Agent may resign from the performance of all of its
functions and duties under this Agreement at any time by giving 20 Business
Days' prior or written notice to the Grantor and the Secured Parties. Such
resignation shall take effect upon the appointment of a successor Collateral
Agent pursuant to clause (i) or (ii) of this Section 13(k).
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(i) If a successor Collateral Agent shall not have been appointed
within said 20 Business Day period by the Required Lenders, the Collateral
Agent, with the consent of the Grantor, which consent shall not be
unreasonably withheld or delayed, shall then appoint a successor Collateral
Agent who shall serve as Collateral Agent hereunder until such time, if
any, as the Required Lenders appoint a successor Collateral Agent as
provided above.
(ii) If no successor Collateral Agent has been appointed pursuant to
clause (i) of this Section 13(k) by the 20th Business Day after the date of
such notice of resignation was given by the Collateral Agent, the Required
Lenders shall then appoint a successor Collateral Agent who shall serve as
Collateral Agent hereunder until such time, if any, as the Required Lenders
appoint a successor Collateral Agent as provided above.
(l) The Grantor (by its execution and delivery hereof) hereby agrees that
it shall pay to Fleet as the Collateral Agent, such fees as have been separately
agreed to in writing with Fleet for acting as Collateral Agent hereunder and
under the other Collateral Documents. In the event a successor Collateral Agent
is appointed pursuant to Section 13(k), the Grantor hereby agrees to pay such
successor Collateral Agent such fees for acting as such as would customarily be
charged by such Collateral Agent for acting in such capacity in similar
situations.
Section 14. Indemnity and Expenses. (a) The Grantor agrees to indemnify
each Secured Party from and against any and all claims, losses and liabilities
growing out of or resulting from this Agreement (including, without limitation,
enforcement of this Agreement), except claims, losses or liabilities found in a
final, appealable judgment by a court of competent jurisdiction to have resulted
solely from such Secured Party's gross negligence or wilful misconduct.
(b) The Grantor agrees to pay to the Collateral Agent, upon demand, the
amount of any and all reasonable costs and expenses, including, without
limitation, the reasonable fees and expenses of its counsel and of any experts
and agents (including, without limitation, the following costs of such counsel:
support staff, litigation preparation, computerized research, telephone,
telefax, mileage, deposition, postage, photocopy, process service, video tape
and other similar costs), that the Collateral Agent may incur in connection with
(i) the administration of this Agreement, (ii) the custody, preservation, use or
operation of, or the sale of, collection from or other realization upon, any of
the Collateral, (iii) the exercise or enforcement of any of the rights of the
Collateral Agent or any other Secured Party hereunder or (iv) the failure by the
Grantor to perform or observe any of the provisions hereof.
Section 15. Security Interest Absolute. The obligations of the Grantor
under this Agreement are independent of the Secured Obligations, and a separate
action or actions may be brought and prosecuted against the Grantor to enforce
this Agreement. All rights of the Collateral Agent and the pledge, assignment
and security interest hereunder, and all obligations of the Grantor hereunder,
shall be absolute and unconditional, irrespective of:
(i) any lack of validity or enforceability of any Loan Document, any
Bank Hedge Agreement or any other agreement or instrument relating thereto;
KL2:200855.2
14
(ii) 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
amendment or waiver of or any consent to any departure from any Loan
Document or any Bank Hedge Agreement, including, without limitation, any
increase in the Secured Obligations resulting from the extension of
additional credit to the Grantor or any of its Subsidiaries or otherwise;
(iii) any taking, exchange, release or nonperfection of any other
collateral, or any taking, release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Secured Obligations;
(iv) any manner of application of collateral, or proceeds thereof, to
all or any of the Secured Obligations, or any manner of sale or other
disposition of any collateral for all or any of the Secured Obligations or
any other assets of the Grantor or any of its Subsidiaries;
(v) any change, restructuring or termination of the corporate
structure or existence of the Grantor or any of its Subsidiaries; or
(vi) any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Grantor or a third-party grantor of a
security interest.
Section 16. Amendments; Waivers; Etc. (a) No amendment or waiver of any
provision of this Agreement, and no 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 Collateral Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
(b) No failure on the part of the Collateral Agent, any Lender or any Hedge
Bank to exercise, and no delay in exercising, any right, power or privilege
hereunder shall operate as a waiver thereof or consent thereto; nor shall any
single or partial exercise of any such right, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.
Section 17. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic or
telex communication) and mailed, telecopied, telegraphed, telexed, cabled or
delivered, if to the Grantor, addressed to it at the address set forth below its
name on the signature pages hereof and if to the Collateral Agent, any Lender,
the Issuing Bank or any Hedge Bank, addressed to it at its address set forth in
Section 8.02 of 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 each other party
complying as to delivery with the terms of this Section 17. All such notices and
other communications shall, when mailed, telecopied, telegraphed or telexed, be
effective when deposited in the mails, delivered to the telegraph company,
transmitted by telecopier or confirmed by telex answerback, respectively,
addressed as aforesaid.
Section 18. Continuing Security Interest; Assignments under the Credit
Agreement. This Agreement shall create a continuing security interest in the
Collateral and shall
KL2:200855.2
15
(a) remain in full force and effect until the latest of the indefeasible and
irrevocable payment in full in cash of the Secured Obligations, the Final
Maturity Date and the termination or expiration of all Bank Hedge Agreements,
(b) be binding upon the Grantor, its successors and assigns and (c) inure,
together with the rights and remedies of the Collateral Agent hereunder, to the
benefit of the Secured Parties and their respective successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), any Lender
may assign or otherwise transfer all or any portion of its rights and
obligations under the Credit Agreement (including, without limitation, all or
any portion of its Commitment, the Advances owing to it and the Note or Notes
held by it) to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to such Lender herein or
otherwise, in each case as provided in Section 8.07 of the Credit Agreement.
Section 19. Release and Termination. (a) Upon any sale, lease, transfer or
other disposition of any item of Collateral in accordance with the terms of the
Loan Documents, the Collateral Agent will, at the Grantor's expense, execute and
deliver to the Grantor such documents as the Grantor shall reasonably request to
evidence the release of such item of Collateral from the assignment and security
interest granted hereby; provided, however, that (i) at the time of such request
and such release no Event of Default shall have occurred and be continuing, (ii)
the Grantor shall have delivered to the Collateral Agent, at least ten Business
Days prior to the date of the proposed release, a written request for release
describing the item of Collateral and the terms of the sale, lease, transfer or
other disposition in reasonable detail, including, without limitation, the price
thereof and any expenses in connection therewith, together with a form of
release for execution by the Collateral Agent and a certification by the Grantor
to the effect that the transaction is in compliance with the Loan Documents and
as to such other matters as the Collateral Agent may request and (iii) the Net
Cash Proceeds of any such sale, lease, transfer or other disposition required to
be applied in accordance with Section 2.06 of the Credit Agreement shall be paid
to, or in accordance with the instructions of, the Collateral Agent at the
closing.
(b) Upon the latest of the indefeasible and irrevocable payment in full in
cash of the Secured Obligations, the Final Maturity Date and the termination or
expiration of all Bank Hedge Agreements, the pledge, assignment and security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the Grantor. Upon any such termination, the Collateral Agent will, at
the Grantor's expense, execute and deliver to the Grantor such documents as the
Grantor shall reasonably request to evidence such termination.
Section 20. Jurisdiction, Etc. (a) THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
TO BE PERFORMED ENTIRELY IN SUCH STATE. UNLESS OTHERWISE DEFINED HEREIN OR IN
THE CREDIT AGREEMENT, TERMS USED IN ARTICLE 9 OF THE NEW YORK UCC ARE USED
HEREIN AS THEREIN DEFINED. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT, ANY OTHER DOCUMENT OR ANY BANK HEDGE AGREEMENT MAY BE BROUGHT IN ▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ SITTING IN NEW YORK CITY OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
KL2:200855.2
16
AGREEMENT, EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY ACCEPTS FOR ITSELF
AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION
OF THE AFORESAID COURTS. EACH SUCH PARTY HEREBY FURTHER IRREVOCABLY WAIVES ANY
CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH PARTY, AND
AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT, ANY OTHER DOCUMENT TO WHICH IT IS A PARTY OR ANY BANK HEDGE
AGREEMENT BROUGHT IN ANY OF THE AFORESAID COURTS, THAT ANY SUCH COURTS LACK
PERSONAL JURISDICTION OVER SUCH PARTY. EACH SUCH PARTY FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN
ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH PARTY AT ITS ADDRESS SET FORTH IN
SECTION 8.02 OF THE CREDIT AGREEMENT, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS
AFTER SUCH MAILING. EACH SUCH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO
SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER
DOCUMENT OR UNDER ANY BANK HEDGE AGREEMENT THAT SERVICE OF PROCESS WAS IN ANY
WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT,
THE COLLATERAL AGENT, ANY SECURED PARTY OR ANY HEDGE BANK TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANY PARTY IN ANY OTHER JURISDICTION.
(b) EACH PARTY TO THIS AGREEMENT HERETO HEREBY IRREVOCABLY WAIVES TO THE
FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, ANY OTHER
DOCUMENT OR ANY BANK HEDGE AGREEMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE
(a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM
IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER DOCUMENTS, ANY BANK HEDGE AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
KL2:200855.2
17
IN WITNESS WHEREOF, the Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
PRECISE HOLDING CORPORATION,
as Grantor
By ___________________________________
Name:
Title:
Agreed and consented to as of
the date first above written:
FLEET NATIONAL BANK,
as Collateral Agent
By _______________________________
Name:
Title:
[Signature Page to Parent Pledge and Security Agreement]
KL2:200855.2
18
Schedule I
PLEDGED SHARES
Percentage of
Issuing Corporation Number of Shares Shares Outstanding Par Value
------------------- ---------------- ------------------ ---------
$
KL2:200855.2
EXHIBIT E TO THE
CREDIT AGREEMENT
PATENT, TRADEMARK AND COPYRIGHT PLEDGE
AND SECURITY AGREEMENT
Dated June 13, 1997
from
PRECISE TECHNOLOGY, INC.,
and
THE OTHER GRANTORS NAMED HEREIN,
as Grantors,
to
FLEET NATIONAL BANK,
as Collateral Agent
KL2:192595.3
TABLE OF CONTENTS
PRELIMINARY STATEMENTS:........................................- 1 -
SECTION 1. Grant of Security..............................................- 2 -
SECTION 2. Security for Obligations.......................................- 3 -
SECTION 3. Grantor Remains Liable.........................................- 3 -
SECTION 4. Representations and Warranties.................................- 3 -
SECTION 5. Further Assurances.............................................- 5 -
SECTION 6. Transfers and Other Liens......................................- 7 -
SECTION 7. The Collateral Agent Appointed Attorney-in-Fact................- 7 -
SECTION 8. The Collateral Agent May Perform...............................- 8 -
SECTION 9. The Collateral Agent's Duties..................................- 8 -
SECTION 10. Remedies.......................................................- 8 -
SECTION 11. Indemnity and Expenses........................................- 10 -
SECTION 12. Amendments; Waivers; Etc......................................- 10 -
SECTION 13. Notices, Etc..................................................- 10 -
SECTION 14. Continuing Security Interest; Assignments
Under the Credit Agreement..................................- 10 -
SECTION 15. Release and Termination.......................................- 11 -
SECTION 16. GOVERNING LAW; TERMS..........................................- 11 -
KL2:192595.3
SCHEDULES
Schedule I - Patents and Patent Applications
Schedule II - Trademark and Service ▇▇▇▇ Registrations and Applications
Schedule III - Copyright Registrations and Applications
Schedule IV - Licenses
Schedule V - Pending Litigation/Unauthorized Uses
KL2:192595.3
PATENT, TRADEMARK AND COPYRIGHT PLEDGE AND SECURITY
AGREEMENT
PATENT, TRADEMARK AND COPYRIGHT PLEDGE AND SECURITY AGREEMENT (as amended,
supplemented or otherwise modified from time to time, this "Agreement"), dated
June 13, 1997, made by and among PRECISE TECHNOLOGY, INC., a Delaware
corporation (the "Borrower"), each of the other Persons listed on the signature
page hereof and the Additional Collateral Grantors (as defined in the Security
Agreement) (Parent, the Borrower, such other Persons and such Additional
Collateral Grantors collectively referred to herein as the "Grantors" and each
individually, a "Grantor") to FLEET NATIONAL BANK ("Fleet"), as collateral agent
(together with any successor collateral agent appointed pursuant to Section 21
of the Security Agreement (the "Collateral Agent") for the Secured Parties, as
custodian for the Hedge Banks and as Issuing Bank.
PRELIMINARY STATEMENTS:
(1) Precise Holding Corporation, a Delaware corporation, the Borrower and
each Subsidiary Guarantor have entered into a Credit Agreement, dated as of June
13, 1997, (said Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, being the "Credit Agreement", the terms
defined therein and not otherwise defined herein being used herein as therein
defined) with Fleet, as agent (together with any successor agent appointed
pursuant to Article VII of the Credit Agreement, the "Agent"), and the Lenders
from time to time party thereto.
(3) Pursuant to the Subsidiary Guaranty, each Subsidiary Guarantor has
guaranteed to the Lenders the payment when due of all obligations and
liabilities of the Borrower under or with respect to the Loan Documents.
(4) It is a condition precedent to the making of Advances by the Lenders
and the issuance of Letters of Credit by the Issuing Bank under the Credit
Agreement and the entry by the Hedge Banks into the Bank Hedge Agreements with
the Borrower from time to time that each Grantor shall have granted the
assignment and security interest and made the pledge and assignment contemplated
by this Agreement.
(5) Each Grantor will obtain benefits from the incurrence of Advances and
the issuance of Letters of Credit under the Credit Agreement and the entering
into of Bank Hedge Agreements with the Hedge Banks and, accordingly, each
Grantor desires to execute this Agreement to satisfy the conditions described in
the preceding paragraph (4).
NOW, THEREFORE, in consideration of the premises and in order to induce the
Lenders to make Advances and the Issuing Bank to issue Letters of Credit under
the Credit Agreement and to induce the Hedge Banks to enter into Bank Hedge
Agreements with the Borrower from time to time, each Grantor hereby agrees with
the Collateral Agent for the ratable benefit of the Secured Parties as follows:
KL2:192595.3
SECTION 1. Grant of Security. Each Grantor hereby assigns and pledges to
the Collateral Agent for the ratable benefit of the Secured Parties, and hereby
grants to the Collateral Agent for the ratable benefit of the Secured Parties, a
security interest in all of such Grantor's right, title and interest in and to
the following, whether now owned or hereafter acquired, whether now or hereafter
existing (collectively, the "Intellectual Property Collateral"):
(a) all patents, patent applications and patentable inventions,
including, without limitation, each patent and patent application
identified on Schedule I attached hereto and made a part hereof, and
including without limitation (i) all inventions and improvements described
and claimed therein, (ii) the right to ▇▇▇ or otherwise recover for any
misappropriations thereof, (iii) all income, royalties, damages and other
payments now and hereafter due and/or payable with respect thereto
(including, without limitation, payments under all licenses entered into in
connection therewith, and damages and payments for past and future
infringements thereof), and (iv) all rights corresponding thereto
throughout the world and all reissues, divisions, continuations,
continuations-in-part, substitutes, renewals, and extensions thereof, all
improvements thereon and all other rights of any kind whatsoever of such
Grantor accruing thereunder or pertaining thereto (the "Patents");
(b) all trademarks, service marks, trade names, trade dress or other
indicia of trade origin, trademark and service ▇▇▇▇ registrations, and
applications for trademark or service ▇▇▇▇ registrations and any renewals
thereof, including, without limitation, each registration and application
identified on Schedule II attached hereto and made a part hereof, and
including without limitation (i) the right to ▇▇▇ or otherwise recover for
any and all past, present and future infringements and misappropriations
thereof, (ii) all income, royalties, damages and other payments now and
hereafter due and/or payable with respect thereto (including, without
limitation, payments under all licenses entered into in connection
therewith, and damages and payments for past or future infringements
thereof), and (iii) all rights corresponding thereto throughout the world
and all other rights of any kind whatsoever of such Grantor accruing
thereunder or pertaining thereto, together in each case with the goodwill
of the business connected with the use of, and symbolized by, each such
trademark, service ▇▇▇▇, trade name, trade dress or other indicia of trade
origin (the "Trademarks"); and
(c) all copyrights, whether statutory or common law, and whether or
not the underlying works of authorship have been published, and all works
of authorship and other intellectual property rights therein, all
copyrights of works based on, incorporated in, derived from or relating to
works covered by such copyrights, all right, title and interest to make and
exploit all derivative works based on or adopted from works covered by such
copyrights, and all copyright registrations and copyright applications, and
any renewals or extensions thereof, including, without limitation, each
copyright registration and copyright application, if any, identified on
Schedule III attached hereto and made a part hereof, and including, without
limitation, (i) the right to print, publish and distribute any of the
foregoing, (ii) the right to ▇▇▇ or otherwise recover for any and all past,
present and future infringements and misappropriations thereof, (iii) all
income, royalties, damages and other payments now and hereafter due and/or
payable with respect thereto
KL2:192595.3
- 2 -
(including, without limitation, payments under all licenses entered into in
connection therewith, and damages and payments for past or future
infringements thereof), and (iv) all rights corresponding thereto
throughout the world and all other rights of any kind whatsoever of such
Grantor accruing thereunder or pertaining thereto (the "Copyrights"); and
(d) all license agreements with any other Person in connection with
any of the Patents or Trademarks, or such other Person's patents, trade
names, trademarks or copyrights, whether such Grantor is a licensor or
licensee under any such license agreement, including, without limitation,
the license agreements listed on Schedule IV attached hereto and made a
part hereof, subject, in each case, to the terms of such license
agreements, including, without limitation, terms requiring consent to a
grant of a security interest, and any right to prepare for sale, sell and
advertise for sale, all Inventory (as defined in the Security Agreement)
now or hereafter owned by such Grantor and now or hereafter covered by such
licenses (the "Licenses").
SECTION 2. Security for Obligations. The pledge, assignment and security
interest granted under this Agreement by each Grantor secure the payment of all
Obligations of such Grantor now or hereafter existing under this Agreement and
the other Loan Documents whether for principal, interest, premiums, fees,
expenses, or otherwise (all such Obligations being the "Secured Obligations").
Without limiting the generality of the foregoing, this Agreement secures the
payment of all amounts that constitute part of the Secured Obligations and would
be owed by any Grantor to the Collateral Agent but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such Grantor.
SECTION 3. Grantor Remains Liable. Anything herein to the contrary
notwithstanding, (i) each Grantor shall remain liable under the contracts and
agreements included in the Intellectual Property Collateral to the extent set
forth therein to perform all of its duties and obligations thereunder to the
same extent as if this Agreement had not been executed, (ii) the exercise by the
Collateral Agent of any of the rights hereunder shall not release each Grantor
from any of its duties or obligations under the contracts and agreements
included in the Intellectual Property Collateral and (iii) the Collateral Agent
has no obligation or liability under the contracts and agreements included in
the Intellectual Property Collateral by reason of this Agreement, nor shall the
Collateral Agent be obligated to perform any of the obligations or duties of
such Grantor thereunder or to take any action to collect or enforce any claim
for payment assigned hereunder.
SECTION 4. Representations and Warranties. Each Grantor represents and
warrants as to itself and its Intellectual Property Collateral as follows:
(a) Such Grantor is the legal and beneficial owner of the entire
right, title and interest in and to the Intellectual Property Collateral in
which it is granting a security interest free and clear of any Lien, except
for the pledge, assignment and security interest created by this Agreement.
No effective financing statement or other instrument similar
KL2:192595.3
- 3 -
in effect covering all or any part of the Intellectual Property Collateral
or listing such Grantor or any trade name of such Grantor as debtor is on
file in any recording office (including, without limitation, the United
States Patent and Trademark Office), except such as may have been filed in
favor of the Collateral Agent relating to this Agreement and those Liens
permitted by Section 5.02(a) of the Credit Agreement.
(b) Set forth in Schedule I is a complete and accurate list of all
patents and all patent applications owned by such Grantor. Set forth in
Schedule II is a complete and accurate list of all trademark and service
▇▇▇▇ registrations and all trademark and service ▇▇▇▇ applications owned by
such Grantor. Set forth in Schedule III is a complete and accurate list of
all copyright registrations and copyright applications owned by each
Grantor. Set forth in Schedule IV is a complete and accurate list of all
Licenses owned by such Grantor in which such Grantor is (i) a licensor with
respect to any of the Patents, Trademarks or Copyrights, or (ii) a licensee
of any other person's patents, trade names, trademarks or copyrights. Such
Grantor has made all necessary filings and recordations to protect and
maintain its interest in the patents, patent applications, trademark and
service ▇▇▇▇ registrations, trademark and service ▇▇▇▇ applications,
copyright registrations and copyright applications and licenses set forth
in Schedules I, II, III and IV.
(c) Each patent, patent application, trademark or service ▇▇▇▇
registration, and trademark or service ▇▇▇▇ application and copyright
registration or copyright application of such Grantor set forth in
Schedules I, II and III is subsisting and has not been adjudged invalid,
unregistrable or unenforceable, in whole or in part, and is valid,
registrable and enforceable. Each License of such Grantor identified in
Schedule IV is validly subsisting and has not been adjudged invalid or
unenforceable, in whole or in part, and is valid and enforceable. Such
Grantor has notified the Collateral Agent in writing of all uses of any
item of Intellectual Property Collateral which could reasonably be expected
to lead to such item becoming invalid or unenforceable, including
unauthorized uses by third parties and uses which were not supported by the
goodwill of the business connected with such Intellectual Property
Collateral.
(d) Such Grantor has not made a previous assignment, transfer or
agreement constituting a present or future assignment, transfer or
encumbrance of any of the Intellectual Property Collateral. Such Grantor
has not granted any license (other than those listed in Schedule IV
hereto), release, covenant not to ▇▇▇, or non-assertion assurance to any
person with respect to any part of the Intellectual Property Collateral.
(e) Such Grantor has used reasonable and proper statutory notice in
connection with its use of each patent, each registered trademark and
service ▇▇▇▇ and each registered copyright contained in Schedules I, II and
III.
(f) This Agreement creates a valid and perfected first priority
security interest in the Intellectual Property Collateral, securing the
payment of the Secured Obligations, and all filings and other actions
necessary or desirable to perfect and protect such security interest have
been duly made or taken.
KL2:192595.3
- 4 -
(g) No authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any other
third party is required for (i) the grant by such Grantor of the assignment
and security interest granted hereby or the execution, delivery or
performance of this Agreement by such Grantor, (ii) the perfection or
maintenance of the pledge, assignment and security interest created hereby
(including the first priority nature of such pledge, assignment or security
interest) or (iii) the exercise by the Collateral Agent of its rights
provided for in this Agreement or the remedies in respect of the
Intellectual Property Collateral pursuant to this Agreement, in each case
other than the filing of financing and continuation statements under the
UCC, which financing statements have been duly filed, and the filing of
this Agreement with the United States Patent and Trademark Office,except
where the failure to obtain such authorization or approval or other action
would not, either individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect.
(h) Except for the Licenses set forth in Schedule IV and except as set
forth in Schedule V hereto, such Grantor has no knowledge of the existence
of any right or any claim that is likely to be made by any third party
relating to any item of Intellectual Property Collateral.
(i) Except as set forth in Schedule V, no claim has been made and is
continuing or threatened that any item of Intellectual Property Collateral
is invalid or unenforceable or that the use by such Grantor of any
Intellectual Property Collateral does or may violate the rights of any
person. Except as set forth in Schedule V, there is currently no
infringement or unauthorized use of any item of Intellectual Property
Collateral.
(j) Such Grantor has taken all necessary steps to use consistent
standards of quality in the manufacture, distribution and sale of all
products sold and the provision of all services provided under or in
connection with any of the Trademarks and has taken all necessary steps to
ensure that all licensed users of any of the Trademarks use such consistent
standards of quality.
(k) There are no conditions precedent to the effectiveness of this
Agreement that have not been satisfied or waived.
SECTION 5. Further Assurances. (a) Each Grantor agrees that from time to
time, at its own expense, it shall promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
that the Collateral Agent may deem desirable and may reasonably request, in
order to perfect and protect any pledge, assignment or security interest granted
or purported to be granted hereby (including, without limitation, the
first-priority nature thereof) or to enable the Collateral Agent to exercise and
enforce its rights and remedies hereunder with respect to any part of the
Intellectual Property Collateral. Without limiting the generality of the
foregoing, each Grantor shall promptly execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or as the Collateral Agent may deem desirable and
may reasonably request in order to perfect and preserve the pledge, assignment
and security interest granted or purported to be granted hereby.
KL2:192595.3
- 5 -
(b) Each Grantor hereby authorizes the Collateral Agent to file one or more
financing or continuation statements, and amendments thereto, relating to all or
any part of the Intellectual Property Collateral without the signature of such
Grantor where permitted by law. A photocopy or other reproduction of this
Agreement or any financing statement covering the Intellectual Property
Collateral or any part thereof shall be sufficient as a financing statement
where permitted by law.
(c) Each Grantor shall furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the Intellectual
Property Collateral and such other reports in connection with the Intellectual
Property Collateral as the Collateral Agent may reasonably request, all in
reasonable detail.
(d) Each Grantor agrees that, should it obtain an ownership interest in any
Patent, Trademark, Copyright or License which is not now a part of the
Intellectual Property Collateral, (i) the provisions of Section 1 hereof shall
automatically apply thereto, (ii) any such Patent, Trademark, Copyright or
License shall automatically become part of the Intellectual Property Collateral,
and (iii) with respect to any ownership interest in any patent, patent
application, trademark or service ▇▇▇▇ registration, trademark or service ▇▇▇▇
application, copyright registration, copyright application or license that such
Grantor should obtain, it shall give prompt written notice thereof to the
Collateral Agent in accordance with Section 13 hereof. Each Grantor authorizes
the Collateral Agent to modify this Agreement by amending Schedules I, II, III
and IV (and will cooperate reasonably with the Collateral Agent in effecting any
such amendment) to include any patent, patent application, trademark or service
▇▇▇▇ registration, trademark or service ▇▇▇▇ application, copyright application
or license which becomes part of the Intellectual Property Collateral under this
Section.
(e) With respect to each patent, patent application, trademark or service
▇▇▇▇ registration, trademark or service ▇▇▇▇ application, copyright
registration, copyright application and license, such Grantor agrees to take all
necessary steps, including, without limitation, in the United States Patent and
Trademark Office or in any court, to (i) maintain each such patent, patent
application, trademark or service ▇▇▇▇ registration, trademark or service ▇▇▇▇
application, copyright registration, copyright application and license and (ii)
pursue each such application for Patent, Trademark or Copyright now or hereafter
included in the Intellectual Property Collateral, including, without limitation,
the filing of responses to office actions issued by the United States Patent and
Trademark Office, the filing of applications for renewal or extension, the
filing of affidavits under Sections 8 and 15 of the United States Trademark Act,
and the participation in opposition, cancellation and infringement and
misappropriation proceedings, the filing of divisional, continuation,
continuation-in-part and substitute applications, the filing of applications for
re-issue, renewal or extensions, the payment of maintenance fees, and the
participation in interference, reexamination, opposition, infringement and
misappropriation proceedings. Each Grantor agrees to take corresponding steps
with respect to each new or acquired Patent, Trademark, Copyright or License to
which it is now or later becomes entitled. Any expenses incurred in connection
with such activities shall be borne by such Grantor. Such Grantor shall not,
without the written consent of the Collateral Agent, discontinue use of or
otherwise abandon any Patent, Trademark or Copyright identified in Schedules I,
II and III, or abandon any right to file an application for a Patent, Trademark
or
KL2:192595.3
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Copyright, or abandon any pending application for a Patent, Trademark or
Copyright identified in Schedules I, II and III. Further, such Grantor shall
not, without the written consent of the Collateral Agent, discontinue use of or
otherwise abandon any other Patent, Trademark or Copyright or abandon any right
to file an application for any other Patent, Trademark or Copyright or abandon
any pending application for any other Patent, Trademark or Copyright.
(f) Each Grantor agrees to notify the Collateral Agent promptly and in
writing if it learns (i) that any item of the Intellectual Property Collateral
may be determined to have become abandoned or dedicated or (ii) of any adverse
determination or the institution of any proceeding (including, without
limitation, the institution of any proceeding in the United States Patent and
Trademark Office or any court) regarding any item of the Intellectual Property
Collateral.
(g) In the event that any Grantor becomes aware that any item of the
Intellectual Property Collateral is infringed or misappropriated by a third
party, such Grantor shall promptly notify the Collateral Agent and shall take
such actions as such Grantor or the Collateral Agent deems reasonable and
appropriate under the circumstances to protect such Intellectual Property
Collateral, including, without limitation, suing for infringement or
misappropriation and for an injunction against such infringement or
misappropriation. Any expense incurred in connection with such activities shall
be borne by such Grantor.
(h) Each Grantor shall continue to use proper statutory notice in
connection with its use of each of its patents, registered trademarks and
service marks and registered copyrights contained in Schedules I, II, III.
(i) Each Grantor shall take all steps which it or the Collateral Agent
deems reasonable and appropriate under the circumstances to preserve and protect
its Intellectual Property Collateral, including, without limitation, maintaining
the quality of any and all products or services used or provided in connection
with any of the Trademarks, consistent with the quality of the products and
services as of the date hereof, and taking all steps necessary to ensure that
all licensed users of any of the Trademarks use such consistent standards of
quality.
SECTION 6. Transfers and Other Liens. Each Grantor agrees not (i) to sell,
assign (by operation of law or otherwise) or otherwise dispose of, or grant any
option with respect to, any item of the Intellectual Property Collateral or (ii)
to create or suffer to exist any Lien upon or with respect to any of the
Intellectual Property Collateral, except for the pledge, assignment and security
interest created by this Agreement and except as otherwise permitted by the
other Loan Documents.
SECTION 7. The Collateral Agent Appointed Attorney-in-Fact. Each Grantor
hereby irrevocably appoints the Collateral 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 upon the occurrence
and during the continuance of a Default and with prior notice to such Grantor,
to take any action and to execute any instrument that may be necessary or that
the Collateral Agent may deem desirable to accomplish the purposes of this
Agreement, including, without limitation:
KL2:192595.3
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(a) to ask for, 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 Intellectual Property Collateral,
(b) to receive, endorse and collect any drafts, instruments, chattel
paper and other documents in connection with subsection 7(a) hereof and
give full discharge for the same; and
(c) to file any claims or take any action or to institute any
proceedings that may be necessary or that the Collateral Agent may deem
desirable for the collection of any payments relating to any of the
Intellectual Property Collateral or otherwise to enforce the rights of the
Collateral Agent with respect to any of the Intellectual Property
Collateral.
SECTION 8. The Collateral Agent May Perform. If any Grantor fails to
perform any agreement contained herein, the Collateral Agent, with prior notice
to such Grantor, may itself perform, or cause performance of, such agreement,
and the expenses of the Collateral Agent incurred in connection therewith shall
be payable by such Grantor under Section 11 hereof.
SECTION 9. The Collateral Agent's Duties. The powers conferred on the
Collateral Agent hereunder are solely to protect its interest in the
Intellectual Property Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the safe
custody and preservation of the certificates of registration for any of the
Trademarks or the letters patent for any of the Patents in its possession and
the accounting for moneys actually received by it hereunder, the Collateral
Agent shall have no duty as to any Intellectual Property Collateral, whether or
not the Collateral Agent has or is deemed to have knowledge of such matters, or
as to the taking of any necessary steps to preserve rights against any parties
or any other rights pertaining to any Intellectual Property Collateral. The
Collateral Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the certificates of registration for any of the
Trademarks or the letters patent for any of the Patents in its possession if
such certificates of registration and letters patent are accorded treatment
substantially equal to that which the Borrower accords its own property of like
tenor. The Collateral Agent may resign from the performance of all of its
functions and duties under this Agreement at any time in accordance with the
provisions of Section 21 of the Security Agreement.
SECTION 10. Remedies. If any Event of Default shall have occurred and be
continuing:
(a) The Collateral Agent may exercise in respect of the Intellectual
Property 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 upon default under the Uniform Commercial Code in effect in
the State of New York at such time (the "New York UCC") whether or not the
New York UCC applies to the affected Intellectual Property Collateral, and
also may (i) require each Grantor to, and each Grantor hereby
KL2:192595.3
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agrees that it shall at its own expense and upon request of the Collateral
Agent forthwith, assemble all or part of the documents and things embodying
any part of the Intellectual Property Collateral as directed by the
Collateral Agent and make them available to the Collateral Agent at a place
to be designated by the Collateral Agent that is reasonably convenient to
both parties and (ii) without notice except as specified below, sell the
Intellectual Property Collateral or any part thereof in one or more parcels
at public or private sale, at any exchange or broker's board or at any of
the Collateral Agent's offices or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as the Collateral Agent may deem
commercially reasonable. In the event of any sale, assignment, or other
disposition of any of the Intellectual Property Collateral of any Grantor,
the goodwill of the business connected with and symbolized by any
Trademarks subject to such disposition shall be included, and such Grantor
shall supply to the Collateral Agent or its designee such Grantor's
know-how and expertise, and documents and things embodying the same,
relating to the manufacture, distribution, advertising and sale of products
or the provision of services relating to any Intellectual Property
Collateral subject to such disposition, and such Grantor's customer lists
and other records and documents relating to such Intellectual Property
Collateral and to the manufacture, distribution, advertising and sale of
such products and services. Such Grantor agrees that, to the extent notice
of sale shall be required by law, at least ten days' 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
Collateral Agent shall not be obligated to make any sale of Intellectual
Property Collateral regardless of notice of sale having been given. The
Collateral Agent may adjourn any public or private sale from time to time
by announcement at the time and place fixed therefor, and such sale,
without further notice, may be made at the time and place to which it was
so adjourned.
(b) Any cash held by the Collateral Agent as Collateral and all cash
proceeds received by the Collateral Agent in respect of any sale of,
collection from, or other realization upon, all or any part of the
Intellectual Property Collateral may, in the discretion of the Collateral
Agent, be held by the Collateral Agent as collateral for, and/or then or at
any time thereafter applied in whole or in part by the Collateral Agent for
the ratable benefit of the Secured Parties against, all or any part of the
Secured Obligations in such order in accordance with Section 20(b) of the
Security Agreement.
(c) It is understood that the Grantors shall remain jointly and
severally liable to the extent of any deficiency between the amount of the
proceeds of the Intellectual Property Collateral and the aggregate amount
of the Secured Obligations.
(d) The Collateral Agent may exercise any and all rights and remedies
of such Grantor in respect to the Intellectual Property Collateral,
including, without limitation, any and all rights of any Grantor to demand
or otherwise require payment of any amount under, or performance of any
provision of, any of the Intellectual Property Collateral.
(e) All payments received by any Grantor in respect of the
Intellectual Property Collateral shall be received in trust for the benefit
of the Collateral Agent, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to the
KL2:192595.3
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Collateral Agent in the same form as so received (with any necessary
endorsement or assignment).
SECTION 11. Indemnity and Expenses. (a) Each Grantor agrees to indemnify
the Collateral Agent and its officers, directors, employees, agents and advisors
(each an "Indemnified Party") from and against any and all claims, losses and
liabilities growing out of or resulting from this Agreement (including, without
limitation, enforcement of this Agreement), except to the extent that such
claims, losses or liabilities are found in a final, nonappealable judgment by a
court of competent jurisdiction to have resulted from such Indemnified Party's
gross negligence or willful misconduct.
(b) Each Grantor jointly and severally agrees to pay to the Collateral
Agent, upon demand, the amount of any and all reasonable costs and expenses
(including, without limitation, the reasonable fees and expenses of its counsel
and of any experts and agents, including, without limitation, the following
costs of such counsel, experts and agents: support staff, litigation
preparation, computerized research, telephone, telefax, mileage, deposition,
postage, photocopy, process service, video tape and other similar costs) that
the Collateral Agent may incur in connection with (i) the administration of this
Agreement, (ii) the custody, preservation, use or operation of, or the sale of,
collection from or other realization upon, any of the Intellectual Property
Collateral, (iii) the exercise or enforcement of any of the rights of the
Collateral Agent or (iv) the failure by such Grantor to perform or observe any
of the provisions hereof.
SECTION 12. Amendments; Waivers; Etc. (a) No amendment or waiver of any
provision of this Agreement, and no 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 Agent and the Collateral Agent, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
(b) No failure on the part of the Collateral Agent to exercise, and no
delay in exercising, any right, power or privilege hereunder shall operate as a
waiver thereof or consent thereto; nor shall any single or partial exercise of
any such right, power or privilege preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
SECTION 13. Notices, Etc. All notices and other communications provided for
hereunder shall be in writing (including telecopier, telegraphic or telex
communication) and mailed, telecopied, telegraphed, telexed or delivered, (i) if
to any Grantor or the Collateral Agent, addressed to it at its address set forth
in Section 8.02 of the Credit Agreement or (ii) as to any party at such other
address as shall be designated by such party in a notice to each other party
complying as to delivery with the terms of this Section 13. All such notices and
other communications shall, when mailed, telecopied, telegraphed or telexed, be
effective when deposited in the mails, transmitted by telecopier, delivered to
the telegraph company or confirmed by telex answerback, respectively, addressed
as aforesaid.
SECTION 14. Continuing Security Interest; Assignments Under the Credit
Agreement. This Agreement shall create a continuing security interest in the
Intellectual Property Collateral and shall (i) remain in full force and effect
until the later of (x) the
KL2:192595.3
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indefeasible and irrevocable cash payment in full of the Secured Obligations and
(y) the Final Maturity Date, (ii) be binding upon such Grantor, its successors
and assigns and (iii) inure, together with the rights and remedies of the
Collateral Agent hereunder, to the benefit of, and be enforceable by, the
Collateral Agent and its respective successors, transferees and assigns. Without
limiting the generality of this Section 14(iii), any Collateral Agent may assign
or otherwise transfer all or any portion of its rights and obligations under the
Credit Agreement (including, without limitation, all or any portion of its
Commitment or Commitments, the Advances owing to it and any Note or Notes held
by it) to any other Person, and such other Person shall thereupon become vested
with all the benefits in respect thereof granted to such Collateral Agent herein
or otherwise, in each case as provided in Section 8.07 of the Credit Agreement.
SECTION 15. Release and Termination. (a) Upon any sale, lease, transfer or
other disposition of any item of Intellectual Property Collateral in accordance
with the terms of the Loan Documents (other than sales of Inventory in the
ordinary course of business), the Collateral Agent shall, at the appropriate
Grantor's expense, execute and deliver to such Grantor such documents as such
Grantor shall reasonably request to evidence the release of such item of
Intellectual Property Collateral from the assignment and security interest
granted hereby; provided, however, that (i) at the time of such request and such
release, no Default shall have occurred and be continuing, (ii) such Grantor
shall have delivered to the Collateral Agent, at least five Business Days prior
to the date of the proposed release, a request for release describing the item
of the Intellectual Property Collateral and the terms of the sale, lease,
transfer or other disposition in reasonable detail (including, without
limitation, the price thereof and any expenses in connection therewith),
together with a form of release for execution by the Collateral Agent and a
certification by such Grantor to the effect that the transaction is in
compliance with the Loan Documents and as to such other matters as the
Collateral Agent may request and (iii) the Collateral Agent shall have approved
such sale, lease transfer or other disposition in writing.
(b) Upon the later of (i) the indefeasible and irrevocable cash payment in
full of the Secured Obligations and (ii) the Final Maturity Date, the pledge,
assignment and security interest granted hereby shall automatically terminate
and all rights to the Intellectual Property Collateral shall revert to such
Grantor. Upon any such termination and reversion, the Collateral Agent shall, at
such Grantor's expense, execute and deliver to such Grantor such documents as
such Grantor shall reasonably request to evidence such termination and
reversion.
SECTION 16. GOVERNING LAW; TERMS. (a) THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED ENTIRELY IN SUCH STATE, EXCEPT TO THE EXTENT THAT THE
VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR INTELLECTUAL PROPERTY COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. UNLESS
OTHERWISE DEFINED HEREIN OR IN THE CREDIT AGREEMENT, TERMS USED IN ARTICLE 9 OF
THE
KL2:192595.3
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NEW YORK UCC ARE USED HEREIN AS THEREIN DEFINED. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT, ANY OTHER DOCUMENT OR ANY BANK HEDGE AGREEMENT
MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ SITTING IN NEW YORK CITY
OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH PARTY TO THIS AGREEMENT HEREBY IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH SUCH PARTY
HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL
JURISDICTION OVER SUCH PARTY, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, ANY OTHER DOCUMENT OR ANY
BANK HEDGE AGREEMENT TO WHICH IT IS A PARTY BROUGHT IN ANY OF THE AFORESAID
COURTS, THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH PARTY. EACH
SUCH PARTY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH PARTY
AT ITS ADDRESS SET FORTH IN SECTION 8.02 OF THE CREDIT AGREEMENT, SUCH SERVICE
TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH SUCH PARTY HEREBY
IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER
IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING
COMMENCED HEREUNDER OR UNDER ANY OTHER DOCUMENT OR UNDER ANY BANK HEDGE
AGREEMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE AGENT, THE COLLATERAL AGENT, ANY SECURED
PARTY OR ANY HEDGE BANK TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PARTY IN ANY
OTHER JURISDICTION.
(b) EACH PARTY TO THIS AGREEMENT HERETO HEREBY IRREVOCABLY WAIVES TO THE
FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, ANY OTHER
DOCUMENT OR ANY BANK HEDGE AGREEMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE
(a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM
IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS
KL2:192595.3
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AGREEMENT, THE OTHER DOCUMENTS, ANY BANK HEDGE AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
KL2:192595.3
- 13 -
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
PRECISE TECHNOLOGY, INC.
By:___________________________________
Name:
Title:
PRECISE TECHNOLOGY OF DELAWARE, INC.
By:___________________________________
Name:
Title:
PRECISE TECHNOLOGY OF ILLINOIS, INC.
By:___________________________________
Name:
Title:
PRECISE TMP, INC.
By:___________________________________
Name:
Title:
PRECISE POLESTAR, INC.
By:___________________________________
Name:
Title:
[Signature Page to the Patent, Trademark and Copyright Pledge
and Security Agreement]
KL2:192595.3
▇▇▇▇▇▇ TOOL, MOLD & DIE, INC.
By:___________________________________
Name:
Title:
Agreed and consented to as of
the date first above written:
FLEET NATIONAL BANK,
as Collateral Agent
By:______________________________
Name:
Title:
[Signature Page to the Patent, Trademark and Copyright Pledge
and Security Agreement]
KL2:192595.3
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ____ day of , before me personally came
__________________________________ to me known, who, being by me duly sworn, did
depose and say he resides at __________________________________________
____________________________________________________________ and that he is the
_______________________ of ____________, the corporation described in and which
executed the above instrument; that he has been authorized to execute said
instrument on behalf of said corporation; and that he signed said instrument on
behalf of said corporation pursuant to said authority.
________________________
Notary Public
[Notarial Seal]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ____ day of , before me personally came
___________________________________________ to me known, who, being by me duly
sworn, did depose and say he resides at
_________________________________________
____________________________________________________________ and that he is the
_______________________ of ___________, the corporation described in and which
executed the above instrument; that he has been authorized to execute said
instrument on behalf of said corporation; and that he signed said instrument on
behalf of said corporation pursuant to said authority.
________________________
Notary Public
[Notarial Seal]
KL2:192595.3
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ____ day of before me personally came
___________________________________________ to me known, who, being by me duly
sworn, did depose and say he resides at
_________________________________________
____________________________________________________________ and that he is the
_______________________ of Fleet National Bank, the banking corporation
described in and which executed the above instrument; that he has been
authorized to execute said instrument on behalf of said corporation; and that he
signed said instrument on behalf of said corporation pursuant to said authority.
________________________
Notary Public
[Notarial Seal]
KL2:192595.3
- 17 -
EXHIBIT F-1 TO THE
CREDIT AGREEMENT
PARENT GUARANTY
Dated June 13, 1997
from
PRECISE HOLDING CORPORATION,
as Guarantor,
in favor of
THE SECURED PARTIES REFERRED TO IN
THE CREDIT AGREEMENT REFERRED TO HEREIN
TABLE OF CONTENTS
Section Page
1. Guaranty .............................................................. 1
2. Guaranty Absolute ..................................................... 2
3. Security .............................................................. 3
4. Waivers and Acknowledgments ........................................... 3
5. Subrogation ........................................................... 4
6. Subordination ......................................................... 4
7. Payments Free and Clear of Taxes, Etc. ................................ 5
8. Representations and Warranties ........................................ 8
9. Affirmative Covenants ................................................. 10
10. [Intentionally Omitted] ............................................... 10
11. Amendments, Etc. ...................................................... 10
12. Notices, Etc. ......................................................... 10
13. No Waiver; Remedies ................................................... 11
14. Fees; Expenses ........................................................ 11
15. Right of Set-off ...................................................... 11
16. Indemnification ....................................................... 11
17. Continuing Guaranty; Assignments under the Credit Agreement ........... 12
18. Counterparts .......................................................... 12
19. Payments by Guarantor ................................................. 12
20. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL, ETC. ............... 12
ii
PARENT GUARANTY
This GUARANTY, dated as of June 13, 1997 (as amended, modified or
supplemented from time to time, this "Guaranty"), made by PRECISE HOLDING
CORPORATION, a Delaware corporation (the "Guarantor"), in favor of the Secured
Parties (as defined in the Credit Agreement referred to below).
WHEREAS, the Lenders and Fleet National Bank, as agent for the Lenders, are
parties to a Credit Agreement dated as of June 13, 1997 (said Agreement, as it
may hereafter be amended, supplemented or otherwise modified from time to time,
being the "Credit Agreement", the terms defined therein and not otherwise
defined herein being used herein as therein defined) with the Guarantor, Precise
Technology, Inc. (the "Borrower"), and certain Subsidiaries of the Borrower as
set forth therein. The Borrower is a Wholly-Owned Subsidiary of the Guarantor.
It is a condition precedent to the making of Advances and the issuances of
Letters of Credit by the Lenders under the Credit Agreement that the Guarantor
shall have executed and delivered this Guaranty; and
WHEREAS, the Guarantor will obtain benefits from the receipt of Advances by
the Borrower under the Credit Agreement and, accordingly, desires to execute
this Guaranty in order to satisfy the condition described in the preceding
paragraph;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to the Guarantor, the receipt and sufficiency of which are hereby
acknowledged, and in order to induce the Lenders to make Advances and to issue
Letters of Credit under the Credit Agreement from time to time, the Guarantor
hereby makes the following representations and warranties to the Secured Parties
and hereby covenants and agrees with each Secured Party as follows:
Section 1. Guaranty. The Guarantor hereby unconditionally and irrevocably
guarantees (i) the full and prompt payment in cash when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations and
liabilities (including, without limitation, the principal of and interest on the
Notes issued by, and Advances made to, the Borrower under the Credit Agreement,
and all indemnities, fees and interest thereon or owed thereunder) owing by each
Loan Party to the Secured Parties, whether now existing or hereafter incurred
under, arising out of or in connection with any Loan Document to which such Loan
Party is a party and the due performance and compliance by each Loan Party with
all of the terms, conditions and agreements contained in the Credit Agreement
and such other Loan Documents (all such principal, interest, indemnities, fees,
obligations and liabilities being herein collectively called the "Guaranteed
Obligations"), and agrees to pay any and all expenses (including reasonable
counsel fees and expenses, including, without limitation, the following costs of
such counsel:
KL2:193861.3
support staff, litigation preparation, computerized research, telephone,
telefax, mileage, deposition, postage, photocopy, process service, video tape
and other similar costs) incurred by the Agent or any other Secured Party in
enforcing any rights under this Guaranty. Without limiting the generality of the
foregoing, the Guarantor's liability shall extend to all amounts that constitute
part of the Guaranteed Obligations and would be owed by the Borrower to the
Agent or any other Secured Party under the Loan Documents but for the fact that
they are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Borrower.
Section 2. Guaranty Absolute. The Guarantor, unconditionally and
irrevocably, guarantees that the Guaranteed Obligations will be paid strictly in
accordance with the terms of the Loan Documents, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of the Agent or any other Secured Party with respect
thereto. The Obligations of the Guarantor under this Guaranty are independent of
the Guaranteed Obligations or any other Obligations of any other Loan Party
under the Loan Documents, and a separate action or actions may be brought and
prosecuted against the Guarantor to enforce this Guaranty, irrespective of
whether any action is brought against the Borrower or any other Loan Party or
whether the Borrower or any other Loan Party is joined in any such action or
actions. The liability of the Guarantor under this Guaranty shall be
irrevocable, absolute and unconditional irrespective of, and the Guarantor
hereby irrevocably waives any defenses it may now or hereafter have in any way
relating to, any or all of the following:
(a) any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations or any other
Obligations of any other Loan Party under the Loan Documents, or any other
release, amendment or waiver of or any consent to departure from any Loan
Document, including, without limitation, any increase in the Guaranteed
Obligations resulting from the extension of additional credit to the
Borrower or otherwise;
(c) any taking, exchange, release or non-perfection of any Collateral,
or any taking, release or amendment or waiver of or consent to departure
from any other guaranty, for all or any of the Guaranteed Obligations;
(d) any manner of application of Collateral, or proceeds thereof, to
all or any of the Guaranteed Obligations, or any manner of sale or other
disposition of any Collateral for all or any of the Guaranteed Obligations
or any other Obligations of any Loan Party or any Subsidiary of any Loan
Party under the Loan Documents or any other assets of any Loan Party or any
Subsidiary of any Loan Party;
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KL2:193861.3
(e) any change, restructuring or termination of the corporate
structure or existence of any Loan Party or any Subsidiary of any Loan
Party;
(f) any failure of any Secured Party to disclose to the Borrower or
the Guarantor any information relating to the financial condition,
operations, properties or prospects of any other Loan Party now or in the
future known to any Secured Party (the Guarantor waiving any duty on the
part of the Secured Parties to disclose such information); or
(g) any other circumstance (including, without limitation, any statute
of limitations) or any existence of or reliance on any representation by
the Agent or any other Secured Party that might otherwise constitute a
defense available to, or a discharge of, the Borrower, the Guarantor or any
other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by any Secured Party or any other Person upon the
insolvency, bankruptcy or reorganization of the Borrower or any other Loan Party
or otherwise, all as though such payment had not been made. This Guaranty shall
constitute a guaranty of payment and performance, and not of collection.
Notwithstanding the foregoing, the Guarantor's waivers under clauses (b), (c),
(f) and (g) of this Section 2 shall not apply in respect of any action or
inaction taken by the Agent or any other Secured Party with respect to the
foregoing clauses (b), (c), (f) and (g) of this Section 2 to the extent that
such action or inaction is proven to constitute willful misconduct.
Section 3. Security. This Guaranty is secured by a first priority perfected
continuing security interest in all of the assets and property of the Guarantor
granted to the Collateral Agent pursuant to the Parent Pledge and Security
Agreement dated the date hereof between Parent and the Collateral Agent.
Section 4. Waivers and Acknowledgments. (a) The Guarantor hereby waives
promptness, diligence, notice of acceptance and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that the
Agent or any other Secured Party protect, secure, perfect or insure any Lien or
any property subject thereto or exhaust any right or take any action against the
Borrower or any other Person or any Collateral (except as shall be required by
applicable law and cannot be waived).
(b) The Guarantor hereby waives any right to revoke this Guaranty, and
acknowledges that this Guaranty is continuing in nature and applies to all
Guaranteed Obligations, whether existing now or in the future.
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(c) The Guarantor acknowledges that it will receive substantial direct and
indirect benefits from the financing arrangements contemplated by the Loan
Documents and that the waivers set forth in this Section 4 are knowingly made in
contemplation of such benefits.
Notwithstanding the foregoing, the Guarantor's waivers under clauses (a) and (b)
of this Section 4 shall not apply in respect of any action or inaction taken by
the Agent or any other Secured Party with respect to the foregoing clauses (a)
and (b) of this Section 4 to the extent that such action or inaction is proven
to constitute willful misconduct.
Section 5. Subrogation. The Guarantor will not exercise any rights that it
may now or hereafter acquire against the Borrower or any other insider guarantor
that arise from the existence, payment, performance or enforcement of the
Guarantor's Obligations under this Guaranty (whether contractual, under Section
509 of Title 11 of the United States Code entitled "Bankruptcy" as now or
hereafter in effect, or any successor thereto, or otherwise) or any other Loan
Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Agent or any other Secured Party
against the Borrower or any other insider guarantor or any Collateral, whether
or not such claim, remedy or right arises in equity or under contract, statute
or common law, including, without limitation, the right to take or receive from
the Borrower or any other insider guarantor, directly or indirectly, in cash or
other property or by set-off or in any other manner, payment or security on
account of such claim, remedy or right, unless and until all of the Guaranteed
Obligations and all other amounts payable under this Guaranty shall have been
paid in full in cash and the Commitments shall have expired or terminated. If
any amount shall be paid to the Guarantor in violation of the preceding sentence
at any time prior to the later of (x) the indefeasible and irrevocable payment
in full in cash of the Guaranteed Obligations and all other amounts payable
under this Guaranty and (y) the Final Maturity Date, such amount shall be held
in trust for the benefit of the Agent and the other Secured Parties and shall
forthwith be paid to the Agent to be credited and applied to the Guaranteed
Obligations and all other amounts payable under this Guaranty, whether matured
or unmatured, in accordance with the terms of the Loan Documents, or to be held
as Collateral for any Guaranteed Obligations or other amounts payable under this
Guaranty thereafter arising. If (i) the Guarantor shall make payment to the
Agent or any other Secured Party of all or any part of the Guaranteed
Obligations, (ii) all of the Guaranteed Obligations and all other amounts
payable under this Guaranty shall be paid in full in cash and (iii) the Final
Maturity Date shall have occurred, the Agent and the other Secured Parties will,
at the Guarantor's request and expense, execute and deliver to the Guarantor
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to the Guarantor of an
interest in the Guaranteed Obligations resulting from such payment by the
Guarantor.
Section 6. Subordination. Any and all rights and claims of the Guarantor
against the Borrower or any of its property, arising by reason of any payment by
the Guarantor to the Agent pursuant to the provisions of this Guaranty shall be
subordinate and subject in right of
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KL2:193861.3
payment to the prior payment and satisfaction of all Guaranteed Obligations and
all other amounts payable under this Guaranty. Any Debt of the Borrower, now or
hereafter held by the Guarantor, is hereby subordinated to all indebtedness and
obligations guaranteed hereby. Upon the occurrence and during the continuance of
an Event of Default, any such indebtedness of the Borrower to the Guarantor
shall, if the Agent so requests, be collected, enforced, and received by the
Guarantor in trust for the Agent and held as security for the payment of the
Guaranteed Obligations to the Agent, but without reducing or affecting in any
manner the liability of the Guarantor hereunder.
Section 7. Payments Free and Clear of Taxes, Etc. (a) Subject to Sections
7(e) and (f), any and all payments by the Guarantor hereunder or under the Notes
shall be made, in accordance with Section 2.11 of the Credit Agreement, free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings imposed by a Governmental
Authority, and all liabilities with respect thereto, excluding net income taxes
and franchise taxes imposed on the Agent or any Lender as a result of a present
or former connection between the Agent or such Lender and the jurisdiction of
the Governmental Authority imposing such tax or any political subdivision or
taxing authority thereof or therein (other than any such connection arising
solely from the Agent or such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this Guaranty, the Credit
Agreement or any Note) (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Guarantor shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note to any Lender or
the Agent, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 7) such Lender or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Guarantor shall make such deductions and
(iii) the Guarantor shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law; provided,
however, that the Guarantor shall not be required to increase such amounts
payable to any Lender organized under the laws of a jurisdiction outside the
United States to the extent provided in subsection (f) of this Section 7, and
shall not be required to indemnify such Lender pursuant to this Section 7(a) if
such Lender fails to comply with the requirements of subsection (e) of this
Section 7 (without regard to the last sentence thereof).
(b) In addition, the Guarantor shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, or otherwise with respect to, this Guaranty, the
Credit Agreement or the Notes; excluding any present or future stamp,
documentary, excise, property or similar taxes, charges or levies (including
without limitation, mortgage recording taxes and similar fees) that arise as a
result of sales, assignments or other transfers of rights hereunder by any
Lender (all such non-excluded taxes, charges and levies being hereinafter
referred to as "Other Taxes").
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KL2:193861.3
(c) The Guarantor shall indemnify each Lender and the Agent for the full
amount of Taxes and Other Taxes, and for the full amount of taxes imposed by any
jurisdiction on amounts payable under this Section 7, paid by such Lender or the
Agent (as the case may be) and any liability (including penalties, additions to
Tax, interest and expenses) arising therefrom or with respect thereto. This
indemnification shall be made within 30 days from the date such Lender or the
Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, the Guarantor
shall furnish to the Agent, at its address referred to in Section 8.02 of the
Credit Agreement, the original receipt of payment thereof or a certified copy of
such receipt or, if none is available, other documentary evidence showing such
payment. In the case of any payment hereunder or under the Notes by or on behalf
of the Guarantor through an account or branch outside the United States or on
behalf of the Guarantor by a payor that is not a United States person, if the
Guarantor determines that no Taxes are payable in respect thereof, the Guarantor
shall furnish, or shall cause such payor to furnish, to the Agent, at such
address, an opinion of counsel acceptable to the Agent stating that such payment
is exempt from Taxes. For purposes of subsections (d) and (e) of this Section 7,
the terms "United States" and "United States person" shall have the meanings
specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction outside the
United States shall, on or prior to the date of its execution and delivery of
this Guaranty in the case of each initial Lender or the Issuing Bank, as the
case may be, and on the date of the Assignment and Acceptance pursuant to which
it became a Lender in the case of each other Lender, and from time to time
thereafter if requested in writing by the Borrower or the Agent (but only so
long thereafter as such Lender remains lawfully able to do so), provide the
Agent and the Borrower with Internal Revenue Service form 1001 or 4224, as well
as form W-9 or W-8, as appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Lender is exempt from or is
entitled to a reduced rate of United States withholding tax on payments under
this Guaranty, the Credit Agreement or the Notes. If the form provided by a
Lender at the time such Lender first becomes a party to the Credit Agreement
indicates a United States interest withholding tax rate in excess of zero,
withholding tax at such rate shall be considered excluded from Taxes unless and
until such Lender provides the appropriate form certifying that a lesser rate
applies, whereupon withholding tax at such lesser rate only shall be considered
excluded from Taxes for periods governed by such form; provided, however, that,
if at the date of the Assignment and Acceptance pursuant to which a Lender
becomes a party to the Credit Agreement, the Lender assignor was entitled to
payments under subsection (a) of this Section 7 in respect of United States
withholding tax with respect to interest paid at such date, then, to such
extent, the term Taxes shall include (in addition to withholding taxes that may
be imposed in the future or other amounts otherwise includable in Taxes) United
States withholding tax, if any, applicable with respect to the Lender assignee
on such date. If any form or document referred to in this subsection (e) of this
Section 7 requires the disclosure of information, other than information
necessary to compute the tax payable and information required on the date hereof
by Internal Revenue Service form 1001 or 4224, that the Lender
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KL2:193861.3
reasonably considers to be confidential, the Lender shall give notice thereof to
the Borrower and shall not be obligated to include in such form or document such
confidential information. Notwithstanding anything to the contrary contained
herein, if the withholding taxes applicable to any payment under any Note or
under the Credit Agreement to a Lender or Lender assignor shall be increased
from that which would have otherwise been applicable at the time of the
execution and delivery by such Lender of the Credit Agreement or the date of the
Assignment and Acceptance pursuant to which it became a Lender, as the case may
be, due to (i) a change in the manner in which such Lender or Lender assignor
holds its interest in the Note, or (ii) an audit of the Internal Revenue Service
indicating that such Lender or Lender assignor is not entitled to an exemption
from, or a reduced rate for, such withholding taxes at the date of the execution
and delivery by such Lender of the Credit Agreement or the date of the
Assignment and Acceptance pursuant to which it became a Lender then any
withholding taxes resulting therefrom shall be considered excluded from Taxes.
(f) For any period with respect to which a Lender has failed to provide the
Guarantor with the appropriate form or document described in subsection (e) of
this Section 7 (other than if such failure is due to a change in law occurring
after the date on which a form originally was required to be provided or if such
form otherwise is not required to obtain an exemption from Taxes), such Lender
shall not be entitled to indemnification under subsection (a) or (c) of this
Section 7 with respect to Taxes imposed by the United States; provided, however,
that should a Lender become subject to Taxes because of its failure to deliver a
form required hereunder, the Guarantor shall take such steps as such Lender
shall reasonably request to assist such Lender to recover such Taxes.
(g) If requested by the Guarantor, and at the Guarantor's expense, any
Lender and the Agent shall take such steps as may be appropriate in the sole
discretion of such Lender or the Agent, as the case may be, to seek a refund of
any Taxes or Other Taxes paid by the Guarantor. If any Lender or the Agent
receives a refund in respect of any Taxes or Other Taxes for which the Lender
has received payment from the Guarantor hereunder, such Lender and the Agent,
within 15 days of such receipt, shall deliver to the Guarantor the amount of
such refund. In addition, within 15 days of a written request of the Guarantor,
any Lender and the Agent shall execute and deliver to the Guarantor such
certificates, forms or other documents which can be reasonably furnished
consistent with the facts and which are reasonably necessary in the opinion of
such Lender and the Agent to assist the Guarantor in applying for refunds of
Taxes or Other Taxes remitted hereunder.
(h) If the Guarantor is required to pay any amounts pursuant to the
provisions of this Section 7, and if thereafter any Lender or the Agent shall
receive or be granted a credit against or remission or other relief for any
Taxes solely in respect of the amounts so paid by the Guarantor, such Lender
shall, to the extent that it can do so without prejudice to the retention of the
amount of such credit, remission or other relief, pay to the Guarantor as soon
as reasonably practicable after the date on which such Lender or the Agent
effectively obtains the benefit of such credit, remission or other relief an
amount which such Lender reasonably
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determines to be equal to such credit, remission or other relief less any sum
which the Lender is required by law to deduct therefrom. The Lender may, in its
sole discretion, determine the order of utilization of all charges, deductions,
credits and expenses.
(i) In the event that any Lender or the Agent receives written
communication from any Governmental Authority with respect to an assessment or
proposed assessment of any Taxes or Other Taxes which the Guarantor is liable to
indemnify pursuant to the provisions of this Section 7, such Lender or the Agent
shall notify the Guarantor in writing as soon as reasonably practicable after
receipt of such written communication.
Section 8. Representations and Warranties. The Guarantor hereby represents
and warrants as follows:
(a) The Guarantor (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property
or assets or in which the conduct of its business requires it to so qualify
or be licensed, except where the failure to be so qualified would not,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, and (iii) has all requisite corporate power and
authority (including, without limitation, all material governmental
licenses, permits and other approvals) to own or lease and operate its
properties and assets and to carry on its business as now conducted and as
presently proposes to be conducted.
(b) The execution, delivery and performance by the Guarantor of this
Guaranty and each other Document to which it is a party, and the
consummation of the transactions contemplated hereby and thereby and the
compliance by it with the terms and provisions thereof, are within the
Guarantor's corporate powers, have been duly authorized by all necessary
corporate action and do not (i) contravene the Guarantor's charter or
bylaws (or equivalent documentation), (ii) violate any law (including,
without limitation, the Exchange Act and the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act of 1970),
rule, regulation (including, without limitation, Regulation X of the Board
of Governors of the Federal Reserve System), order, writ, judgment,
injunction, decree, determination or award, (iii) conflict with or result
in the breach of, or constitute a default under, any material contract,
loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting the Guarantor, any of its Subsidiaries
or any of their respective properties or assets or (iv) except for the
Liens created under the Loan Documents, result in or require the creation
or imposition of any Lien upon or with respect to any of the properties or
assets of the Guarantor or any of its Subsidiaries. Neither the Guarantor
nor any of its Subsidiaries is in violation of any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or
award or in breach of any such contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument, in each case
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KL2:193861.3
where such breach or imposition would, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(c) No authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority or regulatory body or any other
third party is required for (i) the due execution, delivery, recordation,
filing or performance by the Guarantor of this Guaranty and each other
Document to which it is a party, or for the consummation of the
transactions contemplated hereby and thereby, (ii) the grant by the
Guarantor of the Liens granted by it pursuant to the Collateral Documents,
(iii) the perfection or maintenance of the Liens created by the Collateral
Documents (including the first priority nature thereof) or (iv) the
exercise by the Agent, the Collateral Agent or any Lender of its rights
under the Loan Documents or the remedies in respect of the Collateral
pursuant to the Collateral Documents, except for the authorizations,
approvals, actions, notices and filings listed on Schedule 4.01(d) to the
Credit Agreement, all of which have been duly obtained, taken, given or
made and are in full force and effect. All applicable waiting periods in
connection with the transactions contemplated hereby have expired without
any action having been taken by any competent authority restraining,
preventing or imposing materially adverse conditions upon the rights of the
Guarantor or any of its Subsidiaries freely to transfer or otherwise
dispose of, or to create any Lien on, any properties or assets now owned or
hereafter acquired by any of them, except where the failure to obtain such
authorization or approval or other action would not, either individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
(d) There is no action, suit, investigation, litigation or proceeding
affecting the Guarantor or any of its Subsidiaries, including any
Environmental Claim, pending or threatened before any court, governmental
agency or arbitrator (i) that affects or purports to affect the legality,
validity or enforceability of this Guaranty or any other Loan Document or
the consummation of the transactions contemplated hereby or thereby, (ii)
with respect to any material Debt of the Guarantor or any of its
Subsidiaries or (iii) that would reasonably be expected to have a Material
Adverse Effect.
(e) This Guaranty has been duly executed and delivered by the
Guarantor. This Guaranty is the legal, valid and binding obligation of the
Guarantor, enforceable against the Guarantor in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or limiting creditors'
rights or by equitable principles generally (regardless of whether
enforcement is sought in equity or at law).
(f) Any information, exhibit or report (including, without limitation,
the Offering Memorandum and all information contained in the Documents but
excluding any financial projections) prepared and furnished by or on behalf
of the Guarantor in writing to any Secured Party for purposes of or in
connection with this Guaranty, the other
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KL2:193861.3
Documents or any transaction contemplated herein or therein is, and all
other such information hereafter prepared and furnished by or on behalf of
the Guarantor in writing to the Agent or any Secured Party will be, true
and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state
any fact necessary to make such information not misleading in any material
respect at such time in light of the circumstances under which such
information was provided.
(g) There are no conditions precedent to the effectiveness of this
Guaranty that have not been satisfied or waived.
(h) The Guarantor has, independently and without reliance upon the
Agent or any Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Guaranty.
Section 9. Affirmative Covenants. The Guarantor covenants and agrees that,
so long as any part of the Guaranteed Obligations shall remain unpaid, any
Letter of Credit shall be outstanding or any Lender shall have any Commitment,
the Guarantor will at all times require, perform or observe, and will cause each
Loan Party and each of their respective Subsidiaries to perform or observe, all
of the terms, covenants and agreements that the Loan Documents state that the
Guarantor or the Borrower or any other Loan Party is to perform or observe or
that the Guarantor or the Borrower is to cause any Loan Party's Subsidiaries to
perform or observe.
Section 10. [Intentionally Omitted]
Section 11. Amendments, Etc. No amendment or waiver of any provision of
this Guaranty and no consent to any departure by the Guarantor therefrom shall
in any event be effective unless the same shall be in writing and signed by the
Agent and the Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by all of the Lenders, (a) release or limit the liability of
the Guarantor hereunder, (b) postpone any date fixed for payment hereunder or
(c) amend this Section 11.
Section 12. Notices, Etc. All notices and other communications provided for
hereunder shall be in writing (including telegraphic, telecopy or telex
communication) and mailed, telegraphed, telecopied, telexed or delivered to it,
if to the Guarantor, addressed to it at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, telecopier number (▇▇▇) ▇▇▇-▇▇▇▇, with
copies to (a) Mentmore Holdings Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, telecopier number (212)
391-1393 and (b) Winston & ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, telecopier number (▇▇▇) ▇▇▇-▇▇▇▇; if to the Agent or
any Lender, at its address
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KL2:193861.3
specified in Section 8.02 of the Credit Agreement, or as to any party at such
other address as shall be designated by such party in a written notice to each
other party. All such notices and other communications shall, when mailed,
telegraphed, telecopied or telexed, be effective when deposited in the mails,
delivered to the telegraph company, transmitted by telecopier or confirmed by
telex answerback, respectively.
Section 13. No Waiver; Remedies. No failure on the part of the Agent, the
Collateral Agent or any other Secured Party 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 14. Fees; Expenses. The Guarantor hereby agrees to pay all
out-of-pocket costs and expenses of the Agent in connection with the enforcement
of this Guaranty and any amendment, waiver or consent relating hereto
(including, without limitation, the reasonable fees and disbursements of counsel
employed by the Secured Parties, including, without limitation, the following
costs of such counsel: support staff, litigation preparation, computerized
research, telephone, telefax, mileage, deposition, postage, photocopy, process
service, video tape and other similar costs).
Section 15. Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 of the Credit Agreement to
authorize the Agent to declare the Notes due and payable pursuant to the
provisions of said Section 6.01, each Lender and each of its respective
affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender or such affiliate to or for
the credit or the account of the Guarantor against any and all of the
Obligations of the Guarantor now or hereafter existing under this Guaranty,
whether or not such Lender shall have made any demand under this Guaranty and
although such Obligations may be unmatured. Each Lender agrees promptly to
notify the Guarantor after any such set-off and application; provided, however,
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Lender and its respective affiliates
under this Section 15 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) that such Lender and its respective
affiliates may have.
Section 16. Indemnification. Without limitation on any other Obligations of
the Guarantor or remedies of the Secured Parties under this Guaranty, the
Guarantor shall, to the fullest extent permitted by law, indemnify, defend and
save and hold harmless each Secured Party from and against, and shall pay on
demand, any and all losses, liabilities, damages, costs, expenses and charges
(including the reasonable fees and disbursements of such Secured Party's legal
counsel) suffered or incurred by such Secured Party as a result of any failure
of any
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KL2:193861.3
Guaranteed Obligations to be the legal, valid and binding obligations of the
Guarantor enforceable against the Guarantor in accordance with their terms.
Section 17. Continuing Guaranty; Assignments under the Credit Agreement.
This Guaranty is a continuing guaranty and shall (a) remain in full force and
effect until the later of (i) the indefeasible and irrevocable payment in full
in cash of the Guaranteed Obligations and all other amounts payable under this
Guaranty and (ii) the Final Maturity Date, (b) be binding upon the Guarantor,
its successors and assigns and (c) inure to the benefit of and be enforceable by
the Agent, the Collateral Agent and the other Secured Parties and their
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), any Secured Party may assign or otherwise transfer all or
any portion of its rights and obligations under the Credit Agreement (including,
without limitation, all or any portion of its Commitment, the Advances owing to
it and the Note or Notes held by it) to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to such Secured Party herein or otherwise, in each case, subject to the
conditions as and to the extent provided in Section 8.07 of the Credit
Agreement.
Section 18. Counterparts. This Guaranty may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Guarantor and the
Agent.
Section 19. Payments by Guarantor. All payments by the Guarantor hereunder
will be made without setoff, counterclaim or other defense.
Section 20. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL, ETC. (a)
THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE SECURED PARTIES AND THE
GUARANTOR SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY
IN SUCH STATE. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR
ANY OTHER DOCUMENT MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ SITTING
IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND, BY EXECUTION AND DELIVERY OF THIS GUARANTY, EACH PARTY TO THIS GUARANTY
HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH SUCH PARTY
HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL
JURISDICTION OVER SUCH PARTY, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY OTHER DOCUMENT BROUGHT
IN ANY OF THE AFORESAID COURTS, THAT SUCH
- 12 -
KL2:193861.3
COURT LACKS PERSONAL JURISDICTION OVER SUCH PARTY. EACH SUCH PARTY FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH PARTY IN ACCORDANCE WITH
SECTION 12, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH
SUCH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS
AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR
PROCEEDING COMMENCED HEREUNDER OR UNDER ANY DOCUMENT THAT SERVICE OF PROCESS WAS
IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
AGENT, THE COLLATERAL AGENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST ANY PARTY IN ANY OTHER JURISDICTION.
(b) THE GUARANTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS GUARANTY OR ANY OF THE OTHER DOCUMENTS TO WHICH IT IS
A PARTY IN THE COURTS REFERRED TO IN (a) ABOVE. THE GUARANTOR HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(c) THE GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS GUARANTY, ANY OF THE DOCUMENTS,
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR THE ACTIONS OF THE AGENT, THE
COLLATERAL AGENT OR ANY OTHER SECURED PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT HEREOF OR THEREOF.
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KL2:193861.3
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly
executed and delivered by an officer thereunto duly authorized as of the date
first above written.
PRECISE HOLDING CORPORATION
By ___________________________________
Name:
Title:
[Signature Page to the Parent Guaranty]
KL2:193861.3
EXHIBIT F-2 TO THE
CREDIT AGREEMENT
SUBSIDIARY GUARANTY
Dated June 13, 1997
from
CERTAIN SUBSIDIARIES OF
PRECISE TECHNOLOGY, INC.,
as Guarantors, in favor of
THE SECURED PARTIES REFERRED TO IN
THE CREDIT AGREEMENT REFERRED TO HEREIN
TABLE OF CONTENTS
Section Page
1. Guaranty .............................................................. 1
2. Guaranty Absolute ..................................................... 2
3. Security .............................................................. 3
4. Waivers and Acknowledgments ........................................... 3
5. Subrogation ........................................................... 4
6. Subordination ......................................................... 5
7. Payments Free and Clear of Taxes, Etc. ................................ 5
8. Representations and Warranties ........................................ 8
9. Affirmative Covenants ................................................. 10
10. [Intentionally Omitted] ............................................... 10
11. Amendments, Etc. ...................................................... 10
12. Notices, Etc. ......................................................... 10
13. No Waiver; Remedies ................................................... 11
14. Fees; Expenses ........................................................ 11
15. Right of Set-off ...................................................... 11
16. Indemnification ....................................................... 11
17. Continuing Guaranty; Assignments under the Credit Agreement ........... 12
18. Counterparts. ......................................................... 12
19. Payments by Guarantors ................................................ 12
20. Additional Subsidiaries ............................................... 12
Section Page
21. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL; ETC. ............... 12
Schedule I - Outstanding Capital Stock of each Guarantor
-ii-
SUBSIDIARY GUARANTY
This GUARANTY, dated as of June 13, 1997 (as amended, modified or
supplemented from time to time, this "Guaranty"), made by each of the
undersigned (each, a "Guarantor" and collectively, the "Guarantors"), in favor
of the Secured Parties (as defined in the Credit Agreement referred to below).
WHEREAS, the Lenders and Fleet National Bank, as Agent for the Lenders, are
parties to a Credit Agreement dated as of June 13, 1997 (said Agreement, as it
may hereafter be amended, supplemented or otherwise modified from time to time,
being the "Credit Agreement", the terms defined therein and not otherwise
defined herein being used herein as therein defined) with Precise Holding
Corporation ("Parent"), Precise Technology, Inc. (the "Borrower"), and the
Guarantors. Each Guarantor is a direct or indirect Subsidiary of the Borrower.
It is a condition precedent to the making of Advances and the issuances of
Letters of Credit by the Lenders under the Credit Agreement that each Guarantor
shall have executed and delivered this Guaranty; and
WHEREAS, each Guarantor will obtain benefits from the receipt of Advances
by the Borrower under the Credit Agreement and, accordingly, desires to execute
this Guaranty in order to satisfy the condition described in the preceding
paragraph;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Guarantor, the receipt and sufficiency of which are hereby
acknowledged, and in order to induce the Lenders to make Advances and to issue
Letters of Credit under the Credit Agreement from time to time, each Guarantor
hereby makes the following representations and warranties to the Secured Parties
and hereby covenants and agrees with each Secured Party as follows:
Section 1. Guaranty. (a) Each Guarantor, jointly and severally, hereby
unconditionally and irrevocably guarantees (i) the full and prompt payment in
cash when due (whether at the stated maturity, by acceleration or otherwise) of
all obligations and liabilities (including, without limitation, the principal of
and interest on the Notes issued by, and Advances made to, the Borrower under
the Credit Agreement, and all indemnities, fees and interest thereon or owed
thereunder) owing by each Loan Party to the Secured Parties, whether now
existing or hereafter incurred under, arising out of or in connection with any
Loan Document to which such Loan Party is a party and the due performance and
compliance by each Loan Party with all of the terms, conditions and agreements
contained in the Credit Agreement and such other Loan Documents (all such
principal, interest, indemnities, fees, obligations and liabilities being herein
collectively called the "Guaranteed Obligations"), and agrees to pay any and all
expenses (including reasonable counsel fees and expenses, including, without
limitation, the following costs of such counsel: support staff, litigation
preparation, computerized research, telephone, telefax, mileage, deposition,
postage, photocopy, process service, video tape and other similar costs)
incurred by the Agent or any other Secured Party in enforcing any rights
KL2:193918.4
under this Guaranty. Without limiting the generality of the foregoing, each
Guarantor's liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by the Borrower to the Agent or any
other Secured Party under the Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Borrower.
(b) The liability of each Guarantor under this Guaranty shall not exceed
the greater of (i) the net benefit realized by such Guarantor from the proceeds
of the Advances made from time to time by the Borrower to such Guarantor or any
Subsidiary of such Guarantor and (ii) the greater of (x) 95% of the Adjusted Net
Assets of such Guarantor on the date of delivery hereof and (y) 95% of the
Adjusted Net Assets of such Guarantor on the date any demand is made hereunder.
"Adjusted Net Assets" of such Guarantor at any date means the lesser of (x) the
amount by which the present fair salable value of the property of such Guarantor
exceeds the total amount of liabilities (including, without limitation, the
maximum amount reasonably expected to come due in respect of contingent
liabilities, other than contingent liabilities of such Guarantor under this
Guaranty) of such Guarantor at such date and (y) the amount by which the present
fair salable value of the assets of such Guarantor at such date exceeds the
amount that will be required to pay the probable liability of such Guarantor on
its debt, excluding debt in respect of this Guaranty, as they become absolute
and matured.
Section 2. Guaranty Absolute. Each Guarantor, jointly and severally,
unconditionally and irrevocably, guarantees that the Guaranteed Obligations will
be paid strictly in accordance with the terms of the Loan Documents, regardless
of any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Agent or any other Secured
Party with respect thereto. The Obligations of each Guarantor under this
Guaranty are independent of the Guaranteed Obligations or any other Obligations
of any other Guarantor or any other Loan Party under the Loan Documents, and a
separate action or actions may be brought and prosecuted against each Guarantor
to enforce this Guaranty, irrespective of whether any action is brought against
the Borrower, any other Guarantor or any other Loan Party or whether the
Borrower, any other Guarantor, or any other Loan Party is joined in any such
action or actions. The liability of each Guarantor under this Guaranty shall be
irrevocable, absolute and unconditional irrespective of, and each Guarantor
hereby irrevocably waives any defenses it may now or hereafter have in any way
relating to, any or all of the following:
(a) any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations or any other
Obligations of any other Loan Party or Parent under the Loan Documents, or
any other release, amendment or waiver of or any consent to departure from
any Loan Document, including, without limitation, any increase in the
Guaranteed Obligations resulting from the extension of additional credit to
the Borrower or otherwise;
KL2:193918.4
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(c) any taking, exchange, release or non-perfection of any Collateral,
or any taking, release or amendment or waiver of or consent to departure
from any other guaranty, for all or any of the Guaranteed Obligations;
(d) any manner of application of Collateral, or proceeds thereof, to
all or any of the Guaranteed Obligations, or any manner of sale or other
disposition of any Collateral for all or any of the Guaranteed Obligations
or any other Obligations of any Loan Party or any Subsidiary of any Loan
Party or Parent under the Loan Documents or any other assets of any Loan
Party or any Subsidiary of any Loan Party or Parent;
(e) any change, restructuring or termination of the corporate
structure or existence of any Loan Party or any Subsidiary of any Loan
Party or Parent;
(f) any failure of any Secured Party to disclose to the Borrower or
any Guarantor any information relating to the financial condition,
operations, properties or prospects of any other Loan Party or Parent now
or in the future known to any Secured Party (each Guarantor waiving any
duty on the part of the Secured Parties to disclose such information); or
(g) any other circumstance (including, without limitation, any statute
of limitations) or any existence of or reliance on any representation by
the Agent or any other Secured Party that might otherwise constitute a
defense available to, or a discharge of, the Borrower, each Guarantor or
any other guarantor or surety.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by any Secured Party or any other Person upon the
insolvency, bankruptcy or reorganization of the Borrower or any other Loan Party
or Parent or otherwise, all as though such payment had not been made. This
Guaranty shall constitute a guaranty of payment and performance, and not of
collection.
Notwithstanding the foregoing, the Guarantor's waivers under clauses (b), (c),
(f) and (g) of this Section 2 shall not apply in respect of any action or
inaction taken by the Agent or any other Secured Party with respect to the
foregoing clauses (b), (c), (f) and (g) of this Section 2 to the extent that
such action or inaction constitutes willful misconduct.
Section 3. Security. This Guaranty is secured by a first priority perfected
security interest in all of the assets and property of each Guarantor granted to
the Collateral Agent pursuant to the Security Agreement and the Intellectual
Property Security Agreement.
Section 4. Waivers and Acknowledgments. (a) Each Guarantor hereby waives
promptness, diligence, notice of acceptance and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that the
Agent or any other Secured Party protect, secure, perfect or insure any Lien or
any property subject thereto or
KL2:193918.4
-3-
exhaust any right or take any action against the Borrower, any other Guarantor
or any other Person or any Collateral (except as shall be required by applicable
law and cannot be waived).
(b) Each Guarantor hereby waives any right to revoke this Guaranty, and
acknowledges that this Guaranty is continuing in nature and applies to all
Guaranteed Obligations, whether existing now or in the future.
(c) Each Guarantor acknowledges that it will receive substantial direct and
indirect benefits from the financing arrangements contemplated by the Loan
Documents and that the waivers set forth in this Section 4 are knowingly made in
contemplation of such benefits.
Notwithstanding the foregoing, the Guarantor's waivers under clauses (a) and (b)
of this Section 4 shall not apply in respect of any action or inaction taken by
the Agent or any other Secured Party with respect to the foregoing clauses (a)
and (b) of this Section 4 to the extent that such action or inaction constitutes
willful misconduct.
Section 5. Subrogation. No Guarantor will exercise any rights that it may
now or hereafter acquire against the Borrower, any other Guarantor or any other
insider guarantor that arise from the existence, payment, performance or
enforcement of such Guarantor's Obligations under this Guaranty (whether
contractual, under Section 509 of Title 11 of the United States Code entitled
"Bankruptcy" as now or hereafter in effect, or any successor thereto, or
otherwise) or any other Loan Document, including, without limitation, any right
of subrogation, reimbursement, exoneration, contribution or indemnification and
any right to participate in any claim or remedy of the Agent or any other
Secured Party against the Borrower, any other Guarantor or any other insider
guarantor or any Collateral, whether or not such claim, remedy or right arises
in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from the Borrower, any other Guarantor
or any other insider guarantor, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account of
such claim, remedy or right, unless and until all of the Guaranteed Obligations
and all other amounts payable under this Guaranty shall have been paid in full
in cash and the Commitments shall have expired or terminated. If any amount
shall be paid to any Guarantor in violation of the preceding sentence at any
time prior to the later of (x) the payment in full in cash of the Guaranteed
Obligations and all other amounts payable under this Guaranty and (y) the Final
Maturity Date, such amount shall be held in trust for the benefit of the Agent
and the other Secured Parties and shall forthwith be paid to the Agent to be
credited and applied to the Guaranteed Obligations and all other amounts payable
under this Guaranty, whether matured or unmatured, in accordance with the terms
of the Loan Documents, or to be held as Collateral for any Guaranteed
Obligations or other amounts payable under this Guaranty thereafter arising. If
(i) any Guarantor shall make payment to the Agent or any other Secured Party of
all or any part of the Guaranteed Obligations, (ii) all of the Guaranteed
Obligations and all other amounts payable under this Guaranty shall be paid in
full in cash and (iii) the Final Maturity Date shall have occurred, the Agent
and the other Secured Parties will, at such Guarantor's request and expense,
execute and deliver to such Guarantor appropriate documents, without recourse
and without representation
KL2:193918.4
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or warranty, necessary to evidence the transfer by subrogation to such Guarantor
of an interest in the Guaranteed Obligations resulting from such payment by such
Guarantor.
Section 6. Subordination. Any and all rights and claims of any Guarantor
against the Borrower or any of its property, arising by reason of any payment by
such Guarantor to the Agent pursuant to the provisions of this Guaranty shall be
subordinate and subject in right of payment to the prior payment and
satisfaction of all Guaranteed Obligations and all other amounts payable under
this Guaranty. Any Debt of the Borrower, now or hereafter held by any Guarantor,
is hereby subordinated to all indebtedness and obligations guaranteed hereby.
Upon the occurrence and during the continuance of an Event of Default, any such
indebtedness of the Borrower to such Guarantor shall, if the Agent so requests,
be collected, enforced, and received by such Guarantor in trust for the Agent
and held as security for the payment of the Guaranteed Obligations to the Agent,
but without reducing or affecting in any manner the liability of any Guarantor
hereunder.
Section 7. Payments Free and Clear of Taxes, Etc. (a) Subject to Sections
7(e) and (f), any and all payments by each Guarantor hereunder or under the
Notes shall be made, in accordance with Section 2.11 of the Credit Agreement,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings imposed by a Governmental
Authority, and all liabilities with respect thereto, excluding net income taxes
and franchise taxes imposed on the Agent or any Lender as a result of a present
or former connection between the Agent or such Lender and the jurisdiction of
the Governmental Authority imposing such tax or any political subdivision or
taxing authority thereof or therein (other than any such connection arising
solely from the Agent or such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this Guaranty, the Credit
Agreement or any Note) (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If any Guarantor shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note to any Lender or
the Agent, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 7) such Lender or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) such Guarantor shall make such deductions and
(iii) such Guarantor shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law; provided,
however, that no Guarantor shall be required to increase such amounts payable to
any Lender organized under the laws of a jurisdiction outside the United States
to the extent provided in subsection (f) of this Section 7, and shall not be
required to indemnify such Lender pursuant to this Section 7(a) if such Lender
fails to comply with the requirements of subsection (e) of this Section 7
(without regard to the last sentence thereof).
(b) In addition, each Guarantor shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, or
KL2:193918.4
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otherwise with respect to, this Guaranty, the Credit Agreement or the Notes;
excluding any present or future stamp, documentary, excise, property or similar
taxes, charges or levies (including without limitation, mortgage recording taxes
and similar fees) that arise as a result of sales, assignments or other
transfers of rights hereunder by any Lender (all such non-excluded taxes,
charges and levies being hereinafter referred to as "Other Taxes").
(c) Each Guarantor shall indemnify each Lender and the Agent for the full
amount of Taxes and Other Taxes, and for the full amount of taxes imposed by any
jurisdiction on amounts payable under this Section 7, paid by such Lender or the
Agent (as the case may be) and any liability (including penalties, additions to
Tax, interest and expenses) arising therefrom or with respect thereto. This
indemnification shall be made within 30 days from the date such Lender or the
Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes, each Guarantor
shall furnish to the Agent, at its address referred to in Section 8.02 of the
Credit Agreement, the original receipt of payment thereof or a certified copy of
such receipt or, if none is available, other documentary evidence showing such
payment. In the case of any payment hereunder or under the Notes by or on behalf
of any Guarantor through an account or branch outside the United States or on
behalf of any Guarantor by a payor that is not a United States person, if such
Guarantor determines that no Taxes are payable in respect thereof, such
Guarantor shall furnish, or shall cause such payor to furnish, to the Agent, at
such address, an opinion of counsel acceptable to the Agent stating that such
payment is exempt from Taxes. For purposes of subsections (d) and (e) of this
Section 7, the terms "United States" and "United States person" shall have the
meanings specified in Section 7701 of the Internal Revenue Code.
(e) Each Lender organized under the laws of a jurisdiction outside the
United States shall, on or prior to the date of its execution and delivery of
this Guaranty in the case of each initial Lender or the Issuing Bank, as the
case may be, and on the date of the Assignment and Acceptance pursuant to which
it became a Lender in the case of each other Lender, and from time to time
thereafter if requested in writing by the Borrower or the Agent (but only so
long thereafter as such Lender remains lawfully able to do so), provide the
Agent and the Borrower with Internal Revenue Service form 1001 or 4224, as well
as form W-9 or W-8, as appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Lender is exempt from or is
entitled to a reduced rate of United States withholding tax on payments under
this Guaranty, the Credit Agreement or the Notes. If the form provided by a
Lender at the time such Lender first becomes a party to the Credit Agreement
indicates a United States interest withholding tax rate in excess of zero,
withholding tax at such rate shall be considered excluded from Taxes unless and
until such Lender provides the appropriate form certifying that a lesser rate
applies, whereupon withholding tax at such lesser rate only shall be considered
excluded from Taxes for periods governed by such form; provided, however, that,
if at the date of the Assignment and Acceptance pursuant to which a Lender
becomes a party to the Credit Agreement, the Lender assignor was entitled to
payments under subsection (a) of this Section 7 in respect of United States
withholding tax with respect to interest paid at such date, then, to such
extent, the term Taxes shall include (in addition to withholding taxes that may
be
KL2:193918.4
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imposed in the future or other amounts otherwise includable in Taxes) United
States withholding tax, if any, applicable with respect to the Lender assignee
on such date. If any form or document referred to in this subsection (e) of this
Section 7 requires the disclosure of information, other than information
necessary to compute the tax payable and information required on the date hereof
by Internal Revenue Service form 1001 or 4224, that the Lender reasonably
considers to be confidential, the Lender shall give notice thereof to the
Borrower and shall not be obligated to include in such form or document such
confidential information. Notwithstanding anything to the contrary contained
herein, if the withholding taxes applicable to any payment under any Note or
under the Credit Agreement to a Lender or Lender assignor shall be increased
from that which would have otherwise been applicable at the time of the
execution and delivery by such Lender of the Credit Agreement or the date of the
Assignment and Acceptance pursuant to which it became a Lender, as the case may
be, due to (i) a change in the manner in which such Lender or Lender assignor
holds its interest in the Note, or (ii) an audit of the Internal Revenue Service
indicating that such Lender or Lender assignor is not entitled to an exemption
from, or a reduced rate for, such withholding taxes at the date of the execution
and delivery by such Lender of the Credit Agreement or the date of the
Assignment and Acceptance pursuant to which it became a Lender then any
withholding taxes resulting therefrom shall be considered excluded from Taxes.
(f) For any period with respect to which a Lender has failed to provide any
Guarantor with the appropriate form or document described in subsection (e) of
this Section 7 (other than if such failure is due to a change in law occurring
after the date on which a form originally was required to be provided or if such
form otherwise is not required to obtain an exemption from Taxes), such Lender
shall not be entitled to indemnification under subsection (a) or (c) of this
Section 7 with respect to Taxes imposed by the United States; provided, however,
that should a Lender become subject to Taxes because of its failure to deliver a
form required hereunder, each Guarantor shall take such steps as such Lender
shall reasonably request to assist such Lender to recover such Taxes.
(g) If requested by any Guarantor, and at such Guarantor's expense, any
Lender and the Agent shall take such steps as may be appropriate in the sole
discretion of such Lender or the Agent, as the case may be, to seek a refund of
any Taxes or Other Taxes paid by such Guarantor. If any Lender or the Agent
receives a refund in respect of any Taxes or Other Taxes for which the Lender
has received payment from such Guarantor hereunder, such Lender and the Agent,
within 15 days of such receipt, shall deliver to such Guarantor the amount of
such refund. In addition, within 15 days of a written request of any Guarantor,
any Lender and the Agent shall execute and deliver to such Guarantor such
certificates, forms or other documents which can be reasonably furnished
consistent with the facts and which are reasonably necessary in the opinion of
such Lender and the Agent to assist such Guarantor in applying for refunds of
Taxes or Other Taxes remitted hereunder.
(h) If any Guarantor is required to pay any amounts pursuant to the
provisions of this Section 7, and if thereafter any Lender or the Agent shall
receive or be granted a credit against or remission or other relief for any
Taxes solely in respect of the amounts so paid by
KL2:193918.4
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such Guarantor, such Lender shall, to the extent that it can do so without
prejudice to the retention of the amount of such credit, remission or other
relief, pay to such Guarantor as soon as reasonably practicable after the date
on which such Lender or the Agent effectively obtains the benefit of such
credit, remission or other relief an amount which such Lender reasonably
determines to be equal to such credit, remission or other relief less any sum
which the Lender is required by law to deduct therefrom. The Lender may, in its
sole discretion, determine the order of utilization of all charges, deductions,
credits and expenses.
(i) In the event that any Lender or the Agent receives written
communication from any Governmental Authority with respect to an assessment or
proposed assessment of any Taxes or Other Taxes which any Guarantor is liable to
indemnify pursuant to the provisions of this Section 7, such Lender or the Agent
shall notify such Guarantor in writing as soon as reasonably practicable after
receipt of such written communication.
Section 8. Representations and Warranties. Each Guarantor hereby represents
and warrants as follows:
(a) Such Guarantor (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property
or assets or in which the conduct of its business requires it to so qualify
or be licensed, except where the failure to be so qualified would not,
either individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, and (iii) has all requisite corporate power and
authority (including, without limitation, all material governmental
licenses, permits and other approvals) to own or lease and operate its
properties and assets and to carry on its business as now conducted and as
presently proposes to be conducted. All of the outstanding capital stock of
such Guarantor has been validly issued free of pre-emptive rights, is fully
paid and non-assessable and is owned by the Persons and in the amounts and
types specified in Schedule I free and clear of all Liens.
(b) The execution, delivery and performance by such Guarantor of this
Guaranty and each other Document to which it is a party, and the
consummation of the transactions contemplated hereby and thereby and the
compliance by it with the terms and provisions thereof, are within such
Guarantor's corporate powers, have been duly authorized by all necessary
corporate action and do not (i) contravene any Guarantor's charter or
bylaws (or equivalent documentation), (ii) violate any law (including,
without limitation, the Exchange Act and the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act of 1970),
rule, regulation (including, without limitation, Regulation X of the Board
of Governors of the Federal Reserve System), order, writ, judgment,
injunction, decree, determination or award, (iii) conflict with or result
in the breach of, or constitute a default under, any material contract,
loan agreement, indenture, mortgage, deed of trust, lease or other
instrument binding on or affecting any Guarantor, any of its Subsidiaries
or any of their respective properties or
KL2:193918.4
-8-
assets or (iv) except for the Liens created under the Loan Documents,
result in or require the creation or imposition of any Lien upon or with
respect to any of the properties or assets of any Guarantor or any of its
Subsidiaries. No Guarantor nor any of its Subsidiaries is in violation of
any such law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument, in each case
where such breach or imposition would, either individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
(c) No authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority or regulatory body or any other
third party is required for (i) the due execution, delivery, recordation,
filing or performance by such Guarantor of this Guaranty and each other
Document to which it is a party, or for the consummation of the
transactions contemplated hereby or thereby, (ii) the grant by such
Guarantor of the Liens granted by it pursuant to the Collateral Documents,
(iii) the perfection or maintenance of the Liens created by the Collateral
Documents (including the first priority nature thereof) or (iv) the
exercise by the Agent, the Collateral Agent or any Lender of its rights
under the Loan Documents or the remedies in respect of the Collateral
pursuant to the Collateral Documents, except for the authorizations,
approvals, actions, notices and filings listed on Schedule 4.01(d) to the
Credit Agreement, all of which have been duly obtained, taken, given or
made and are in full force and effect. All applicable waiting periods in
connection with the transactions contemplated hereby have expired without
any action having been taken by any competent authority restraining,
preventing or imposing materially adverse conditions upon the rights of
such Guarantor or any of its Subsidiaries freely to transfer or otherwise
dispose of, or to create any Lien on, any properties or assets now owned or
hereafter acquired by any of them except where the failure to be obtain
such approval or authorization or other action would not, either
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
(d) There is no action, suit, investigation, litigation or proceeding
affecting such Guarantor or any of its Subsidiaries, including any
Environmental Claim, pending or threatened before any court, governmental
agency or arbitrator (i) that affects or purports to affect the legality,
validity or enforceability of this Guaranty or any other Loan Document or
the consummation of the transactions contemplated hereby or thereby, (ii)
with respect to any material Debt of any Guarantor or any of its
Subsidiaries or (iii) that would reasonably be expected to have a Material
Adverse Effect.
(e) This Guaranty has been duly executed and delivered by such
Guarantor. This Guaranty is the legal, valid and binding obligation of such
Guarantor, enforceable against such Guarantor in accordance with its terms
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or limiting creditors'
rights or by equitable principles generally (regardless of whether
enforcement is sought in equity or at law).
KL2:193918.4
-9-
(f) Any information, exhibit or report (including, without limitation,
the Offering Memorandum and all information contained in the Documents but
excluding any financial projections) prepared and furnished by or on behalf
of such Guarantor or any of its Subsidiaries in writing to any Secured
Party for purposes of or in connection with this Guaranty, the other
Documents or any transaction contemplated herein or therein is, and all
other such information hereafter prepared and furnished by or on behalf of
such Guarantor or any of its Subsidiaries in writing to any Secured Parties
will be, true and accurate in all material respects on the date as of which
such information is dated or certified and not incomplete by omitting to
state any fact necessary to make such information not misleading in any
material respect at such time in light of the circumstances under which
such information was provided.
(g) There are no conditions precedent to the effectiveness of this
Guaranty that have not been satisfied or waived.
(h) Such Guarantor has, independently and without reliance upon the
Agent or any Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into
this Guaranty.
Section 9. Affirmative Covenants. Each Guarantor covenants and agrees that,
so long as any part of the Guaranteed Obligations shall remain unpaid, any
Letter of Credit shall be outstanding or any Lender shall have any Commitment,
such Guarantor will at all times require, perform or observe, and will cause
each Loan Party and each of their respective Subsidiaries and Parent to perform
or observe, all of the terms, covenants and agreements that the Loan Documents
state that such Guarantor or the Borrower or any other Loan Party or Parent is
to perform or observe or that such Guarantor or the Borrower is to cause any
Loan Party's Subsidiaries to perform or observe.
Section 10. [Intentionally Omitted]
Section 11. Amendments, Etc. No amendment or waiver of any provision of
this Guaranty and no consent to any departure by any Guarantor therefrom shall
in any event be effective unless the same shall be in writing and signed by the
Agent and the Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by all of the Lenders, (a) release or limit the liability of
any Guarantor hereunder, (b) postpone any date fixed for payment hereunder or
(c) amend this Section 11.
Section 12. Notices, Etc. All notices and other communications provided for
hereunder shall be in writing (including telegraphic, telecopy or telex
communication) and mailed, telegraphed, telecopied, telexed or delivered to it,
if to any Guarantor, addressed to it at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, telecopier number (▇▇▇) ▇▇▇-▇▇▇▇, with
copies to (a) Mentmore Holdings Corporation, ▇▇▇▇ ▇▇▇▇▇▇▇▇,
KL2:193918.4
-▇▇-
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, telecopier
number (▇▇▇) ▇▇▇-▇▇▇▇ and (b) Winston & ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, telecopier number (▇▇▇) ▇▇▇-▇▇▇▇; if to the
Agent or any Lender, at its address specified in Section 8.02 of the Credit
Agreement, or as to any party at such other address as shall be designated by
such party in a written notice to each other party. All such notices and other
communications shall, when mailed, telegraphed, telecopied or telexed, be
effective when deposited in the mails, delivered to the telegraph company,
transmitted by telecopier or confirmed by telex answerback, respectively.
Section 13. No Waiver; Remedies. No failure on the part of the Agent, the
Collateral Agent or any other Secured Party 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 14. Fees; Expenses. The Guarantors hereby jointly and severally
agree to pay all out-of-pocket costs and expenses of the Agent in connection
with the enforcement of this Guaranty and any amendment, waiver or consent
relating hereto (including, without limitation, the reasonable fees and
disbursements of counsel employed by the Secured Parties, including, without
limitation, the following costs of such counsel: support staff, litigation
preparation, computerized research, telephone, telefax, mileage, deposition,
postage, photocopy, process service, video tape and other similar costs).
Section 15. Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 of the Credit Agreement to
authorize the Agent to declare the Notes due and payable pursuant to the
provisions of said Section 6.01, each Lender and each of its respective
affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender or such affiliate to or for
the credit or the account of any Guarantor against any and all of the
Obligations of such Guarantor now or hereafter existing under this Guaranty,
whether or not such Lender shall have made any demand under this Guaranty and
although such Obligations may be unmatured. Each Lender agrees promptly to
notify such Guarantor after any such set-off and application; provided, however,
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Lender and its respective affiliates
under this Section 15 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) that such Lender and its respective
affiliates may have.
Section 16. Indemnification. Without limitation on any other Obligations of
any Guarantor or remedies of the Secured Parties under this Guaranty, each
Guarantor shall, to the fullest extent permitted by law, indemnify, defend and
save and hold harmless each Secured Party from and against, and shall pay on
demand, any and all losses, liabilities, damages, costs, expenses and charges
(including the reasonable fees and disbursements of such Secured Party's
KL2:193918.4
-11-
legal counsel) suffered or incurred by such Secured Party as a result of any
failure of any Guaranteed Obligations to be the legal, valid and binding
obligations of each Guarantor enforceable against any Guarantor in accordance
with their terms.
Section 17. Continuing Guaranty; Assignments under the Credit Agreement.
This Guaranty is a continuing guaranty and shall (a) remain in full force and
effect until the later of (i) the indefeasible and irrevocable payment in full
in cash of the Guaranteed Obligations and all other amounts payable under this
Guaranty and (ii) the Final Maturity Date, (b) be binding upon each Guarantor,
its successors and assigns and (c) inure to the benefit of and be enforceable by
the Agent, the Collateral Agent and the other Secured Parties and their
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), any Secured Party may assign or otherwise transfer all or
any portion of its rights and obligations under the Credit Agreement (including,
without limitation, all or any portion of its Commitment, the Advances owing to
it and the Note or Notes held by it) to any other Person, and such other Person
shall thereupon become vested with all the benefits in respect thereof granted
to such Secured Party herein or otherwise, in each case, subject to the
conditions as and to the extent provided in Section 8.07 of the Credit
Agreement.
Section 18. Counterparts. This Guaranty may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Guarantors and the
Agent.
Section 19. Payments by Guarantors. All payments made by any Guarantor
hereunder will be made without setoff, counterclaim or other defense.
Section 20. Additional Subsidiaries. It is understood and agreed that any
Subsidiary of any Loan Party that is required to execute a counterpart of this
Guaranty pursuant to the Credit Agreement shall automatically become a Guarantor
hereunder by executing a counterpart hereof and delivering the same to the
Agent.
Section 21. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL; ETC. (a)
THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE SECURED PARTIES AND EACH
GUARANTOR SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY
IN SUCH STATE. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR
ANY OTHER DOCUMENT MAY BE BROUGHT IN ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ SITTING
IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND, BY EXECUTION AND DELIVERY OF THIS GUARANTY, EACH PARTY TO THIS GUARANTY
HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
AND UNCONDITIONALLY, THE JURISDICTION OF THE
KL2:193918.4
-▇▇-
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇. EACH SUCH PARTY HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM
THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH PARTY, AND AGREES NOT
TO PLEAD OR CLAIM, IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
GUARANTY OR ANY OTHER LOAN DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS, THAT
SUCH COURT LACKS PERSONAL JURISDICTION OVER SUCH PARTY. EACH SUCH PARTY FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH PARTY IN ACCORDANCE WITH
SECTION 12, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH
SUCH PARTY HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS
AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR
PROCEEDING COMMENCED HEREUNDER OR UNDER ANY LOAN DOCUMENT THAT SERVICE OF
PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE AGENT, THE COLLATERAL AGENT, ANY LENDER OR THE HOLDER OF ANY NOTE
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY PARTY IN ANY OTHER JURISDICTION.
(b) EACH GUARANTOR IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS GUARANTY OR ANY OF THE OTHER DOCUMENTS TO WHICH IT IS
A PARTY IN THE COURTS REFERRED TO IN (a) ABOVE. EACH GUARANTOR HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT.
(c) EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS GUARANTY, ANY OF THE DOCUMENTS,
THE TRANS ACTIONS CONTEMPLATED HEREBY OR THEREBY OR THE ACTIONS OF THE AGENT,
THE COLLATERAL AGENT OR ANY OTHER SECURED PARTY IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE OR ENFORCEMENT HEREOF OR THEREOF.
KL2:193918.4
-13-
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed and delivered by an officer thereunto duly authorized as of the date
first above written.
PRECISE TECHNOLOGY OF DELAWARE, INC.
By ___________________________________
Name:
Title:
PRECISE TECHNOLOGY OF ILLINOIS, INC.
By ___________________________________
Name:
Title:
PRECISE TMP, INC.
By ___________________________________
Name:
Title:
PRECISE POLESTAR, INC.
By ___________________________________
Name:
Title:
▇▇▇▇▇▇ TOOL, MOLD & DIE, INC.
By ___________________________________
Name:
Title:
[Signature Page to the Subsidiary Guaranty]
KL2:193918.4
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Schedule I
to Subsidiary Guaranty
Outstanding Capital Stock of each Guarantor
KL2:193918.4
-15-
EXHIBIT G
[Form of Opinion of Borrower's Counsel]
June 13, 1997
To the Agent and each of the Lenders party
to the Credit Agreement referred to below
and the Collateral Agent referred to therein
Ladies and Gentlemen:
We have acted as special counsel to Precise Holding Corporation, a
Delaware corporation ("Parent"), Precise Technology, Inc., a Delaware
corporation (the "Borrower") and each Subsidiary Guarantor in connection with
the execution and delivery by Parent, the Borrower and each Subsidiary Guarantor
of the Credit Agreement, dated as of June 13, 1997 (the "Credit Agreement")
among Parent, the Borrower, each Subsidiary Guarantor, the financial
institutions from time to time party thereto (the "Lenders"), and Fleet National
Bank, as agent (the "Agent"), and the transactions contemplated thereby. This
opinion is delivered to you pursuant to Section 3.01(g)(xvi) of the Credit
Agreement. Unless otherwise indicated, capitalized terms used herein but not
otherwise defined herein shall have the respective meanings set forth in the
Loan Documents. Parent, the Borrower, each Subsidiary Guarantor collectively are
referred to as the "Loan Parties" and each a "Loan Party". Parent, the Borrower,
Precise Technology of Delaware Inc., a Delaware corporation, and Precise
Technology of Illinois Inc., a Delaware corporation, collectively are referred
to as the "Delaware Loan Parties" and each a "Delaware Loan Party".
In connection with this opinion, we have examined:
(i) the Credit Agreement;
(ii) the Note;
(iii) the Parent Guaranty;
(iv) the Subsidiary Guaranty;
(v) the Security Agreement;
(vi) the Intellectual Property Security Agreement;
(vii) the Mortgages;
(viii) the Senior Subordinated Notes;
(ix) the Senior Subordinated Notes Indenture;
June 13, 1997
Page 2
(x) the Senior Subordinated Notes Guaranty; and
(xi) UCC-1 Financing Statements the unexecuted forms of which are
attached hereto as Exhibit A (collectively the "Financing
Statements").
The documents described in clauses (i) through (vii) and (xi) are
hereinafter referred to collectively as the "Loan Documents" and the documents
described in clauses (i) through (xi) are referred to collectively as the
"Documents". References in this opinion letter to the "New York UCC" are to the
Uniform Commercial Code currently in effect in the State of New York.
We have also examined such other agreements, instruments and documents,
and such questions of law as we have deemed necessary or appropriate to enable
us to render the opinions expressed below. Additionally, we have examined
originals or copies, certified to our satisfaction, of such certificates of
public officials and officers and representatives of the Loan Parties and we
have made such inquiries of officers and representatives of the Loan Parties as
we have deemed relevant or necessary, as the basis for the opinions set forth
herein.
In rendering the opinions expressed below, we have, with your consent,
assumed that the signatures of persons signing all documents in connection with
which this opinion is rendered are genuine, all documents submitted to us as
originals or duplicate originals are authentic and all documents submitted to us
as copies, whether certified or not, conform to authentic original documents.
Additionally, we have, with your consent, assumed and relied upon, the
following:
(a) the accuracy and completeness of all certificates and other
statements, documents, records, financial statements and papers reviewed by us,
and the accuracy and completeness of all representations, warranties, schedules
and exhibits contained in the Documents, with respect to the factual matters set
forth therein;
(b) all parties to the documents reviewed by us (other than the Loan
Parties) are duly organized, validly existing and in good standing under the
laws of all jurisdictions where they are conducting their businesses or
otherwise required to be so qualified, and have full power and authority to
execute, deliver and perform under such documents and all such documents have
been duly authorized, executed and delivered by such parties;
(c) neither the Agent, nor any Lender nor any of their respective
representatives have any knowledge (actual or constructive) of any adverse
claim, lien, security interest, claim, encumbrance, interest or other condition
of title affecting any of the Collateral, except for Liens described in the Loan
Documents, Liens assigned to the Collateral Agent pursuant to the Loan
June 13, 1997
Page 3
Documents and Liens the existence of which would reasonably be expected not to
have a Material Adverse Effect;
(d) each Document constitutes the valid and binding obligation of each
party thereto (other than the Loan Parties) enforceable against such party in
accordance with its terms;
(e) the descriptions of the Collateral in the Loan Documents reasonably
describe the property intended to be described as Collateral; and
(f) all of the transactions contemplated by the Loan Documents in
connection with the Initial Extension of Credit, the Refinancing Transactions,
and the issuance of the Senior Subordinated Notes pursuant to the Senior
Subordinated Notes Indenture have been consummated, and consummated
concurrently, such that no delivery or payment contemplated thereby shall be
deemed to have been made until all such transactions shall have been completed.
Whenever our opinion with respect to the existence or absence of facts
is indicated to be based on our knowledge or awareness, we are referring to the
knowledge of the particular Winston & ▇▇▇▇▇▇ attorneys who have represented the
Loan Parties during the course of our limited representation of the Loan Parties
in connection with the Documents. Except as expressly set forth herein, we have
not undertaken any independent investigation, examination or inquiry to
determine the existence or absence of any facts and no inference as to our
knowledge concerning any facts should be drawn as a result of the limited
representations undertaken by us.
Based upon the foregoing and subject to the qualifications stated
herein, we are of the opinion that:
1. Each Delaware Loan Party (i) is a corporation duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property or
assets or in which the conduct of its business requires it to so qualify or be
licensed, except where the failure to be so qualified would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect and
(iii) has all requisite corporate power and authority to own or lease and
operate its properties and assets and to carry on its business as now conducted.
All of the outstanding capital stock of each Delaware Loan Party has been
validly issued, is fully paid and non-assessable and, to our knowledge, was not
issued in violation of any preemptive or similar rights. To our knowledge, no
Delaware Loan Party has outstanding any securities convertible into or
exchangeable for its capital stock or has outstanding any rights to subscribe
for or to purchase, or any options for the purchase of, or any agreements
providing for the issuance (contingent or otherwise) of, or any
June 13, 1997
Page 4
calls, commitments or claims of any character relating to, its capital stock.
2. Each Delaware Loan Party has all requisite corporate power and
authority to execute, deliver and perform its obligations under each of the Loan
Documents to which it is a party and has taken all necessary corporate action to
authorize the execution and delivery of and the performance by it of its
obligations under each of such Loan Documents. Each Loan Party has duly executed
and delivered each of the Loan Documents to which it is a party, and each of
such Loan Documents constitutes the valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its terms.
3. The execution, delivery and performance by each Loan Party of the
Loan Documents to which it is a party, and the consummation of the transactions
contemplated thereby, do not (i) contravene any Loan Party's charter or bylaws,
(ii) violate any law or regulation (or any writ, judgment, injunction, decree,
determination or award of any court or governmental entity known to us)
applicable to such Loan Party; (iii) to our knowledge, conflict with or result
in the breach of, or constitute a default under, any contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument binding on or
affecting any Loan Party, any of its Subsidiaries or any of their respective
properties or assets (which conflict, breach or default would individually or in
the aggregate reasonably be expected to have a Material Adverse Effect) or (iv)
except for the Liens created under the Loan Documents, result in or require the
creation or imposition of any Lien upon or with respect to any of the properties
or assets of any Loan Party or any of its Subsidiaries.
4. No authorization or approval or other action by, and no notice to or
filing with, any Governmental Authority or regulatory body or, to our knowledge,
any other third party, is required for (i) the due execution, delivery, or
performance by any Loan Party of any Loan Document to which it is a party, or
for the consummation of the transactions contemplated thereby, (ii) the grant by
any Loan Party of the Liens granted by it pursuant to the Collateral Documents,
(iii) the perfection of the Liens created by the Collateral Documents, except
for the filings listed on Schedule 4.01(d) to the Credit Agreement.
5. To our knowledge, there is no action, suit, investigation,
litigation or proceeding affecting any Loan Party pending or threatened before
any court, governmental agency or arbitrator (i) that affects or purports to
affect the legality, validity or enforceability of the Documents, the Senior
Subordinated Notes or the consummation of the transactions contemplated thereby,
or (ii) that could reasonably be expected to have a Material Adverse Effect.
6. No Loan Party nor any of its Subsidiaries is an "investment
company," or a "holding company" of an "investment
June 13, 1997
Page 5
company" as such terms are defined in the Investment Company Act of 1940, as
amended.
7. The subordination provisions contained in the Senior Subordinated
Notes and the other Senior Subordinated Note Documents are enforceable against
the Borrower and the respective guarantors party thereto, and the Obligations of
each Loan Party under the Loan Documents and the Guaranteed Obligations of each
Loan Party (as defined in the Parent Guaranty and the Subsidiary Guaranty) are
within the definition of "Senior Debt" under the Senior Subordinated Notes
Indenture.
8. The Security Agreement is effective to create in favor of the
Collateral Agent for the benefit of the Secured Parties a valid security
interest under the New York UCC in all of the right, title and interest of each
Loan Party in, to and under all "equipment", "inventory", "accounts",
"instruments", "documents", "chattel paper" and "general intangibles" (as such
terms are defined in the New York UCC) that are included within the definition
of "Collateral" set forth in the Security Agreement (collectively referred to
hereinafter as the "Article 9 Collateral"), to the extent a security interest
may be created therein under the New York UCC, except that (a) such security
interest will continue in such Article 9 Collateral after its sale, exchange or
other disposition only to the extent provided in Sections 9-306, 9-307 and 9-308
of the New York UCC, (b) the security interest in Article 9 Collateral in which
any Loan Party acquires rights after the commencement of a case under the
Federal Bankruptcy Code in respect of such Loan Party may be limited by Section
552 of such Code and (c) the security interest in any such Article 9 Collateral
constituting a "security" (as defined in the New York UCC) is enforceable only
to the extent that such security also has been transferred to the Collateral
Agent or a Person designated by it in one of the ways set forth in Section
8-313(1) of the New York UCC (delivery of possession thereof to the Collateral
Agent being one of such ways).
9. Assuming that the Financing Statements are filed in the offices set
forth on Schedule I hereto and are not subsequently released, terminated or
modified, the Collateral Agent's security interest in the Article 9 Collateral
described therein will be perfected.
When filed in each of the jurisdictions identified in Schedule I
hereto, the effectiveness of the Financing Statements will lapse on the
expiration of a five year period from their date of filing unless appropriate
continuation statements are filed within the six month period prior to
expiration of the applicable five year period. If the Loan Party that has
executed particular Financing Statements so changes its name, identity or
corporate structure that such Financing Statements become seriously misleading,
such Financing Statements will be ineffective to perfect a security interest in
Article 9 Collateral acquired more than four months after such change. If any
such Loan Party changes
June 13, 1997
Page 6
its chief executive office to a new jurisdiction outside the jurisdiction in
which it has its chief executive office as indicated in the Security Agreement,
the effectiveness of such Financing Statements will be terminated four months
after such change as to Article 9 Collateral consisting of "accounts" (as such
term is defined in the New York UCC).
10. Upon delivery pursuant to the Security Agreement to the Collateral
Agent of certificates representing the Pledged Shares and Pledged Debt (as such
terms are defined in the Security Agreement) together with undated stock or bond
powers duly endorsed in blank, and assuming that the Collateral Agent is taking
possession of the Pledged Shares and Pledged Debt for value and in good faith
and without notice of any adverse claim with respect thereto within the meaning
of the New York UCC, the Security Agreement creates a valid and perfected
security interest in the Pledged Shares and Pledged Debt in favor of the
Collateral Agent.
In giving the opinions set forth in paragraphs 8 through 10 above, we
have examined standard compilations of the Uniform Commercial Code as in effect
in jurisdictions other than the State of New York to determine the appropriate
location(s) and the types of forms required for the filing of financing
statements in such jurisdictions. In addition, we have assumed that none of the
Article 9 Collateral consists or will consist of fixtures, minerals or the like
(including oil and gas and accounts relating thereto), interests in real estate
cooperatives, consumer goods or farm products, livestock, crops, gain, timber,
equipment used in farming operations and/or accounts or general intangibles
resulting from the sale thereof.
The opinions as expressed herein are subject to the following
qualifications:
(a) the enforceability of the Loan Documents and the obligations of the
Loan Parties thereunder and the availability of certain rights and remedial
provisions provided for in the Loan Documents are subject to the effect of
bankruptcy, fraudulent conveyance or transfer, insolvency, reorganization,
liquidation, conservatorship, and moratorium laws and are subject to limitations
imposed by other laws and judicial decisions relating to or affecting the rights
of creditors or secured creditors generally, and general principles of equity
(regardless of whether enforcement is considered in proceedings at law or in
equity) upon the availability of injunctive relief or other equitable remedies;
(b) as to our opinions set forth in paragraph 2 hereof, we express no
opinion as to the enforceability of cumulative remedies to the extent such
cumulative remedies purport to or would have the effect of compensating the
party entitled to the benefits thereof in amounts in excess of the actual loss
suffered by such party;
June 13, 1997
Page 7
(c) we express no opinion as to any Collateral as to which the creation
and perfection of security interests therein are not governed solely by the New
York UCC or any Collateral consisting of goods that are or may become fixtures
on any premises, nor do we express any opinion with respect to the creation,
perfection or enforceability of security interests in property in which it is
illegal or violative of governmental rules or regulations to grant a security
interest, or any security interest in any "accounts," "chattel paper,"
"documents," "instruments" or "general intangibles" (as defined in the New York
UCC) with respect to which the account debtor or obligor is the United States of
America, any state, county, city, municipality or other governmental body, or
any department, agency or instrumentality thereof, unless the same has been
assigned to the Collateral Agent to the extent required by the Assignment of
Claims Act of 1940, as amended, or any similar law or regulation relating to the
assignment or pledge thereof;
(d) we express no opinion as to the perfection of a security interest
in any Collateral consisting of "proceeds" (as such term is defined in the New
York UCC) to the extent such perfection is limited as set forth in Section 9-306
of the New York UCC and note that, under certain circumstances described in
Sections 9-307 and 9-308 of the New York UCC, purchasers of Collateral may take
the same free of a perfected security interest;
(e) we have not made nor undertaken to make any investigation of the
state of title to the Collateral or the location thereof and we express no
opinion as to the priority of the liens, security interests or pledges granted
or purported to be granted by the Loan Documents;
(f) any purported assignment of any agreement or any governmental
approval, license or permit may be subject to restrictions upon assignment or
transfer which, although not necessarily applicable to assignments intended as
security, may be required to be satisfied before the Collateral Agent will be
treated as an assignee (other than a collateral assignee) thereof, except to the
extent that consents to or approvals of such assignment have been obtained from
the appropriate governmental body or third party;
(g) the rights of debtors, guarantors and other secured parties to
receive notices under Section 9-504 and 9-505 of the New York UCC may not be
waived prior to default and the failure to comply with such notice requirements
may bar or limit the recovery of any deficiency remaining after the retention or
sale of repossessed collateral and further, we express no opinion as to the
right of the Collateral Agent to enforce any of its rights without notice to the
relevant Loan Party and without judicial hearing or without bond, nor do we
express any opinion as to whether the periods of notice set forth in the Loan
Documents are enforceable;
June 13, 1997
Page 8
(h) certain provisions of the Loan Documents regarding the application
of proceeds realized from the sale of Collateral do not make reference (although
they do not have to in order to enable the Collateral Agent to exercise the
rights and remedies of a secured party under the New York UCC) to the Collateral
Agent's obligations to satisfy indebtedness due to the holders of subordinate
security interests in such collateral under certain conditions under Section
9-504(l)(c) of the New York UCC or to account to Loan Party involved for any
surplus proceeds;
(i) notwithstanding certain language of the Loan Documents, the
Collateral Agent may be limited to recovering only reasonable expenses with
respect to the retaking, holding, preparing for sale or lease, selling, leasing
and the like of Collateral and reasonable attorneys' fees and legal expenses and
only reasonable compensation for funding losses, increased costs or yield
protection;
(j) the duties to exercise reasonable care in the custody and
preservation of Collateral in a secured party's possession, to deal with and to
dispose of Collateral in a commercially reasonable manner as required by the
Code or other applicable law may not be disclaimed by agreement, modified,
waived or released prior to a default;
(k) we express no opinion with respect to the validity, binding effect
or enforceability of any provision of the Loan Documents which purports to
authorize the Collateral Agent to sign or file financing statements or other
documents without the signature of the relevant Loan Party (except to the extent
a secured party may execute and file financing statements without the signature
of the debtor under Section 9-402(2) of the New York UCC);
(l) we express no opinion with respect to the validity, binding effect
or enforceability of any purported waiver, release or disclaimer under any of
the Loan Documents relating to (i) statutory or equitable rights and defenses of
the Loan Parties which are not subject to waiver, release or disclaimer, or (ii)
rights or claims of, or duties owing to, the Loan Parties (including, without
limitation, any waiver, release or disclaimer of any provision of the New York
UCC) to the extent limited by Sections 1-102(3), 9-207 and 9-501(3) of the New
York UCC or other provisions of applicable law, or to the extent such rights,
claims and duties otherwise exist as a matter of law except to the extent the
Loan Party has effectively so waived, released or disclaimed such rights, claims
or duties in accordance with Section 9-501 of the New York UCC or other
applicable law;
(m) we express no opinion as to the Collateral Agent's ability to use
"self-help" remedies to repossess the Collateral if a breach of the peace were
to occur;
June 13, 1997
Page 9
(n) certain other rights, remedies and waivers contained in the Loan
Documents may be rendered ineffective, or limited by, applicable laws, rules,
regulations, constitutional requirements or judicial decisions governing such
provisions, but such laws, rules, regulations, constitutional limitations and
judicial decisions do not, in our opinion, make the Loan Documents inadequate
for the practical realization of the benefits and/or security provided by such
Loan Documents, although they may result in a delay thereof (and we express no
opinion with respect to the economic consequences of any such delay);
(o) we express no opinion with respect to the applicability or effect
of federal or state anti-trust, securities or "blue sky" laws with respect to
the transactions contemplated by the Loan Documents;
(p) we express no opinion with respect to the validity, binding effect
or enforceability of any provision of the Loan Documents purporting to eliminate
any obligation to ▇▇▇▇▇▇▇▇ assets; and
(q) we express no opinion with respect to any provisions of the Loan
Documents purporting to appoint the Collateral Agent as attorney-in-fact or
agent for any Loan Party.
The opinions expressed herein are based upon and are limited to the
laws of the State of New York, the General Corporation Law of the State of
Delaware and the laws of the United States of America and we express no opinion
with respect to the laws of any other state or jurisdiction.
Our opinions set forth in this letter are based upon the facts in
existence and laws in effect on the date hereof and we expressly disclaim any
obligation to update our opinions herein, regardless of whether changes in such
facts or laws come to our attention after the delivery hereof.
This opinion is solely for the benefit of the addressees hereof (and
each other entity that hereafter becomes a Lender under the Credit Agreement).
This opinion may not be relied upon in any manner by any other person and may
not be quoted or filed with a governmental agency without our prior written
consent.
Very truly yours,
SCHEDULE I
UCC-1 FILING JURISDICTIONS
Name of Entity Filing Locations
-------------- ----------------
Precise Technology, Inc. Delaware Secretary of State
New Castle County, DE
Florida Secretary of State
Pinellas County, FL
Illinois Secretary of State
▇▇▇▇ County, IL
Massachusetts Secretary of Commonwealth
Town of Grafton, MA
Missouri Secretary of State
Clay County, MO
Pennsylvania Secretary of Commonwealth
Allegheny County (PA) Prothonotary
Centre County (PA) Prothonotary
Indiana Secretary of State
Tippecanoe County, IN
New York Secretary of State
New York County, NY
Precise TMP, Inc. Florida Secretary of State
Pinellas County, FL
Massachusetts Secretary of Commonwealth
Worcester District, MA
Town of Grafton, MA
Northbridge (MA) Town Clerk
Clay County, MO
Clay County Recorder, MO
Missouri Secretary of State
Precise Technology of
Delaware, Inc. Delaware Secretary of State
New Castle County, DE
Precise Technology of
Illinois, Inc. Delaware Secretary of State
New Castle County, DE
Illinois Secretary of State
▇▇▇▇ County, IL
Precise Polestar, Inc. Pennsylvania Secretary of the Commonwealth
Centre County (PA) Prothonotary
Virginia Secretary of State
City of Richmond, VA
▇▇▇▇▇▇ Tool, Mold
& Die, Inc. Florida Secretary of State
Pinellas County, FL
Precise Holding Corporation New York Secretary of State
New York County, NY
Delaware Secretary of State
New Castle County, DE
EXHIBIT H
EXECUTION COPY
================================================================================
PRECISE TECHNOLOGY, INC.
11 1/8% SENIOR SUBORDINATED NOTES DUE 2007
------------------------
INDENTURE
Dated as of June 13, 1997
------------------------
------------------------
Marine Midland Bank
Trustee
------------------------
================================================================================
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE................... 1
Section 1.01. Definitions.................................................. 1
Section 1.02. Other Definitions............................................ 18
Section 1.03. Incorporation By Reference of Trust Indenture Act............ 18
Section 1.04. Rules of Construction........................................ 19
Section 1.05. Compliance Certificates and Opinions......................... 19
ARTICLE 2 THE NOTES.................................................... 21
Section 2.01. Form and Dating.............................................. 21
Section 2.02. Execution and Authentication................................. 22
Section 2.03. Registrar and Paying Agent................................... 23
Section 2.04. Paying Agent to Hold Money in Trust.......................... 23
Section 2.05. Holder Lists................................................. 24
Section 2.06. Transfer and Exchange........................................ 24
Section 2.07. Replacement Notes............................................ 36
Section 2.08. Outstanding Notes............................................ 36
Section 2.09. Treasury Notes............................................... 36
Section 2.10. Temporary Notes.............................................. 36
Section 2.11. Cancellation................................................. 37
Section 2.12. Defaulted Interest........................................... 37
ARTICLE 3 REDEMPTION AND PREPAYMENT.................................... 38
Section 3.01. Applicability of Article..................................... 38
Section 3.02. Election to Redeem; Notice to Trustee........................ 38
Section 3.03. Selection by Trustee of Notes to Be Redeemed................. 38
Section 3.04. Notice of Redemption......................................... 38
Section 3.05. Deposit of Redemption Price.................................. 39
Section 3.06. Notes Payable on Redemption Date............................. 39
Section 3.07. Notes Redeemed in Part....................................... 39
Section 3.08. Optional Redemption.......................................... 40
Section 3.09. Mandatory Redemption......................................... 40
Section 3.10. Offer to Purchase by Application of Excess Proceeds.......... 40
ARTICLE 4 COVENANTS.................................................... 42
Section 4.01. Payment of Principal, Premium and Interest................... 42
Section 4.02. Maintenance of Office or Agency.............................. 43
Section 4.03. Money for Security Payments to Be Held In Trust.............. 43
Section 4.04. Reports...................................................... 44
Section 4.05. Statement as to Compliance; Notice of Default. .............. 45
Section 4.06. Payment of Taxes and Other Claims............................ 46
Section 4.07. Limitation on Liens.......................................... 46
Section 4.08. Corporate Existence.......................................... 46
Section 4.09. Offer to Repurchase Upon Change of Control................... 46
Section 4.10. Asset Sales.................................................. 48
i
Section 4.11. Limitation on Restricted Payments............................ 49
Section 4.12. Limitation on Incurrence of Indebtedness
and Issuance of Preferred Stock.............................. 51
Section 4.13. Transactions with Affiliates................................. 53
Section 4.14. Dividend and Other Payment Restrictions
Affecting Subsidiaries....................................... 54
Section 4.15. Limitation on Issuances and Sales of Capital Stock
of Wholly Owned Restricted Subsidiaries...................... 55
Section 4.16. Limitation on Layering Debt.................................. 55
Section 4.17. Additional Subsidiary Guarantees............................. 55
Section 4.18. Payments For Consent......................................... 56
ARTICLE 5 SUCCESSORS................................................... 56
Section 5.01. Merger, Consolidation, or Sale of All or
Substantially All Assets..................................... 56
Section 5.02. Successor Corporation Substituted............................ 57
ARTICLE 6 DEFAULTS AND REMEDIES........................................ 57
Section 6.01. Events of Default and Notice Thereof......................... 57
Section 6.02. Acceleration of Maturity; Rescission......................... 58
Section 6.03. Other Remedies............................................... 59
Section 6.04. Waiver of Past Defaults...................................... 59
Section 6.05. Control by Majority.......................................... 59
Section 6.06. Limitation on Suits.......................................... 60
Section 6.07. Rights of Holders of Notes to Receive Payment................ 60
Section 6.08. Collection Suit by Trustee................................... 60
Section 6.09. Trustee May File Proofs of Claim............................. 60
Section 6.10. Priorities................................................... 61
Section 6.11. Undertaking for Costs........................................ 61
Section 6.12. Waiver of Stay, Extension of Usury Laws...................... 61
ARTICLE 7 TRUSTEE...................................................... 62
Section 7.01. Duties of Trustee............................................ 62
Section 7.02. Rights of Trustee............................................ 63
Section 7.03. Individual Rights of Trustee................................. 63
Section 7.04. Trustee's Disclaimer......................................... 64
Section 7.05. Notice of Defaults........................................... 64
Section 7.06. Reports by Trustee to Holders of the Notes................... 64
Section 7.07. Compensation and Indemnity................................... 64
Section 7.08. Replacement of Trustee....................................... 65
Section 7.09. Successor Trustee by Merger, etc............................. 66
Section 7.10. Eligibility; Disqualification................................ 66
Section 7.11. Preferential Collection of Claims Against the Company........ 66
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE..................... 67
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance..... 67
Section 8.02. Legal Defeasance and Discharge............................... 67
Section 8.03. Covenant Defeasance.......................................... 67
Section 8.04. Conditions to Legal Defeasance or Covenant Defeasance........ 68
Section 8.05. Deposited Money and U.S. Government Obligations to be
Held in Trust; Other Miscellaneous Provisions................ 69
ii
Section 8.06. Reinstatement................................................ 70
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER............................. 70
Section 9.01. Without Consent of Holders of Notes.......................... 70
Section 9.02. With Consent of Holders of Notes............................. 71
Section 9.03. Compliance with TIA.......................................... 72
Section 9.04. Revocation and Effect of Consents............................ 72
Section 9.05. Notation on or Exchange of Notes............................. 72
Section 9.06. Trustee to Sign Amendments, etc.............................. 72
ARTICLE 10 SUBORDINATION................................................ 73
Section 10.01.Agreement to Subordinate..................................... 73
Section 10.02.Liquidation; Dissolution; Bankruptcy......................... 73
Section 10.03.Default on Designated Senior Debt............................ 73
Section 10.04.Acceleration of Securities................................... 74
Section 10.05.When Distribution Must Be Paid Over.......................... 74
Section 10.06.Notice by Company............................................ 75
Section 10.07.Subrogation.................................................. 75
Section 10.08.Relative Rights.............................................. 75
Section 10.09.Subordination May Not Be Impaired by Company................. 76
Section 10.10.Distribution or Notice to Representative..................... 76
Section 10.11.Rights of Trustee and Paying Agent........................... 76
Section 10.12.Authorization to Effect Subordination........................ 76
ARTICLE 11 SATISFACTION AND DISCHARGE................................... 77
Section 11.01.Satisfaction and Discharge of Indenture...................... 77
Section 11.02.Application of Trust Money.................................. 77
ARTICLE 12 SUBSIDIARY GUARANTEES........................................ 78
Section 12.01.Subsidiary Guarantee......................................... 78
Section 12.02.Execution and Delivery of Guarantee.......................... 79
Section 12.03.Guarantors May Consolidate, etc., on Certain Terms........... 79
Section 12.04.Releases From Guarantees..................................... 80
Section 12.05.Limitation on Guarantor Liability............................ 80
Section 12.06.Subordination of Subsidiary Guarantees....................... 81
ARTICLE 13 MISCELLANEOUS................................................ 81
Section 13.01.Conflict of Any Provision of Indenture with TIA.............. 81
Section 13.02.Notices...................................................... 81
Section 13.03.Communication by Holders of Notes with Other
Holders of Notes............................................. 82
Section 13.04.Certificate and Opinion as to Conditions Precedent........... 82
Section ▇▇.▇▇.▇▇▇▇▇ Holidays............................................... 83
Section ▇▇.▇▇.▇▇ Personal Liability of Directors, Officers,
Employees and Stockholders................................... 83
Section 13.07.Governing Law; Submission to Jurisdiction.................... 83
Section ▇▇.▇▇.▇▇ Adverse Interpretation of Other Agreements................ 83
Section 13.09.Successors and Assigns....................................... 84
Section 13.10.Severability................................................. 84
iii
Section 13.11.Counterpart Originals........................................ 84
Section 13.12.Table of Contents, Headings, etc............................. 84
iv
EXHIBITS
Exhibit A-1 Form of Restricted Definitive Note, Regulation S Permanent
Global Note and Rule 144A Global Note
Exhibit A-2 Form of Regulation S Temporary Global Note
Exhibit A-3 Form of Unrestricted Note
Exhibit B Form of Certificate of Transfer
Exhibit C Form of Certificate of Exchange
Exhibit D Form of Certificate from Acquiring Institutional
Accredited Investor
Exhibit E Form of Subsidiary Guarantee
Schedule I Schedule of Existing Indebtedness
v
CROSS-REFERENCE TABLE*
Trust Indenture Indenture Section
Act Section
310(a)(1)...................................................7.10
(a)(2)...................................................7.10
(a)(3)...................................................N.A.
(a)(4)...................................................N.A.
(a)(5)...................................................7.10
(b)......................................................7.10
(c)......................................................N.A.
311(a)......................................................7.11
(b)......................................................7.11
(c)......................................................N.A.
312(a)......................................................11.03
(b)......................................................11.03
(c)......................................................11.03
313(a)......................................................7.06
(b)(1)...................................................N.A.
(b)(2)...................................................7.06; 7.07
(c)......................................................7.06; 10.02
(d)......................................................7.06
314(a)......................................................4.04; 11.02
(b)......................................................N.A.
(c)(1)...................................................11.04
(c)(2)...................................................11.04
(c)(3)...................................................N.A.
(d)......................................................N.A.
(f)......................................................N.A.
315(a)......................................................7.01
(b)......................................................7.05; 11.02
(c)......................................................7.01
(d)......................................................7.01
(e)......................................................6.11
316(a)(last sentence).......................................2.09
(a)(1)(A)................................................6.05
(a)(1)(B)................................................6.04
(a)(2)...................................................N.A.
(b)......................................................6.07
317(a)(1)...................................................6.08
(a)(2)...................................................6.09
(b)......................................................2.04
318(a)......................................................11.01
(b)......................................................N.A.
(c)......................................................11.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
vi
INDENTURE dated as of June 13, 1997 among Precise Technology, Inc., a
Delaware corporation (the "Company"), Precise TMP, Inc., a Virginia corporation
("Precise TMP"), ▇▇▇▇▇▇ Tool, Mold & Die, Inc., a Florida corporation
("▇▇▇▇▇▇"), Precise Polestar, Inc., a Virginia corporation ("Precise Polestar"),
Precise Technology of Delaware Inc., a Delaware corporation ("Precise
Delaware"), and Precise Technology of Illinois Inc., a Delaware corporation
("Precise Illinois") (each of Precise TMP, ▇▇▇▇▇▇, Precise Polestar, Precise
Delaware and Precise Illinois a "Guarantor", and together with certain future
Subsidiaries of the Company as set forth herein, the "Guarantors") and Marine
Midland Bank, as trustee (the "Trustee"). The Company, the Guarantors and the
Trustee agree as follows for the benefit of each other and for the equal and
ratable benefit of the Holders of the 11 1/8% Senior Subordinated Notes due 2007
(the "Notes").
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01.DEFINITIONS.
"Accredited Investor" has the meaning set forth in Rule 501(a) (1), (2),
(3) or (7) of the Securities Act.
"Acquired Debt" means, with respect to any specified Person, (i)
Indebtedness or preferred stock of any other Person existing at the time such
other Person is merged with or into or became a Subsidiary of such specified
Person, including, without limitation, Indebtedness or preferred stock incurred
in connection with, or in contemplation of, such other Person merging with or
into or becoming a Subsidiary of such specified Person, and (ii) Indebtedness
secured by a Lien encumbering any asset acquired by such specified Person.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling," "controlled by"
and "under common control with"), as used with respect to any Person, shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Agent Members" means members of, or participants in, the Depository.
"Applicable Procedures" means applicable procedures of the Depository,
Euroclear or Cedel Bank, as the case may be.
"Asset Sale" means (i) the sale, lease, conveyance or other disposition of
any assets or rights (including, without limitation, by way of a sale and
leaseback) other than sales of inventory in the ordinary course of business
consistent with past practices (provided that the sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Company and
its Subsidiaries taken as a whole will be governed by the provisions of Section
4.09 and/or the provisions of Section 5.01 and not by the
provisions of Section 4.10), and (ii) the issuance of Equity Interests in any
Restricted Subsidiary or the sale of Equity Interests in any of the Company's
Restricted Subsidiaries, in the case of either clause (i) or (ii), whether in a
single transaction or a series of related transactions (a) that have a fair
market value in excess of $1.0 million or (b) for net proceeds in excess of $1.0
million. Notwithstanding the foregoing: (i) a transfer of assets or Equity
Interests by the Company to a Wholly Owned Restricted Subsidiary or by a Wholly
Owned Restricted Subsidiary to the Company or to another Wholly Owned Restricted
Subsidiary, (ii) an issuance of Equity Interests by a Wholly Owned Restricted
Subsidiary to the Company or to another Wholly Owned Restricted Subsidiary,
(iii) the disposal of obsolete equipment and machinery in the ordinary course of
business and (iv) a Restricted Payment that is permitted to be made, and is
made, under Section 4.11 will not be deemed to be Asset Sales.
"Bankruptcy Law" means Title 11, U.S. Code or any similar foreign, federal
or state law for the relief of debtors.
"Board of Directors" means the board of directors of the Company or any
duly authorized committee of such board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Borrowing Base" means, as of any date, an amount equal to the sum of (a)
85% of the face amount of all trade receivables owned by the Company and its
Restricted Subsidiaries as of such date that are not more than 90 days past due,
less the allowance for doubtful accounts, each of the foregoing determined in
accordance with GAAP, and (b) 50% of the book value of all inventory owned by
the Company and its Restricted Subsidiaries as of such date, less any applicable
reserves, each of the foregoing determined in accordance with GAAP. To the
extent that information is not available as to the amount of trade receivables
or inventory as of a specific date, the Company may utilize the most recent
available information for purposes of calculating the Borrowing Base.
"Broker-Dealer" has the meaning set forth in the Registration Rights
Agreement.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in The City of New York are
authorized or obligated by law, regulation or executive order to close.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(iv) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person.
2
"Cash Equivalents" means (i) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than one
year from the date of acquisition, (iii) certificates of deposit and eurodollar
time deposits with maturities of one year or less from the date of acquisition,
bankers' acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any lender party to the Credit Agreement or with any
domestic commercial bank having capital and surplus in excess of $500 million,
(iv) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (ii) and (iii) above
entered into with any financial institution meeting the qualifications specified
in clause (iii) above, (v) commercial paper rated at least P-1 by ▇▇▇▇▇'▇
Investors Service, Inc. or A-1 by Standard & Poor's Ratings Services and in each
case maturing within six months after the date of acquisition and (vi)
investment funds with total assets in excess of $500 million that invest at
least 95% of their assets in securities of the types described in clauses (i)
through (v) above.
"Change of Control" means the occurrence of any of the following:
(i) the sale, lease, transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one or a series of
related transactions, of all or substantially all of the assets
of the Company and its Restricted Subsidiaries taken as a whole
to any "person" (as such term is defined in Section 13(d)(3) of
the Exchange Act) other than the Principals or their Related
Parties;
(ii) the adoption of a plan relating to the liquidation or dissolution
of the Company;
(iii) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is
that any "person" (as defined above), other than the Principals
and their Related Parties, becomes the "beneficial owner" (as
such term is defined in Rule 13d-3 and Rule 13d-5 under the
Exchange Act, except that a Person shall be deemed to have
"beneficial ownership" of all securities that such Person has the
right to acquire, whether such right is currently exercisable or
is exercisable only upon the occurrence of a subsequent
condition), directly or indirectly, of more than 50% of the
Voting Stock of the Company (measured by voting power rather than
number of shares); or
(iv) the first day on which a majority of the members of the Board of
Directors of the Company are not Continuing Directors.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor thereto.
"Company" means Precise Technology, Inc., a Delaware corporation, and any
successor thereto pursuant to Section 5.01 hereof.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company (i) by its Chairman, a Vice Chairman, its
President or a Vice President and (ii) by its Treasurer, an Assistant Treasurer,
its Secretary or an Assistant Secretary and delivered to the Trustee; provided,
however, that such written request or order may be signed by any two of the
officers or directors listed in clause (i) above in lieu of being signed by one
of such officers or directors listed in such clause (i) and one of the officers
listed in clause (ii) above.
3
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus (i) an amount
equal to any extraordinary, non-recurring or unusual loss plus any net loss
realized in connection with an asset sale (to the extent such losses were
deducted or otherwise excluded in computing such Consolidated Net Income), plus
(ii) provision for taxes based on income or profits of such Person and its
Subsidiaries for such period, to the extent that such provision for taxes was
included in computing such Consolidated Net Income, plus (iii) consolidated
interest expense of such Person and its Subsidiaries for such period, whether
paid or accrued and whether or not capitalized (including, without limitation,
amortization of debt issuance costs and original issue discount, non-cash
interest payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net payments
(if any) pursuant to Hedging Obligations), to the extent that any such expense
was deducted in computing such Consolidated Net Income, plus (iv) depreciation,
amortization (including amortization of goodwill and other intangibles but
excluding amortization of prepaid cash expenses that were paid in a prior
period) and other non-cash expenses (excluding any such non-cash expense to the
extent that it represents an accrual of or reserve for cash expenses in any
future period or amortization of a prepaid cash expense that was paid in a prior
period) of such Person and its Subsidiaries for such period to the extent that
such depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income, plus (v) an amount equal to all premiums
on prepayments of debt, minus (vi) non-cash items increasing such Consolidated
Net Income for such period, in each case, on a consolidated basis and determined
in accordance with GAAP. Notwithstanding the foregoing, the provision for taxes
on the income or profits of, and the depreciation and amortization and other
non-cash charges of, a Subsidiary of the referent Person shall be added to
Consolidated Net Income to compute Consolidated Cash Flow only to the extent
that a corresponding amount would be permitted at the date of determination to
be dividended to the Company by such Subsidiary without prior approval (that has
not been obtained), and without direct or indirect restriction pursuant to the
terms of its charter and all agreements, instruments, judgments, decrees,
orders, statutes, rules and governmental regulations applicable to that
Subsidiary or its stockholders.
"Consolidated Net Income" means, with respect to any Person for any
period, the aggregate of the Net Income of such Person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (i) the Net Income (but not loss) of any Person that is
not a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Wholly Owned Restricted
Subsidiary thereof that is a Guarantor and, for purposes of determining
Consolidated Cash Flow only, shall not exceed the consolidated net income of
such Person for such period, (ii) the Net Income of any Restricted Subsidiary
shall be excluded to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Restricted
Subsidiary or its stockholders, (iii) the Net Income of any Person acquired in a
pooling of interests transaction for any period prior to the date of such
acquisition shall be excluded, (iv) the cumulative effect of a change in
accounting principles shall be excluded and (v) the Net Income of any Person
that is an Unrestricted Subsidiary shall be included only to the extent of the
amount of cash dividends or cash distributions paid to such Person or a
Restricted Subsidiary thereof.
4
"Consolidated Net Worth" means, with respect to any Person as of any date,
the sum of (i) the consolidated equity of the common stockholders of such Person
and its consolidated Subsidiaries as of such date plus (ii) the respective
amounts reported on such Person's balance sheet as of such date with respect to
any series of preferred stock (other than Disqualified Stock) that by its terms
is not entitled to the payment of dividends unless such dividends may be
declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock, less (x) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within 12 months after the acquisition
of such business) subsequent to the date of this Indenture in the book value of
any asset owned by such Person or a consolidated Subsidiary of such Person, (y)
all investments as of such date in unconsolidated Restricted Subsidiaries and in
Persons that are not Subsidiaries (except, in each case, Permitted Investments),
and (z) all unamortized debt discount and expense and unamortized deferred
charges as of such date, all of the foregoing determined in accordance with
GAAP.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors of the Company who (i) was a member of such Board of
Directors on the date of this Indenture or (ii) was nominated by the Principals
or any Related Party to serve on such Board of Directors.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 13.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Agreement" means that certain Credit Agreement, dated as of June
13, 1997, by and among Parent, the Company and the Subsidiaries of the Company
named therein, the lenders named therein and Fleet National Bank, as Agent and
as issuing bank, providing for up to $30.0 million of revolving credit
borrowings, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, and in each case as
amended, modified (including any agreement extending the maturity of, increasing
the total commitment under or otherwise restructuring all or any portion of the
Indebtedness under such agreement or any successor or replacement agreement),
renewed, refunded, replaced, restated, supplemented or refinanced from time to
time.
"Custodian" means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Definitive Notes" means Restricted Definitive Notes and Unrestricted
Definitive Notes.
"Depository" means, with respect to any Global Note, the Person specified
in Section 2.03 hereof as the Depository with respect to such Note, until a
successor shall have been appointed and become such pursuant to the applicable
provision of this Indenture, and, thereafter, "Depository" shall mean or include
such successor.
"Designated Senior Debt" means (i) any Indebtedness outstanding under the
Credit Agreement and (ii) any other Senior Debt, the principal amount of which
is $5.0 million or more and that has been designated by a Board Resolution as
"Designated Senior Debt."
5
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the date on which the Notes mature.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"Exchange Offer" means the offer that may be made by the Company pursuant
to the Registration Rights Agreement to exchange Notes (as defined in the
Registration Rights Agreement) for New Notes.
"Exchange Offer Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Existing Indebtedness" means up to $6.8 million in aggregate principal
amount of Indebtedness of the Company and its Subsidiaries (other than
Indebtedness under the Credit Agreement) in existence on the date hereof and set
forth on Schedule I hereto (including any refinancings thereof), until such
amounts are permanently repaid.
"Fixed Charges" means, with respect to any Person and its Restricted
Subsidiaries for any period, the sum, without duplication, of (i) the
consolidated interest expense of such Person and its Restricted Subsidiaries for
such period, whether paid or accrued (including, without limitation,
amortization of debt issuance costs and original issue discount, non-cash
interest payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net payments
(if any) pursuant to Hedging Obligations) and (ii) the consolidated interest
expense of such Person and its Restricted Subsidiaries that was capitalized
during such period, and (iii) any interest expense on Indebtedness of another
Person that is Guaranteed by such Person or one of its Restricted Subsidiaries
or secured by a Lien on assets of such Person or one of its Restricted
Subsidiaries (whether or not such Guarantee or Lien is called upon) and (iv) all
dividend payments (including all dividend payments within 60 days of the
measurement date for any period), whether or not in cash, on any series of (A)
Disqualified Stock of such Person and (B) preferred stock of any Subsidiary of
such Person, other than dividend payments on Equity Interests payable solely in
Equity Interests of the Company and other than payments to such Person and its
Restricted Subsidiaries, in each case, on a consolidated basis and in accordance
with GAAP.
"Fixed Charge Coverage Ratio" means with respect to any Person and its
Restricted Subsidiaries for any period, the ratio of the Consolidated Cash Flow
of such Person and its Restricted Subsidiaries for such period to the Fixed
Charges of such Person and its Restricted Subsidiaries for such period. In the
event that the Company or any of its Restricted Subsidiaries incurs, assumes,
Guarantees or redeems any Indebtedness (other than revolving credit borrowings)
or issues or redeems preferred stock subsequent to the commencement of the
period for which the Fixed Charge Coverage Ratio is being calculated but prior
to the date on which the event for which the calculation of the Fixed Charge
Coverage Ratio is made (the
6
"Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated
giving pro forma effect to such incurrence, assumption, Guarantee or redemption
of Indebtedness, or such issuance or redemption of preferred stock, and the
application of the net proceeds thereof, as if the same had occurred at the
beginning of the applicable four-quarter reference period. In addition, for
purposes of making the computation referred to above, (i) acquisitions that have
been made by the Company or any of its Restricted Subsidiaries, including
through mergers or consolidations and including any related financing
transactions, during the four-quarter reference period or subsequent to such
reference period and on or prior to the Calculation Date shall be deemed to have
occurred on the first day of the four-quarter reference period and Consolidated
Cash Flow for such reference period shall be calculated without giving effect to
clause (iii) of the proviso set forth in the definition of Consolidated Net
Income, and (ii) the Consolidated Cash Flow attributable to discontinued
operations, as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded, and (iii) the
Fixed Charges attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, but only to the extent that the obligations
giving rise to such Fixed Charges will not be obligations of the referent Person
or any of its Restricted Subsidiaries following the Calculation Date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Global Note" means, individually and collectively, the Regulation S
Global Note, the Rule 144A Global Note and the Unrestricted Global Note.
"Global Note Legend" means the legend set forth in Section 2.06(g)(ii).
"Government Securities" means securities that are (a) direct obligations
of the United States of America for the timely payment of which its full faith
and credit is pledged or (b) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States of America the
timely payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act), as custodian with respect to any such Government Securities
or a specific payment of principal of or interest on any such Government
Securities held by such custodian for the account of the holder of such
depository receipt; provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the Government Securities or the specific payment of principal of or interest on
the Government Securities evidenced by such depository receipt.
"Guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Guarantors" means each of (i) the Company's Subsidiaries listed in the
preamble to this Indenture and future Restricted Subsidiaries (having either
assets or stockholder's equity in excess of $50,000) and
7
(ii) any other subsidiary that executes a Subsidiary Guarantee in accordance
with the provisions of this Indenture, and their respective successors and
assigns.
"Hedging Obligations" means, with respect to any Person, the obligations
of such Person under (i) interest rate swap agreements, currency rate swap
agreements, interest rate cap agreements and interest rate collar agreements and
(ii) other agreements or arrangements designed to protect such Person against
fluctuations in interest rates or currency values.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or banker's acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of the
purchase price of any property or representing any Hedging Obligations, except
any such balance that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP, as well as all indebtedness of others
secured by a Lien on any asset of such Person (but only to the extent of the
fair market value of the assets subject to such Lien) (whether or not such
indebtedness is assumed by such Person) and, to the extent not otherwise
included, the Guarantee by such Person of any indebtedness of any other Person.
The amount of any Indebtedness outstanding as of any date shall be (i) the
accreted value thereof, in the case of any Indebtedness that does not require
current payments of interest, and (ii) the principal amount thereof, together
with any interest thereon that is more than 30 days past due, in the case of any
other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Initial Purchasers" means Bear, ▇▇▇▇▇▇▇ & Co. Inc. and ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated.
"Interest Payment Date" means each June 15 and December 15, whether or not
such day is a Business Day.
"interest" means all interest payable with respect to the Notes,
including, without limitation Special Interest.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including Guarantees of Indebtedness or other obligations),
advances or capital contributions (excluding commission, travel and similar
advances to officers and employees made in the ordinary course of business),
purchases or other acquisitions for consideration of Indebtedness, Equity
Interests or other securities, together with all items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP;
provided, however, that if the sole consideration for any such investment is
Capital Stock of the Company or a Subsidiary that is not Disqualified Stock,
then such investment shall not be deemed an Investment for purposes of this
Indenture. If the Company or any Restricted Subsidiary of the Company sells or
otherwise disposes of any Equity Interests of any direct or indirect Subsidiary
of the Company such that, after giving effect to any such sale or disposition,
such Person is no longer a Restricted Subsidiary of the Company, the Company
8
shall be deemed to have made an Investment on the date of any such sale or
disposition equal to the fair market value of the Equity Interests of such
Restricted Subsidiary not sold or disposed of in an amount determined as
provided in the final paragraph of Section 4.11.
"Issuance Date" means the closing date for the sale and original issuance
of the Notes under this Indenture.
"Letter of Transmittal" means the letter of transmittal to be prepared by
the Company and sent to all Holders of the Notes for use by such Holders in
connection with the Exchange Offer.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Liquidated Damages" has the meaning set forth in the Registration Rights
Agreement.
"Make-Whole Premium" means, with respect to a Note, an amount equal to the
greater of (i) 5.563% of the outstanding principal amount of such Note and (ii)
the excess of (a) the present value of the remaining interest, premium and
principal payments due on such Note as if such Note were redeemed on June 15,
2002, computed using a discount rate equal to the Treasury Rate plus 75 basis
points, over (b) the outstanding principal amount of such Note.
"Management Agreement" means the agreement, dated as of March 15, 1996,
between the Company and Mentmore, as amended from time to time.
"Maturity" when used in respect to any Note means the date on which the
principal of (and premium, if any) and interest on such Note becomes due and
payable as therein or herein provided, whether at Stated Maturity or the
applicable Redemption Date and whether by declaration of acceleration, call for
redemption or otherwise.
"Mentmore" means Mentmore Holdings Corporation, a Delaware corporation, or
its successors.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or its successors.
"Net Income" means, with respect to any Person for any period, the net
income (loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, (i) any
gain (but not loss), together with any related provision for taxes on such gain
(but not loss), realized in connection with (a) any asset sale (including,
without limitation, dispositions pursuant to sale and leaseback transactions) or
(b) the disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (ii) any extraordinary or nonrecurring gain (but
not loss), together with any related provision for taxes on such extraordinary
or nonrecurring gain (but not loss).
9
"Net Proceeds" means the aggregate cash proceeds received by the Company
or any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of the direct costs
relating to such Asset Sale (including, without limitation, legal, accounting
and investment banking fees, and sales commissions) and any relocation expenses
incurred as a result thereof, taxes paid or payable as a result thereof (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), amounts required to be applied to the repayment of Indebtedness
secured by a Lien on the asset or assets that were the subject of such Asset
Sale, any provision for permitted minority interests in any Restricted
Subsidiary as a result of such Asset Sale and any reserve established in
accordance with GAAP against any liabilities associated with the assets sold or
disposed of in such Asset Sale, including, without limitation, sales price
adjustments, pension and other post-employment benefit liabilities and
liabilities related to environmental matters or against any indemnification
obligations associated with the assets sold or disposed of in such Asset Sale or
provision for minority interest holders in any Restricted Subsidiary as a result
of such Asset Sale.
"New Notes" has the meaning set forth in the Registration Rights
Agreement.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the Company
nor any of its Restricted Subsidiaries (a) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness), (b) is directly or indirectly liable (as a guarantor or
otherwise), or (c) constitutes the lender; and (ii) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries in excess of $5.0 million to
declare a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity; and (iii) as to which the
lenders have been notified in writing that they will not have any recourse to
the stock or assets of the Company or any of its Restricted Subsidiaries.
"Notes" means $75,000,000 aggregate principal amount of the Company's
111/8% Senior Subordinated Notes due 2007 issued pursuant to the Offering
Memorandum and any other 111/8% Senior Subordinated Notes due 2007 hereafter
issued in compliance with the provisions of this Indenture (including Section
4.12).
"Note Custodian" means the custodian for the Depository of the Global
Notes, or any successor entity thereto.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Offering Memorandum" means that certain offering memorandum with respect
to the Notes, dated June 10, 1997.
"Officer" means the Chairman of the Board, the President, any Vice
President, the Secretary or any Assistant Secretary of the Company or any
Guarantor, as applicable.
"Officers' Certificate" means a certificate signed on behalf of the
Company or any Guarantor, as applicable, by two Officers of the Company or any
Guarantor, as applicable, one of whom must be the
10
principal executive officer, the principal financial officer, the treasurer or
the principal accounting officer of the Company or any Guarantor, as applicable,
that meets the requirements set forth in Section 1.05.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company or any Guarantor, as applicable, and who shall be
acceptable to the Trustee. Each such opinion shall include the statements
provided for in TIA Section 314(e) to the extent applicable.
"Parent" means Precise Holding Corporation, a Delaware corporation, or its
successors.
"Permitted Investments" means (a) any Investment in the Company or in a
Wholly Owned Restricted Subsidiary of the Company; (b) any Investment in Cash
Equivalents; (c) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person, if as a result of such Investment (i) such Person
becomes a Wholly Owned Restricted Subsidiary of the Company and a Guarantor or
(ii) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated into,
the Company or a Wholly Owned Restricted Subsidiary of the Company; (d) any
Restricted Investment made as a result of the receipt of non-cash consideration
from an Asset Sale that was made pursuant to and in compliance with Section 4.10
hereof; (e) any acquisition of assets solely in exchange for the issuance of
Equity Interests (other than Disqualified Stock) of the Company; (f) reasonable
and customary loans and advances made to employees in connection with their
relocation (including related travel expenses) not to exceed $250,000 in the
aggregate at any one time outstanding; (g) any Investment existing on the date
of this Indenture; (i) any Investment acquired by the Company or any of its
Restricted Subsidiaries (x) in exchange for any other Investment or accounts
receivable held by the Company or any such Restricted Subsidiary in connection
with or as a result of a bankruptcy, workout, reorganization or recapitalization
of the issuer of such Investment or accounts receivable or (y) as the result of
a foreclosure by the Company or any of its Restricted Subsidiaries with respect
to any secured Investment or other transfer of title with respect to any secured
Investment in default; and (j) other Investments in any Person having an
aggregate fair market value (measured on the date each such Investment was made
and without giving effect to subsequent changes in value), when taken together
with all other Investments made pursuant to this clause (j) that are at the time
outstanding, not to exceed $5.0 million.
"Permitted Junior Securities" means Equity Interests in the Company or
debt securities that are subordinated to all Senior Debt (and any debt
securities issued in exchange for Senior Debt) to substantially the same extent
as, or to a greater extent than, the Notes are subordinated to Senior Debt.
"Permitted Liens" means (i) Liens securing Senior Debt that was permitted
by the terms of this Indenture to be incurred; (ii) Liens in favor of the
Company or any Restricted Subsidiary; (iii) Liens on property of a Person
existing at the time such Person is merged into or consolidated with the Company
or any Subsidiary of the Company; provided that such Liens were in existence
prior to the contemplation of such merger or consolidation and do not extend to
any assets other than those of the Person merged into or consolidated with the
Company; (iv) Liens on property existing at the time of acquisition thereof by
the Company or any Subsidiary of the Company, provided that such Liens were in
existence prior to the contemplation of such acquisition; (v) Liens to secure
the performance of statutory obligations, surety or appeal bonds, performance
bonds or other obligations of a like nature incurred in the ordinary course of
business; (v) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (iii) of the second paragraph of Section 4.12 covering only
the assets acquired with such Indebtedness; (vi) Liens existing on the date
hereof; (vii) Liens for taxes, assessments or governmental charges or claims
that
11
are not yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently concluded, provided that any
reserve or other appropriate provision as shall be required in conformity with
GAAP shall have been made therefor; (viii) Liens on assets of Unrestricted
Subsidiaries that secure Non-Recourse Debt of Unrestricted Subsidiaries; (ix)
statutory Liens or landlords', carriers', warehousemens', mechanics', suppliers'
or similar Liens incurred in the ordinary course of business of the Company or
any Subsidiary of the Company; (x) easements, minor title defects,
irregularities in title or other charges or encumbrances on property not
interfering in any material respect with the use of such property by the Company
or a Subsidiary of the Company; (xi) Liens incurred or deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security; (xii) liens securing
industrial revenue bonds or other tax-favored financing; (xiii) deposit
arrangements entered into in connection with acquisitions or in the ordinary
course of business; (xiv) other Liens securing obligations incurred in the
ordinary course of business which obligations do not exceed $5.0 million at any
one time outstanding; and (xv) any extensions, substitutions, replacements or
renewals of the foregoing.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund, other Indebtedness of the Company or any of its Restricted Subsidiaries;
provided that: (i) the principal amount (or accreted value, if applicable) of
such Permitted Refinancing Indebtedness does not exceed the principal amount of
(or accreted value, if applicable), plus accrued interest on, the Indebtedness
so extended, refinanced, renewed, replaced, defeased or refunded (plus the
amount of reasonable expenses and prepayment premiums incurred in connection
therewith) (except to the extent such increase is a result of a simultaneous
incurrence of additional Indebtedness permitted to be incurred under this
Indenture); (ii) such Permitted Refinancing Indebtedness has a final maturity
date later than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; (iii) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded is subordinated in right of payment to the Notes,
such Permitted Refinancing Indebtedness has a final maturity date later than the
final maturity date of, and is subordinated in right of payment to, the Notes on
terms at least as favorable to the Holders of Notes as those contained in the
documentation governing the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; and (iv) such Indebtedness is incurred either by
the Company or by the Restricted Subsidiary who is the obligor on the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded.
"Permitted Warrant Put Payment" means any payment or distribution (whether
in cash or securities of the Company) made after March 29, 2001 and in
accordance with the following sentence, by the Company or any of its Restricted
Subsidiaries to Parent in order to enable Parent to satisfy Parent's obligations
under the Warrant Agreement and/or the Shareholders Agreement to repurchase the
Put Shares (as defined in the Warrant Agreement) or to repay indebtedness
incurred by Parent to satisfy such obligations. If, after giving pro forma
effect to any Permitted Warrant Put Payment by the Company, the Fixed Charge
Coverage Ratio for the Company's most recently ended four full fiscal quarters
for which internal financial statements are available immediately preceding the
date on which such Permitted Warrant Put Payment is made is (i) greater than
2.50 to 1 and less than 2.75 to 1, then the Company will be permitted to make a
Permitted Warrant Put Payment in an amount not to exceed $5.0 million, (ii)
greater than or equal to 2.75 to 1 and less than 3.00 to 1, then the Company
will be permitted to make a Permitted Warrant Put Payment in an amount not to
exceed $10.0 million and (iii) greater than or equal to 3.00 to
12
1, then the Company will be permitted to make a Permitted Warrant Put Payment in
an amount not to exceed $15.0 million.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.
"preferred stock" means any Equity Interest with preferential right of
payment of dividends or upon liquidation, dissolution, or winding up.
"Principals" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and/or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
"Private Placement Legend" means the legend set forth in Section
2.06(g)(i)(A) to be placed on all Notes issued under this Indenture except as
permitted pursuant to Section 2.06(g)(i)(B).
"Public Equity Offering" means a bona fide underwritten sale to the public
of common stock of Parent or the Company pursuant to a registration statement
(other than on Form S-8 or any other form relating to securities issuable under
any benefit plan of Parent or the Company) that is declared effective by the SEC
and results in aggregate gross equity proceeds to the Company of at least $20.0
million.
"Redemption Date," when used with respect to any Note to be redeemed,
means the date fixed for such redemption pursuant to this Indenture.
"Redemption Price," when used with respect to any Note to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
"Registration Rights Agreement" means the Registration Rights Agreement,
dated as of June 13, 1997, by and among the Company, Precise TMP, ▇▇▇▇▇▇,
Precise Polestar, Precise Delaware, Precise Illinois and the Initial Purchasers,
as such agreement may be amended, modified or supplemented from time to time.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the June 1 or December 1 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Regulation S Global Note" means a Regulation S Temporary Global Note or
Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global Note
substantially in the form of Exhibit A-1 hereto bearing the Global Note Legend
and the Private Placement Legend and deposited with or on behalf of and
registered in the name of the Depository or its nominee, issued in a
denomination equal to the outstanding principal amount of the Regulation S
Temporary Global Note upon expiration of the Restricted Period.
13
"Regulation S Temporary Global Note" means a temporary global Note
substantially in the form of Exhibit A-2 hereto bearing the Private Placement
Legend and deposited with or on behalf of and registered in the name of the
Depository or its nominee, issued in a denomination equal to the outstanding
principal amount of the Notes initially sold in reliance on Rule 903 of
Regulation S.
"Related Parties" with respect to any Principal means (A) any spouse or
immediate family member of such Principal and any child or spouse of any spouse
or immediate family member of such Principal, (B) a trust, corporation,
partnership or other entity, the beneficiaries, stockholders, partners, owners
or Persons beneficially holding, directly or indirectly, a controlling interest
of which consist of any of such Principal and/or such other Persons referred to
in the immediately preceding clause (A) or (C) the trustees of any trust
referred to in clause (B).
"Repurchase Offer" means an offer made by the Company to purchase all or
any portion of a Holder's Notes pursuant to the provisions described under
Sections 4.09 or 4.10.
"Responsible Officer," when used with respect to the Trustee, means any
officer in the Corporate Trust Office of the Trustee with direct responsibility
for the administration of this Indenture and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Restricted Broker-Dealer" has the meaning set forth in the Registration
Rights Agreement.
"Restricted Definitive Notes" means Notes that are substantially in the
form of the Notes attached hereto as Exhibit A-1, that do not include the
information called for by footnotes 1 and 2 thereof.
"Restricted Global Notes" means the Regulation S Global Notes and the Rule
144A Global Notes.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Period" means the 40-day restricted period as defined in
Regulation S.
"Restricted Subsidiary" of a Person means any Subsidiary of the referent
Person that is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Global Note" means a permanent global note that contains the
paragraph referred to in footnote 1 and the additional schedule referred to in
footnote 2 to the form of the Note attached hereto as Exhibit A-1, and that is
deposited with the Note Custodian and registered in the name of the Depository,
representing Notes sold to Accredited Investors or in reliance on Rule 144A, as
applicable.
"Rule 903" means Rule 903 promulgated under the Securities Act.
"Rule 904" means Rule 904 promulgated under the Securities Act.
"S&P" means Standard and Poor's Ratings Services, or its successors.
14
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"Senior Debt" of any Person means (i) all Indebtedness of such Person
under the Credit Agreement, including, without limitation, obligations to pay
principal and interest (including any interest accruing subsequent to the filing
of a petition of bankruptcy at the rate provided for in the documentation with
respect thereto, whether or not such interest is an allowed claim under
applicable law), reimbursement obligations under letters of credit, fees,
expenses and indemnities, and all Hedging Obligations with respect thereto,
whether outstanding on the date of this Indenture or hereafter incurred, (ii)
the principal of, premium, if any, and interest (including any interest accruing
subsequent to the filing of a petition of bankruptcy at the rate provided for in
the documentation with respect thereto, whether or not such interest is an
allowed claim under applicable law) on, and all other Obligations with respect
to, any other Indebtedness of such Person permitted to be incurred by such
Person under the terms of this Indenture, whether outstanding on the date of
this Indenture or hereafter incurred, unless the instrument under which such
Indebtedness is incurred expressly provides that it is on a parity with or
subordinated in right of payment to the Notes and (iii) all Obligations of such
Person with respect to the foregoing. Notwithstanding anything to the contrary
in the foregoing, Senior Debt shall not include (w) any liability for federal,
state, local or other taxes owed or owing by such Person, (x) any Indebtedness
of such Person to any of its Subsidiaries or other Affiliates, (y) any trade
payables or (z) any Indebtedness that is incurred in violation of this
Indenture.
"Shareholders Agreement" means the shareholders agreement, dated as of
March 29, 1996, as amended, among Parent, Sunderland, ▇▇▇▇▇▇▇▇ Holdings Ltd.
Corporation, Delaware State Employees' Retirement Fund, Declaration of Trust for
Defined Benefit Plans of Zeneca Holdings Inc., Declaration of Trust for Defined
Benefit Plans of ICI American Holdings Inc., Rice Partners II, L.P. and ▇▇▇▇
▇▇▇▇▇▇▇ Mutual Life Insurance Company, with respect to certain securities of
Parent.
"Shelf Registration Statement" has the meaning set forth in the
Registration Rights Agreement.
"Significant Subsidiary" means any Subsidiary which would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the Issuance Date.
"Special Record Date" means a date fixed by the Trustee for the payment of
any Defaulted Interest pursuant to Section 2.12.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subordinated Note Obligations" means any principal of, premium, if any,
and interest and Liquidated Damages, if any, on the Notes payable pursuant to
the terms of the Notes or upon acceleration, redemption, repurchase or other
acquisition thereof, together with and including any amounts received
15
upon the exercise of rights of rescission or other rights of action (including
claims for damages) or otherwise, to the extent relating to the purchase price
of the Notes or amounts corresponding to such principal, premium, if any, or
interest and Liquidated Damages, if any, on the Notes.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (b)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof).
"Subsidiary Guarantee" means any guarantee of the obligations of the
Company pursuant to Section 12 of this Indenture and the Notes by any Person in
accordance with the provisions of this Indenture.
"Sunderland" means Sunderland Industrial Holdings Corporation, a Delaware
corporation, or its successors.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ▇▇.▇▇.
77aaa-77bbbb) as in effect on the date on which this Indenture is qualified
under the TIA; provided, however, that in the event the Trust Indenture Act of
1939 is amended after such date, then "TIA" means, to the extent required by
such amendment, the Trust Indenture Act of 1939 as so amended.
"Treasury Rate" means the yield to maturity at the time of the computation
of United States Treasury securities with a constant maturity (as compiled by
and published in the most recent Federal Reserve Statistical Release H.15(519)),
which has become publicly available at least two Business Days prior to the date
fixed for prepayment (or, if such Statistical Release is no longer published,
any publicly available source of similar market data) most nearly equal to the
then remaining average life to the first date on which the Notes are subject to
optional redemption by the Company; provided, however, that if the average life
of such Note is not equal to the constant maturity of the United States Treasury
security for which weekly average yield is given, the Treasury Rate shall be
obtained by linear interpolation (calculated to the nearest one-twelfth of a
year) from the weekly average yields of United States Treasury securities for
which such yields are given, except that if the average life of the Notes is
less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used.
"Trustee" means the party named as such above unless and until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means such successor.
"Unrestricted Definitive Note" means Notes that are substantially in the
form of the Notes attached hereto as Exhibit A-3 that do not include the
information called for by footnotes 1 and 2 thereof.
"Unrestricted Global Note" means a permanent global Note that contains the
paragraph referred to in footnote 1 and the additional schedule referred to in
footnote 2 to the form of the Note attached hereto as Exhibit A-3, and that is
deposited with the Note Custodian and registered in the name of the Depository.
16
"Unrestricted Notes" means the Unrestricted Global Notes and the
Unrestricted Definitive Notes.
"Unrestricted Subsidiary" means (i) any Subsidiary that is designated by
the Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution; but only to the extent that such Subsidiary: (a) has no Indebtedness
other than Non-Recourse Debt; (b) is not party to any agreement, contract,
arrangement or understanding with the Company or any Restricted Subsidiary of
the Company unless the terms of any such agreement, contract, arrangement or
understanding are no less favorable to the Company or such Restricted Subsidiary
than those that might be obtained at the time from Persons who are not
Affiliates of the Company; (c) is a Person with respect to which neither the
Company nor any of its Restricted Subsidiaries has any direct or indirect
obligation (x) to subscribe for additional Equity Interests or (y) to maintain
or preserve such Person's financial condition or to cause such Person to achieve
any specified levels of operating results; and (d) has not guaranteed or
otherwise directly or indirectly provided credit support for any Indebtedness of
the Company or any of its Restricted Subsidiaries. Any such designation by the
Board of Directors shall be evidenced to the Trustee by filing with the Trustee
a certified copy of the Board Resolution giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
foregoing conditions and was permitted by Section 4.11. If, at any time, any
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of this Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under Section 4.12, the Company shall be in default of
such covenant). The Board of Directors of the Company may at any time designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (i) such Indebtedness
is permitted under Section 4.12, calculated on a pro forma basis as if such
designation had occurred at the beginning of the four-quarter reference period,
and (ii) no Default or Event of Default would be in existence following such
designation.
"Voting Stock" of any Person as of any date means the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Warrant Agreement" means the warrant agreement, dated as of March 29,
1996, as amended, among Parent, Rice Partners II, L.P., ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life
Insurance Company, Delaware State Employees' Retirement Fund, Declaration of
Trust for Defined Benefit Plans of Zeneca Holdings Inc. and Declaration of Trust
for Defined Benefit Plans of ICI American Holdings Inc., with respect to certain
warrants of Parent.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such Person
100% of the outstanding Capital Stock or other ownership interests of which
(other than directors' qualifying shares)
17
shall at the time be owned by such Person or by one or more Wholly Owned
Subsidiaries of such Person and one or more Wholly Owned Subsidiaries of such
Person.
SECTION 1.02 OTHER DEFINITIONS.
Term Defined in
Section
"Act"................................................ 1.07
"Affiliate Transaction".............................. 4.13
"Asset Sale Offer"................................... 3.10
"Cedel Bank"......................................... 2.01
"Change of Control Offer"............................. 4.09
"Change of Control Payment"........................... 4.09
"Change of Control Payment Date"...................... 4.09
"Covenant Defeasance"................................ 8.03
"Defaulted Interest".................................. 2.12
"DTC"................................................ 2.03
"Euroclear".......................................... 2.01
"Event of Default"................................... 6.01
"Excess Proceeds"..................................... 4.10
"Incur"............................................... 4.12
"Legal Defeasance".................................... 8.02
"Offer Amount"........................................ 3.10
"Offer Period"........................................ 3.10
"Paying Agent"........................................ 2.03
"Payment Blockage Notice"............................. 10.03
"Payment Default".................................... 6.01
"Permitted Debt"...................................... 4.12
"Purchase Date"....................................... 3.10
"QIB"................................................ 2.01
"Registrar".......................................... 2.03
"Restricted Payments"................................ 4.11
"Rule 144 A Global Notes"............................ 2.01
"Successor Company".................................. 5.01
SECTION 1.03 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
18
"indenture securities" means the Notes and the Subsidiary Guarantees;
"indenture security Holder" means a Holder of a Note;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Notes means the Company, each Guarantor and any
successor obligors upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act shall
be deemed to include substitute, replacement or successor
sections or rules adopted by the SEC from time to time.
SECTION 1.05. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture (including any covenant compliance with which
constitutes a condition precedent) relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that, in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion (other than the certificates required by
Section 4.05(a)) with respect to compliance with a condition or covenant
provided for in this Indenture shall comply with the provisions of TIA 314(e)
and shall include:
19
(a) a statement that each individual signing such certificate or opinion has
read such covenant or condition and the definitions herein relating thereto;
(a) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(b) a statement that, in the opinion of each such individual, he or she
has made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(c) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 1.06 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representation
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.07.
ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any
20
purpose of this Indenture and (subject to TIA Section 315) conclusive in favor
of the Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any reasonable manner that the Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by a register kept by the
Registrar.
(d) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a Board Resolution, fix in advance a record
date for the determination of such Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act or to
revoke any consent previously given, but the Company shall have no obligation to
do so. Notwithstanding TIA Section 316(c), any such record date shall be the
record date specified in or pursuant to such Board Resolution, which shall be a
date not more than 30 days prior to the first solicitation of Holders generally
in connection therewith and no later than the date such solicitation is
completed.
If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act or revocation of any consent
previously given may be given before or after such record date, but only the
Holders of record at the close of business on such record date shall be deemed
to be Holders for the purposes of determining whether Holders of the requisite
proportion of Notes then outstanding have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or other
Act, and for this purpose the Notes then outstanding shall be computed as of
such record date; provided that no such request, demand, authorization,
direction, notice, consent, waiver or other Act by the Holders on such recorded
date shall be deemed effective unless it shall become effective pursuant to the
provisions of this Indenture not later than six months after the record date.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act by the Holder of any Note shall bind every future Holder of the
same Note or the Holder of every Note issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof, in respect of anything done,
suffered or omitted to be done by the Trustee, any Paying Agent or the Company
in reliance thereon, whether or not notation of such action is made upon such
Note.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibits ▇-▇, ▇-▇ and A-3 attached hereto. The
Subsidiary Guarantees shall be substantially in the form of Exhibit E, the terms
of which are incorporated in and made part of this Indenture. The Notes may have
notations, legends or endorsements required by law, stock exchange rule or
usage, as designated by the Company or its counsel. Each Note shall be dated the
date of its authentication. The Notes shall be in denominations of $1,000 and
integral multiples thereof (subject to a minimum initial purchase requirement of
$100,000 for Notes sold on original issuance by the Company to Accredited
Investors other than in reliance on Rule 144A or Regulation S).
21
The Notes offered and sold in reliance on Rule 144A shall be issued
initially in the form of a Rule 144A Global Note. Notes offered and sold to
Accredited Investors in transactions exempt from registration under the
Securities Act not made in reliance on Rule 144A or Regulation S shall be issued
initially in the form of a separate Rule 144A Global Note. Notes offered and
sold in reliance on Regulation S shall be issued initially in the form of the
Regulation S Temporary Global Note, which shall be deposited on behalf of the
purchasers of the Notes represented thereby with the Note Custodian, at its New
York office, as custodian for the Depository, and registered in the name of the
Depository or the nominee of the Depository for the accounts of designated
agents holding on behalf of Euroclear or Cedel Bank, duly executed by the
Company and authenticated by the Trustee as hereinafter provided. The Restricted
Period shall be terminated upon the receipt by the Trustee of (i) a written
certificate from the Depository or the Note Custodian, together with copies of
certificates from Euroclear and Cedel Bank certifying that they have received
certification of non-United States beneficial ownership of 100% of the aggregate
principal amount of the Regulation S Temporary Global Note, and (ii) an
Officers' Certificate from the Company to the effect set forth in Section
13.04(a) hereof. Following the termination of the Restricted Period, beneficial
interests in the Regulation S Temporary Global Note shall be exchanged for
beneficial interests in Regulation S Permanent Global Notes pursuant to the
Applicable Procedures. Simultaneously with the authentication of Regulation S
Permanent Global Notes, the Trustee shall cancel the Regulation S Temporary
Global Note.
Notes issued in global form shall be substantially in the form of Exhibits
▇-▇, ▇-▇ or A-3 attached hereto (including the Global Note Legend and the
"Schedule of Exchanges in the Global Note" attached thereto). Notes issued in
definitive form shall be substantially in the form of Exhibit A-1 or A-3
attached hereto (but without the Global Note Legend and without the "Schedule of
Exchanges of Interests in the Global Note" attached thereto). Each Global Note
shall represent such of the outstanding Notes as shall be specified therein and
each shall provide that it shall represent the aggregate principal amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
principal amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges and redemptions.
Any endorsement of a Global Note to reflect the amount of any increase or
decrease in the aggregate principal amount of outstanding Notes represented
thereby shall be made by the Trustee or the Note Custodian, at the direction of
the Trustee, in accordance with instructions given by the Holder thereof as
required by Section 2.06 hereof.
The provisions of the "Operating Procedures of the Euroclear System" and
"Terms and Conditions Governing Use of Euroclear" and the "General Terms and
Conditions of Cedel Bank" and "Customer Handbook" of Cedel Bank shall be
applicable to transfers of beneficial interests in the Regulation S Temporary
Global Note and the Regulation S Permanent Global Notes that are held by the
Agent Members through Euroclear or Cedel Bank.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
Two Officers shall sign the Notes for the Company by manual or facsimile
signature.
If an Officer whose signature is on a Note no longer holds that office at
the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of
the Trustee. The signature shall be conclusive evidence that the Note has been
authenticated under this Indenture.
22
The Trustee shall, upon a written order of the Company signed by two
Officers, authenticate Notes for original issue in the aggregate principal
amount of up to $200,000,000 in one or more series. The aggregate principal
amount of Notes outstanding at any time may not exceed $200,000,000 except as
provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with Holders or an Affiliate of the Company.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Company shall maintain an office or agency where Notes may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company or any of
its Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depository with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Company shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of
principal, premium, if any, or interest on the Notes, and will notify the
Trustee of any default by the Company or any Guarantor in making any such
payment. While any such default continues, the Trustee may require a Paying
Agent to pay all money held by it to the Trustee. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee. Upon payment
over to the Trustee, the Paying Agent (if other than the Company or a
Subsidiary) shall have no further liability for the money. If the Company or a
Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust
fund for the benefit of the Holders all money held by it as Paying Agent. Upon
any bankruptcy or reorganization proceedings relating to the Company or any
Guarantor, the Trustee shall serve as Paying Agent for the Notes.
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA ss. 312(a). If the Trustee is
not the Registrar, the Company and/or the Guarantors shall furnish to the
Trustee at least
23
seven Business Days before each interest payment date and at such other times as
the Trustee may request in writing, a list in such form and as of such date as
the Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company and/or the Guarantors shall otherwise comply with TIA ss.
312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Transfer and Exchange of Global Notes. A Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository,
by a nominee of the Depository to the Depository or to another nominee of the
Depository, or by the Depository or any such nominee to a successor Depository
or a nominee of such successor Depository. All Global Notes will be exchanged by
the Company for Definitive Notes if (i) the Company delivers to the Trustee
notice from the Depository that it is unwilling or unable to continue to act as
Depository or that it is no longer a clearing agency registered under the
Exchange Act and, in either case, a successor Depository is not appointed by the
Company within 120 days after the date of such notice from the Depository or
(ii) the Company in its sole discretion determines that the Global Notes (in
whole but not in part) should be exchanged for Definitive Notes and delivers a
written notice to such effect to the Trustee; provided that in no event shall
the Regulation S Temporary Global Note be exchanged by the Company for
Definitive Notes prior to (x) the expiration of the Restricted Period and (y)
the receipt by the Registrar of any certificates certified in an Officers'
Certificate to be required pursuant to Rule 903 under the Securities Act. Upon
the occurrence of either of the preceding events in (i) or (ii) above,
Definitive Notes shall be issued in such names as the Depository shall instruct
the Trustee. Global Notes also may be exchanged or replaced, in whole or in
part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and
delivered in exchange for, or in lieu of, a Global Note or any portion thereof,
pursuant to Section 2.07 or 2.10 hereof, shall be authenticated and delivered in
the form of, and shall be, a Global Note. A Global Note may not be exchanged for
another Note other than as provided in this Section 2.06(a); however, beneficial
interests in a Global Note may be transferred and exchanged as provided in
Section 2.06(b), (c) or (f) hereof.
(b) Transfer and Exchange of Beneficial Interests in Global Notes. The
transfer and exchange of beneficial interests in the Global Notes shall be
effected through the Depository, in accordance with the provisions of this
Indenture and the Applicable Procedures. Beneficial interests in the Restricted
Global Notes shall be subject to restrictions on transfer described in the
Private Placement Legend to the extent required by the Securities Act. Transfers
of beneficial interests in the Global Notes also shall require compliance with
either subparagraph (i) or (ii) below, as applicable, as well as one or more of
the other following subparagraphs as applicable:
(i) Transfer of Beneficial Interests in the Same Global Note.
Beneficial interests in any Restricted Global Note may be transferred to
Persons who take delivery thereof in the form of a beneficial interest in
the same Restricted Global Note in accordance with the transfer
restrictions set forth in the Private Placement Legend; provided, however,
that prior to the expiration of the Restricted Period transfers of
beneficial interests in the Temporary Regulation S Global Note may not be
made to a U.S. Person or for the account or benefit of a U.S. Person (other
than an Initial Purchaser). Beneficial interests in any Unrestricted Global
Note may be transferred only to Persons who take delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note. No written
orders or instructions shall be required to be delivered to the Registrar
to effect the transfers described in this Section 2.06(b)(i).
24
(ii) All Other Transfers and Exchanges of Beneficial Interests in
Global Notes. In connection with all transfers and exchanges of beneficial
interests in a Global Note (other than a transfer of a beneficial interest
in a Global Note to a Person who takes delivery thereof in the form of a
beneficial interest in the same Global Note), the transferor of such
beneficial interest must deliver to the Registrar either (A) (1) a written
order from an Agent Member to the Depository in accordance with the
Applicable Procedures directing the Depository to credit or cause to be
credited a beneficial interest in another Global Note in an amount equal to
the beneficial interest to be transferred or exchanged and (2) instructions
given in accordance with the Applicable Procedures containing information
regarding the Agent Member account to be credited with such increase or (B)
(1) a written order from an Agent Member given to the Depository in
accordance with the Applicable Procedures directing the Depository to cause
to be issued a Definitive Note in an amount equal to the beneficial
interest to be transferred or exchanged and (2) instructions given by the
Depository to the Registrar containing information regarding the Person in
whose name such Definitive Note shall be registered to effect the
registration of transfer or exchange referred to in (1) above; provided
that in no event shall Definitive Notes be issued upon the registration of
transfer or exchange of beneficial interests in the Regulation S Temporary
Global Note prior to (x) the expiration of the Restricted Period and (y)
the receipt by the Registrar of any certificates certified in an Officers'
Certificate to be required pursuant to Rule 903 under the Securities Act.
Upon an Exchange Offer by the Company in accordance with Section 2.06(f)
hereof, the requirements of this Section 2.06(b)(ii) shall be deemed to
have been satisfied upon receipt by the Registrar of the instructions
contained in the Letter of Transmittal delivered by the Holder of such
beneficial interests in the Restricted Global Notes. Upon satisfaction of
all of the requirements for registration of transfer or exchange of
beneficial interests in Global Notes contained in this Indenture, the Notes
and otherwise applicable under the Securities Act, the Trustee shall adjust
the principal amount of the relevant Global Note(s) pursuant to Section
2.06(h) hereof.
(iii) Transfer of Beneficial Interests to Another Restricted Global
Note. A beneficial interest in any Restricted Global Note may be
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in another Restricted Global Note if the transfer
complies with the requirements of clause (ii) above and the Registrar
receives the following:
(A) if the transferee will take delivery in the form of a
beneficial interest in the 144A Global Note, then the transferor must
deliver a certificate in the form of Exhibit B hereto, including the
certifications in item (1) thereof; and
(B) if the transferee will take delivery in the form of a
beneficial interest in the Regulation S Temporary Global Note or the
Regulation S Global Note, then the transferor must deliver a
certificate in the form of Exhibit B hereto, including the
certifications in item (2) thereof.
(iv) Transfer and Exchange of Beneficial Interests in a Restricted
Global Note for Beneficial Interests in the Unrestricted Global Note. A
beneficial interest in any Restricted Global Note may be exchanged by any
holder thereof for a beneficial interest in an Unrestricted Global Note or
transferred to a Person who takes delivery thereof in the form of a
beneficial interest in an Unrestricted Global Note if the exchange or
transfer complies with the requirements of clause (ii) above and:
25
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of the beneficial interest to be transferred, in the
case of an exchange, or the transferee, in the case of a transfer,
certifies in the applicable Letter of Transmittal that it is not (1) a
Broker-Dealer, (2) a Person participating in the distribution of the
Notes issues in the Exchange Offer or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Restricted Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for a beneficial interest in an Unrestricted Global
Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (1)(a) thereof;
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of a beneficial interest in an Unrestricted Global Note, a
certificate from such holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof; and
(3) in each such case set forth in this subparagraph (D), an
Opinion of Counsel in form reasonably acceptable to the Registrar
to the effect that such exchange or transfer is in compliance
with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are not
required in order to maintain compliance with the Securities Act.
If any such transfer is effected pursuant to subparagraph (B) or (D)
above at a time when an Unrestricted Global Note has not yet been issued,
the Company shall issue and, upon receipt of an authentication order in
accordance with Section 2.02 hereof, the Trustee shall authenticate one or
more Unrestricted Global Notes in an aggregate principal amount equal to
the principal amount of beneficial interests transferred pursuant to
subparagraph (B) or (D) above.
(v) Transfer and Exchange of Beneficial Interests in the Unrestricted
Global Note for Beneficial Interests in a Restricted Global Note.
Beneficial interests in an Unrestricted Global Note cannot be exchanged
for, or transferred to, Persons who take delivery thereof in the form of a
beneficial interest in a Restricted Global Note.
(c) Transfer or Exchange of Beneficial Interests in Global Notes for
Definitive Notes.
(i) If any holder of a beneficial interest in a Restricted Global
Note proposes to exchange such beneficial interest for a Restricted
Definitive Note or to transfer such beneficial
26
interest to a Person who takes delivery thereof in the form of a
Restricted Definitive Note, then, upon receipt by the Registrar of the
following documentation:
(A) if the holder of such beneficial interest proposes to
exchange such beneficial interest for a Restricted Definitive
Note, a certificate from such holder in the form of Exhibit C
hereto, including the certifications in item (2)(a) thereof;
(B) if such beneficial interest is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto,
including the certifications in item (1) thereof;
(C) if such beneficial interest is being transferred to a
Non-U.S. Person (as defined in Regulation S of the Securities
Act) in an offshore transaction in accordance with Rule 903 or
Rule 904 under the Securities Act, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in
item (2) thereof;
(D) if such beneficial interest is being transferred
pursuant to an exemption from the registration requirements of
the Securities Act in accordance with Rule 144 under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(a) thereof;
(E) if such beneficial interest is being transferred to an
Accredited Investor in reliance on an exemption from the
registration requirements of the Securities Act other than those
listed in subparagraphs (B) through (D) above, a certificate to
the effect set forth in Exhibit B hereto, including the
certifications, certificates and Opinion of Counsel required by
item (3)(d) thereof, if applicable;
(F) if such beneficial interest is being transferred to the
Company or any of its Subsidiaries, a certificate to the effect
set forth in Exhibit B hereto, including the certifications in
item (3)(b) thereof; or
(G) if such beneficial interest is being transferred
pursuant to an effective registration statement under the
Securities Act, a certificate to the effect set forth in Exhibit
B hereto, including the certifications in item (3)(c) thereof,
the Trustee shall cause the aggregate principal amount of the
applicable Restricted Global Note to be reduced accordingly pursuant
to Section 2.06(h) hereof, and the Company shall execute and the
Trustee shall authenticate and deliver to the Person designated in the
instructions a Restricted Definitive Note in the appropriate principal
amount. Any Restricted Definitive Note issued in exchange for a
beneficial interest in a Restricted Global Note pursuant to this
Section 2.06(c) shall be registered in such name or names and in such
authorized denomination or denominations as the holder of such
beneficial interest shall instruct the Registrar through instructions
from the Depository and the Agent Member. The Trustee shall deliver
such Restricted Definitive Notes to the Persons in whose names such
Notes are so registered. Any Restricted Definitive Note issued in
exchange for a beneficial interest in a Restricted Global Note
pursuant to this Section 2.06(c)(i) shall bear the Private Placement
Legend and shall be subject to all restrictions on transfer contained
therein.
27
(ii) Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a
beneficial interest in the Regulation S Temporary Global Note may not be
(A) exchanged for a Definitive Note prior to (x) the expiration of the
Restricted Period and (y) the receipt by the Registrar of any certificates
required pursuant to Rule 903(c)(3)(B) under the Securities Act or (B)
transferred to a Person who takes delivery thereof in the form of a
Definiti
ve Note prior to the conditions set forth in clause (A) above or
unless the transfer is pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 903 or Rule 904.
(iii) Notwithstanding 2.06(c)(i) hereof, a holder of a beneficial
interest in a Restricted Global Note may exchange such beneficial interest
for an Unrestricted Definitive Note or may transfer such beneficial
interest to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the holder of such beneficial interest, in the case of an
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (1) a
Broker-Dealer, (2) a Person participating in the distribution of the
Notes issued in the Exchange Offer or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Restricted Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the holder of such beneficial interest in a
Restricted Global Note proposes to exchange such beneficial
interest for an Unrestricted Definitive Note, a certificate from
such holder in the form of Exhibit C hereto, including the
certifications in item (1)(b) thereof;
(2) if the holder of such beneficial interest in a
Restricted Global Note proposes to transfer such beneficial
interest to a Person who shall take delivery thereof in the form
of an Unrestricted Definitive Note, a certificate from such
holder in the form of Exhibit B hereto, including the
certifications in item (4) thereof; and
(3) in each such case set forth in this subparagraph (D), an
Opinion of Counsel in form reasonably acceptable to the Company,
to the effect that such exchange or transfer is in compliance
with the Securities Act and that the restrictions on transfer
contained herein and in the Private Placement Legend are not
required in order to maintain compliance with the Securities Act.
(iv) If any holder of a beneficial interest in an Unrestricted Global
Note proposes to exchange such beneficial interest for an Unrestricted
Definitive Note or to transfer such beneficial
28
interest to a Person who takes delivery thereof in the form of an
Unrestricted Definitive Note, then, upon satisfaction of the conditions set
forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the aggregate
principal amount of the applicable Unrestricted Global Note to be reduced
accordingly pursuant to Section 2.06(h) hereof, and the Company shall
execute and the Trustee shall authenticate and deliver to the Person
designated in the instructions an Unrestricted Definitive Note in the
appropriate principal amount. Any Unrestricted Definitive Note issued in
exchange for a beneficial interest pursuant to this Section 2.06(c)(iv)
shall be registered in such name or names and in such authorized
denomination or denominations as the holder of such beneficial interest
shall instruct the Registrar through instructions from the Depository and
the Agent Member. The Trustee shall deliver such Unrestricted Definitive
Notes to the Persons in whose names such Notes are so registered. Any
Unrestricted Definitive Note issued in exchange for a beneficial interest
pursuant to this Section 2.06(c)(iv) shall not bear the Private Placement
Legend. A beneficial interest in an Unrestricted Global Note cannot be
exchanged for a Restricted Definitive Note or transferred to a Person who
takes delivery thereof in the form of a Restricted Definitive Note.
(d) Transfer and Exchange of Definitive Notes for Beneficial Interests
in Global Notes.
(i) If any Holder of a Restricted Definitive Note proposes to exchange
such Note for a beneficial interest in a Restricted Global Note or to
transfer such Restricted Definitive Notes to a Person who takes delivery
thereof in the form of a beneficial interest in a Restricted Global Note,
then, upon receipt by the Registrar of the following documentation:
(A) if the Holder of such Restricted Definitive Note proposes to
exchange such Note for a beneficial interest in a Restricted Global
Note, a certificate from such Holder in the form of Exhibit C hereto,
including the certifications in item (2)(b) thereof;
(B) if such Restricted Definitive Note is being transferred to a
QIB in accordance with Rule 144A under the Securities Act, a
certificate to the effect set forth in Exhibit B hereto, including the
certifications in item (1) thereof; or
(C) if such Restricted Definitive Note is being transferred to a
Non-U.S. Person in an offshore transaction in accordance with Rule 903
or Rule 904 under the Securities Act, a certificate to the effect set
forth in Exhibit B hereto, including the certifications in item (2)
thereof;
the Trustee shall cancel the Restricted Definitive Note, increase or cause
to be increased the aggregate principal amount of, in the case of clause
(A) above, the appropriate Restricted Global Note, in the case of clause
(B) above, the 144A Global Note, and in the case of clause (C) above, the
Regulation S Global Note.
(ii) A Holder of a Restricted Definitive Note may exchange such Note
for a beneficial interest in an Unrestricted Global Note or transfer such
Restricted Definitive Note to a Person who takes delivery thereof in the
form of a beneficial interest in an Unrestricted Global Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an
29
exchange, or the transferee, in the case of a transfer, certifies in
the applicable Letter of Transmittal that it is not (1) a
Broker-Dealer, (2) a Person participating in the distribution of the
Notes issued in the Exchange Offer or (3) a Person who is an affiliate
(as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Restricted Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the
form of Exhibit C hereto, including the certifications in item
(1)(c) thereof;
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of a beneficial interest in the
Unrestricted Global Note, a certificate from such Holder in the
form of Exhibit B hereto, including the certifications in item
(4) thereof; and
(3) in each such case set forth in this subparagraph (D), an
Opinion of Counsel in form reasonably acceptable to the Company
to the effect that such exchange or transfer is in compliance
with the Securities Act, that the restrictions on transfer
contained herein and in the Private Placement Legend are not
required in order to maintain compliance with the Securities Act,
and such Restricted Definitive Notes are being exchanged or
transferred in compliance with any applicable blue sky securities
laws of any State of the United States.
Upon satisfaction of the conditions of any of the subparagraphs in this
Section 2.06(d)(ii), the Trustee shall cancel the Restricted Definitive
Notes and increase or cause to be increased the aggregate principal amount
of the Unrestricted Global Note.
(iii) A Holder of an Unrestricted Definitive Note may exchange such
Note for a beneficial interest in an Unrestricted Global Note or transfer
such Unrestricted Definitive Notes to a Person who takes delivery thereof
in the form of a beneficial interest in an Unrestricted Global Note at any
time. Upon receipt of a request for such an exchange or registration of
transfer, the Trustee shall cancel the applicable Unrestricted Definitive
Note and increase or cause to be increased the aggregate principal amount
of the Unrestricted Global Note.
If any such exchange or transfer from a Definitive Note to a beneficial
interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above
at a time when an Unrestricted Global Note has not yet been issued, the Company
shall issue and, upon receipt of an authentication order in accordance with
Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted
Global Notes in an aggregate
30
principal amount equal to the principal amount of beneficial interests
transferred pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above.
(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon
request by a Holder of Definitive Notes and such Holder's compliance with the
provisions of this Section 2.06(e), the Registrar shall register the transfer or
exchange of Definitive Notes. Prior to such registration of transfer or
exchange, the requesting Holder shall present or surrender to the Registrar the
Definitive Notes duly endorsed or accompanied by a written instruction of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney, duly authorized in writing. In addition, the requesting Holder
shall provide any additional certifications, documents and information, as
applicable, pursuant to the provisions of this Section 2.06(e).
(i) Restricted Definitive Notes may be transferred to and registered
in the name of Persons who take delivery thereof if the Registrar receives
the following:
(A) if the transfer will be made pursuant to Rule 144A under the
Securities Act, then the transferor must deliver a certificate in the
form of Exhibit B hereto, including the certifications in item (1)
thereof;
(B) if the transfer will be made pursuant to Rule 903 or Rule
904, then the transferor must deliver a certificate in the form of
Exhibit B hereto, including the certifications in item (2) thereof;
and
(C) if the transfer will be made pursuant to any other exemption
from the registration requirements of the Securities Act, then the
transferor must deliver a certificate in the form of Exhibit B hereto,
including the certifications, certificates and Opinion of Counsel
required by item (3) thereof, if applicable.
(ii) Any Restricted Definitive Note may be exchanged by the Holder
thereof for an Unrestricted Definitive Note or transferred to a Person or
Persons who take delivery thereof in the form of an Unrestricted Definitive
Note if:
(A) such exchange or transfer is effected pursuant to the
Exchange Offer in accordance with the Registration Rights Agreement
and the Holder, in the case of an exchange, or the transferee, in the
case of a transfer, certifies in the applicable Letter of Transmittal
that it is not (1) a Broker-Dealer, (2) a Person participating in the
distribution of the Notes issued in the Exchange Offer or (3) a Person
who is an affiliate (as defined in Rule 144) of the Company;
(B) any such transfer is effected pursuant to the Shelf
Registration Statement in accordance with the Registration Rights
Agreement;
(C) any such transfer is effected by a Restricted Broker-Dealer
pursuant to the Exchange Offer Registration Statement in accordance
with the Registration Rights Agreement; or
(D) the Registrar receives the following:
31
(1) if the Holder of such Restricted Definitive Notes
proposes to exchange such Notes for an Unrestricted Definitive
Note, a certificate from such Holder in the form of Exhibit C
hereto, including the certifications in item (1)(d) thereof;
(2) if the Holder of such Restricted Definitive Notes
proposes to transfer such Notes to a Person who shall take
delivery thereof in the form of an Unrestricted Definitive Note,
a certificate from such Holder in the form of Exhibit B hereto,
including the certifications in item (4) thereof; and
(3) in each such case set forth in this subparagraph (D), an
Opinion of Counsel in form reasonably acceptable to the Company
to the effect that such exchange or transfer is in compliance
with the Securities Act, that the restrictions on transfer
contained herein and in the Private Placement Legend are not
required in order to maintain compliance with the Securities Act,
and such Restricted Definitive Note is being exchanged or
transferred in compliance with any applicable blue sky securities
laws of any State of the United States.
(iii) A Holder of Unrestricted Definitive Notes may transfer such
Notes to a Person who takes delivery thereof in the form of an Unrestricted
Definitive Note. Upon receipt of a request to register such a transfer, the
Registrar shall register the Unrestricted Definitive Notes pursuant to the
instructions from the Holder thereof. Unrestricted Definitive Notes cannot
be exchanged for or transferred to Persons who take delivery thereof in the
form of a Restricted Definitive Note.
(f) Exchange Offer. Upon the occurrence of the Exchange Offer in
accordance with the Registration Rights Agreement, the Company shall issue
and, upon receipt of an authentication order in accordance with Section
2.02, the Trustee shall authenticate (i) one or more Unrestricted Global
Notes in an aggregate principal amount equal to the principal amount of the
beneficial interests in the Restricted Global Notes tendered for acceptance
by Persons that certify in the applicable Letter of Transmittal that they
are not (x) Broker-Dealers, (y) Persons participating in the distribution
of the Notes issued in the Exchange Offer or (z) Persons who are Affiliates
(as defined in Rule 144) of the Company and accepted for exchange in the
Exchange Offer and (ii) Unrestricted Definitive Notes in an aggregate
principal amount equal to the principal amount of the Restricted Definitive
Notes accepted for exchange in the Exchange Offer. Concurrent with the
issuance of such Notes, the Trustee shall cause the aggregate principal
amount of the applicable Restricted Global Notes to be reduced accordingly,
and the Company shall execute and the Trustee shall authenticate and
deliver to the Persons designated by the Holders of Definitive Notes so
accepted Unrestricted Definitive Notes in the appropriate principal amount.
(g) Legends. The following legends shall appear on the face of all
Global Notes and Definitive Notes issued under this Indenture unless
specifically stated otherwise in the applicable provisions of this
Indenture.
(i) Private Placement Legend.
(A) Except as permitted by subparagraph (B) below, each Global
Note and each Definitive Note (and all Notes issued in exchange
therefor or substitution thereof) shall bear the legend in
substantially the following form:
32
"THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) (A "QIB"), (B) IT IS NOT A U.S. PERSON, IS NOT ACQUIRING THIS
NOTE FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON AND IS ACQUIRING THIS
NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR"
(AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER
THE SECURITIES ACT) (AN "IAI"), (2) AGREES THAT IT WILL NOT, WITHIN
THE TIME PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE
PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE)
UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF
THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE
COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON WHOM THE HOLDER
REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
ACT (IF AVAILABLE), (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE REGISTRATION OF
TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM
THE TRUSTEE) AND, IF THE ISSUER SO REQUESTS, AN OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES THAT
IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN
IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS
USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS."
(B) Notwithstanding the foregoing, any Unrestricted Global Note
or Unrestricted Definitive Note issued pursuant to subparagraphs
(b)(iv), (c)(iii), (c)(iv),
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(d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.06 (and
all Notes issued in exchange therefor or substitution thereof) shall
not bear the Private Placement Legend.
(ii) Global Note Legend. Each Global Note shall bear a legend in
substantially the following form:
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITORY (AS DEFINED IN THE
INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE
BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO
ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY
MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07
OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT
NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS
GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE
TRANSFERRED TO A SUCCESSOR DEPOSITORY WITH THE PRIOR WRITTEN CONSENT
OF THE COMPANY."
(iii) Regulation S Temporary Global Note Legend. The Regulation S
Temporary Global Note shall bear a legend in substantially the following
form:
"THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND
THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED
NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER
THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY
GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE CASH PAYMENTS OF INTEREST
DURING THE PERIOD WHICH SUCH HOLDER HOLDS THIS NOTE. NOTHING IN THIS
LEGEND SHALL BE DEEMED TO PREVENT INTEREST FROM ACCRUING ON THIS
NOTE."
(h) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in a particular Global Note have been exchanged for
Definitive Notes or a particular Global Note has been redeemed, repurchased or
cancelled in whole and not in part, each such Global Note shall be returned to
or retained and cancelled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for or transferred to a Person who will take delivery thereof
in the form of a beneficial interest in another Global Note or for Definitive
Notes, the principal amount of Notes represented by such Global Note shall be
reduced accordingly and an endorsement shall be made on such Global Note, by the
Trustee or by the Depository at the direction of the Trustee, to reflect such
reduction; and if the beneficial interest is being exchanged for or transferred
to a Person who will take delivery thereof in the form of a beneficial interest
in another Global Note, such other Global Note shall be increased accordingly
and an endorsement shall be made on such Global Note, by the Trustee or by the
Depository at the direction of the Trustee, to reflect such increase.
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(i) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, the Company
shall execute and the Trustee shall authenticate Global Notes and
Definitive Notes upon receipt of a Company Order or at the Registrar's
request.
(ii) No service charge shall be made to a holder of a beneficial
interest in a Global Note or to a Holder of a Definitive Note for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 2.10, 3.07, 4.09, 4.10 and 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer of
or exchange any Note selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part.
(iv) All Global Notes and Definitive Notes issued upon any
registration of transfer or exchange of Global Notes or Definitive Notes
shall be the valid obligations of the Company, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Global Notes
or Definitive Notes surrendered upon such registration of transfer or
exchange.
(v) The Company shall not be required (A) to issue, to register the
transfer of or to exchange Notes during a period beginning at the opening
of business 15 days before the day of any selection of Notes for redemption
under Section 3.02 hereof and ending at the close of business on the day of
selection, (B) to register the transfer of or to exchange any Note so
selected for redemption in whole or in part, except the unredeemed portion
of any Note being redeemed in part or (C) to register the transfer of or to
exchange a Note between a record date and the next succeeding Interest
Payment Date.
(vi) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and interest on
such Notes and for all other purposes, and none of the Trustee, any Agent
or the Company shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Global Notes and Definitive Notes
in accordance with the provisions of Section 2.02 hereof.
(viii) All certifications, certificates and Opinions of Counsel
required to be submitted to the Registrar pursuant to this Section 2.06 to
effect a registration of transfer or exchange may be submitted by
facsimile.
35
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the Company and
the Trustee and the Company receive evidence to their satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon the written order of the Company signed by two Officers of the Company,
shall authenticate a replacement Note if the Trustee's and the Company's
requirements are met. If required by the Trustee or the Company, an indemnity
bond must be supplied by the Holder that is sufficient in the judgment of the
Trustee and the Company to protect the Company, the Trustee, any Agent and any
authenticating agent from any loss that any of them may suffer if a Note is
replaced. The Company may charge for its expenses in replacing a Note.
Every replacement Note is an additional obligation of the Company and
shall be entitled to all of the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company or an Affiliate of the
Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary or an Affiliate
of any thereof) holds, on a redemption date or maturity date, money sufficient
to pay Notes payable on that date, then on and after that date such Notes shall
be deemed to be no longer outstanding and shall cease to accrue interest.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, or by an Affiliate of the Company, shall be considered as though not
outstanding, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Notes that a Responsible Officer of the Trustee has been informed of by the
Company as being so owned shall be so disregarded.
SECTION 2.10. TEMPORARY NOTES.
Until permanent Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes upon a written order of the
Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of permanent Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the
36
Trustee. Without unreasonable delay, the Company shall prepare and the Trustee
shall authenticate definitive Notes in exchange for temporary Notes.
Holders of temporary Notes shall be entitled to all of the benefits of
this Indenture.
SECTION 2.11. CANCELLATION.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and shall destroy
cancelled Notes (subject to the record retention requirement of the Exchange
Act). Certification of the destruction of all cancelled Notes shall be delivered
to the Company. The Company may not issue new Notes to replace Notes that it has
paid or that have been delivered to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
Interest on any Note which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Note is registered at the close of business on the Regular Record Date
for such interest.
Any interest on any Note which is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date and interest on such defaulted
interest at the applicable interest rate borne by the Notes, to the extent
lawful (such defaulted interest (and interest thereon) herein collectively
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder; and
such Defaulted Interest shall be paid by the Company to the Persons in whose
names the Notes are registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall give the Trustee at least 15 days' written
notice (unless a shorter period is acceptable to the Trustee for its
convenience) of the amount of Defaulted Interest proposed to be paid on each
Note and the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held by the Trustee in
trust for the benefit of the Persons entitled to such Defaulted Interest as in
this subsection provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall not be more than 15 days
and not less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such Special Record
Date. In the name and at the expense of the Company, the Trustee shall cause
notice of the proposed payment of such Defaulted Interest and the Special Record
Date therefor to be mailed, first-class postage prepaid, to each Holder at his
address as it appears in the Registrar, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Notes are registered at
the close of business on such Special Record Date.
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Subject to the foregoing provisions of this Section, each Note delivered
under this Indenture upon registration of transfer of or in exchange for or in
lieu of any other Note shall carry the rights to interest accrued and unpaid,
and to accrue, which were carried by such other Note.
ARTICLE 3
REDEMPTION AND PREPAYMENT
SECTION 3.01. APPLICABILITY OF ARTICLE.
Redemption of Notes at the election of the Company shall be made in
accordance with this Article 3.
SECTION 3.02. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Notes pursuant to Section 3.08
shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company, the Company shall, at least 45 but not more than 60
days prior to the Redemption Date fixed by it (unless a shorter notice period
shall be satisfactory to the Trustee for its convenience), notify the Trustee of
such Redemption Date and of the principal amount of Notes to be redeemed.
SECTION 3.03. SELECTION BY TRUSTEE OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed at any time, selection of
Notes for redemption shall be made by the Trustee in compliance with the
requirements of the principal national securities exchange, if any, on which
such Notes are listed, or, if such Notes are not so listed, on a pro rata basis,
by lot or by such method as the Trustee shall deem fair and appropriate;
provided that no Notes of $1,000 or less shall be redeemed in part.
The Trustee shall promptly notify the Company and the Registrar in writing
of the Notes selected for redemption and, in the case of any Notes selected for
partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to redemption of Notes shall relate, in the case of any
Note redeemed or to be redeemed only in part, to the portion of the principal
amount of such Note which has been or is to be redeemed.
SECTION 3.04. NOTICE OF REDEMPTION.
Notices of redemption shall be mailed by first class mail, postage
prepaid, at least 30 but not more than 60 days before the Redemption Date to
each Holder of Notes to be redeemed at such Holder's registered address. If any
Note is to be redeemed in part only, any notice of redemption that relates to
such Note shall state the portion of the principal amount thereof to be
redeemed.
All notices of redemption shall state:
(a) the Redemption Date;
38
(b) the Redemption Price;
(c) if less than all Notes then outstanding are to be redeemed, the
identification (and, in the case of a Note to be redeemed in part, the
principal amount) of the particular Notes to be redeemed;
(d) that on the Redemption Date the Redemption Price will become due
and payable upon each such Note or portion thereof, and that (unless the
Company shall default in payment of the Redemption Price) interest thereon
shall cease to accrue on or after said date;
(e) the places or places where such Notes are to be surrendered for
payment of the Redemption Price;
(f) that Notes called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price;
(g) the CUSIP number, if any, relating to such Notes, and
(h) in the case of a Note to be redeemed in part, the principal amount
of such Note to be redeemed and that after the Redemption Date upon
surrender of such Note, a new Note or Notes in the aggregate principal
amount equal to the unredeemed portion thereof will be issued.
Notice of redemption of Notes to be redeemed at the election of the
Company shall be given by the Company or, at its request, by the Trustee in the
name and at the expense of the Company.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its owning
Paying Agent, segregate and hold in trust as provided in Section 4.03) an amount
of money in same day funds (or New York Clearing House funds if such deposit is
made prior to the applicable Redemption Date) sufficient to pay the Redemption
Price of, and accrued interest on, all the Notes or portions thereof which are
to be redeemed on that date.
SECTION 3.06. NOTES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the Notes so to be
redeemed shall, on the Redemption Date, become due and payable at the Redemption
Price therein specified and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such Notes
shall cease to bear interest. Upon surrender of any such Note for redemption in
accordance with said notice, such Note shall be paid by the Company at the
Redemption Price together with accrued interest to the Redemption Date;
provided, however, that installments of interest whose Stated Maturity is on or
prior to the Redemption Date shall by payable to the Holders of such Notes,
registered as such on the relevant Regular Record Dates according to the terms
and the provisions of Section 2.12.
If any Note called for redemption shall not be so paid upon surrender
thereof for redemption, the principal thereof (and premium, if any, thereon)
shall, until paid, bear interest from the Redemption Date at the rate borne by
such Note.
39
SECTION 3.07. NOTES REDEEMED IN PART.
Any Note which is to be redeemed only in part shall be surrendered at the
office or agency of the Company maintained for such purpose pursuant to Section
4.02 (with, if the Company, the Registrar or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company, the Registrar or the Trustee duly executed by, the Holder thereof or
his attorney duly authorized in writing), and a new Note in principal amount
equal to the unpurchased or unredeemed portion will be issued in the name of the
Holder thereof upon cancellation of the original Note. On and after the purchase
or redemption date, unless the Company defaults in payment of the purchase or
redemption price, interest shall cease to accrue on Notes or portions thereof
purchased or called for redemption.
SECTION 3.08. OPTIONAL REDEMPTION.
(a) Except as described in this Section 3.08, the Notes will not be
redeemable at the Company's option prior to June 15, 2002. On and after June 15,
2002, the Notes will be subject to redemption at the option of the Company, in
whole or in part, upon not less than 30 nor more than 60 days' written notice,
at the Redemption Prices (expressed as a percentage of principal amount) set
forth below, plus accrued and unpaid interest thereon, if any, to the applicable
Redemption Date, if redeemed during the twelve-month period beginning on June 15
of each of the years indicated below:
REDEMPTION
YEAR PRICE
---- ----------
2002........................................................... 105.563%
2003........................................................... 103.708%
2004........................................................... 101.854%
2005 and thereafter............................................ 100.000%
In addition, at any time prior to June 15, 2000, the Company may on any
one or more occasions redeem up to 33 1/3% of the aggregate principal amount of
Notes originally issued (including, for this purpose, one or more series of
Notes issued under this Indenture after the date hereof) at a Redemption Price
of 111.125% of the principal amount thereof, plus accrued and unpaid interest
and Liquidated Damages, if any, thereon to the Redemption Date, with the net
cash proceeds of one or more Public Equity Offerings; provided that at least
66 2/3% of the Notes originally issued (including, for this purpose, one or more
series of Notes issued under this Indenture after the date hereof) remain
outstanding immediately after the occurrence of such redemption and provided,
further, that such redemption occurs within 60 days of the date of the closing
of such Public Equity Offering.
In addition, at any time prior to June 15, 2002, the Company may, at its
option, redeem the Notes, in whole or in part, at a Redemption Price equal to
100% of the principal amount thereof plus the applicable Make-Whole Premium.
(b) Any redemption pursuant to this Section 3.08 shall be made pursuant to
the provisions of Sections 3.01 through 3.07 hereof.
SECTION 3.09. MANDATORY REDEMPTION.
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Except as set forth under Sections 3.10, 4.09 and 4.10 hereof, the Company
shall not be required to make mandatory redemption or sinking fund payments with
respect to the Notes.
SECTION 3.10 OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
In the event that, pursuant to Section 4.10 hereof, the Company shall be
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by applicable law (the "Offer Period"). No later than five
Business Days after the termination of the Offer Period (the "Purchase Date"),
the Company shall purchase the principal amount of Notes required to be
purchased pursuant to Section 4.10 hereof (the "Offer Amount") or, if less than
the Offer Amount has been tendered, all Notes tendered in response to the Asset
Sale Offer.
If the Purchase Date is on or after a Regular Record Date and on or before
the related Interest Payment Date, any accrued and unpaid interest shall be paid
to the Person in whose name a Note is registered at the close of business on
such Regular Record Date, and no additional interest shall be payable to Holders
who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall send, by
first class mail, a notice to each of the Holders, with a copy to the Trustee.
The notice shall contain all instructions and materials necessary to enable such
Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer
shall be made to all Holders. The notice, which shall govern the terms of the
Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section 3.10
and Section 4.10 hereof and the length of time the Asset Sale Offer
shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue to
accrue interest;
(d) that, unless the Company defaults in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer shall cease to
accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to any Asset
Sale Offer shall be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the
Note completed, or transfer by book-entry transfer, to the Company, a
depositary, if appointed by the Company, or a Paying Agent at the
address specified in the notice not later than the third Business Day
preceding the end of the Offer Period;
(f) that Holders shall be entitled to withdraw their election if the
Company, the depositary or the Paying Agent, as the case may be,
receives, not later than the Business Day preceding the end of the
Offer Period, a telegram, telex, facsimile transmission or letter
setting forth
41
the name of the Holder, the principal amount of the Note the Holder
delivered for purchase and a statement that such Holder is withdrawing
his election to have such Note purchased;
(g) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Company shall select the Notes
to be purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the Company so that only Notes in denominations
of $1,000, or integral multiples thereof, shall be purchased); and
(h) that Holders whose Notes were purchased only in part shall be issued
new Notes equal in principal amount to the unpurchased portion of the
Notes surrendered (or transferred by book-entry transfer).
On or before 12:00 p.m. (New York City time) on each Purchase Date, the
Company shall, irrevocably deposit with the Trustee or Paying Agent in
immediately available funds the aggregate purchase price with respect to a
principal amount of Notes equal to the Offer Amount, together with accrued and
unpaid interest thereon to the Purchase Date, to be held for payment in
accordance with the terms of this Section 3.10. On the Purchase Date, the
Company shall, to the extent lawful, (i) accept for payment, on a pro rata basis
to the extent necessary, the Offer Amount of Notes or portions thereof tendered
pursuant to the Asset Sale Offer, or if less than the Offer Amount has been
tendered, all Notes tendered, (ii) deliver or clause the Paying Agent or
depositary, as the case may be, to deliver to the Trustee Notes so accepted and
(iii) deliver to the Trustee an Officer's Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 3.10. The Company, the Depository or the Paying Agent, as
the case may be, shall promptly (but in any case not later than three Business
Days after the Purchase Date) mail or deliver to each tendering Holder an amount
equal to the purchase price of the Notes tendered by such Holder and accepted by
the Company for purchase, plus any accrued and unpaid interest, thereon to the
Purchase Date, and the Company shall promptly issue a new Note, and the Trustee,
upon written request from the Company, shall authenticate and mail or deliver
such new Note to such Holder, equal in principal amount to any unpurchased
portion of the Note surrendered. Any Note not so accepted shall be promptly
mailed or delivered by the Company to the Holder thereof. The Company shall send
a notice to each Holder a stating the results of the Asset Sale Offer on the
Purchase Date.
Other than as specifically provided in this Section 3.10, any purchase
pursuant to this Section 3.10 shall be made pursuant to the provisions of
Sections 3.01 through 3.07 hereof.
ARTICLE 4
COVENANTS
SECTION 4.01 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company shall pay or cause to be paid the principal of, premium, if
any, and interest on the Notes on the dates and in the manner provided in the
Notes. Principal, premium, if any, and interest shall be considered paid on the
date due if the Paying Agent, if other than the Company or a Subsidiary thereof,
holds as of 10:00 a.m. Eastern Time on the due date money deposited by the
Company in immediately
42
available funds and designated for and sufficient to pay all principal, premium,
if any, and interest then due.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate of the
then applicable interest rate on the Notes to the extent lawful; it shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace period) at the same rate to the extent
lawful.
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Company will maintain, in The City of New York, an office or agency
where Notes may be presented or surrendered for payment, where Notes may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company will give prompt written notice to the Trustee of any change
in the location of any such office or agency. If at any time the Company shall
fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may from time to time designate one or more other offices or
agencies (in or outside of The City of New York) where the Notes may be
presented or surrendered for any or all such purposes, and may from time to time
rescind such designation; provided, however, that no such designation or
recession shall in any manner relieve the Company of its obligation to maintain
an office or agency in The City of New York for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or recession
and any change in the location of any such office or agency.
SECTION 4.03. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.
If the Company shall at any time act as its own Paying Agent, it will, on
or before each due date of the principal of, premium, if any, or interest on any
of the Notes, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal, premium, if any, or
interest so becoming due until such sums shall be paid to such Persons or
otherwise disposed of as herein provided, and will promptly notify the Trustee
of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents for the Notes,
it will, on or before each due date of the principal of, premium, if any, or
interest on any Notes, deposit with a Paying Agent a sum in same day funds (or
New York Clearing House funds if such deposit is made prior to the date on which
such deposit is required to be made) sufficient to pay the principal, premium,
if any, or interest so becoming due (or at the option of the Company, payment of
interest may be mailed by check to the Holders of the Notes at their respective
addresses set forth in the register of Holders of Notes; provided that all
payments with respect to Global Notes and Definitive Notes, the holders of which
have given wire transfer instructions to the Company shall receive such payments
of interest by wire transfer in same day funds) such sum to be held in trust for
the benefit of the Persons entitled to such principal, premium or interest and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of su
ch action or any failure so to act.
43
The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall agree
with the Trustee, subject to the provisions of this Section, that such Paying
Agent will:
(a) hold all sums held by it for the payment of the principal of, premium,
if any, or interest on Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any default by the Company (or any other
obligor upon the Notes) in the making of any payment of principal,
premium, if any, or interest;
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all respects with the
provisions of this Indenture relating to the duties, rights and
obligations of such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium, if any, or
interest on any Note and remaining unclaimed for two years after such principal,
premium, if any, or interest has become due and payable shall be paid to the
Company on Company Request or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Note shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, shall at the expense of the Company cause notice to
be promptly sent to each Holder that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 4.04. REPORTS.
Whether or not required by the rules and regulations of the SEC, so long
as any Notes are outstanding, the Company shall furnish to the Holders of Notes
(i) all quarterly and annual financial information that would be required to be
contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were
required to file such Forms, including a "Management's Discussion and Analysis
of Financial Condition and Results of Operations" that describes the financial
condition and results of operations of the Company and its consolidated
Subsidiaries (showing in reasonable detail, either on the face of the financial
statements or in the footnotes thereto and in Management's Discussion and
Analysis of Financial Condition and Results of Operations, the financial
condition and results of operations of the Company and its Restricted
Subsidiaries separate from the financial condition and results of operations of
44
the Unrestricted Subsidiaries of the Company) and, with respect to the annual
information only, a report thereon by the Company's certified independent
accountants and (ii) all current reports that would be required to be filed with
the SEC on Form 8-K if the Company were required to file such reports; provided,
however, that the Company shall not be required to make any such filings on or
prior to the date on which the Company's quarterly report on Form 10-Q for the
fiscal quarter ended June 30, 1997 would have been required to be filed if, at
the time such filings would have been required to be made with the SEC, either
(i) the Company shall have provided to each Holder the information that would
have been required to be filed or (ii) the Exchange Offer Registration Statement
has been filed with the SEC but has not yet been declared effective and copies
of the Exchange Offer Registration Statement and any amendments thereto (to the
extent such registration statement and/or amendments contain additional
information not disclosed in the Offering Memorandum that would have been the
subject of a filing required to be made under Section 13 or 15(d) of the
Exchange Act) have been provided to each Holder, provided that any exhibits to
the Exchange Offer Registration Statement (or any amendments thereto) need not
be delivered to any Holder of the Notes, but sufficient copies thereto shall be
furnished to the Trustee as reasonably requested to permit the Trustee to
deliver any such exhibits to any Holder upon request. In addition, whether or
not required by the rules and regulations of the SEC, the Company shall file a
copy of all such information and reports with the SEC for public availability
(unless the SEC will not accept such a filing) and make such information
available to securities analysts and prospective investors upon request. In
addition, the Company and the Guarantors shall, for so long as any Notes remain
outstanding, furnish to the Holders and to securities analysts and prospective
investors, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.
SECTION 4.05. STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT.
(a) The Company and each Guarantor shall deliver to the Trustee, within 90
days after the end of each fiscal year ending after the date hereof, a brief
certificate of its principal executive officer, principal financial officer or
principal accounting officer stating whether, to such officer's knowledge, the
Company and such Guarantor is in compliance with all covenants and conditions to
be complied with by it under this Indenture (including with respect to any
Restricted Payments made during such year, the basis upon which the calculations
required by this Section 4.05 were computed, which calculations may be based on
the Company's latest financial statements), and further stating, as to each
Officer signing such certificate, that to the best of his or her knowledge each
entity is not in default in the performance or observance of any terms,
provisions and conditions of this Indenture (or, if a Default or Event of
Default shall have occurred, describing all such Defaults or Events of Default
of which he or she may have knowledge and what action the Company is taking or
proposes to take with respect thereto) and that to the best of his or her
knowledge no event has occurred and remains in existence by reason of which
payments on account of the principal of or interest, if any, on the Notes is
prohibited or if such event has occurred, a description of the event and what
action the Company is taking or proposes to take with respect thereto. For
purposes of this Section 4.05, such compliance shall be determined without
regard to any period of grace or requirement of notice under this Indenture.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the annual reports delivered
pursuant to Section 4.04 above shall be accompanied by a written statement of
the Company's independent public accountants (who shall be a firm of established
national reputation) that in making the examination necessary for certification
of such financial statements, nothing has come to their attention that would
lead them to believe that the Company has violated any provisions of Article 4
or Article 5 hereof or, if any such violation has occurred,
45
specifying the nature and period of existence thereof, it being understood that
such accountants shall not be liable directly or indirectly to any Person for
any failure to obtain knowledge of any such violation. In the event that, after
the Company has used its best efforts to obtain the written statement of the
Company's independent public accountants required by the provisions of this
paragraph, such statement cannot be obtained, the Company shall deliver, in
satisfaction of its obligations under this Section 4.05(b), an Officers'
Certificate (A) certifying that it has used its best efforts to obtain such
required statement but was unable to do so and (B) attaching the written
statement of the Company's accountants that the Company received in lieu
thereof.
(c) The Company shall, within five Business Days, upon becoming aware of
any Default or Event of Default or any default under any document, instrument or
agreement representing Indebtedness of the Company or any Guarantor, deliver to
the Trustee an Officer's Certificate specifying such Default or Event of
Default.
SECTION 4.06. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon it or any Subsidiary or upon the
income, profits or property of the Company or any of its Subsidiaries and (b)
all material lawful claims for labor, materials and supplies, which, if unpaid,
might by law become a Lien upon the property of the Company or any of its
Subsidiaries that could produce a material adverse effect on the consolidated
financial condition of the Company; provided, however, that the Company shall
not be required to pay or discharge or cause to be paid or discharged any such
tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings and in respect of which
appropriate reserves (in the good faith judgment of management of the Company)
are being maintained in accordance with GAAP.
SECTION 4.07. LIMITATION ON LIENS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien securing Indebtedness or trade payables on any asset now owned or
hereafter acquired, or any income or profits therefrom or assign or convey any
right to receive income therefrom, except Permitted Liens.
SECTION 4.08. CORPORATE EXISTENCE.
Subject to Article 5 hereof, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect (i) its corporate
existence, and the corporate, partnership or other existence of each of its
Restricted Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or any
such Restricted Subsidiary and (ii) the rights (charter and statutory), licenses
and franchises of the Company and its Restricted Subsidiaries; provided,
however, that the Company shall not be required to preserve any such right,
license or franchise, or the corporate, partnership or other existence of any of
its Restricted Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Subsidiaries, taken as a whole, and that the loss thereof is
not adverse in any material respect to the Holders of the Notes.
46
SECTION 4.09. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, the Company shall make an
offer to purchase all or any part (equal to $1,000 or an integral multiple
thereof) of the Notes pursuant to the offer described below (the "Change of
Control Offer") at a price in cash (the "Change of Control Payment") equal to
101% of the aggregate principal amount thereof plus accrued and unpaid interest
and Liquidated Damages, if any, to the date of purchase.
(b) Within 30 days following any Change of Control, the Company shall mail
a notice to each Holder of Notes issued under this Indenture, with a copy to the
Trustee, with the following statements and/or information:
(1) a Change of Control Offer is being made pursuant to this Section 4.09
and that all Notes properly tendered pursuant to such Change of
Control Offer will be accepted for payment;
(2) the purchase price and the purchase date, which will be no earlier
than 30 days nor later than 60 days from the date such notice is
mailed, except as may be otherwise required by applicable law (the
"Change of Control Payment Date");
(3) any Note not properly tendered will remain outstanding and continue to
accrue interest;
(4) unless the Company defaults in the payment of the Change of Control
Payment, all Notes accepted for payment pursuant to the Change of
Control Offer will cease to accrue interest on the Change of Control
Payment Date;
(5) Holders electing to have any Notes purchased pursuant to a Change of
Control Offer will be required to surrender the Notes, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the
Notes completed, to the Paying Agent and at the address specified in
the notice prior to the close of business on the third Business Day
preceding the Change of Control Payment Date;
(6) Holders will be entitled to withdraw their tendered Notes and their
election to require the Company to purchase such Notes, provided that
the Paying Agent receives, not later than the close of business on the
third Business Day preceding the Change of Control Payment Date, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of Notes tendered for
purchase, and a statement that such Holder is withdrawing his tendered
Notes and his election to have such Notes purchased; and
(7) that Holders whose Notes are being purchased only in part will be
issued new Notes equal in principal amount to the unpurchased portion
of the Notes surrendered, which unpurchased portion must be equal to
$1,000 in principal amount or an integral multiple thereof.
47
(c) Prior to complying with the provisions of this Section 4.09, but in
any event within 30 days following a Change of Control, the Company shall either
repay in full in cash all Indebtedness under the Credit Agreement (and terminate
all commitments thereunder) and all other Senior Debt the terms of which require
repayment upon a Change of Control or offer to repay in full in cash all
Indebtedness under the Credit Agreement (and terminate all commitments
thereunder) and all such other Senior Debt and to repay the Indebtedness owed to
(and terminate the commitments of) each lender which has accepted such offer or
obtain the requisite consents under the Credit Agreement and all such other
Senior Debt to permit the repurchase of the Notes.
(d) The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws or regulations are applicable in connection with the repurchase
of the Notes pursuant to a Change of Control Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
this Indenture, the Company shall comply with the applicable securities laws and
regulations and will not be deemed to have breached its obligations described in
this Indenture by virtue thereof.
(e) On the Change of Control Payment Date, the Company shall, to the
extent permitted by law, (1) accept for payment all Notes or portions thereof
properly tendered pursuant to the Change of Control Offer, (2) deposit with the
Paying Agent an amount equal to the aggregate Change of Control Payment in
respect of all Notes or portions thereof so tendered and (3) deliver, or cause
to be delivered, to the Trustee for cancellation the Notes so accepted together
with an Officers' Certificate stating that the aggregate principal amount of
Notes or portions thereof have been tendered to and purchased by the Company.
The Paying Agent shall promptly mail to each Holder of Notes so tendered the
Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each Holder
a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided, that each such new Note will be in a principal
amount of $1,000 or an integral multiple thereof. The Company will publicly
announce the results of the Change of Control Offer on or as soon as practicable
after the Change of Control Payment Date.
(f) Notwithstanding the foregoing, the Company shall not be required to
make a Change of Control Offer upon a Change of Control if a third party makes
the Change of Control Offer in the manner, at the times and otherwise in
compliance with the requirements set forth in this Section 4.09 applicable to a
Change of Control Offer made by the Company and purchases all Notes validly
tendered and not withdrawn under such Change of Control Offer.
(g) The Change of Control provisions described in this Section 4.09 will
be applicable whether or not any other provisions of this Indenture are
applicable.
SECTION 4.10. ASSET SALES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (i) the Company (or the
Restricted Subsidiary, as the case may be) receives consideration at the time of
such Asset Sale at least equal to the fair market value (evidenced by a Board
Resolution and as set forth in an Officers' Certificate delivered to the
Trustee) of the assets or Equity Interests issued or sold or otherwise disposed
of and (ii) at least 75% of the consideration therefor received by the Company
or such Restricted Subsidiary is in the form of cash; provided that the amount
of (x) any liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet) of the Company or
48
any Restricted Subsidiary (other than contingent liabilities and liabilities
that are by their terms subordinated to the Notes or any guarantee thereof) that
are assumed by the transferee of any such assets pursuant to a customary
novation agreement that releases the Company or such Restricted Subsidiary from
further liability and (y) any securities, notes or other obligations received by
the Company or any such Restricted Subsidiary from such transferee that are
immediately converted by the Company or such Restricted Subsidiary into cash (to
the extent of the cash received), shall be deemed to be cash for purposes of
this provision.
Within 360 days after the receipt of any Net Proceeds from an Asset Sale,
the Company may apply such Net Proceeds, at its option, (a) to permanently
reduce (or, in the case of letters of credit or Eurodollar loans under the
Credit Agreement, cash collateralize) any Senior Debt (and to correspondingly
reduce commitments with respect thereto in the case of revolving borrowings), or
(b) to the acquisition of a controlling interest in another business, the making
of a capital expenditure or the acquisition of other long-term assets, in each
case, in the same line of business as the Company was engaged in on the date of
this Indenture. Pending the final application of any such Net Proceeds, the
Company may invest such Net Proceeds in any manner that is not prohibited by
this Indenture. Any Net Proceeds from Asset Sales that are not applied or
invested as provided in the first sentence of this paragraph shall be deemed to
constitute "Excess Proceeds." When the aggregate amount of Excess Proceeds
exceeds $5.0 million, the Company shall, within ten Business Days thereafter, be
required to make an Asset Sale Offer to purchase the maximum principal amount of
Notes that may be purchased out of the Excess Proceeds, at an offer price in
cash in an amount equal to 100% of the principal amount thereof plus accrued and
unpaid interest and Liquidated Damages, if any, thereon, to the date of
purchase, in accordance with the procedures set forth in this Indenture. To the
extent that the aggregate amount of Notes tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Company may use any remaining Excess
Proceeds for general corporate purposes. If the aggregate principal amount of
Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis. Upon
completion of such offer to purchase, the amount of Excess Proceeds shall be
reset at zero.
The Company shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent such laws or regulations are applicable in connection with the repurchase
of the Notes pursuant to an Asset Sale Offer. To the extent that the provisions
of any securities laws or regulations conflict with the provisions of this
Indenture, the Company will comply with the applicable securities laws and
regulations and shall not be deemed to have breached its obligations described
in this Indenture by virtue thereof.
SECTION 4.11. LIMITATION ON RESTRICTED PAYMENTS.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other payment or distribution on account of the Company's Equity Interests
(including, without limitation, any payment in connection with any merger or
consolidation involving the Company) or to the direct or indirect holders of the
Company's or any of its Restricted Subsidiaries' Equity Interests in their
capacity as such (other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company or dividends or
distributions payable to the Company or any Restricted Subsidiary of the
Company); (ii) purchase, redeem or otherwise acquire or retire for value
(including without limitation, in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company or any direct or
indirect parent of the Company or other Affiliate of the Company (other than any
such Equity Interests owned by the Company
49
or any Wholly Owned Subsidiary of the Company); (iii) make any payment on or
with respect to, or purchase, redeem, defease or otherwise acquire or retire for
value any Indebtedness that is subordinated to the Notes more than six months
prior to any scheduled maturity, mandatory redemption, scheduled principal
repayment or sinking fund payment date (other than regularly scheduled payments
of interest); or (iv) make any Restricted Investment (all such payments and
other actions set forth in clauses (i) through (iv) above being collectively
referred to as "Restricted Payments"), unless, at the time of and after giving
effect to such Restricted Payment:
(a) no Default or Event of Default would have occurred and be
continuing or would occur as a consequence thereof; and
(b) the Company shall, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Fixed Charge Coverage Ratio test set forth in Section 4.12 hereof; and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted
Subsidiaries after the date of this Indenture (excluding Restricted
Payments permitted by clauses (ii), (iii), (iv), (v), (vii) and (viii) of
the next succeeding paragraph), is less than the sum of (i) 50% of the
Consolidated Net Income of the Company for the period (taken as one
accounting period) from the beginning of the first fiscal quarter
commencing after the date of this Indenture to the end of the Company's
most recently ended fiscal quarter for which internal financial statements
are available at the time of such Restricted Payment (or, if such
Consolidated Net Income for such period is a deficit, less 100% of such
deficit), plus (ii) 100% of the aggregate net cash proceeds received by the
Company from the issue or sale since the date of this Indenture of Equity
Interests of the Company (other than Disqualified Stock) or of Disqualified
Stock or debt securities of the Company that have been converted into such
Equity Interests (other than Equity Interests (or Disqualified Stock or
convertible debt securities) sold to a Subsidiary of the Company and other
than Disqualified Stock or convertible debt securities that have been
converted into Disqualified Stock), plus (iii) to the extent that any
Restricted Investment that was made after the date of this Indenture is
sold for cash or otherwise liquidated or repaid for cash, the lesser of (A)
the cash return of capital with respect to such Restricted Investment (less
the cost of disposition, if any) (but only to the extent not included in
subclause (i) of this clause (c)), and (B) the initial amount of such
Restricted Investment, plus (iv) $5.0 million.
The foregoing provisions shall not prohibit: (i) the payment of any
dividend within 60 days after the date of declaration thereof, if at said date
of declaration such payment would have complied with the provisions of this
Indenture; (ii) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness or Equity Interests of the Company
in exchange for, or out of the net cash proceeds of the substantially concurrent
sale (other than to a Subsidiary of the Company) of, other Equity Interests of
the Company (other than any Disqualified Stock); provided that the amount of any
such net cash proceeds that are utilized for any such redemption, repurchase,
retirement, defeasance or other acquisition shall be excluded from clause
(c)(ii) of the preceding paragraph; (iii) the defeasance, redemption, repurchase
or other acquisition of subordinated Indebtedness with the net cash proceeds
from an incurrence of Permitted Refinancing Indebtedness; (iv) the payment of
scheduled dividends on or the redemption, repurchase, retirement, defeasance or
other acquisition of, any Disqualified Stock issued after
50
the date hereof in compliance with the provisions of this Indenture; (v) after
March 29, 2001, the Permitted Warrant Put Payment; (vi) payments made with
respect to the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of the Company, the Parent, Sunderland or any
Subsidiary of the Company held by any member of the Company's (or any of its
Restricted Subsidiaries'), Parent's or Sunderland's management pursuant to any
management equity subscription agreement or stock option agreement in effect as
of the date of this Indenture (provided that the aggregate price paid for all
such repurchased, redeemed, acquired or retired Equity Interests shall not
exceed $1.0 million in any twelve-month period); (vii) distributions to Parent
in order to enable Parent to pay franchise taxes and other ordinary course
operating expenses in an amount not to exceed $25,000 in any twelve-month
period; and (viii) the application of the proceeds of the offering of the Notes
pursuant to the Offering Memorandum in the manner contemplated in the section of
the Offering Memorandum titled "Use of Proceeds"; provided, however, that at the
time of, and after giving effect to, any Restricted Payment permitted under
clauses (i) through (vii) no Default or Event of Default shall have occurred and
be continuing. In addition, payments and transactions permitted pursuant to
clauses (s) through (y) under Section 4.13 hereof shall not be deemed to be
Restricted Payments.
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such determination, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid in cash) in
the Subsidiary so designated shall be deemed to be Restricted Payments at the
time of such designation and shall reduce the amount available for Restricted
Payments under the first paragraph of this covenant. All such outstanding
Investments shall be deemed to constitute Investments in an amount equal to the
greatest of (x) the net book value of such Investments at the time of such
designation and (y) the fair market value of such Investments at the time of
such designation. Such designation shall only be permitted if such Restricted
Payment would be permitted at such time and if such Restricted Subsidiary
otherwise meets the definition of an Unrestricted Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Subsidiary, as the
case may be, pursuant to the Restricted Payment. Not later than the date of
making any Restricted Payment, the Company shall deliver to the Trustee an
Officers' Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this Section
4.11 were computed, together with a copy of any fairness opinion or appraisal
required by this Indenture.
SECTION 4.12. LIMITATION ON INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED
STOCK.
The Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, "incur") any Indebtedness (including Acquired Debt) and that the
Company shall not issue any Disqualified Stock and shall not permit any of its
Subsidiaries to issue any shares of preferred stock (other than to the Company
or a Restricted Subsidiary of the Company); provided, however, that the Company
may incur Indebtedness (including Acquired Debt) or issue shares of Disqualified
Stock if:
(i) the Fixed Charge Coverage Ratio for the Company's most recently
ended four full fiscal quarters for which internal financial statements are
available immediately preceding the date
51
on which such additional Indebtedness is incurred or such Disqualified
Stock is issued would have been at least 2.0 to 1, determined on a pro
forma basis (including a pro forma application of the net proceeds
therefrom), as if the additional Indebtedness had been incurred, or the
Disqualified Stock had been issued, as the case may be, at the beginning of
such four-quarter period; and
(ii) no Default or Event of Default shall have occurred and be
continuing at the time of, or would occur after giving effect on a pro
forma basis to, such incurrence or issuance.
The provisions of the first paragraph of this Section 4.12 shall not apply
to the incurrence of any of the following items of Indebtedness or the issuance
of preferred stock or Disqualified Stock (collectively, "Permitted Debt"):
(i) the incurrence by the Company and its Subsidiaries of Indebtedness
arising under or in connection with the Credit Agreement; provided that the
aggregate principal amount of all Indebtedness (with letters of credit
being deemed to have a principal amount equal to the maximum potential
liability of the Company and its Restricted Subsidiaries thereunder)
outstanding under the Credit Agreement after giving effect to such
incurrence, including all Permitted Refinancing Indebtedness incurred to
refund, refinance or replace any other Indebtedness incurred pursuant to
this clause (i), does not exceed an amount equal to the greater of $50.0
million or $30.0 million plus the Borrowing Base, in each case less the
aggregate amount of all Indebtedness permanently repaid with the Net
Proceeds of any Asset Sale;
(ii) the incurrence by the Company and its Subsidiaries of the
Existing Indebtedness;
(iii) the incurrence by the Company or any of its Restricted
Subsidiaries of Indebtedness represented by Capital Lease Obligations,
mortgage financings or purchase money obligations, in each case incurred
for the purpose of financing all or any part of the purchase price or cost
of construction or improvement of property, plant or equipment used in the
business of the Company or such Restricted Subsidiary, in an aggregate
principal amount not to exceed the principal amount of such Capital Lease
Obligations outstanding on the date hereof plus $15.0 million at any time
outstanding;
(iv) the incurrence by the Company or any of its Restricted
Subsidiaries of Acquired Debt in connection with the acquisition of assets
or a new Restricted Subsidiary; provided that such Acquired Debt was
incurred by the prior owner of such assets or such Restricted Subsidiary
prior to such acquisition by the Company or one of its Restricted
Subsidiaries and was not incurred in connection with, or in contemplation
of, such acquisition by the Company or one of its Restricted Subsidiaries;
and provided further that the aggregate principal amount, accreted value or
liquidation preference, as applicable, of such Acquired Debt, together with
any other outstanding Indebtedness or preferred stock incurred pursuant to
this clause (iv), does not exceed $5.0 million;
(v) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to refund, refinance or replace Indebtedness
that was permitted by this Indenture to be incurred;
(vi) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company and
any of its Wholly Owned
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Restricted Subsidiaries; provided, however, that (A) any subsequent
issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than the Company or a Wholly
Owned Restricted Subsidiary and (B) any sale or other transfer of any such
Indebtedness to a Person that is not either the Company or a Wholly Owned
Restricted Subsidiary (other than any pledge of such Indebtedness to the
lenders under the Credit Agreement) shall be deemed, in each case, to
constitute an incurrence of such Indebtedness by the Company or such
Restricted Subsidiary, as the case may be;
(vii) the incurrence by the Company or any of its Restricted
Subsidiaries of Hedging Obligations that are incurred for the purpose of
fixing or hedging interest rate risk with respect to any floating rate
Indebtedness that is permitted by the terms of this Indenture to be
outstanding, provided that the notional principal amount of any Hedging
Obligations does not significantly exceed the principal amount of
Indebtedness to which such agreement relates, or for the purpose of hedging
against fluctuations in currency values;
(viii) the Guarantee by the Company or any of the Restricted
Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of
the Company that was permitted to be incurred by another provision of this
covenant;
(ix) the issuance by the Company's Unrestricted Subsidiaries of
preferred stock or the incurrence by the Company's Unrestricted
Subsidiaries of Non-Recourse Debt, provided, however, that if any such
Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary,
such event shall be deemed to constitute an incurrence of Indebtedness by a
Restricted Subsidiary of the Company;
(x) the incurrence by the Company and its Restricted Subsidiaries of
Indebtedness represented by the $75,000,000 aggregate principal amount of
Notes issued pursuant to the Offering Memorandum and the Subsidiary
Guarantees and any Notes issued pursuant to Section 2.07 hereof; and
(xi) the incurrence by the Company or any of its Restricted
Subsidiaries of additional Indebtedness in an aggregate principal amount
(or accreted value, as applicable) or the issuance of preferred stock with
an aggregate liquidation preference at any time outstanding, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or replace
any other Indebtedness incurred pursuant to this clause (xi), not to exceed
$10.0 million.
For purposes of determining compliance with this covenant, in the event
that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Debt described in clauses (i) through (xi) above or is
entitled to be incurred pursuant to the first paragraph of this covenant, the
Company shall, in its sole discretion, classify or reclassify such item of
Indebtedness in any manner that complies with this covenant and such item of
Indebtedness shall be treated as having been incurred pursuant to only one of
such clauses or pursuant to the first paragraph hereof. Accrual of interest, the
accretion of accreted value and the payment of interest in the form of
additional Indebtedness shall not be deemed to be an incurrence of Indebtedness
for purposes of this covenant.
SECTION 4.13 TRANSACTIONS WITH AFFILIATES.
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The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless
(i) such Affiliate Transaction is on terms that are no less favorable to the
Company or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person and (ii) the Company delivers to the Trustee
(a) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $1.0 million, a
Board Resolution and an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (i) above and that such Affiliate Transaction
has been approved by a majority of the Board of Directors and (b) with respect
to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $5.0 million, an opinion as to
the fairness to the Holders of such Affiliate Transaction from a financial point
of view issued by an accounting, appraisal or investment banking firm of
national standing; provided that (r) the application of the proceeds of the
offering of the Notes pursuant to the Offering Memorandum and the transactions
entered into in connection therewith in the manner contemplated in the section
of the Offering Memorandum titled "Use of Proceeds", (s) capital contributions,
advances, loans or other investments made by Parent to the Company or any of its
Restricted Subsidiaries, (t) (I) payments under the Management Agreement in an
amount not to exceed $300,000 in any twelve-month period and (II) after the
first anniversary of the original issuance of the Notes, additional payments
under the Management Agreement in an amount not to exceed $700,000 in any
twelve-month period, provided that the Company's Fixed Charge Coverage Ratio for
the Company's most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which such
payment under the Management Agreement is made, after giving pro forma effect to
such payment, is equal to or greater than 2.25 to 1 (in each case, plus
reasonable expenses incurred in connection with and reimbursable under the
Management Agreement), (u) payments by the Company or any of its Restricted
Subsidiaries to Mentmore and/or its Affiliates made for any financial advisory,
financing, underwriting or placement services or in respect of other investment
banking activities, including, without limitation, in connection with
acquisitions or divestitures, which payments are approved by a majority of the
Board of Directors of the Company in good faith, (v) payments under tax sharing
agreements to the extent such payments do not otherwise exceed the tax liability
the Company would have had were it not part of a consolidated group, (w) any
employment agreement, compensation agreement or employee benefit arrangement
entered into by the Company or any of its Restricted Subsidiaries in the
ordinary course of business, (x) transactions between or among Parent, the
Company and/or its Restricted Subsidiaries, (y) any other payment or
reimbursement of reasonable and customary fees and expenses incurred by an
Affiliate for services rendered to the Company or any of its Subsidiaries not to
exceed $100,000 in any twelve-month period (without duplication for any amounts
paid pursuant to any other clause of this covenant) and (z) Restricted Payments
that are permitted under Section 4.11 hereof, in each case, shall not be deemed
Affiliate Transactions.
SECTION 4.14 DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (i)(a) pay dividends or make any other distributions to
the Company or any of its Restricted Subsidiaries (1) on its Capital Stock or
(2) with respect to any other interest or participation in, or measured by, its
profits, or (b) pay any Indebtedness owed to the Company
54
or any of its Restricted Subsidiaries, (ii) make loans or advances to the
Company or any of its Restricted Subsidiaries or (iii) transfer any of its
properties or assets to the Company or any of its Restricted Subsidiaries,
except for such encumbrances or restrictions existing under or by reason of (a)
Existing Indebtedness as in effect on the date of this Indenture, (b) the Credit
Agreement as in effect as of the date of this Indenture, and any amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacements or refinancings thereof, provided that such amendments,
modifications, restatements, renewals, increases, supplements, refundings,
replacement or refinancings are no more restrictive on a whole with respect to
such dividend and other payment restrictions than those contained in the Credit
Agreement as in effect on the date of this Indenture, (c) this Indenture and the
Notes, (d) applicable law, (e) any instrument governing Indebtedness or Capital
Stock of a Person acquired by the Company or any of its Restricted Subsidiaries
as in effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of such
acquisition), which encumbrance or restriction is not applicable to any Person,
or the properties or assets of any Person, other than the Person, or the
property or assets of the Person (including any Subsidiary of the Person), so
acquired, provided that, in the case of Indebtedness, such Indebtedness was
permitted by the terms of this Indenture to be incurred, (f) by reason of
customary non-assignment and net worth provisions in leases or other agreements
entered into in the ordinary course of business and consistent with past
practices, (g) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the nature described in clause
(iii) above on the property so acquired, (h) Permitted Refinancing Indebtedness,
provided that the restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are no more restrictive than those contained
in the agreements governing the Indebtedness being refinanced, (i) customary
restrictions in Capital Lease Obligations, security agreements or mortgages
securing Indebtedness of the Company or a Restricted Subsidiary to the extent
such restrictions restrict the transfer of the property subject to such Capital
Lease Obligations, security agreements or mortgages, (j) customary restrictions
with respect to an agreement that has been entered into for the sale or
disposition of assets or Capital Stock held by the Company or any Restricted
Subsidiary, (k) customary restrictions contained in any agreements or
documentation governing Indebtedness or preferred stock issued pursuant to
clause (xi) of Section 4.12 hereof and (l) the Warrant Agreement and the
Shareholders Agreement.
SECTION 4.15. LIMITATION ON ISSUANCES AND SALES OF CAPITAL STOCK OF WHOLLY OWNED
RESTRICTED SUBSIDIARIES.
The Company (i) shall not, and shall not permit any Wholly Owned
Restricted Subsidiary of the Company to, issue, transfer, convey, sell, lease or
otherwise dispose of any Capital Stock of any Wholly Owned Restricted Subsidiary
of the Company to any Person (other than the Company or a Wholly Owned
Restricted Subsidiary of the Company), unless (a) such issuance, transfer,
conveyance, sale, lease or other disposition is of all the Capital Stock of such
Wholly Owned Restricted Subsidiary and (b) the Net Proceeds from such transfer,
conveyance, sale, lease or other disposition are applied in accordance with
Section 4.10 hereof and (ii) shall not permit any Wholly Owned Restricted
Subsidiary of the Company to issue any of its Equity Interests (other than, if
necessary, shares of its Capital Stock constituting directors' qualifying
shares) to any Person other than to the Company or a Wholly Owned Restricted
Subsidiary of the Company.
SECTION 4.16. LIMITATION ON LAYERING DEBT.
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The Company shall not, incur, create, issue, assume, Guarantee or
otherwise become liable for any Indebtedness that is by its terms subordinate or
junior in right of payment to any Senior Debt and senior in any respect in right
of payment to the Notes and the Guarantors shall not incur, create, issue,
assume, Guarantee or otherwise become liable for any Indebtedness that is by its
terms subordinate or junior in right of payment to any Senior Debt and senior in
any respect in right of payment to the Subsidiary Guarantees.
SECTION 4.17. ADDITIONAL SUBSIDIARY GUARANTEES.
If the Company or any of its Subsidiaries shall acquire or create another
Subsidiary after the date hereof, then such newly acquired or created Subsidiary
(at any time such Subsidiary has net assets or stock holder's equity in excess
of $50,000) shall execute a Subsidiary Guarantee and deliver an Opinion of
Counsel, in accordance with the terms of this Indenture; provided, however, that
all Subsidiaries that have been properly designated as Unrestricted Subsidiaries
in accordance with this Indenture shall not be subject to the preceding clause
for so long as they continue to constitute Unrestricted Subsidiaries.
SECTION 4.18. PAYMENTS FOR CONSENT.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any Holder of any Notes for or as an inducement
to any consent, waiver or amendment of any of the terms or provisions of this
Indenture or the Notes unless such consideration is offered to be paid or is
paid to all Holders of the Notes that consent, waive or agree to amend in the
time frame set forth in the solicitation documents relating to such consent,
waiver or agreement.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ALL OR SUBSTANTIALLY ALL ASSETS.
The Company shall not consolidate or merge with or into or wind up into
(whether or not the Company is the surviving corporation), or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of its
properties or assets in one or more related transactions to, any Person unless:
(i) the Company is the surviving corporation or the Person formed by or
surviving any such consolidation or merger (if other than the Company)
or to which such sale, assignment, transfer, lease, conveyance or
other disposition will have been made is a corporation organized or
existing under the laws of the United States, any state thereof or the
District of Columbia, (the Company or such Person, as the case may be,
being herein called the "Successor Company");
(ii) the Successor Company (if other than the Company) assumes all the
obligations of the Company under this Indenture and the Notes pursuant
to a supplemental indenture or other documents or instruments in form
reasonably satisfactory to the Trustee;
(iii) immediately after such transaction no Default or Event of Default
exists;
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(iv) except in the case of a merger of the Company with or into a Wholly
Owned Subsidiary of the Company, the Company or the Person formed by
or surviving any such consolidation or merger (if other than the
Company), or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made (A) shall have
Consolidated Net Worth immediately after the transaction equal to or
greater than the Consolidated Net Worth of the Company immediately
preceding the transaction and (B) shall, at the time of such
transaction and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable
four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Fixed Charge Coverage Ratio
test set forth in Section 4.12 hereof; and
(v) the Company has delivered to the Trustee an Officers' Certificate
stating that such consolidation, merger, sale, assignment, transfer,
lease, conveyance or other disposition and such supplemental indenture
complies with this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
Upon any consolidation or merger, or any sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of the assets
of the Company in accordance with Section 5.01 hereof, the successor corporation
formed by such consolidation or into or with which the Company is merged or to
which such sale, assignment, transfer, lease, conveyance or other disposition is
made shall succeed to, and be substituted for (so that from and after the date
of such consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Indenture referring to the "Company" shall refer instead to
the successor corporation and not to the Company), and may exercise every right
and power of the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; provided, however, that
the predecessor Company shall not be relieved from the obligation to pay the
principal of and interest on the Senior Notes except in the case of a sale of
all of the Company's assets that meets the requirements of Section 5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT AND NOTICE THEREOF.
Each of the following constitutes an "Event of Default":
(a) default for 30 days or more in the payment when due of interest on, or
Liquidated Damages, if any, with respect to the Notes (whether or not
prohibited by Article 10 hereof);
(b) default in payment when due (whether payable at maturity, upon
redemption or otherwise) of the principal of or premium, if any, on
the Notes (whether or not prohibited by Article 10 hereof);
(c) failure by the Company to comply with Sections 4.09, 4.10 and 5.01
hereof;
57
(d) failure by the Company for 30 days after receipt of written notice to
comply with any of its other agreements in this Indenture or the
Notes;
(e) default under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Restricted Subsidiaries) whether such
Indebtedness or guarantee now exists, or is created after the date of
this Indenture, which default (1) is caused by the failure to pay
principal of or premium, if any, or interest on such Indebtedness
prior to the expiration of the grace period provided in such
Indebtedness on the date of such default (a "Payment Default") at its
stated final maturity (after giving effect to any applicable grace
periods) or (2) results in the acceleration of such Indebtedness prior
to its express maturity and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any other
such Indebtedness under which there has been a Payment Default or the
maturity of which has been so accelerated, aggregates $5.0 million or
more;
(f) failure by the Company or any of its Restricted Subsidiaries to pay
final and non-appealable judgments aggregating in excess of $5.0
million, which judgments are not paid, discharged or stayed for a
period of 60 days;
(g) the Company or any Restricted Subsidiary that is a Significant
Subsidiary pursuant to or within the meaning of any Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in an
involuntary case in which it is the debtor,
(iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property,
(iv) makes a general assignment for the benefit of its creditors, or
(v) admits in writing its inability generally to pay its debts as the
same become due;
(h) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(i) is for relief against the Company or any Restricted Subsidiary
that is a Significant Subsidiary in an involuntary case in which
it is the debtor,
(ii) appoints a Custodian of the Company or any Restricted Subsidiary
that is a Significant Subsidiary or for all or substantially all
of the property of the Company or any Restricted Subsidiary that
is a Significant Subsidiary; or
(iii) orders the liquidation of the Company or any Restricted
Subsidiary that is a Significant Subsidiary,
58
and the order or decree contemplated in clauses (i), (ii) or (iii) of
this clause (h), remains unstayed and in effect for 60 consecutive
days; or
(i) except as permitted by this Indenture, any Subsidiary Guarantee
shall be held in any judicial proceeding to be unenforceable or
invalid and such judgment has become final or non-appealable or
shall cease for any other reason to be in full force and effect
or any Guarantor, or any Person acting on behalf of any Guarantor
shall deny or disaffirm its obligations under its Subsidiary
Guarantee.
A Default under Section 6.01(d) is not an Event of Default until the
Trustee notifies the Company, or any Holder notifies the Company and the
Trustee, of the Default and the Company does not cure the Default within 30 days
after receipt of the notice. The notice must specify the Default, demand that it
be remedied and state that the notice is a "Notice of Default."
SECTION 6.02. ACCELERATION OF MATURITY; RESCISSION.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately by notice in writing to
the Company and the Trustee; provided that so long as any Indebtedness permitted
to be incurred pursuant to the Credit Agreement shall be outstanding, such
acceleration shall not be effective until the earlier of (i) an acceleration of
any such Indebtedness under the Credit Agreement or (ii) five Business Days
after receipt by the Company and the Agent of written notice of such
acceleration.
Notwithstanding the foregoing, in the case of an Event of Default
specified in clause (g) or (h) of Section 6.01 occurring with respect to the
Company, any Significant Subsidiary that is a Restricted Subsidiary or any group
of Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary, all outstanding Notes will become due and payable without further
action or notice. Holders of the Notes may not enforce this Indenture or the
Notes except as provided in this Indenture. The Trustee may withhold from
Holders of the Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in their interest.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of principal, premium, if any, and
interest on the Notes or to enforce the performance of any provision of the
Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or omission
by the Trustee or any Holder of a Note in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
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Holders of not less than a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may on behalf of the Holders of
all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of, premium, if any, or interest on, any such Note held
by a non-consenting Holder; provided, however, that the Holders of at least a
majority in aggregate principal amount of the Notes then outstanding may rescind
an acceleration and its consequences, including any related payment default that
resulted from such acceleration. Upon any such waiver, such Default shall cease
to exist, and any Event of Default arising therefrom shall be deemed to have
been cured for every purpose of this Indenture; but no such waiver shall extend
to any subsequent or other Default or impair any right consequent thereon.
SECTION 6.05. CONTROL BY MAJORITY.
The Holders of a majority in aggregate principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture that the Trustee determines
may be unduly prejudicial to the rights of other Holders of Notes or that may
involve the Trustee in personal liability. The Trustee may take any other action
which it deems proper which is not inconsistent with any such direction.
SECTION 6.06. LIMITATION ON SUITS.
No Holder of a Note will have any right to institute any proceeding with
respect to this Indenture or for any remedy hereunder, unless (i) such Holder
shall have previously given to the Trustee written notice of a continuing Event
of Default with respect to the Notes, (ii) the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding shall have made written
request to the Trustee to institute such proceeding and, if requested by the
Trustee, provided reasonable indemnity to the Trustee, with respect to such
proceeding and (iii) the Trustee shall not have received from the Holders of a
majority in aggregate principal amount of the Notes then outstanding a direction
inconsistent with such request and shall have failed to institute such
proceeding within 60 days.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal, premium, if any, and interest
on any Note, on or after the respective due dates expressed in any Note, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a) or (b) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Company or any Guarantor for the whole
amount of principal of, premium, if any, and interest remaining unpaid on the
Notes and interest on overdue principal and, to the extent lawful, interest and
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due to
the Trustee under Section 7.07 hereof.
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SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, as administrative expenses associated with any such proceeding and
in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section 7.07
hereof. To the extent that the payment of any such compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.07 hereof out of the estate in any such
proceeding, shall be denied for any reason, payment of the same shall be secured
by a Lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other properties that the Holders may be entitled to
receive in such proceeding whether in liquidation or under any plan of
reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it shall pay
out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the costs
and expenses of collection;
Second: to holders of Senior Debt of the Company and the Guarantors to the
extent required by Article 10 hereof or any Subsidiary Guarantee;
Third: to Holders of Notes for amounts due and unpaid on the Notes for
principal, premium, if any, and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Notes for principal, premium and, if any, and interest, respectively;
Fourth: without duplication, to the Holders for any other Obligations
owing to the Holders under this Indenture and the Notes; and
Fifth: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
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SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as a Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Trustee, a suit by a Holder of a
Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in
principal amount of the then outstanding Notes.
SECTION 6.12. WAIVER OF STAY, EXTENSION OF USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture,
provided that the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
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(i) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b), and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture unless
the Holders shall have offered to the Trustee security and indemnity
satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or documents, but the Trustee, in its discretion may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company or any Guaranteeing Subsidiary, personally or by agent or
attorney.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
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(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company or any Guarantor shall be
sufficient if signed by an Officer of the Company or such Guarantor. A
permissive right granted to the Trustee hereunder shall not be deemed an
obligation to act.
(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
(g) The Trustee shall not be charged with knowledge of any Default or
Event of Default unless either (i) a Responsible Officer of the Trustee shall
have actual knowledge of such Default or Event of Default or (ii) written notice
of such Default or Event of Default shall have been given to the Trustee by the
Company or any Holder.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee, in its individual or any other capacity, may become the owner
or pledgee of Notes and may otherwise deal with the Company or any Affiliate of
the Company with the same rights it would have if it were not Trustee. However,
in the event that the Trustee acquires any conflicting interest it must
eliminate such conflict within 90 days, apply to the SEC for permission to
continue as trustee or resign. Any Agent may do the same with like rights and
duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the direction of the Company under any provision of
this Indenture, it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of, premium, if any, or
interest on any Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, and for so long as Notes remain outstanding, the Trustee
shall mail to the Holders of the Notes a brief
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report dated as of such reporting date that complies with TIA ss. 313(a) (but if
no event described in TIA ss. 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA ss. 313(b)(2). The Trustee shall also transmit by mail all
reports as required by TIA ss. 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the SEC and each stock exchange on
which the Notes are listed in accordance with TIA ss. 313(d). The Company shall
promptly notify the Trustee when the Notes are listed on any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee, from time to time as may be agreed
upon between them, reasonable compensation for its acceptance of this Indenture
and services hereunder. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee promptly upon request for all reasonable disbursements,
advances and expenses incurred or made by it in addition to the compensation for
its services. Such expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee against any and all losses,
liabilities or expenses (other than taxes based on the income of the Trustee)
incurred by it arising out of or in connection with the acceptance or
administration of its duties under this Indenture, including the costs and
expenses of enforcing this Indenture against the Company (including this Section
7.07) and defending itself against any claim (whether asserted by the Company or
any Holder or any other Person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder, except to the extent any
such loss, liability or expense may be attributable to its negligence or bad
faith. The Trustee shall notify the Company promptly of any claim for which it
may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee shall cooperate in the defense. The Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses of
such counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
The obligations of the Company under this Section 7.07 shall survive the
resignation or removal of the Trustee and the satisfaction and discharge of this
Indenture.
To secure the Company's payment obligations in this Section, the Trustee
shall have a Lien prior to the Notes on all money or property held or collected
by the Trustee, except that held in trust to pay principal and interest on
particular Notes. Such Lien shall survive the satisfaction and discharge of this
Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA ss. 313(b)(2) to the
extent applicable.
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SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section 7.08.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof,
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder of a Note who has been
a Holder of a Note for at least six months, fails to comply with Section 7.10,
such Holder of a Note may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders of the Notes. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section
7.08, the Company's obligations under Section 7.07 hereof shall continue for the
benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business (including the trust created
by this Indenture) to, another corporation, the successor corporation without
any further act shall be the successor Trustee.
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SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has, or is a wholly owned subsidiary of a bank holding
company that has, a combined capital and surplus of at least $100 million as set
forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA ss. 310(a)(1), (2) and (5). The Trustee is subject to TIA ss. 310(b).
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee is subject to TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). A Trustee who has resigned or been
removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The Company may, at its option by Board Resolution, at any time, with
respect to the Notes, elect to have either Section 8.02 hereof or Section 8.03
hereof be applied to all Notes and Subsidiary Guarantees then outstanding upon
compliance with the conditions set forth in this Article 8.
SECTION 8.02.
LEGAL DEFEASANCE AND DISCHARGE.
Upon the Company's exercise under Section 8.01 of the option applicable to
this Section 8.02, the Company and the Guarantors, if any, shall be deemed to
have been discharged from their respective obligations with respect to all Notes
and Subsidiary Guarantees then outstanding on the date the conditions set forth
below are satisfied (hereinafter, "Legal Defeasance"). For this purpose, such
defeasance means that the Company and any Guarantor shall be deemed to have paid
and discharged the entire indebtedness represented by the Notes and any
Subsidiary Guarantees outstanding, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.05 and the other Sections of
this Indenture referred to in (A) and (B) below, and to have satisfied all its
other obligations under such Notes, Subsidiary Guarantees and this Indenture
(and the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (A) the rights of
Holders of Notes then outstanding to receive solely from the trust fund
described in Section 8.04 and as more fully set forth in such Section, payments
in respect of the principal of (and premium, if any), interest and Liquidated
Damages, if any, on such Notes when such payments are due, or on the Redemption
Date, as the case may be, (B) the Company's obligations with respect to such
Notes under Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.10, 4.02 and 4.03, (C) the
rights, powers, trusts, duties, indemnities and immunities of the Trustee
hereunder and the Company's obligations in connection therewith and (D) this
Article 8. Subject to compliance with this
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Article 8, the Company may exercise its option under this Section 8.02
notwithstanding the prior exercise of its option under Section 8.03 with respect
to the Notes.
SECTION 8.03. COVENANT DEFEASANCE.
Upon the Company's exercise under Section 8.01 of the option applicable to
this Section 8.03, the Company and each Guarantor shall be released from its
obligations under the covenants contained in Article 5 and in Sections 4.04,
4.06, 4.07, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17 and 4.18 with
respect to the outstanding Notes and Subsidiary Guarantees, if any, on and after
the date the conditions set forth below are satisfied (hereinafter, "Covenant
Defeasance"), and the Notes and the Subsidiary Guarantees, if any, shall
thereafter be deemed to be not "outstanding" for the purposes of any direction,
waiver, consent or declaration or Act of Holders (and the consequences of any
thereof) in connection with such covenants, but shall continue to be deemed
"outstanding" for all other purposes hereunder (it being understood that such
Notes and Subsidiary Guarantees, if any, shall not be deemed outstanding for
financial accounting purposes). For this purpose, such covenant defeasance means
that, with respect to the outstanding Notes and Subsidiary Guarantees, if any,
the Company and any Guarantor may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
covenant, whether directly or indirectly, by reason of any reference elsewhere
herein to any such covenant or by reason of any reference in any such covenant
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under Section
6.01(c) or Section 6.01(d), but, except as specified above, the remainder of
this Indenture and such Notes and Subsidiary Guarantees, if any, shall be
unaffected thereby. In addition, upon the Company's exercise under Section 8.01
of the option applicable to Section 8.03, Sections 6.01(c) through 6.01(f) and
Section 6.01(i) shall not constitute Events of Default.
SECTION 8.04. CONDITIONS TO LEGAL DEFEASANCE OR COVENANT DEFEASANCE.
The following shall be the conditions to application of either Section
8.02 or Section 8.03 to the outstanding Notes and Subsidiary Guarantees:
(i) the Company must irrevocably deposit with the Trustee, in trust, for
the benefit of the Holders of the Notes and without retaining any legal interest
in the corpus of such trust, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient, in
the opinion of a nationally recognized firm of independent public accountants,
to pay the principal of, premium, if any, and interest and Liquidated Damages,
if any, due on the outstanding Notes on the Stated Maturity thereof or on the
applicable Redemption Date, as the case may be, and the Company must specify
whether the Notes are being defeased to maturity or to a particular redemption
date;
(ii) in the case of Legal Defeasance, the Company shall have delivered to
the Trustee an Opinion of Counsel in the United States reasonably acceptable to
the Trustee confirming that, subject to customary assumptions and exclusions,
(A) the Company has received from, or there has been published by, the United
States Internal Revenue Service a ruling or (B) since the date of this
Indenture, there has been a change in the applicable U.S. federal income tax
law, in either case to the effect that, and based thereon such Opinion of
Counsel in the United States shall confirm that, subject to customary
assumptions and exclusions, the Holders of the outstanding Notes will not
recognize income, gain or loss for U.S. federal income tax purposes as a result
of such Legal Defeasance and will be subject to U.S. federal
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income tax on the same amounts, in the same manner and at the same times as
would have been the case if such Legal Defeasance had not occurred;
(iii) in the case of Covenant Defeasance, the Company shall have delivered
to the Trustee an Opinion of Counsel in the United States reasonably acceptable
to the Trustee confirming that, subject to customary assumptions and exclusions,
the Holders of the outstanding Notes will not recognize income, gain or loss for
U.S. federal income tax purposes as a result of such Covenant Defeasance and
will be subject to such tax on the same amounts, in the same manner and at the
same times as would have been the case if such Covenant Defeasance had not
occurred;
(iv) no Default or Event of Default shall have occurred and be continuing
on the date of such deposit (other than a Default or Event of Default resulting
from the borrowing of funds to be applied to such deposit) or, insofar as Events
of Default set forth in Sections 6.01(g) and (h), at any time in the period
ending on the 91st day after the date of such deposit (it being understood that
this condition shall not be satisfied until the expiration of such period);
(v) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture) to which the Company or any of its
Subsidiaries is a party or by which the Company or any of its Subsidiaries is
bound;
(vi) the Company shall have delivered to the Trustee an Opinion of Counsel
to the effect that, as of the date of such opinion and subject to customary
assumptions and exclusions (which assumptions and exclusions shall not relate to
the operation of Section 547 of the United States Bankruptcy Code or any
analogous laws of the state governing the provisions of this Indenture)
following the deposit the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally under any applicable U.S. federal or state law, and
that the Trustee has a perfected security interest in such trust funds for the
ratable benefit of the Holders;
(vii) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the intent
of preferring the Holders of Notes over the other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding any creditors of
the Company or others;
(viii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel in the United States (which Opinion of
Counsel may be subject to customary assumptions and exclusions) each stating
that all conditions precedent provided for or relating to the Legal Defeasance
or the Covenant Defeasance, as the case may be, have been complied with; and
(ix) the Trustee shall have received such other documents and assurances
as the Trustee shall reasonably require.
SECTION 8.05. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN
TRUST; OTHER MISCELLANEOUS PROVISIONS.
Subject to the provisions of the last paragraph of Section 4.03, all money
and Government Securities (including the proceeds thereof) deposited with the
Trustee (or other qualifying trustee,
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collectively for purposes of this Section 8.05, the "Trustee") pursuant to
Section 8.04 in respect of the Notes then outstanding shall be held in trust and
applied by the Trustee, in accordance with the provisions of such Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal (and premium, if any) and interest, but such
money need not be segregated from other funds except to the extent required by
law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or Government Securities
deposited pursuant to Section 8.04 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the Notes then outstanding.
Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
money or Government Securities held by it as provided in Section 8.04 which, in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee (which may
be the opinion delivered under Section 8.04(i)), are in excess of the amount
thereof which would then be required to be deposited to effect an equivalent
Legal Defeasance or Covenant Defeasance.
SECTION 8.06. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any United States
dollars or Government Securities in accordance with Section 8.02 or 8.03, as the
case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the Company's and any Guarantor's obligations under this Indenture, the Notes
and the Subsidiary Guarantees, if any, shall be revived and reinstated as though
no deposit had occurred pursuant to Section 8.02 or 8.03, as the case may be,
until such time as the Trustee or Paying Agent is permitted to apply all such
money in accordance with Section 8.02 or 8.03, as the case may be; provided,
however, that if the Company or any Guarantor makes any payment of principal of
(or premium, if any) or interest on any Note following the reinstatement of its
obligations, the Company or any Guarantor shall be subrogated to the rights of
the Holders of such Notes to receive such payment from the money held by the
Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 of this Indenture, the Company and the
Trustee may amend or supplement this Indenture or Notes, and with respect to a
Subsidiary Guarantee, the Guarantor under such Subsidiary Guarantee and the
Trustee may amend or supplement such Subsidiary Guarantee, without the consent
of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
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(c) to comply with Article 5 hereof;
(d) to provide for the assumption of the Company's or any Guarantor's
obligations to the Holders of the Notes;
(e) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely
affect the legal rights hereunder of any such Holder;
(f) to add covenants for the benefit of the Holders or to surrender any
right or power conferred upon the Company;
(g) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA; or
(h) to add a Guarantor under this Indenture.
Upon the written request of the Company accompanied by resolutions of the
Board of Directors authorizing the execution of any such amended or supplemental
Indenture, and upon receipt by the Trustee of an Officers' Certificate and an
Opinion of Counsel in compliance with Section 1.05 hereof, the Trustee shall
join with the Company and the Guarantors, if any, in the execution of any
amended or supplemental Indenture authorized or permitted by the terms of this
Indenture and to make any further appropriate agreements and stipulations that
may be therein contained, but the Trustee shall not be obligated to enter into
such amended or supplemental Indenture that affects its own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
Except as provided below in this Section 9.02, this Indenture, the Notes
and a Subsidiary Guarantee issued hereunder may be amended or supplemented with
the consent of the Holders of at least a majority in principal amount of the
Notes then outstanding (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, the
Notes), and, subject to Sections 6.02, 6.04 and 6.07 hereof, any existing
default or compliance with any provision of this Indenture, the Notes or the
Subsidiary Guarantees may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for the Notes).
Upon the request of the Company accompanied by resolutions of the Board of
Directors authorizing the execution of any such amended or supplemental
Indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of an Officers' Certificate and an Opinion of Counsel in compliance
with Section 1.05 hereof, the Trustee shall join with the Company and any
Guarantor in the execution of such amended or supplemental Indenture unless such
amended or supplemental Indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may in
its discretion, but shall not be obligated to, enter into such amended or
supplemental Indenture.
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The consent of the Holders is not necessary under this Section 9.02 to
approve the particular form of any proposed amendment. It is sufficient if such
consent approves the substance of the proposed amendment.
After an amendment, supplement or waiver under this Section 9.02 becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in aggregate principal amount of the Notes then outstanding may waive
compliance in a particular instance by the Company with any provision of this
Indenture, the Notes or the Subsidiary Guarantees, if any. However, without the
consent of each Holder affected, an amendment or waiver may not (with respect to
any Note or Subsidiary Guarantee held by a non-consenting Holder):
(i) reduce the principal amount of the Notes whose Holders must consent
to an amendment, supplement or waiver;
(ii) reduce the principal of or change the fixed maturity of any Note or
alter the provisions with respect to the redemption of the Notes
(other than provisions relating to the covenants described under
Sections 4.09 and 4.10);
(iii) reduce the rate of or change the time for payment of interest on any
Note;
(iv) waive a Default or Event of Default in the payment of principal of,
premium, if any, or interest on the Notes (except a rescission of
acceleration of the Notes by the Holders of at least a majority in
aggregate principal amount of such Notes and a waiver of the payment
default that resulted from such acceleration);
(v) make any Note payable in money other than that stated in such Notes;
(vi) make any change in Section 6.04 or 6.07;
(vii) waive a redemption payment with respect to any Note (other than a
payment required by Section 4.09 or Section 4.10);
(viii) make any change in Article 10 or the subordination provisions of
any Subsidiary Guarantee that would adversely affect the legal
rights of the Holders of the Notes; or
(ix) make any change in the foregoing amendment and waiver provisions of
this Article 9.
SECTION 9.03. COMPLIANCE WITH TIA.
Every amendment or supplement to this Indenture or the Notes shall be set
forth in an amended or supplemental Indenture that complies with the TIA as then
in effect.
SECTION 9.04.
REVOCATION AND EFFECT OF CONSENTS.
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Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may, but shall not be required to, place an appropriate
notation about an amendment, supplement or waiver on any Note thereafter
authenticated. The Company in exchange for all Notes may issue and the Trustee
shall authenticate new Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The Company
may not sign an amendment or supplemental Indenture until the Board of Directors
approves it. In signing or refusing to sign any amended or supplemental
indenture the Trustee shall be entitled to receive and (subject to Section 7.01)
shall be fully protected in relying upon an Officers' Certificate and an Opinion
of Counsel stating that the execution of such amended or supplemental indenture
is authorized or permitted by this Indenture, that it is not inconsistent
herewith, and that it will be valid and binding upon the Company and the
Guarantors, if any, in accordance with its terms.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Company agrees, and each Holder by accepting a Note agrees, that the
payment (by set-off or otherwise) of principal of, premium, if any and interest
and Liquidated Damages, if any, on the Notes (including with respect to any
repurchases of the Notes) shall be subordinated in right of payment, as set
forth in this Article 10, to the prior payment in full in cash, or at the option
of the holders of Senior Debt, in Cash Equivalents of all obligations in respect
of Senior Debt, whether outstanding on the date hereof or thereafter incurred.
SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY.
Upon any distribution to creditors of the Company upon any total or
partial liquidation, dissolution or winding up of the Company or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or its property, whether voluntary or involuntary, an
assignment for the benefit of creditors or any marshalling of the Company's
assets and liabilities, the holders of Senior
73
Debt will be entitled to receive payment in full in cash, or at the option of
the holders of Senior Debt, in Cash Equivalents, of all Obligations due or to
become due in respect of such Senior Debt (including interest after the
commencement of any such proceeding at the rate specified in the applicable
Senior Debt) before the Holders of Notes will be entitled to receive any payment
of any kind or character with respect to the Notes, and until all Obligations
with respect to Senior Debt are paid in full in cash, or at the option of the
holders of Senior Debt, in Cash Equivalents, any distribution of any kind or
character to which the Holders of Notes would be entitled shall be made to the
holders of Senior Debt (except that Holders of Notes may receive Permitted
Junior Securities and payments made from the trust described in Article 8
hereof).
SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT.
The Company shall not make, directly or indirectly, (x) any payment upon
or in respect of the Notes (except in Permitted Junior Securities or from the
trust described in Article 8 hereof) or (y) acquire any of the Notes for cash or
property or otherwise or make any other distribution with respect to the Notes
if:
(i) any default occurs and is continuing (beyond any applicable grace
period) in the payment when due, whether at maturity, upon any
redemption, by declaration or otherwise, of any principal of,
interest on, unpaid drawings for letters of credit issued in respect
of, or regularly accruing fees with respect to, any Designated
Senior Debt or
(ii) any other default occurs and is continuing with respect to
Designated Senior Debt that permits holders of the Designated Senior
Debt as to which such default relates to accelerate its maturity and
the Trustee receives a notice of such default (a "Payment Blockage
Notice" ) from the Company or the holders of any Designated Senior
Debt.
The Company may and shall resume payments on the Notes:
(a) in the case of a payment default, upon the date on which such
default is cured or waived and
(b) in case of a nonpayment default, the earlier of the date on which
such nonpayment default is cured or waived or 179 days after the
date on which the applicable Payment Blockage Notice is received,
unless the maturity of any Designated Senior Debt has been
accelerated.
No new period of payment blockage may be commenced unless and until (i)
360 days have elapsed since the effectiveness of the immediately prior Payment
Blockage Notice and (ii) all scheduled payments of principal, premium, if any,
and interest and Liquidated Damages, if any, on the Notes that have come due
have been paid in full in cash. No nonpayment default that existed or was
continuing on the date of delivery of any Payment Blockage Notice to the Trustee
shall be, or be made, the basis for a subsequent Payment Blockage Notice unless
such nonpayment default shall have been waived for a period of not less than 90
days (it being acknowledged that any subsequent action, or any breach of any
financial covenants for a period commencing after the date of delivery of any
Payment Blockage Notice which, in either case, would give rise to a default
pursuant to any provision under which a default previously existed or was
continuing shall constitute a new default for this purpose).
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SECTION 10.04. ACCELERATION OF SECURITIES.
If the Company fails to make any payment on the Notes when due or within
any applicable grace period, whether or not on account of the payment blockage
provision referred to above, such failure shall constitute an Event of Default
and shall entitle the holders of the Notes to accelerate the maturity thereof.
The Company shall promptly notify holders of Senior Debt if payment of the Notes
is accelerated because of an Event of Default.
SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER.
In the event that the Trustee or any Holder receives any payment of any
Subordinated Note Obligations at a time when the Trustee or such Holder, as
applicable, has actual knowledge that such payment is prohibited by Section
10.02 or 10.03 hereof, such payment shall be held by the Trustee or such Holder,
in trust for the benefit of, and shall be paid forthwith over and delivered,
upon written request, to, the holders of Senior Debt as their interests may
appear or their representative under the indenture or other agreement (if any)
pursuant to which Senior Debt may have been issued, as their respective
interests may appear, for application to the payment of all Obligations with
respect to Senior Debt remaining unpaid to the extent necessary to pay such
Obligations in full in accordance with their terms, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Debt.
In the event that any Holder receives any payment or payments pursuant to
this Indenture and the amount or total amount of such payment or payments
exceeds the amount, if any, that such Holder would be entitled to receive upon
the proper application of the subordination provisions of this Article 10, the
payment of such excess amount shall be deemed null and void, and the Holder
agrees that it will be obliged to return the amount of the excess payment to the
Company, as instructed in a written notice of such excess payment, within ten
days of receiving such notice.
With respect to the holders of Senior Debt, the Trustee undertakes to
perform only such obligations on the part of the Trustee as are specifically set
forth in this Article 10, and no implied covenants or obligations with respect
to the holders of Senior Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Trustee shall pay over or distribute to or on behalf of Holders or the Company
or any other Person money or assets to which any holders of Senior Debt shall be
entitled by virtue of this Article 10, except if such payment is made as a
result of the willful misconduct or gross negligence of the Trustee.
SECTION 10.06. NOTICE BY COMPANY.
The Company shall promptly notify the Trustee and the Paying Agent of any
facts known to the Company that would cause a payment of any Subordinated Note
Obligations to violate this Article 10, but failure to give such notice shall
not affect the subordination of the Notes to the Senior Debt as provided in this
Article 10.
SECTION 10.07. SUBROGATION.
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After all Senior Debt is paid in full and until the Notes are paid in
full in cash, Holders of Notes shall be subrogated (equally and ratably with all
other Indebtedness pari passu with the Notes) to the rights of holders of Senior
Debt to receive distributions applicable to Senior Debt to the extent that
distributions otherwise payable to the Holders of Notes have been applied to the
payment of Senior Debt. A distribution made under this Article 10 to holders of
Senior Debt that otherwise would have been made to Holders of Notes is not, as
between the Company and Holders, a payment by the Company on the Senior Debt.
SECTION 10.08. RELATIVE RIGHTS.
This Article 10 defines the relative rights of Holders of Notes and
holders of Senior Debt. Nothing in this Indenture shall:
(1) impair, as between the Company and Holders of Notes, the obligation
of the Company, which is absolute and unconditional, to pay
principal of, premium, if any, and interest on the Notes in
accordance with their terms;
(2) affect the relative rights of Holders of Notes and creditors of the
Company other than their rights in relation to holders of Senior
Debt; or
(3) prevent the Trustee or any Holder of Notes from exercising its
available remedies upon a Default or Event of Default, subject to
the rights of holders and owners of Senior Debt to receive
distributions and payments otherwise payable to Holders of Notes.
If the Company fails because of this Article 10 to pay principal of,
premium, if any, or interest on a Note on the due date, the failure is
nevertheless a Default or an Event of Default.
SECTION 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY.
No right of any holder of Senior Debt to enforce the subordination of the
Indebtedness evidenced by the Notes shall be impaired by any act or failure to
act by the Company or any Holder or by the failure of the Company or any Holder
to comply with this Indenture.
SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
Whenever a distribution is to be made or a notice given to holders of
Senior Debt, the distribution may be made and the notice given to their
representative.
Upon any payment or distribution of assets of the Company referred to in
this Article 10, the Trustee and the Holders of Notes shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction or upon any
certificate of such representative or of the liquidating trustee or agent or
other Person making any distribution to the Trustee or to the Holders of Notes
for the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Debt and other Indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 10.
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SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding the provisions of this Article 10 or any other provision
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts that would prohibit the making of any payment or
distribution by the Trustee, and the Trustee and the Paying Agent may continue
to make payments on the Notes, unless the Trustee shall have received at its
Corporate Trust Office at least five Business Days prior to the date of such
payment written notice of facts that would cause the payment of any Subordinated
Note Obligations to violate this Article 10. Only the Company or a
representative may give the notice. Nothing in this Article 10 shall impair the
claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof.
Trustee in its individual or any other capacity may hold Senior Debt with
the same rights it would have if it were not Trustee. Any Agent may do the same
with like rights.
SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of Notes, by the Holder's acceptance thereof, authorizes and
directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination as provided in this
Article 10, and appoints the Trustee to act as such Holder's attorney-in-fact
for any and all such purposes. If the Trustee does not file a proper proof of
claim or proof of debt in the form required in any proceeding referred to in
Section 6.09 hereof at least 30 days before the expiration of the time to file
such claim, a representative of Designated Senior Debt is hereby authorized to
file an appropriate claim for and on behalf of the Holders of the Notes.
ARTICLE 11
SATISFACTION AND DISCHARGE
SECTION 11.01. SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall be discharged and will cease to be of further effect
as to all Notes issued hereunder, when either
(a) all such Notes theretofore authenticated and delivered (except lost,
stolen or destroyed Notes which have been replaced or paid and Notes
for whose payment money has theretofore been deposited in trust and
thereafter repaid to the Company) have been delivered to the Trustee
for cancellation; or
(b) (i) all such Notes not theretofore delivered to such Trustee
for cancellation have become due and payable by reason of the
making of a notice of redemption or otherwise or will become
due and payable within one year and the Company or a
Guarantor, if any, has irrevocably deposited or caused to be
deposited with such Trustee as trust funds in trust an amount
of money sufficient to pay and discharge the entire
Indebtedness on such Notes not theretofore delivered to the
Trustee for cancellation for principal, premium, if any, and
accrued interest to the date of maturity or redemption;
77
(ii) no Default or Event of Default with respect to this Indenture
or the Notes shall have occurred and be continuing on the date
of such deposit or shall occur as a result of such deposit and
such deposit will not result in a breach or violation of, or
constitute a default under, any other instrument to which the
Company or a Guarantor, if any, is a party or by which the
Company or a Guarantor, if any, is bound;
(iii) the Company or a Guarantor, if any, has paid or caused to be
paid all sums payable by it under this Indenture; and
(iv) the Company has delivered irrevocable instructions to the
Trustee under this Indenture to apply the deposited money
toward the payment of such Notes at maturity or the redemption
date, as the case may be.
In addition, the Company must deliver an Officers' Certificate and an
Opinion of Counsel to the Trustee stating that all conditions precedent to
satisfaction and discharge have been satisfied.
SECTION 11.02. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 4.03, all
money deposited with the Trustee pursuant to Section 11.01 shall be held in
trust and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as Paying Agent) as the Trustee may determine, to
Persons entitled thereto, of the principal (and premium, if any) and interest
for whose payment such money has been deposited with the Trustee.
If the Trustee or Paying Agent is unable to apply any money in accordance
with Section 11.01 by reason of any legal proceeding or by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though such deposit
had occurred pursuant to Section 11.01; provided that if the Company has made
any payment of principal of, premium, if any, or interest on any Notes because
of the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Notes to receive such payment from the money held
by the Trustee or Paying Agent.
ARTICLE 12
SUBSIDIARY GUARANTEES
SECTION 12.01. SUBSIDIARY GUARANTEE.
Each of the Guarantors hereby, jointly and severally, unconditionally
guarantees to each Holder of a Note authenticated and delivered by the Trustee
and to the Trustee and its successors and assigns, irrespective of the validity
and enforceability of this Indenture, the Notes or the Obligations of the
Company hereunder or thereunder, that: (a) the principal of, premium, if any,
and interest and Liquidated Damages, if any, on the Notes will be promptly paid
in full when due, whether at maturity, by
78
acceleration, redemption or otherwise, and interest on overdue principal,
premium, if any, and (to the extent permitted by law) interest on any interest,
if any, and Liquidated Damages, if any, on the Notes and all other obligations
of the Company to the Holders or the Trustee hereunder or thereunder will be
promptly paid in full or performed, all in accordance with the terms hereof and
thereof; and (b) in case of any extension of time of payment or renewal of any
Notes or any of such other obligations, that same will be promptly paid in full
when due or performed in accordance with the terms of the extension or renewal,
whether at stated maturity, by acceleration or otherwise. Failing payment when
due of any amount so guaranteed or any performance so guaranteed for whatever
reason, the Guarantors will be jointly and severally obligated to pay the same
immediately. The Guarantors hereby agree that their obligations hereunder shall
be unconditional, irrespective of the validity, regularity or enforceability of
the Notes or this Indenture, the absence of any action to enforce the same, any
waiver or consent by any Holder of the Notes with respect to any provisions
hereof or thereof, the recovery of any judgment against the Company, any action
to enforce the same or any other circumstance which might otherwise constitute a
legal or equitable discharge or defense of a Guarantor. Each Guarantor hereby
waives diligence, presentment, demand of payment, filing of claims with a court
in the event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenant that this Subsidiary Guarantee will not be discharged except by
complete performance of the obligations contained in the Notes and this
Indenture. If any Holder or the Trustee is required by any court or otherwise to
return to the Company or any Guarantor, or any Custodian, Trustee, liquidator or
other similar official acting in relation to either the Company or any
Guarantor, any amount paid by either to the Trustee or such Holder, this
Subsidiary Guarantee, to the extent theretofore discharged, shall be reinstated
in full force and effect. Each Guarantor agrees that it shall not be entitled to
any right of subrogation in relation to the Holders in respect of any
obligations guaranteed hereby. Each Guarantor further agrees that, as between
such Guarantor, on the one hand, and the Holders and the Trustee, on the other
hand, (x) the maturity of the obligations guaranteed hereby may be accelerated
as provided in Article 6 for the purposes of this Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the obligations guaranteed hereby, and (y) in the
event of any declaration of acceleration of such obligations as provided in
Article 6, such obligations (whether or not due and payable) shall forthwith
become due and payable by such Guarantor for the purpose of this Subsidiary
Guarantee.
Notwithstanding the foregoing, in the event that any Subsidiary Guarantee
hereunder would constitute or result in a violation of any applicable fraudulent
conveyance or similar law of any relevant jurisdiction, the liability of a
Guarantor under such Subsidiary Guarantee shall be reduced to the maximum amount
permissible under such fraudulent conveyance or similar law.
SECTION 12.02. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.
To evidence its Subsidiary Guarantee set forth in Section 12.01, each
Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form of Exhibit E shall be endorsed by an officer of such
Guarantor on each Note authenticated and delivered by the Trustee and that this
Indenture shall be executed on behalf of such Guarantor by its President or one
of its Vice Presidents.
Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in
Section 12.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Note a notation of such Subsidiary Guarantee.
79
If an Officer whose signature is on this Indenture or on the Subsidiary
Guarantee no longer holds that office at the time the Trustee authenticates the
Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall
be valid nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Subsidiary Guarantee set forth
in this Indenture on behalf of the Guarantors.
SECTION 12.03 GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS.
Subject to Section 12.04, no Guarantor may consolidate or merge with or
into (whether or not such Guarantor is the surviving Person) another Person
unless:
(a) such Guarantor is the surviving Person or the Person formed by or
surviving any such consolidation or merger (if other than such Guarantor)
is a corporation organized or existing under the laws of the United
States, any state thereof or the District of Columbia and expressly
assumes all the Obligations of such Guarantor pursuant to a supplemental
indenture in form and substance reasonably satisfactory to the Trustee,
under the Notes and this Indenture;
(b) immediately after giving effect to such transaction no Default or
Event of Default exists;
(c) the Company would be permitted by virtue of the Company's pro forma
Fixed Charge Coverage Ratio, immediately after giving effect to such
transaction (on a pro forma basis), to incur at least $1.00 of additional
Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in
Section 4.12 hereof; and
(d) the Guarantor has delivered to the Trustee an Officers' Certificate
stating that such consolidation or merger and such supplemental indenture
complies with this Article and that all conditions precedent herein
provided for relating to such transaction have been complied with.
In case of any such consolidation or merger and upon the assumption by
the successor corporation, by supplemental indenture, executed and delivered to
the Trustee and satisfactory in form to the Trustee, of the Subsidiary Guarantee
endorsed upon the Notes and the due and punctual performance of all of the
covenants and conditions of this Indenture to be performed by the Guarantor,
such successor corporation shall succeed to and be substituted for the Guarantor
with the same effect as if it had been named herein as a Guarantor. Such
successor corporation thereupon may cause to be signed any or all of the
Subsidiary Guarantees to be endorsed upon all of the Notes issuable hereunder
which theretofore shall not have been signed by the Company and delivered to the
Trustee. All the Subsidiary Guarantees so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Subsidiary Guarantees
theretofore and thereafter issued in accordance with the terms of this Indenture
as though all of such Subsidiary Guarantees had been issued at the date of the
execution hereof.
Except as set forth in Articles 4 and 5, nothing contained in this
Indenture shall prevent any consolidation or merger of a Guarantor with or into
the Company or another Guarantor or shall prevent any sale or conveyance of the
property of a Guarantor as an entirety or substantially as an entirety to the
Company or another Guarantor.
SECTION 12.04 RELEASES FROM SUBSIDIARY GUARANTEES.
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In the event of a sale or other disposition of all of the assets of any
Guarantor, by way of merger, consolidation or otherwise, or a sale or
disposition of all of the Capital Stock of any Guarantor, then such Guarantor
(in the event of a sale or other disposition, by way of such a merger,
consolidation or otherwise, of all of the Capital Stock of such Guarantor) or
the Person acquiring the property (in the event of a sale or other disposition
of all of the assets of such Guarantor) shall be released and relieved of its
obligations under its Subsidiary Guarantee or Section 12.03, as the case may be;
provided that in the event of an Asset Sale, the Net Proceeds from such sale or
other disposition are applied in accordance with the provisions of Section 4.10.
Upon delivery by the Company to the Trustee of an Officers' Certificate and an
Opinion of Counsel to the effect that such sale or other disposition was made by
the Company in accordance with the provisions of this Indenture, including
without limitation Section 4.10, the Trustee shall execute any documents
reasonably required in order to evidence the release of any Guarantor from its
obligations under its Subsidiary Guarantee. Any Guarantor not released from its
obligations under its Subsidiary Guarantee shall remain liable for the full
amount of principal of and interest on the Notes and for the other obligations
of any Guarantor under the Indenture as provided in this Article 12.
SECTION 12.05. LIMITATION ON GUARANTOR LIABILITY.
For purposes hereof, each Guarantor's liability shall be limited to the
lesser of (i) the aggregate amount of the Obligations of the Company under the
Notes and this Indenture and (ii) the amount, if any, which would not have (A)
rendered such Guarantor "insolvent" (as such term is defined in the United
States Bankruptcy Code and in the Debtor and Creditor Law of the State of New
York) or (B) left such Guarantor with unreasonably small capital at the time its
Subsidiary Guarantee of the Notes was entered into; provided that, it will be a
presumption in any lawsuit or other proceeding in which a Guarantor is a party
that the amount guaranteed pursuant to the Subsidiary Guarantee is the amount
set forth in clause (i) above unless any creditor, or representative of
creditors of such Guarantor, or debtor in possession or trustee in bankruptcy of
the Guarantor, otherwise proves in such a lawsuit that the aggregate liability
of the Guarantor is the amount set forth in clause (ii) above. In making any
determination as to solvency or sufficiency of capital of a Guarantor in
accordance with the previous sentence, the right of such Guarantor to
contribution from other Guarantors, and any other rights such Guarantor may
have, contractual or otherwise, shall be taken into account.
SECTION 12.06. SUBORDINATION OF SUBSIDIARY GUARANTEES.
The obligations of each Guarantor under its Subsidiary Guarantee pursuant
to this Article 12 shall be junior and subordinated to the prior payment in full
in cash, or at the option of the holders of Senior Debt, in Cash Equivalents of
all obligations in respect of Senior Debt of such Guarantor, whether outstanding
on the date hereof or thereafter incurred (including amounts for which the
Guarantors will be liable for under the Subsidiary Guarantees issued from time
to time with respect to Senior Debt of such Guarantor or the Company) on the
same basis as the Notes are junior and subordinated to Senior Debt. For the
purposes of the foregoing sentence, the Trustee and the Holders shall have the
right to receive and/or retain payments by any of the Guarantors only at such
times as they may receive and/or retain payments in respect of the Notes
pursuant to this Indenture, including Article 10 hereof.
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ARTICLE 13
MISCELLANEOUS
SECTION 13.01. CONFLICT OF ANY PROVISION OF INDENTURE WITH TIA.
If any provision of this Indenture limits, qualifies, or conflicts with
the duties imposed by TIA ss. 318(c), the imposed duties shall control.
SECTION 13.02. NOTICES.
Any notice or communication by the Company, any Guarantor or the Trustee
to the others is duly given if in writing and delivered in Person or mailed by
first class mail (registered or certified, return receipt requested), telecopier
or overnight air courier guaranteeing next day delivery, to the others' address:
If to the Company or any Guarantor:
Precise Technology, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Secretary
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
With, in the case of any notice of a Default or an Event of Default, a
copy to:
Winston & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and
Mentmore Holdings Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
82
If to the Trustee:
Marine Midland Bank
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Department -- Precise Technology, Inc.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
The Company, any Guarantor or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if telecopied; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA ss. 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it shall mail
a copy to the Trustee and each Agent at the same time.
SECTION 13.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES.
Holders may communicate pursuant to TIA ss. 312(b) with other Holders
with respect to their rights under this Indenture or the Notes. The Company, any
Guarantor, the Trustee, the Registrar and anyone else shall have the protection
of TIA ss. 312(c).
SECTION 13.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company and/or any Guarantor to
the Trustee to take any action under this Indenture, the Company and/or any
Guarantor, as the case may be, shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 1.05 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided
for in this Indenture relating to the proposed action have been
satisfied; and
83
(b) an Opinion of Counsel in form and substance reasonably satisfactory
to the Trustee (which shall include the statements set forth in
Section 1.05 hereof) stating that, in the opinion of such counsel,
all such conditions precedent and covenants have been satisfied.
SECTION 13.05. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, any date established for
payment of Defaulted Interest pursuant to Section 2.12, or any Maturity with
respect to any Note shall not be a Business Day, then (notwithstanding any other
provisions of this Indenture, the Notes or any Subsidiary Guarantee) payment of
interest or principal (and premium, if any) need not be made on such date but
may be made on the next succeeding Business Day with the same force and effect
as if made on the Interest Payment Date or date established for payment of
Defaulted Interest pursuant to Section 2.12 or Maturity, and no interest shall
accrue with respect to such payment for the period from and after such Interest
Payment Date or date established for payment of Defaulted Interest pursuant to
Section 2.12 or Maturity, as the case may be, to the next succeeding Business
Day.
SECTION 13.06. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS,
EMPLOYEES AND STOCKHOLDERS.
No director, officer, employee, incorporator or stockholder of the Company
or a Guarantor, as such, shall have any liability for any obligations of the
Company or the Guarantors under the Notes, the Subsidiary Guarantees, if any, or
this Indenture or for any claim based on, in respect of, or by reason of such
obligations or their creation. Each Holder of the Notes by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes. Such waiver may not be effective to
waive liabilities under the federal securities laws and it is the view of the
SEC that such a waiver is against public policy.
SECTION 13.07. GOVERNING LAW; SUBMISSION TO JURISDICTION.
THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES, SHALL BE,
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO THE CHOICE OF LAW RULES THEREOF. BY THE EXECUTION
AND DELIVERY OF THIS INDENTURE, EACH OF THE COMPANY AND THE GUARANTORS SUBMITS
TO THE JURISDICTION OF ANY FEDERAL OR STATE COURT IN THE STATE OF NEW YORK IN
ANY SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE.
SECTION 13.08. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Subsidiaries or of any other Person. Any
such indenture, loan or debt agreement may not be used to interpret this
Indenture.
SECTION 13.09. SUCCESSORS AND ASSIGNS.
84
All covenants and agreements in this Indenture by the Company and the
Guarantors shall bind their respective successors and assigns, whether so
expressed or not. All covenants and agreements in this Indenture by the Trustee
shall bind its respective successors and assigns, whether so expressed or not.
SECTION 13.10. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 13.11. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
SECTION 13.12. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
85
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed in New York, New York as of the day and year first above written.
PRECISE TECHNOLOGY, INC.
Dated: June 13, 1997 By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
PRECISE TMP, INC.
Dated: June 13, 1997 By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
▇▇▇▇▇▇ TOOL, MOLD & DIE, INC.
Dated: June 13, 1997 By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
PRECISE POLESTAR, INC.
Dated: June 13, 1997 By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
PRECISE TECHNOLOGY OF DELAWARE INC.
Dated: June 13, 1997 By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
PRECISE TECHNOLOGY OF ILLINOIS INC.
Dated: June 13, 1997 By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
MARINE MIDLAND BANK, as Trustee
Dated: June 13, 1997 By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Assistant Vice President
EXHIBIT A-1
(Face of Note)
11 1/8% Senior Subordinated Notes due 2007
No. CUSIP No:
PRECISE TECHNOLOGY, INC.
promises to pay to ______ or registered assigns, the principal sum of $________
_______________________________ Dollars on June 15, 2007.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
Reference is made to the further provisions of this Note contained herein, which
will for all purposes have the same effect as if set forth at this place.
Dated: _______
PRECISE TECHNOLOGY, INC.
By:______________________________
Name:
Title:
By:______________________________
Name:
Title:
This is one of the 11 1/8% Senior Subordinated
Notes due 2007 referred to in the
within-mentioned Indenture:
Marine Midland Bank,
A-1-1
as Trustee
By: _____________________________
Authorized Signature
A-1-2
(Back of Note)
11 1/8% Senior Subordinated Notes due 2007
[Unless and until it is exchanged in whole or in part for Notes in definitive
form, this Note may not be transferred except as a whole by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository. Unless this
certificate is presented by an authorized representative of The Depository Trust
Company (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) ("DTC") to the issuer or its agent
for registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as may be requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or
such other entity as may be requested by an authorized representative of DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.]1
"THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN
THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT IS
NOT A U.S. PERSON, IS NOT ACQUIRING THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A
U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT) (AN "IAI"), (2) AGREES THAT IT WILL NOT,
WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE
PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE
SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS NOTE, RESELL OR
OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY
THEREOF, (B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB PURCHASING
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE REGISTRATION OF TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM
-----------------------
1 This paragraph should be included only if the Note is a Global Note.
A-1-3
THE TRUSTEE) AND, IF THE ISSUER SO REQUESTS, AN OPINION OF COUNSEL REASONABLY
ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE
SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN
INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER
THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING
RESTRICTIONS."
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITORY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITORY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY."
Capitalized terms used herein shall have the meanings assigned to them in the
Indenture referred to below.
1. INTEREST. Precise Technology, Inc., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at 111/8% per
annum from the Issuance Date until June 15, 2007 and shall pay the Liquidated
Damages, if any, payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company shall pay interest and Liquidated
Damages, if any, semi-annually in arrears on June 15 and December 15 of each
year (each an "Interest Payment Date"), or if any such day is not a Business
Day, on the next succeeding Business Day. Interest on the Notes will accrue from
the most recent date to which interest has been paid or, if no interest has been
paid, from the Issuance Date; provided that if there is no existing Default in
the payment of interest, and if this Note is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date; provided,
further, that the first Interest Payment Date shall be December 15, 1997. The
Company shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal and premium, if any, from time to
time on demand at a rate equal to the per annum rate on the Notes then in
effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace periods) from time to
time on demand at the same rate to the extent lawful. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
A-1-4
2. METHOD OF PAYMENT. The Company shall make payments in respect of Global Notes
(including principal, premium, if any, and interest and Liquidated Damages, if
any) by wire transfer of immediately available funds to the accounts specified
by the Note Custodian or, at the option of the Company, payment of interest and
Liquidated Damages, if any, may be made by check mailed to the Holders of the
Notes at their respective addresses set forth in the register of Holders of
Notes. Notwithstanding the foregoing, all payments with respect to the Notes
(the Holders of which have provided wire transfer instructions to the Company at
least ten Business Days prior to the applicable payment date), will be required
to be made by wire transfer of immediately available funds to the accounts
specified by the Holders thereof. Such payment shall be made in such coin or
currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, Marine Midland Bank, the Trustee under
the Indenture, will act as Paying Agent and Registrar. The Notes may be
presented for registration of transfer and exchange at the offices of the
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated as of June
13, 1997 ("Indenture") between the Company and the Trustee. The terms of the
Notes include those stated in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code ▇▇.▇▇.
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred
to the Indenture and such Act for a statement of such terms. The Notes are
general unsecured obligations of the Company limited to $200,000,000 in
aggregate principal amount.
5. OPTIONAL REDEMPTION.
Except as set forth in the following paragraphs, the Notes will not be
redeemable at the Company's option prior to June 15, 2002. On and after June 15,
2002, the Notes will be subject to redemption at the option of the Company, in
whole or in part, upon not less than 30 nor more than 60 days' written notice,
at the Redemption Prices (expressed as a percentage of principal amount) set
forth below, plus accrued and unpaid interest thereon, if any, to the applicable
Redemption Date, if redeemed during the twelve-month period beginning on June 15
of each of the years indicated below:
REDEMPTION
Year PRICE
-----
2002 ........................................... 105.563%
2003 ........................................... 103.708%
2004 ........................................... 101.854%
2005 and thereafter.............................. 100.000%
In addition, at any time prior to June 15, 2000, the Company may on any
one or more occasions redeem up to 33 1/3% of the aggregate principal amount of
Notes originally issued
A-1-5
(including, for this purpose, one or more series of Notes issued under the
Indenture after the date of the Indenture) at a Redemption Price of 111.125% of
the principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon, to the Redemption Date, with the net cash proceeds of
one or more Public Equity Offerings; provided that at least 662/3% of the Notes
originally issued (including, for this purpose, one or more series of Notes
issued under the Indenture after the date of the Indenture) remain outstanding
immediately after the occurrence of such redemption and provided, that such
redemption occurs within 60 days of the date of the closing of each such Public
Equity Offering. The Trustee shall select the Notes to be purchased in the
manner described in the Indenture.
In addition, at any time prior to June 15, 2002, the Company may, at its
option, redeem the Notes, in whole or in part, at a Redemption Price equal to
100% of the principal amount thereof plus the applicable Make-Whole Premium.
6. MANDATORY REDEMPTION. Except as set forth in paragraph 8, the Company shall
not be required to make mandatory redemption or sinking fund payments with
respect to the Notes.
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed by first class
mail, postage prepaid, at least 30 days but not more than 60 days before the
Redemption Date to each Holder of Notes to be redeemed at such Holder's
registered address. If any Note is to be redeemed in part only, any notice of
redemption that relates to such Note shall state the portion of the principal
amount thereof to be redeemed. On or after the Redemption Date, unless the
Company defaults in making the redemption payments, interest ceases to accrue on
the Notes or portions thereof called for redemption.
8. REPURCHASE AT OPTION OF HOLDERS. (a) Upon the occurrence of a Change of
Control, the Company shall make an offer (a "Change of Control Offer") to
purchase all or any part (equal to $1,000 or an integral multiple thereof) of
the Notes at a price in cash equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest and Liquidated Damages, if any,
thereon, to the date of purchase (the "Change of Control Payment"). Prior to
complying with the provisions of Section 4.09 of the Indenture, but in any event
within 30 days following a Change of Control, the Company shall either repay in
full in cash all Indebtedness under the Credit Agreement (and terminate all
commitments thereunder) and all other Senior Debt the terms of which require
repayment upon a Change of Control or offer to repay in full in cash all
Indebtedness under the Credit Agreement (and terminate all commitments
thereunder) and all such other Senior Debt and to repay the Indebtedness owed to
(and terminate the commitments of) each lender which has accepted such offer or
obtain the requisite consents under the Credit Agreement and all such other
Senior Debt to permit the repurchase of the Notes. Within 30 days following any
Change of Control, the Company shall mail a notice to each Holder of Notes
issued under the Indenture, with a copy to the Trustee, containing the
information set forth in Section 4.09 of the Indenture. Holders of Notes that
are subject to an offer to purchase may elect to have such Notes purchased by
completing the form entitled "Option of Holder to Elect Purchase" on the reverse
side of this Note.
(b) When the aggregate amount of Excess Proceeds in connection with Asset
Sales by the Company exceeds $5.0 million, the Company shall make an offer to
all Holders of Notes (an
A-1-6
"Asset Sale Offer") to purchase the maximum principal amount of Notes that may
be purchased out of the Excess Proceeds, at an offer price in cash equal to 100%
of the principal amount thereof plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase, in accordance with the
procedures set forth in Section 3.10 of the Indenture. The Company will commence
an Asset Sale Offer with respect to Excess Proceeds within ten Business Days
after the date that Excess Proceeds exceeds $5.0 million by mailing by first
class mail the notice required pursuant to the terms Section 3.10 of the
Indenture, with a copy to the Trustee. To the extent that the aggregate amount
of Notes tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount of Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes to be purchased on a pro rata basis. Upon completion of such offer to
purchase, the amount of Excess Proceeds shall be reset at zero. Holders of Notes
that are the subject of an offer to purchase will receive an Asset Sale Offer
from the Company prior to any related purchase date and may elect to have such
Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse side of this Note.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without
coupons in minimum denominations of $1,000 and integral multiples of $1,000 in
excess thereof (subject to a minimum initial purchase requirement of $100,000
for Notes sold to institutional investors that qualify as accredited investors
as defined in Rule 501(a)(1), (2), (3) and (7) under the Securities Act other
than in reliance on Rule 144A or Regulation S). The transfer of Notes may be
registered and Notes may be exchanged only as provided in Article 2 of the
Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents (including
legal opinions) and the Company may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. The Company need not exchange or
register the transfer of any Note or portion of a Note selected for redemption,
except for the unredeemed portion of any Note being redeemed in part. Also, it
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its
owner for all purposes.
11. SUBORDINATION. Each Holder by accepting a Note agrees that the payment (by
set-off or otherwise) of principal of, premium, if any, and interest and
Liquidated Damages, if any, on the Notes (including with respect to any
repurchases of the Notes) is subordinated in right of payment, to the extent and
in the manner provided in Article 10 of the Indenture, to the prior payment in
full in cash, or at the option of the holders of Senior Debt, in Cash
Equivalents of all obligations in respect of Senior Debt, whether outstanding on
the date of the Indenture or thereafter incurred.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture, the Notes or any Subsidiary Guarantee may be amended or supplemented
with the consent of the Holders of at least a majority in principal amount of
the then outstanding Notes (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, the
Notes), and, subject to the terms of the Indenture and any applicable Subsidiary
Guarantee, any existing default or compliance with any provision of the
Indenture, the Notes or any Subsidiary
A-1-7
Guarantee may be waived with the consent of the Holders of a majority in
principal amount of the then outstanding Notes (including consents obtained in
connection with a tender offer or exchange offer for the Notes). Without the
consent of any Holder of a Note, the Indenture, the Notes and any Subsidiary
Guarantee may be amended or supplemented to cure any ambiguity, defect or
inconsistency, to provide for uncertificated Notes in addition to or in place of
certificated Notes, to comply with Article 5 of the Indenture, to provide for
the assumption of the Company's or any Guarantor's obligations to Holders of the
Notes, to make any change that would provide any additional rights or benefits
to the Holders of the Notes or that does not adversely affect the legal rights
under the Indenture of any such Holder, to add covenants for the benefit of the
Holders or to surrender any right or power conferred upon the Company, to comply
with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA or to add a Guarantor under the
Indenture.
13. DEFAULTS AND REMEDIES. Each of the following constitutes an "Event of
Default": (a) default in payment when due (payable at maturity, upon redemption
or otherwise), of principal of or premium, if any, on the Notes (whether or not
such payment shall be prohibited by Article 10 of the Indenture); (b) default
for 30 days or more in the payment when due of interest on, or Liquidated
Damages, if any, with respect to the Notes (whether or not such payment shall be
prohibited by Article 10 of the Indenture; (c) failure by the Company to comply
with Sections 4.09, 4.10 and 5.01 of the Indenture; (d) failure by the Company
for 30 days after receipt of written notice to comply with any of its other
agreements in the Indenture or the Notes; (e) default under any mortgage,
indenture or instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the Company or any
of its Restricted Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Restricted Subsidiaries) whether such Indebtedness or
guarantee now exists, or is created after the date of the Indenture, which
default (1) is caused by the failure to pay principal of or premium, if any, or
interest on such Indebtedness prior to the expiration of the grace period
provided in such Indebtedness on the date of such default (a "Payment Default")
at its stated final maturity (after giving effect to any applicable grace
periods) or (2) results in the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $5.0 million or more; (f) failure by the Company or
any of its Restricted Subsidiaries to pay final and non-appealable judgments
aggregating in excess of $5.0 million, which judgments are not paid, discharged
or stayed for a period of 60 days; (g) the Company or any Restricted Subsidiary
that is a Significant Subsidiary pursuant to or within the meaning of any
Bankruptcy Law: (i) commences a voluntary case, (ii) consents to the entry of an
order for relief against it in an involuntary case in which it is the debtor,
(iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property, (iv) makes a general assignment for the
benefit of its creditors, or (v) admits in writing its inability generally to
pay its debts as the same become due; (h) a court of competent jurisdiction
enters an order or decree under any Bankruptcy Law that: (i) is for relief
against the Company or any Restricted Subsidiary that is a Significant
Subsidiary in an involuntary case in which it is the debtor, (ii) appoints a
Custodian of the Company or any Restricted Subsidiary that is a Significant
Subsidiary or for all or substantially all of the property of the Company or any
Restricted Subsidiary that is a Significant Subsidiary; or (iii) orders the
liquidation of the Company or any Restricted Subsidiary that is a Significant
Subsidiary, and the
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order or decree contemplated in clauses (i), (ii) or (iii) of this clause (h),
remains unstayed and in effect for 60 consecutive days; or (i) except as
permitted by the Indenture, any Subsidiary Guarantee shall be held in any
judicial proceeding to be unenforceable or invalid and such judgment has become
final or non-appealable or shall cease for any other reason to be in full force
and effect or any Guarantor, or any Person acting on behalf of any Guarantor
shall deny or disaffirm its obligations under its Subsidiary Guarantee.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately by notice in writing to
the Company and the Trustee; provided that so long as any Indebtedness permitted
to be incurred pursuant to the Credit Agreement shall be outstanding, such
acceleration shall not be effective until the earlier of (i) an acceleration of
any such Indebtedness under the Credit Agreement or (ii) five Business Days
after receipt by the Company and the Agent of written notice of such
acceleration. Notwithstanding the foregoing, in the case of an Event of Default
arising from certain events of bankruptcy or insolvency, with respect to the
Company, any Significant Subsidiary that is a Restricted Subsidiary or any group
of Restricted Subsidiaries that, taken together, would constitute a Significant
Subsidiary, all outstanding Notes will become due and payable without further
action or notice. Holders of the Notes may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other
capacity, may become the owner or pledgee of Notes and may otherwise deal with
the Company with the same rights it would have if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. A director, officer, employee or stockholder, as
such, of the Company shall not have any liability for any obligations of the
Company under these Notes or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. Each Holder by accepting
any of these Notes waives and releases all such liability.
16. AUTHENTICATION. This Note shall not be valid until authenticated by the
manual signature of the Trustee.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder
or an assignee, such as: TEN COM (= tenants in common), TENANT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
18. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In addition
to the rights provided to Holders of the Notes under the Indenture, Holders of
Transferred Restricted Securities (as defined in the Registration Rights
Agreement) shall have all the rights set forth in the
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Registration Rights Agreement, dated as of the date hereof, among the Company,
the Guarantors and the Initial Purchaser (the "Registration Rights Agreement").
19. SUBSIDIARY GUARANTEES. Payment of principal, premium, if any, and interest
(including interest on overdue principal and overdue interest, if lawful) and
Liquidated Damages, if any, is unconditionally guaranteed by certain
subsidiaries of the Company. Such guaranties are junior and subordinated to the
guaranties of such subsidiaries on the same basis as the Notes are junior and
subordinated to Senior Debt.
20. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company have caused CUSIP
numbers to be printed on the Notes and the Trustee may use CUSIP numbers in
notices of redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Precise Technology, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Secretary
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
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ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint__________________________________________________ to
transfer this Note on the books of the Company. The agent may substitute another
to act for him.
--------------------------------------------------------------------------------
Date: __________
Your Signature:___________________
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee.
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OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant
to Section 4.09 or 4.10 of the Indenture, check the box below:
|_| Section 4.09 |_| Section 4.10
If you want to elect to have only part of the Note purchased by the
Company pursuant to Section 4.09 or Section 4.10 of the Indenture, state the
amount you elect to have purchased:
$_____________
Date: __________
Your Signature:___________________
(Sign exactly as your name appears on the
face of this Note)
Tax Identification No.:
Signature Guarantee.
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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE2
The following exchanges of a part of this Global Note for an interest in
another Global Note or for a Definitive Note, or exchanges of a part of another
Global Note or Definitive Note for an interest in this Global Note, have been
made:
Principal
Amount of Amount of Amount
decrease in increase in of this
Principal Principal Global Note Signature of
Amount Amount following such authorized officer
of this of this decrease of Trustee or
Date of Exchange Global Note Global Note (or increase) Note Custodian
---------------- ----------- ----------- ------------- --------------
---------------------
2 This should be included only if the Note is a Global Note.
▇-▇-▇▇
▇▇▇▇▇▇▇ ▇-▇
(Face of Regulation S Temporary Global Note)
11 1/8% Senior Subordinated Notes due 2007
No. CUSIP No:
PRECISE TECHNOLOGY, INC.
promises to pay to Cede & Co. or registered assigns, the principal sum of
_______________________________ Dollars on __________, 2007.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
Reference is made to the further provisions of this Note contained herein, which
will for all purposes have the same effect as of set forth at this place.
Dated: __________
PRECISE TECHNOLOGY, INC.
By:______________________________
Name:
Title:
By:______________________________
Name:
Title:
This is one of the 11 1/8% Senior Subordinated
Notes due 2007 referred to in the
within-mentioned Indenture:
Marine Midland Bank,
As Trustee
By: _____________________________
Authorized Signature
A-2-1
(Back of Regulation S Temporary Global Note)
11 1/8% Senior Subordinated Notes due 2007
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE
BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED
TO RECEIVE CASH PAYMENTS OF INTEREST DURING THE PERIOD WHICH SUCH HOLDER HOLDS
THIS NOTE. NOTHING IN THIS LEGEND SHALL BE DEEMED TO PREVENT INTEREST FROM
ACCRUING ON THIS NOTE.
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE
FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS
CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) ("DTC") TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
"THIS SECURITY (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN
THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST
HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT IS
NOT A U.S. PERSON, IS NOT ACQUIRING THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A
U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT OR (C) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT) (AN "IAI"), (2) AGREES THAT IT WILL NOT,
WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO
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ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE)
UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS NOTE,
RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE REGISTRATION OF TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM THE TRUSTEE) AND, IF THE ISSUER SO REQUESTS, AN OPINION OF
COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT
OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION
REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN
VIOLATION OF THE FOREGOING RESTRICTIONS."
Capitalized terms used herein shall have the meanings assigned to them in the
Indenture referred to below.
1. INTEREST. Precise Technology, Inc., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at 111/8% per
annum from the Issuance Date until June 15, 2007 and shall pay the Liquidated
Damages, if any, payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company shall pay interest and Liquidated
Damages, if any, semi-annually in arrears on June 15 and December 15 of each
year (each an "Interest Payment Date"), or if any such day is not a Business
Day, on the next succeeding Business Day. Interest on the Notes will accrue from
the most recent date to which interest has been paid or, if no interest has been
paid, from the Issuance Date; provided that if there is no existing Default in
the payment of interest, and if this Note is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date; provided,
further, that the first Interest Payment Date shall be December 15, 1997. The
Company shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal and premium, if any, from time to
time on demand at a rate equal to the per annum rate on the Notes then in
effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace periods) from time to
time on demand at the same rate to the extent lawful. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
A-2-3
2. METHOD OF PAYMENT. The Company shall make payments in respect of Global Notes
(including principal, premium, if any, and interest and Liquidated Damages, if
any) by wire transfer of immediately available funds to the accounts specified
by the Note Custodian or, at the option of the Company, payment of interest and
Liquidated Damages, if any, may be made by check mailed to the Holders of the
Notes at their respective addresses set forth in the register of Holders of
Notes. Notwithstanding the foregoing, all payments with respect to the Notes
(the Holders of which have provided wire transfer instructions to the Company at
least ten Business Days prior to the applicable payment date), will be required
to be made by wire transfer of immediately available funds to the accounts
specified by the Holders thereof. Such payment shall be made in such coin or
currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, Marine Midland Bank, the Trustee under
the Indenture, will act as Paying Agent and Registrar. The Notes may be
presented for registration of transfer and exchange at the offices of the
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated as of June
13, 1997 ("Indenture") between the Company and the Trustee. The terms of the
Notes include those stated in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code ▇▇.▇▇.
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred
to the Indenture and such Act for a statement of such terms. The Notes are
general unsecured obligations of the Company limited to $200,000,000 in
aggregate principal amount.
5. OPTIONAL REDEMPTION.
Except as set forth in the following paragraphs, the Notes will not be
redeemable at the Company's option prior to June 15, 2002. On and after June 15,
2002, the Notes will be subject to redemption at the option of the Company, in
whole or in part, upon not less than 30 nor more than 60 days' written notice,
at the Redemption Prices (expressed as a percentage of principal amount) set
forth below, plus accrued and unpaid interest thereon, if any, to the applicable
Redemption Date, if redeemed during the twelve-month period beginning on June 15
of each of the years indicated below:
Year REDEMPTION
PRICE
-----
2002 .................................... 105.563%
2003 .................................... 103.708%
2004 .................................... 101.854%
2005 and thereafter............................... 100.000%
In addition, at any time prior to June 15, 2000, the Company may on any
one or more occasions redeem up to 331/3% of the aggregate principal amount of
Notes originally issued (including, for this purpose, one or more series of
Notes issued under the Indenture after the date of the Indenture) at a
Redemption Price of 111.125% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages, if any, thereon, to the Redemption Date,
with the net cash proceeds of one or more Public Equity Offerings; provided that
at least 66 2/3%
A-2-4
of the Notes originally issued (including, for this purpose, one or more series
of Notes issued under the Indenture after the date of the Indenture) remain
outstanding immediately after the occurrence of such redemption and provided,
that such redemption occurs within 60 days of the date of the closing of each
such Public Equity Offering. The Trustee shall select the Notes to be purchased
in the manner described in the Indenture.
In addition, at any time prior to June 15, 2002, the Company may, at its
option, redeem the Notes, in whole or in part, at a Redemption Price equal to
100% of the principal amount thereof plus the applicable Make-Whole Premium.
6. MANDATORY REDEMPTION. Except as set forth in paragraph 8, the Company shall
not be required to make mandatory redemption or sinking fund payments with
respect to the Notes.
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed by first class
mail, postage prepaid, at least 30 days but not more than 60 days before the
Redemption Date to each Holder of Notes to be redeemed at such Holder's
registered address. If any Note is to be redeemed in part only, any notice of
redemption that relates to such Note shall state the portion of the principal
amount thereof to be redeemed. On or after the Redemption Date, unless the
Company defaults in making the redemption payments, interest ceases to accrue on
the Notes or portions thereof called for redemption.
8. REPURCHASE AT OPTION OF HOLDERS. (a) Upon the occurrence of a Change of
Control, the Company shall make an offer (a "Change of Control Offer") to
purchase all or any part (equal to $1,000 or an integral multiple thereof) of
the Notes at a price in cash equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest and Liquidated Damages, if any,
thereon, to the date of purchase (the "Change of Control Payment"). Prior to
complying with the provisions of Section 4.09 of the Indenture, but in any event
within 30 days following a Change of Control, the Company shall either repay in
full in cash all Indebtedness under the Credit Agreement (and terminate all
commitments thereunder) and all other Senior Debt the terms of which require
repayment upon a Change of Control or offer to repay in full in cash all
Indebtedness under the Credit Agreement (and terminate all commitments
thereunder) and all such other Senior Debt and to repay the Indebtedness owed to
(and terminate the commitments of) each lender which has accepted such offer or
obtain the requisite consents under the Credit Agreement and all such other
Senior Debt to permit the repurchase of the Notes. Within 30 days following any
Change of Control, the Company shall mail a notice to each Holder of Notes
issued under the Indenture, with a copy to the Trustee, containing the
information set forth in Section 4.09 of the Indenture. Holders of Notes that
are subject to an offer to purchase may elect to have such Notes purchased by
completing the form entitled "Option of Holder to Elect Purchase" on the reverse
side of this Note.
(b) When the aggregate amount of Excess Proceeds in connection with Asset
Sales by the Company exceeds $5.0 million, the Company shall make an offer to
all Holders of Notes (an "Asset Sale Offer") to purchase the maximum principal
amount of Notes that may be purchased out of the Excess Proceeds, at an offer
price in cash equal to 100% of the principal amount thereof plus accrued and
unpaid interest and Liquidated Damages, if any, thereon to the date of purchase,
in accordance with the procedures set forth in Section 3.10 of the Indenture.
The Company will commence an Asset Sale Offer with respect to Excess Proceeds
within ten Business Days after the date that Excess Proceeds exceeds $5.0
million by mailing by first class mail the notice required pursuant to the terms
Section 3.10 of the Indenture, with a copy to the Trustee. To the extent that
A-2-5
the aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less
than the Excess Proceeds, the Company may use any remaining Excess Proceeds for
general corporate purposes. If the aggregate principal amount of Notes
surrendered by Holders thereof exceeds the amount of Excess Proceeds, the
Trustee shall select the Notes to be purchased on a pro rata basis. Upon
completion of such offer to purchase, the amount of Excess Proceeds shall be
reset at zero. Holders of Notes that are the subject of an offer to purchase
will receive an Asset Sale Offer from the Company prior to any related purchase
date and may elect to have such Notes purchased by completing the form entitled
"Option of Holder to Elect Purchase" on the reverse side of this Note.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without
coupons in minimum denominations of $1,000 and integral multiples of $1,000 in
excess thereof (subject to a minimum initial purchase requirement of $100,000
for Notes sold to institutional investors that qualify as accredited investors
as defined in Rule 501(a)(1), (2), (3) and (7) under the Securities Act other
than in reliance on Rule 144A or Regulation S). The transfer of Notes may be
registered and Notes may be exchanged only as provided in Article 2 of the
Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents (including
legal opinions) and the Company may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. The Company need not exchange or
register the transfer of any Note or portion of a Note selected for redemption,
except for the unredeemed portion of any Note being redeemed in part. Also, it
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its
owner for all purposes.
11. SUBORDINATION. Each Holder by accepting a Note agrees that the payment (by
set-off or otherwise) of principal of, premium, if any, and interest and
Liquidated Damages, if any, on the Notes (including with respect to any
repurchases of the Notes) is subordinated in right of payment, to the extent and
in the manner provided in Article 10 of the Indenture, to the prior payment in
full in cash, or at the option of the holders of Senior Debt, in Cash
Equivalents of all obligations in respect of Senior Debt, whether outstanding on
the date of the Indenture or thereafter incurred.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture, the Notes or any Subsidiary Guarantee may be amended or supplemented
with the consent of the Holders of at least a majority in principal amount of
the then outstanding Notes (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, the
Notes), and, subject to the terms of the Indenture and any applicable Subsidiary
Guarantee, any existing default or compliance with any provision of the
Indenture, the Notes or any Subsidiary Guarantee may be waived with the consent
of the Holders of a majority in principal amount of the then outstanding Notes
(including consents obtained in connection with a tender offer or exchange offer
for the Notes). Without the consent of any Holder of a Note, the Indenture, the
Notes and any Subsidiary Guarantee may be amended or supplemented to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes, to comply with Article 5 of the
Indenture, to provide for the assumption of the Company's or any Guarantor's
obligations to Holders of the Notes, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, to add
covenants for the benefit of the Holders or to surrender any right or power
conferred upon the Company, to comply with the requirements
A-2-6
of the SEC in order to effect or maintain the qualification of the Indenture
under the TIA or to add a Guarantor under the Indenture.
13. DEFAULTS AND REMEDIES. Each of the following constitutes an "Event of
Default": (a) default in payment when due (payable at maturity, upon redemption
or otherwise), of principal of or premium, if any, on the Notes (whether or not
such payment shall be prohibited by Article 10 of the Indenture); (b) default
for 30 days or more in the payment when due of interest on, or Liquidated
Damages, if any, with respect to the Notes (whether or not such payment shall be
prohibited by Article 10 of the Indenture; (c) failure by the Company to comply
with Sections 4.09, 4.10 and 5.01 of the Indenture; (d) failure by the Company
for 30 days after receipt of written notice to comply with any of its other
agreements in the Indenture or the Notes; (e) default under any mortgage,
indenture or instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the Company or any
of its Restricted Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Restricted Subsidiaries) whether such Indebtedness or
guarantee now exists, or is created after the date of the Indenture, which
default (1) is caused by the failure to pay principal of or premium, if any, or
interest on such Indebtedness prior to the expiration of the grace period
provided in such Indebtedness on the date of such default (a "Payment Default")
at its stated final maturity (after giving effect to any applicable grace
periods) or (2) results in the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $5.0 million or more; (f) failure by the Company or
any of its Restricted Subsidiaries to pay final and non-appealable judgments
aggregating in excess of $5.0 million, which judgments are not paid, discharged
or stayed for a period of 60 days; (g) the Company or any Restricted Subsidiary
that is a Significant Subsidiary pursuant to or within the meaning of any
Bankruptcy Law: (i) commences a voluntary case, (ii) consents to the entry of an
order for relief against it in an involuntary case in which it is the debtor,
(iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property, (iv) makes a general assignment for the
benefit of its creditors, or (v) admits in writing its inability generally to
pay its debts as the same become due; (h) a court of competent jurisdiction
enters an order or decree under any Bankruptcy Law that: (i) is for relief
against the Company or any Restricted Subsidiary that is a Significant
Subsidiary in an involuntary case in which it is the debtor, (ii) appoints a
Custodian of the Company or any Restricted Subsidiary that is a Significant
Subsidiary or for all or substantially all of the property of the Company or any
Restricted Subsidiary that is a Significant Subsidiary; or (iii) orders the
liquidation of the Company or any Restricted Subsidiary that is a Significant
Subsidiary, and the order or decree contemplated in clauses (i), (ii) or (iii)
of this clause (h), remains unstayed and in effect for 60 consecutive days; or
(i) except as permitted by the Indenture, any Subsidiary Guarantee shall be held
in any judicial proceeding to be unenforceable or invalid and such judgment has
become final or non-appealable or shall cease for any other reason to be in full
force and effect or any Guarantor, or any Person acting on behalf of any
Guarantor shall deny or disaffirm its obligations under its Subsidiary
Guarantee.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately by notice in writing to
the Company and the Trustee; provided that so long as any Indebtedness permitted
to be incurred pursuant to the Credit Agreement shall be outstanding, such
acceleration shall not be effective until the earlier of (i) an acceleration of
any such Indebtedness under the Credit Agreement or (ii) five Business Days
after receipt by the Company and the Agent
A-2-7
of written notice of such acceleration. Notwithstanding the foregoing, in the
case of an Event of Default arising from certain events of bankruptcy or
insolvency, with respect to the Company, any Significant Subsidiary that is a
Restricted Subsidiary or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary, all outstanding Notes will
become due and payable without further action or notice. Holders of the Notes
may not enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, Holders of a majority in principal amount of the
then outstanding Notes may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other
capacity, may become the owner or pledgee of Notes and may otherwise deal with
the Company with the same rights it would have if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. A director, officer, employee or stockholder, as
such, of the Company shall not have any liability for any obligations of the
Company under these Notes or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. Each Holder by accepting
any of these Notes waives and releases all such liability.
16. AUTHENTICATION. This Note shall not be valid until authenticated by the
manual signature of the Trustee.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder
or an assignee, such as: TEN COM (= tenants in common), TENANT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
18. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In addition
to the rights provided to Holders of the Notes under the Indenture, Holders of
Transferred Restricted Securities (as defined in the Registration Rights
Agreement) shall have all the rights set forth in the Registration Rights
Agreement, dated as of the date hereof, among the Company, the Guarantors and
the Initial Purchaser (the "Registration Rights Agreement").
19. SUBSIDIARY GUARANTEES. Payment of principal, premium, if any, and interest
(including interest on overdue principal and overdue interest, if lawful) and
Liquidated Damages, if any, is unconditionally guaranteed by certain
subsidiaries of the Company. Such guaranties are junior and subordinated to the
guaranties of such subsidiaries on the same basis as the Notes are junior and
subordinated to Senior Debt.
20. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company have caused CUSIP
numbers to be printed on the Notes and the Trustee may use CUSIP numbers in
notices of redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
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Precise Technology, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Secretary
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
--------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint__________________________________________________ to
transfer this Note on the books of the Company. The agent may substitute another
to act for him.
--------------------------------------------------------------------------------
Date: __________
Your Signature:___________________
(Sign exactly as your name appears on the
face of this Note)
Signature Guarantee.
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SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE
The following exchanges of a part of this Regulation S Temporary Global Note for
an interest in another Global Note, or of other Restricted Global Notes for an
interest in this Regulation S Temporary Global Note, have been made:
Principal
Amount of Amount of Amount
decrease in increase in of this
Principal Principal Global Note Signature of
Amount Amount following such authorized officer
of this of this decrease of Trustee or
Date of Exchange Global Note Global Note (or increase) Note Custodian
---------------- ----------- ----------- ------------- --------------
▇-▇-▇▇
▇▇▇▇▇▇▇ ▇-▇
(Face of Unrestricted Note)
111/8% Senior Subordinated Notes due 2007
No. CUSIP No.
PRECISE TECHNOLOGY, INC.
promises to pay to Cede & Co. or registered assigns, the principal sum of
_______________________________ Dollars on __________, 2007.
Interest Payment Dates: June 15 and December 15
Record Dates: June 1 and December 1
Reference is made for the further provisions of this Note contained herein,
which will for all purposes have the same effect as if set forth at this place.
Dated: ____________
PRECISE TECHNOLOGY, INC.
By:______________________________
Name:
Title:
By:______________________________
Name:
Title:
This is one of the 11 1/8% Senior Subordinated
Notes due 2007 referred to in the
within-mentioned Indenture:
Marine Midland Bank,
as Trustee
By: _____________________________
Authorized Signature
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(Back of Unrestricted Note)
11 1/8% Senior Subordinated Notes due 2007
[Unless and until it is exchanged in whole or in part for Notes in definitive
form, this Note may not be transferred except as a whole by the Depository to a
nominee of the Depository or by a nominee of the Depository to the Depository or
another nominee of the Depository or by the Depository or any such nominee to a
successor Depository or a nominee of such successor Depository. Unless this
certificate is presented by an authorized representative of The Depository Trust
Company (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇) ("DTC") to the issuer or its agent
for registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co. or such other name as may be requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or
such other entity as may be requested by an authorized representative of DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.]1
"THIS GLOBAL NOTE IS HELD BY THE DEPOSITORY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL
OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES
EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED
PURSUANT TO SECTION 2.07 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE
EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,
(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT
TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO
A SUCCESSOR DEPOSITORY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY."
Capitalized terms used herein shall have the meanings assigned to them in the
Indenture referred to below.
1. INTEREST. Precise Technology, Inc., a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at 111/8% per
annum from the Issuance Date until June 15, 2007 and shall pay the Liquidated
Damages, if any, payable pursuant to Section 5 of the Registration Rights
Agreement referred to below. The Company shall pay interest and Liquidated
Damages, if any, semi-annually in arrears on June 15 and December 15 of each
year (each an "Interest Payment Date"), or if any such day is not a Business
Day, on the next succeeding Business Day. Interest on the Notes will accrue from
the most recent date to which interest has been paid or, if no interest has been
paid, from the Issuance Date; provided that if there is no existing Default in
the payment of interest, and if this Note is authenticated between a record date
referred to on the face hereof and the next succeeding Interest Payment Date,
interest shall accrue from such next succeeding Interest Payment Date; provided,
further, that the first Interest Payment Date shall be December 15, 1997. The
Company shall pay interest (including post-petition interest in any proceeding
under any Bankruptcy Law) on overdue principal and premium, if any, from time to
time on demand at a rate equal to the per annum rate on the Notes then in
effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on
--------------------
1. This paragraph should be included only if the Note is a Global Note.
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overdue installments of interest and Liquidated Damages (without regard to any
applicable grace periods) from time to time on demand at the same rate to the
extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. METHOD OF PAYMENT. The Company shall make payments in respect of Global Notes
(including principal, premium, if any, and interest and Liquidated Damages, if
any) by wire transfer of immediately available funds to the accounts specified
by the Note Custodian or, at the option of the Company, payment of interest and
Liquidated Damages, if any, may be made by check mailed to the Holders of the
Notes at their respective addresses set forth in the register of Holders of
Notes. Notwithstanding the foregoing, all payments with respect to the Notes
(the Holders of which have provided wire transfer instructions to the Company at
least ten Business Days prior to the applicable payment date), will be required
to be made by wire transfer of immediately available funds to the accounts
specified by the Holders thereof. Such payment shall be made in such coin or
currency of the United States of America as at the time of payment is legal
tender for the payment of public and private debts.
3. PAYING AGENT AND REGISTRAR. Initially, Marine Midland Bank, the Trustee under
the Indenture, will act as Paying Agent and Registrar. The Notes may be
presented for registration of transfer and exchange at the offices of the
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. INDENTURE. The Company issued the Notes under an Indenture dated as of June
13, 1997 ("Indenture") between the Company and the Trustee. The terms of the
Notes include those stated in the Indenture and those made part of the Indenture
by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code ▇▇.▇▇.
77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred
to the Indenture and such Act for a statement of such terms. The Notes are
general unsecured obligations of the Company limited to $200,000,000 in
aggregate principal amount.
5. OPTIONAL REDEMPTION.
Except as set forth in the following paragraphs, the Notes will not be
redeemable at the Company's option prior to June 15, 2002. On and after June 15,
2002, the Notes will be subject to redemption at the option of the Company, in
whole or in part, upon not less than 30 nor more than 60 days' written notice,
at the Redemption Prices (expressed as a percentage of principal amount) set
forth below, plus accrued and unpaid interest thereon, if any, to the applicable
Redemption Date, if redeemed during the twelve-month period beginning on June 15
of each of the years indicated below:
Year REDEMPTION
PRICE
2002 .................................... 105.563%
2003 .................................... 103.708%
2004 .................................... 101.854%
2005 and thereafter............................... 100.000%
In addition, at any time prior to June 15, 2000, the Company may on any
one or more occasions redeem up to 331/3% of the aggregate principal amount of
Notes originally issued (including, for this purpose, one or more series of
Notes issued under the Indenture after
A-3-3
the date of the Indenture) at a Redemption Price of 111.125% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any,
thereon, to the Redemption Date, with the net cash proceeds of one or more
Public Equity Offerings; provided that at least 662/3% of the Notes originally
issued (including, for this purpose, one or more series of Notes issued under
the Indenture after the date of the Indenture) remain outstanding immediately
after the occurrence of such redemption and provided, that such redemption
occurs within 60 days of the date of the closing of each such Public Equity
Offering. The Trustee shall select the Notes to be purchased in the manner
described in the Indenture.
In addition, at any time prior to June 15, 2002, the Company may, at its
option, redeem the Notes, in whole or in part, at a Redemption Price equal to
100% of the principal amount thereof plus the applicable Make-Whole Premium.
6. MANDATORY REDEMPTION. Except as set forth in paragraph 8, the Company shall
not be required to make mandatory redemption or sinking fund payments with
respect to the Notes.
7. NOTICE OF REDEMPTION. Notice of redemption will be mailed by first class
mail, postage prepaid, at least 30 days but not more than 60 days before the
Redemption Date to each Holder of Notes to be redeemed at such Holder's
registered address. If any Note is to be redeemed in part only, any notice of
redemption that relates to such Note shall state the portion of the principal
amount thereof to be redeemed. On or after the Redemption Date, unless the
Company defaults in making the redemption payments, interest ceases to accrue on
the Notes or portions thereof called for redemption.
8. REPURCHASE AT OPTION OF HOLDERS. (a) Upon the occurrence of a Change of
Control, the Company shall make an offer (a "Change of Control Offer") to
purchase all or any part (equal to $1,000 or an integral multiple thereof) of
the Notes at a price in cash equal to 101% of the aggregate principal amount
thereof plus accrued and unpaid interest and Liquidated Damages, if any,
thereon, to the date of purchase (the "Change of Control Payment"). Prior to
complying with the provisions of Section 4.09 of the Indenture, but in any event
within 30 days following a Change of Control, the Company shall either repay in
full in cash all Indebtedness under the Credit Agreement (and terminate all
commitments thereunder) and all other Senior Debt the terms of which require
repayment upon a Change of Control or offer to repay in full in cash all
Indebtedness under the Credit Agreement (and terminate all commitments
thereunder) and all such other Senior Debt and to repay the Indebtedness owed to
(and terminate the commitments of) each lender which has accepted such offer or
obtain the requisite consents under the Credit Agreement and all such other
Senior Debt to permit the repurchase of the Notes. Within 30 days following any
Change of Control, the Company shall mail a notice to each Holder of Notes
issued under the Indenture, with a copy to the Trustee, containing the
information set forth in Section 4.09 of the Indenture. Holders of Notes that
are subject to an offer to purchase may elect to have such Notes purchased by
completing the form entitled "Option of Holder to Elect Purchase" on the reverse
side of this Note.
(b) When the aggregate amount of Excess Proceeds in connection with Asset
Sales by the Company exceeds $5.0 million, the Company shall make an offer to
all Holders of Notes (an "Asset Sale Offer") to purchase the maximum principal
amount of Notes that may be purchased out of the Excess Proceeds, at an offer
price in cash equal to 100% of the principal amount thereof plus accrued and
unpaid interest and Liquidated Damages, if any, thereon to the date of purchase,
in accordance with the procedures set forth in Section 3.10 of the Indenture.
The Company will
A-3-4
commence an Asset Sale Offer with respect to Excess Proceeds within ten Business
Days after the date that Excess Proceeds exceeds $5.0 million by mailing by
first class mail the notice required pursuant to the terms Section 3.10 of the
Indenture, with a copy to the Trustee. To the extent that the aggregate amount
of Notes tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount of Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes to be purchased on a pro rata basis. Upon completion of such offer to
purchase, the amount of Excess Proceeds shall be reset at zero. Holders of Notes
that are the subject of an offer to purchase will receive an Asset Sale Offer
from the Company prior to any related purchase date and may elect to have such
Notes purchased by completing the form entitled "Option of Holder to Elect
Purchase" on the reverse side of this Note.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without
coupons in minimum denominations of $1,000 and integral multiples of $1,000 in
excess thereof (subject to a minimum initial purchase requirement of $100,000
for Notes sold to institutional investors that qualify as accredited investors
as defined in Rule 501(a)(1), (2), (3) and (7) under the Securities Act other
than in reliance on Rule 144A or Regulation S). The transfer of Notes may be
registered and Notes may be exchanged only as provided in Article 2 of the
Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents (including
legal opinions) and the Company may require a Holder to pay any taxes and fees
required by law or permitted by the Indenture. The Company need not exchange or
register the transfer of any Note or portion of a Note selected for redemption,
except for the unredeemed portion of any Note being redeemed in part. Also, it
need not exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.
10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its
owner for all purposes.
11. SUBORDINATION. Each Holder by accepting a Note agrees that the payment (by
set-off or otherwise) of principal of, premium, if any, and interest and
Liquidated Damages, if any, on the Notes (including with respect to any
repurchases of the Notes) is subordinated in right of payment, to the extent and
in the manner provided in Article 10 of the Indenture, to the prior payment in
full in cash, or at the option of the holders of Senior Debt, in Cash
Equivalents of all obligations in respect of Senior Debt, whether outstanding on
the date of the Indenture or thereafter incurred.
12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the
Indenture, the Notes or any Subsidiary Guarantee may be amended or supplemented
with the consent of the Holders of at least a majority in principal amount of
the then outstanding Notes (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, the
Notes), and, subject to the terms of the Indenture and any applicable Subsidiary
Guarantee, any existing default or compliance with any provision of the
Indenture, the Notes or any Subsidiary Guarantee may be waived with the consent
of the Holders of a majority in principal amount of the then outstanding Notes
(including consents obtained in connection with a tender offer or exchange offer
for the Notes). Without the consent of any Holder of a Note, the Indenture, the
Notes and any Subsidiary Guarantee may be amended or supplemented to cure any
ambiguity, defect or inconsistency, to provide for uncertificated Notes in
addition to or in place of certificated Notes, to comply with Article 5 of the
Indenture, to provide for the assumption of the Company's or any Guarantor's
obligations to Holders of the Notes, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal
A-3-5
rights under the Indenture of any such Holder, to add covenants for the benefit
of the Holders or to surrender any right or power conferred upon the Company, to
comply with the requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the TIA or to add a Guarantor under the
Indenture.
13. DEFAULTS AND REMEDIES. Each of the following constitutes an "Event of
Default": (a) default in payment when due (payable at maturity, upon redemption
or otherwise), of principal of or premium, if any, on the Notes (whether or not
such payment shall be prohibited by Article 10 of the Indenture); (b) default
for 30 days or more in the payment when due of interest on, or Liquidated
Damages, if any, with respect to the Notes (whether or not such payment shall be
prohibited by Article 10 of the Indenture; (c) failure by the Company to comply
with Sections 4.09, 4.10 and 5.01 of the Indenture; (d) failure by the Company
for 30 days after receipt of written notice to comply with any of its other
agreements in the Indenture or the Notes; (e) default under any mortgage,
indenture or instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the Company or any
of its Restricted Subsidiaries (or the payment of which is guaranteed by the
Company or any of its Restricted Subsidiaries) whether such Indebtedness or
guarantee now exists, or is created after the date of the Indenture, which
default (1) is caused by the failure to pay principal of or premium, if any, or
interest on such Indebtedness prior to the expiration of the grace period
provided in such Indebtedness on the date of such default (a "Payment Default")
at its stated final maturity (after giving effect to any applicable grace
periods) or (2) results in the acceleration of such Indebtedness prior to its
express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates $5.0 million or more; (f) failure by the Company or
any of its Restricted Subsidiaries to pay final and non-appealable judgments
aggregating in excess of $5.0 million, which judgments are not paid, discharged
or stayed for a period of 60 days; (g) the Company or any Restricted Subsidiary
that is a Significant Subsidiary pursuant to or within the meaning of any
Bankruptcy Law: (i) commences a voluntary case, (ii) consents to the entry of an
order for relief against it in an involuntary case in which it is the debtor,
(iii) consents to the appointment of a Custodian of it or for all or
substantially all of its property, (iv) makes a general assignment for the
benefit of its creditors, or (v) admits in writing its inability generally to
pay its debts as the same become due; (h) a court of competent jurisdiction
enters an order or decree under any Bankruptcy Law that: (i) is for relief
against the Company or any Restricted Subsidiary that is a Significant
Subsidiary in an involuntary case in which it is the debtor, (ii) appoints a
Custodian of the Company or any Restricted Subsidiary that is a Significant
Subsidiary or for all or substantially all of the property of the Company or any
Restricted Subsidiary that is a Significant Subsidiary; or (iii) orders the
liquidation of the Company or any Restricted Subsidiary that is a Significant
Subsidiary, and the order or decree contemplated in clauses (i), (ii) or (iii)
of this clause (h), remains unstayed and in effect for 60 consecutive days; or
(i) except as permitted by the Indenture, any Subsidiary Guarantee shall be held
in any judicial proceeding to be unenforceable or invalid and such judgment has
become final or non-appealable or shall cease for any other reason to be in full
force and effect or any Guarantor, or any Person acting on behalf of any
Guarantor shall deny or disaffirm its obligations under its Subsidiary
Guarantee.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately by notice in writing to
the Company and the Trustee; provided that so long as any Indebtedness permitted
to be incurred pursuant to the Credit Agreement shall be outstanding, such
acceleration shall not be effective until the earlier of (i) an acceleration of
any such Indebtedness
A-3-6
under the Credit Agreement or (ii) five Business Days after receipt by the
Company and the Agent of written notice of such acceleration. Notwithstanding
the foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, with respect to the Company, any Significant
Subsidiary that is a Restricted Subsidiary or any group of Restricted
Subsidiaries that, taken together, would constitute a Significant Subsidiary,
all outstanding Notes will become due and payable without further action or
notice. Holders of the Notes may not enforce the Indenture or the Notes except
as provided in the Indenture. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Notes may direct the
Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of the Notes notice of any continuing Default or Event of Default
(except a Default or Event of Default relating to the payment of principal or
interest) if it determines that withholding notice is in their interest.
14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other
capacity, may become the owner or pledgee of Notes and may otherwise deal with
the Company with the same rights it would have if it were not the Trustee.
15. NO RECOURSE AGAINST OTHERS. A director, officer, employee or stockholder, as
such, of the Company shall not have any liability for any obligations of the
Company under these Notes or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. Each Holder by accepting
any of these Notes waives and releases all such liability.
16. AUTHENTICATION. This Note shall not be valid until authenticated by the
manual signature of the Trustee.
17. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder
or an assignee, such as: TEN COM (= tenants in common), TENANT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
18. ADDITIONAL RIGHTS OF HOLDERS OF TRANSFER RESTRICTED SECURITIES. In addition
to the rights provided to Holders of the Notes under the Indenture, Holders of
Transferred Restricted Securities (as defined in the Registration Rights
Agreement) shall have all the rights set forth in the Registration Rights
Agreement, dated as of the date hereof, among the Company, the Guarantors and
the Initial Purchaser (the "Registration Rights Agreement").
19. SUBSIDIARY GUARANTEES. Payment of principal, premium, if any, and interest
(including interest on overdue principal and overdue interest, if lawful) and
Liquidated Damages, if any, is unconditionally guaranteed by certain
subsidiaries of the Company. Such guaranties are junior and subordinated to the
guaranties of such subsidiaries on the same basis as the Notes are junior and
subordinated to Senior Debt.
20. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company have caused CUSIP
numbers to be printed on the Notes and the Trustee may use CUSIP numbers in
notices of redemption as a convenience to Holders. No representation is made as
to the accuracy of such numbers either as printed on the Notes or as contained
in any notice of redemption and reliance may be placed only on the other
identification numbers placed thereon.
The Company shall furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
A-3-7
Precise Technology, Inc.
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Secretary
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
A-3-8
EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER
Precise Technology, Inc.
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Marine Midland Bank
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: 11 1/8% Senior Subordinated Notes due 2007
Reference is hereby made to the Indenture, dated as of June 13, 1997 (the
"Indenture"), between Precise Technology, Inc., as issuer (the "Company"), and
Marine Midland Bank, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
______________, (the "Transferor") owns and proposes to transfer the
Note[s] or interest in such Note[s] specified in Annex A hereto, in the
principal amount of $___________ in such Note[s] or interests (the "Transfer"),
to __________ (the "Transferee"), as further specified in Annex A hereto. In
connection with the Transfer, the Transferor hereby certifies that:
[CHECK ALL THAT APPLY]
1.|_|Check if Transferee will take delivery of a beneficial interest in the 144A
Global Note or a Restricted Definitive Note Pursuant to Rule 144A. The Transfer
is being effected pursuant to and in accordance with Rule 144A under the United
States Securities Act of 1933, as amended (the "Securities Act"), and,
accordingly, the Transferor hereby further certifies that the beneficial
interest or Restricted Definitive Note is being transferred to a Person that the
Transferor reasonably believed and believes is purchasing the beneficial
interest or Restricted Definitive Note for its own account, or for one or more
accounts with respect to which such Person exercises sole investment discretion,
and such Person and each such account is a "qualified institutional buyer"
within the meaning of Rule 144A in a transaction meeting the requirements of
Rule 144A and such Transfer is in compliance with any applicable blue sky
securities laws of any state of the United States. Upon consummation of the
proposed Transfer in accordance with the terms of the Indenture, the transferred
beneficial interest or Restricted Definitive Note will be subject to the
restrictions on transfer enumerated in the Private Placement Legend printed on
the 144A Global Note and/or the Restricted Definitive Note and in the Indenture
and the Securities Act.
2.|_|Check if Transferee will take delivery of a beneficial interest in the
Temporary Regulation S Global Note, the Regulation S Global Note or a Restricted
Definitive Note pursuant to Regulation S. The Transfer is being effected
pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act
and, accordingly, the Transferor hereby further certifies that (i) the Transfer
is not being made to a person in the United States and (x) at the time the buy
order was originated, the Transferee was outside the United States or such
Transferor and any Person acting
B-1
on its behalf reasonably believed and believes that the Transferee was outside
the United States or (y) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither such
Transferor nor any Person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States, (ii) no directed selling efforts
have been made in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S under the Securities Act, (iii) the transaction is not
part of a plan or scheme to evade the registration requirements of the
Securities Act and (iv) if the proposed transfer is being made prior to the
expiration of the Restricted Period, the transfer is not being made to a U.S.
Person or for the account or benefit of a U.S. Person (other than an Initial
Purchaser). Upon consummation of the proposed transfer in accordance with the
terms of the Indenture, the transferred beneficial interest or Restricted
Definitive Note will be subject to the restrictions on Transfer enumerated in
the Private Placement Legend printed on the Regulation S Global Note, the
Temporary Regulation S Global Note and/or the Definitive Note and in the
Indenture and the Securities Act.
3.|_|Check and complete if Transferee will take delivery of a Restricted
Definitive Note pursuant to any provision of the Securities Act other than Rule
144A or Regulation S. The Transfer is being effected in compliance with the
transfer restrictions applicable to Restricted Definitive Notes and pursuant to
and in accordance with the Securities Act and any applicable blue sky securities
laws of any state of the United States, and accordingly the Transferor hereby
further certifies that (check one):
(a)|_|such Transfer is being effected pursuant to and in accordance with
Rule 144 under the Securities Act;
or
(b)|_|such Transfer is being effected to the Company or a Subsidiary
thereof;
or
(c)|_|such Transfer is being effected pursuant to an effective
registration statement under the Securities Act and in compliance with the
prospectus delivery requirements of the Securities Act;
or
(d)|_|such Transfer is being effected to an Accredited Investor and
pursuant to an exemption from the registration requirements of the Securities
Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor hereby
further certifies that the Transfer complies with the transfer restrictions
applicable to Restricted Definitive Notes and the requirements of the exemption
claimed, which certification is supported by (1) a certificate executed by the
Transferee in the form of Exhibit D to the Indenture and (2) if the Company so
requests, an Opinion of Counsel reasonably acceptable to the Company provided by
the Transferor or the Transferee (a copy of which the Transferor has attached to
this certification), to the effect that such Transfer is in compliance with the
Securities Act. Upon consummation of the proposed transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Restricted
Definitive Note will be subject to the restrictions on transfer enumerated in
the Private Placement Legend printed on the Restricted Definitive Notes and in
the Indenture and the Securities Act.
B-2
4.|_|Check if Transferee will take delivery of a beneficial interest in an
Unrestricted Global Note or of an Unrestricted Definitive Note.
(a)|_|Check if Transfer is pursuant to Rule 144. (i) The Transfer is being
effected pursuant to and in accordance with Rule 144 under the Securities Act
and in compliance with the transfer restrictions contained in the Indenture and
any applicable blue sky securities laws of any state of the United States and
(ii) the restrictions on transfer contained in the Indenture and the Private
Placement Legend are not required in order to maintain compliance with the
Securities Act. Upon consummation of the proposed Transfer in accordance with
the terms of the Indenture, the transferred beneficial interest or Unrestricted
Definitive Note will no longer be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes, on Restricted Definitive Notes and in the Indenture.
(b)|_|Check if Transfer is Pursuant to Regulation S. (i) The Transfer is
being effected pursuant to and in accordance with Rule 903 or Rule 904 under the
Securities Act and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any state of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Unrestricted Definitive Note will no longer be subject to the restrictions on
transfer enumerated in the Private Placement Legend printed on the Restricted
Global Notes, on Restricted Definitive Notes and in the Indenture.
(c)|_|Check if Transfer is Pursuant to Other Exemption. (i) The Transfer
is being effected pursuant to and in compliance with an exemption from the
registration requirements of the Securities Act other than Rule 144, Rule 903 or
Rule 904 and in compliance with the transfer restrictions contained in the
Indenture and any applicable blue sky securities laws of any State of the United
States and (ii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act. Upon consummation of the proposed Transfer in accordance
with the terms of the Indenture, the transferred beneficial interest or
Unrestricted Definitive Note will not be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the Restricted Global
Notes or Restricted Definitive Notes and in the Indenture.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
---------------------------
[Insert Name of Transferor]
By:
------------------------
Name:
Title:
Dated: ,
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B-3
ANNEX A TO CERTIFICATE OF TRANSFER
1. The Transferor owns and proposes to transfer the following:
|_|a beneficial interest in the:
(i) |_| 144A Global Note (QIB Global Note) (CUSIP No. 74018P AA7),
or
(ii) 144A Global Note |_| (Accredited Investor Global Note) (CUSIP
No. 74018P AB5).
2. After the Transfer, the Transferee will hold:
[CHECK ONE]
(a)|_|a beneficial interest in the:
(i) |_| 144A Global Note (QIB Global Note) (CUSIP ▇▇. ▇▇▇▇▇▇ ▇▇▇),
▇▇
(▇▇) |_| 144A Global Note (Accredited Investor Global Note) (CUSIP
▇▇. ▇▇▇▇▇▇ ▇▇▇), ▇▇
(▇▇▇) |_| Unrestricted Global Note (CUSIP_); or
(b)|_|a Restricted Definitive Note; or
(c)|_|an Unrestricted Definitive Note,
in accordance with the terms of the Indenture.
B-4
EXHIBIT C
FORM OF CERTIFICATE OF EXCHANGE
Precise Technology, Inc.
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Marine Midland Bank
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▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: 11 1/8% Senior Subordinated Notes due 2007 (CUSIP )
----------------------------------------------------------------------
Reference is hereby made to the Indenture, dated as of June 13, 1997 (the
"Indenture"), between Precise Technology, Inc., as issuer (the "Company"), and
Marine Midland Bank, as trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
_________________, (the "Owner") owns and proposes to exchange the Note[s]
or interest in such Note[s] specified herein, in the principal amount of
$____________ in such Note[s] or interests (the "Exchange"). In connection with
the Exchange, the Owner hereby certifies that:
1. Exchange of Restricted Definitive Notes or Beneficial Interests in a
Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests
in an Unrestricted Global Note
(a)|_|Check if Exchange is from beneficial interest in a Restricted Global
Note to beneficial interest in an Unrestricted Global Note. In connection with
the Exchange of the Owner's beneficial interest in a Restricted Global Note for
a beneficial interest in an Unrestricted Global Note in an equal principal
amount, the Owner hereby certifies (i) the beneficial interest is being acquired
for the Owner's own account without transfer, (ii) such Exchange has been
effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the United States
Securities Act of 1933, as amended (the "Securities Act"), (iii) the
restrictions on transfer contained in the Indenture and the Private Placement
Legend are not required in order to maintain compliance with the Securities Act
and (iv) the beneficial interest in an Unrestricted Global Note is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(b)|_|Check if Exchange is from beneficial interest in a Restricted Global
Note to Unrestricted Definitive Note. In connection with the Exchange of the
Owner's beneficial interest in a Restricted Global Note for an Unrestricted
Definitive Note, the Owner hereby certifies (i) the Definitive Note is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to the
Restricted Global Notes and pursuant to and in accordance with the Securities
Act, (iii) the restrictions on transfer contained in the Indenture and the
Private Placement Legend are not required in order to maintain compliance with
the Securities Act and (iv) the Unrestricted Definitive Note is being acquired
in compliance with any applicable blue sky securities laws of any state of the
United States.
C-1
(c)|_|Check if Exchange is from Restricted Definitive Note to beneficial
interest in an Unrestricted Global Note. In connection with the Owner's Exchange
of a Restricted Definitive Note for a beneficial interest in an Unrestricted
Global Note, the Owner hereby certifies (i) the beneficial interest is being
acquired for the Owner's own account without transfer, (ii) such Exchange has
been effected in compliance with the transfer restrictions applicable to
Restricted Definitive Notes and pursuant to and in accordance with the
Securities Act, (iii) the restrictions on transfer contained in the Indenture
and the Private Placement Legend are not required in order to maintain
compliance with the Securities Act and (iv) the beneficial interest is being
acquired in compliance with any applicable blue sky securities laws of any state
of the United States.
(d)|_|Check if Exchange is from Restricted Definitive Note to Unrestricted
Definitive Note. In connection with the Owner's Exchange of a Restricted
Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies
(i) the Unrestricted Definitive Note is being acquired for the Owner's own
account without transfer, (ii) such Exchange has been effected in compliance
with the transfer restrictions applicable to Restricted Definitive Notes and
pursuant to and in accordance with the Securities Act, (iii) the restrictions on
transfer contained in the Indenture and the Private Placement Legend are not
required in order to maintain compliance with the Securities Act and (iv) the
Unrestricted Definitive Note is being acquired in compliance with any applicable
blue sky securities laws of any state of the United States.
2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted
Global Notes for Restricted Definitive Notes or Beneficial Interests in
Restricted Global Notes
(a)|_|Check if Exchange is from beneficial interest in a Restricted Global
Note to Restricted Definitive Note. In connection with the Exchange of the
Owner's beneficial interest in a Restricted Global Note for a Restricted
Definitive Note with an equal principal amount, the Owner hereby certifies that
the Restricted Definitive Note is being acquired for the Owner's own account
without transfer. Upon consummation of the proposed Exchange in accordance with
the terms of the Indenture, the Restricted Definitive Note issued will continue
to be subject to the restrictions on transfer enumerated in the Private
Placement Legend printed on the Restricted Definitive Note and in the Indenture
and the Securities Act.
(b)|_|Check if Exchange is from Restricted Definitive Note to beneficial
interest in a Restricted Global Note. In connection with the Exchange of the
Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE]
|_| 144A Global Note or |_| Regulation S Global Note, with an equal principal
amount, the Owner hereby certifies (i) such Owner acquired such Restricted
Definitive Note in a transaction pursuant to Rule 144A or Regulation S, (ii) the
beneficial interest is being acquired for the Owner's own account without
transfer and (iii) such Exchange has been effected in compliance with the
transfer restrictions applicable to the Restricted Global Notes and pursuant to
and in accordance with the Securities Act, and in compliance with any applicable
blue sky securities laws of any state of the United States. Upon consummation of
the proposed Exchange in accordance with the terms of the Indenture, the
beneficial interest issued will be subject to the restrictions on transfer
enumerated in the Private Placement Legend printed on the relevant Restricted
Global Note and in the Indenture and the Securities Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
C-2
[Insert Name of Owner]
By:
----------------------------
Name:
Title:
Dated: ,
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C-3
EXHIBIT D
FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Precise Technology, Inc.
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Marine Midland Bank
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: 11 1/8% Senior Subordinated Notes due 2007
Reference is hereby made to the Indenture, dated as of June 13, 1997 (the
"Indenture"), between Precise Technology, Inc., as issuer (the "Company"), and
First Trust of New York, National Association, as trustee. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of Restricted Definitive Notes we confirm that:
1. We understand that any subsequent transfer of the Notes or any interest
therein is subject to certain restrictions and conditions set forth in the
Indenture and the undersigned agrees to be bound by, and not to resell, pledge
or otherwise transfer the Notes or any interest therein except in compliance
with, such restrictions and conditions and the United States Securities Act of
1933, as amended (the "Securities Act").
2. We understand that the Notes have not been registered under the
Securities Act, and that the Notes and any interest therein may not be offered
or sold except as permitted in the following sentence. We agree, on our own
behalf and on behalf of each account for which we acquire any Notes (for which
are acting as hereinafter stated), that such Notes may be offered, resold,
pledged or otherwise transferred only (i) to a person whom we reasonably believe
to be a "qualified institutional buyer" (as defined in Rule 144A under the
Securities Act) in a transaction meeting the requirements of Rule 144A, in a
transaction meeting the requirements of Rule 144 under the Securities Act,
outside the United States in a transaction meeting the requirements of Rule 904
under the Securities Act, or in accordance with another exemption from the
registration requirements of the Securities Act (and based upon an Opinion of
Counsel if the Company so Requests), (ii) to the Company or (iii) pursuant to an
effective registration statement, and, in each case, in accordance with any
applicable securities laws of any State of the United States or any other
applicable jurisdiction. We further agree to provide to any person purchasing
the Definitive Note or a beneficial interest in a Global Note from us in a
transaction meeting the requirements of (i) or (ii) of this paragraph a notice
advising such purchaser that resales thereof are restricted as stated herein.
D-1
3. We understand that, on any proposed resale of the Notes or beneficial
interest therein, we will be required to furnish to you and the Company such
certifications, legal opinions and other information as you and the Company may
reasonably require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Notes purchased by us will bear a
legend to the foregoing effect. We further understand that any subsequent
transfer by us of the Notes or beneficial interest therein acquired by us must
be effected through one of the Placement Agents.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1),(2),(3) or(7) of Regulation D under the Securities Act) and have such
knowledge and experience in financial and business matters as to be capable of
evaluating the merits and risks of our investment in the Notes, and we and any
accounts for which we are acting are each able to bear the economic risk of our
or its investment.
5. We are acquiring the Notes without a view to distribution thereof in
violation of the Securities Act for our own account or for one or more accounts
(each of which is an institutional "accredited investor") as to each of which we
exercise sole investment discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
------------------------------------
[Insert Name of Accredited Investor]
------------------------------------
By:
Name:
Title:
Dated: ,
----------------- ----
D-2
EXHIBIT E
SUBSIDIARY GUARANTEE
Each Guarantor hereby, jointly and severally, unconditionally guarantees
to each Holder of a Note authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and
enforceability of the Indenture, the Notes and the Obligations of the Company
under the Notes or under the Indenture, that: (a) the principal of, premium, if
any, interest and Liquidated Damages, if any, on the Notes will be promptly paid
in full when due, subject to any applicable grace period, whether at maturity,
by acceleration, redemption or otherwise, and interest on overdue principal,
premium, if any, (to the extent permitted by law) interest on any interest, if
any, and Liquidated Damages, if any, on the Notes and all other payment
Obligations of the Company to the Holders or the Trustee under the Indenture or
under the Notes will be promptly paid in full and performed, all in accordance
with the terms thereof; and (b) in case of any extension of time of payment or
renewal of any Notes or any of such other payment Obligations, the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, subject to any applicable grace period, whether at stated
maturity, by acceleration, redemption or otherwise. Failing payment when so due
of any amount so guaranteed for whatever reason, the Guarantors will be jointly
and severally obligated to pay the same immediately.
The obligations of the Guarantor to the Holders and to the Trustee
pursuant to this Subsidiary Guarantee and the Indenture are expressly set forth
in Article 12 of the Indenture, and reference is hereby made to such Indenture
for the precise terms of this Subsidiary Guarantee. The terms of Article 12 of
the Indenture are incorporated herein by reference. This Subsidiary Guarantee is
subject to release as and to the extent provided in Section 12.04 of the
Indenture.
This is a continuing Subsidiary Guarantee and shall remain in full force
and effect and shall be binding upon each Guarantor and its respective
successors and assigns to the extent set forth in the Indenture until full and
final payment of all of the Company's Obligations under the Notes and the
Indenture and shall inure to the benefit of the successors and assigns of the
Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges herein conferred
upon that party shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof. This is a
Subsidiary Guarantee of payment and not a guarantee of collection.
This Subsidiary Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Note upon which this Subsidiary
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
For purposes hereof, each Guarantor's liability shall be limited to the
lesser of (i) the aggregate amount of the Obligations of the Company under the
Notes and the Indenture and (ii) the amount, if any, which would not have (A)
rendered such Guarantor "insolvent" (as such term is defined in the Bankruptcy
Law and in the Debtor and Creditor Law of the State of New York) or (B) left
such Guarantor with unreasonably small capital at the time its Subsidiary
Guarantee of the Notes was entered into; provided that, it will be a presumption
in any lawsuit or other proceeding in which a Guarantor is a party that the
amount guaranteed pursuant to the Subsidiary Guarantee is the amount set forth
in clause (i) above unless any creditor, or representative of creditors of such
Guarantor, or debtor in possession or trustee in bankruptcy of such Guarantor,
otherwise proves in such a lawsuit that the aggregate liability of the Guarantor
is limited to the amount set forth in clause (ii) above. The Indenture provides
that, in making any determination as to the solvency or sufficiency of capital
of a Guarantor in accordance with the previous
sentence, the right of such Guarantors to contribution from other Guarantors and
any other rights such Guarantors may have, contractual or otherwise, shall be
taken into account.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
PRECISE TMP, INC.
By:
-----------------------------
Name:
Title:
▇▇▇▇▇▇ TOOL, MOLD & DIE, INC.
By:
-----------------------------
Name:
Title:
PRECISE POLESTAR, INC.
By:
-----------------------------
Name:
Title:
PRECISE TECHNOLOGY OF DELAWARE INC.
By:
-----------------------------
Name:
Title:
PRECISE TECHNOLOGY OF ILLINOIS INC.
By:
-----------------------------
Name:
Title:
SCHEDULE I
Term Loans:
Delaware State Loan $112,604.00
Concord Comm. Corp. (Phg tool EDM) $186,339.21
Concord Comm. Corp. (TMP EDM) $171,942.12
-----------
SUBTOTAL: $470,885.33
Cap Leases:
Phoenixcor (Del Presses) $1,184,237.24
▇▇▇▇▇▇ Financial (LAF Presses) $778,009.22
TM Acceptance (PGH Presses) $2,519,605.18
US Bancorp. (Polestar Presses) $382,964.99
Concord Comm. Corp. (TMP ▇. ▇▇▇▇.) $408,317.06
Pencader Assoc. (Del) $118,102.47
OTHER CAPITAL LEASES:
Vision Fin. (PGH fork trk) $3,031.51,
Iron & Glass Bank (Eng Software) $40,081.00
Concord Capital Lease (Various Equip) $271,014.89
Concord Comm. (Pgh tooling grinder) $57,701.18
Concord Comm. (Unity Tooling EDM) $118,908.64
Concord Comm. (PHG Tool CNC) $145,262.01
Concord Comm. (▇▇▇▇▇▇ Grinder $223,410.00
-------------
$6,250,645.39
-------------
Totals $6,721,530.72
EXHIBIT I
SUBSIDIARY GUARANTEE
Each Guarantor hereby, jointly and severally, unconditionally guarantees
to each Holder of a Note authenticated and delivered by the Trustee and to the
Trustee and its successors and assigns, irrespective of the validity and
enforceability of the Indenture, the Notes and the Obligations of the Company
under the Notes or under the Indenture, that: (a) the principal of, premium, if
any, interest and Liquidated Damages, if any, on the Notes will be promptly paid
in full when due, subject to any applicable grace period, whether at maturity,
by acceleration, redemption or otherwise, and interest on overdue principal,
premium, if any, (to the extent permitted by law) interest on any interest, if
any, and Liquidated Damages, if any, on the Notes and all other payment
Obligations of the Company to the Holders or the Trustee under the Indenture or
under the Notes will be promptly paid in full and performed, all in accordance
with the terms thereof; and (b) in case of any extension of time of payment or
renewal of any Notes or any of such other payment Obligations, the same will be
promptly paid in full when due or performed in accordance with the terms of the
extension or renewal, subject to any applicable grace period, whether at stated
maturity, by acceleration, redemption or otherwise. Failing payment when so due
of any amount so guaranteed for whatever reason, the Guarantors will be jointly
and severally obligated to pay the same immediately.
The obligations of the Guarantor to the Holders and to the Trustee
pursuant to this Subsidiary Guarantee and the Indenture are expressly set forth
in Article 12 of the Indenture, and reference is hereby made to such Indenture
for the precise terms of this Subsidiary Guarantee. The terms of Article 12 of
the Indenture are incorporated herein by reference. This Subsidiary Guarantee is
subject to release as and to the extent provided in Section 12.04 of the
Indenture.
This is a continuing Subsidiary Guarantee and shall remain in full force
and effect and shall be binding upon each Guarantor and its respective
successors and assigns to the extent set forth in the Indenture until full and
final payment of all of the Company's Obligations under the Notes and the
Indenture and shall inure to the benefit of the successors and assigns of the
Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges herein conferred
upon that party shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof. This is a
Subsidiary Guarantee of payment and not a guarantee of collection.
This Subsidiary Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Note upon which this Subsidiary
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
For purposes hereof, each Guarantor's liability shall be limited to the
lesser of (i) the aggregate amount of the Obligations of the Company under the
Notes and the Indenture and (ii) the amount, if any, which would not have (A)
rendered such Guarantor "insolvent" (as such term is defined in the Bankruptcy
Law and in the Debtor and Creditor Law of the State of New York) or (B) left
such Guarantor with unreasonably small capital at the time its Subsidiary
Guarantee of the Notes was entered into; provided that, it will be a presumption
in any lawsuit or other proceeding in which a Guarantor is a party that the
amount guaranteed pursuant to the Subsidiary Guarantee is the amount set forth
in clause (i) above unless any creditor, or representative of creditors of such
Guarantor, or debtor in possession or trustee in bankruptcy of such Guarantor,
otherwise proves in such a lawsuit that the aggregate liability of the Guarantor
is limited to the amount set forth in clause (ii) above. The Indenture provides
that, in making any determination as to the solvency or sufficiency of capital
of a Guarantor in accordance with the previous
sentence, the right of such Guarantors to contribution from other Guarantors and
any other rights such Guarantors may have, contractual or otherwise, shall be
taken into account.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
PRECISE TMP, INC.
By:
-----------------------------
Name:
Title:
▇▇▇▇▇▇ TOOL, MOLD & DIE, INC.
By:
-----------------------------
Name:
Title:
PRECISE POLESTAR, INC.
By:
-----------------------------
Name:
Title:
PRECISE TECHNOLOGY OF DELAWARE INC.
By:
-----------------------------
Name:
Title:
PRECISE TECHNOLOGY OF ILLINOIS INC.
By:
-----------------------------
Name:
Title:
EXHIBIT J
EXECUTION COPY
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PRECISE TECHNOLOGY, INC.
PRECISE TMP, INC.
▇▇▇▇▇▇ TOOL, MOLD & DIE, INC.
PRECISE POLESTAR, INC.
PRECISE TECHNOLOGY OF DELAWARE INC.
PRECISE TECHNOLOGY OF ILLINOIS INC.
11 1/8% SENIOR SUBORDINATED NOTES DUE 2007
REGISTRATION RIGHTS AGREEMENT
June 13, 1997
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
================================================================================
This Registration Rights Agreement (this "Agreement") is made and entered
into as of June 13, 1997 by and among Precise Technology, Inc., a Delaware
corporation (the "Company"), Precise TMP, Inc., a Virginia corporation, ▇▇▇▇▇▇
Tool, Mold & Die, Inc., a Florida corporation, Precise Polestar, Inc., a
Virginia corporation, Precise Technology of Delaware Inc., a Delaware
corporation, and Precise Technology of Illinois Inc., a Delaware corporation
(collectively, the "Guarantors"), Bear, ▇▇▇▇▇▇▇ & Co. Inc. and ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated (each a "Purchaser" and, collectively, the
"Purchasers"), each of whom has agreed to purchase the Company's 11 1/8% Senior
Subordinated Notes due 2007 (the "Notes") pursuant to the Purchase Agreement (as
defined below).
This Agreement is made pursuant to the Purchase Agreement, dated June 10,
1997 (the "Purchase Agreement"), by and among the Company, the Guarantors and
the Purchasers. In order to induce the Purchasers to purchase the Notes, the
Company has agreed to provide the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
obligations of the Purchasers set forth in Sections 2 and 3 of the Purchase
Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings:
Act: The Securities Act of 1933, as amended.
Broker-Dealer: Any broker or dealer registered under the Exchange Act.
Broker-Dealer Transfer Restricted Securities: New Notes that are acquired
by a Broker-Dealer in the Exchange Offer in exchange for Notes that such
Broker-Dealer acquired for its own account as a result of market making
activities or other trading activities (other than Notes acquired directly from
the Company or any of its affiliates).
Closing Date: The date of this Agreement.
Commission: The Securities and Exchange Commission.
Consummate: A Registered Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the New Notes to be issued in the Exchange Offer, (ii) the
maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum period
required pursuant to Section 3(b) hereof, and (iii) the delivery by the Company
to the Registrar under the Indenture of New Notes in the same aggregate
principal amount as the aggregate principal amount of Notes that were tendered
by Holders thereof pursuant to the Exchange Offer.
Damages Payment Date: With respect to the Notes, each Interest Payment
Date.
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer: The registration by the Company under the Act of the New
Notes pursuant to a Registration Statement pursuant to which the Company offers
the Holders of all outstanding Transfer Restricted Securities the opportunity to
exchange all such outstanding Transfer Restricted Securities held by such
Holders for New Notes in an aggregate principal amount equal to the aggregate
principal amount of the Transfer Restricted Securities tendered in such exchange
offer by such Holders.
Exchange Offer Registration Statement: The Registration Statement relating
to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Purchasers propose to sell
the Notes to (i) certain "qualified institutional buyers," as such term is
defined in Rule 144A under the Act, (ii) certain institutional "accredited
investors," as such term is defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Act ("Accredited Institutions") and (iii) non-U.S.
persons permitted to purchase the Notes in offshore transactions in reliance
upon Regulation S under the Act.
Holders: As defined in Section 2(b) hereof.
Indenture: The Indenture, dated as of June 13, 1997, between the Company,
the Guarantors and Marine Midland Bank, as trustee (the "Trustee"), pursuant to
which the Subordinated Notes are to be issued, as such Indenture is amended or
supplemented from time to time in accordance with the terms thereof.
Interest Payment Date: As defined in the Indenture and the Subordinated
Notes.
NASD: National Association of Securities Dealers, Inc.
New Notes: The Company's 11 1/8% New Senior Subordinated Notes due 2007 to
be issued pursuant to the Indenture in the Exchange Offer.
Person: An individual, partnership, corporation, trust or unincorporated
organization, or a government or agency or political subdivision thereof.
Prospectus: The prospectus included in a Registration Statement, as amended
or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.
Purchasers: As defined in the preamble hereto.
Record Holder: With respect to any Damages Payment Date relating to Notes,
each Person who is a Holder of Notes on the record date with respect to the
Interest Payment Date on which such Damages Payment Date shall occur.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company relating
to (a) an offering of New Notes pursuant to an Exchange Offer or (b) the
registration for resale of Transfer Restricted Securities pursuant to the Shelf
Registration Statement, which is filed pursuant to the provisions of this
Agreement, in each case, including the Prospectus included therein, all
amendments and supplements thereto (including post-effective amendments) and all
exhibits and material incorporated by reference therein.
Restricted Broker-Dealer: Any Broker-Dealer which holds Broker-Dealer
Transfer Restricted Securities.
Shelf Filing Deadline: As defined in Section 4 hereof.
Shelf Registration Statement: As defined in Section 4 hereof.
Subordinated Notes: The Notes and the New Notes.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as in
effect on the date of the Indenture.
Transfer Restricted Securities: Each Note, until the earliest to occur of
(a) the date on which such Note is exchanged in the Exchange Offer and entitled
to be resold to the public by the Holder thereof without complying with the
prospectus delivery requirements of the Act, (b) the date on which such Note has
been effectively registered under the Act and disposed of in accordance with a
Shelf Registration Statement and (c) the date on which such Note is distributed
to the public pursuant to Rule 144 under the Act or by a Restricted
Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the
Exchange Offer Registration Statement (including delivery of the Prospectus
contained therein).
Underwritten Registration or Underwritten Offering: A registration in which
securities of the Company are sold to an underwriter for reoffering to the
public.
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to the benefits
of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to be a
holder of Transfer Restricted Securities (each, a "Holder") whenever such Person
owns Transfer Restricted Securities.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permissible under applicable law
or Commission policy (after the procedures set forth in Section 6(a) below have
been complied with), the Company and the Guarantors shall (i) cause to be filed
with the Commission as soon as practicable after the Closing Date, but in no
event later than 45 days after the Closing Date, a Registration Statement under
the Act relating to the New Notes and the Exchange Offer, (ii) use their best
efforts to cause such Registration Statement to become effective at the earliest
possible time, but in no event later than 150 days after the Closing Date, (iii)
in connection with the foregoing, file (A) all pre-effective amendments to such
Registration Statement as may be necessary in order to cause such Registration
Statement to become effective, (B) if applicable, a post-effective amendment to
such Registration Statement pursuant to Rule 430A under the Act and (C) cause
all necessary filings, if any, in connection with the registration and
qualification of the New Notes to be made under the Blue Sky laws of such
jurisdictions as are necessary to permit Consummation of the Exchange Offer, and
(iv) promptly following the effectiveness of such Registration Statement,
commence the Exchange Offer. The Exchange Offer shall be on the appropriate form
permitting registration of the
New Notes to be offered in exchange for the Transfer Restricted Securities and
to permit sales of Broker-Dealer Transfer Restricted Securities by Restricted
Broker-Dealers as contemplated by Section 3(c) below.
(b) The Company shall use its best efforts to cause the Exchange Offer
Registration Statement to be effective continuously and shall keep the Exchange
Offer open for a period of not less than the minimum period required under
applicable federal and state securities laws to Consummate the Exchange Offer;
provided, however, that in no event shall such period be less than 20 business
days. The Company shall cause the Exchange Offer to comply with all applicable
federal and state securities laws. Without the consent of the Purchasers, no
securities other than the Subordinated Notes and the Subsidiary Guarantees shall
be included in the Exchange Offer Registration Statement. The Company shall use
its best efforts to cause the Exchange Offer to be Consummated on the earliest
practicable date after the Exchange Offer Registration Statement has become
effective, but in no event later than 30 business days thereafter.
(c) The Company shall indicate in a "Plan of Distribution" section
contained in the Prospectus contained in the Exchange Offer Registration
Statement that any Restricted Broker-Dealer who holds Notes that are Transfer
Restricted Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Company or an affiliate of the
Company), may exchange such Notes pursuant to the Exchange Offer; however, such
Restricted Broker-Dealer may be deemed to be an "underwriter" within the meaning
of the Act and must, therefore, deliver a prospectus meeting the requirements of
the Act in connection with any resales of the New Notes received by such
Restricted Broker-Dealer in the Exchange Offer, which prospectus delivery
requirement may be satisfied by the delivery by such Restricted Broker-Dealer of
the Prospectus contained in the Exchange Offer Registration Statement. Such
"Plan of Distribution" section shall also contain all other information with
respect to such sales of Broker-Dealer Transfer Restricted Securities by
Restricted Broker-Dealers that the Commission may require in order to permit
such sales pursuant thereto, but such "Plan of Distribution" shall not name any
such Restricted Broker-Dealer or disclose the amount of Notes held by any such
Restricted Broker-Dealer, except to the extent required by the Commission as a
result of a change in policy after the date of this Agreement.
The Company and the Guarantors shall use their best efforts to keep the
Exchange Offer Registration Statement continuously effective, supplemented and
amended as required by the provisions of Section 6(c) below to the extent
necessary to ensure that it is available for sales of Broker-Dealer Transfer
Restricted Securities by Restricted Broker-Dealers, and to ensure that it
conforms with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of one year from the date on which the Exchange Offer Registration
Statement is declared effective.
The Company shall provide sufficient copies of the latest version of such
Prospectus to such Restricted Broker-Dealers promptly upon request at any time
during such one-year period in order to facilitate such resales.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Company is not required to file an
Exchange Offer Registration Statement or to consummate the Exchange Offer
because, in the reasonable determination of the Company, the Exchange Offer is
not permitted by applicable law or Commission policy (after the procedures set
forth in Section 6(a) below have been complied with) or (ii) any Holder of
Transfer Restricted Securities shall notify the Company within 20 business days
of the Consummation of the Exchange Offer, in its reasonable
discretion, (A) that such Holder is prohibited by applicable law or Commission
policy from participating in the Exchange Offer, or (B) that such Holder may not
resell the New Notes acquired by it in the Exchange Offer to the public without
delivering a prospectus and that the Prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for such resales by such
Holder, or (C) that such Holder is a Broker-Dealer and holds Notes acquired
directly from the Company or one of its affiliates, then the Company and the
Guarantors shall
(x) cause to be filed a shelf registration statement pursuant to Rule
415 under the Act, which may be an amendment to the Exchange Offer
Registration Statement (in either event, the "Shelf Registration
Statement") on or prior to the earliest to occur of (1) the 30th day after
the date on which the Company determines that it is not required to file
the Exchange Offer Registration Statement, (2) the 30th day after the date
on which the Company receives notice from a Holder of Transfer Restricted
Securities as contemplated by clause (ii) above, and (3) the 60th day after
the Closing Date (such earliest date being the "Shelf Filing Deadline"),
which Shelf Registration Statement shall provide for resales of all
Transfer Restricted Securities the Holders of which shall have provided the
information required pursuant to Section 4(b) hereof; and
(y) use their best efforts to cause such Shelf Registration Statement
to be declared effective by the Commission on or before the 60th day after
the Shelf Filing Deadline.
The Company and the Guarantors shall use their best efforts to keep such Shelf
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Sections 6(b) and (c) hereof to the extent
necessary to ensure that it is available for resales of Notes by the Holders of
Transfer Restricted Securities entitled to the benefit of this Section 4(a), and
to ensure that it conforms with the requirements of this Agreement, the Act and
the policies, rules and regulations of the Commission as announced from time to
time, for a period of two years following the Closing Date, or such shorter
period ending when (i) all Notes covered by the Shelf Registration Statement
have been sold in the manner set forth therein or (ii) a subsequent Shelf
Registration Statement relating to the Notes has been declared effective under
the Act. Notwithstanding the foregoing, the Company shall not be required to
file a Shelf Registration Statement with respect to the Notes of any Holder
(other than Notes of a Purchaser) as a result of such Holder not being able to
make the representations required by Section 6(a) in connection with the
Exchange Offer.
(b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 business days after receipt of a request
therefor, such information as the Company may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted Securities shall
be entitled to Liquidated Damages pursuant to Section 5 hereof unless and until
such Holder shall have provided all such reasonably requested information. Each
Holder as to which any Shelf Registration Statement is being effected agrees to
furnish promptly to the Company all information required to be disclosed in
order to make the information previously furnished to the Company by such Holder
not materially misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) any of the Registration Statements required by this Agreement is not
filed with the Commission on or prior to the date specified for such filing in
this Agreement, (ii) any of such Registration Statements has not been declared
effective by the Commission on or prior to the date specified for such
effectiveness in this Agreement (the "Effectiveness Target Date"), (iii) the
Exchange Offer has not been Consummated within 30 business days after the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (iv) any Registration Statement required by this Agreement is filed
and declared effective but shall thereafter cease to be effective or fail to be
usable for its intended purpose without being succeeded immediately by a
post-effective amendment to such Registration Statement that cures such failure
and that is itself immediately declared effective (each such event referred to
in clauses (i) through (iv), a "Registration Default"), the Company and the
Guarantors hereby jointly and severally agree to pay liquidated damages
("Liquidated Damages") to each Holder of Transfer Restricted Securities with
respect to the first 90-day period immediately following the occurrence of such
Registration Default, in an amount equal to $.05 per week per $1,000 principal
amount of Transfer Restricted Securities held by such Holder for each week or
portion thereof that the Registration Default continues. The amount of the
Liquidated Damages shall increase by an additional $.05 per week per $1,000 in
principal amount of Transfer Restricted Securities with respect to each
subsequent 90-day period until all Registration Defaults have been cured, up to
a maximum amount of Liquidated Damages of $.50 per week per $1,000 principal
amount of Transfer Restricted Securities. All accrued Liquidated Damages shall
be paid to the affected Record Holders by the Company by wire transfer of
immediately available funds or by federal funds check on each Damages Payment
Date, as provided in the Indenture. Following the cure of all Registration
Defaults relating to any particular Transfer Restricted Securities, the accrual
of Liquidated Damages with respect to such Transfer Restricted Securities will
cease. Notwithstanding the foregoing, the Company may issue a notice that the
Shelf Registration Statement is unusable pending the announcement of a material
corporate transaction and may issue any notice suspending the use of the Shelf
Registration Statement required under applicable securities laws to be issued
and, in the event that the aggregate number of days in any consecutive
twelve-month period for which all such notices are issued and effective does not
exceed 45 days in the aggregate, then Liquidated Damages will not be payable as
described above as a result of such suspension.
All obligations of the Company and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
Security shall have been satisfied in full. If the Company has complied with the
provisions of Sections 3, 4 and 6 hereof, the accrual and payment of Liquidated
Damages, as set forth above, shall be the sole and exclusive remedy of the
Holders against the Company and the Guarantors for the events constituting a
Registration Default.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the Exchange
Offer, the Company and the Guarantors shall comply with all of the provisions of
Section 6(c) below, shall use their best efforts to effect such exchange to
permit the sale of Transfer Restricted Securities being sold in accordance with
the intended method or methods of distribution thereof, and shall comply with
all of the following provisions:
(i) If in the reasonable opinion of counsel to the Company there is a
question as to whether the Exchange Offer is permitted by applicable law,
the Company and the Guarantors hereby agree, to the extent reasonably
practicable, to seek a no-action letter or other favorable decision from
the Commission allowing the Company and the Guarantors to Consummate an
Exchange Offer for Notes. The Company and the Guarantors each hereby agrees
to pursue the issuance of such a decision to the Commission staff level but
shall not be required to take commercially unreasonable action to effect a
change of Commission policy. The Company and the Guarantors each hereby
agrees, however, to (A) participate in telephonic conferences with the
Commission, (B) deliver to the Commission staff an analysis prepared by
counsel to the Company setting forth the legal bases, if any, upon which
such counsel has concluded that such an Exchange Offer should be permitted
and (C) diligently pursue a resolution (which need not be favorable) by the
Commission staff of such submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer Restricted
Securities shall furnish, upon the request of the Company, prior to the
Consummation thereof, a written representation to the Company (which may be
contained in the letter of transmittal contemplated by the Exchange Offer
Registration Statement) to the effect that (A) it is not an affiliate,
directly or indirectly, of the Company, (B) it is not engaged in, and does
not intend to engage in, and has no arrangement or understanding with any
person to participate in, a distribution of the New Notes to be issued in
the Exchange Offer, (C) it is acquiring the New Notes in its ordinary
course of business and (D) it is not acting on behalf of any Person who
could not make the foregoing representations. Such Holder shall also make
such other representations as may be required to comply with applicable law
or policy of the Commission with respect to the Exchange Offer. In
addition, all such Holders of Transfer Restricted Securities shall
otherwise cooperate in the Company's preparations for the Exchange Offer.
Each Holder hereby acknowledges and agrees that any Restricted
Broker-Dealer and any such Holder using the Exchange Offer to participate
in a distribution of the securities to be acquired in the Exchange Offer
(1) could not under Commission policy as in effect on the date of this
Agreement rely on the position of the Commission enunciated in ▇▇▇▇▇▇
▇▇▇▇▇▇▇ and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings
Corporation (available May 13, 1988), as interpreted in the Commission's
letter to Shearman & Sterling dated July 2, 1993, and similar no-action
letters (including, if applicable, any no-action letter obtained pursuant
to clause (i) above), and (2) must comply with the registration and
prospectus delivery requirements of the Act in connection with a secondary
resale transaction and that such a secondary resale transaction should be
covered by an effective registration statement containing the selling
security holder information required by Item 507 or 508, as applicable, of
Regulation S-K if the resales are of New Notes obtained by such Holder in
exchange for Notes acquired by such Holder directly from the Company. The
Company shall not be required to register the Notes of any Holder (other
than Notes of a Purchaser) that fails to furnish the representations
required by the first sentence of this paragraph.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Guarantors shall provide a supplemental
letter to the Commission (A) stating that the Company and the Guarantors
are registering the Exchange Offer in reliance on the position of the
Commission enunciated in Exxon Capital Holdings Corporation (available May
13, 1988), ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and Co., Inc. (available June 5, 1991) and, if
applicable, any no-action letter obtained pursuant to clause (i) above and
(B) including a representation that neither the Company nor any of the
Guarantors has entered into any arrangement or understanding with any
Person to distribute the New Notes to be received in the Exchange Offer and
that, to the best of the Company's information and belief, each Holder
participating in the Exchange Offer is acquiring the New Notes in its
ordinary course of
business and has no arrangement or understanding with any Person to
participate in the distribution of the New Notes received in the Exchange
Offer.
(b) Shelf Registration Statement. In connection with the Shelf Registration
Statement, the Company and the Guarantors shall comply with all the provisions
of Section 6(c) below and shall use their best efforts to effect such
registration to permit the sale of the Transfer Restricted Securities being sold
in accordance with the intended method or methods of distribution thereof (as
indicated in the information furnished to the Company pursuant to Section 4(b)
hereof), and pursuant thereto the Company will as expeditiously as possible (in
accordance with Section 4 hereof) prepare and file with the Commission a
Registration Statement relating to the registration on any appropriate form
under the Act, which form shall be available for the sale of the Transfer
Restricted Securities in accordance with the intended method or methods of
distribution thereof.
(c) General Provisions. In connection with any Registration Statement and
any related Prospectus required by this Agreement to permit the sale or resale
of Transfer Restricted Securities (including, without limitation, any Exchange
Offer Registration Statement and the related Prospectus, to the extent that the
same are required to be available to permit sales of Broker-Dealer Transfer
Restricted Securities by Restricted Broker-Dealers), the Company shall:
(i) use its best efforts to keep such Registration Statement
continuously effective and provide all requisite financial statements
(including, if required by the Act or any regulation thereunder, financial
statements of the Guarantors) for the period specified in Section 3 or 4 of
this Agreement, as applicable; upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained therein
(A) to contain a material misstatement or omission or (B) not to be
effective and usable for resale of Transfer Restricted Securities during
the period required by this Agreement, the Company shall, upon becoming
aware thereof, file promptly an appropriate amendment to such Registration
Statement, in the case of clause (A), correcting any such misstatement or
omission, and, in the case of either clause (A) or (B), use its best
efforts to cause such amendment to be declared effective and such
Registration Statement and the related Prospectus to become usable for
their intended purpose(s) as soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments and
post-effective amendments to the Registration Statement as may be necessary
to keep the Registration Statement effective for the applicable period set
forth in Section 3 or 4 hereof, as applicable, or such shorter period as
will terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold or a subsequent Registration
Statement has been declared effective; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 under the Act, and to comply fully with
the applicable provisions of Rules 424 and 430A under the Act in a timely
manner; and comply with the provisions of the Act with respect to the
disposition of all securities covered by such Registration Statement during
the applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus;
(iii) in the event that a Shelf Registration Statement is filed or a
Restricted Broker-Dealer would be required to deliver a Prospectus
contained in an Exchange Offer Registration Statement, advise the managing
underwriter(s), if any, and selling Holders promptly and, if requested by
such Persons, to confirm such advice in writing, (A) when the Prospectus or
any Prospectus supplement or post-effective amendment has been filed, and,
with respect to any Registration Statement or any post-effective amendment
thereto, when the same has become effective, (B) of any request by the
Commission for amendments to the Registration Statement or amendments or
supplements to the Prospectus or for additional information relating
thereto, (C) of the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement under the Act or of the
suspension by any state securities commission of the qualification of the
Transfer Restricted Securities for offering or sale in any jurisdiction, or
the initiation of any proceeding for any of the preceding purposes, (D) of
the existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document
incorporated by reference therein untrue, or that requires the making of
any additions to or changes in the Registration Statement or the Prospectus
in order to make the statements therein not misleading. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities under
state securities or Blue Sky laws, the Company and the Guarantors shall use
their reasonable best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time;
(iv) in the event that a Shelf Registration Statement is filed or a
Restricted Broker-Dealer would be required to deliver a Prospectus
contained in an Exchange Offer Registration Statement, furnish to each of
the selling Holders specifically named in or covered by any Registration
Statement or Prospectus and each of the managing underwriter(s) in
connection with such sale, if any, before filing with the Commission,
copies of any Registration Statement or any Prospectus included therein or
any amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the
initial filing of such Registration Statement), which documents will be
subject to the review of such Holders and underwriter(s) in connection with
such sale, if any, for a period of at least five business days, and the
Company will not file any such Registration Statement or Prospectus or any
amendment or supplement to any such Registration Statement or Prospectus
(including all such documents incorporated by reference) to which selling
Holders of 25% or more in aggregate principal amount of Transfer Restricted
Securities covered by such Registration Statement or the managing
underwriter(s) in connection with such sale, if any, shall reasonably
object within five business days after the receipt thereof. A selling
Holder or managing underwriter, if any, shall be deemed to have reasonably
objected to such filing if such Registration Statement, amendment,
Prospectus or supplement, as applicable, as proposed to be filed, contains
a material misstatement or omission;
(v) in the event that a Shelf Registration Statement is filed or a
Restricted Broker-Dealer would be required to deliver a Prospectus
contained in an Exchange Offer Registration Statement, prior to the filing
of any document that is to be incorporated by reference into a Registration
Statement or Prospectus, provide copies of such document to the selling
Holders covered by such Registration Statement and to the managing
underwriter(s) in connection with such sale, if any, make the Company's
representatives available (and representatives of the Guarantors) for
discussion of such document and other customary due diligence matters on
reasonable prior notice, and include such information in such document
prior to the filing thereof as such selling Holders or managing
underwriter(s), if any, reasonably may request within five business days of
the receipt of the proposed filing;
(vi) in the event that a Shelf Registration Statement is filed or a
Restricted Broker-Dealer would be required to deliver a Prospectus
contained in an Exchange Offer Registration Statement, make available at
reasonable times, and at the offices where normally kept, for inspection by
the selling Holders, any underwriter participating in any disposition
pursuant to such Registration
Statement, and any attorney or accountant retained by such selling Holders
or any of the underwriter(s), all financial and other records, pertinent
corporate documents and properties of the Company and the Guarantors and
cause the Company's and the Guarantors' officers, directors and employees,
as applicable, to supply all information reasonably requested by any such
Holder, underwriter, attorney or accountant in connection with such
Registration Statement subsequent to the filing thereof and prior to its
effectiveness, in each case to the extent reasonably necessary to enable
them to exercise any applicable due diligence responsibilities;
(vii) in the event that a Shelf Registration Statement is filed, if
requested by any selling Holders covered by such Registration Statement or
the underwriter(s) in connection with such sale, if any, as promptly as
practicable incorporate in any Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment if necessary, such
information as such selling Holders and underwriter(s), if any, may
reasonably request to have included therein, including, without limitation,
information relating to the "Plan of Distribution" of the Transfer
Restricted Securities, information with respect to the principal amount of
Transfer Restricted Securities being sold to such underwriter(s), the
purchase price being paid therefor and any other terms of the offering of
the Transfer Restricted Securities to be sold in such offering; and make
all required filings of such Prospectus supplement or post-effective
amendment as soon as practicable after the Company is notified of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment; provided that, if any such Holder or underwriter had the
opportunity to review a filing pursuant to clause (iv) or clause (v) above
and the information proposed to be included was available at the time of
and could have been included in such earlier filing, all costs relating to
the inclusion of such information pursuant to a supplement or
post-effective amendment to such Registration Statement shall be paid for
by the party(ies) requesting such inclusion;
(viii) use its best efforts to cause the Transfer Restricted
Securities covered by the Registration Statement to be rated with the
appropriate rating agencies, if so requested by the Holders of a majority
in aggregate principal amount of Subordinated Notes covered thereby or the
underwriter(s), if any;
(ix) in the event that a Shelf Registration Statement is filed,
furnish to each selling Holder covered by such Registration Statement, on
request, and each of the managing underwriter(s) in connection with such
sale, if any, without charge, at least one copy of the Registration
Statement, as first filed with the Commission, and of each amendment
thereto, including all documents incorporated by reference therein and all
exhibits (including exhibits incorporated therein by reference);
(x) in the event that a Shelf Registration Statement is filed or a
Restricted Broker-Dealer would be required to deliver a Prospectus
contained in an Exchange Offer Registration Statement, deliver to each
selling Holder and each of the underwriter(s), if any, without charge, as
many copies of the Prospectus (including each preliminary prospectus) and
any amendment or supplement thereto as such Persons reasonably may request;
the Company and the Guarantors hereby consent to the use of the Prospectus
and any amendment or supplement thereto by each of the selling Holders and
each of the underwriter(s), if any, in connection with the offering and the
sale of the Transfer Restricted Securities covered by the Prospectus or any
amendment or supplement thereto provided that the Company has not advised
such Persons otherwise pursuant to Section 6(c)(iii);
(xi) in the event that a Shelf Registration Statement is filed or a
Restricted Broker-Dealer would be required to deliver a Prospectus
contained in an Exchange Offer Registration Statement, enter into, and
cause the Guarantors to enter into, such customary agreements (including an
underwriting agreement), and make, and cause the Guarantors to make, such
customary representations and warranties, and take all such other
reasonable actions in connection therewith in order to expedite or
facilitate the disposition of the Transfer Restricted Securities pursuant
to any Registration Statement contemplated by this Agreement, all to such
extent as may be reasonably requested by any Holder of Transfer Restricted
Securities or managing underwriter in connection with any sale or resale
pursuant to any Registration Statement contemplated by this Agreement; and
whether or not an underwriting agreement is entered into and whether or not
the registration is an Underwritten Registration, the Company and the
Guarantors shall:
(A) furnish to each selling Holder and each managing underwriter,
if any, upon the effectiveness of the Shelf Registration Statement and
to each Restricted Broker-Dealer upon Consummation of the Exchange
Offer:
(1) such representations and warranties with respect to the
business of the Company and the Guarantors and the Registration
Statement, Prospectus and documents, if any, incorporated by
reference therein, in each case, as are customarily made by
issuers to underwriters in primary underwritten offerings of debt
securities similar to the Subordinated Notes, and confirm the
same if and when requested;
(2) an opinion, dated the date of Consummation of the
Exchange Offer or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel for the
Company and the Guarantors, covering the matters customarily
covered in opinions requested in underwritten offerings of debt
securities similar to the Subordinated Notes and such other
matters as such parties may reasonably request, and in any event
including a statement to the effect that such counsel has
participated in conferences with officers and other
representatives of the Company, representatives of the
independent public accountants for the Company, the Purchasers'
representatives and the Purchasers' counsel in connection with
the preparation of such Registration Statement and the related
Prospectus and have considered the matters required to be stated
therein and the statements contained therein, although such
counsel has not independently verified the accuracy, completeness
or fairness of such statements; and that such counsel advises
that, on the basis of the foregoing (relying as to materiality to
a large extent upon facts provided to such counsel by officers
and other representatives of the Company and without independent
check or verification), no facts came to such counsel's attention
that caused such counsel to believe that the applicable
Registration Statement, at the time such Registration Statement
or any post-effective amendment thereto became effective, and, in
the case of the Exchange Offer Registration Statement, as of the
date of Consummation, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, or that the Prospectus contained in such Registration
Statement as of its date and, in the case of the opinion dated
the date of Consummation of the Exchange Offer, as of the date of
Consummation, contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading. Without limiting the foregoing,
such counsel may state further that such counsel assumes no
responsibility for, and has not independently verified, the
accuracy, completeness or fairness of the financial statements,
notes and schedules and other financial data included in any
Registration Statement contemplated by this Agreement or the
related Prospectus; and
(3) provided that the requesting Holders, underwriter(s), if
any, or other such financial intermediary furnish the undertaking
required in SAS 72, if required, a customary comfort letter in
form and substance reasonably satisfactory to the requesting
Holders, underwriter(s), if any, or other financial intermediary,
dated as of the date of Consummation of the Exchange Offer or the
date of effectiveness of the Shelf Registration Statement, as the
case may be, from the Company's independent accountants, in the
customary form and covering matters of the type customarily
covered in comfort letters to underwriters in connection with
primary underwritten offerings;
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, the indemnification provisions and
procedures of Section 8 hereof with respect to all parties to be
indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with
clause (A) above and with any customary conditions contained in the
underwriting agreement or other agreement entered into by the Company
pursuant to this clause (xi), if any.
If at any time the representations and warranties of the Company and the
Guarantors contemplated in clause (A)(1) above cease to be true and correct, the
Company or the Guarantors shall so advise the Purchasers and the underwriter(s),
if any, each selling Holder and Restricted Broker-Dealers, if any, promptly and,
if requested by such Persons, shall confirm such advice in writing;
(xii) prior to any public offering of Transfer Restricted Securities
provided for under this Agreement, cooperate with, and cause the Guarantors
to cooperate with, the selling Holders, the underwriter(s), if any, and
their respective counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the state
securities or Blue Sky laws of such domestic jurisdictions as the selling
Holders or underwriter(s), if any, may reasonably request in writing and do
any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Transfer Restricted Securities
covered by the Shelf Registration Statement; provided, however, that
neither the Company nor any of the Guarantors shall be required to register
or qualify as a foreign corporation where it is not now so qualified or to
take any action that would subject it to the service of process in suits or
to taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so subject;
(xiii) in the event that a Shelf Registration Statement is filed,
shall issue, upon the request of any Holder of Notes covered by the Shelf
Registration Statement contemplated by this Agreement, Notes not bearing
legends restricting their transfer, having an aggregate principal amount
equal to the aggregate principal amount of Notes surrendered to the Company
by such Holder in exchange therefor or being sold by such Holder; such New
Notes to be registered in the name of such Holder or in the name of the
purchaser(s) of such Subordinated Notes, as the case may be; in return, the
Notes held by such Holder shall be surrendered to the Company for
cancellation;
(xiv) in the event that a Shelf Registration Statement is filed, in
connection with any sale of Transfer Restricted Securities that will result
in such securities no longer being Transfer Restricted Securities,
cooperate with, and cause the Guarantors to cooperate with, the selling
Holders and the underwriter(s), if any, to facilitate the timely
preparation and delivery of certificates representing Transfer Restricted
Securities to be sold and not bearing any restrictive legends; and enable
such Transfer Restricted Securities to be in such denominations and
registered in such names as the Holders
or the underwriter(s), if any, may reasonably request at least two business
days prior to any sale of Transfer Restricted Securities made by such
underwriter(s);
(xv) use its best efforts to cause the Transfer Restricted Securities
covered by the Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to
enable the seller or sellers thereof or the underwriter(s), if any, to
consummate the disposition of such Transfer Restricted Securities, except
as may be required solely as a consequence of the nature of such seller's
business and subject to the proviso contained in clause (xii) above;
(xvi) in the event that a Shelf Registration Statement is filed or a
Restricted Broker-Dealer would be required to deliver a Prospectus
contained in an Exchange Offer Registration Statement, if any fact or event
contemplated by clause 6(c)(iii)(D) hereof shall exist or have occurred,
prepare a supplement or post-effective amendment to the Registration
Statement or related Prospectus or any document incorporated therein by
reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the
Prospectus will not contain an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
(xvii) provide a CUSIP number for all Transfer Restricted Securities
not later than the effective date of the first Registration Statement
required by this Agreement and provide the Trustee under the Indenture with
printed certificates for the Transfer Restricted Securities which are in a
form eligible for deposit with The Depositary Trust Company;
(xviii) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and regulations of the
NASD, and use its reasonable best efforts to cause such Registration
Statement to become effective and approved by such governmental agencies or
authorities as may be necessary to enable the Holders selling Transfer
Restricted Securities to consummate the disposition of such Transfer
Restricted Securities;
(xix) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to
its security holders, as soon as practicable, a consolidated earnings
statement meeting the requirements of Rule 158 (which need not be audited)
for the twelve-month period (A) commencing at the end of any fiscal quarter
in which Transfer Restricted Securities are sold to underwriters in a firm
or best efforts Underwritten Offering or (B) if not sold to underwriters in
such an offering, beginning on the first day of the Company's first fiscal
quarter commencing after the effective date of the Registration Statement;
(xx) cause the Indenture to be qualified under the TIA not later than
the effective date of the first Registration Statement required by this
Agreement, and, in connection therewith, cooperate, and cause the
Guarantors to cooperate, with the Trustee and the Holders of Subordinated
Notes to effect such changes to the Indenture as may be required for such
Indenture to be so qualified in accordance with the terms of the TIA; and
execute, and cause the Guarantors to execute, and use its best efforts to
cause the Trustee to execute, all documents that may be required to effect
such changes and all other forms and documents required to be filed with
the Commission to enable such Indenture to be so qualified in a timely
manner; and
(xxi) use its best efforts to cause all Transfer Restricted Securities
covered by the Registration Statement to be listed on each securities
exchange on which similar securities issued by the Company are then listed
if requested by the Holders of a majority in aggregate principal amount of
Notes or the managing underwriter(s), if any.
Each Holder agrees by acquisition of a Transfer Restricted Security that,
upon receipt of any notice from the Company of the existence of any fact of the
kind described in Section 6(c)(iii)(D) hereof, such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the
applicable Registration Statement until such Holder's receipt of the copies of
the supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof,
or until it is advised in writing (the "Advice") by the Company that the use of
the Prospectus may be resumed, and has received copies of any amendments or
supplements thereto. If so directed by the Company, each Holder will deliver to
the Company (at the Company's expense) all copies, other than permanent file
copies then in such Holder's possession, of the Prospectus covering such
Transfer Restricted Securities that was current at the time of receipt of such
notice. In the event the Company shall give any such notice, the time period
regarding the effectiveness of such Registration Statement set forth in Section
3 or 4 hereof, as applicable, shall be extended by the number of days during the
period from and including the date of the giving of such notice pursuant to
Section 6(c)(iii)(D) hereof to and including the date when each selling Holder
covered by such Registration Statement shall have received the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xvi) hereof or
shall have received the Advice.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's or the Guarantors performance of
or compliance with this Agreement will be borne by the Company or the
Guarantors, regardless of whether a Registration Statement becomes effective,
including without limitation: (i) all registration and filing fees and expenses
(including filings made by any Purchaser or Holder with the NASD (and, if
applicable, the fees and expenses of any "qualified independent underwriter" and
its counsel that may be required by the rules and regulations of the NASD));
(ii) all fees and expenses of compliance with federal securities and state Blue
Sky or securities laws; (iii) all expenses of printing (including printing
certificates for the New Notes to be issued in the Exchange Offer and printing
of Prospectuses), messenger and delivery services and telephone; (iv) all fees
and disbursements of counsel for the Company, the Guarantors and, subject to
Section 7(b) below, the Holders of Transfer Restricted Securities; (v) all
application and filing fees in connection with listing Subordinated Notes on a
national securities exchange or automated quotation system pursuant to the
requirements hereof; and (vi) all fees and disbursements of independent
certified public accountants of the Company and the Guarantors (including the
expenses of any special audit and comfort letters required by or incident to
such performance).
The Company will, in any event, bear its and the Guarantor's internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company.
(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company will reimburse the
Holders of Transfer Restricted Securities being tendered in the Exchange Offer
and/or resold pursuant to the "Plan of Distribution" contained in the Exchange
Offer Registration Statement or registered pursuant to the Shelf Registration
Statement, as applicable, for the reasonable fees
and disbursements of not more than one counsel, who shall be ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ or
such other counsel as may be chosen by the Holders of a majority in principal
amount of the Transfer Restricted Securities for whose benefit such Registration
Statement is being prepared. The Company and the Guarantors shall not have any
obligation to pay any underwriting fees, discounts or commissions attributable
to the sale of any New Notes pursuant to this Agreement.
SECTION 8. INDEMNIFICATION
(a) The Company and the Guarantors, jointly and severally, agree to
indemnify and hold harmless (i) each Holder, (ii) each person, if any, who
controls any Holder within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act and (iii) the respective officers, directors, partners,
employees, representatives and agents of any Holder or any controlling person
(each a "Participant") to the fullest extent lawful, from and against any and
all losses, liabilities, claims, damages and expenses whatsoever (including but
not limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any investigation or litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts paid
in settlement of any claim or litigation), joint or several, to which they or
any of them may become subject under the Act, the Exchange Act or otherwise,
insofar as such losses, liabilities, claims, damages or expenses (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus, or in any supplement thereto or amendment thereof, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company and the Guarantors will not be
liable in any such case to the extent, but only to the extent, that (i) any such
loss, liability, claim, damage or expense arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company or the Guarantors by or on behalf of any
Holder, underwriter or other Purchaser expressly for use therein and (ii) the
foregoing indemnity with respect to any untrue statement contained in or omitted
from a Registration Statement or the Prospectus shall not inure to the benefit
of any Holder (or any person controlling such Holder), from whom the person
asserting any such loss, liability, claim, damage or expense purchased any of
the Subordinated Notes which are the subject thereof if it is finally judicially
determined that such loss, liability, claim, damage or expense resulted solely
from the fact that the Holder sold Subordinated Notes to a person to whom there
was not sent or given, at or prior to the written confirmation of such sale, a
copy of the Registration Statement and the Prospectus, as amended or
supplemented, and (x) the Company shall have previously and timely furnished
sufficient copies of the Registration Statement or Prospectus, as so amended or
Supplemented, to such Holder in accordance with this Agreement and (y) the
Registration Statement or Prospectus, as so amended or supplemented, would have
corrected such untrue statement or omission of a material fact. This indemnity
agreement will be in addition to any liability which the Company and the
Guarantors may otherwise have, including, under this Agreement.
(b) Each Participant (and each underwriter in an underwritten offering
pursuant to a Shelf Registration Statement) will be required to agree (and each
Holder hereby agrees), severally and not jointly, to indemnify and hold harmless
the Company, the Guarantors and each person, if any, who controls the Company or
the Guarantors within the meaning of Section 15 of the Act or Section 20(a) of
the Exchange Act, against any losses, liabilities, claims, damages and expenses
whatsoever (including but not limited to attorneys' fees and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any investigation or litigation, commenced or threatened, or any claim
whatsoever and
any and all amounts paid in settlement of any claim or litigation), to which
they or any of them may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, liabilities, claims, damages or expenses (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement or the Prospectus, or in any amendment thereof or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, in each case to the extent, but only to the extent, that
any such loss, liability, claim, damage or expense arises out of or is based
upon any untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company or the Guarantors by or on behalf of such
Participant expressly for use therein. This indemnity will be in addition to any
liability which a Holder may otherwise have, including under this Agreement. In
no event, however, shall the liability of any selling Holder hereunder be
greater in amount than the dollar amount of the proceeds received by such Holder
upon its sale of the Transfer Restricted Securities giving rise to such
indemnification obligation.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is
to be sought in writing of the commencement thereof (but the failure so to
notify an indemnifying party shall not relieve it from any liability which it
may have under this Section 8 except to the extent that it has been prejudiced
in any material respect by such failure or from any liability which it may
otherwise have). In case any such action is brought against any indemnified
party, and it notifies an indemnifying party of the commencement thereof, the
indemnifying party will be entitled to participate therein, and to the extent it
may elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof with counsel reasonably satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such indemnified party or
parties unless (i) the employment of such counsel shall have been authorized in
writing by the indemnifying parties in connection with the defense of such
action, (ii) the indemnifying parties shall not have employed counsel to take
charge of the defense of such action within a reasonable time after notice of
commencement of the action, or (iii) such indemnified party or parties shall
have been advised in writing that there may be defenses available to it or them
which are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying party or parties shall not
have the right to direct the defense of such action on behalf of the indemnified
party or parties), in any of which events such fees and expenses of counsel
shall be borne by the indemnifying parties; provided, however, that the
indemnifying party under subsection (a) or (b) above, shall only be liable for
the legal expenses of one counsel (in addition to any local counsel) for all
indemnified parties in each jurisdiction in which any claim or action is
brought; provided, however, that the indemnifying party shall be liable for
separate counsel for any indemnified party in a jurisdiction, if counsel to the
indemnified party or parties shall have reasonably concluded in writing that
there may be defenses available to such indemnified party that are different
from or additional to those available to one or more of the other indemnified
parties and that separate counsel for such indemnified party is prudent under
the circumstances. Anything in this subsection to the contrary notwithstanding,
an indemnifying party shall not be liable for any settlement of any claim or
action effected without its prior written consent; provided, however, that such
consent was not unreasonably withheld.
(d) In order to provide for contribution in circumstances in which the
indemnification provided for in this Section 8 is for any reason held to be
unavailable to an indemnified party or is insufficient to
hold harmless a party indemnified thereunder, the Company, the Guarantors and
each Participant (or other indemnifying person) shall contribute to the
aggregate losses, claims, damages, liabilities and expenses of the nature
contemplated by such indemnification provision (including any investigation,
legal and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but after
deducting in the case of losses, claims, damages, liabilities and expenses
suffered by the Company, any contribution received by the Company from Persons,
other than the Holders, who may also be liable for contribution, including
Persons who control the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act) to which the Company and any Participant (or
other indemnifying person) may be subject, in such proportion as is appropriate
to reflect the relative benefits received by the Company and any Participant
from their sale of Transfer Restricted Securities or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in this Section 8,
in such proportion as is appropriate to reflect not only the relative benefits
referred to above but also the relative fault of the Company and the Guarantors,
on the one hand, and the Participants (or other indemnifying person), on the
other hand, in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits received by the Company
and any Participant shall be deemed to be in the same proportion as (x) the
total proceeds from the offering (net of discounts but before deducting
expenses) of the Subordinated Notes received by the Company and (y) the total
proceeds received by such Participant upon its sale of Subordinated Notes which
would otherwise give rise to the indemnification obligation, respectively. The
relative fault of the Company and the Guarantors and of the Participant (or
other indemnifying person) shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Participants and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Guarantors and each Holder agree that it
would not be just and equitable if contribution pursuant to this Section 8 were
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to above.
Notwithstanding the provisions of this Section 8, (i) no Holder shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the total value of the Subordinated Notes held by such Holder exceeds the
amount of any damages which such Holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission and (ii) no Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. For purposes of
this Section 8, (A) each person, if any, who controls a Holder within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and (B)
the respective officers, directors, partners, employees, representatives and
agents of a Holder or any controlling Person shall have the same rights to
contribution as such Holder, and each Person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act
shall have the same rights to contribution as the Company, subject in each case
to clauses (i) and (ii) of this Section 8(d). Any party entitled to contribution
will, promptly after receipt of notice of commencement of any action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this Section 8, notify such party
or parties from whom contribution may be sought, but the failure to so notify
such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this
Section 8 or otherwise (except to the extent it has been prejudiced in any
material respect by such failure). No party shall be liable for contribution
with respect to any action or claim settled without its prior written consent;
provided, however, that such written consent was not unreasonably withheld.
SECTION 9. RULE 144A
Unless the Company is then subject to Section 13 or 15(d) of the Exchange
Act, the Company hereby agrees with each Holder, for so long as any Transfer
Restricted Securities remain outstanding, to make available, upon request, to
any Holder or beneficial owner of Transfer Restricted Securities in connection
with any sale thereof and any prospective purchaser of such Transfer Restricted
Securities from such Holder or beneficial owner, the information required by
Rule 144A(d)(4) under the Act in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144A.
SECTION 10. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder unless
such Holder (a) agrees to sell such Holder's Transfer Restricted Securities on
the basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements and (b) completes and executes
all reasonable questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents required under the terms of such
underwriting arrangements, which, in any event, shall be reasonably satisfactory
to the Company and customary in connection with underwritten securities
offerings.
SECTION 11. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided, that such investment bankers and managers must be
reasonably satisfactory to the Company. Except as expressly provided for herein,
neither the Company nor the Guarantors shall be responsible for any fees, costs
or expenses of such bankers or managers or their respective advisors or
representatives.
SECTION 12. MISCELLANEOUS
(a) Remedies. The Company and the Guarantors agree that monetary damages
(including the Liquidated Damages contemplated hereby) would not be adequate
compensation for any loss incurred by reason of a breach by it of the provisions
of this Agreement and hereby agree to waive the defense in any action for
specific performance that a remedy at law would be adequate; provided, however,
if the Company has complied with the provisions of Sections 3, 4 and 6 hereof,
the accrual and payment of Liquidated Damages, as set forth in Section 5 above,
shall be the sole and exclusive remedy of the Holders against the Company and
the Guarantors for the events constituting a Registration Default.
(b) No Inconsistent Agreements. The Company will not, and will cause the
Guarantors not to, on or after the date of this Agreement enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof. Neither the Company nor any of the Guarantors has previously
entered into any agreement granting any registration rights with respect to its
securities to any Person which would permit such Person to (i) include its
securities in any Registration Statement or (ii) participate in any Underwritten
Registration or Underwritten
Offering. The rights granted to the Holders hereunder do not in any way conflict
with and are not inconsistent with the rights granted to the holders of the
Company's securities under any agreement in effect on the date hereof.
(c) Adjustments Affecting the Subordinated Notes. The Company and the
Guarantors will not take any action with respect to the Subordinated Notes that
would materially and adversely affect the ability of the Holders to Consummate
any Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given, unless the Company has obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are sold or exchanged pursuant to a
Registration Statement and that does not affect directly or indirectly the
rights of other Holders whose securities are not being tendered pursuant to such
Exchange Offer may be given by the Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities being sold or exchanged
pursuant to such Registration Statement.
(e) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
(ii) if to the Company:
Precise Technology, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Secretary
With a copy to:
Mentmore Holdings Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
and
Winston & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
(iii) notice to the Company shall be deemed notice to any and every
Guarantor.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and on the
next business day, if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders of Transfer Restricted Securities; provided, however, that this
Agreement shall not inure to the benefit of or be binding upon a successor or
assign of a Holder unless and to the extent such successor or assign acquired
Transfer Restricted Securities from such Holder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement together with the other Operative
Documents (as defined in the Purchase Agreement) is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein
with respect to the registration rights granted by the Company with respect to
the Transfer Restricted Securities. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
Precise Technology, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name:
Title:
Precise TMP, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name:
Title:
▇▇▇▇▇▇ Tool, Mold & Die, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name:
Title:
Precise Polestar, Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name:
Title:
Precise Technology of Delaware Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name:
Title:
Precise Technology of Illinois Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name:
Title:
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
By: Bear, ▇▇▇▇▇▇▇ & Co. Inc.
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇▇
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Name: J. ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Managing Director