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Exhibit 10(q)
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BRIDGE LOAN AGREEMENT
among
LINCOLN ELECTRIC HOLDINGS, INC.
and
▇.▇. ▇▇▇▇▇▇ VENTURES CORPORATION,
as Joint Lead Arranger, Agent
and Joint Bookrunner
and
CREDIT SUISSE FIRST BOSTON,
as Joint Lead Arranger, Syndication Agent
and Joint Bookrunner
Dated as of April 25, 2000
$200,000,000
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TABLE OF CONTENTS
SECTION 1. DEFINITIONS.....................................................................................1
1.1 Definitions.....................................................................................1
1.2 Interpretation..................................................................................4
SECTION 2. AMOUNT AND TERMS OF LOANS.......................................................................4
2.1 Commitments.....................................................................................4
2.2 Takedown Procedures.............................................................................5
2.3 Fees............................................................................................5
2.4 Mandatory Termination and Reduction of Commitment...............................................5
2.5 Optional Reduction of Commitment................................................................6
2.6 Interest........................................................................................6
2.7 Option to Exchange Loans for Exchange Notes.....................................................7
2.8 Prepayments.....................................................................................7
2.9 Eurocurrency Rate Loans; Increased Costs; Taxes; Capital Adequacy...............................8
2.10 Use of Proceeds.................................................................................8
2.11 Subordination...................................................................................9
2.12 Registration of Transfer; Register Evidence of Loans............................................9
2.13 Payments........................................................................................9
SECTION 3. CONDITIONS PRECEDENT...........................................................................10
3.1 Conditions Precedent to the Commitment Effective Date..........................................10
3.2 Conditions Precedent to Closing Date...........................................................11
SECTION 4. REPRESENTATIONS AND WARRANTIES.................................................................12
4.1 Incorporation by Reference.....................................................................12
4.2 Representations in Credit Agreement............................................................12
SECTION 5. COVENANTS......................................................................................12
5.1 Incorporation by Reference.....................................................................12
5.2 Indebtedness...................................................................................12
5.3 Subsidiary Guaranty............................................................................13
5.4 Additional Agreements..........................................................................13
SECTION 6. EVENTS OF DEFAULT..............................................................................13
6.1 Events of Default..............................................................................13
6.2 Rights and Remedies............................................................................14
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SECTION 7. MISCELLANEOUS..................................................................................15
7.1 Expenses.......................................................................................15
7.2 Indemnity......................................................................................15
7.3 Set-Off........................................................................................16
7.4 Ratable Sharing................................................................................16
7.5 Notices........................................................................................17
7.6 Successors and Assigns; Participation; Assignments.............................................17
7.7 Amendments and Waivers.........................................................................18
7.8 No Waiver; Remedies Cumulative.................................................................19
7.9 Governing Law..................................................................................19
7.10 Counterparts...................................................................................20
7.11 Effectiveness..................................................................................20
7.12 Headings Descriptive...........................................................................20
7.13 Marshalling; Recapture.........................................................................20
7.14 Severability...................................................................................20
7.15 Survival.......................................................................................20
7.16 Limitation of Liability........................................................................20
7.17 Independence of Covenants......................................................................21
7.18 Survival of Representations, Warranties and Agreements.........................................21
7.19 Failure or Indulgence Not Waiver; Remedies Cumulative..........................................21
7.20 Obligations Several; Independent Nature of Lenders' Rights.....................................21
7.21 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.................................................22
7.22 WAIVER OF JURY TRIAL...........................................................................22
7.23 Changes to this Agreement......................................................................23
7.24 Confidentiality................................................................................23
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BRIDGE LOAN AGREEMENT, dated as of April 25, 2000 among
Lincoln Electric Holdings, Inc., an Ohio corporation (the "Company" or the
"Borrower"), ▇.▇. ▇▇▇▇▇▇ Ventures Corporation ("JPMVC"), as a Lender, as agent
for the Holders (in such capacity, and as set forth on EXHIBIT C attached hereto
and made a part hereof, the "Administrative Agent" or "Agent"), as joint lead
arranger (in such capacity, "Joint Lead Arranger") and as joint lead bookrunner,
and Credit Suisse First Boston ("CSFB"), as a Lender, joint lead arranger (in
such capacity, "Joint Lead Arranger," and together with JPMVC acting as Joint
Lead Arranger, the "Arrangers"), Syndication Agent and joint bookrunner.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company has requested that the Lenders extend
credit to the Company in an aggregate principal amount not to exceed
$200,000,000 in order to finance the Offer and the Acquisition;
WHEREAS, the Company (i) intends, in accordance with this
Agreement, to offer debt or equity (including hybrid equity) securities for
gross proceeds in an aggregate amount equal to or greater than the amount of the
Loans (the "Permanent Financing") and (ii) has entered into an engagement letter
agreement dated as of April 25, 2000 with one or more nationally recognized
investment banking institutions acceptable to the Lenders (the "Engagement
Letter") in connection with such Permanent Financing;
WHEREAS, a portion of the proceeds of the issuance and sale of
the securities offered pursuant to the Permanent Financing will be used to repay
the Loans on or before the Final Maturity Date; and
WHEREAS, the Company has entered into a Credit Agreement dated
as of April 25, 2000 by and among the Company, The Lincoln Electric Company,
Lincoln Electric Global Limited, the domestic subsidiaries of the Company
signatories thereto, the foreign subsidiaries of the Company signatories
thereto, the financial institutions listed on the signature pages thereof, CSFB
as a Joint Lead Arranger, Administrative Agent, collateral agent and bookrunner,
and ▇▇ ▇▇▇▇▇▇ Securities, Inc., as a Joint Lead Arranger and as Syndication
Agent (such Credit Agreement, as in force and effect as of the date hereof, the
"Credit Agreement").
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained herein and intending to be legally
bound hereby, the Company and the Lenders hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Definitions
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As used herein, the following terms shall have the meanings
herein specified unless the context otherwise requires. Section 1.1 of the
Credit Agreement, as in effect on the date hereof, is hereby incorporated by
reference mutatis mutandis as if set forth herein in its entirety (other than
defined terms set forth herein which are also defined therein).
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"Agreement" shall mean this Bridge Loan Agreement as the same
may from time to time hereafter be modified, supplemented or amended in
accordance with the terms hereof.
"Assignee" shall have the meaning provided in Section 7.6(c).
"Authorized Officer" of any Person shall mean any of the
president, chief executive officer, chief financial officer, treasurer or any
vice president of such Person.
"Borrowing" shall mean the incurrence of the Loans on the
Closing Date.
"Closing Date" shall mean the date on which the Loans are
advanced hereunder.
"Commitment" shall mean collectively up to $200,000,000, with
the Commitment of (i) JPMVC severally to be up to $110,000,000 and (ii) CSFB
severally to be up to $90,000,000 and the obligation of each such Lender to make
a Loan not to exceed the amount of its respective Commitment, as the same may be
reduced from time to time pursuant to Sections 2.4 and 2.5.
"Commitment Effective Date" means the date upon which the
Lenders' Commitments become effective following the satisfaction of all
conditions precedent set forth in Section 3.1.
"Credit Agreement" shall have the meaning provided in the
recitals hereto.
"Credit Exposure" shall have the meaning provided in Section
7.6(b).
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Exchange Note Indenture" shall mean the indenture relating to
the Exchange Notes among the Company, the Subsidiary Guarantors and the Exchange
Note Trustee to be entered into pursuant to Section 5.4, which indenture shall
be in the Agent's customary form and shall have the terms set forth in EXHIBIT A
hereto and such other terms and conditions as are satisfactory to the Arrangers.
"Exchange Note Trustee" shall mean the trustee under the
Exchange Note Indenture meeting the requirements of Section 5.4 hereof and
applicable law.
"Exchange Notes" means the Senior Subordinated Notes issued by
the Company at the request of any Holder pursuant to Section 2.7 in such form as
is customary for transactions of this type and as may be approved by the
Lenders.
"Exchange Notice" shall have the meaning provided in Section
2.7.
"Expiration Date" shall have the meaning provided in Section
2.1.
"Event of Default" shall have the meaning provided in Section
6.
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"Fee Letter" shall mean the Fee Letter dated as of the date
hereof among the Company and the Arrangers.
"Fees" shall mean all amounts payable pursuant to Section 2.3.
"Final Maturity Date" shall mean the earlier of (i) the date
which is ten years after the Closing Date or (ii) such time as the Commitment is
reduced to zero pursuant to the terms hereof.
"Holder" means any registered owner from time to time of any
Obligations.
"Interest Payment Date" shall mean the last day of each
Interest Period (or, if any such date is not a Business Day, the next succeeding
Business Day).
"Interest Period" shall mean the period from the date of this
Agreement to but excluding the 90th day thereafter, and thereafter each
successive 90-day period. If any Interest Period would begin or end on a date
which is not a Business Day, such Interest Period shall begin or end, as the
case may be, on the next succeeding Business Day and any Interest Period that
would extend beyond the Final Maturity Date shall end on the Final Maturity
Date. The Agent may, in its discretion, select Interest Periods of one day for
any day on or after the Loans shall have become due and payable in accordance
with the terms hereof.
"Lenders" means each of JPMVC and CSFB and their successors
and permitted assigns.
"Lenders' Office" shall mean the office of the Agent located
at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or such other location designated as
such by the Agent to the Company.
"Loan" and "Loans" shall have the meanings provided in Section
2.1(a).
"Loan Documents" means this Agreement, the Notes, the
Subsidiary Guaranty, the Fee Letter, the Engagement Letter and agreements and
instruments entered into pursuant to any of such agreements.
"Loan Parties" shall mean the Company and its Subsidiaries and
"Loan Party" any one of the foregoing.
"Note" means the Notes evidencing the Bridge Loans issued
pursuant to Section 2.2(c).
"Obligations" shall mean all obligations, liabilities and
Indebtedness of every nature of the Loan Parties from time to time owing to the
Lenders under or in connection with this Agreement or any other Loan Document.
"Participant" shall have the meaning provided in Section
7.6(b).
"Register" shall have the meaning set forth in Section 2.12.
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"Registration Rights Agreement" shall mean the Registration
Rights Agreement to be entered into among the Company, the Subsidiary Guarantors
and the Arrangers pursuant to Section 5.4, which shall be in the Agent's
customary form and shall have the terms set forth in EXHIBIT A hereto and such
other terms and provisions as are acceptable to the Arrangers.
"Requisite Lenders" shall mean Lenders holding at least (x) a
majority of the Commitments, or (y) if the Commitments have been terminated, a
majority in principal amount of outstanding Loans ; PROVIDED, HOWEVER, that so
long as an Arranger holds at least $30.0 million in aggregate principal amount
of Loans, the term "Requisite Lenders" shall include such Arranger.
"Subsidiary Guarantors" shall mean each Subsidiary of the
Company that is required to provide a Subsidiary Guaranty pursuant to Section
3.2(e) and Section 5.3, and each additional Subsidiary of the Company which
provides a Subsidiary Guaranty.
"Subsidiary Guaranty" means a Subsidiary Guaranty in such form
as is customary for transactions of this type and as may be approved by the
Lenders, as will be executed by certain Subsidiaries of the Company to be
entered into as soon as practicable after the Announcement Date but in any event
shall be entered into as of the Closing Date.
"Takedown" shall have the meaning provided in Section 2.2(a).
"Transfer Supplement" shall have the meaning provided in
Section 7.6(c).
"Transferee" shall have the meaning provided in Section
7.6(d).
1.2 Interpretation
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When a provision of the Credit Agreement is incorporated by
reference herein mutatis mutandis, such provision of the Credit Agreement, as in
effect on the date hereof, shall be deemed to be set forth herein in full, it
being understood that references to defined terms in such incorporated
provisions that are also defined in this Agreement shall have the meanings set
forth in this Agreement.
Defined terms in this Agreement shall include in the singular
number the plural and in the plural number the singular.
SECTION 2. AMOUNT AND TERMS OF LOANS
2.1 Commitments
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Subject to the terms and conditions set forth herein and in
reliance on the representations and warranties contained herein and in the other
Loan Documents, each Lender severally agrees to lend to the Company an aggregate
principal amount not to exceed its respective Commitment (each, a "Loan", and
collectively, the "Loans").
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(a) TERMINATION OF COMMITMENT. The Commitment will terminate
on the earliest of (i) the Commitment Termination Date and (ii) the date of the
closing of the Transactions without the funding of the Commitment (the
"Expiration Date").
(b) The Commitment is not revolving in nature, and the
principal amounts of Obligations prepaid in accordance with Section 2.8 may not
be reborrowed hereunder.
2.2 Takedown Procedures.
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(a) NOTICE. The Company shall give the Lenders notice not
later than 11:00 AM (New York City time) three (3) Business Days prior to the
proposed borrowing of the Loans hereunder (such borrowing, the "Takedown"),
which notice shall specify (i) the principal amount of the Loans to be made
hereunder at such Takedown (which amount shall be in minimum denominations of
$10,000,000 or larger multiples of $250,000) and (ii) the date of such Takedown
(which shall be a Business Day). There shall be only one Takedown permitted
hereunder.
(b) FUNDING. On the date of the Takedown, each Lender shall
deliver by wire transfer, to the account number of the Company specified by the
Company in writing no later than 2:00 PM (New York City time) three (3) Business
Days prior to the date of the Takedown, immediately available funds in an amount
equal to the principal amount of the Loans to be made hereunder on such date,
less, unless a Lender otherwise requests, the aggregate amount of fees payable
by the Company to such Lender on such date pursuant to Section 2.3 and expenses
(if any) payable to such Lender on such date pursuant to Section 7.1.
(c) DELIVERY OF NOTES. At the Takedown, against payment as set
forth in subsection (b) of this Section 2.2, the Company shall deliver, if
requested by a Lender, separate Notes in such denominations and registered in
such name or names as shall be designated by such Lender by notice to the
Company at least three (3) Business Days prior to the date of the Takedown.
2.3 FEES
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The Company shall pay each Lender all fees as and when due in
accordance with the Fee Letter.
2.4 Mandatory Termination and Reduction of Commitment.
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(a) The Commitment shall terminate on the earlier of the
Expiration Date or the Takedown hereunder.
(b) The Commitment shall be reduced by an amount equal to the
Net Debt Securities Proceeds and Net Equity Securities Proceeds received by any
Loan Party (to the extent permitted under the Credit Agreement) MINUS the amount
of such proceeds applied to repay outstanding Obligations in accordance with
Section 2.8(b) in excess of the amount thereof required to be paid to the
Lenders pursuant to the Credit Agreement. Each such reduction shall be effective
on the date of the related prepayment of the Obligations, or if no Obligations
are at the time outstanding, on the date of receipt of such proceeds.
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(c) Any such reduction shall reduce permanently each Lender's
Commitment then in effect PRO RATA.
2.5 Optional Reduction of Commitment
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The Company may, upon not less than three (3) Business Days'
notice to the Lenders, terminate the unused Commitment at any time or reduce the
unused Commitment from time to time in amounts equal to $5,000,000 or any larger
multiple of $1,000,000. Any such reduction shall reduce permanently each
Lender's Commitment then in effect pro rata.
2.6 Interest.
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(a) PAYMENT DATES. Interest on the Obligations shall be
payable in dollars in arrears, on each Interest Payment Date during which such
Obligations remain outstanding, commencing with the first Interest Payment Date
after the Closing Date, on the principal sum of the Obligations outstanding.
Interest on the Obligations shall be calculated at the rate per annum set forth
in subsection (b) below, and shall accrue from and including the most recent
Interest Payment Date to which interest has been paid on the Obligations (or if
no interest has been paid on the Obligations, from the date of issuance thereof)
to but excluding the date on which payment in full of the principal sum of the
Obligations has been made.
(b) INTEREST RATE. Interest for the first Interest Period
commencing on the Closing Date shall be at the rate of three month LIBOR plus
700 basis points per annum increasing by an additional 50 basis points per annum
at the end of each Interest Period subsequent to the Closing Date.
Notwithstanding anything to the contrary set forth above, at no time shall the
per annum interest rate on the Obligations exceed 16 1/2%; provided that to the
extent the Interest Rate exceeds 14 1/2% per annum, the Company may, at its
option, pay such excess interest by capitalizing it to the principal of the
Loans. Notwithstanding the foregoing, if an Event of Default occurs, the Company
shall on demand from time to time pay interest on such defaulted amount, to the
extent permitted by law, from the date such Event of Default first occurred to
but excluding the date of actual cure or waiver (after as well as before
judgment) to the extent lawful, at a rate per annum equal to 200 basis points in
excess of the otherwise applicable interest rate on the Obligations.
(c) Except as otherwise set forth herein, interest on the
Loans shall be payable in arrears on and to (i) each Interest Payment Date
applicable to that Loan; (ii) any prepayment of that Loan, to the extent accrued
on the amount being prepaid; (iii) at maturity, including final maturity; and
(iv) if such Loan is a Loan that is exchanged for an Exchange Note, the date of
exchange as specified in the relevant Exchange Notice. All interest payments
shall be made not later than 12:00 noon (New York City time) on the date
specified for payment by wire transfer of immediately available funds in
accordance with Section 2.13.
(d) Interest on the Obligations will be calculated on the
basis of a 360-day year and paid for the actual number of days elapsed.
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2.7 Option to Exchange Loans for Exchange Notes.
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(a) On any Business Day on or after one year anniversary of
the Closing Date (if any), any Lender may elect to exchange all or any portion
of its Loan and Notes, if any, for one or more Exchange Notes by giving not less
than five Business Days' prior irrevocable written notice of such election to
the Company, the Agent and the Exchange Note Trustee specifying the principal
amount of its Loan to be exchanged (which shall be at least $1,000,000 and
integral multiples of $1,000 in excess thereof), the name of the proposed
registered holder and, subject to the terms of the Exchange Note Indenture, the
amount of each Exchange Note requested (each such notice, an "Exchange Notice").
Any such exchanging Lender shall deliver its Notes, if any, to the Agent within
five Business Days following delivery of an Exchange Notice. Loans and/or Notes
exchanged for Exchange Notes pursuant to this Section 2.7(a) shall be deemed
repaid and canceled and the Exchange Notes so issued shall be governed by and
construed in accordance with the provisions of the Exchange Note Indenture.
(b) Not later than the fifth Business Day after delivery of an
Exchange Notice:
(i) the Agent shall cancel each Note delivered to it and,
if applicable, the Borrower shall issue a replacement Note to such
Lender in an amount equal to the principal amount of such Lender's Loan
that is not being exchanged, or the Agent shall make a notation on the
surrendered Note to the effect that a portion of the Loan represented
thereby has been repaid; and
(ii) upon completion of the actions set forth in clause
(b)(i) the Company shall deliver the applicable Exchange Note(s) to the
Exchange Note Trustee for authentication and delivery to the holder or
holders thereof specified in the Exchange Notice.
(c) Each Exchange Note issued pursuant to this Section 2.7
shall bear interest at a fixed rate equal to the rate per annum on the Loans on
the date of the Exchange Notice. Accrued interest on Loans so exchanged shall be
canceled and the Exchange Notes received in such exchange shall bear interest
from and including the most recent date to which interest has been paid on the
Loans so exchanged.
2.8 Prepayments.
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(a) OPTIONAL PREPAYMENT. The Obligations may be prepaid, in
whole or in part, upon not less than ten (10) days written notice, at the option
of the Company, at any time at par plus accrued interest to the prepayment date.
(b) MANDATORY PREPAYMENTS. To the extent permitted under the
Credit Agreement, the Company shall, within five (5) days of receipt by any Loan
Party of Net Asset Sales Proceeds, Net Debt Securities Proceeds or Net Equity
Securities Proceeds that is in excess of the amount thereof required to be paid
to the Lenders under the Credit Agreement (to the extent such Net Proceeds
Amount equals or exceeds the minimums set forth in Section 2.8(c) prepay a
principal amount of the Obligations equal to the amount of such proceeds (less
any amounts not required to be paid as a result of the requirement in subsection
(c) of this Section 2.8 that all such prepayments be made in multiples of
$1,000), at a prepayment price equal to one
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hundred percent (100%) of the principal amount of the Obligations so prepaid
together with accrued interest to the date of prepayment.
(c) MINIMUM AMOUNT. Any prepayment of the Obligations pursuant
to Section 2.8(a) shall be in a minimum amount of at least $1,000,000, unless
less than $1,000,000 of the Obligations remain outstanding, in which case all of
the Obligations must be prepaid. Any prepayment of the Obligations pursuant to
Section 2.8(b) shall be in a minimum amount which is a multiple of $1,000 times
the number of Holders at the time of such prepayment. Any such prepayment shall
be made to the Holders PRO RATA in accordance with Section 2.8(e).
(d) PARTIAL PREPAYMENTS. Any partial prepayment shall be made
so that the Obligations then held by each Holder shall be prepaid in a principal
amount which shall bear the same ratio, as nearly as may be, to the total
principal amount being prepaid as the principal amount of such Obligations held
by such Holder shall bear to the aggregate principal amount of all Obligations
then outstanding. In the event of a partial prepayment, upon presentation of any
Note, the Company shall execute and deliver to or on the order of the Holder, at
the expense of the Company, a new Note in principal amount equal to the
remaining outstanding portion of such Note.
(e) EFFECT OF NOTICE OF PREPAYMENT. The Company shall notify
the Lenders of any prepayment in writing at their addresses shown in the
Register, which notice shall be given at least one Business Day prior to any
date set for prepayment of Loans (each such day, a "Prepayment Date"). Once such
notice is sent or mailed, the Loans to be prepaid shall become due and payable
on the Prepayment Date set forth in such notice. Such notice may not be
conditional.
2.9 Eurocurrency Rate Loans; Increased Costs; Taxes; Capital
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Adequacy
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Section 2.6 and Section 2.7 of the Credit Agreement, as in
effect on the date hereof, is hereby incorporated by reference mutatis mutandis
as if set forth herein in its entirety.
2.10 Use of Proceeds
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(a) The proceeds of the Loans shall be used by the Company
solely to finance the Offer, the Acquisition, the Refinancing and transaction
costs and expenses associated with the Transactions. The Company shall use the
funds borrowed hereunder and under the Credit Facility to pay the existing
lenders under the $200,000,000 Credit Agreement, dated as of December 20, 1995,
among The Lincoln Electric Company, the Banks listed therein, and Keybank
National Association, as Agent, as such agreement has been amended and is
currently in effect. No portion of the proceeds of any borrowing under this
Agreement shall be used by any Loan Party to purchase or carry Margin Stock or
in any other manner that might cause the borrowing or the application of such
proceeds to violate Regulation U, Regulation T or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation of such Board or
to violate the Exchange Act, in each case as in effect on the date or dates of
such borrowing and such use of proceeds.
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2.11 Subordination
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The obligations of the Company hereunder are subordinate and
junior in right of payment to all Designated Senior Debt, as such term is
defined in, and to the extent and in the manner set forth in Exhibit B attached
hereto and made a part hereof.
2.12 Registration of Transfer; Register Evidence of Loans.
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(a) The Obligations are transferable and assignable subject to
any applicable limitations set forth in Section 7.6.
(b) The Company shall keep at its principal office a register
(the "Register") in which shall be entered the names and addresses of the
Holders and particulars of the respective Obligations held by them and of all
transfers of such Obligations. References to the "Holder" or "Holders" shall
mean the Person listed in the Register as the owner of any Obligation. No
transfer of any Obligation shall be effective except upon recordation in the
Register.
(c) The Loans shall not be evidenced by any instruments. Each
Holder, however, at its option, shall be entitled to receive a Note evidencing
its portion of the Loan. Each Holder of a Loan shall maintain in accordance with
its usual practice an account or accounts evidencing the indebtedness of the
Company to such Holder resulting from the Loan held by such Holder from time to
time, including the amounts of principal and interest payable and paid to such
Holder from time to time under this Agreement. The entries made in such accounts
shall, to the extent permitted by applicable law, be PRIMA FACIE evidence of the
existence and amounts of the obligations of the Company therein recorded;
PROVIDED, HOWEVER, that the failure of any Holder to maintain such accounts or
any error therein shall not in any manner affect the obligations of the Company
to repay (with the applicable interest) the Loans in accordance with the terms
of this Agreement.
2.13 Payments
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(a) WIRE TRANSFER. The principal of, fees, premium, if any,
and interest on each Loan and all other Obligations arising under the Loan
Documents shall be payable by wire transfer in immediately available funds (in
United States dollars) to the Agent for the respective accounts of the Lenders
set forth below their signatures on the signature pages of this Agreement or
otherwise designated in the Register from time to time to the Company by any
Lender at least three Business Days prior to the due date therefor.
(b) PAYMENTS ON BUSINESS DAYS. If any payment to be made
hereunder or under any Note shall 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 be included in computing interest in connection with
such payment); provided, however, that if such succeeding Business Day falls in
the next calendar month, such payment shall be made on the next preceding
Business Day.
(c) NO DEFENSE. To the fullest extent permitted by law, the
Company shall make all payments hereunder and under the Notes regardless of any
defense or counterclaim.
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(d) ALLOCATION. Any money paid to, received by, or collected
by any Agent or any Lender pursuant to this Agreement or any other Loan Document
shall be applied in the following order, at the date or dates fixed by the
Agent:
First: to any unpaid fees and reimbursement or unpaid expenses
of the Arrangers (in their capacity as Agent and/or as Lender)
hereunder and under the Fee Letter;
Second: to the payment of all costs, expenses, other fees,
commissions and taxes owing to any Lender hereunder;
Third: to the indefeasible payment of all accrued interest to
the date of such payment or collection;
Fourth: to the indefeasible payment of the amounts then due
and unpaid under this Agreement, the Notes or any other Loan Document
for principal, in respect of which or for the benefit of which such
money has been paid or collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Notes for principal; and
Fifth: the balance, if any, to the Person lawfully entitled
thereto.
SECTION 3. CONDITIONS PRECEDENT
3.1 Conditions Precedent to the Commitment Effective Date
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The Commitment Effective Date is subject to the following
conditions precedent, each of which shall be satisfied on or prior to the
Announcement Date (and the Lenders' written confirmations that the following
conditions are satisfied shall be conclusive evidence thereof for purposes of
this Section 3.1 but shall not deny the Lenders of the exercise of any remedies
which remedies shall not be inconsistent with the requirements of Rule 24.7 of
the Companies Act):
(a) each of the conditions to Announcement as set forth in
Section 4.1 of the Credit Agreement as in effect on the date hereof shall have
been satisfied in the sole discretion of the Lenders, which such Section 4.1 of
the Credit Agreement is hereby incorporated by reference MUTATIS MUTANDIS as if
set forth herein in its entirety;
(b) this Agreement, the Fee Letter and the Engagement Letter
shall have been duly executed and delivered by the parties thereto, the Company
shall be in compliance with all of its agreements thereunder and each such
agreement shall be in full force and effect and no term or condition thereof
shall have been amended, waived or otherwise modified without the prior written
consent of each Lender;
(c) the Lenders shall have received (x) a certificate of the
Secretary or Assistant of the Company dated the Announcement Date and certifying
(A) that attached thereto is a true and complete copy of the articles or
certificate of incorporation, the by-laws or memorandum and articles of
association and other organizational documents of the Company as in effect on
the Announcement Date and at all times since the date of the resolutions
described in clause (B) below, (B) that attached thereto is a true and complete
copy of resolutions duly adopted by the
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Board of Directors or a Committee of the Board of Directors of the Company, as
applicable, authorizing the execution, delivery and performance of the Loan
Documents to which such person is a party, and that such resolutions have not
been modified, rescinded or amended and are in full force and effect, (C) that
the certificate or articles of incorporation of Company have not been amended
since the date of the last amendment thereto shown on the certificate of good
standing furnished pursuant to Section 4.1 of the Credit Agreement, and (D) as
to the incumbency and specimen signature of each officer authorized, to the
extent applicable, to act with respect to the Loan Documents and each of the
other documents related thereto; and (y) a certificate of another officer as to
the incumbency and specimen signature of the Secretary or Assistant Secretary
executing the certificate pursuant to clause (x);
(d) the Lenders shall have received a favorable written
opinion of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ & ▇▇▇▇▇, special counsel to the Company, as to the
enforceability and effectiveness of the Loan Documents and as to such other
matters as the Lenders may request;
(e) there shall not be any Event of Default or event that,
with notice and/or the passage of time, is reasonably likely to result in an
Event of Default and the representations and warranties made herein shall be
true and correct in all material respects as of the Announcement Date and after
giving effect to the Transactions;
(f) all fees and other amounts then due and payable to the
Lenders under the Loan Documents shall have been paid in full.
3.2 Conditions Precedent to Closing Date
------------------------------------
Occurrence of the Closing Date is subject to the Commitment
Effective Date having occurred, and to the satisfaction of the following
conditions precedent (unless the Requisite Lenders, in their sole and absolute
discretion, shall agree otherwise):
(a) each of the conditions to Closing as set forth in Section
4.2 of the Credit Agreement as in effect on the date hereof shall have been
satisfied and each of the conditions to Offer Borrowings as set forth in Section
4.3 of the Credit Agreement as in effect on the date hereof shall have been
satisfied (which such Sections are hereby incorporated by reference MUTATIS
MUTANDIS as if set forth herein in its entirety);
(b) the Credit Agreement as in effect on the date hereof shall
be in full force and effect and Loans in the full amount of the commitments
thereunder in effect on the date hereof shall be available for borrowing;
(c) all fees and other amounts then due and payable to the
Lenders under the Loan Documents shall have been paid in full;
(d) to the extent requested, Notes shall have been executed by
the Company in favor of each Lender, each in a principal amount equal to that
Lender's Commitment;
(e) the Subsidiary Guaranty shall have been duly executed and
delivered to the Lenders by each of Lincoln Electric International Holding
Company, the Lincoln Electric Company, Lincoln Global, Inc. and ▇▇▇▇▇▇
Calorific, Inc.;
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(f) notice of borrowing shall have been given to the Lenders
pursuant to Section 2.2 hereof; and
(g) no Event of Default pursuant to Sections 8.6, 8.7, 8.9 or
8.12 of the Credit Agreement as in effect on the date hereof shall have occurred
and be continuing in respect of the Target or the Company.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement
and to make the Loans, the Company and each Subsidiary Guarantor makes the
following representations and warranties in favor of the Holders, which shall
survive the execution and delivery of this Agreement and the effectiveness of
the Commitments:
4.1 Incorporation by Reference
--------------------------
The Company and each Subsidiary Guarantor hereby makes each of
the representations and warranties contained in Section 5 (other than Sections
5.16 and 5.24) of the Credit Agreement as in effect on the date hereof, which
such Section is hereby incorporated by reference mutatis mutandis as if set
forth herein in its entirety.
4.2 Representations in Credit Agreement
-----------------------------------
Each of the representations and warranties of the Loan Parties
set forth in the Credit Agreement as in effect on the date hereof and the other
documents related thereto is true and correct in all material respects.
SECTION 5. COVENANTS
Each Loan Party hereby covenants and agrees for the benefit of
the Holders, that on and after the Announcement Date and until the Commitment
has terminated and the Obligations are paid in full:
5.1 Incorporation by Reference
--------------------------
Each Loan Party will comply with each of the covenants
contained in Section 6 and Section 7 of the Credit Agreement as in effect on the
date hereof, (except for subsections 6.8, 6.9, 7.6 and 7.8 thereof) each of
which such Sections are hereby incorporated by reference mutatis mutandis as if
set forth herein in their entirety.
5.2 Indebtedness
------------
Notwithstanding Section 5.1 above, Section 7.1 of the Credit
Agreement as incorporated herein by reference shall include Indebtedness
incurred under the Credit Agreement or any refinancing thereof as permitted
Indebtedness hereunder, so long as the aggregate amount thereof is not increased
above the aggregate commitments under the Credit Agreement as in effect on the
Closing Date.
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5.3 Subsidiary Guaranty
-------------------
The Company will cause each Subsidiary that is not a guarantor
under the Subsidiary Guaranty that becomes a guarantor or an obligor in respect
of the Domestic Obligations under the Credit Agreement promptly to enter into
the Subsidiary Guaranty. Concurrently with the delivery of a Subsidiary Guaranty
by a Subsidiary of the Company, the Company shall deliver to the Agent, on
behalf of the Lenders, the favorable written opinion of ▇▇▇▇▇, Day, ▇▇▇▇▇▇ &
▇▇▇▇▇ as to the enforceability of such Subsidiary Guaranty.
5.4 Additional Agreements.
----------------------
Not later than the one year anniversary of the Closing Date,
if the Obligations have not been repaid in full, the Company shall:
(i) Execute and deliver, cause each Subsidiary Guarantor
to execute and deliver, and cause a bank or trust company acting as
trustee thereunder to execute and deliver the Exchange Note Indenture;
and
(ii) Execute and deliver, and cause each Subsidiary
Guarantor to execute and deliver, to such holder or owner, as the case
may be, a Registration Rights Agreement.
The bank or trust company acting as trustee under the Exchange
Note Indenture shall at all times be a corporation organized and doing business
under the laws of the United States of America or the State of New York, in good
standing and having its principal offices in the Borough of Manhattan, in The
City of New York, which is authorized under such laws to exercise corporate
trust powers and is subject to supervision or examination by Federal or State
authority and which has a combined capital and surplus of not less than
$50,000,000.
SECTION 6. EVENTS OF DEFAULT
6.1 Events of Default
---------------------
Each of the following events, acts, occurrences or conditions
shall constitute an "Event of Default" under this Agreement, regardless of
whether such event, act, occurrence or condition is voluntary or involuntary or
results from the operation of law or pursuant to or as a result of compliance by
any Person with any judgment, decree, order, rule or regulation of any court or
administrative or governmental body:
(a) FAILURE TO MAKE PAYMENTS. The Company shall (i) default in
the payment when due of any principal of the Loan or (ii) default, and such
default shall continue unremedied for five or more days, in the payment when due
of any interest on the Loan or in the payment when due of any Fees or any other
amounts owing hereunder.
(b) BREACH OF REPRESENTATION OR WARRANTY. Any representation
or warranty made by any Loan Party herein or in any other Loan Document or in
any certificate or statement delivered pursuant hereto or thereto shall prove to
be false or misleading in any material respect on the date as of which made or
deemed made.
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(C) BREACH OF COVENANTS.
(i) The Company shall fail to perform or observe any
agreement, covenant or obligation arising under Section 5 of this
Agreement (giving effect to the applicable cure or grace periods
provided in Section 8 of the Credit Agreement, as in effect on the date
hereof, with respect to breaches of the corresponding provisions of the
Credit Agreement), the Engagement Letter or the Fee Letter.
(ii) The Company shall fail to perform or observe any
agreement, covenant or obligation arising under this Agreement (except
those described in subsections (a), (b) and (c)(i) above) or any other
Loan Document, and such failure shall continue for 30 days.
(d) CREDIT AGREEMENT. An "Event of Default" as defined in
Section 8 of the Credit Agreement as in effect on the date hereof, all of which
such Section, through the first paragraph of Section 8.12 thereof, are hereby
incorporated by reference MUTATIS MUTANDIS as if set forth herein in their
entirety. In addition, the penultimate paragraph of Section 8 of the Credit
Agreement, as in effect on the date hereof, is hereby incorporated by reference
MUTATIS MUTANDIS as if set forth herein in its entirety.
6.2 Rights and Remedies
-------------------
Upon the occurrence of any Event of Default described in
subsection 8.6 or 8.7 of the Credit Agreement as in effect on the date hereof
(incorporated herein by reference pursuant to Section 6.1(d) hereof), the
Commitment shall automatically and immediately terminate and the unpaid
principal amount of and any and all accrued interest on the Loan and any and all
accrued Fees and other Obligations shall automatically become immediately due
and payable, with all additional interest from time to time accrued thereon and
without presentation, demand or protest or other requirements of any kind
(including, without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by Company, and any
obligation to make a Loan hereunder shall thereupon terminate; and upon the
occurrence and during the continuance of any other Event of Default, the Agent
may, by written notice to Company, (i) declare that the Commitment is
terminated, whereupon the Commitment and the obligation of the Lenders to make
the Loans hereunder shall immediately terminate, and (ii) declare the unpaid
principal amount of and any and all accrued and unpaid interest on the Loan and
any and all accrued Fees and other Obligations to be, and the same shall
thereupon be, immediately due and payable with all additional interest from time
to time accrued thereon and without presentation, demand or protest or other
requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and notice of acceleration), all of which are hereby expressly waived by
Company; provided, that notwithstanding any other provision of the Loan
Documents, during the period commencing with the Announcement Date and ending on
the Offer Termination Date, Agent and the Lenders (or any of them or any other
party) shall not be entitled to (i) terminate the Commitments, (ii) rescind this
Agreement nor, (iii) declare the Loans due and payable (or due and payable on
demand) or accelerate any principal amounts outstanding hereunder howsoever
described, in whole or in part or exercise any set off or similar right arising
on the basis of breach of contract,
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misrepresentation or Event of Default or otherwise unless an Event of Default
described in subsection 8.6, 8.7, 8.9 or 8.12 of the Credit Agreement as in
effect on the date hereof (incorporated by reference herein pursuant to Section
6.1(d) hereof) shall have occurred and be continuing.
SECTION 7. MISCELLANEOUS
7.1 Expenses
--------
Whether or not the transactions contemplated hereby shall be
consummated, the Company agrees to pay promptly (i) all the actual and
reasonable costs and expenses of the Agent in connection with the preparation of
the Loan Documents and any consents, amendments, waivers or other modifications
thereto; (ii) all reasonable costs of furnishing all opinions by counsel for the
Company (including any opinions requested by Lenders as to any legal matters
arising hereunder) and of the Loan Parties' performance of and compliance with
all agreements and conditions on their part to be performed or complied with
under this Agreement and the other Loan Documents including with respect to
confirming compliance with environmental, insurance and solvency requirements;
(iii) the reasonable fees, expenses and disbursements of counsel to Agent
(including allocated costs of internal counsel) in connection with the
negotiation, preparation, execution and administration of the Loan Documents and
any consents, amendments, waivers or other modifications thereto and any other
documents or matters requested by the Loan Parties; (iv) all other actual and
reasonable costs and expenses incurred by Agent in connection with the
syndication of the Commitments and the negotiation, preparation and execution of
the Loan Documents and any consents, amendments, waivers or other modifications
thereto and the transactions contemplated thereby; and (v) after the occurrence
of an Event of Default, all costs and expenses, including reasonable attorneys'
fees (including allocated costs of internal counsel) and costs of settlement,
incurred by Agent and Lenders in enforcing any Obligations of or in collecting
any payments due from any Loan Party hereunder or under the other Loan Documents
by reason of such Event of Default (including in connection with the realization
upon or the enforcement of the Subsidiary Guaranty) or in connection with any
refinancing or restructuring of the credit arrangements provided under this
Agreement in the nature of a "work-out" or pursuant to any insolvency or
bankruptcy proceedings.
7.2 Indemnity
---------
In addition to the payment of expenses pursuant to subsection
9.1, whether or not the transactions contemplated hereby shall be consummated,
the Loan Parties agree to defend (subject to Indemnities' selection of counsel),
indemnify, pay and hold harmless the Agent and Lenders, and the officers,
directors, employees, trustee, agents and affiliates of the Agent and Lenders
(collectively called the "Indemnities"), from and against any and all
Indemnified Liabilities (as hereinafter defined); provided that the Loan Parties
shall not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise solely
from the gross negligence or willful misconduct of that Indemnitee as determined
by a final judgment of a court of competent jurisdiction.
As used herein, "INDEMNIFIED LIABILITIES" means, collectively,
any and all liabilities, obligations, losses, damages (including natural
resource damages), penalties, actions,
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judgments, suits, claims (including Environmental Claims), costs (including
costs related to Cleanups), expenses and disbursements of any kind or nature
whatsoever (including the reasonable fees and disbursements of counsel for
Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened by any Person, whether or not any such
Indemnitee shall be designated as a party or a potential party thereto, and any
fees or expenses incurred by Indemnitees in enforcing this indemnity), whether
direct, indirect or consequential and whether based on any federal, state or
foreign laws, statutes, rules or regulations (including securities and
commercial laws, statutes, rules or regulations and Environmental Laws), on
common law or equitable cause or on contract or otherwise, that may be imposed
on, incurred by, or asserted against any such Indemnitee, in any manner relating
to or arising out of (i) this Agreement or the other Loan Documents or the
transactions contemplated hereby or thereby (including Lenders' agreement to
make the Loans hereunder or the use or intended use of the proceeds thereof or
any enforcement of any of the Loan Documents (including any the enforcement of
the Subsidiary Guaranty) or (ii) the current, former or future operations of
Company or its Subsidiaries, including, but not limited to, the current, former
or future ownership or use of any real property.
To the extent that the undertakings to defend, indemnify, pay
and hold harmless set forth in this subsection 7.2 may be unenforceable in whole
or in part because they are violative of any law or public policy, the Loan
Parties shall contribute the maximum portion that they are permitted to pay and
satisfy under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by Indemnitees or any of them.
7.3 Set-Off
-------
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence of any Event of Default each Lender is hereby authorized by the Loan
Parties at any time or from time to time, without notice to the Loan Parties or
to any other Person, any such notice being hereby expressly waived, to set off
and to appropriate and to apply any and all deposits (general or special,
including Indebtedness evidenced by certificates of deposit, whether matured or
unmatured, but not including trust accounts) and any other Indebtedness at any
time held or owing by that Lender to or for the credit or the account of any
Loan Party against and on account of the obligations and liabilities of the Loan
Parties to that Lender under this Agreement, and the other Loan Documents,
including all claims of any nature or description arising out of or connected
with this Agreement, or any other Loan Document, irrespective of whether or not
(i) that Lender shall have made any demand hereunder or (ii) the principal of or
the interest on the Loans or any other amounts due hereunder shall have become
due and payable pursuant to Section 8 and although said obligations and
liabilities, or any of them, may be contingent or unmatured.
7.4 Ratable Sharing
---------------
Lenders hereby agree among themselves that if any of them
shall, whether by voluntary payment (other than a voluntary prepayment of Loans
made and applied in accordance with the terms of this Agreement), by realization
upon security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
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collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, fees and other
amounts then due and owing to that Lender hereunder or under the other Loan
Documents (collectively, the "Aggregate Amounts Due" to such Lender) which is
greater than the proportion received by any other Lender in respect of the
Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (i) notify the Agent and each other Lender
of the receipt of such payment and (ii) apply a portion of such payment to
purchase participations (which it shall be deemed to have purchased from each
seller of a participation simultaneously upon the receipt by such seller of its
portion of such payment) in the Aggregate Amounts Due to the other Lenders so
that all such recoveries of Aggregate Amounts Due shall be shared by all Lenders
in proportion to the Aggregate Amounts Due to them; provided that if all or part
of such proportionately greater payment received by such purchasing Lender is
thereafter recovered from such Lender upon the bankruptcy or reorganization of
any Loan Party or otherwise, those purchases shall be rescinded and the purchase
prices paid for such participations shall be returned to such purchasing Lender
ratably to the extent of such recovery, but without interest. The Loan Parties
expressly consent to the foregoing arrangement and agree that any holder of a
participation so purchased may exercise any and all rights of banker's lien,
set-off or counterclaim with respect to any and all monies owing by any Loan
Party to that holder with respect thereto as fully as if that holder were owed
the amount of the participation held by that holder.
7.5 Notices
-------
Except as otherwise expressly provided herein, all notices,
requests and demands to or upon the respective parties hereto shall be deemed to
have been duly given when delivered by hand, or five days after being deposited
in the United States mail, postage prepaid, or, in the case of telex notice,
when sent, answerback received, or, in the case of telecopy notice, when sent,
or, in the case of a nationally recognized overnight courier service, one
Business Day after delivery to such courier service, addressed, in the case of
each party hereto, at its address specified below its signature hereto or to
such other address as may be designated by any party in a written notice to the
other parties hereto.
7.6 Successors and Assigns; Participation; Assignments.
---------------------------------------------------
(a) SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of Company, the Lenders, all Holders and their
respective successors and assigns, except that Company may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of the Holders.
(b) PARTICIPATION. Each Lender may at any time sell to one or
more Persons (each a "Participant") participating interests in its Loan, any
Note, its Commitment or any other interest of such Lender hereunder (its "Credit
Exposure"); PROVIDED that any such sale shall be in a minimum amount of
$500,000. Notwithstanding any such sale by a Lender of participating interests
to a Participant, such Lender's rights and obligations under this Agreement
shall remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any Note for all
purposes under this Agreement (except as expressly provided below), and the
Company shall continue to deal solely and directly with such
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Lender in connection with such Lender's rights and obligations under this
Agreement. The Company agrees that if any Obligations are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence and during the continuance of an Event of Default, each Participant
shall be deemed to have the right of setoff in respect of its participating
interest in amounts owing under this Agreement and any Note to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement or any Note, provided that such right of setoff
shall be subject to the obligations of such Participant to share with the
Lender, and the Lender agrees to share with such Participant. The Company also
agrees that each Participant shall be entitled to the benefits of Section 2.9.
(c) ASSIGNMENTS. The Lenders may at any time and from time to
time assign to one or more Persons (an "Assignee") all or any part of its Credit
Exposure pursuant to a supplement to this Agreement, in such form as is
customary for transactions of this type and as may be approved by the Agent (a
"Transfer Supplement"), executed by such Assignee and a Lender; provided that
any such assignment shall be in a minimum amount of $500,000. Any such partial
assignment shall be an assignment of an identical percentage of the Lender's
Loan and Commitment hereunder. Upon (i) such execution of such Transfer
Supplement, (ii) delivery of an executed copy thereof to the Company and (iii)
payment by such Assignee to the Lender of an amount equal to the purchase price
agreed between the Lender and such Assignee, the Lender shall be released from
its obligations hereunder to the extent of such assignment and such Assignee
shall for all purposes be a party to this Agreement and shall have all the
rights and obligations of the Lender under this Agreement to the same extent as
if it were an original party hereto, and no further consent or action by the
Company or the Lender shall be required. Such Transfer Supplement shall be
deemed to amend this Agreement to the extent, and only to the extent, necessary
to reflect the addition of such Assignee as a party and the resulting adjustment
of the Commitment, if any, arising from the purchase by such Assignee of all or
a portion of the Credit Exposure of the Lender. Promptly after the consummation
of any transfer to an Assignee pursuant hereto, if requested by such Assignee,
the Lender and Company shall make appropriate arrangements so that a replacement
Note is issued to the Lender and a new Note is issued to such Assignee, in each
case in principal amounts reflecting such transfer. Any subsequent transfer by
an Assignee of all or any part of its Credit Exposure shall be subject to the
consent of the Lender.
(d) DISCLOSURE OF INFORMATION. Subject to the confidentiality
provisions of Section 7.24, Company authorizes the Lenders to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee
any and all financial and other information in the Lender's possession
concerning the Company which has been delivered to the Lenders by the Company
pursuant to this Agreement or which has been delivered to the Lenders by the
Company in connection with the Lenders' credit evaluation of the Company prior
to entering into this Agreement.
7.7 Amendments and Waivers
----------------------
Neither this Agreement, any Note, any other Loan Document to
which the Company or any Subsidiary Guarantor is a party nor any terms hereof or
thereof may be amended, supplemented, modified or waived except in accordance
with the provisions of this Section. The Requisite Lenders and the Loan Parties
may, from time to time, enter into written amendments, supplements,
modifications or waivers for the purpose of adding, deleting,
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changing or waiving any provisions to this Agreement, the Notes, or the other
Loan Documents to which such Loan Parties are party; provided, that no such
amendment, supplement, modification or waiver shall (a) extend either the Final
Maturity Date or required prepayment of any Obligations or reduce the rate or
extend the time of payment of interest, fees or other amounts on or with respect
to any Obligations, or reduce the principal amount of any Obligations or reduce
any fee payable to the Lenders hereunder; release any Subsidiary Guarantor from
its obligations under the Subsidiary Guaranty, other than in accordance with the
terms of the Loan Documents; or change the amount of any Commitment, or amend,
modify or waive any provision of this Section 7.7 or the definition of Requisite
Lenders, or consent to or permit the assignment or transfer by the Company of
any of its rights and obligations under this Agreement or any other Loan
Document, in each case without the written consent of all the Holders, or (b)
amend, modify or waive any provision of Exhibit C or any other provision of any
Loan Document if the effect thereof is to affect the rights or duties of the
Agent, without the written consent of the then Agent. Any such amendment,
supplement, modification or waiver shall apply to each of the Holders equally
and shall be binding upon the Loan Parties, the Holders, the Agent and all
future holders. In the case of any waiver, the Loan Parties, the Holders and the
Agent shall be restored to their former position and rights hereunder and under
any outstanding Notes, and any Default or Event of Default waived shall be
deemed to be cured and not continuing, but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
7.8 No Waiver; Remedies Cumulative
------------------------------
No failure or delay on the part of the Lenders or any Holder
in exercising any right, power or privilege hereunder or under any other Loan
Document and no course of dealing between any Loan Party and the Lenders or any
Holder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Loan
Document preclude any other or further exercise thereof of the exercise of any
other right, power or privilege hereunder or thereunder. The rights and remedies
herein expressly provided are cumulative and not exclusive of any rights or
remedies which the Lenders or any Holder would otherwise have. No notice to or
demand on any Loan Party in any case shall entitle any Loan Party to any other
or further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Lender or the holder of any Note to any other or
further action in any circumstances without notice or demand.
7.9 Governing Law.
--------------
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 LAWS OF THE STATE OF NEW YORK (WITHOUT
GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW).
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7.10 Counterparts
------------
This Agreement may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which when
so executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
7.11 Effectiveness
-------------
This Agreement shall become effective on the date on which the
Lenders and the Company shall have each signed a counterpart hereof and the
Company shall have delivered the same to the Lenders.
7.12 Headings Descriptive
--------------------
The headings of the several Sections and subsections of this
Agreement are inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.
7.13 Marshalling; Recapture
----------------------
The Holders shall be under no obligation to marshal any assets
in favor of or any other party or against or in payment of any or all of the
Obligations. To the extent the Holders receive any payment by or on behalf of
any Loan Party, which payment or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
such Loan Party or its estate, trustee, receiver, custodian or any other party
under any bankruptcy law, state or federal law, common law or equitable cause,
then to the extent of such payment or repayment, the obligation or part thereof
which has been paid, reduced or satisfied by the amount so repaid shall be
reinstated by the amount so repaid and shall be included within the liabilities
of such Loan Party to the Holders as of the date such initial payment, reduction
or satisfaction occurred.
7.14 Severability
------------
In case any provision in or obligation under this Agreement or
the Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
7.15 Survival
--------
All indemnities set forth herein including, without
limitation, in Sections 2.9 and 7.2 shall survive the execution and delivery of
this Agreement and the Notes and the making and repayment of the Loans
hereunder.
7.16 Limitation of Liability
-----------------------
No claim may be made by any Loan Party or any other Person
against the Holders or any of its Affiliates, directors, officers, employees,
attorneys or agents for any special,
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indirect, consequential or punitive damages in respect of any claim for breach
of contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement or any act, omission or event
occurring in connection herewith; and each Loan Party hereby waives, releases
and agrees not to ▇▇▇ upon any claim for any such damages, whether or not
accrued and whether or not known or suspected to exist in its favor.
7.17 Independence of Covenants
-------------------------
All covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or would
otherwise be within the limitations of, another covenant shall not avoid the
occurrence of an Event of Default or Potential Event of Default if such action
is taken or condition exists.
7.18 Survival of Representations, Warranties and Agreements.
-------------------------------------------------------
(a) All representations, warranties and agreements made herein
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.
(b) Notwithstanding anything in this Agreement or implied by
law to the contrary, the agreements of the Loan Parties set forth in Sections
2.9, 7.1, 7.2 and 7.3 and the agreements of Lenders set forth in Section 7.4
shall to the extent set forth therein survive the payment of the Loans and the
termination of this Agreement.
7.19 Failure or Indulgence Not Waiver; Remedies Cumulative
-----------------------------------------------------
No failure or delay on the part of any Agent or any Lender in
the exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
7.20 Obligations Several; Independent Nature of Lenders'
---------------------------------------------------
Rights
------
The obligations of Lenders hereunder are several and no Lender
shall be responsible for the obligations or Commitments of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no action
taken by Lenders pursuant hereto or thereto, shall be deemed to constitute
Lenders as a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt, and each Lender shall be entitled to protect and
enforce its rights arising out of this Agreement and it shall not be necessary
for any other Lender to be joined as an additional party in any proceeding for
such purpose.
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7.21 CONSENT TO JURISDICTION AND SERVICE OF PROCESS
----------------------------------------------
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY LOAN PARTY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY
OBLIGATIONS THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇. BY EXECUTING
AND DELIVERING THIS AGREEMENT, EACH BORROWER, FOR ITSELF AND IN CONNECTION WITH
ITS PROPERTIES, IRREVOCABLY
(i) ACCEPTS GENERALLY AND UNCONDITIONALLY THE
NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS;
(ii) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SUBSECTION 7.5;
(iii) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (ii)
ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY
SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE
AND BINDING SERVICE IN EVERY RESPECT;
(iv) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS
AGAINST COMPANY IN THE COURTS OF ANY OTHER JURISDICTION; AND
(v) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 7.21
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO
THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1402 OR OTHERWISE.
7.22 Waiver of Jury Trial
--------------------
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR
THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including contract claims, tort claims, breach of duty claims and all other
common law and statutory claims. Each party hereto acknowledges that this waiver
is a material inducement to enter into a business relationship, that each has
already relied on this waiver in entering into this Agreement, and that each
will continue to rely on this waiver in their related future dealings. Each
party hereto further warrants
22
26
and represents that it has reviewed this waiver with its legal counsel and that
it knowingly and voluntarily waives its jury trial rights following consultation
with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER
SPECIFICALLY REFERRING TO THIS SUBSECTION 7.22 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS
MADE HEREUNDER. In the event of litigation, this Agreement may be filed as a
written consent to a trial by the court.
7.23 Changes to This Agreement
-------------------------
Notwithstanding any provision herein or in the Credit
Agreement to the contrary, the Company hereby irrevocably agrees that it shall,
and shall cause all Subsidiary Guarantors to, promptly upon the request of the
Lenders, amend and restate or otherwise modify or supplement this Agreement and
any other Loan Document, to be a stand-alone facility or otherwise, on such
terms and conditions as the Lenders may request.
7.24 Confidentiality
---------------
Each Lender shall hold all non-public information obtained
pursuant to the requirements of this Agreement which has been identified as
confidential by the Company in accordance with such Lender's customary
procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices, if applicable, it being
understood and agreed by the Company that in any event a Lender may make
disclosures to the accountants, auditors, attorneys and affiliates of such
Lender or disclosures reasonably required by any bond fide assignee, transferee
or participant in connection with the contemplated assignment or transfer by
such Lender of any Loans or any participations therein or disclosures required
or requested by any governmental agency or representative thereof or pursuant to
legal process or the City Code; provided that, unless specifically prohibited by
applicable law or court order, each Lender shall notify the Company of any
request by any governmental agency or representative thereof (other than any
such request in connection with any routine compliance examination or
examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information; and provided, further, that in no event shall any Lender be
obligated or required to return any materials furnished by the Company or any of
their Subsidiaries.
23
27
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
LINCOLN ELECTRIC HOLDINGS, INC.
By:
----------------------------------------
Name:
Title:
Notice Address:
S-1
28
LENDERS:
▇.▇. ▇▇▇▇▇▇ VENTURES CORPORATION
as a Lender
By:
----------------------------------------
Name:
Title:
Notice Address:
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
CREDIT SUISSE FIRST BOSTON
as a Lender
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
Notice Address:
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
S-2
29
▇.▇. ▇▇▇▇▇▇ VENTURES CORPORATION
as Joint Lead Arranger, Agent and Joint
Bookrunner
By:
----------------------------------------
Name:
Title:
Notice Address:
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
CREDIT SUISSE FIRST BOSTON
as Joint Lead Arranger, Syndication Agent
and Joint Bookrunner
By:
----------------------------------------
Name:
Title:
By:
----------------------------------------
Name:
Title:
Notice Address:
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:
S-3
30
EXHIBIT A
---------
TERMS OF EXCHANGE NOTES(1)
ISSUER: The Company will issue Exchange
Notes under an indenture, in such
form as is customary for
transactions of this type and as may
be approved by the Lenders, that
complies with the Trust Indenture
Act and which shall incorporate
substantially the terms and
conditions applicable to the
Exchange Notes as set forth herein.
PRINCIPAL AMOUNT: The Exchange Notes will be available
only in exchange for the Loans. The
face amount of any Exchange Note
will equal the aggregate principal
amount (including any accrued
interest not required to be paid in
cash) of the Loans for which it is
exchanged.
MATURITY: The Exchange Notes will mature on
the tenth anniversary of the Closing
Date.
INTEREST RATE: Exchange Notes will bear interest at
a rate equal to the interest rate
borne by the Loan at the time such
Exchange Notes are issued.
GUARANTEES: The obligations of the Company under
the Exchange Notes will be
unconditionally guaranteed on a
senior subordinated basis by each
existing and subsequently acquired
or organized subsidiary of the
Company that issues a guarantee or
becomes an obligor under the Credit
Agreement in respect of Domestic
Obligations.
TAX GROSS UP: Same as Loans.
RANK: Exchange Notes will rank pari passu
with Loans but will be subordinated
in right of payment to all existing
and future senior indebtedness of
Company.
MANDATORY REDEMPTION: Same as Loans.
OPTIONAL REDEMPTION: The Exchange Notes will be
non-callable until the fifth
anniversary of the Closing Date
(subject to customary equity
offering clawback provisions) and
will be callable thereafter at par
plus accrued interest plus a
premium, which premium shall
initially be one half of the fixed
interest rate borne by such Exchange
Note declining ratably
----------
(1) All capitalized terms used but not defined herein have the meanings
given to them in the Bridge Loan Agreement to which this Exhibit is
attached.
A-1
31
each year thereafter to zero on the
date that is one year prior to the
maturity of the Exchange Notes.
REGISTRATION RIGHTS: The Company will use its reasonable
best efforts to cause to become
effective a shelf registration
statement which will permit
registered resales of the Exchange
Notes no later than 120 days from
the one year anniversary of the
Closing Date, and the Company will
use its reasonable best efforts to
keep such registration statement
effective and available (subject to
customary exceptions) until it is no
longer needed to permit unrestricted
resales of such Exchange Notes. If
the registration statement ceases to
be effective or ceases to be useable
in connection with resales of such
Exchange Notes (subject to customary
exceptions), cash interest will
accrue and be payable (in addition
to interest otherwise accruing on
the Exchange Notes) at a rate of
0.50% per annum until such default
shall be cured.
The Company agrees, at its expense,
to assist in connection with resales
of any of the Exchange Notes,
including making its senior officers
available, including making them
available to assist in the
preparation of marketing materials
relating to any resales, to
participate in due diligence
sessions and to participate in road
shows or other presentations to
prospective purchasers of such
Exchange Notes.
EXCHANGE NOTES: The Exchange Notes will be in such
form as is customary for
transactions of this type and as may
be approved by the Lenders.
RIGHT TO TRANSFER
EXCHANGE NOTES: The holders of the Exchange
Notes shall have the absolute and
unconditional right to transfer such
Exchange Notes to any third parties
in compliance with applicable law.
COVENANTS: Those typical for an indenture
governing a high-yield senior
subordinated note issue, including a
"change in control" put provision,
and, to the extent deemed reasonably
necessary by the Lenders and
reasonably satisfactory to the
Company, certain covenants contained
in the Agreement and the other Loan
Documents.
EVENTS OF DEFAULT: Those typical for an indenture
governing a high-yield senior
subordinated note issue.
GOVERNING LAW
AND FORUM: New York.
A-2
32
EXHIBIT B
---------
TERMS OF SUBORDINATION(2)
Set forth below are the operative and binding subordination
provisions applicable to the Loans (referred to for the purposes herein
collectively as the "Junior Debt").
(a) JUNIOR DEBT SUBORDINATED TO DESIGNATED SENIOR DEBT. The Company, for
itself and its successors, agrees that the payment of the principal and
interest (including post-petition interest as provided below) on the
Junior Debt and any claim for rescission or damages in respect thereof
under any applicable law (the "Subordinated Obligations") by the
Company is subordinated, to the extent and in the manner provided in
this Section, to the prior payment of the Obligations (as defined in
the Credit Agreement as in effect on the date hereof) under the Credit
Agreement (the "Designated Senior Debt"), provided that the provisions
of this Section do not apply to, and the Junior Debt is not
subordinated in respect of, the proceeds of the Permanent Financing.
This Section will constitute a continuing offer to all Persons who, in
reliance upon its provisions, become holders of, or continue to hold,
Designated Senior Debt, and such provisions are made for the benefit of
the holders of Designated Senior Debt, and such holders are made
obligees under this Section and they and/or each of them may enforce
its provisions.
(b) NO PAYMENT ON JUNIOR DEBT IN CERTAIN CIRCUMSTANCES.
(i) No payment will be made on account of the Subordinated
Obligations, or to acquire any of the Junior Debt for cash or
property other than capital stock of the Company, or on
account of the redemption provisions of the Junior Debt (x)
upon the maturity of any Designated Senior Debt by lapse of
time, acceleration or otherwise, unless and until all such
Designated Senior Debt shall first be paid in full or
provided for in cash or cash equivalents or such payment duly
provided for or (y) in the event that the Company defaults in
the payment of any principal of or interest on or any other
amounts payable on or due in connection with any Designated
Senior Debt when it becomes due and payable, whether at
maturity or at a date fixed for prepayment or by declaration
or otherwise, unless and until such default has been cured
or waived in writing.
(ii) Upon the happening of any event of default (or if an event of
default would result upon any payment with respect to the
Subordinated Obligations) with respect to any Designated
Senior Debt, as such event of default is defined in the
instruments evidencing such Designated Senior Debt under which
it is outstanding, permitting the holders to accelerate its
maturity (if the default is other than default in payment of
the principal of or interest on or any other amount due in
connection with such Designated Senior Debt) upon written
notice of the event of default
----------
(2) All capitalized terms used but not defined herein have the meanings
given to them in the Bridge Loan Agreement to which this Exhibit is
attached.
B-1
33
given to the Company by the holders of such Designated Senior
Debt, then, unless and until such event of default has been
cured or waived in writing, no payment will be made by the
Company with respect to the Subordinated Obligations or to
acquire any of the Junior Debt for cash, property or
securities other than capital stock of the Company or with
regard to redemption of Junior Debt; PROVIDED, that this
paragraph (ii) will not prevent the making of any payment for
a period of more than 179 days after the date the written
notice of the default is given unless such Designated Senior
Debt in respect of which such event of default exists has been
declared due and payable in its entirety within that period,
and that declaration has not been rescinded. If such
Designated Senior Debt is not declared due and payable within
179 days after the written notice of the default is given,
promptly after the end of the 179 day period the Company will
pay all sums not paid during the 179 day period because of
this paragraph (ii) unless paragraph (i) above is then
applicable. During any 360-day consecutive period only one
such period during which payment of principal of, or interest
on, the Junior Debt may not be made may commence and the
duration of such period may not exceed 179 days.
(iii) If any payment or distribution of assets of the Company is
received by any Holder in respect of the Subordinated
Obligations at a time when that payment or distribution should
not have been made because of paragraph (i) or (ii), such
payment or distribution will be received and held in trust for
and will be paid over to the holders of Designated Senior Debt
which is due and payable and remains unpaid or unprovided for
(pro rata as to each of such holders on the basis of the
respective amounts of Designated Senior Debt which is due and
payable held by them) until all such Designated Senior Debt
has been paid in full or provided for in cash or cash
equivalents, after giving effect to any concurrent payment or
distribution or provision therefor to the holders of such
Designated Senior Debt.
(c) JUNIOR DEBT SUBORDINATED TO PRIOR PAYMENT OF ALL DESIGNATED SENIOR DEBT
ON DISSOLUTION, LIQUIDATION OR REORGANIZATION. Upon any distribution of
assets of the Company upon any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency,
receivership or similar proceeding related to the Company or its
property or upon an assignment for the benefit of creditors or
otherwise);
(i) the holders of all Designated Senior Debt will first be
entitled to receive payment in full or provision for payment
in full in cash or cash equivalents of the principal of and
interest due on Designated Senior Debt and other amounts due
in connection with Designated Senior Debt (including interest
accruing subsequent to an event specified in Sections 8.6 or
8.7 (certain bankruptcy events) and 8.9 (certain winding up
events)) of the Credit Agreement at the rate provided for in
the Credit Agreement, whether or not such interest is an
allowed claim enforceable against the debtor in a bankruptcy
case under Title 11 of the United States Code, before the
Holders are entitled to receive any payment on account of the
principal of or interest on the Junior Debt;
B-2
34
(ii) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to
which the Holders would be entitled except for the provisions
of this Section will be paid by the liquidating trustee or
agent or other person making such a payment or distribution
directly to the holders of Designated Senior Debt or their
representatives to the extent necessary to make payment in
full or provision for payment in full in cash or cash
equivalents of all Designated Senior Debt remaining unpaid,
after giving effect to any concurrent payment or distribution
or provision therefor to the holders of such Designated Senior
Debt; and
(iii) if, notwithstanding the foregoing, any payment or distribution
of assets of the Company of any kind or character, whether in
cash, property or securities is received by the Holders on
account of the Subordinated Obligations before all Designated
Senior Debt is paid in full or provided for in cash or cash
equivalents, such payment or distribution will be received and
held in trust for and will be paid over to the holders of the
Designated Senior Debt remaining unpaid or unprovided for or
their representatives for application to the payment of such
Designated Senior Debt until all such Designated Senior Debt
has been paid in full or provided for in cash or cash
equivalents, after giving effect to any concurrent payment or
distribution or provision therefor to the holders of
Designated Senior Debt.
The Company will give prompt written notice to the Holders of
any dissolution, winding up, liquidation or reorganization of
it or any assignment for the benefit of its creditors and of
any event of default in respect of Designated Senior Debt.
(d) For purposes of this Section, the words "cash, property or securities"
shall not be deemed to include (x) shares of capital stock of the
Company as reorganized or readjusted, (y) securities of the Company or
any other corporation provided for by a plan of reorganization or
readjustment which are subordinated, to at least the same extent as the
Junior Debt, to the payment of all Designated Senior Debt then
outstanding or (z) any payment or distribution of securities of the
Company or any other corporation authorized by an order or decree
giving effect, and stating in such order or decree that effect has been
given, to subordination of the Junior Debt to Designated Senior Debt
and made by a court of competent jurisdiction in a reorganization
proceeding under any applicable bankruptcy, insolvency or similar law.
For purposes of this Section, "payment on the account of the
Subordinated Obligations" shall not include the issuance of the
Exchange Notes or any sale or transfer of any of the foregoing.
(e) HOLDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS OF DESIGNATED SENIOR
DEBT. Following the payment in full or provision for payment in full of
all Designated Senior Debt, the Holders will be subrogated to the
rights of the holders of Designated Senior Debt to receive payments or
distributions of assets of the Company applicable to the Designated
Senior Debt until all amounts owing on the Junior Debt have been paid
in full, and for the purpose of such subrogation no such payments or
distributions to the holders of Designated Senior Debt by or on behalf
of the Company or by or on behalf of the Holders by virtue of this
Section which otherwise would have been made to the Holders will, as
B-3
35
between the Company and the Holders, be deemed to be payment by the
Company to or on account of the Designated Senior Debt, it being
understood that the provisions of this Section are and are intended
solely for the purpose of defining the relative rights of the Holders,
on the one hand, and the holders of Designated Senior Debt, on the
other hand.
(f) OBLIGATIONS OF THE COMPANY UNCONDITIONAL. Nothing contained in this
Section or elsewhere in the Junior Debt is intended to or will impair,
as between the Company and the Holders, the obligations of the Company,
which are absolute and unconditional, to pay to the Holders the
Subordinated Obligations as and when they become due and payable in
accordance with their terms, or is intended to or will affect the
relative rights of the Holders and creditors of the Company other than
the holders of the Designated Senior Debt, nor will anything herein or
therein prevent any Holder from exercising all remedies otherwise
permitted by applicable law upon default the Junior Debt, subject to
the rights if any, under this Section of the holders of Designated
Senior Debt in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.
(g) SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF THE COMPANY
OR HOLDERS OF DESIGNATED SENIOR DEBT. No right of any present or future
holders of any Designated Senior Debt to enforce subordination as
provided herein will at any time in any way be prejudiced or impaired
by any act or failure to act on the part of the Company or by any act
or failure to act by any such holder, or by any noncompliance by the
Company with the terms of the Junior Debt, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with.
The holders of Designated Senior Debt may extend, renew, modify or
amend the terms of the Designated Senior Debt or any security therefor
and release, sell or exchange such security and otherwise deal freely
with the Company, all without affecting the liabilities and obligations
of the parties to the document or the Holders. No amendment to these
provisions will be effective against the holders of the Designated
Senior Debt who have not consented thereto in writing.
(h) NOT TO PREVENT EVENTS OF DEFAULT. The failure to make a payment on
account of the Subordinated Obligations by reason of any provision of
this Section will not be construed as preventing the occurrence of an
Event of Default.
B-4
36
EXHIBIT C
---------
THE AGENT(3)
(i) APPOINTMENT OF THE AGENT. JPMVC is hereby appointed as the Agent
hereunder and under the other Loan Documents, and each Holder hereby
authorizes the Agent to act as its agent in accordance with the terms
of this Agreement and the other Loan Documents. The Agent agrees to act
upon the express conditions contained in this Agreement and the other
Loan Documents, as applicable. The provisions of this EXHIBIT C are
solely for the benefit of the Agent and the Holders and the Company
shall have no rights as a third party beneficiary of any of the
provisions thereof. In performing its functions and duties under this
Agreement, the Agent shall act solely as an agent of the Holders and
does not assume and shall not be deemed to have assumed any obligation
towards or relationship of agency or trust with or for the Company or
any of its Subsidiaries.
(j) POWERS AND DUTIES; GENERAL IMMUNITY.
(i) POWERS; DUTIES SPECIFIED. Each Holder irrevocably authorizes
the Agent to take such action on such Holder's behalf and to
exercise such powers, rights and remedies hereunder and under
the other Loan Documents as are specifically delegated or
granted to the Agent by the terms hereof and thereof, together
with such powers, rights and remedies as are reasonably
incidental thereto. The Agent shall have only those duties and
responsibilities that are expressly specified in this
Agreement with respect to the Agent and the other Loan
Documents. The Agent may exercise such powers, rights and
remedies and perform such duties by or through its agents or
employees. The Agent shall not have, by reason of this
Agreement or any of the Loan Documents, a fiduciary
relationship in respect of any Holder; and nothing in this
Agreement or any of the other Loan Documents, expressed or
implied, is intended to or shall be so construed as to impose
upon the Agent any obligations in respect of this Agreement or
any of the other Loan Documents except as expressly set forth
herein or therein.
(ii) NO RESPONSIBILITY FOR CERTAIN MATTERS. The Agent shall not be
responsible to any Holder for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or
sufficiency of this Agreement or any other Loan Document or
for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral
statements or in any financial or other statements,
instruments, reports or certificates or any other documents
furnished or made by the Agent to the Holders or by or on
behalf of the Company to the Agent or any Holder in connection
with the Loan Documents and the transactions contemplated
thereby or for the financial condition or business affairs of
the Company or any other Person liable for the payment of any
Obligations, nor shall the Agent be required to ascertain or
inquire as to the performance or observance of any of the
terms, conditions, provisions, covenants or agreements
contained in any of the
----------
(3) All capitalized terms used but not defined herein have the meanings
given to them in the Bridge Loan Agreement to which this Exhibit is
attached.
C-1
37
Loan Documents or as to the use of the proceeds of the Loans
or as to the existence or possible existence of any Event of
Default. Anything contained in this Agreement to the contrary
notwithstanding, the Agent shall not have any liability
arising from confirmations of the amount of outstanding Loans
or the component amounts thereof.
(iii) EXCULPATORY PROVISIONS. Neither the Agent nor any of its
respective officers, directors, employees or agents shall be
liable to the Holders for any action taken or omitted by the
Agent under or in connection with any of the Loan Documents
except to the extent caused by the Agent's gross negligence or
willful misconduct. The Agent shall be entitled to refrain
from any act or the taking of any action (including the
failure to take an action) in connection with this Agreement
or any of the other Loan Documents or from the exercise of any
power, discretion or authority vested in it hereunder or
thereunder unless and until the Agent shall have received
instructions in respect thereof from the Requisite Lenders
and, upon receipt of such instructions from the Requisite
Lenders, the Agent shall be entitled to act or (where so
instructed) refrain from acting, or to exercise such power,
discretion or authority, in accordance with such instructions.
Without prejudice to the generality of the foregoing, (i) the
Agent shall be entitled to rely, and shall be fully protected
in relying, upon any communication, instrument or document
believed by it to be genuine and correct and to have been
signed or sent by the proper person or persons, and shall be
entitled to rely and shall be protected in relying on opinions
and judgments of attorneys (who may be attorneys for the
Company and its Subsidiaries), accountants, experts and other
professional advisors selected by it; and (ii) no Holder shall
have any right of action whatsoever against the Agent as a
result of the Agent acting or (where so instructed) refraining
from acting under this Agreement or any of the other Loan
Documents in accordance with the instructions of the Requisite
Lenders.
(iv) THE AGENT ENTITLED TO ACT AS HOLDERS. The agency hereby
created shall in no way impair or affect any of the rights and
powers of, or impose any duties or obligations upon, the Agent
in its individual capacity as a Holder hereunder. With respect
to its participation in the Loans, the Agent shall have the
same rights and powers hereunder as any other Holder and may
exercise the same as though it were not performing the duties
and functions delegated to it hereunder, and the term "Holder"
or "Holders" or any similar term shall, unless the context
clearly otherwise indicates, include the Agent in its
individual capacity. The Agent and its Affiliates may accept
deposits from, lend money to and generally engage in any kind
of banking, trust, financial advisory or other business with
the Company or any of its Affiliates as if it were not
performing the duties specified herein, and may accept fees
and other consideration from the Company for services in
connection with this Agreement and otherwise without having to
account for the same to the Holders.
(k) REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS. Each Holder represents and warrants that it has made
its own independent investigation of the financial condition and
affairs of the Company and its Subsidiaries in connection
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with the making of the Loans hereunder and that it has made and shall
continue to make its own appraisal of the creditworthiness of the
Company and its Subsidiaries. The Agent shall not have any duty or
responsibility, either initially or on a continuing basis, to make any
such investigation or any such appraisal on behalf of the Holders or to
provide any Holder with any credit or other information with respect
thereto, whether coming into its possession before the making of the
Loans or at any time or times thereafter, and the Agent shall not have
any responsibility with respect to the accuracy of or the completeness
of any information provided to the Holders.
(l) RIGHT TO INDEMNITY. Each Holder, in proportion to its Pro Rata Share,
severally agrees to indemnify the Agent, to the extent that the Agent
shall not have been reimbursed by the Company, for and against any and
all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including counsel fees and
disbursements) or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against the Agent in
exercising its powers, rights and remedies or performing its duties
hereunder or under the other Loan Documents or otherwise in its
capacity as the Agent, in any way relating to or arising out of this
Agreement or the other Loan Documents; PROVIDED that no Holder
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. If any indemnity furnished to the Agent for any purpose
shall, in the opinion of the Agent, be insufficient or become impaired,
the Agent may call for additional indemnity and cease, or not commence,
to do the acts indemnified against until such additional indemnity is
furnished.
(m) SUCCESSOR AGENT. The Agent may resign at any time by giving 30 days'
prior written notice thereof to the Holders and the Company. Upon any
such notice of resignation, the Requisite Holders shall have the right,
upon five Business Days' notice to the Company, to appoint a successor
to the Agent. Upon the acceptance of any appointment as the Agent
hereunder by a successor Agent, that successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, as the case may be, and the retiring
Agent shall be discharged from its duties and obligations under this
Agreement. After the retiring Agent's resignation hereunder as the
Agent, the provisions of this EXHIBIT C shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was the
Agent under this Agreement.
(n) GUARANTIES. Each Holder hereby further authorizes the Agent, on behalf
of and for the benefit of Lenders, to enter into the Subsidiary
Guaranty, and each Holder agrees to be bound by the terms of the
Subsidiary Guaranty; PROVIDED that the Agent shall not enter into or
consent to any amendment, modification, termination or waiver of any
provision contained in the Subsidiary Guaranty; PROVIDED, FURTHER,
HOWEVER, that, without further written consent or authorization from
the Requisite Lenders, the Agent may execute any documents or
instruments necessary to release any Subsidiary Guarantor from the
Subsidiary Guaranty if all of the capital stock of such Subsidiary
Guarantor is sold to any Person (other than an Affiliate of the
Company) pursuant to a sale or other disposition permitted hereunder or
to which the Requisite Lenders have otherwise consented. Anything
contained in any of the Loan Documents to the contrary notwithstanding,
the
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Company, the Agent and each Holder hereby agree that no Holder shall
have any right individually to enforce the Subsidiary Guaranty, it
being understood and agreed that all rights and remedies under the
Subsidiary Guaranty may be exercised solely by the Agent for the
benefit of the Holders in accordance with the terms thereof.
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