-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F7/6i3Kb2i15uzuk+1QNrV0+m2P3o0o+KIy5p6bH6PY+NQb74+6HibBsmdnIeQP8 9gsMYsMETdoKU/apJatkLQ== 0000895345-97-000218.txt : 19970702 0000895345-97-000218.hdr.sgml : 19970702 ACCESSION NUMBER: 0000895345-97-000218 CONFORMED SUBMISSION TYPE: 10-12G/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19970630 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MT INVESTORS INC CENTRAL INDEX KEY: 0001037646 STANDARD INDUSTRIAL CLASSIFICATION: MISC INDUSTRIAL & COMMERCIAL MACHINERY & EQUIPMENT [3590] IRS NUMBER: 133668641 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-12G/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-22493 FILM NUMBER: 97633587 BUSINESS ADDRESS: STREET 1: CO AEA INVESTORS INC STREET 2: 65 EAST 55TH STREET CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2126445900 MAIL ADDRESS: STREET 1: C/O AEA INVESTORS INC STREET 2: 65 EAST 55TH STREET CITY: NEW YORK STATE: NY ZIP: 10022 10-12G/A 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 - ------------------------------------------------------------------------------- AMENDMENT NO. 1 TO FORM 10 General Form for Registration of Securities Pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934 - ------------------------------------------------------------------------------- MT Investors Inc. (Exact name of registrant as specified in its charter) Delaware 13-3668641 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) Im Langacher P.O. Box MT-100 CH 8608 Greifensee, Switzerland (Address of principal executive offices) 41-1-944-22-11 (Registrant's telephone number, including area code) - ------------------------------------------------------------------------------- Securities to be registered pursuant to Section 12(b) of the Act: NONE Securities to be registered pursuant to Section 12(g) of the Act: Class A Common Stock, par value $.01 per share - ------------------------------------------------------------------------------- (Title of class) Class C Common Stock, par value $.01 per share - ------------------------------------------------------------------------------- (Title of class) MT INVESTORS INC. REGISTRATION STATEMENT ON FORM 10 INDEX PAGE ITEM 1. BUSINESS..............................................................1 ITEM 2. FINANCIAL INFORMATION................................................12 ITEM 3. PROPERTIES...........................................................26 ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.....................................................27 ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.....................................................28 ITEM 6. EXECUTIVE COMPENSATION...............................................30 ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......................32 ITEM 8. LEGAL PROCEEDINGS....................................................33 ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS....................................33 ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.............................34 ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.....................................................35 ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS...........................36 ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.........................37 ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE...........................................37 ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS...................................37 SIGNATURES ...............................................................38 The "Company" or "Mettler-Toledo" as used herein means the Registrant's indirectly wholly owned subsidiary Mettler-Toledo, Inc. and its subsidiaries, after giving effect to the acquisition of the Mettler-Toledo Group on October 15, 1996. The Registrant has no material assets, liabilities or operations other than those that result from its ownership of 100% of the outstanding common stock of Mettler-Toledo Holding Inc., the parent of Mettler-Toledo, Inc. Mettler-Toledo[R], Mettler[R], Ingold[R], Garvens[R], Ohaus[R], and DigiTol[R] are registered trademarks of the Company and Brickstone[TM], Spider[TM], Mentor SC[TM], MultiRange[TM] and TRUCKMATE[TM] are trademarks of the Company. ITEM 1. BUSINESS GENERAL Mettler-Toledo is the world's largest manufacturer and marketer of weighing instruments for use in laboratory, industrial and food retailing applications. The Company focuses on the high value-added segments of the weighing instruments market by providing solutions for specific applications. The Company also manufactures and sells certain related laboratory measurement instruments, with one of the top three market positions worldwide in titrators, thermal analysis systems, pH meters, and lab reactors. Mettler-Toledo services a worldwide customer base, with 1996 net sales of $849 million, which were derived 50% in Europe, 39% in North and South America and 11% in Asia and other markets. For additional financial information by geographic segment, see Note 20 to the Audited Consolidated Financial Statements included elsewhere in this Registration Statement (the "Audited Consolidated Financial Statements"). The Company has a global manufacturing presence, with manufacturing facilities in Europe, the United States and Asia. Mettler-Toledo is the only company to offer weighing products for laboratory, industrial and food retailing applications throughout the world. The Company believes that in 1996, the global market for weighing instruments for laboratory, industrial and food retailing applications was approximately $4.5 billion and that the Company held a market share more than two times greater than its nearest competitor. The Company believes that in 1996, it had an approximate 40% market share of the global market for laboratory balances, including the largest market share in each of Europe, the United States and Asia (excluding Japan), and one of the three leading positions in Japan. In the industrial and food retailing market, the Company believes it has the largest market share in Europe and in the United States. In Asia, the Company has a substantial, rapidly growing industrial and food retailing business supported by its established manufacturing presence in China. The Company attributes its worldwide market leadership position to its brand recognition, its leadership in technological innovation, its comprehensive product range, its global sales and service organization, its large installed base of weighing instruments and the diversity of its revenue base. HISTORY The Company traces its roots to the invention of the single-pan analytical balance by Dr. Erhard Mettler and the formation of Mettler Instrumente AG ("Mettler") in 1945. During the 1970s and 1980s, Mettler expanded from laboratory balances into industrial and food retailing products, and it introduced the first fully electronic precision balance in 1973. The Toledo Scale Company ("Toledo Scale") was founded in 1901 and developed a leading market position in the industrial weighing market in the United States. During the 1970s, Toledo Scale expanded into the food retailing market. In 1981, Toledo Scale set up a joint venture in Changzhou, China, which gave it early access to the large potential Chinese weighing market. Following the 1989 acquisition of Toledo Scale by Mettler, the name of the Company was changed to Mettler-Toledo to reflect the combined strengths of the two companies and to capitalize on their historic reputations for quality and innovation. During the past 15 years, the Company has grown through other acquisitions that complemented existing geographic markets and product lines. In 1986, Mettler acquired the Ingold Group of companies, manufacturers of electrodes, and Garvens Kontrollwaagen AG, a maker of dynamic checkweighers. Toledo Scale acquired Hi-Speed Checkweigher Co., Inc. in 1981. In 1990, the Company acquired Ohaus Corporation, a manufacturer of laboratory balances. The Registrant was incorporated in December 1991. It was recapitalized in connection with the October 15, 1996 acquisition (the "Acquisition") of the Mettler-Toledo Group from Ciba-Geigy AG ("Ciba"). See Note 1 to the Audited Consolidated Financial Statements for further information with respect to the Acquisition. The Company is a wholly owned subsidiary of Mettler-Toledo Holding Inc. On May 30, 1997, the Company purchased Safeline Limited, the world's leading supplier of metal detection systems for companies who produce and package goods in the food, pharmaceutical, cosmetics and other industries. See Item 1, "Business - Recent Developments." PRODUCTS Laboratory The Company manufactures and markets a complete range of laboratory balances, as well as other selected laboratory measurement instruments, such as titrators, thermal analysis systems, pH meters and lab reactors, for laboratory applications in research and development, quality assurance, production and education. Laboratory products accounted for approximately 40% of the Company's net sales in 1996 (including revenues from related after-sale service). The Company believes that it has an approximate 40% share of the global market for laboratory balances and is among the top three worldwide producers of titrators, thermal analysis systems, pH meters and lab reactors. The Company believes it has the leading market share for laboratory balances in Europe, the United States and Asia (excluding Japan) and one of the three leading positions in Japan. Balances. The balance is the most common piece of equipment in the laboratory. The Company believes that it sells the highest performance laboratory balances available on the market, with weighing ranges up to 32 kilograms and down to one ten-millionth of a gram. The Mettler-Toledo name is identified worldwide with accuracy, reliability and innovation. The Company's brand name is so well recognized that laboratory balances are often referred to as "Mettlers." This reputation, in management's judgment, constitutes one of the Company's principal competitive strengths. In order to cover a wide range of customer needs and price points, Mettler-Toledo markets precision balances, analytical and semimicrobalances, microbalances and ultramicrobalances in three principal product tiers offering different levels of functionality. High-end balances provide maximum automation of calibration, application support and additional functions. Mid-level balances provide a more limited but still extensive set of automated features and software applications, while basic level balances provide simple operations and a limited feature set. The Company also manufactures mass comparators, which are used by weights and measures regulators as well as laboratories to ensure the accuracy of reference weights. Due to the wide range of functions and features offered by the Company's products, prices vary significantly. A typical mid-range precision balance is priced at approximately $2,500 and a typical microbalance is priced at approximately $14,000. The Company regularly introduces new features and updated models in its lines of balances. For example, the Company's DeltaRange models permit weighing of light and heavy samples on the same balance without the need for difficult adjustments, a function particularly useful in dispensing and formula weighing. High-end balances are equipped with fully automatic calibration technology. These balances are carefully calibrated many times in controlled environments, with the results of the calibrations incorporated into built-in software, so that adjustments to ambient temperature and humidity can automatically be made at any time. The Company also offers universal interfaces that offer simultaneous connection of up to five peripheral devices. The customer can then interface one balance with, for example, a computer for further processing of weighing data, a printer for automatically printing results and a bar-code reader for sample identification. In addition to Mettler-Toledo brand products, the Company also manufactures and sells balances under the brand name "Ohaus." Ohaus brand products include triple-beam balances, strain gauge balances and electronic balances for the educational market and other markets in which customers are interested in lower cost, a more limited set of features and less comprehensive service. Titrators. Titrators measure the chemical composition of samples. The Company's high-end titrators are multi-tasking models, which can perform two determinations simultaneously. They permit high sample throughputs and have extensive expansion capability and flexibility in calculations, functions and parameters. Lower-range models permit common determinations to be stored in a database for frequent use. Titrators are used heavily in the food and beverage industry. A typical titrator is priced at approximately $12,000. Thermal Analysis Systems. Thermal analysis systems measure different properties, such as weight, dimension and energy flow, at varying temperatures. The Company's thermal analysis products include full computer integration and a significant amount of proprietary software. Thermal analysis systems are used primarily in the plastics and polymer industries. A typical thermal analysis system is priced at approximately $50,000. pH Meters. A pH meter measures acidity in a laboratory sample and is the second most widely used measurement instrument in the laboratory, after the balance. The Company manufactures desktop models and portable models. Desktop models are microprocessor-based instruments, offering a wide range of features and self-diagnostic functions. Portable models are waterproof, ultrasonically welded and ergonomically designed, and permit later downloading of data to a computer or printer using an interface kit and custom software. PH meters are used in a wide range of industries. A typical pH meter is priced at approximately $1,200. Lab Reactors and Reaction Calorimeters. Lab reactors and reaction calorimeters are used to simulate an entire chemical manufacturing process in the laboratory before proceeding to production, in order to ensure the safety and feasibility of the process. The Company's products are fully computer-integrated, with a significant software component, and offer wide flexibility in the structuring of experimental processes. Lab reactors and reaction calorimeters are typically used in the chemical and pharmaceutical industries. A typical lab reactor is priced at approximately $140,000. Electrodes. The Company manufactures electrodes for use in a variety of laboratory instruments and in-line process applications. Laboratory electrodes are consumable goods used in pH meters and titrators, which may be replaced many times during the life of the instrument. In-line process electrodes are used to monitor production processes, for example, in the beverage industry. A typical in-line process electrode is priced at approximately $1,600. Other Instruments. The Company sells density and refractometry instruments, which measure chemical concentrations in solutions. These instruments are sourced through a marketing joint venture with a third-party manufacturer, but are sold under the Mettler-Toledo brand name. In addition, the Company manufactures and sells moisture analyzers, which precisely determine the moisture content of a sample by utilizing an infrared dryer to evaporate moisture. Industrial and Food Retailing Weighing is one of the most broadly used measurement techniques in industry and food retailing. The Company's industrial and food retailing weighing and related products include bench and floor scales for standard industrial applications, truck and railcar scales for heavy industrial applications, checkweighers (which determine the weight of goods in motion), scales for use in food retailing establishments and specialized software systems for industrial processes. Increasingly, many of the Company's industrial and food retailing products can integrate weighing data into process controls and information systems. The Company's industrial and food retailing products are also sold to original equipment manufacturers ("OEMs"), which incorporate the Company's products into larger process solutions and comprehensive food retailing checkout systems. At the same time, the Company's products themselves include significant software content and additional functions including networking, printing and labeling capabilities, and the incorporation of other measuring technologies such as dimensioning. The Company works with customer segments to create specific solutions to their weighing needs. The Company has also recently worked closely with the leading manufacturer of postal meters to develop a new generation of postal metering systems. Industrial and food retailing products accounted for approximately 60% of the Company's net sales in 1996 (including revenues from related after-sale service). The Company believes that it has the leading position in industrial and food retailing sales in Europe and in the United States. In Asia, the Company has a substantial, rapidly growing industrial and food retailing business supported by established manufacturing capabilities in China. The Company believes that it is the only company with a true global presence across industrial and food retailing weighing applications. Standard Industrial Products. The Company offers a complete line of standard industrial scales, such as bench scales and floor scales, for weighing loads from a few grams to loads of several thousand kilograms in applications ranging from measuring materials in chemical production to weighing mail and packages. Product lines include the "Spider" range of scales, often used in receiving and shipping departments in counting applications; "TrimWeigh" scales, which determine whether an item falls within a specified weight range, and are used primarily in the food industry; "Mentor SC" scales, for counting parts; and precision scales for formulating and mixing ingredients. The Company's "MultiRange" products include standardized software which uses the weight data obtained to calculate other parameters, such as price or number of pieces. The modular design of these products facilitates the integration of the Company's weighing equipment into a computer system performing other functions, like inventory control or batch management. Prices vary significantly with the size and functions of the scale, generally ranging from $1,000 to $20,000. Heavy Industrial Products. The Company's primary heavy industrial products are scales for weighing trucks or railcars (i.e., weighing bulk goods as they enter a factory or at a toll station). The Company's truck scales, such as the "DIGITOL TRUCKMATE," generally have digital load cells, which offer significant advantages in serviceability over analog load cells. Heavy industrial scales are capable of measuring weights up to 500 tons and permit accurate weighing under extreme environmental conditions. The Company also offers advanced computer software that can be used with its heavy industrial scales to permit a broad range of applications. Truck sales prices generally range from $25,000 to $50,000. Dynamic Checkweighing. The Company offers solutions to checkweighing requirements in the food, pharmaceutical, chemical and cosmetic industries, where accurate filling of packages is required, and in the transportation and package delivery industries, where tariffs are levied based on weight. Customizable software applications utilize the information generated by checkweighing hardware to find production flaws, packaging and labeling errors and nonuniform products, as well as to sort rejects and record the results. Mettler-Toledo checkweighing equipment can accurately determine weight in dynamic applications at speeds of up to several hundred units per minute. Checkweighers generally range in price from $8,000 to $40,000. Food Retailing Products. Supermarkets, hypermarkets and other food retail establishments make use of multiple weighing applications for the handling of perishable goods from backroom to checkout counter. For example, perishable goods are weighed on arrival to determine payment to suppliers and some of these goods are repackaged, priced and labeled for sale to customers. Other goods are kept loose and selected by customers and either weighed at the produce or deli counter or at the check-out counter. The Company offers stand-alone scales for basic counter weighing and pricing, price finding, and printing. In addition, the Company offers network scales and software, which can integrate backroom, counter, self-service and checkout functions, and can incorporate weighing data into a supermarket's overall perishable goods management system. Backroom products include dynamic weighing products, labeling and wrapping machines, perishable goods management and data processing systems. In some countries in Europe, the Company also sells slicing and mincing equipment. Prices for food retailing scales generally range from $800 to $5,000, but are often sold as part of comprehensive weighing solutions. Systems. The Company's systems business consists of software applications for drum filling in the food and chemical industries and batching systems in the glass industry. The software systems control or modify the manufacturing process. CUSTOMERS AND DISTRIBUTION The Company's business is geographically diversified, with 1996 net sales derived 50% in Europe, 39% in North and South America and 11% in Asia and other markets. The Company's customer base is also diversified by industry and by individual customer. The Company's largest single customer accounted for no more than 2% of 1996 net sales. Laboratory Principal customers for laboratory products include chemical, pharmaceutical and cosmetics manufacturers; food and beverage makers; the metals, electronics, plastics, transportation, packaging, logistics and rubber industries; the jewelry and precious metals trade; educational institutions; and government standards labs. Balances and pH meters are the most widely used laboratory measurement instruments and are found in virtually every laboratory across a wide range of industries. Other products have more specialized uses. The Company's laboratory products are sold in more than 100 countries through a worldwide distribution network. The Company's extensive direct distribution network and its dealer support activities enable the Company to maintain a significant degree of control over the distribution of its products. In markets where there are strong laboratory distributors, such as the United States, the Company uses them as the primary marketing channel for lower- and mid-price point products. This strategy allows the Company to leverage the strength of both the Mettler-Toledo brand and the laboratory distributors' market position into sales of other laboratory measurement instruments. The Company provides its distributors with a significant amount of technical and sales support. High-end products are handled by the Company's own sales force. There has been recent consolidation among distributors in the United States market. While this consolidation could adversely affect the Company's U.S. distribution, the Company believes its leadership position in the market gives it a competitive advantage when dealing with its U.S. distributors. Asian distribution is primarily through distributors, while European distribution is primarily through direct sales. European and Asian distributors are generally fragmented on a country-by-country basis. The Company negotiated a transfer of the laboratory business in Japan from its former agent to a subsidiary of the Company effective January 1, 1997. For this transfer a total sum of approximately SFr. 8.0 million (approximately US$6.4 million) was partially paid in 1996 with the remaining to be paid in 1997. In addition, the Company began to distribute laboratory products directly in certain other Asian countries. Ohaus brand products are generally positioned in alternative distribution channels to those of Mettler-Toledo brand products. In this way, the Company is able to fill a greater number of distribution channels and increase penetration of its existing markets. Since the acquisition of Ohaus in 1990, the Company has expanded the Ohaus brand beyond its historical U.S. focus. Ohaus brand products are sold exclusively through distributors. Industrial and Food Retailing Customers for Mettler-Toledo industrial products include chemical companies (e.g., formulating, filling and bagging applications), food companies (e.g., packaging and filling applications), electronics and metal processing companies (e.g., piece counting and logistical applications), transportation companies (e.g., sorting, dimensioning and vehicle weighing applications) and auto body paint shops, which mix paint colors based on weight. The Company's products for these industries share similar weighing technology, and often minor modifications of existing products can make them useful for applications in a variety of industrial processes. The Company also sells to OEMs which integrate weighing modules into larger process control applications, or comprehensive packaging lines. OEM applications often include software content and technical support, as the Company's weighing module must communicate with a wide variety of other process modules and data management functions. The Company's products are also purchased by engineering firms, systems integrators and vertical application software companies. Customers for food retailing products include supermarkets, hypermarkets and smaller food retailing establishments. The North American and European markets include many large supermarket chains. In most of the Company's markets, food retailing continues to shift to supermarkets and hypermarkets from "mom and pop" grocery stores. While supermarkets and hypermarkets generally buy less equipment per customer, they tend to buy more advanced products that require more electronic and software content. In emerging markets, however, the highest growth is in basic scales. As with industrial products, the Company also sells food retailing products to OEMs for inclusion in more comprehensive checkout systems. For example, the Company's checkout scales are incorporated into scanner-scales, which can both weigh perishable goods and also read bar codes on other items. Scanner-scales are in turn integrated with cash registers to form a comprehensive checkout system. The Company's industrial products are sold in more than 100 countries and its food retailing products in 20 countries. In the industrial and food retailing market, the Company distributes directly to customers (including OEMs) and through distributors. In the United States, distributor sales slightly exceed direct sales. Distributors are highly fragmented in the U.S., with many small "scale houses" selling the Company's products. In Europe, direct sales predominate, with distributors used in certain cases. As in its laboratory distribution, the Company provides significant support to its distributors. SALES AND SERVICE Market Organizations The Company has over 30 geographically-focused market organizations ("MOs") around the world that are responsible for all aspects of sales and service. The MOs are local marketing and service organizations designed to maintain close relationships with the Company's customer base. Each MO has the flexibility to adapt its marketing and service efforts to account for different cultural and economic conditions. MOs also work closely with the Company's producing organizations (described below) by providing feedback on manufacturing and product development initiatives and relaying innovative product and application ideas. The Company has the only global sales and service organization among weighing instruments manufacturers. At December 31, 1996, this organization consisted of approximately 2,800 employees in sales, marketing and customer service (including related administration) and after-sales technical service. This field organization has the capability to provide service and support to the Company's customers and distributors in virtually all major markets across the globe. Sales managers and representatives interact across product lines and markets in order to serve customers that have a wide range of weighing needs, such as pharmaceutical companies that purchase both laboratory and industrial products. The Company classifies customers according to their potential for sales and the appropriate distribution channel is selected to service the customer as efficiently as possible. Larger accounts tend to have dedicated sales representatives. Other representatives are specialized by product line. Sales representatives call directly on end-users either alone or, in regions where sales are made through distributors, jointly with distributors. The Company utilizes a variety of advertising media, including trade journals, catalogs, exhibitions and trade shows. The Company also sponsors seminars, product demonstrations and customer training programs. An extensive database on markets helps the Company to gauge growth opportunities, target its message to appropriate customer groups and monitor competitive developments. After-Sales Service The Company believes that it has the largest installed base of weighing instruments in the world. To support its installed base, the Company employs service technicians who provide contract and repair services in all countries in which the Company's products are sold. Service (representing service contracts, repairs and replacement parts) accounted for approximately 17% of the Company's total net sales in 1996. (Service revenue is included in the laboratory and industrial and food retailing sales percentages given above.) Management believes that service is a key part of its product offering and helps significantly in repeat sales. The close relationships and frequent contact with its large customer base provide the Company with sales opportunities and innovative product and application ideas. Moreover, a global service network is an important factor in the ability to expand in emerging markets. Widespread adoption of quality laboratory and manufacturing standards and the privatization of weights and measures certification are both favorable trends for the Company's service business, as they tend to increase demand for on-site calibration services. The Company's service contracts provide for repair services within various guaranteed response times, depending on the level of service selected. Many contracts also include periodic calibration and testing. Contracts are generally one year in length, but may be longer. The Company's own employees directly provide all service on Mettler-Toledo products. If the service contract also includes products of other manufacturers, the Company will generally perform calibration, testing and basic repairs directly, and contract out more significant repair work. As application software becomes more complex, the Company's service efforts increasingly include installation and customer training programs as well as product service. Warranties on Mettler-Toledo products are generally one year. Based on past experience, the Company believes its reserves for warranty claims are adequate. RESEARCH AND PRODUCT DEVELOPMENT; MANUFACTURING Producing Organizations The Company is organized into a number of producing organizations ("POs"), which are specialized centers responsible for product development, research and manufacturing. At December 31, 1996, POs included approximately 3,900 employees worldwide, and consisted of product development teams whose members are from marketing, development, research, manufacturing, engineering and purchasing. POs also often seek customer input to ensure that the products developed are tailored to market needs. The Company has organized POs in order to reduce product development time, improve its customer focus, reduce costs and maintain technological leadership. The POs work together to share ideas and best practices. Some employees are in both MOs and POs. The Company is currently implementing a number of projects that it believes will result in increased productivity and lower costs. For example, the Company is restructuring the order and product delivery process in Europe to enable the Company to deliver many of its products to its customers directly from the manufacturing facility within several days, which minimizes the need to store products in decentralized warehouses. In addition, the Company is centralizing its European spare parts inventory management system. Research and Product Development The Company closely integrates research and development with marketing, manufacturing and product engineering. The Company has nearly 600 professionals in research and development and product engineering. The Company's principal product development activities involve applications improvements to provide enhanced customer solutions, systems integration and product cost reduction. However, the Company also actively conducts research in basic weighing technologies. As part of its research and development activities, the Company has frequent contact with university experts, industry professionals and the governmental agencies responsible for weights and measures. In addition, the Company's in-house development is complemented by technology and product development alliances with customers and OEMs. A recent example of innovation at the Company is the "Brickstone" technology, which eliminates many of the complex mechanical linkages in a weighing sensor and reduces the number of parts in the sensor from approximately 100 to approximately 50. The Brickstone sensor permits more accurate weighing, lower manufacturing costs and cheaper and faster design changes. Brickstone technology has been incorporated into certain of the Company's products, and the Company expects to expand its use to additional product lines in the future. The Company has been spending an increasing proportion of its research and development budget on software development. Software development for weighing applications includes application-specific software, as well as software utilized in sensor mechanisms, displays, and other common components, which can be leveraged across the Company's broad product lines. The Company spent $50.0 million on research and development in 1996 (excluding research and development purchased in connection with the Acquisition), $54.5 million in 1995 and $48.0 million in 1994, which the Company believes was more than any of its competitors. Including costs associated with customer-specific engineering projects, which are included in cost of sales for financial reporting purposes, the Company spent approximately 6.6% of net sales on research and development in 1996. Manufacturing The Company's manufacturing strategy is to produce directly those components that require its specific technical competence, or for which dependable, high-quality suppliers cannot be found. The Company contracts out the manufacture of its other component requirements. Consequently, much of the Company's manufacturing capability consists of assembly of components sourced from others. The Company utilizes a wide range of suppliers and it believes its supply arrangements to be adequate. From time to time the Company relies on one supplier for all of its requirements of a particular component, but in such cases the Company believes adequate alternative sources would be available if necessary. Supply arrangements for electronics are generally made globally. For mechanical components, the Company generally uses local sources to optimize materials flow. The Company's manufacturing operations emphasize product quality. Most of its products require very strict tolerances and exact specifications. The Company utilizes an extensive quality control system that is integrated into each step of the manufacturing process. This integration permits field service technicians to trace important information about the manufacture of a particular unit, which facilitates repair efforts and permits fine-tuning of the manufacturing process. Many of the Company's measuring instruments are subjected to an extensive calibration process that allows the software in the unit to automatically adjust for the impact of temperature and humidity. The Company has six manufacturing plants in the U.S. (after giving effect to the closure of the Westerville, Ohio facility in 1996), four in Switzerland, two in Germany and two in China, of which one is a 60% owned joint venture and the other, the Shanghai facility, was completed and began to produce laboratory products by the end of 1996. Laboratory products are produced mainly in Switzerland and to a lesser extent in the United States, while industrial and food retailing products are produced in all four countries. The Company believes its manufacturing capacity is sufficient to meet its present and currently anticipated needs. Backlog Manufacturing turnaround time is generally sufficiently short so as to permit the Company to manufacture to fill orders for most of its products, which helps to limit inventory costs. Backlog is therefore generally a function of requested customer delivery dates and is typically no longer than one to two months. EMPLOYEES As of December 31, 1996, the Company had approximately 6,400 employees throughout the world, including more than 3,200 in Europe and more than 2,400 in North and South America. Management believes that its relations with employees are good. The Company has not suffered any material employee work stoppage or strike in its worldwide operations during the last five years. Labor unions do not represent a meaningful number of the Company's employees In certain of its facilities, the Company has instituted a flexible workforce environment, in which hours vary depending on the quantity of workload. The Company believes that this flexible working environment enhances employees' involvement, thus increasing productivity, and improves efficient payroll management by permitting the Company to adjust staffing to match workload to a greater degree without changing the size of the overall workforce. INTELLECTUAL PROPERTY The Company holds more than 1,150 patents and trademarks, primarily in the United States, Switzerland, Germany and Japan and, to a lesser extent, in China. The Company's products generally incorporate a wide variety of technological innovations, many of which are protected by patents and many of which are not. Moreover, products are generally not protected as a whole by individual patents. Accordingly, no one patent or group of related patents is material to the Company's business. The Company also has numerous trademarks and considers the Mettler-Toledo name and logo to be material to its business. The Company regularly protects against infringement of its intellectual property. REGULATION The Company's products are subject to regulatory standards and approvals by weights and measures regulatory authorities in the countries in which it sells its products. Weights and measures regulation has been harmonized across the European Union. The Company's food processing and food retailing products are subject to regulation and approvals by relevant governmental agencies, such as the United States Food and Drug Administration. Products used in hazardous environments may also be subject to special requirements. All of the Company's electrical components are subject to electrical safety standards. The Company believes that it is in compliance in all material respects with applicable regulations. ENVIRONMENTAL MATTERS The Company is subject to various environmental laws and regulations in the jurisdictions in which it operates, including those relating to air emissions, wastewater discharges, the handling and disposal of solid and hazardous wastes and the remediation of contamination associated with the use and disposal of hazardous substances. The Company wholly or partly owns, leases or holds a direct or indirect equity interest in a number of properties and manufacturing facilities around the world, including the United States, Europe, Canada, Mexico, Brazil, Australia and China. The Company, like many of its competitors, has incurred, and will continue to incur, capital and operating expenditures and other costs in complying with such laws and regulations in both the United States and abroad. The Company is currently involved in, or has potential liability with respect to, the remediation of past contamination in certain of its presently and formerly owned and leased facilities in both the United States and abroad. In addition, certain of the Company's present and former facilities have or had been in operation for many decades and, over such time, some of these facilities may have used substances or generated and disposed of wastes which are or may be considered hazardous. It is possible that such sites, as well as disposal sites owned by third parties to which the Company has sent wastes, may in the future be identified and become the subject of remediation. Accordingly, although the Company believes that it is in substantial compliance with applicable environmental requirements and the Company to date has not incurred material expenditures in connection with environmental matters, it is possible that the Company could become subject to additional environmental liabilities in the future that could result in a material adverse effect on the Company's financial condition or results of operations. The Company is involved in litigation concerning remediation of hazardous substances at its operating facility in Landing, New Jersey. On or about July 1988, an affiliate of Ciba ("AGP") purchased 100% of the outstanding stock of Metramatic Corporation ("Metramatic"), a manufacturer of checkweighing equipment located in Landing, from GEI International Corporation ("GEI"). GEI agreed to indemnify and hold harmless AGP for certain pre-closing environmental conditions, including those resulting in cleanup responsibilities required by the New Jersey Department of Environmental Protection ("NJDEP") pursuant to the New Jersey Environmental Cleanup Responsibility Act ("ECRA"). ECRA is now the Industrial Site Recovery Act. Pursuant to a 1988 NJDEP administrative consent order naming GEI and Metramatic as respondents, GEI has spent approximately $2 million in the performance of certain investigatory and remedial work addressing groundwater contamination at the site. However, a final remedy has not yet been selected by NJDEP, and, therefore, future remedial costs are currently unknown. In 1992, GEI filed a suit against various parties including Hi-Speed Checkweigher Co., Inc., a wholly-owned subsidiary of the Company that currently owns the facility, to recover certain costs incurred by GEI in connection with the site. Based on currently available information and the Company's rights of indemnification from GEI, the Company believes that its ultimate allocation of costs associated with the past and future investigation and remediation of this site will not have a material adverse effect on the Company's financial condition or results of operations. In addition, the Company is aware that Toledo Scale, the former owner of Toledo Scale or the Company has been named a potentially responsible party under CERCLA or analogous state statutes at the following third-party owned sites with respect to the alleged disposal at the sites by Toledo Scale during the period it was owned by such former owner: Granville Solvents Site, Granville, Ohio; Aqua-Tech Environmental, Inc. Site, Greer, South Carolina; and Seaboard Chemical Company Site, Jamestown, North Carolina. The former owner has also been named in a lawsuit seeking contribution pursuant to CERCLA with respect to the Caldwell Trucking Site, New Jersey based on the alleged disposal at the site by Toledo Scale during the former owner's period of ownership. Pursuant to the terms of the stock purchase agreement between Mettler and the former owner of Toledo Scale, the former owner is obligated to indemnify Mettler for various environmental liabilities. To date, with respect to each of the foregoing sites, the former owner has undertaken the defense and indemnification of Toledo Scale. Based on currently available information and the Company's contractual rights of indemnification, the Company believes that the costs associated with the investigation and remediation of these sites will not have a material adverse effect on the Company's financial condition or results of operations. COMPETITION The markets in which the Company operates are highly competitive. Because of the fragmentation of weighing instruments markets, particularly the industrial and food retailing market, both geographically and by application, the Company competes with numerous regional or specialized competitors, many of which are well-established in their markets. Some competitors are less leveraged than the Company and/or are divisions of larger companies with potentially greater financial and other resources than the Company. Although the Company believes that it has certain competitive advantages over its competitors, realizing and maintaining these advantages will require continued investment by the Company in research and development, sales and marketing and customer service and support. The Company has, from time to time, experienced price pressures from competitors in certain product lines and geographic markets. In the United States, the Company believes that the principal competitive factors on which purchasing decisions are made are accuracy and durability, while in Europe accuracy and service are the most important factors. In emerging markets, where there is greater demand for less sophisticated products, price is a more important factor than in developed markets. Competition in the United States laboratory market is also influenced by the presence of large distributors through which the Company and its competitors sell many of their products. RECENT DEVELOPMENTS On May 30, 1997, the Company purchased (the "Safeline Acquisition") the entire issued share capital of Safeline Limited ("Safeline"). The purchase price (the "Purchase Price") for the Safeline Acquisition, subject to future adjustment, was GBP 61 million (approximately US $100 million), plus up to an additional GBP 6 million for a contingent earn-out payment. The Safeline Acquisition was effected pursuant to the terms of a Share Sale and Purchase Agreement (the "Purchase Agreement"), dated May 30, 1997, among the Company's subsidiaries Safeline Holding Company and Mettler-Toledo Inc. (a Canadian corporation), as purchasers, and Safeline Limited and each of the sellers named therein as sellers. The terms of the Safeline Acquisition were based upon arms' length negotiations of the parties. Safeline, based in Manchester, U.K., is the world's leading supplier of metal detection systems for companies who produce and package goods in the food, pharmaceutical, cosmetics, chemicals and other industries. Safeline will report sales of GBP 28.6 million (US $46.4 million) and operating profits (before non-recurring costs) of GBP 6.7 million (US $11 million), for its fiscal year ended March 31, 1997 in accordance with UK GAAP, and such amounts are substantially the same as those that would be obtained using US GAAP. The source of funds for the Purchase Price was provided by GBP 13.7 million in loan notes to be retained by the sellers with the remaining amounts provided by amounts loaned under the Amended and Restated Credit Agreement described below. On May 29, 1997, the Company entered into an Amended and Restated Credit Agreement. The Company's prior credit agreement (the "Credit Agreement") provided for term loan borrowings in an aggregate principal amount of approximately US $147.0 million and SFr 125.0 million, that were scheduled to mature in 2002, 2003 and 2004 and a multi-currency revolving credit facility with availability of US $140.0 million. The revolving credit facility was scheduled to mature under the Credit Agreement in 2002. The Amended and Restated Credit Agreement provides for term loan borrowings in an aggregate principal amount of approximately US $133.8 million, SFr 171.5 million and GBP 26.7 million that are scheduled to mature in 2002 and 2004, a Canadian revolver with availability of CDN $26.3 million (approximately CDN $21 million of which has been drawn) which is scheduled to mature in 2002, and a multi-currency revolving credit facility with availability of US $151.0 million (approximately US $25 million of which has been drawn). The revolving credit facility is scheduled to mature in 2002. The interest rate margin on all loans have been reduced by 75 basis points under the Amended and Restated Credit Agreement. ITEM 2. FINANCIAL INFORMATION The selected historical financial information set forth below at December 31, 1994, 1995, 1996, for the years ended December 31, 1993, 1994, 1995, and for the period from January 1, 1996 to October 14, 1996, and for the period from October 15, 1996 to December 31, 1996 is derived from the Registrant's financial statements, which were audited by KPMG Fides Peat, independent auditors. The financial information for all periods prior to October 15, 1996, the date of the Acquisition, is combined financial information of the Mettler-Toledo Group, the Predecessor Business. The summary historical financial information at March 31, 1997 and for the three months ended March 31, 1996 and 1997 is derived from the unaudited interim consolidated financial statements of the Predecessor Business and of the Registrant, which, in the opinion of management, include all adjustments necessary for a fair presentation of the results for the unaudited periods. Operating results for the three months ended March 31, 1997 are not necessarily indicative of the results that may be expected for the year ended December 31, 1997. The combined historical data of the Mettler-Toledo Group and the consolidated historical data of the Registrant are not comparable in many respects due to the Acquisition. See "Management's Discussion and Analysis of Financial Condition and Results of Operations", below and the consolidated financial statements and accompanying notes. The financial information presented below was prepared in accordance with U.S. generally accepted accounting principles. (1) Represents the unaudited pro forma statement of operations of the Company for fiscal year 1996, assuming the Acquisition occurred on January 1, 1996. Such pro forma statement of operations reflects (i) the adjustment to fair value of the Company's assets and liabilities which, on a pro forma basis would have resulted in increased amortization of approximately $1.5 million for 1996, (ii) the incurrence of additional debt in connection with the Acquisition which would have resulted in a net increase in interest expense, including amortization of debt and issuance costs and other fees of $16.1 million for 1996, (iii) the incurrence of approximately $2.3 million annually in additional selling, general and administrative expenses as a result of being an independent company, (iv) a decrease in the Company's provision for income taxes of $9.9 million in 1996, and(v) other charges of $11.8 million representing principally severance costs for the general headcount reduction in Europe and North America, the closure of the Company's Westerville, Ohio manufacturing facility, and the realignment of the analytical and precision balance business in Switzerland. The pro forma statement of operations does not reflect the acquisition of Safeline on May 30, 1997. See "Management's Discussion and Analysis of Financial Condition and Results of Operations - Effect of Acquisition on Results of Operations." (2) Balance sheet information at December 31, 1992 and 1993 is not available. Income statement information for the year ended December 31, 1992 is not available, except that net sales were $769,000. (3) In connection with the Acquisition, the Company allocated approximately $32,200 of the purchase price to revalue certain inventories (principally work-in-progress and finished goods) to fair value (net realizable value). Substantially all such inventories were sold during the period October 15, 1996 to December 31, 1996. The charge associated with this item has been excluded from the pro forma financial information. (4) In conjunction with the Acquisition, the Company allocated, based upon independent valuations, $114,070 of the purchase price to purchased research and development in process. Such amount was recorded as an expense in the period from October 15, 1996 to December 31, 1996. The charge associated with this item has been excluded from the pro forma financial information. (5) For 1993, consists primarily of costs associated with the closure of a manufacturing facility in Cologne, Germany, and also includes the restructuring of certain manufacturing operations and an early retirement program in the United States. Other income for 1993, 1994 and 1995 relates primarily to gains from the sale of real property and, in 1994, to a gain on the sale of an investment. Other charges for the period January 1, 1996 to October 14, 1996 of $1,872 represent employee severance of $1,545 and other exit costs of $327 associated with the closing of its Westerville, Ohio facility. Other charges for the period October 15, 1996 to December 31, 1996 principally represent employee severance benefits associated with (i) the Company's general headcount reduction programs, in Europe and North America, of $4,557 which were announced during such period, and (ii) the realignment of the analytical and precision balance business in Switzerland of $6,205 which was internally announced in December, 1996. In connection with such programs the Company reduced its workforce by 168 employees in 1996 and intends to further reduce its workforce by approximately 70 employees. See Note 17 to the Audited Consolidated Financial Statements. (6) Earnings per common share for MT Investors Inc. has been computed using the weighted average number of outstanding common shares. Earnings per common share for the 1996 pro forma statement of operations has been computed assuming the common shares issued in the Acquisition were outstanding at January 1, 1996. (7) Includes notes payable and long-term debt payable to Ciba and affiliates less amounts due from Ciba and affiliates. See Notes 3 and 11 to the Audited Consolidated Financial Statements. (8) Consists primarily of obligations under various pension plans and plans that provide post-retirement medical benefits. See Note 15 to the Audited Consolidated Financial Statements. (9) Shareholder's equity for the Predecessor Business consists of the combined net assets of the Mettler-Toledo Group. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of the Company's financial condition and results of operations should be read in conjunction with the Audited Consolidated Financial Statements and the Unaudited Interim Audited Consolidated Financial Statements. The Registrant has no material assets, liabilities or operations other than those that result from its ownership of 100% of the outstanding common stock of Mettler-Toledo Holding Inc., the parent of Mettler-Toledo, Inc. Therefore, the analysis set forth is of the Company. GENERAL The financial statements for periods ended prior to October 15, 1996 reflect the combined operations of the Mettler-Toledo Group, while the financial statements for periods after October 15, 1996 reflect the consolidated operations of the Company after accounting for the Acquisition using the purchase method of accounting. See Note 1 to the Audited Consolidated Financial Statements. Operating results subsequent to the Acquisition are not comparable in many respects to the operating results prior to the Acquisition. See "Effect of Acquisition on Results of Operations." Financial information is presented in accordance with U.S. generally accepted accounting principles. In 1996, the Company undertook several efforts to increase productivity and lower costs. In July 1996, the Company announced the closure of its Westerville, Ohio facility. In the fourth quarter of 1996, the Company recorded charges for a general headcount reduction program in Europe and North America and the realignment of the analytical and precision balance business in Switzerland. In connection with such programs, the Company reduced its workforce by 168 employees in 1996 and intends to further reduce its workforce by approximately 70 employees. The Company recorded costs of $11.8 million in 1996, primarily relating to severance, in connection with these efforts. On May 30, 1997, the Company purchased Safeline for GBP 61 million (approximately US $100 million), subject to future adjustment, plus up to an additional GBP 6 million for a contingent earn-out payment. The source of funds for the Safeline Acquisition was provided by GBP 13.7 million in loan notes to be retained by the Sellers with the remaining amounts provided by amounts loaned under the Amended and Restated Credit Agreement. Safeline reported sales of GBP 28.6 million (US $46.4 million) and operating profits (before non-recurring costs) of GBP 6.7 million (US $11 million), for its fiscal year ended March 31, 1997 in accordance with UK GAAP, and management believes such amounts are substantially the same as those that would be obtained using US GAAP. RESULTS OF OPERATIONS The following table sets forth certain items in the statements of operations as a percentage of net sales for the years 1994, 1995 for the period from January 1, 1996 to October 14, 1996, for the period from October 15, 1996 to December 31, 1996, pro forma for the year 1996 and for the three months ended March 31, 1996 and 1997.
PERCENTAGE OF NET SALES ----------------------------------------------------------------- Successor Predecessor Successor Predecessor For the period ----------- --------- Predecessor Predecessor For the period October 15, For the three months For the years ended January 1, 1996 1996 ended March 31, December 31, to October 14, to December Pro Forma -------------------- 1994 1995 1996 31, 1996 1996 (1) 1996 1997 ---------- ---------- --------------- -------------- ----------- --------- --------- Net sales.................... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Cost of sales................ 60.0 59.7 59.7 73.2 58.9 60.1 57.8 ------ ----- ------ ------- ------- ------ ------ Gross profit................. 40.0 40.3 40.3 26.8 41.1 39.9 42.2 Research and development expenses (2)............. 6.3 6.4 6.1 5.2 5.9 6.2 5.5 Selling, general and administrative expenses...... 29.3 29.3 28.2 31.8 29.2 30.5 30.5 Amortization................. 0.8 0.3 0.3 .6 .6 .3 .6 Purchased research and _ _ _ 61.0 _ _ _ development ................. Other charges (income), net.. (0.4) (0.1) 0.3 5.3 1.4 - - ------- ------ ------ ------- ------- ------ ------ Earnings (loss) before interest and taxes........... 4.0% 4.4% 5.4% (77.1%) 4.1% 2.9% 5.6% ====== ====== ======= ========= ======== ======= ======= - ------------------------ (1) Represents the unaudited pro forma statement of operations of the Company for fiscal year 1996, assuming the Acquisition occurred on January 1, 1996. (2) Total research and development expenses were 7.2% in 1994, 7.3% in 1995 and 6.6% in 1996, including costs associated with customer-specific engineering projects, which are included in cost of sales for financial reporting purposes.
Three Months Ended March 31, 1997 Compared to Three Months Ended March 31, 1996 Net sales were $197.4 million for the three months ended March 31, 1997, compared to $201.4 million for the corresponding period in the prior year, a decrease of 2.0%. Net sales during the three month period in local currencies increased by approximately 4% but were offset by a strengthening of the U.S. dollar relative to the local currencies of the Company's operations. Net sales during the three month period in Europe in local currencies decreased 1% principally as a result of weak European economies adversely affecting sales to industrial and food retailing customers. Net sales during the three month period in the Americas in local currencies increased 5% principally due to improved market conditions for sales to industrial and food retailing customers. Net sales in the three month period in Asia and other markets in local currencies increased 19%, primarily as a result of the establishment of additional direct marketing and distribution in the region. Gross profit as a percentage of net sales increased to 42.2% for the three months ended March 31, 1997, compared to 39.9% for the corresponding period in the prior year. These results reflect the benefits of reduced product costs arising from the Company's research and development efforts, ongoing productivity improvements, and the depreciation of the Swiss franc against the Company's other principal trading currencies. See "Effect of Currency on Results of Operations." Selling, general and administrative expenses as a percentage of net sales were 30.5% for the three months ended March 31, 1997 and 1996. Research and development expenses as a percentage of net sales decreased to 5.5% for the three months ended March 31, 1997, compared to 6.2% for the corresponding period in the prior year; however, the local currency spending level remained relatively constant period to period. Earnings before interest and taxes was $11.1 million for the three months ended March 31, 1997, compared to $5.8 million for the corresponding period in the prior year. Interest expense increased to $9.4 million for the three months ended March 31, 1997, compared to $4.5 million for the corresponding period in the prior year. The increase was principally due to additional Acquisition related debt. Net financial expense of $3.7 million for the three months ended March 31, 1997 compared to net financial income of $0.4 million for the corresponding period in the prior year as a result of lower interest income and an increase in foreign currency losses. The net loss of $1.1 million for the three months ended March 31, 1997, compared to net earnings of $0.9 million for the corresponding period in the prior year. For The Period From January 1, 1996 To October 14, 1996, The Period From October 15, 1996 to December 31, 1996 And Pro Forma 1996 Compared To Year Ended December 31, 1995 Net sales for the period from January 1, 1996 to October 14, 1996 and for the period from October 15, 1996 to December 31, 1996 were $662.2 million and $186.9 million, respectively. Pro forma 1996 net sales were virtually unchanged at $849.1 million compared to actual net sales of $850.4 million in 1995. Net sales in local currency increased 2.6%, excluding the impact of the reduction of the systems business, but were offset by a strengthening of the U.S. dollar, the Company's reporting currency, relative to the local currencies of the Company's operations. The flat sales (pro forma) in 1996 compared to actual 1995 resulted from slightly lower sales from products in the industrial and food retailing markets, offset by strong performance by the product lines in the laboratory market. The growth in the laboratory market was across substantially all product lines and geographical regions as sales in local currency increased 7% compared to the previous year. In particular, new product introductions in titration, thermal and reaction calorimetry as well as new Ohaus products for the education, laboratory and light industrial market helped to increase laboratory market sales. The slight decline in industrial and food retailing sales resulted from overall weakness in the European market while the Company has been able to retain its market share. This market weakness has persisted in early 1997. Net sales (pro forma) in Europe in local currency decreased 2% in 1996 compared to actual 1995 due to a weaker second half of the year in 1996 in all major markets, and especially in key countries such as Germany, France and the United Kingdom. Net sales (pro forma) in the Americas in local currency increased by 5% over actual 1995 due to growth in the United States and Latin America and double digit expansion in laboratory measurement instruments other than balances and in related service. Net sales (pro forma) in Asia and other markets in local currency increased by 8% over actual 1995, primarily as a result of significantly increased sales in the Shanghai operation and strong sales in Japan and Australia. Gross profit for the period from January 1, 1996 to October 14, 1996 and for the period from October 15, 1996 to December 31, 1996 was $267.0 million and $50.1 million, respectively. Pro forma gross profit as a percentage of sales increased to 41.1% in 1996 from 40.3% in actual 1995. The increased gross profit margin resulted principally from operational improvements and the depreciation of the Swiss franc against the Company's other principal trading currencies. See "Effect of Currency on Results of Operations." Selling, general and administrative expenses and research and development expenses for the period from January 1, 1996 to October 14, 1996 and for the period from October 15, 1996 to December 31, 1996 were $227.1 million and $69.2 million, respectively. Pro forma selling, general and administrative expenses and research and development expenses as a percentage of net sales decreased to an aggregate of 35.1% in 1996 from 35.7% in actual 1995. The cost decreases resulted primarily from the currency effect of the depreciation of the Swiss franc against the Company's other major trading currencies and the Company's cost control efforts which were partially offset by additional selling, general and administrative expenses the Company estimates it will incur as a result of being an independent company which more than offset the $4.8 million of non-recurring legal and advisory fees associated with the Acquisition. See "Effect of Acquisition on Results of Operations." In connection with the Acquisition, the Company allocated, based upon independent valuations, $114.1 million of the purchase price to purchased research and development in process. Such amount was expensed immediately following the Acquisition. Other charges for the period January 1, 1996 to October 14, 1996 of $1.9 million represent employee severance of $1.5 million and other exit costs of $.3 million associated with the closing of its Westerville, Ohio facility. Other charges for the period October 15, 1996 to December 31, 1996 principally represent employee severance benefits associated with (i) the Company's general headcount reduction programs, in Europe and North America, of $4.6 million which were announced during such period, and (ii) the realignment of the analytical and precision balance business in Switzerland of $6.2 million which was internally announced in December, 1996. In connection with such programs the Company reduced its workforce by 168 employees in 1996 and intends to further reduce its workforce by approximately 70 employees in 1997. The Company anticipates that as a result of the foregoing that it will achieve cost savings in the range of $8.3 million. Earnings before interest and taxes for the period from January 1, 1996 to October 14, 1996 was $35.8 million. Loss before interest taxes and for the period from October 15, 1996 to December 31, 1996 was $144.1 million. This loss includes an expense of $114.1 million for the allocation of purchase price to in-process research and development projects, a charge of $32.2 million for the revaluation of inventories to fair value and $9.9 million of other charges (an additional $1.9 million of other charges was incurred by the Predecessor Business in 1996). Pro forma earnings before interest and taxes would have been $34.4 million in 1996 compared to earnings before interest and taxes of $37.4 million in actual 1995. Earnings before amortization, interest and taxes, adjusted for non-recurring items including the charge for in process Research and Development ($114.1 million), revaluation of inventories to fair value ($32.2 million), other charges ($11.8 million) and non-recurring legal and advisory fees ($4.8 million) would have been $57.8 million. Interest expense for the period from January 1, 1996 to October 14, 1996 and for the period from October 15, 1996 to December 31, 1996 was $13.9 million and $8.7 million, respectively. Pro forma interest expense increased to $38.7 million in 1996 from $18.2 million in actual 1995, principally due to a higher debt level as a result of the Acquisition. Interest expense since the Acquisition is materially different. See "Effect of Acquisition on Results of Operations" and "Liquidity and Capital Resources." Financial expense (income) for the period from January 1, 1996 to October 14, 1996 and for the period from October 15, 1996 to December 31, 1996 was $(3.2) million and $7.2 million, respectively. Pro forma financial expense (income), net decreased to an expense of $4.0 million in 1996 from income of $2.3 million in actual 1995. The reduction resulted principally from losses on foreign currency transactions due to the appreciation of the dollar. Net earnings for the period from January 1, 1996 to October 14, 1996 were $14.5 million. The net loss for the period from October 15, 1996 to December 31, 1996 was and $159.0 million. Pro forma net loss of $6.4 million in 1996 compared to net earnings of $18.3 million in actual 1995. Year Ended December 31, 1995 Compared To Year Ended December 31, 1994 Net sales were $850.4 million in 1995 compared to $769.1 million in 1994, an increase of 11%. Net sales in local currency increased 5%; the remaining 6% of the increase resulted from changes in currency exchange rates. In 1994 the Company discontinued certain items in its systems and laboratory measurement instruments product lines. Excluding the effect of these discontinued items, net sales in local currency would have increased 6%. Sales growth in local currency reflected steady growth across all major product lines in laboratory, industrial and food retailing markets as result of favorable economic conditions and market share gains in selected geographic markets. Sales were helped by the expansion of the Company's line of titrators and the introduction of a family of standard industrial programmable terminals for weighing instruments. Net sales in Europe in local currency increased 7% in 1995 over 1994, consistent with the continuing recovery from the 1993 recession and market share gains in selected regions and product lines. Southern Europe contributed significantly to the increase. Net sales in the Americas in local currency decreased 1% in 1995 from 1994. Results in the Americas reflect reduced demand in the United States for laboratory instruments in the wake of consolidation in the pharmaceutical and chemical industries and unusually high demand for retail equipment in 1994 as a result of a new labeling law that caused food retailers to buy additional retail weighing and labeling equipment. Net sales in Asia and other markets in local currency increased 20% in 1995 over 1994, primarily as a result of continued economic growth and the Company's increased market share in selected markets. Sales were also helped by the recovery in China from the poor market conditions of 1994. Gross profit as a percentage of net sales increased slightly to 40.3% in 1995 from 40.0% in 1994. These results were achieved despite the appreciation of the Swiss franc against the Company's other principal trading currencies, which has the effect of increasing overall manufacturing costs due to the Company's significant manufacturing operations in Switzerland. Improved manufacturing productivity contributed to the increase, including the favorable effects of the Company's mid-1994 closure of its Cologne, Germany plant, partially offset by higher raw materials costs. Selling, general and administrative expenses and research and development expenses were relatively constant as a percentage of net sales. Cost increases resulting from the currency effect of the significant appreciation of the Swiss franc against the Company's other major trading currencies were offset by the Company's cost control efforts. Earnings before interest and taxes were $37.4 million in 1995 compared to $30.9 million in 1994. If 1994 currency exchange rates had remained in effect throughout 1995 earnings before interest and taxes in 1995 would have been $47.4 million. Interest expense rose to $18.2 million in 1995 from $13.3 million in 1994, an increase of 37%, principally due to higher interest rates from the conversion of a loan from Ciba from short term to long term. Interest expense since the Acquisition is materially different. See "Effect of Acquisition on Results of Operations," and "Liquidity and Capital Resources." Net financial income increased to $8.6 million in 1995 from $4.9 million in 1994. The higher level of financial income resulted principally from increased gain on foreign currency transactions. Net earnings increased to $18.3 million in 1995 from $13.5 million in 1994. LIQUIDITY AND CAPITAL RESOURCES The Registrant does not have any liabilities except through its ownership of the Company. The Acquisition was financed principally through capital contributions of $190 million before related expenses from the Registrant, borrowings under the Credit Agreement of $307 million and 9 3/4% Senior Subordinated Notes due 2006 (the "Notes") of $135 million. Prior to the Acquisition, the Company's cash and other liquidity was used principally to fund capital expenditures, working capital requirements, debt service and dividends to Ciba. Following the Acquisition, the annual interest expense associated with the borrowings under the Credit Agreement and the Notes, as well as scheduled principal payments of term loans under the Credit Agreement, have significantly increased the Company's liquidity requirements. See "Effect of Acquisition on Results of Operations." The Company's capital expenditures (pro forma) totaled $28.6 million in 1996, $25.9 million in 1995 and $24.9 million in 1994. Capital expenditures are primarily for machinery, equipment and the purchase and expansion of facilities, including the purchase of land for, and construction of, the Company's Shanghai manufacturing facility. Capital expenditures for 1997, as a percentage of sales, are expected to remain relatively constant with historical expenditures. In connection with the transfer of the Japanese laboratory business from a former agent to a subsidiary of the Company, the Company will make payments of approximately SFr. 8.0 million of which SFr. 1.0 million had been paid during 1996. See Item 1, "Business--Customers and Distribution." The Credit Agreement provided for term loan borrowings in an aggregate principal amount of approximately US $147.0 million and SFr. 125.0 million that were scheduled to mature in 2002, 2003 and 2004 and a multi-currency revolving credit facility with availability of US $140.0 million including letter of credit and swingline subfacilities. At December 31, 1996 approximately $75 million was available to the Company under the revolving credit facility. The revolving credit facility was scheduled to mature under the Credit Agreement in 2002. The Amended and Restated Credit Agreement provides for term loan borrowings in an aggregate principal amount of approximately US $133.8 million, SFr 171.5 million and GBP 26.7 million that are scheduled to mature in 2002 and 2004, a Canadian revolver with availability of CDN $26.3 million (approximately CDN $21 million of which has been drawn) which is scheduled to mature in 2002, and a multi-currency revolving credit facility with availability of US $151.0 million (approximately US $25 million of which has been drawn). The revolving credit facility is scheduled to mature in 2002. The interest rate margin on all loans have been reduced by 75 basis points under the Amended and Restated Credit Agreement. Under the Amended and Restated Credit Agreement, mandatory prepayments are required to be made in certain circumstances with the proceeds of asset sales or issuance of capital stock or indebtedness and with certain excess cash flow. The Amended and Restated Credit Agreement imposes certain restrictions on the Company and its subsidiaries, including restrictions on the ability to incur indebtedness, make investments, grant liens, sell financial assets and engage in certain other activities. The Company must also comply with certain financial covenants. The Amended and Restated Credit Agreement is secured by certain assets of the Company. The Notes will mature in 2006. The Notes may be required to be purchased by the Company upon a Change of Control (as defined) and in certain circumstances with the proceeds of asset sales. The Notes are subordinated to the indebtedness under the Credit Agreement. The indenture governing the Notes (the "Indenture") imposes certain restrictions on the Company and its subsidiaries, including restrictions on the ability to incur indebtedness, make investments, grant liens and engage in certain other activities. Under the Amended and Restated Credit Agreement and the Indenture, Mettler-Toledo, Inc. is prohibited from paying dividends to Mettler-Toledo Holding Inc., subject to certain limited exceptions. The Company's obligations under the Amended and Restated Credit Agreement and Notes is guaranteed by Mettler-Toledo Holding Inc. At December 31, 1996, approximately $147 million of the borrowings under the Credit Agreement and all of the borrowings under the Notes were denominated in U.S. dollars. The balance of the borrowings under the Credit Agreement and under local working capital facilities were denominated in certain of the Company's other principal trading currencies. At December 31, 1996, the Company had $27.5 million of other long-term debt incurred by its various operating subsidiaries primarily denominated in various currencies. Changes in exchange rates between the currencies in which the Company generates cash flow and the currencies in which its borrowings are denominated will affect the Company's liquidity. See "Effect of Currency on Results of Operations". The Company's cash provided by operating activities declined from $11.1 million in the three months ended March 31, 1996 to $8.1 million in the three months ended March 31, 1997. The decline resulted principally from higher interest costs resulting from the Acquisition. During the three months ended March 31, 1997, the Company reduced its borrowings by $34.1 million. At March 31, 1997, net debt was $397.5 million. The Company continues to explore acquisitions to expand its product portfolio and improve its distribution capabilities. In connection with any acquisition, the Company may incur additional indebtedness. The Company currently believes that cash flow from operating activities, together with borrowings available under the Credit Agreement and local working capital facilities will be sufficient to fund currently anticipated working capital needs and capital spending requirements as well as debt service requirements for at least several years, but there can be no assurance that this will be the case. EFFECT OF CURRENCY ON RESULTS OF OPERATIONS The Company's operations are conducted by subsidiaries in many countries, and the results of operations and the financial position of each of those subsidiaries is reported in the relevant foreign currency and then translated into U.S. dollars at the applicable foreign exchange rate for inclusion in the Company's Audited Consolidated Financial Statements. Accordingly, the results of operations of such subsidiaries as reported in U.S. dollars can vary significantly as a result of changes in currency exchange rates. Specifically, a strengthening of the U.S. dollar versus other currencies reduces net sales and earnings as translated into U.S. dollars while a weakening of the U.S. dollar has the opposite effect. Swiss franc-denominated costs represent a much greater percentage of the Company's total expenses than Swiss franc-denominated sales represent of total sales. In general, an appreciation of the Swiss franc versus the Company's other major trading currencies, especially the principal European currencies has a negative impact on the Company's results of operations and a depreciation of the Swiss franc versus the Company's other major trading currencies, especially the principal European currencies has a positive impact on the Company's results of operations. The effect of these changes generally offsets in part the effect the translation effect on earnings before interest and taxes of changes in exchange rate between the U.S. dollar and other currencies described in the preceding paragraph. EFFECT OF ACQUISITION ON RESULTS OF OPERATIONS In connection with the Acquisition, the Company has, in accordance with U.S. GAAP relating to purchase accounting rules, adjusted to fair value the Company's assets and liabilities which, on a pro forma basis, would have resulted in increased amortization of approximately $1.5 million for 1996. In addition, as part of the Acquisition, the Company has incurred additional debt, which would have resulted in a net increase in interest expense, including amortization of debt issuance costs and other fees, in the amount of $16.1 million for 1996, on a pro forma basis. The Company estimates that it will incur approximately $2.3 million annually in additional selling, general and administrative expenses as a result of being an independent company, including an annual management fee of $1.0 million to be paid to AEA Investors Inc. ("AEA Investors"). The Acquisition would have resulted in a decrease in the Company's provision for income taxes of $9.9 million for 1996, on a pro forma basis. As a result of the above adjustments, on a pro forma basis, the Company would have reported a net loss of $6.4 million in 1996, as compared to its net loss of $5.4 million in 1995 (before giving effect to the non-recurring charges referred to below). The following table represents the unaudited pro forma statement of operations of the Company after the predecessor business for the fiscal year 1996, assuming the Acquisition occurred on January 1, 1996. This pro forma statement does not reflect the anticipated benefits to be derived in the future from the Company's 1996 employee reduction programs or the acquisition of Safeline on May 30, 1997. The pro forma financial data reflects other charges in 1996 of $11.8 million representing principally severance costs for the general headcount reduction, in Europe and North America, the closure of the Company's Westerville, Ohio manufacturing facility, and the realignment of the analytical and precision balance business in Switzerland. PRO FORMA YEAR ENDED DECEMBER 31, (Dollars in thousands, except per share data)
1996 ---- Net sales .................................................. $849,133 Cost of sales .............................................. 499,865 -------- Gross profit .......................................... 349,268 -------- Research and development ................................... 50,049 Selling, general and administrative ........................ 248,337 Amortization ............................................... 4,687 Other charges (income), net ................................ 11,764 Earnings before interest and taxes .................... 34,431 Interest expense ........................................... 38,715 Financial expense (income) net ............................. 2,272 -------- Loss before taxes and minority interest ............... (6,556) Provision for taxes ........................................ (738) Minority interest .......................................... 545 -------- Net loss .............................................. $(6,363) ======== Loss per common share: Weighted average number of common shares .............. 2,438,514 Loss per common share ................................. $(2.61) =========
In addition in accordance with U.S. GAAP, the Company has allocated a portion of the purchase price to in-process research and development projects that have economic value and to the revaluation of inventories to fair values. Approximately $114.1 million has been allocated to in-process research and development and has been charged to expense in the fourth quarter of 1996. Approximately $32.2 million has been allocated to the revaluation of inventories to fair value. Substantially all of such inventories were sold during the period from October 15, 1996 to December 31, 1996. These charges are not reflected in the above table due to their unusual, non-recurring nature. TAXES The Company is subject to taxation in many jurisdictions throughout the world. The Company's effective tax rate and tax liability will be affected by a number of factors, such as the amount of taxable income in particular jurisdictions, the tax rates in such jurisdictions, tax treaties between jurisdictions, the extent to which the Company transfers funds between jurisdictions and income is repatriated, and future changes in law. Generally, the tax liability for each legal entity is determined either (i) on a non-consolidated basis or (ii) on a consolidated basis only with other entities incorporated in the same jurisdiction, in either case without regard to the taxable losses of non-consolidated affiliated entities. As a result, the Company may pay income taxes in certain jurisdictions even though the Company on an overall basis incurs a net loss for the period. ENVIRONMENTAL MATTERS The Company is subject to various environmental laws and regulations in the jurisdictions in which it operates. The Company, like many of its competitors, has incurred, and will continue to incur, capital and operating expenditures and other costs in complying with such laws and regulations in both the United States and abroad. The Company does not currently anticipate any material capital expenditures for environmental control technology. Some risk of environmental liability is inherent in the Company's business, and there can be no assurance that material environmental costs will not arise in the future. However, the Company does not anticipate any material adverse effect on its results of operations or financial condition as a result of future costs of environmental compliance. See Item 1, "Business--Environmental Matters." INFLATION Inflation can affect the costs of goods and services used by the Company. The competitive environment in which the Company operates limits somewhat the Company's ability to recover higher costs through increased selling prices. Moreover, there may be differences in inflation rates between countries in which the Company incurs the major portion of its costs and other countries in which the Company sells its products, which may limit the Company's ability to recover increased costs, if not offset by future increase of selling prices. The Company's growth strategy includes expansion in Latin America and China, which have experienced inflationary conditions. To date, inflationary conditions have not had a material effect on the Company's operating results. However, as the Company's presence in Latin America and China increases, these inflationary conditions could have a greater impact on the Company's operating results. SEASONALITY The Company's business has historically experienced a slight amount of seasonal variation, with sales in the first fiscal quarter slightly lower than, and sales in the fourth fiscal quarter slightly higher than, sales in the second and third fiscal quarters. This trend has a somewhat greater effect on income from operations than on net sales due to the effect of fixed costs. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISKS The Company enters into currency forward and option contracts primarily as a hedge against anticipated foreign currency exposures and not for speculative purposes. Such contracts, which are types of financial derivatives, limit the Company's exposure to both favorable and unfavorable currency fluctuations. These contracts are adjusted to reflect market values as of each balance sheet date, with the resulting unrealized gains and losses being recognized in financial income or expense, as appropriate. The Company may be exposed to credit losses in the event of nonperformance by the counterparties to its foreign currency forward and option contracts. The Company has no reason to believe, however, that such counterparties will not be able to fully satisfy their obligations under these contracts. At December 31, 1996, the Company had contracts maturing during 1997 to sell the equivalent of approximately $135.0 million in various currencies in exchange for Swiss francs. These contracts were used to limit its exposure to foreign currency fluctuations on anticipated future cash flows, primarily for the delivery of United States dollars, German marks, French francs, British pounds and Japanese yen in exchange for Swiss francs. At December 31, 1996, the fair value of such financial instruments, which the Company recognized as net unrealized losses, was approximately $5.1 million. NEW ACCOUNTING STANDARDS Beginning January 1, 1996 the Company adopted Financial Accounting Standards Board's Statement of Financial Accounting Standards No. 121 (SFAS 121), "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." SFAS 121 requires that long-lived assets and certain identifiable intangibles to be held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In addition, SFAS 121 requires that long-lived assets and certain identifiable intangibles to be disposed of be reported at the lower of carrying amount or fair value less cost to sell. Adoption of SFAS 121 had no effect on the Company's financial statements. In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings per Share." The Company has yet to determine the effect of this statement on its earnings per share. FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS This Registration Statement includes forward-looking statements that reflect the Registrant current views with respect to future events and financial performance, including capital expenditures, potential cost savings from planned employee reductions and the realignment of the analytical and precision balance business in Switzerland, strategic plans and future cash sources and requirements. These forward-looking statements are subject to certain risks and uncertainties, including those identified below, which could cause actual results to differ materially from historical results or those anticipated. The words, "believe," "expect," "anticipate" and similar expressions identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. The Registrant undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The following risks could cause actual results to differ materially from historical results or those anticipated: Effect Of Substantial Indebtedness On Operations And Liquidity The Credit Agreement and the Indenture contain a number of covenants that restrict the Company's operations. See "Liquidity and Capital Resources." The Company's ability to comply with the covenants and restrictions contained in the Credit Agreement and the Indenture may be affected by events beyond its control, including prevailing economic, financial and industry conditions. The Company's high degree of leverage could have important consequences including but not limited to the following: (i) the Company's ability to obtain additional financing for acquisitions, capital expenditures, working capital or general corporate purposes may be impaired in the future; (ii) a substantial portion of the Company's cash flow from operations must be dedicated to the payment of principal and interest on the Notes and borrowings under the Credit Agreement and other indebtedness, thereby reducing the funds available to the Company for its operations and other purposes, including investments in research and development and capital spending; (iii) certain of the Company's borrowings are and will continue to be at variable rates of interest, which exposes the Company to the risk of increased interest rates; and (iv) the Company may be substantially more leveraged than certain of its competitors, which may place the Company at a relative competitive disadvantage and may make the Company more vulnerable to a downturn in general economic conditions or its business or changing market conditions and regulations. Restrictions On Operations Under Credit Agreement And Indenture In connection with the Acquisition, the Company incurred a significant amount of indebtedness. At December 31, 1996, the Company's consolidated indebtedness (excluding unused commitments) was approximately $452.2 million and its shareholder's equity was approximately $12.4 million. On a pro forma basis giving the effect to the Acquisition, the Company's ratio of earnings to fixed charges for the year ended December 31, 1996 would have been 1.5x. The Company has additional borrowing capacity on a revolving credit basis under the Credit Agreement and under local working capital facilities. The Company will be required to make semiannual scheduled principal payments on the term loans under the Credit Agreement commencing in March 1997. The Company's ability to comply with the terms of the Indenture and the Credit Agreement, to make cash payments with respect to the Notes and under the Credit Agreement and to satisfy its other debt or to refinance any of such obligations will depend on the future performance of the Company, which, in turn, is subject to prevailing economic and competitive conditions and certain financial, business and other factors beyond its control. Risk Of Currency Fluctuations The Company is subject to risks and uncertainties resulting from changes in currency exchange rates. For a discussion of these risks, see "Effect of Currency on Results of Operations." Risks Associated With International Operations The Company does business in numerous countries, including emerging markets in Asia and Latin America. In addition to currency risks discussed above, the Company's international operations are subject to the risk of new and different legal and regulatory requirements in local jurisdictions, tariffs and trade barriers, potential difficulties in staffing and managing local operations, credit risk of local customers and distributors, potential difficulties in protecting intellectual property, risk of nationalization of private enterprises, potential imposition of restrictions on investments, potentially adverse tax consequences, including imposition or increase of withholding and other taxes on remittances and other payments by subsidiaries, and local economic, political and social conditions, including the possibility of hyper-inflationary conditions, in certain countries. The Company plans to increase its presence in Latin American countries and China. As a result, inflationary conditions in these countries could have an increasingly significant effect on the Company's operating results. The conversion into foreign currency of funds earned in local currency through the Company's operations in the People's Republic of China and the repatriation of such funds require certain governmental approvals. Failure to obtain such approvals could result in the Company being unable to convert or repatriate earnings from its Chinese operations, which may become an increasingly important part of the Company's international operations. Competition; Improvements In Technology The markets in which the Company operates are highly competitive. Weighing markets are fragmented both geographically and by application, particularly the industrial and food retailing market. As a result, the Company competes with numerous regional or specialized competitors, many of which are well-established in their markets. Some competitors are divisions of larger companies with potentially greater financial and other resources than the Company. The Company has, from time to time, experienced price pressures from competitors in certain product lines and geographic markets. The Company's competitors can be expected to continue to improve the design and performance of their products and to introduce new products with competitive price and performance characteristics. Although the Company believes that it has certain technological and other advantages over its competitors, realizing and maintaining these advantages will require continued investment by the Company in research and development, sales and marketing and customer service and support. There can be no assurance that the Company will have sufficient resources to continue to make such investments or that the Company will be successful in maintaining such advantages. Significant Sales To Pharmaceutical And Chemical Industries The Company's products are used extensively in the pharmaceutical and chemical industries. Consolidation in these industries has had an adverse impact on the Company's sales in recent years. A prolonged downturn or any additional consolidation in these industries could adversely affect the Company's operating results. Reliance On Key Management Robert F. Spoerry has an employment contract with the Company and it is anticipated that all of the key management employees will have employment contracts with the Company. In addition, various members of management own a portion of the shares of nonvoting capital stock of the Registrant and will have options to purchase additional shares of such nonvoting capital stock. Nonetheless, there is no assurance that such individuals will remain with the Company. If, for any reason, such key personnel do not continue to be active in the Company's management, operations could be adversely affected. The Company has no key man life insurance policies with respect to any of its senior executives. Environmental Matters The Company is subject to various environmental laws and regulations in the jurisdiction in which it operates. For a discussion of risks relating to environmental matters, see "Environmental Matters" above Item 1, "Business-Environmental Matters." Transfer Restrictions Transfers by current holders of the Registrant's common stock are subject to certain restrictions and requirements pursuant to subscription agreements entered into in connection with such holder's purchase of such common stock. Generally, prior to transfer, a shareholder must obtain a legal opinion stating that such transfer may be effected without registering the common stock under the Securities Act of 1933, as amended (the "Securities Act"). In the case of employees of the Company, employees may not transfer shares owned by them within three years or five years from the date of their acquisition, as the case may be. There can be no assurance that the value of the Company's common stock will remain stable during the time when stockholders are unable to sell such stock. See Item 11, "Description of Registrant's Securities to be Registered - Restrictions on Transfer." Voting Rights Voting control of the Registrant is vested in holders of Class B Common Stock. Holders of the Class A Common Stock and Class C Common Stock registered pursuant to this Registration Statement are not entitled to vote on any corporate matters, except as provided by Delaware law. As a result, holders of the Class B Common Stock will be able to elect all of the members to the Board of Directors and determine the disposition of practically all matters submitted to a vote of the Registrant's stockholders, including mergers and other extraordinary transactions and the terms thereof. See Item 11, "Description of Registrant's Securities to be Registered - Restrictions on Transfer." No Market for Registered Securities There is currently no trading market for the Registrant's common stock, and the Registrant does not anticipate that there will be such a market in the foreseeable future. Consequently, shareholders may be unable to sell their shares of common stock once any applicable transfer restrictions expire and the price obtainable in such sale may be adversely affected by the lack of such trading market. Absence of Dividends The Registrant anticipates that all of its earnings in the foreseeable future will be retained to finance the continued growth and expansion of its business and has no current intention to pay cash dividends on its common stock. ITEM 3. PROPERTIES The following table lists the Company's principal operating facilities, indicating the location, primary use and whether the facility is owned or leased. LOCATION PRINCIPAL USE (1) OWNED/LEASED ------------------------------- -------------------------------- ------------ Europe: Greifensee/Nanikon, Switzerland............... Production, Corporate Headquarters Owned Uznach, Switzerland....... Production Owned Urdorf, Switzerland....... Production Owned Schwerzenbach, Switzerland............. Production Leased Albstadt, Germany......... Production Owned Giessen, Germany.......... Production Owned Giessen, Germany.......... Sales and Service Owned Steinbach, Germany........ Sales and Service Owned Viroflay, France.......... Sales and Service Owned Beersel, Belgium.......... Sales and Service Owned Tiel, Netherlands......... Sales and Service Owned Leicester, England........ Sales and Service Leased Americas: Worthington, Ohio......... Production Owned Spartanburg, South Carolina.......... Production Owned Franksville, Wisconsin.... Production Owned Ithaca, New York.......... Production Owned Wilmington, Massachusetts........... Production Leased Florham Park, New Jersey.. Production Leased Hightstown, New Jersey.... Sales and Service Owned Burlington, Canada........ Sales and Service Owned Mexico City, Mexico....... Sales and Service Leased Other: Shanghai, China........... Production Building Owned; Land Leased Changzhou, China (2)...... Production Building Owned; Land Leased Melbourne, Australia...... Sales and Service Leased - ------------------------ (1) The Company also conducts research and development activities at certain of the listed facilities in Switzerland, Germany, the United States and, to a lesser extent, China. (2) Held by a 60%-owned joint venture. The Company believes its facilities are adequate for its current and reasonably anticipated future needs. ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth information with respect to the beneficial ownership of the capital stock of the Registrant by (i) each director of the Registrant, (ii) the Registrant's Chief Executive Officer and the four other most highly compensated executives (collectively, the "Named Executives") and (iii) all directors and executive officers of the Registrant as a group:
CLASS A NON-VOTING CLASS B VOTING CLASS C NON-VOTING COMMON STOCK COMMON STOCK (1) COMMON STOCK ------------------- ------------------ ------------------- NUMBER OF % OF NUMBER OF % OF NUMBER OF % OF NAME SHARES CLASS SHARES CLASS SHARES CLASS - ----------------------------------------------------- --------- ------- --------- ------- --------- ------- DIRECTORS AND EXECUTIVE OFFICERS: Robert F. Spoerry................................ 26,873 1.4% 0 % 7,678 1.4% Fred Ort......................................... 4,726 * 0 * 1,350 * Karl M. Lang..................................... 4,726 * 0 * 1,350 * Lukas Braunschweiler............................. 4,726 * 0 * 1,350 * John D. Robechek................................ 4,055 * 0 * 1,159 * Philip Caldwell (2).............................. 4,644 * 0 * 3,492 * Reginald H. Jones................................ 1,161 * 70 7.0 2,472 * John D. Macomber................................. 1,161 * 65 6.5 2,250 * Laurence Z.Y. Moh................................ 23,218 1.2 0 * 5,134 * Thomas P. Salice (2)............................. 3,701 * 0 * 36,007 6.7 Alan W. Wilkinson (2)............................ 3,701 * 0 * 36,007 6.7 All directors and executive officers as a group (14 persons (3))................................. 94,075 4.94% 135 13.5% 101,501 18.85% - ------------------------ * Less than 1% (1) AEA Investors owns 49.0% of the Class B voting common stock of the Registrant. AEA Investors' address is 65 East 55th Street, New York, New York 10022. (2) Includes shares held by, or in trust for, members of such individual's family for which Messrs. Caldwell, Salice and Wilkinson disclaim beneficial ownership. Does not include shares held by AEA Investors, of which Messrs. Salice and Wilkinson are officers. (3) Includes William Donnelly, who became Vice President, Chief Financial Officer, Treasurer and Assistant Secretary on April 1, 1997, and Fred Ort who ceased to be an executive officer on April 1, 1997 but who remains a non-executive officer.
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The directors and executive officers of the Registrant are set forth below. All directors hold office until the annual meeting of stockholders following their election or until their successors are duly elected and qualified. Officers are appointed by the Board of Directors and serve at the discretion thereof. NAME AGE POSITION - --------------------------------- ------- ------------------------------ Robert F. Spoerry 41 Director; President and Chief Executive Officer William Donnelly 35 Vice President, Chief Financial Officer, Treasurer and Assistant Secretary Karl M. Lang 50 Head, Laboratory Division Lukas Braunschweiler 41 Head, Industrial and Retail (Europe) John D. Robechek 48 Head, Industrial and Retail (Americas) Peter Burker 51 Head, Human Resources Thomas Rubbe 43 Head, Logistics and Information Systems Philip Caldwell 77 Director; Chairman of the Board Reginald H. Jones 79 Director John D. Macomber 69 Director Laurence Z.Y. Moh 71 Director Thomas P. Salice 36 Director Alan W. Wilkinson 41 Director Robert F. Spoerry has been President and Chief Executive Officer of the Company since 1993. He served as Head, Industrial and Retail (Europe) of the Company from 1987 to 1993. Mr. Spoerry has been a Director since October 1996. William Donnelly has been Vice President, Chief Financial Officer, Treasurer and Assistant Secretary of the Registrant and Chief Financial Officer of the Company since April 1, 1997. Prior to joining the Company, he was Group Vice President and Chief Financial Officer and was an Executive Committee member of Elsag Bailey Process Automation ("Elsag Bailey"), a global manufacturer of instrumentation and analytical products, and developer of distributed control systems. Mr. Donnelly joined Elsag Bailey in 1993 and held various senior financial positions during that period. Prior to joining Elsag Bailey, Mr. Donnelly was associated with the international accounting firm of Price Waterhouse. Karl M. Lang has been Head, Laboratory Division of the Company since 1994. From 1991 to 1994 he was based in Japan as a representative of senior management with responsibility for expansion of the Asian operations. Lukas Braunschweiler has been Head, Industrial and Retail (Europe) of the Company since 1995. From 1992 until 1995, he held various senior management positions with the Landis & Gyr Group, a manufacturer of electrical meters. Prior to August 1992 he was a Vice President in the Technology Group of Saurer Group, a manufacturer of textile machinery. John D. Robechek has been Head, Industrial and Retail (Americas) of the Company and President of Mettler-Toledo, Inc., a U.S.-based subsidiary of the Company, since 1995. From 1990 through 1994 he served as Senior Vice President and managed all of the Company's U.S. subsidiaries. Peter Burker has been Head, Human Resources of the Company since 1994. From 1992 to 1994 he was Mettler-Toledo's General Manager in Spain, and from 1989 to 1991 he headed the Company's operations in Italy. Thomas Rubbe has been Head, Logistics and Information Systems of the Company since 1995. From 1990 to 1995, he was head of Controlling, Finance and Administration with the Company's German marketing organization. Philip Caldwell has been a Director and Chairman of the Board since October 1996. Mr. Caldwell has been Senior Managing Director of Lehman Brothers Inc. and its predecessor, Shearson Lehman Brothers Holdings Inc., since 1985. Mr. Caldwell spent 32 years at Ford Motor Company where he was Chairman of the Board of Directors and Chief Executive Officer from 1980 to 1985 and a Director from 1973 through 1990. Mr. Caldwell is a Director of Lehman Brothers Inc., Zurich Holding Company of America, Inc., Zurich Reinsurance Centre Holdings, Inc., American Guarantee & Liability Insurance Company (a Zurich affiliate), The Mexico Fund, Waters Corporation and Russell Reynolds Associates, Inc. He has served as a Director of the Chase Manhattan Bank Corporation, the Chase Manhattan Bank, N.A., Digital Equipment Corporation, Federated Department Stores Inc., the Kellogg Company, Shearson Lehman Brothers Holdings Inc., CasTech Aluminum Group Inc. and Specialty Coatings International Inc. Reginald H. Jones has been a Director since October 1996. Mr. Jones retired as Chairman of the Board of Directors of General Electric Company ("General Electric") in April 1981. At General Electric, he served as Chairman of the Board of Directors and Chief Executive Officer from December 1972 through April 1981, President from June 1972 to December 1972 and a Director from August 1971 to April 1981. Mr. Jones is also a Director of ASA Limited and Birmingham Steel Corporation. John D. Macomber has been a Director since October 1996. He has been a principal of JDM Investment Group since 1992. He was Chairman and President of the Export-Import Bank of the United States (an agency of the U.S. Government) from 1989 to 1992. From 1973 to 1986 Mr. Macomber was Chairman and Chief Executive Officer of Celanese Corporation. Prior to that, Mr. Macomber was a Senior Partner of McKinsey & Company. Mr. Macomber is also a Director of Textron Inc., Bristol-Myers Squibb Company, Xerox Corporation, Lehman Brothers Holdings Inc. and Pilkington plc. Laurence Za Yu Moh has been a Director since October 1996. He is Chairman Emeritus of Universal Furniture Limited, which he founded in 1959. Thomas P. Salice has been a Director since October 1996. He is a Managing Director of AEA Investors and has been associated with AEA Investors since June 1989. Mr. Salice is also a Director of Waters Corporation. Alan W. Wilkinson has been a Director since October 1996. He has been a Managing Director of AEA Investors since September 1989. Prior to his association with AEA Investors, Mr. Wilkinson was a Vice President in the Merchant Banking and Mergers and Acquisitions divisions of Lehman Brothers Inc. ITEM 6. EXECUTIVE COMPENSATION The following table sets forth the compensation paid to or accrued for services performed by the Named Executives for the years ended December 31, 1995 and 1996. SUMMARY COMPENSATION TABLE (1)
LONG TERM COMPENSATION ANNUAL COMPENSATION --------------------- ------------------------------------ SECURITIES OTHER ANNUAL UNDERLYING ALL OTHER NAME AND PRINCIPAL POSITION YEAR SALARY BONUS (2) COMPENSATION OPTIONS (#) COMPENSATION - ------------------------------------------------------------------------------------------------------------------------- Robert F. Spoerry, President and Chief 1996 $ 435,135 $276,521 $8,857(3) 83,279 $ 124,431 Executive Officer...................1995 289,343 85,871 -- 300(4) 54,346(5) Fred Ort, Head, Finance and Control.....1996 207,221 99,325 -- 6,246 52,745 1995 227,284 69,701 -- -- 70,804(5) Karl M. Lang, Head, Laboratory..........1996 212,997 88,375 -- 16,656 61,901 1995 228,427 38,071 -- -- 60,321(5) Lukas Braunschweiler, Head, Industrial 1996 210,893 66,162 -- 16,656 62,482 and Retail (Europe).................1995 228,427 25,381 -- --- 50,460(5) John D. Robechek, Head, Industrial 1996 233,754 88,137 -- 16,656 6,215 and Retail (Americas)...............1995 225,000 40,563 -- -- 6,168(6) - ------------------------ (1) Amounts paid in Swiss francs (all amounts except those paid to Mr. Robechek) converted to U.S. dollars at a rate of SFr 1.182 to U.S. $1.00 for 1995 and SFr 1.2355 to U.S. $1.00 for 1996, in each case the average exchange rate during such year. (2) Does not include Ciba bonuses to the Named Executives for services rendered to Ciba in connection with its efforts to sell the Company. (3) Represents additional compensation paid to fully offset, after payment of all taxes and social security contributions, interest charged to Mr. Spoerry on a loan to Mr. Spoerry from Mettler-Toledo AG, a subsidiary of the Company. See Item 13. (4) Option to purchase the specified number of shares of Ciba common stock at an exercise price of SFr 750 ($665 at the date of grant) per share. The fair market value at the date of grant was SFr 764 ($678) per share. (5) Represents Company contributions to the Mettler-Toledo Fonds (a Swiss pension plan similar to a defined contribution plan under U.S. law). Fifty percent of the amount shown is a required employee contribution under the plan which the Company has contributed on behalf of the Named Executives, and the other 50% is a required matching employer contribution. (6) Includes $1,024 for the value of group life insurance over $50,000, $4,500 for the Company's contribution to Mr. Robechek's 401(k) plan account and $644 for Mr. Robechek's profit sharing payout under the Company's Performance Dividend Plan.
OPTION/SAR GRANTS IN LAST FISCAL YEAR INDIVIDUAL GRANTS -----------------
POTENTIAL REALIZABLE VALUE AT NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF STOCK SECURITIES OPTIONS/SARS EXERCISE/ PRICE APPRECIATION FOR OPTION/SAR UNDERLYING GRANTED TO BASE TERM (2) OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION --------------------------------- NAME GRANTED (#)(1) FISCAL YEAR ($/SH) DATE 5%($) 10% ($) - ---------------------- -------------- ------------ --------- ---------- ------------ ---------- Robert F. Spoerry 83,279 29.85 100 2006 5,237,372 13,272,528 Fred Ort 6,246 2.24 100 2006 392,808 995,452 Karl M. Lang 16,656 5.97 100 2006 1,046,858 2,652,944 Lukas Braunschweiler 16,656 5.97 100 2006 1,046,858 2,652,944 John D. Robechek 16,656 5.97 100 2006 1,046,858 2,652,944 (1) All Options are to purchase shares of Class A Common Stock of the Registrant. (2) The assumed annual rates of appreciation over the term of the option are set forth in accordance with rules and regulations adopted by the Securities and Exchange Commission and do not represent the Company's estimate of stock appreciation price.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND OPTION/SAR VALUES AS OF DECEMBER 31, 1996 ---------------------------------------------
NUMBER OF SECURITIES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED SHARES OPTIONS/SARS AT FISCAL IN-THE-MONEY OPTIONS/SARS ACQUIRED ON VALUE YEAR-END AT FISCAL YEAR-END EXERCISE REALIZED (#) ($) (1) ------------------------------ --------------------------------- NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE - ---------------------- ----------- --------- ----------- ------------- ----------- ------------- Robert F. Spoerry 0 0 0 83,279 0 0 Fred Ort 0 0 0 6,246 0 0 Karl M. Lang 0 0 0 16,656 0 0 Lukas Braunschweiler 0 0 0 16,656 0 0 John D. Robechek 0 0 0 16,656 0 0 - ------------------------ (1) There is no market value for the Class A Common Stock of the Registrant. Estimated value, as determined by the Registrant, at December 31, 1996 does not exceed the exercise price.
EMPLOYMENT AGREEMENTS; STOCK OPTIONS; MANAGEMENT EQUITY Mettler-Toledo AG, a subsidiary of the Company, entered into an employment agreement (the "Agreement") with Robert F. Spoerry (the "Executive") dated as of October 30, 1996. The Agreement provides for annual base salary of SFr 560,000 ($435,135 at December 31, 1996), which may be increased from time to time in accordance with the Company's normal business practices, and for participation in the Company's bonus plan. In addition, the Agreement provides for payment of the amount necessary, after payment of all taxes and social security contributions, to fully offset the interest charged to the Executive on a certain loan to the Executive. See Item 7, "Certain Relationships and Related Transactions" for a description of the loan. The Agreement prohibits the Executive from competing with the Company for a period of twenty-four months after termination of employment. The Agreement may be terminated without cause, on thirty-six months notice during which period the Executive is entitled to full compensation under the Agreement. The Company expects to negotiate new employment agreements with the other Named Executives. Base salary of executive officers under these agreements in the aggregate will not be materially different from historical practice. The agreements will also include bonuses contingent on meeting performance objectives in amounts to be determined. COMPENSATION OF DIRECTORS All members of the Board of Directors of the Registrant who are officers of the Company or employees of AEA Investors will not receive additional compensation for being on the Board or its committees. Mr. Caldwell purchased 2,856 shares of Class C Common Stock and each of Messrs. Jones, Macomber and Moh purchased 1,905 shares of Class C Common Stock for being on the Board or its committees and, in Mr. Caldwell's case, being Chairman of the Board. RETIREMENT PLANS Mr. Robechek is covered under two pensions plans, the Mettler-Toledo Retirement Plan and the Mettler-Toledo Supplemental Retirement Income Plan. Benefits under these plans are determined by career average compensation rather than final compensation. The annual accrual for each year under both plans is the difference of 2% of annual compensation in a plan year and 0.6% of the lesser of annual compensation or covered compensation (defined under the plans as the average of the Social Security Taxable Wage Bases in effect for each calendar year during the 35-year period ending on the last day of a given plan year). The Mettler-Toledo Retirement Plan includes all compensation up to the qualified plan limitations under the Internal Revenue Code of 1986, as amended ($150,000 per year in 1996) and the Mettler-Toledo Supplemental Retirement Income Plan pays for benefits in excess of these limits. The accrued annual benefit payable to Mr. Robechek under the Mettler-Toledo Retirement Plan is $45,693 and the accrued annual benefit under the Mettler-Toledo Supplemental Plan is $11,329, for a total annual retirement benefit of $57,022. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The following directors served on the Registrant's Compensation Committee during the fiscal year ended December 31, 1996: Reginald H. Jones, Laurence Z. Y. Moh and Thomas P. Salice. Mr. Salice also served as an officer of the Registrant and certain of its subsidiaries during such fiscal year. Mr. Salice is an officer of AEA Investors, a stockholder of the Registrant. See Item 7, "Certain Relationships and Related Transactions" for a description of relationships between AEA Investors and the Registrant. ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AEA Investors and the Company have entered into a Management Agreement pursuant to which AEA Investors provides management, consulting and financial services to the Company. Services are expected to be provided in such areas as the preparation and evaluation of strategic, operating, financial and capital plans and the development and implementation of compensation and other incentive programs. Such services will be provided by the executive staff of AEA Investors. In consideration of such services, AEA Investors is entitled to an annual fee of $1.0 million, plus reimbursement for certain expenses and indemnification against certain liabilities. The agreement further provides that in the event the Company employs any employee of AEA Investors as an officer of the Company or otherwise, and such employment includes a substantial amount of such employee's time, the Company will compensate such employee at a reasonable rate. The Company believes that the terms of these management arrangements are as favorable as could be obtained from an unaffiliated third party. In connection with the Acquisition and in consideration of services by AEA Investors in arranging, structuring and negotiating the terms of the Acquisition and the related financing transactions, the Company paid AEA Investors a transaction fee of $5.5 million and reimbursed AEA Investors for certain related expenses. Management and other employees of the Company have contributed approximately $12 million of the equity of the Registrant. For information regarding the number of shares purchased by each Named Executive, see Item 4, "Security Ownership of Certain Beneficial Owners and Management." Each share of Class A Common Stock was purchased for $100 per share and each share of Class C Common Stock was purchased for approximately $.03 per share. On October 7, 1996, in order to fund a portion of the purchase price for the shares purchased by Mr. Spoerry, Mettler-Toledo AG entered into a Loan Agreement with Mr. Spoerry, in the amount of SFr 1.0 million ($742,000 at December 31, 1996). The loan bears interest at a rate of 5% and is payable upon demand, which may not be made until seven years after the date of the loan. ITEM 8. LEGAL PROCEEDINGS The Company is subject to routine litigation incidental to its business. The Company is currently not involved in any legal proceeding that it believes could have a material adverse effect upon its financial condition or results of operations. See "Environmental Matters" under Item 1 for information concerning legal proceedings relating to certain environmental claims. ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS (a) Market Information. There is no established trading market for any equity securities of the Registrant. On the date hereof with respect to the common equity of the Registrant (i) there are outstanding options or warrants to purchase 291,488 shares of Class A Common Stock of the Registrant, (ii) due to contractual restrictions and the limitations of Rule 144 of the Securities Act, there are no shares that could be sold without restriction or that the Registrant has agreed to register under the Securities Act for sale by security holders, and (iii) there are no shares that are being, or have been publicly proposed to be, publicly offered by the Registrant. See Item 11, "Description of Registrant's Securities to be Registered - Common Stock - Restrictions on Transfer." (b) Holders. On the date hereof, there are approximately (i) 832 holders of the Class A Common Stock of the Registrant, (ii) 9 holders of the Class B Common Stock of the Registrant, and (iii) 843 holders of the Class C Common Stock of the Registrant. (c) Dividends. The Registrant has never paid any dividends on its common stock. Since the only assets of the Registrant are those resulting from its ownership of 100% of the outstanding common stock of Mettler-Toledo Holding Inc., which has no assets other than those resulting from its ownership of 100% of the outstanding common stock of Mettler-Toledo Inc., and since Mettler-Toledo, Inc. is prohibited from paying dividends to Mettler-Toledo Holding, Inc., subject to certain limited exceptions, the Registrant does not expect to have any assets to distribute to its security holders in the foreseeable future. See Item 2, "Financial Data" - "Management's Discussion and Analysis of Financial Condition and Results of Operations." ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES From the date of its incorporation until the issuances of common stock which occurred beginning in October 1996, the Registrant issued common stock to certain members of senior management, the investor-participants of AEA Investors and AEA Investors for approximately $.03 per share. In connection with the Acquisition, the Registrant effected a recapitalization pursuant to which such common stock was converted into Class B Common Stock or Class C Common Stock, as the case may be. 1. In October 1996, the Registrant issued 1,803,489 shares of Class A Common Stock for an aggregate consideration of $180,348,900, 50 shares of Class B Common Stock for an aggregate consideration of approximately $2, and 172,376 shares of Class C Common Stock for an aggregate consideration of approximately $5,171. The shares were offered and sold to executive officers of the Company and the management and investor-participants of AEA Investors in reliance on Rule 506 of Regulation D and Section 4(2) under the Securities Act. 2. In October 1996, the Registrant issued 8,843 shares of Class A Common Stock for an aggregate consideration of $884,300, and 2,526 shares of Class C Common Stock for an aggregate consideration of approximately $76. The shares were offered and sold in reliance on Rule 701 under the Securities Act and were sold pursuant to a written compensatory benefit plan to employees of the Registrant and its subsidiaries. 3. In October 1996, the Registrant issued 16,578 shares of Class A Common Stock for an aggregate consideration of $1,657,800, and 4,738 shares of Class C Common Stock for an aggregate consideration of approximately $142. The shares were offered and sold in reliance on Rule 903 under the Securities Act outside the United States to employees of the Company who represented that they were non U.S. persons. 4. In December 1996, the Registrant issued 25,750 shares of Class A Common Stock for an aggregate consideration of $2,575,000, and 11,885 shares of Class C Common Stock for an aggregate consideration of approximately $357. The shares were offered and sold to executive officers of the Company and the management and investor-participants of AEA Investors in reliance on Rule 506 of Regulation D under the Securities Act. 5. In December 1996, the Registrant issued 8,620 shares of Class A Common Stock for an aggregate consideration of $862,000, and 2,472 shares of Class C Common Stock for an aggregate consideration of approximately $74. The shares were offered and sold in reliance on Rule 701 under the Securities Act and were sold pursuant to a written compensatory benefit plan to employees of the Registrant and its subsidiaries. 6. In December 1996, the Registrant issued 36,499 shares of Class A Common Stock for an aggregate consideration of $3,649,900, and 10,401 shares of Class C Common Stock for an aggregate consideration of approximately $312. The shares were offered and sold in reliance on Rule 903 under the Securities Act outside the United States to employees of the Company who represented that they were non U.S. persons. 7. In April 1997, the Registrant issued 3,000 shares of Class A Common Stock for an aggregate consideration of $300,000, and 857 shares of Class C Common Stock for an aggregate consideration of approximately $26. The shares were offered and sold to an executive officer of the Company in reliance on Rule 506 of Regulation D under the Securities Act. The sales described in items 1, 4 and 7 were made to (i) individuals who represented that they were accredited investors, (ii) executive officers of the Company, or (iii) employees of AEA Investors (who numbered fewer than 35 and) who the Company believes have knowledge and experience in financial and business matters sufficient to be capable of evaluating the merits and risks of purchasing the securities issued. ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED The following brief description of the Registrant's capital stock does not purport to be complete and is subject in all respects to applicable Delaware law and to the provision of the Registrant's Restated Certificate of Incorporation, as amended (the "Registrant's Certificate of Incorporation") and By-Laws (the "Registrant's By-Laws"). As of the date hereof, the authorized capital stock of the Registrant consists of 2,778,755 shares of Common Stock, $.01 par value, of which 2,235,896 shares are designated as Class A Common Stock, 1,000 shares are designated as Class B Common Stock and 541,859 shares are designated as Class C Common Stock. As of the date hereof, the Registrant had outstanding 1,902,779 shares of Class A Common Stock, 1,000 shares of Class B Common Stock and 538,592 shares of Class C Common Stock, and an additional 291,488 shares of Class A Common Stock were issuable upon exercise of outstanding employee stock options. COMMON STOCK Holders of common stock of the Registrant have no preemptive, subscription or redemption rights. Except for the Class A dividend and distribution preference and the Class B voting rights (each as described below), the three classes of common stock of the Registrant have identical rights under the Registrant's Certificate of Incorporation and By-Laws. Preference. Dividends or distributions in connection with the liquidation, dissolution or winding up of the affairs of the Registrant or not paid out of the current and accumulated earnings and profits shall be paid in the following manner: First, exclusively to the holders of the shares of Class A Common Stock, ratably to each such holder, until the sum of all dividends and distributions to each holder of Class A Common Stock equals $100 for each share of Class A Common Stock held by such holder. After each holder of shares of Class A Common Stock shall have received dividends and distributions totaling $100, then exclusively to the holders of the shares of Class B Common and Class C Common Stock ratably to each such holder until the sum of all dividends and distributions to each holder of Class B Common Stock and/or Class C Common Stock equals $100 for each share of Class B Common Stock and/or Class C Common Stock held by such holder. After each holder of Class B Common Stock and Class C Common Stock shall have received such dividends and distributions, then to all holders of Class A Common Stock, Class B Common Stock and/or Class C Common Stock, ratably to each holder of such shares. Voting. The entire voting power of the Registrant's common stock is vested exclusively in the Class B Common Stock. Each holder of shares of the Class B Common Stock shall be entitled to one vote for each share of the Class B Common Stock. Restrictions on Transfer. Transfers by holders of the Registrant's common stock (the "Restricted Securities") are restricted pursuant to subscription agreements entered into in connection with such holder's purchase of such Restricted Securities. See Item 2, "Financial Information - Forward Looking Statements and Associated Risks - Transfer Restrictions." Section 203 of the DGCL. The Registrant is a Delaware corporation and is subject to Section 203 of the General Corporation Law of the State of Delaware (the "DGCL"). In general, Section 203 prevents an "interested stockholder" (defined as a person who is the owner of 15% or more of a corporation's voting stock, or who, as an affiliate or associate of a corporation, was the owner of 15% or more of that corporation's voting stock within the prior three years) from engaging in a "business combination" (as defined under the DGCL) with a Delaware corporation for three years following the date such person became an interested stockholder unless: (i) before such person became an interested stockholder, the board of directors of the corporation approved the transaction or the business combination in which the interested stockholder became an interested stockholder; (ii) upon consummation of the transaction that resulted in the interested stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced (excluding shares owned by persons who are both officers and directors of the corporation and shares held by certain employee stock ownership plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer); or (iii) following the transaction in which such person became an interested stockholder, the business combination is approved by the board of directors of the corporation and authorized at a meeting of stockholders by the affirmative vote of the holders of at least two-thirds of the outstanding voting stock of the corporation not owned by the "interested stockholder." A "business combination" generally includes mergers, stock or assets sales and other transactions resulting in a financial benefit to the "interested stockholders." CERTAIN CHARTER AND BY-LAW PROVISIONS Director's Liability. The Registrant's Certificate of Incorporation provides that to the fullest extent permitted by the DGCL as it currently exists or may be amended, a director of the Registrant shall not be liable to the Registrant or its stockholders for monetary damages for breach of fiduciary duty as a director. See Item 12, "Indemnification of Officers and Directors." REGISTRATION RIGHTS Current holders of the Registrant's common stock (other than certain members of senior management) have rights to require the Registrant to register such shares of common stock for resale pursuant to subscription agreements pursuant to which they acquired their shares. If no securities of the Registrant have theretofore been sold pursuant to a registration statement under the Securities Act, upon the request of persons owning at least 51% of the sum of all outstanding shares of the Class A Stock, the Class B Stock and the Class C Stock which are then Restricted Securities, the Registrant would be required to register the sale of such securities, subject to certain limitations and requirements. After securities of the Registrant have been sold pursuant to a registration statement under the Securities Act, upon the request of persons owning at least 25% of the sum of all outstanding shares of the Class A Stock, the Class B Stock and the Class C Stock which are then Restricted Securities and which have a value of at least $5,000,000, the Registrant would be required to register the sale of such securities, subject to certain limitations and requirements. The Registrant is not required to file any registration statement within six months of the effective date of any earlier registration statement and is not required to file more than three registration statements pursuant to such requests. In addition, under certain circumstances, should the Registrant file a registration statement with the Securities and Exchange Commission registering shares of the common stock of the Registrant, the owners of Restricted Securities would be entitled to include their Restricted Securities in such registration. ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Registrant, as a Delaware corporation, is empowered by Section 145 of the DGCL, subject to the procedures and limitations stated therein, to indemnify any person against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with any threatened, pending or completed action, suit or proceeding in which such person is made or threatened to be made a party by reason of his being or having been a director, officer, employee or agent of the Registrant or his serving at the request of the Registrant as a director, officer, employee or agent of another company or other entity. The statute provides that indemnification pursuant to its provisions is not exclusive of other rights of indemnification to which a person may be entitled under any by-law, agreement, vote of stockholders or disinterested directors, or otherwise. The Registrant's By-Laws provide for indemnification by the Registrant of its directors and officers to the full extent authorized by the DGCL. Pursuant to Section 145 of the DGCL, the Registrant has purchased insurance on behalf of its present and former directors and officers against liabilities asserted against and incurred by them in such capacity or arising out of their status as such. Pursuant to specific authority granted by Section 102 of the DGCL, the Registrant's Certificate of Incorporation contains the following provision regarding indemnification of directors: "To the fullest extent permitted by the Delaware General Corporation Law as the same exists or may hereafter be amended, a Director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a Director." The Registrant's By-Laws contain the following provision regarding indemnification of directors and officers: "The Corporation shall indemnify to the full extent authorized by law any person made or threatened to be made a party to an action, suit or proceeding, whether criminal, civil administrative or investigative, by reason of the fact that he, his testator or intestate is or was a director, officer, employee or agent of the Corporation or is or was serving, at the request of the Corporation, as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise." The Registrant has entered into agreements to provide indemnification for their directors and certain officers in addition to the indemnification provided for in the Registrant's By-Laws. These agreements, among other things, indemnify the directors, to the fullest extent provided by Delaware law, for certain expenses (including attorneys' fees), losses, claims, liabilities, judgments, fines and settlement amounts incurred by such indemnitee in any action or proceeding, including any action by or in the right of the Registrant, on account of services as a director or officer of any affiliate of the Registrant, or as a director or officer of any other company or enterprise that the indemnitee provides services to at the request of the Registrant. The Management Agreement between the Company and AEA Investors provides for indemnification of employees of AEA Investors who serve as directors of the Registrant. ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements required by this item are set forth on pages F-1 through F-41 and the related financial schedules are set forth on pages S-1 through S-8. ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not Applicable. ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS (a) Financial Statements Filed as Part of this Report: 1. Financial Statements. See Index to Financial Statements included on page F-1. 2. Financial Statements Schedules. See "Schedule I - Condensed Financial Information of Registrant" and "Schedule II - Valuation and Qualifying Accounts" included on pages S-1 through S-8. (b) Exhibits Filed as Part of this Report. 1. List of Exhibits. See Index of Exhibits included on pages E-1 through E-3. SIGNATURES Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized. MT Investors Inc. (Registrant) Date: June 30, 1997 By: /s/ William P. Donnelly ----------------------- William P. Donnelly Vice President, Chief Financial Officer and Treasurer INDEX OF EXHIBITS ----------------- Page Number or Exhibit No. Description Incorporation by Reference ----------- ----------- -------------------------- 2.1 Stock Purchase Agreement Filed as Exhibit 2.1 to the between AEA-MT Inc., AG fur Registration Statement, as amended, prazisionsinstrumente and on Form S-1, of the Company (Reg. Ciba-Geigy AG, as amended No. 33-09621) and incorporated herein by reference. 2.2 Share Sale and Purchase Filed as Exhibit 2 to the Current Agreement, dated May 30, Report on Form 8-K of Mettler- 1997, among Safeline Holding Toledo Holding Inc. dated June 3, Company and Mettler-Toledo 1997 and incorporated herein by Inc. (a Canadian reference. corporation), Safeline Limited and each of the Sellers named therein. 3.1.1* Restated Certificate of Incorporation of MT Investors Inc. dated October 11, 1996 3.1.2* Certificate of Amendment of Restated Certificate of Incorporation of MT Investors Inc. dated October 15, 1996 3.1.3* Certificate of Amendment of Restated Certificate of Incorporation of MT Investors Inc. dated April 1, 1997 3.2* By-laws of MT Investors Inc. 4.1 Indenture dated as of October Filed as Exhibit 4.1 to the Current 15, 1996, among MT Report on Form 8-K of Mettler- Acquisition Corp., as Issuer, Toledo Holding Inc. dated October Mettler-Toledo Holding Inc., 30, 1996 and incorporated herein by as Note Guarantor, and United by reference. States Trust Company of New York, as Trustee 4.2 First Supplemental Indenture Filed as Exhibit 4.2 to the Current dated as of October 15, 1996, Report on Form 8-K of Mettler- among Mettler-Toledo, Inc., Toledo Holding Inc. dated October Mettler-Toledo Holding Inc., 30, 1996 and incorporated herein as Note Guarantor, and by reference. United States Trust Company of New York, as Trustee 10.1 Credit Agreement, dated as Filed as Exhibit 99.1 to the of October 15, 1996, between Current Report on Form 8-K of MT Acquisition Corp. and Mettler-Toledo Holding Inc. dated Mettler-Toledo Holding AG, October 30, 1996 and incorporated as borrowers, and Merrill herein by reference. Lynch Capital Corporation, as document agent and the lenders party thereto 10.2 Credit Agreement Amendment Filed as Exhibit 10.2 to the Annual No. 1 dated as of January 14, Report on Form 10-K of Mettler- 1997 between MT Acquisition, Toledo Holding Inc. dated March 31, Mettler-Toledo Holding Inc. 1997 and incorporated herein by and Mettler-Toledo Holding, reference. AG, as borrowers, and Merrill Lynch & Co., Merrill Lynch, Pierce Fenner & Smith Inc., as document agent and the lenders party thereto 10.3 Management Consulting Filed as Exhibit 10.3 to the Annual Agreement dated as of October Report on Form 10-K of Mettler- 15, 1996 between Mettler- Toledo Holding Inc. dated March 31, Toledo, Inc. and AEA 1997 and incorporated herein by Investors Inc. reference. 10.4 Employment Agreement Filed as Exhibit 10.4 to the Annual between Robert F. Spoerry and Report on Form 10-K of Mettler- Mettler-Toledo AG, dated as Toledo Holding Inc. dated March 31, of October 30, 1996 1997 and incorporated herein by reference. 10.5 Loan Agreement between Robert Filed as Exhibit 10.5 to the Annual F. Spoerry and Mettler-Toledo Report on Form 10-K of Mettler- AG, dated as of October 7, Toledo Holding Inc. dated March 31, 1996 1997 and incorporated herein by reference. 10.6 MT Investors Inc. Stock Option Filed as Exhibit 10.6 to the Annual Plan Report on Form 10-K of Mettler- Toledo Holding Inc. dated March 31, 1997 and incorporated herein by reference. 10.7 Mettler Toledo Performance- Filed as Exhibit 10.7 to the Annual Oriented Bonus System (POBS), Report on Form 10-K of Mettler- effective as of 1993 Toledo Holding Inc. dated March 31, 1997 and incorporated herein by reference. 10.8 Mettler Toledo POBS Plus -- Filed as Exhibit 10.8 to the Annual Incentive Scheme for Senior Report on Form 10-K of Mettler- Management of Mettler Toledo, Toledo Holding Inc. dated March 31, dated as of November 4, 1996 1997 and incorporated herein by reference. 10.9 Amended and Restated Credit Agreement, dated as of October 15, 1996 between Mettler-Toledo Inc., Mettler-Toledo Holding AG, as Borrowers, Safeline Holding Company as UK Borrower, Mettler- Toledo, Inc. as Canadian Borrower and Merrill Lynch & Co. as Arranger and Documentation Agent, and the Lenders thereto, Amended and Restated as of May 29, 1996. 21.1* Subsidiaries of the Registrant 27.1 Financial Data Schedule * Previously filed. MT INVESTORS INC. INDEX TO FINANCIAL STATEMENTS Audited Consolidated Financial Statements: Page - ----------------------------------------- ---- Independent Auditors' Report F-2 Consolidated Balance Sheets as of December 31, 1995 and 1996 F-3 Consolidated Statements of Operations for the years ended December 31, 1994 and 1995 and for the period January 1, 1996 to October 14, 1996 and for the period October 15, 1996 to December 31, 1996 F-5 Consolidated Statements of Changes in Net Assets / Shareholders' Equity for the years ended December 31, 1994 and 1995 and for the period January 1, 1996 to October 14, 1996 and for the period October 15, 1996 to December 31, 1996 F-6 Consolidated Statements of Cash Flows for the years ended December 31, 1994 and 1995 and for the period January 1, 1996 to October 14, 1996 and for the period October 15, 1996 to December 31, 1996 F-8 Notes to Audited Consolidated Financial Statements F-10 Unaudited Interim Consolidated Financial Statements: - --------------------------------------------------- Interim Consolidated Balance Sheets as of December 31, 1996 and March 31, 1997 F-34 Interim Consolidated Statements of Operations for the three months ended March 31, 1996 and 1997 F-36 Interim Consolidated Statements of Changes in Net Assets / Shareholders' Equity for the three months ended March 31, 1996 and 1997 F-37 Interim Consolidated Statements of Cash Flows for the three months ended March 31, 1996 and 1997 F-39 Notes to the Interim Consolidated Financial Statements F-40 Financial Statement Schedules: Schedule I - Condensed Financial Information of Registrant S-1 Schedule II - Valuation and Qualifying Accounts S-8 INDEPENDENT AUDITORS' REPORT The Board of Directors MT Investors Inc. We have audited the accompanying consolidated balance sheets of MT Investors Inc. and subsidiaries (as defined in Note 1 to the Audited Consolidated Financial Statements) as of December 31, 1995 and 1996 and the related consolidated statements of operations, net assets/shareholders' equity and cash flows for each of the years ended December 31, 1994 and 1995 and for the period January 1, 1996 to October 14, 1996, the Predecessor periods, and for the period October 15, 1996 to December 31, 1996, the Successor period. In connection with our audits of the Audited Consolidated Financial Statements, we also have audited the financial statement schedules as listed in the accompanying index. These Audited Consolidated Financial Statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on these Audited Consolidated Financial Statements and financial statement schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the Audited Consolidated Financial Statements referred to above present fairly, in all material respects, the consolidated financial position of MT Investors Inc. and subsidiaries as of December 31, 1995 and 1996, and the consolidated results of their operations and their cash flows for each of the years ended December 31, 1994 and 1995 and for the period January 1, 1996 to October 14, 1996, the Predecessor periods, and for the period October 15, 1996 to December 31, 1996, the Successor period, in conformity with generally accepted accounting principles in the United States of America. Also in our opinion, the related financial statement schedules, when considered in relation to the basic Audited Consolidated Financial Statements taken as a whole, presents fairly, in all material respects, the information set forth therein. As more fully described in Note 1 to the Audited Consolidated Financial Statements, MT Investors Inc. acquired the Mettler-Toledo Group as of October 15, 1996 in a business combination accounted for as a purchase. As a result of the acquisition, the Audited Consolidated Financial Statements for the Successor period are presented on a different basis of accounting than that of the Predecessor periods, and therefore are not directly comparable. KPMG Fides Peat Zurich, Switzerland April 18, 1997 MT INVESTORS INC. CONSOLIDATED BALANCE SHEETS (in thousands, except per share data)
Predecessor Successor ----------- --------- December 31, December 31, 1995 1996 ----------- --------- ASSETS Current assets: Cash and cash equivalents.............................. $41,402 $60,696 Due from Ciba and affiliates ...................... 33,072 -- Trade accounts receivable, less allowances of $9,292 in 1995 and $8,388 in 1996 .............. 159,218 151,161 Inventories ....................................... 110,986 102,526 Deferred taxes .................................... 6,180 7,565 Other current assets .............................. 21,469 17,268 -------- -------- Total current assets ........................... 372,327 339,216 Property, plant and equipment, net .................... 241,018 255,292 Excess of cost over net assets acquired, net of accumulated amortization of $17,268 in 1995 and $982 in 1996 .................................. 84,425 135,490 Long-term deferred taxes .............................. 14,312 3,916 Other assets .......................................... 12,012 37,974 --------- --------- Total assets ................................... $724,094 $771,888 ========= =========
MT INVESTORS INC. CONSOLIDATED BALANCE SHEETS--(Continued) (in thousands, except per share data)
Predecessor Successor ----------- --------- December 31, December 31, 1995 1996 ------------ ------------ LIABILITIES AND NET ASSETS/SHAREHOLDERS' EQUITY Current liabilities: Trade accounts payable $ 34,389 $ 32,797 Accrued and other liabilities 107,118 115,314 Taxes payable 11,737 17,580 Deferred taxes 7,698 9,132 Bank and other loans 29,513 80,446 Notes payable to Ciba and affiliates 91,132 - ---------- -------- Total current liabilities 281,587 255,269 Long-term debt payable to Ciba and affiliates 145,097 - Long-term debt due to third parties 3,621 373,758 Long-term deferred taxes 13,502 30,467 Other long-term liabilities 84,303 96,810 ---------- -------- Total liabilities 528,110 756,304 Minority interest 2,730 3,158 Net assets/shareholders' equity: Common stock, $0.01 par value per share: Class A non-voting, authorized 2,233,117 shares; issued 1,899,779 at December 31, 1996 - 19 Class B voting, authorized 1,000 shares; issued 1,000 at December 31, 1996 - 1 Class C non-voting, authorized 541,859 shares; issued 537,735 at December 31, 1996 - 5 Additional paid-in capital - 188,084 Accumulated deficit - (159,046) Capital employed 162,604 - Currency translation adjustment 30,650 (16,637) ---------- -------- Total net assets/shareholders' equity 193,254 12,426 ---------- -------- Commitments and contingencies Total liabilities and net assets/shareholders' equity $724,094 $771,888 ========== ========
See the accompanying notes to the Audited Consolidated Financial Statements MT INVESTORS INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data)
Predecessor Successor ------------------------------------------------ ---------------- Twelve months Twelve months For the period For the period ended ended January 1, 1996 October 15, 1996 December 31, December 31, to October 14, to December 31, 1994 1995 1996 1996 ------------------------------------------------ ---------------- Net sales $769,136 $850,415 $662,221 $ 186,912 Cost of sales 461,629 508,089 395,239 136,820 -------- -------- -------- --------- Gross profit 307,507 342,326 266,982 50,092 Research and development 47,994 54,542 40,244 9,805 Selling, general and administrative 224,978 248,327 186,898 59,353 Amortization 6,437 2,765 2,151 1,065 Purchased research and development - - - 114,070 Other charges (income), net (2,852) (701) 1,872 9,892 -------- -------- -------- --------- Earnings (loss) before interest and taxes 30,950 37,393 35,817 (144,093) Interest expense 13,307 18,219 13,868 8,738 Financial expense (income), net (4,864) (8,630) (3,204) 7,245 -------- -------- -------- --------- Earnings (loss) before taxes and minority interest 22,507 27,804 25,153 (160,076) Provision for taxes 8,676 8,782 10,055 (938) Minority interest 347 768 637 (92) -------- -------- -------- --------- Net earnings (loss) $ 13,484 $ 18,254 $ 14,461 $(159,046) ======== ======== ========= ========== Earnings (loss) per common share: Weighted average number of common shares 2,438,514 2,438,514 1,930,490 499,165 Earnings (loss) per common share $5.53 $7.49 $7.49 $(318.62) ========= ========= ========= =========
See the accompanying notes to the Audited Consolidated Financial Statements MT INVESTORS INC. CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS / SHAREHOLDERS' EQUITY (in thousands, except per share data)
Predecessor ------------------------------------------ For the twelve month periods ended December 31, 1994 and 1995 and for the period January 1, 1996 to October 14, 1996 ------------------------------------------ Currency Capital Translation Employed Adjustment Total -------- ----------- ----- Net assets at December 31, 1993 $202,643 $(9,122) $193,521 Capital transactions with Ciba and affiliates 2,002 - 2,002 Net earnings 13,484 - 13,484 Change in currency translation adjustment - 19,187 19,187 -------- -------- ------- Net assets at December 31, 1994 218,129 10,065 228,194 Capital transactions with Ciba and affiliates (73,779) - (73,779) Net earnings 18,254 - 18,254 Change in currency translation adjustment - 20,585 20,585 -------- -------- ------- Net assets at December 31, 1995 162,604 30,650 193,254 Capital transactions with Ciba and affiliates (88,404) - (88,404) Net earnings 14,461 - 14,461 Change in currency translation adjustment - (6,538) (6,538) -------- -------- ------- Net assets at October 14, 1996 $ 88,661 $24,112 $112,773 ======== ======= ========
See the accompanying notes to the Audited Consolidated Financial Statements MT INVESTORS INC. CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS/SHAREHOLDERS' EQUITY--(Continued) (in thousands, except per share data)
Successor --------------------------------------------------------------------------------------------------- For the period from October 15, 1996 to December 31, 1996 --------------------------------------------------------------------------------------------------- Common Stock -------------------------------------------------- Class A Class B Class C Additional Currency ----------------- -------------- --------------- Paid-in Accumulated Translation Shares Amount Shares Amount Shares Amount Capital Deficit Adjustment Total ------- ----- ------ ------ ------ ------ ---------- ----------- ---------- ------- Balance at October 15, 1996 - $ - 1,000 $ 1 - $ - $ - $ - $ - $ 1 New issuance of shares 1,899,779 19 - - 537,735 5 188,084 - - 188,108 Net loss - - - - - - - (159,046) - (159,046) Change in currency translation adjustment - - - - - - - - (16,637) (16,637) --------- ------ ----- ------ ------- ------ ---------- ---------- ----------- -------- Balance at December 31, 1996 1,899,779 $ 19 1,000 $ 1 537,735 $ 5 $ 188,084 $ (159,046) $ (16,637) $ 12,426 ========= ====== ===== ====== ======= ====== ========== ========== ========== ========
See the accompanying notes to the Audited Consolidated Financial Statements MT INVESTORS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
Predecessor Successor ------------------------------------------------ ----------------- Twelve months Twelve months For the period For the period ended ended January 1, 1996 October 15, 1996 December 31, December 31, to October 14, to December 31, 1994 1995 1996 1996 ------------- ------------ --------------- ----------------- Cash flows from operating activities: Net earnings (loss) $13,484 $18,254 $14,461 $(159,046) Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: Depreciation 27,681 30,598 19,512 7,925 Amortization 6,437 2,765 2,151 1,065 Write-off of purchased research and development and cost of sales associated with revaluation of inventories -- -- -- 146,264 Net gain on disposal of long-term assets (1,396) (1,053) (768) -- Deferred taxes 740 (551) (1,934) (4,563) Minority interest 347 768 637 (92) Increase (decrease) in cash resulting from changes in: Trade accounts receivable, net (7,410) (9,979) 9,569 (10,159) Inventories (574) (607) 1,276 3,350 Other current assets 1,636 (3,058) 14,748 (10,605) Trade accounts payable (1,123) 1,437 (3,065) 3,415 Accruals and other liabilities, net (5,728) 13,095 5,948 32,030 --------- -------- -------- -------- Net cash provided by operating activities 34,094 51,669 62,535 9,584 --------- -------- -------- -------- Cash flows from investing activities: Proceeds from sale of property, plant and equipment 12,454 4,000 1,606 736 Purchase of property, plant and equipment (24,916) (25,858) (16,649) (11,928) Acquisition of Mettler-Toledo from Ciba -- -- -- (314,962) Investments in other long term assets, net 162 (7,484) (1,632) 4,857 --------- -------- -------- -------- Net cash used in investing activities (12,300) (29,342) (16,675) (321,297) --------- -------- -------- -------- Cash flows from financing activities: Borrowings of third party debt - 3,983 - 414,170 Repayments of third party debt (311) - (13,464) - Proceeds from issuance of common stock - - - 188,108 Ciba and affiliates borrowings (repayments) (9,187) (15,693) (26,589) (184,666) Capital transactions with Ciba and affiliates 2,002 (37,361) (7,716) (80,687) --------- -------- -------- -------- Net cash provided by (used in) financing activities (7,496) (49,071) (47,769) 336,925 --------- -------- -------- -------- Effect of exchange rate changes on cash and cash equivalents 10,040 4,344 (3,394) (615) --------- -------- -------- -------- Net increase (decrease) in cash and cash equivalents 24,338 (22,400) (5,303) 24,597 Cash and cash equivalents: Beginning of period 39,464 63,802 41,402 36,099 --------- -------- -------- -------- End of period $63,802 $41,402 $36,099 $60,696 ========= ======== ======== ========
MT INVESTORS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS-(Continued) (in thousands)
Predecessor Successor ------------------------------------------------ ----------------- Twelve months Twelve months For the period For the period ended ended January 1, 1996 October 15, 1996 December 31, December 31, to October 14, to December 31, 1994 1995 1996 1996 ------------- ------------- --------------- ----------------- Supplemental disclosures of cash flow information: Cash paid during the year for: Interest $ 13,225 $ 18,927 $6,524 $17,874 Taxes 9,370 9,970 9,385 2,470 Non-cash financing and investing activities: Due to Ciba for capital transactions -- 36,418 -- --
See the accompanying notes to the Audited Consolidated Financial Statements MT INVESTORS INC. NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS (in thousands unless otherwise stated) 1. BASIS OF PRESENTATION AND ACQUISITION MT Investors Inc. ("MT Investors") was incorporated by AEA Investors Inc. ("AEA") in December 1991. It was recapitalized to effect the acquisition of the Mettler-Toledo Group from Ciba-Geigy AG ("Ciba") and its wholly owned subsidiary, AG fur Prazisionsinstrumente ("AGP"). Pursuant to the terms of a stock purchase agreement dated April 2, 1996 between MT Investors, AGP and Ciba, on October 15, 1996 MT Investors acquired the Mettler-Toledo Group in a transaction more fully described below. Between the date of formation and October 15, 1996, MT Investors had no substantive operations. In the accompanying Audited Consolidated Financial Statements the terms "Mettler-Toledo" or the "Company" when used in situations pertaining to periods prior to October 15, 1996 refer to the combined group of businesses sold by Ciba and when used in situations pertaining to periods subsequent to October 15, 1996 refer to MT Investors Inc. and its consolidated subsidiaries. The combined historical financial information of the business acquired from Ciba prior to the acquisition on October 15, 1996 are referred to as "Predecessor" while the consolidated financial information of the Company subsequent to the date of acquisition are referred to as "Successor." The accompanying Audited Consolidated Financial Statements have been prepared in accordance with United Sates generally accepted accounting principles. MT Investors acquired the Company on October 15, 1996 from a subsidiary of Ciba for cash consideration of SFr. 504,996 (approximately $402,000) including dividends of SFr. 109,406 (approximately $87,100) which were paid to Ciba by the Company in conjunction with the acquisition. In addition, the Company incurred expenses in connection with the acquisition and related financing of approximately $29,000, including approximately $5,500 paid to AEA, and paid approximately $185,000 to settle amounts due to Ciba and affiliates. The Company has accounted for the acquisition using the purchase method of accounting. Accordingly, the costs of the acquisition were allocated to the assets acquired and liabilities assumed based upon their respective fair values. The excess of the cost of the acquisition over the fair value of the net assets acquired of approximately $137,500 is being amortized over 32 years. Because of this purchase price allocation, the accompanying financial statements of Successor are not directly comparable to those of the Predecessor. The following unaudited pro forma summary presents the consolidated results of operations of the Company as if the acquisition had been completed as of the beginning of each of the periods presented, after giving effect to certain adjustments, including the depreciation and amortization of the assets acquired based upon their fair values, increased interest expense from the financing of the acquisition and income tax effects. The Company allocated a portion of the purchase price to (i) in-process research and development projects, that have economic value (see Note 2) and (ii) the revaluation of inventories (see Note 4). These adjustments have not been reflected in the following pro forma summary due to their unusual and non-recurring nature. This pro forma summary does not necessarily reflect the results of operations as they would have been if the acquisition had been completed as of the beginning of such periods and is not necessarily indicative of the results which may be obtained in the future.
Pro Forma Financial Information ----------------------------------------------- Predecessor Successor ---------------------------- ----------------- For the period For the period Year Ended from January 1, from October 15, December 31, 1996 to October 1996 to December 1995 14, 1996 31, 1996 ------------ -------------- ----------------- Net sales $850,415 662,221 186,912 Net loss (5,396) (3,181) (3,182) Loss per common share (1) N/A N/A (1.30) - ------------------------ N/A - Not Applicable (1) The loss per common share for the Successor has been computed assuming the common shares issued in the Acquisition were outstanding at the beginning of the period.
The foregoing pro forma financial information does not reflect the anticipated benefits to be derived in the future from the Company's 1996 employee reduction programs. MT INVESTORS INC. NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS-(Continued) (in thousands unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Mettler-Toledo is a manufacturer and marketer of weighing instruments for use in laboratory, industrial and food retailing applications. The Company also manufacturers and sells certain related laboratory measurement instruments. The Company's manufacturing facilities are located in Switzerland, the United States, Germany and China. The Company's principal executive offices are located in Greifensee, Switzerland. Principles of Consolidation The Audited Consolidated Financial Statements include all of the entities of the Company. All intercompany transactions and balances have been eliminated. Cash and Cash Equivalents Cash and cash equivalents include highly liquid investments with original maturity dates of three months or less. Inventories Inventories are valued at the lower of cost or market. Cost, which includes direct materials, labor and overhead plus indirect overhead, is determined using the first in, first out (FIFO) or weighted average cost methods and to a lesser extent the last in, first out (LIFO) method. Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is charged on a straight line basis over the estimated useful lives of the assets as follows: Buildings and improvements 15 to 50 years Machinery and equipment 3 to 12 years Computer software 3 years Leasehold improvements Shorter of useful life or lease term Beginning January 1, 1996 the Company adopted Financial Accounting Standards Board's Statement of Financial Accounting Standards No. 121 (SFAS 121), "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of." SFAS 121 requires that long-lived assets and certain identifiable intangibles to be held and used by an entity be reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In addition, SFAS 121 requires that long-lived assets and certain identifiable intangibles to be disposed of be reported at the lower of carrying amount or fair value less cost to sell. Adoption of SFAS 121 had no material effect on the Audited Consolidated Financial Statements. Excess of cost over net assets acquired The excess of purchase price over the fair value of net assets acquired, is amortized on a straight-line basis over 32 years being the expected period to be benefited. The Company assesses the recoverability of such amount by determining whether the amortization of the balance over its remaining life can be recovered from the undiscounted future operating cash flows of the acquired operation. The amount of impairment, if any, is measured based on projected discounted future operating cash flows using a discount rate reflecting the Company's average cost of funds. The assessment of the recoverability of the excess of cost over net assets acquired will be impacted if estimated future operating cash flows are not achieved. MT INVESTORS INC. NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS-(Continued) (in thousands unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-(Continued) Deferred Financing Costs Debt financing costs, which were incurred by the Company in connection with borrowings incurred in connection with the acquisition discussed at Note 1, are deferred and amortized, over the life of the underlying indebtedness using the interest method. Taxation The Company files its own tax returns in each jurisdiction in which it operates. Prior to the acquisition discussed in Note 1, in certain jurisdictions the Company filed its tax returns jointly with other Ciba subsidiaries. The Company had a tax sharing arrangement with Ciba in these countries to share the tax burden or benefits. Such arrangement resulted in each company's tax burden or benefit equating to that which it would have incurred or received if it had been filing a separate tax return. Taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in the respective jurisdictions in which the Company operates that are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Generally, deferred taxes are not provided on the unremitted earnings of subsidiaries outside of the United States because it is expected that these earnings are permanently reinvested. Such earnings may become taxable upon the sale or liquidation of these subsidiaries or upon the remittance of dividends. Deferred taxes are provided in situations where the Company's subsidiaries plan to make future dividend distributions. Research and Development Research and development costs are expensed as incurred. Research and development costs, including customer engineering (which represents research and development charged to customers and, accordingly, is included in cost of sales), amounted to approximately $55,600, $62,400, $45,100 and $11,100 for the years ended 1994 and 1995 and for the period from January 1, 1996 to October 14, 1996 and for the period from October 15, 1996 to December 31, 1996, respectively. In connection with the acquisition discussed in Note 1 the Company allocated, based upon independent valuations, $114,070 of the purchase price to purchased research and development in process. Such amount was recorded as an expense in the period from October 15, 1996 to December 31, 1996. Currency Translation and Transactions The reporting currency for the Audited Consolidated Financial Statements of the Company is the United States dollar (USD). The functional currency for the Company's operations is generally the applicable local currency. Accordingly, the assets and liabilities of companies whose functional currency is other than the USD are included in the consolidation by translating the assets and liabilities into the reporting currency at the exchange rates applicable at the end of the reporting year. The statements of operations and cash flows of such non-USD functional currency operations are translated at the monthly average exchange rates during the year. Translation gains or losses are accumulated as a separate component of net assets/shareholders' equity. Currency transaction gains or losses arising from transactions of Mettler-Toledo companies in currencies other than the functional currency are included in operations at each reporting period. MT INVESTORS INC. NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS-(Continued) (in thousands unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-(Continued) Derivative Financial Instruments The Company has only limited involvement with derivative financial instruments and does not use them for trading purposes. Derivative financial instruments in the form of currency forward and option contracts are entered into by the Company primarily as a hedge against anticipated currency exposures. Such contracts limit the Company's exposure to both favorable and unfavorable currency fluctuations. These contracts are adjusted to reflect market values as of each balance sheet date, with the resulting unrealized gains and losses being recognized in financial income or expense, as appropriate. Fair Value of Financial Instruments The carrying amount of cash and cash equivalents, accounts receivable, other current assets and current liabilities approximates fair market value because of the short term maturity of these financial instruments. It is not practical to determine the fair value of balances with Ciba due to the related party nature of these financial instruments. See Note 5 and Note 12 for the fair values of the Company's derivative financial instruments and third party debt, respectively. Other financial instruments are not significant to the Audited Consolidated Financial Statements. Stock Based Compensation The Company applies Accounting Principles Board Opinion No. 25 "Accounting for Stock Issued to Employees" and related interpretations in accounting for its stock option plan. Earnings per Common Share Earnings per common share has been computed using the weighted average number of outstanding common shares during the Successor period. Earnings per common share for the Predecessor periods have been computed assuming the common shares issued in the acquisition discussed in Note 1 were outstanding during each of the periods presented. In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings per Share." The Company has yet to determine the effect of this statement on its earnings per share. Concentration of Credit Risk The Company's revenue base is widely diversified by geographic region and by individual customer. The Company's products are utilized in many different industries, although extensively in the pharmaceutical and chemical industries. The Company performs ongoing credit evaluations of its customers' financial condition and, generally, requires no collateral from its customers. Revenue Recognition Revenue is recognized when title to a product has transferred or services have been rendered. Revenues from service contracts are recognized over the contract period. Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. MT INVESTORS INC. NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS-(Continued) (in thousands unless otherwise stated) 3. DUE FROM CIBA AND AFFILIATES, NET The amount due from Ciba, net was comprised of the following:
Predecessor Successor ----------- ------------ December 31, December 31, 1995 1996 ---- ---- Cash pool deposits $ 22,239 $ -- Due from AGP, 6.5%, revolving repayment terms 10,833 -- -------- --------- $ 33,072 $ -- ======== =========
Prior to the acquisition discussed in Note 1, certain Mettler-Toledo companies participated in an arrangement with Ciba whereby excess cash was pooled into an account maintained by Ciba. The net deposit with Ciba in connection with this arrangement bore interest at the short-term money market rates available to Ciba. Prior to the acquisition Ciba also performed certain limited administrative services on behalf of the Company. The cost of such services, which was not charged to the Company nor included in the Audited Consolidated Financial Statements, was not significant. 4. INVENTORIES Inventories consisted of the following:
Predecessor Successor ----------- ------------ December 31, December 31, 1995 1996 ---- ---- Raw materials and parts $ 45,523 $ 41,015 Work-in-progress 38,191 31,534 Finished goods 30,149 29,982 -------- --------- 113,863 102,531 LIFO reserve (2,877) (5) -------- --------- $110,986 $102,526 ======== =========
At December 31, 1995 and 1996, 8.8% and 13.2% respectively, of the Company's inventories (certain U.S. companies only) were valued using the LIFO method of accounting. There were no material liquidations of LIFO inventories during the periods presented. In connection with the acquisition discussed in Note 1, the Company allocated approximately $32,200 of the purchase price to revalue certain inventories (principally work-in-process and finished goods) to fair value (net realizable value). Substantially all of such inventories were sold during the period from October 15, 1996 to December 31, 1996. MT INVESTORS INC. NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS-(Continued) (in thousands unless otherwise stated) 5. FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISKS The Company may be exposed to credit losses in the event of nonperformance by the counterparties to its currency forward and option contracts. The Company has no reason to believe, however, that such counterparties will not be able to fully satisfy their obligations under these contracts. At December 31, 1995, the Company had contracts maturing during 1996 to purchase the equivalent of approximately $23,300 and to sell the equivalent of approximately $27,900 in various currencies. At December 31, 1996, the Company had contracts maturing during 1997 to sell the equivalent of approximately $135,000 in various currencies in exchange for Swiss francs. These contracts were used to limit its exposure to currency fluctuations on anticipated future cash flows, primarily for the delivery of United States dollars, German marks, French francs, British pounds and Japanese yen in exchange for Swiss francs. At December 31, 1995 and 1996, the fair value of such financial instruments, which the Company recognized as net unrealized gains (losses), was approximately $2,400 and $(5,100), respectively. 6. OTHER CURRENT ASSETS Other current assets consisted of the following:
Predecessor Successor ----------- ------------ December 31, December 31, 1995 1996 ---- ---- Prepaid expenses $ 4,703 $ 5,302 Other (including in 1995 net gains on derivative financial instruments) 16,766 11,966 -------- --------- $ 21,469 $ 17,268 ======== =========
7. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net, consisted of the following:
Predecessor Successor ----------- ------------ December 31, December 31, 1995 1996 ---- ---- Land $ 31,535 $ 63,514 Buildings and leasehold improvements 186,608 120,173 Machinery and equipment 237,457 75,675 Computer software 5,373 3,067 -------- --------- 460,973 262,429 Less accumulated depreciation and amortization (219,955) (7,137) -------- --------- $241,018 $255,292 ======== =========
MT INVESTORS INC. NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS-(Continued) (in thousands unless otherwise stated) 8. OTHER ASSETS Other assets consisted of the following:
Predecessor Successor ----------- ------------ December 31, December 31, 1995 1996 ---- ---- Deferred financing fees, net of accumulated amortization of $820 in 1996 $ -- $ 22,015 Bank deposits-restricted cash 4,697 5,960 Secured loans 2,911 2,805 Other 4,404 7,194 -------- --------- $ 12,012 $ 37,974 ======== =========
Bank deposits-restricted cash at December 31, 1995 and 1996 principally represented deposits collateralizing a letter of credit given by a financial institution in connection with one of the Company's subsidiaries in the Peoples Republic of China. 9. BANK AND OTHER LOANS Bank and other loans consisted of the following:
Predecessor Successor ----------- ------------ December 31, December 31, 1995 1996 ---- ---- Current maturities of long-term debt $ - $ 8,968 Borrowings under revolving credit facility - 51,928 Other short-term borrowings 19,408 19,550 Borrowings under line of credit 10,105 - -------- --------- $ 29,513 $ 80,446 ======== ========
The weighted average interest rate at December 31, 1995 on the borrowings under the line of credit was approximately 8.0%. The weighted average interest rate at December 31, 1996 on the borrowings under the revolving credit facility was approximately 4.1%. The Company had available revolving lines of credit and swingline facilities for short-term financing of approximately $75,000 at December 31, 1996 (See Note 12). MT INVESTORS INC. NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS-(Continued) (in thousands unless otherwise stated) 10. ACCRUED AND OTHER LIABILITIES Accrued and other liabilities consisted of the following:
Predecessor Successor ----------- ------------ December 31, December 31, 1995 1996 ---- ---- Accrued payroll and vacation $ 26,400 $ 26,239 Social benefits and payroll taxes 9,563 9,218 Severance and other cost provisions 1,890 12,783 Interest 4,731 6,858 Losses on derivative financial instruments - 5,137 Other taxes payable 8,190 5,402 Warranty 6,420 6,803 Other liabilities 49,924 42,874 -------- --------- $107,118 $115,314 ======== ========
Warranties on Mettler-Toledo products are generally for one year. The Company provides for warranty costs, which have not been significant, based on historical experience. 11. DEBT PAYABLE TO CIBA AND AFFILIATES The Company's debt obligations to Ciba and affiliates consisted of the following: Short-term borrowings are summarized as follows:
Predecessor Successor ----------- ------------ December 31, December 31, 1995 1996 ---- ---- Unsecured notes payable: AGP, 4.25%, due February 29,1996 $ 26,517 $ - Due to Ciba for capital transactions 36,418 - Other unsecured short-term debt to Ciba, varying interest rates and maturities 28,197 - -------- --------- $ 91,132 $ - ======== ========
Long-term obligations are summarized as follows:
Predecessor Successor ----------- ------------ December 31, December 31, 1995 1996 ---- ---- Unsecured notes payable to Ciba and affiliates: AGP, 8.4%, due October 14, 1996 $122,000 $ - AGP, 6%, due October 14, 1996 20,000 - Other unsecured long-term debt to Ciba, varying interest rates and maturities 3,097 - -------- --------- $145,097 $ - ======== ========
Interest expense on debt payable to Ciba and affiliates for the years ended December 31, 1994 and 1995 and for the period January 1, 1996 to October 14, 1996 was $10,506, $15,693, and $10,955, respectively. MT INVESTORS INC. NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS-(Continued) (in thousands unless otherwise stated) 12. DEBT PAYABLE TO THIRD PARTIES Long-term debt payable to third parties consist of the following:
Predecessor Successor ----------- ------------ December 31, December 31, 1995 1996 ---- ---- 9.75% Senior Subordinated Notes due October 1, 2006 $ - $135,000 Credit Agreement: Term A Loans, interest at LIBOR plus 2.5% (4.38% at December 31, 1996) payable in quarterly installments beginning March 31, 1997 due December 31, 2002 - 92,730 Term B Loans, interest at LIBOR plus 3.00% (8.53% at December 31, 1996) payable in quarterly installments beginning March 31, 1997 due December 31, 2003 - 75,000 Term C(CH) and C(US) Loans, interest at LIBOR plus 3.25% (8.78% at December 31, 1996) payable in quarterly installments beginning March 31, 1997 due December 31, 2004 - 72,000 Revolving credit facility - 51,928 Other 3,621 27,546 3,621 454,204 Less current maturities - 80,446 -------- --------- $3,621 $373,758 ======== ========
To provide a portion of the financing required for the acquisition and for working capital and for general corporate purposes thereafter, in October, 1996 Mettler-Toledo Holding Inc., a wholly owned subsidiary of the Company, entered into a credit agreement with various banks. Loans under the credit agreement consist of: (i) Term A Loans in an aggregate principal amount of SFr. 125,000 ($92,730 at December 31, 1996), (ii) Term B Loans in an aggregate principal amount of $75,000, (iii) Term C(CH) loans in an aggregate principal amount of $32,000, and (iv) Term C(US) Loans in an aggregate principal amount of $40,000 (the Term A Loans, the Term B Loans the Term C(CH) Loans and Term C(US) Loans are referred to collectively as the "term loans"), and (v) a multi-currency revolving credit facility that may be borrowed in an aggregate principal amount of $140,000, and includes letter of credit and swingline subfacilities available to certain subsidiaries (the "revolving facility" and together with the term loans, the "credit facilities"). Loans under the revolving facility may be repaid and reborrowed and are due in full on February 18, 1997. The Company is required to pay a facility fee equal to 0.05% per annum on the amount of the revolving facility and letter of credit fees on the aggregate face amount of letters of credit under the revolving facility. At December 31, 1996 the Company had available approximately $75,000 of additional borrowing capacity. MT INVESTORS INC. NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS-(Continued) (in thousands unless otherwise stated) 12. DEBT PAYABLE TO THIRD PARTIES-(Continued) The credit agreement contains covenants that, among other things, limit the Company's ability to incur liens; merge, consolidate or dispose of assets; make loans and investments; incur indebtedness; engage in certain transactions with affiliates; incur certain contingent obligations; pay dividends and other distributions; prepay the Notes; or make capital expenditures. The credit agreement also requires the Company to maintain a minimum net worth and a minimum fixed charge coverage ratio, and to maintain a ratio of total debt to EBITDA below a specified maximum. The aggregate maturities of long-term obligations during each of the years 1998 through 2001 are approximately $12,800, $15,600, $19,300 and $23,000, respectively. The estimated fair value of the Company's Senior Subordinated Notes at December 31, 1996 was approximately $142,000. The estimated fair value of the obligations under the credit agreement approximate fair value due to the variable rate nature of the obligations. Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. Fair value estimates were based on the amount of future cash flows discounted using the Company's current borrowing rate for loans of comparable maturity. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. 13. SHAREHOLDERS' EQUITY As of December 31, 1996, the authorized capital stock of the Company consisted of 2,775,976 shares of Common Stock, $.01 par value of which 2,233,117 shares were designated as Class A Common Stock, 1,000 shares were designated as Class B Common Stock and 541,859 shares were designated as Class C Common Stock. As of December 31, 1996, the Company had outstanding 1,899,779 shares of Class A Common Stock, 1,000 shares of Class B Common Stock and 537,735 shares of Class C Common Stock. Additionally, 333,117 shares of Class A Common Stock are reserved for the Company's stock option plan (See Note 14). Holders of the Company's common stock have no preemptive, subscription or redemption rights. Except as described below, the Company's three classes of common stock have identical rights under the Company's Certificate of Incorporation and By-Laws. Dividends or distributions in connection with the liquidation, dissolution or winding up of the affairs of the Company or not paid out of the current and accumulated earnings and profits shall be paid in the following manner. First, exclusively to the holders of the shares of Class A Common Stock, ratably to each such holder, until the sum of all dividends and distributions to each holder of Class A Common Stock equals $100 for each share of Class A Common Stock held by such holder. After each holder of shares of Class A Common Stock shall have received dividends and distributions totaling $100, then exclusively to the holders of the shares of Class B Common and Class C Common Stock ratably to each such holder until the sum of all dividends and distributions to each holder of Class B Common Stock and/or Class C Common Stock equals $100 for each share of Class B Common Stock and/or Class C Common Stock held by such holder. After each holder of Class B Common Stock and Class C Common Stock shall have received such dividends and distributions, then to all holders of Class A Common Stock, Class B Common Stock and/or Class C Common Stock, ratably to each holder of such shares. Class A and C Common Stock shareholders have no voting rights. MT INVESTORS INC. NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS-(Continued) (in thousands unless otherwise stated) 14. STOCK OPTION PLAN Effective October 15, 1996, MT Investors adopted a stock option plan to provide certain key employees and/or directors of the Company additional incentive to join and/or remain in the service of the Company as well as to maintain and enhance the long-term performance and profitability of the Company. The plan reserves 333,117 shares of Class A non-voting common stock of MT Investors. Under the terms of the plan, options granted shall be nonqualified and the exercise price, as determined by the committee, shall not be less than 100% of the fair market value of the share of such common stock on the date of grant. Options may not be exercised until the fifth anniversary of the date of grant, subject to certain acceleration clauses and expire on October 15, 2006. Stock option activity is shown below (per share average option price amounts in whole dollars):
Option Price ---------------------- Number Per Share Total of Shares Average Price --------- --------- ------- Granted during the period October 15, 1996, to December 31, 1996 278,988 $100.00 $27,899 Exercised - - - Forfeited - - - ------- ------- ------- Outstanding at December 31, 1996 278,988 $100.00 $27,899 ======= ======= ======= Shares exerciseable at December 31, 1996 - $ - $ - ======= ======= =======
As of the date granted, the weighted-average grant-date fair value of the options was approximately $25.00 per share. Such weighted-average grant-date fair value was determined using an option pricing model assuming: (i) an expected option life of seven years, (ii) no dividends are expected to be paid in the foreseeable future, and (iii) a risk free interest rate of 4%. The Company applies Accounting Standards Board Opinion No. 25 and related interpretations in accounting for its plans. Accordingly, no compensation cost has been recognized for its stock option plan as all options have been issued at fair market value. The Company's net loss for the period October 15, 1996 to December 31, 1996 would not have been materially different had compensation cost been determined consistent with Financial Accounting Standards Board's Statement of Financial Accounting Standards No. 123 "Accounting for Stock Based Compensation". MT INVESTORS INC. NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS-(Continued) (in thousands unless otherwise stated) 15. BENEFIT PLANS Mettler-Toledo maintains a number of retirement plans for the benefit of its employees. Certain companies sponsor defined contribution plans. Benefits are determined and funded annually based upon the terms of the plans. Contributions under these plans amounted to $9,042, $9,413, $9,484 and $2,496 in 1994, 1995, for the period January 1, 1996 to October 14, 1996 and for the period October 15, 1996 to December 31, 1996, respectively. Certain companies sponsor defined benefit plans. Benefits are also provided to employees under defined benefit plans primarily based upon years of service and employees' compensation for certain periods during the last years of employment. The following table sets forth the funded status and amounts recognized in the Audited Consolidated Financial Statements for the Company's principal defined benefit plans at December 31, 1995 and 1996:
Predecessor Successor -------------------------------- ----------------------------------- December 31, December 31, 1995 1996 -------------------------------- ----------------------------------- Assets exceed Accumulated Assets exceed Accumulated accumulated benefits accumulated benefits benefits exceed assets benefits exceed assets -------------- ------------- ------------- -------------- Actuarial present value of accumulated benefit obligations: Vested benefits $ 8,582 $90,698 $10,211 $97,639 Non-vested benefits 90 3,122 16 2,280 ------- ------- ------- ------- 8,672 93,820 10,227 99,919 ------- ------- ------- ------- Projected benefit obligations 10,737 100,820 12,458 108,504 Plan assets at fair value 10,546 40,091 13,336 50,609 ------- ------- ------- ------- Projected benefit obligations in excess of (less than) plan assets 191 60,729 (878) 57,895 Unrecognized prior service (cost) benefit (183) 252 - - Unrecognized net (losses) gains (188) (247) 22 1,479 Unrecognized transition obligations - (3,851) - - ------- ------- ------- ------- (Prepaid) accrued pension costs $ (180) $56,883 $ (856) $59,374 ======= ======= ======= =======
The (prepaid) accrued pension costs are recognized in the accompanying Audited Consolidated Financial Statements as other long-term assets and other long term liabilities, respectively. MT INVESTORS INC. NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS-(Continued) (in thousands unless otherwise stated) 15. BENEFIT PLANS-(Continued) The assumed discount rates and rates of increase in future compensation level used in calculating the projected benefit obligations vary according to the economic conditions of the country in which the retirement plans are situated. The range of rates used for the purposes of the above calculations are as follows: 1995 1996 ---- ---- Discount rates 6.5% to 8.0% 6.0% - 8.5% Compensation increase rates 2.5% to 6.0% 2.0% - 6.5% The expected long term rates of return on plan assets ranged between 9.5% and 11.0% in 1994, 9.5% and 10.0% for 1995, and 7.0% and 10.0% for 1996. The assumptions used above have a significant effect on the reported amounts of projected benefit obligations and net periodic pension cost. For example, increasing the assumed discount rate would have the effect of decreasing the projected benefit obligation and increasing unrecognized net gains. Increasing the assumed compensation increase rate would increase the projected benefit obligation and decrease unrecognized net gains. Increasing the expected long-term rate of return on investments would decrease unrecognized net gains. Plan assets relate principally to the Company's U.S. companies and consist of equity investments, obligations of the U.S. Treasury or other governmental agencies, and other interest-bearing investments. Net periodic pension cost for all of the plans above includes the following components:
Predecessor Successor ------------------------------------------------ ---------------- Twelve months Twelve months For the period For the period ended ended January 1, 1996 October 15, 1996 December 31, December 31, to October 14, to December 31, 1994 1995 1996 1996 ------------- ------------- --------------- ---------------- Service cost (benefits earned during the period) $ 3,833 $ 3,668 $ 3,850 $ 1,013 Interest cost on projected benefit obligations 6,426 7,561 6,540 1,721 Actual return on plan assets (2,725) (8,653) (6,079) (1,600) Net amortization and deferral (170) 5,137 2,485 - ------- ------- ------- ------- Net periodic pension expense $ 7,364 $ 7,713 $ 6,796 $ 1,134 ======= ======= ======= =======
MT INVESTORS INC. NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS-(Continued) (in thousands unless otherwise stated) 15. BENEFIT PLANS-(Continued) The Company's U.S. operations provide postretirement medical benefits to their employees. Employee contributions for medical benefits are related to employee years of service. The following table sets forth the status of the U.S. postretirement plans and amounts recognized in the Company's Audited Consolidated Financial Statements at December 31, 1995 and 1996:
Predecessor Successor ----------- --------- December 31, December 31, 1995 1996 ---- ---- Accumulated postretirement benefit obligations: Retired $27,682 $25,894 Fully eligible 1,196 3,033 Other 2,361 3,098 ------- ------- 31,239 32,025 Unrecognized net loss (6,261) (540) Unrecognized prior service benefit 692 - Unrecognized transition obligation (1,389) - ------- ------- Accrued postretirement benefit cost $24,281 $31,485 ======= =======
Net periodic postretirement benefit cost for the above plans includes the following components:
Predecessor Successor ------------------------------------------------ ---------------- Twelve months Twelve months For the period For the period ended ended January 1, 1996 October 15, 1996 December 31, December 31, to October 14, to December 31, 1994 1995 1996 1996 ------------- ------------- --------------- ---------------- Service cost (benefits earned during the period) $ 333 $ 285 $ 431 $114 Interest cost on projected benefit obligations 2,193 2,371 1,795 472 Net amortization and deferral 82 99 343 - ------- ------- ------- ------- Net periodic postretirement benefit cost $2,608 $2,755 $2,569 $586 ======= ======= ======= =======
The accumulated postretirement benefit obligation and net periodic postretirement benefit cost were principally determined using discount rates of 7.3% in 1994 and 1995, and 7.6% in 1996, and health care cost trend rates ranging from 9.5% to 12.25% in 1994, 1995, and 1996 decreasing to 5.0% in 2005. The health care cost trend rate assumption has a significant effect on the accumulated postretirement benefit obligation and net periodic postretirement benefit cost. For example, in 1996 the effect of a one-percentage-point increase in the assumed health care cost trend rate would be an increase of $3,064 on the accumulated postretirement benefit obligations and an increase of $71 on the aggregate of the service and interest cost components of the net periodic benefit cost. MT INVESTORS INC. NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS-(Continued) (in thousands unless otherwise stated) 16. TAXES The sources of the Company's earnings (loss) before taxes and minority interest were as follows:
Predecessor ---------------------------------------------------- Twelve months Twelve months For the period ended ended January 1, 1996 December 31, December 31, to October 14, 1994 1995 1996 -------------- ------------- --------------- Switzerland $ 9,855 $11,431 $21,241 Non-Switzerland 12,652 16,373 3,912 ------- ------- ------- Earnings before taxes and minority interest $22,507 $27,804 $25,153 ======= ======= =======
Successor -------------- For the period October 15, 1996 to December 31, 1996 -------------- United States $ (37,293) Non-United States (122,783) ----------- Earnings before taxes and minority interest $ (160,076) ===========
MT INVESTORS INC. NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS-(Continued) (in thousands unless otherwise stated) 16. TAXES-(Continued) The provision (benefit) for taxes consists of:
Current Deferred Total ------- -------- ----- Predecessor: Year ended December 31, 1994: Switzerland Federal $ 1,182 $ (32) $ 1,150 Switzerland Canton (State) and Local 1,215 (53) 1,162 Non-Switzerland 5,538 826 6,364 ------ ----- ------ $ 7,935 $741 $ 8,676 ====== ===== ====== Year ended December 31, 1995: Switzerland Federal $ 513 $ (92) $ 421 Switzerland Canton (State) and Local 481 (505) (24) Non-Switzerland 8,339 46 8,385 ------ ----- ------ $ 9,333 $ (551) $ 8,782 ====== ====== ====== For the period January 1, 1996 to October 14, 1996: Switzerland Federal $ 2,152 $ (172) $ 1,980 Switzerland Canton (State) and Local 4,305 (344) 3,961 Non-Switzerland 5,532 (1,418) 4,114 ------ ----- ------ $ 11,989 $ (1,934) $ 10,055 ====== ======== ======= Successor: For the period October 15, 1996 to December 31, 1996: United States Federal $ 475 $ (1,556) $ (1,081) United States State and Local 696 (183) 513 Non-United States 2,454 (2,824) (370) ------ ----- ------ $ 3,625 $ (4,563) $ (938) ====== ======== ========
MT INVESTORS INC. NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS-(Continued) (in thousands unless otherwise stated) 16. TAXES-(Continued) The provision for tax expense (benefit) for the years ended December 31, 1994 and 1995 and for the period January 1, 1996 to October 14, 1996 where the Company operated as a group of businesses owned by Ciba differed from the amounts computed by applying the Switzerland federal income tax rate of 9.8% to earnings before taxes and minority interest as a result of the following:
Predecessor ---------------------------------------------------- Twelve months Twelve months For the period ended ended January 1, 1996 December 31, December 31, to October 14, 1994 1995 1996 -------------- ------------- --------------- Expected tax $2,206 $2,725 $ 2,465 Switzerland Canton (state) and local income taxes, net of federal income tax benefit 1,048 (21) 3,573 Non-deductible intangible amortization 249 248 205 Change in valuation allowance (716) 1,603 1,235 Non-Switzerland income taxes in excess of 9.8% 5,591 4,968 2,291 Other, net 298 (741) 286 ------ ------ ------- Total provision for taxes $8,676 $8,782 $10,055 ====== ====== =======
The provision for tax expense (benefit) for the period October 15, 1996 to December 31, 1996, subsequent to the reorganization of the Company under MT Investors Inc. and the acquisition described in Note 1, differed from the amounts computed by applying the United States federal income tax rate of 35% to the loss before taxes and minority interest.
Successor ---------------- For the period October 15, 1996 to December 31, 1996 ---------------- Expected tax $(56,027) United States state and local income taxes, net of federal income tax benefit 333 Non-deductible purchased research and development 39,925 Non-deductible intangible amortization 336 Change in valuation allowance 4,662 Benefits of Non-United States income taxes less than 35% 10,037 Other, net (204) --------- Total provision for taxes $ (938) =========
MT INVESTORS INC. NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS-(Continued) (in thousands unless otherwise stated) 16. TAXES-(Continued) The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:
Predecessor Successor ----------- ------------ December 31, December 31, 1995 1996 ----------- ------------ Deferred tax assets: Inventory $ 9,706 $ 7,974 Accrued and other liabilities 6,129 7,046 Deferred loss on sale of subsidiaries 7,807 7,907 Accrued postretirement benefit costs 9,227 11,334 Accrued pension costs 6,276 7,709 Net operating loss carryforwards 10,140 15,817 Other 3,000 408 ------- ------- Total deferred tax assets 52,285 58,195 Less valuation allowance (21,166) (46,714) ------- ------- Total deferred tax assets less valuation allowance 31,119 11,481 ------- ------- Deferred tax liabilities: Inventory 5,952 5,618 Property, plant and equipment 21,675 31,123 Other 4,200 2,858 ------- ------- Total deferred tax liabilities 31,827 39,599 ------- ------- Net deferred tax liability $ 708 $28,118 ======= =======
MT INVESTORS INC. NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS-(Continued) (in thousands unless otherwise stated) 16. TAXES-(Continued) The net change in the total valuation allowance, including changes resulting from translation of such amounts from the local functional currencies to the reporting currency and the effect of the acquisition discussed in Note 1, for the years ended December 31, 1994 and 1995 and for the period January 1, 1996 to October 14, 1996 and for the period October 15, 1996 to December 31, 1996 was a decrease of $716 for the year ended December 31, 1994, an increase of $1,603 for the year ended December 31, 1995, an increase of $1,111 for the period January 1, 1996 to October 14, 1996 and an increase of $24,437 for the period October 15, 1996 to December 31, 1996. Of the increase in the valuation allowance of $24,437 during the period October 15, 1996 to December 31, 1996, $19,882 was recognized as an increase in goodwill resulting from the acquisition discussed in Note 1. Should a reduction of such valuation allowance be justified in the future, the amount of any reduction would accordingly reduce goodwill. The Company has established valuation allowances primarily for net operating losses, deferred losses on the sale of subsidiaries as well as postretirement and pension costs as follows:
Predecessor Successor ----------- ------------ December 31, December 31, 1995 1996 ----------- ------------ Summary of valuation allowances: Cumulative net operating losses $10,140 $15,817 Deferred losses on sale of subsidiaries 7,807 7,907 Accrued postretirement benefit costs - 10,786 Accrued pension costs - 7,336 Other 3,219 4,868 ------- ------- Total valuation allowance $21,166 $46,714 ======= =======
At December 31, 1996, the Company had net operating loss carryforwards in various countries for income tax purposes of $59,076. Of this amount, $25,131 had no expiration date, relating to subsidiaries in Sweden, Belgium, Australia, United Kingdom, Austria, Brazil and France. Additionally, there were operating losses at that date in various other countries in the amount of $33,945 which expire in varying amounts through 2011. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. MT INVESTORS INC. NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS-(Continued) (in thousands unless otherwise stated) 17. OTHER CHARGES (INCOME), NET Other income in 1994 and 1995 primarily relates to gains from sales of property, and in 1994 to a gain on sale of a cost basis investment. Other charges for the period January 1, 1996 to October 14, 1996 of $1,872 represent employee severance of $1,545 and other exit costs of $327 associated with the closing of its Westerville, Ohio facility. Other charges for the period October 15, 1996 to December 31, 1996 principally represent employee severance benefits associated with (i) the Company's general headcount reduction programs, in Europe and North America, of $4,557 which were announced during such period, and (ii) the realignment of the analytical and precision balance business in Switzerland of $6,205 which was internally announced in December, 1996. In connection with such programs the Company reduced its workforce by 168 employees in 1996 and intends to further reduce its workforce by approximately 70 employees. 18. FINANCIAL INCOME, NET Financial income (expense) consists of the following for the years ended December 31:
Predecessor Successor ----------------------------------------------- ------------------ Twelve months Twelve months For the period For the period ended ended ended October 15, 1996 December 31, December 31, October 14, to December 31, 1994 1995 1996 1996 -------------- -------------- ------------- ------------------ Interest income $4,386 $5,388 $3,424 $ 1,079 Foreign currency transactions, net 478 3,242 (220) (8,324) ------ ------ ------ ------- Total $4,864 $8,630 $3,204 $(7,245) ======= ====== ====== =======
19. COMMITMENTS AND CONTINGENCIES Operating Leases The Company leases certain of its facilities and equipment under operating leases. The future minimum lease payments under non-cancelable operating leases are as follows at December 31, 1996: 1997 $11,582 1998 8,521 1999 5,494 2000 2,236 2001 1,298 Thereafter 1,447 ------- Total $30,578 ======= Rent expense for operating leases amounted to $16,493, $13,034 and $3,430 in 1995 and for the period January 1, 1996 to October 14, 1996 and for the period October 15, 1996 to December 31, 1996, respectively. MT INVESTORS INC. NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS-(Continued) (in thousands unless otherwise stated) 19. COMMITMENTS AND CONTINGENCIES-(Continued) Legal The Company is party to various legal proceedings, including certain environmental matters, incidental to the normal course of business. Management does not expect that any of such proceedings will have a material adverse effect on the Company's financial condition or results of operations. 20. GEOGRAPHIC SEGMENT INFORMATION The tables below shows the Company's operations by geographic region. Transfers between geographic regions are priced to reflect consideration of market conditions and the regulations of the countries in which the transferring entities are located.
Transfers Earnings between Total net before Twelve months ended Net sales by Net sales geographic sales by interest December 31, 1994 destination by origin areas origin and taxes - ---------------------- ------------ ------------ ------------ ----------- ----------- Switzerland (1) $ 31,992 $ 89,495 $ 133,583 $ 223,078 $ 10,516 Germany 126,527 133,772 37,056 170,828 10,034 Other Europe 215,230 192,557 776 193,333 1,665 ----------- ----------- ----------- ---------- ---------- Total Europe 373,749 415,824 171,415 587,239 22,215 United States 269,034 300,244 29,877 330,121 10,111 Other Americas 56,628 33,204 64 33,268 939 ----------- ----------- ----------- ---------- ---------- Total Americas 325,662 333,448 29,941 363,389 11,050 Asia and other 69,725 19,864 75 19,939 238 Eliminations - - (201,431) (201,431) (2,553) ----------- ----------- ----------- ---------- ---------- Totals $ 769,136 $ 739,136 $ - $ 769,136 $ 30,950 ========== =========== =========== ========== ==========
Transfers Earnings between Total net before Twelve months ended Net sales by Net sales geographic sales by interest December 31, 1995 destination by origin areas origin and taxes Total assets - ---------------------- ------------ ------------ ------------ ----------- ----------- ------------ Switzerland (1) $ 41,820 $ 102,712 $ 159,453 $ 262,165 $ 6,316 $ 593,955 Germany 151,974 158,393 47,379 205,772 14,799 196,460 Other Europe 247,802 228,939 799 229,738 2,080 123,431 ----------- ----------- ----------- ---------- ---------- --------- Total Europe 441,596 490,044 207,631 697,675 23,195 913,846 United States 263,945 298,053 29,578 327,631 7,363 257,956 Other Americas 52,966 32,732 131 32,863 950 14,474 ---------- ---------- ----------- ----------- ---------- --------- Total Americas 316,911 330,785 29,709 360,494 8,313 272,430 Asia and other 91,908 29,586 97 29,683 2,331 31,777 Eliminations - - (237,437) (237,437) 3,554 (493,959) ---------- ---------- ----------- ----------- ---------- --------- Totals $ 850,415 $ 850,415 $ - $ 850,415 $ 37,393 $ 724,094 ========== ========= ========== ========== ========== =========
MT INVESTORS INC. NOTES TO THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS-(Continued) (in thousands unless otherwise stated) 20. GEOGRAPHIC SEGMENT INFORMATION-(Continued)
Transfers Earnings For the period Net sales between Total net before January 1, 1996 to by Net sales by geographic sales by interest and October 14, 1996 destination origin areas origin taxes - ---------------------- ------------ ------------ ------------ ----------- ------------ Switzerland (1) $ 32,282 $ 74,303 $ 126,423 $ 200,726 $ 17,229 Germany 104,961 114,015 35,583 149,598 9,631 Other Europe 186,823 171,061 840 171,901 1,928 ------------ ------------ ------------ ----------- ----------- Total Europe 324,066 359,379 162,846 522,225 28,858 United States 217,636 246,180 22,753 268,933 8,508 Other Americas 47,473 25,925 3 25,928 618 ------------ ------------ ------------ ----------- ----------- Total Americas 265,109 272,105 22,756 294,861 9,126 Asia and other 73,046 30,737 265 31,002 1,241 Eliminations - - (185,867) (185,867) (3,408) ------------ ------------ ------------ ----------- ----------- Totals $ 662,221 $ 662,221 $ - $ 662,221 $ 35,817 ============ ============ ============ ============ ===========
Transfers Earnings For the period Net sales between Total net before October 15, 1996 to by Net sales by geographic sales by interest and December 31, 1996 destination origin areas origin taxes(2) Total assets - ---------------------- ------------ ------------- ------------ ----------- ------------ ------------ Switzerland (1) $ 8,415 $ 15,892 $ 39,570 $ 55,462 $ (99,233) $ 432,387 Germany 29,688 29,117 10,965 40,082 (5,209) 170,845 Other Europe 58,598 59,688 485 60,173 (4,971) 126,063 ------------ ------------ ------------ ----------- ----------- ------------ Total Europe 96,701 104,697 51,020 155,717 (109,413) 729,295 United States 56,405 64,109 6,731 70,840 (32,519) 477,762 Other Americas 13,436 7,371 3 7,374 (753) 17,730 ------------ ------------ ------------ ----------- ----------- ------------ Total Americas 69,841 71,480 6,734 78,214 (33,327) 495,492 Asia and other 20,370 10,735 28 10,763 (1,919) 48,245 Eliminations - - (57,782) (57,782) 511 (501,144) ------------ ------------ ------------ ----------- ----------- ------------ Totals $ 186,912 $ 186,912 $ - $ 186,912 $(144,093) $ 771,888 ============ ============ ============ =========== =========== ============ - -------------------------- (1) Includes Corporate. (2) The effect of non-recurring acquisition charges arising from in-process research and development projects ($114.1 million) and the revaluation of inventories to fair value ($32.2 million) by region are as follows
Home $108,100 Americas 36,000 Asia/Rest of World 2,200
MT INVESTORS INC. INTERIM CONSOLIDATED BALANCE SHEETS December 31, 1996 and March 31, 1997 (in thousands, except per share data)
Successor Successor ------------ ---------- December 31, March 31, 1996 1997 ---- ---- (unaudited) ASSETS Current assets: Cash and cash equivalents $ 60,696 $ 40,599 Trade accounts receivable, net 151,161 152,196 Inventories 102,526 104,474 Deferred taxes 7,565 8,026 Other current assets 17,268 17,868 ------- ------- Total current assets 339,216 323,163 Property, plant and equipment, net 255,292 238,219 Excess of cost over net assets acquired, net 135,490 132,400 Long-term deferred taxes 3,916 3,720 Other assets 37,974 31,389 ------- ------- Total assets $771,888 $728,891 ======== ========
MT INVESTORS INC. INTERIM CONSOLIDATED BALANCE SHEETS - (continued) December 31, 1996 and March 31, 1997 (in thousands, except per share data)
Successor Successor ------------ --------- December 31, March 31, 1996 1997 ---- ---- (unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Trade accounts payable $ 32,797 $ 29,888 Accrued and other liabilities 115,314 126,949 Taxes payable 17,580 16,363 Deferred taxes 9,132 8,630 Bank and other loans 80,446 54,754 ------- ------- Total current liabilities 255,269 236,584 Long-term debt due to third parties 373,758 365,369 Long-term deferred taxes 30,467 28,273 Other long-term liabilities 96,810 92,177 ------- ------- Total liabilities 756,304 722,403 Minority interest 3,158 3,506 Shareholders' equity: Common stock, $0.01 par value per share: Class A non-voting, authorized 2,233,117 shares; issued 1,899,779 at December 31, 1996 and March 31, 1997 19 19 Class B voting, authorized 1,000 shares; issued 1,000 at December 31, 1996 and March 31, 1997 1 1 Class C non-voting, authorized 541,859 shares; issued 537,735 at December 31, 1996 and March 31, 1997 5 5 Additional paid-in capital 188,084 188,084 Accumulated deficit (159,046) (160,168) Currency translation adjustment (16,637) (24,959) ------- ------- Total shareholders' equity 12,426 2,982 ------- ------- Total liabilities and shareholders' equity $771,888 $728,891 ======== ========
See the accompanying notes to the interim consolidated financial statements MT INVESTORS INC. INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS Three months ended March 31, 1996 and 1997 (in thousands, except per share data)
Predecessor Successor ----------- --------- March 31, March 31, 1996 1997 ---- ---- (unaudited) (unaudited) Net sales $201,373 $197,402 Cost of sales 120,979 114,120 -------- -------- Gross profit 80,394 83,282 Research and development 12,452 10,832 Selling, general and administrative 61,479 60,193 Amortization 671 1,157 Other charges, net - 11 -------- -------- Earnings before interest and taxes 5,792 11,089 Interest expense 4,537 9,446 Financial expense (income), net (396) 3,743 -------- -------- Earnings (loss) before taxes and minority interest 1,651 (2,100) Provision for taxes 648 (1,087) Minority interest 74 109 -------- -------- Net earnings (loss) $ 929 $ (1,122) ======== ======== Loss per common share: Weighted average number of common shares - 2,438,514 Loss per common share - $(0.46) ======== ========
See the accompanying notes to the interim consolidated financial statements MT INVESTORS INC. INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS/SHAREHOLDERS' EQUITY Three months ended March 31, 1996 and 1997 (in thousands)
Predecessor ------------------------------------------- Three months ended March 31, 1996 ------------------------------------------- Currency Capital Translation Employed Adjustment Total -------- ----------- ----- Net assets at January 1, 1996 $162,604 $30,650 $193,254 Capital transactions with Ciba and affiliates 1,330 - 1,330 Net earnings 929 - 929 Change in currency translation adjustment - (3,489) (3,489) -------- -------- -------- Net assets at March 31, 1996 $164,863 $27,161 $192,024 ======== ======= ========
MT INVESTORS INC. INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN NET ASSETS/SHAREHOLDERS' EQUITY - (continued) Three months ended March 31, 1996 and 1997 (in thousands, except per share data)
Successor -------------------------------------------------------------------------------------------------- Three months ended March 31, 1997 -------------------------------------------------------------------------------------------------- Common Stock --------------------------------------------------- Class A Class B Class C Additional Currency ----------------- --------------- --------------- Paid-in Accumulated Translation Shares Amount Shares Amount Shares Amount Capital Deficit Adjustment Total --------- ------ ------- ------ -------- ------ --------- ----------- ----------- ----- Balance at December 31, 1996 1,899,779 $ 19 1,000 $ 1 537,735 $ 5 $ 188,084 $ (159,046) $ (16,637) $12,426 Net loss - - - - - - - (1,122) - (1,122) Change in currency translation adjustment - - - - - - - - (8,322) (8,322) --------- ----- ----- ---- ------- ----- --------- ---------- ------- ------ Balance at March 31, 1997 1,899,779 $ 19 1,000 $ 1 537,735 $ 5 $ 188,084 $ (160,168) (24,959) $ 2,982 ========= ===== ===== ==== ======= ===== ========= ========== ======= =======
See the accompanying notes to the interim consolidated financial statements MT INVESTORS INC. INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS Three months ended March 31, 1996 and 1997 (in thousands)
Predecessor Successor ----------- --------- March 31, March 31, 1996 1997 ---- ---- (unaudited) (unaudited) Cash flows from operating activities: Net earnings (loss) $929 $(1,122) Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: Depreciation 6,559 5,821 Amortization 671 1,157 Net gain on disposal of long-term assets (202) (53) Deferred taxes (807) (1,446) Minority interest 74 109 Increase (decrease) in cash resulting from changes in: Trade accounts receivable, net (3,176) (8,557) Inventories (684) (7,819) Other current assets (2,690) (2,405) Trade accounts payable 588 (1,436) Accruals and other liabilities, net 9,860 23,832 ------ ------ Net cash provided by operating activities 11,122 8,081 ------ ------ Cash flows from investing activities: Proceeds from sale of property, plant and equipment 179 431 Purchase of property, plant and equipment (4,099) (3,063) Investments in other long term assets, net (123) (98) ------ ------ Net cash used in investing activities (4,043) (2,730) ------ ------ Cash flows from financing activities: Borrowings of third party debt 1,643 1,055 Repayments of third party debt - (23,160) Ciba and affiliates repayments (12,748) -- Capital transactions with Ciba and affiliates (2,865) -- ------ ------ Net cash used in financing activities (13,970) (22,105) ------ ------ Effect of exchange rate changes on cash and cash equivalents (1,524) (3,343) ------ ------ Net decrease in cash and cash equivalents (8,415) (20,097) Cash and cash equivalents: Beginning of period 41,402 60,696 ------- ------ End of period $32,987 $40,599 ======= =======
See the accompanying notes to the interim consolidated financial statements MT INVESTORS INC. NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS (in thousands of dollars unless otherwise stated) 1. BASIS OF PRESENTATION The accompanying interim consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles on a basis which reflects the interim consolidated financial statements of MT Investors Inc. ("MT Investors"). MT Investors was incorporated by AEA Investors Inc. ("AEA") in December 1991. It was recapitalized to effect the acquisition (the "Acquisition") of the Mettler-Toledo Group from Ciba-Geigy AG ("Ciba") and its wholly owned subsidiary, AG fur Prazisionsinstrumente ("AGP"). Pursuant to the terms of a stock purchase agreement dated April 2, 1996 between MT Investors, AGP and Ciba, on October 15, 1996 MT Investors acquired the Mettler-Toledo Group in a business combination accounted for as a purchase. Between the date of formation and October 15, 1996, MT Investors had no substantive operations. In the accompanying interim consolidated financial statements the terms "Mettler-Toledo" or the "Company" when used in situations pertaining to periods prior to October 15, 1996 refer to the combined group of businesses sold by Ciba and when used in situations pertaining to periods subsequent to October 15, 1996 refer to MT Investors and its consolidated subsidiaries. The combined historical financial information of the business acquired from Ciba prior to the Acquisition on October 15, 1996 are referred to as "Predecessor" while the consolidated financial information of the Company subsequent to the date of the Acquisition are referred to as "Successor". Because of purchase price accounting for the Acquisition and the additional interest expense from debt incurred to finance the Acquisition, the accompanying interim financial statements of the Successor are not directly comparable to those of the Predecessor. The accompanying interim consolidated financial statements of the Company have been prepared without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The accompanying interim consolidated financial statements as of March 31, 1997 and for the three months ended March 31, 1996 and 1997 should be read in conjunction with the December 31, 1995 and 1996 Audited Consolidated Financial Statements and the notes thereto included elsewhere is this Registration statement. The accompanying unaudited interim consolidated financial statements reflect all adjustments (consisting of only normal recurring adjustments) which, in the opinion of management, are necessary for a fair statement of the results of the interim periods presented. Operating results for the three months ended March 31, 1997 are not necessarily indicative of the results to be expected for the full year ending December 31, 1997. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Mettler-Toledo is a manufacturer and marketer of weighing instruments for use in laboratory, industrial and food retailing applications. The Company also manufactures and sells certain related laboratory measurement instruments. The Company manufacturing facilities are located in Switzerland, the United States, Germany and China. Inventories Inventories are valued at the lower of cost or market. Cost, which includes direct materials, labor and overhead plus indirect overhead, is determined using either the first in, first out (FIFO) or weighted average cost method. Two companies in the U.S. use the last in, first out (LIFO) cost method. MT INVESTORS INC. NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (in thousands of dollars unless otherwise stated) 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued) Inventories - (Continued) Inventories consisted of the following at December 31, 1996 and March 31, 1997:
December 31, March 31, 1996 1997 ------------- ---------- Raw materials and parts $41,015 $38,795 Work in progress 31,534 33,263 Finished goods 29,982 32,433 ------------- -------- 102,531 104,491 LIFO reserve (5) (17) ------------- ----------- $102,526 $104,474 ============= ===========
3. SUBSEQUENT EVENT On May 30, 1997, the Company acquired Safeline Limited ("Safeline") for approximately $100 million, subject to future adjustment, plus up to an additional $10 million for a contingent earnout payment. Safeline, based in Manchester, U.K., is the world's leading supplier of metal detection systems. The acquisition was financial by amounts provided under the Amended and Restated Credit Agreement and approximately $20 million in loan notes retained by the sellers. Schedule I Schedule I - Condensed Financial Information of Registrant MT INVESTORS INC. BALANCE SHEET (in thousands, except per share data)
December 31, 1996 ---- ASSETS Current assets: Cash and cash equivalents $ 1 ---------- Total current assets 1 Investment in Mettler-Toledo Holding Inc. 29,062 ---------- Total assets $ 29,063 ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Shareholders' equity: Common stock, $0.01 par value per share: Class A non-voting, authorized 2,233,117 shares; issued 1,899,779 $ 19 Class B voting, authorized 1,000 shares; issued 1,000 1 Class C non-voting, authorized 541,859 shares; issued 537,735 5 Additional paid-in capital 188,084 Accumulated deficit (159,046) ---------- Total shareholders' equity 29,063 ---------- Total liabilities and shareholders' equity $ 29,063 ==========
See the accompanying notes to the financial statements Schedule I MT INVESTORS INC. STATEMENT OF OPERATIONS (in thousands, except per share data)
For the period October 15, 1996 to December 31, 1996 ---- Equity in loss of Mettler-Toledo Holding Inc. $ (159,046) -------------- Net loss $ (159,046) ============== Loss per common share: Weighted average number of common shares 499,165 Loss per common share $ (318.62) ==============
See the accompanying notes to the financial statements Schedule I MT INVESTORS INC. STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (in thousands, except per share data)
For the period from October 15, 1996 to December 31, 1996 ------------------------------------------------------------------------------------------------- Common Stock ------------------------------------------------------ Class A Class B Class C Additional ------------------ ----------------- --------------- Paid-in Accumulated Shares Amount Shares Amount Shares Amount Capital Deficit Total --------- -------- ------- --------- ------- ------- ---------- ----------- ----- Balance at October 15, 1996 -- $ -- 1,000 $ 1 -- $ -- $ -- $ -- $ 1 New Issuance of shares 1,899,779 19 -- -- 537,735 5 188,084 -- 188,108 Net loss -- -- -- -- -- -- -- (159,046) (159,046) --------- ------- ------ ------ ------- ------ -------- ----------- --------- Balance at December 31, 1996 1,899,779 $ 19 1,000 $ 1 537,735 $ 5 $188,084 $ (159,046) $ 29,063 ========= ===== ===== ====== ======= ====== ======== =========== =========
See the accompanying notes to the financial statements Schedule I MT INVESTORS INC. STATEMENT OF CASH FLOWS (in thousands)
For the period October 15, 1996 to December 31, 1996 ---------------- Cash flows from operating activities: Net loss $ (159,046) Adjustments to reconcile net loss to net cash provided by operating activities: Equity in loss of Mettler-Toledo Holding Inc. 159,046 -------------- Net cash provided by operating activities - -------------- Cash flows from investing activities: Investments in Mettler-Toledo Holding Inc. (188,108) -------------- Net cash used in investing activities (188,108) -------------- Cash flows from financing activities: Proceeds from issuance of common stock 188,108 -------------- Net cash provided by financing activities 188,108 -------------- Net change in cash and cash equivalents - Cash and cash equivalents: Beginning of period 1 -------------- End of period $ 1 ==============
See the accompanying notes to the financial statements MT INVESTORS INC. NOTES TO THE FINANCIAL STATEMENTS (in thousands unless otherwise stated) 1. BASIS OF PRESENTATION AND ACQUISITION MT Investors Inc. ("MT Investors") was incorporated by AEA Investors Inc. ("AEA") in December 1991. It was recapitalized to effect the acquisition of the Mettler-Toledo Group from Ciba-Geigy AG ("Ciba") and its wholly owned subsidiary, AG fur Prazisionsinstrumente ("AGP"). Pursuant to the terms of a stock purchase agreement dated April 2, 1996 between MT Investors, AGP and Ciba, on October 15, 1996 MT Investors acquired the Mettler-Toledo Group in a transaction accounted for as a purchase. Between the date of formation and October 15, 1996, MT Investors has no substantive operations. The accompanying financial statements have been prepared in accordance with United Sates generally accepted accounting principles. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash and Cash Equivalents Cash and cash equivalents include highly liquid investments with original maturity dates of three months or less. Investment The Company accounts for its investment in Mettler-Toledo Holding Inc. under the equity method of accounting. Stock Based Compensation The Company applies Accounting Principles Board Opinion No. 25 "Accounting for Stock Issued to Employees" and related interpretations in accounting for its stock option plan. Earnings per Common Share Earnings per common share has been computed using the weighted average number of outstanding common shares during the period. In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings per Share." The Company has yet to determine the effect of this statement on its earnings per share. Use of Estimates The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. MT INVESTORS INC. NOTES TO THE FINANCIAL STATEMENTS-(Continued) (in thousands unless otherwise stated) 3. SHAREHOLDERS' EQUITY The authorized capital stock of the Company consists of 2,775,976 shares of Common Stock, $.01 par value of which 2,233,117 shares are designated as Class A Common Stock, 1,000 shares are designated Class B Common Stock and 541,859 shares are designated Class C Common Stock. As of December 31, 1996, the Company had outstanding 1,899,779 shares of Class A Common Stock, 1,000 shares of Class B Common Stock and 537,735 shares of Class C Common Stock. Additionally, 333,117 shares of Class A Common Stock are reserved for the Company's stock option plan (See Note 4). Holders of the Company's common stock have no preemptive, subscription or redemption rights. Except as described below, the Company's three classes of common stock have identical rights under the Company's Certificate of Incorporation and By-Laws. Dividends or distributions in connection with the liquidation, dissolution or winding up of the affairs of the Company or not paid out of the current and accumulated earnings and profits shall be paid in the following manner. First, exclusively to the holders of the shares of Class A Common Stock, ratably to each such holder, until the sum of all dividends and distributions to each holder of Class A Common Stock equals $100 for each share of Class A Common Stock held by such holder. After each holder of shares of Class A Common Stock shall have received dividends and distributions totaling $100, then exclusively to the holders of the shares of Class B Common and Class C Common Stock ratably to each such holder until the sum of all dividends and distributions to each holder of Class B Common Stock and/or Class C Common Stock equals $100 for each share of Class B Common Stock and/or Class C Common Stock held by such holder. After each holder of Class B Common Stock and Class C Common Stock shall have received such dividends and distributions, then to all holders of Class A Common Stock, Class B Common Stock and/or Class C Common Stock, ratably to each holder of such shares. Class A and C Common Stock shareholders have no voting rights. 4. STOCK OPTION PLAN Effective October 15, 1996, MT Investors adopted a stock option plan to provide certain key employees and/or directors of the Company additional incentive to join and/or remain in the service of the Company as well as to maintain and enhance the long-term performance and profitability of the Company. The plan reserves 333,117 shares of Class A non-voting common stock of MT Investors. Under the terms of the plan, options granted shall be nonqualified and the exercise price, as determined by the committee, shall not be less than 100% of the fair market value of the share of such common stock on the date of grant. Options may not be exercised until the fifth anniversary of the date of grant, subject to certain acceleration clauses. MT INVESTORS INC. NOTES TO THE FINANCIAL STATEMENTS-(Continued) (in thousands unless otherwise stated) 4. STOCK OPTION PLAN-(Continued) Stock option activity is shown below (per share average option price amounts in whole dollars):
Option Price ------------------ Number Per Share Total of Shares Average Price --------- --------- ----- Granted during the period October 15, 1996 to December 31, 1996 278,988 $100.00 $27,899 Exercised - - - Forfeited - - - Outstanding at December 31, 1996 278,988 $100.00 $27,899 ======== ======= ======= Shares exerciseable at December 31, 1996 - $ - $ - ======== ======= =======
The Company applies Accounting Standards Board Opinion No. 25 and related interpretations in accounting for its plans. Accordingly, no compensation cost has been recognized for its stock option plan as all options have been issued at fair market value. The Company's net loss for the period October 15, 1996 to December 31, 1996 would not have been materially different had compensation cost been determined consistent with Financial Accounting Standards Board's Statement of Financial Accounting Standards No. 123 "Accounting for Stock Based Compensation". Schedule II Schedule II- Valuation and Qualifying Accounts
- --------------------------- ------------------ ----------------------------- ------------- ------------ Column A Column B Column C Column D Column E - --------------------------- ------------------ ----------------------------- ------------- ------------ Additions ----------------------------- (1) (2) Balance at Charged Charged to the beginning to costs other accounts Balance at and Deductions end of Description of period expenses describe describe period - --------------------------- ------------------ ------------- ---------------- ------------ ------------ Accounts Receivable- allowance for doubtful accounts: For the period October 15, 1996 to December 31, $9,429 $97 - $1,138 $8,388 1996 For the period January 1, 1996 to October 14, 1996 9,292 370 - 233 9,429 Year ended December 31, 1995 7,411 3,287 - 1,406 9,292 1994 5,926 2,342 - 857 7,411 - --------------------------- ------------- ------------------ -------------------- -------- ----------
Note A Represents excess of uncollectable balances written off over recoveries of accounts previously written off. Additionally, amounts are net of foreign currency translation effect of $(462), $(409), $(375) and $(159) for the years ended 1994 and 1995 and for the period from January 1, 1996 to October 14, 1996 and for the period from October 15, 1996 to December 31, 1996, respectively. EX-10.9 2 ================================================================= AMENDED AND RESTATED CREDIT AGREEMENT Dated as of October 15, 1996 among METTLER-TOLEDO HOLDING INC., as Guarantor, METTLER-TOLEDO, INC. (survivor of the merger of MT Acquisition Corp. and Mettler-Toledo, Inc.) and METTLER-TOLEDO HOLDING AG, as Borrowers, SAFELINE HOLDING COMPANY, as UK Borrower, METTLER-TOLEDO INC., as Canadian Borrower, THE SUBSIDIARY SWING LINE BORROWERS NAMED HEREIN, MERRILL LYNCH & CO., as Arranger and Documentation Agent, THE BANK OF NOVA SCOTIA, as Administrative Agent, THE BANK OF NOVA SCOTIA, as Canadian Agent, CREDIT SUISSE FIRST BOSTON and LEHMAN COMMERCIAL PAPER INC., as Co-Agents, and THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO AMENDED AND RESTATED AS OF MAY 29, 1997 ================================================================= TABLE OF CONTENTS ----------------- Section Page - ------- ---- ARTICLE 1. DEFINITIONS, ETC. 2 1.1. Certain Defined Terms. 2 1.2. Other Interpretive Provisions. 37 1.3. Accounting Principles. 38 1.4. Currency Equivalents Generally. 38 1.5. Principle of Deemed Reinvestment. 38 1.6. Effect on Original Credit Agreement and Other Loan Documents 46 1.7. Payments on Amendment and Restatement Date; Assignments on Amendment and Restatement Date; etc. 46 1.8. Certain Transactions Exempted. 48 1.9. Repayment of Safeline Funds. 48 ARTICLE II THE CREDITS 48 2.1. Amounts and Terms of Commitments and Loans. 49 2.2. Notes. 52 2.3. Procedure for Committed Borrowing (Other than Canadian Borrowings. 52 2.3A Procedure for Canadian Borrowings. 54 2.4. Conversion and Continuation Elections for Committed Borrowings (Other Than Canadian Borrowings). 54 2.4A Conversion and Continuation Elections for Canadian Borrowings. 56 2.5. Utilization of Commitments in Offshore Currencies. 57 2.6. Reduction or Termination of Commitments. 61 2.7. Prepayments. 62 2.8. Currency Exchange Fluctuations. 66 2.9. Repayment. 67 2.10. Interest. 69 2.11. Fees. 71 2.12. Computation of Fees, Interest and Dollar Equivalent Amount. 71 2.13. Payments by Each Applicable Borrower. 72 2.14. Payments by the Lenders to the Applicable Agent. 73 2.15. Adjustments. 74 2.16. Swing Line Commitment. 74 2.17. Borrowing Procedures for Swing Line Loans. 75 2.18. Refunding of Swing Line Loans. 76 2.19. Participations in Swing Line Loans. 77 2.20. Swing Line Participation Obligations Unconditional. 78 2.21. Conditions to Swing Line Loans. 79 2.22. Substitution of Lenders in Certain Circumstances. 79 2.23. Qualified Foreign Lender Notes. 79 ARTICLE III. THE LETTERS OF CREDIT 80 3.1. The Letter of Credit Subfacility. 80 3.2. Issuance, Amendment and Renewal of Letters of Credit. 82 3.3. Risk Participations, Drawings and Reimbursements. 85 3.4. Repayment of Participations. 87 3.5. Role of the L/C Lender. 88 3.6. Obligations Absolute. 89 3.7. Cash Collateral Pledge. 89 3.8. Letter of Credit Fees. 89 3.9. Uniform Customs and Practice. 90 3.10. Letters of Credit for the Account of Subsidiaries. 91 ARTICLE IV. NET PAYMENTS, YIELD PROTECTION AND ILLEGALITY 91 4.1. Net Payments. 91 4.2. Illegality. 116 4.3. Increased Costs and Reduction of Return. 117 4.4. Funding Losses. 118 4.5. Inability to Determine Rates. 119 4.6. Reserves on LIBOR Rate Loans; MLA Costs. 121 4.7. Certificates of Lenders. 122 4.8. Substitution of Lenders. 122 4.9. Right of Lenders to Fund Through Branches and Affiliates. 122 ARTICLE V. CONDITIONS PRECEDENT 123 5.1. Conditions of Initial Loans. 123 (a) Credit Agreement; Notes. 123 (b) Transactions. 123 (c) Transaction Documents. 124 (d) Opinions of Counsel. 124 (e) Corporate Documents. 125 (f) Adverse Change, etc. 125 (g) Litigation. 125 (h) Approvals. 126 (i) Security Documents. 126 (j) Conditions Relating to Mortgaged Real Property and Real Property. 127 (k) Solvency Opinion; Environmental Analyses; Evidence of Insurance; Financial Statements. 129 (l) Pro Forma Balance Sheet. 130 (m) Payment of Fees. 130 (n) Other Matters. 131 (o) Certificate. 131 (p) Debt to Be Repaid. 131 (q) Date of Closing. 131 5.1A Conditions of Loans to Effect the Safeline Acquisition. 131 (a) Credit Agreement; Notes. 132 (b) Safeline Acquisitions Transactions. 132 (c) Safeline Acquisition Documents. 132 (d) Opinions of Counsel. 133 (e) Corporate Documents. 133 (f) Adverse Change, etc. 133 (g) Litigation. 134 (h) Approvals. 134 (i) Security Documents. 134 (j) Environmental Analyses. 135 (k) Pro Forma Balance Sheet. 135 (l) Payment of Fees. 136 (m) Other Matters. 136 (n) Certificate. 136 (o) Debt to Be Repaid. 137 (p) Date of Closing. 137 5.2. Conditions to All Credit Extensions. 137 (a) Notice, Application. 137 (b) Continuation of Representations and Warranties. 137 (c) No Existing Default; No Legal Bar. 137 5.3. Conditions to Effectiveness of Amendment and Restatement. 138 (a) Amended and Restated Credit Agreement; Ratification of Security Documents by Loan Parties; Notes. 138 (b) Opinions of Counsel. 138 (c) Corporate Documents. 139 (d) Accuracy of Representations and Warranties. 139 (e) Adverse Change, etc. 139 (f) Litigation. 139 (g) Approvals. 139 (h) Payment Adjustments; Amendment and Restatement Assignments. 140 (i) Certificate. 140 5.4. Delivery of Documents. 140 ARTICLE VI. REPRESENTATIONS AND WARRANTIES 141 6.1. Corporate Status. 141 6.2. Authority. 142 6.3. No Conflicts; Consents. 142 6.4. Binding Effect. 142 6.5. Litigation. 143 6.6. No Default. 143 6.7. Benefit Plans. 143 6.8. Use of Proceeds; Margin Regulations. 144 6.9. Financial Condition; Financial Statements; Solvency; etc. 144 6.10. Properties. 146 6.11. Taxes. 146 6.12. Environmental Matters. 147 6.13. Regulated Entities. 149 6.14. Employee and Labor Matters. 150 6.15. Intellectual Property. 150 6.16. Subsidiaries. 151 6.17. Existing Indebtedness. 151 6.18. True and Complete Disclosure. 151 6.19. Security Interests. 152 6.20. Representations and Warranties in Basic Documents. 153 6.21. M-T Acquisition and Safeline Acquisition. 153 6.22. Broker's Fees. 153 6.23. Senior Subordinated Notes. 154 6.24. Assignment of Rights Under M-T Acquisition Documents. 154 ARTICLE VII. AFFIRMATIVE COVENANTS 154 7.1. Financial Statements, etc. 154 7.2. Certificates; Other Information. 156 7.3. Notices. 156 7.4. Preservation of Corporate Existence, etc. 158 7.5. Maintenance of Property; Insurance. 158 7.6. Payment of Obligations. 159 7.7. Compliance with Environmental Laws. 159 7.8. Compliance with ERISA. 160 7.9. Inspection of Property and Books and Records. 160 7.10. End of Fiscal Years; Fiscal Quarters. 161 7.11. Use of Proceeds. 161 7.12. Further Assurances. 162 7.13. Equal Security for Loans and Notes; No Further Negative Pledges. 162 7.14. Pledge of Additional Collateral. 163 7.15. Security Interests. 164 7.16. Interest Rate Protection. 165 7.17. Currency and Commodity Hedging Transactions. 165 7.18. Foreign Subsidiaries Security. 166 7.19. Register. 167 7.20. New Subsidiaries. 168 7.21. Assumption by Mettler-Toledo, Inc. 169 7.22. Post-Closing Obligations. 169 7.23. Post-Amendment and Restatement and Post- Safeline Closing Obligations. 170 ARTICLE VIII. NEGATIVE COVENANTS 170 8.1. Limitation on Liens. 171 8.2. Consolidations, Mergers and Disposition of Assets. 175 8.3. Leases. 177 8.4. Loans and Investments. 178 8.5. Limitation on Indebtedness. 183 8.6. Transactions with Affiliates. 185 8.7. Use of Proceeds. 186 8.8. Contingent Obligations. 187 8.9. Restrictions on Subsidiaries. 189 8.10. Fixed Charge Coverage Ratio. 189 8.11. Minimum Net Worth. 190 8.12. Debt to EBITDA Ratio. 191 8.13. Restricted Payments. 191 8.14. ERISA. 193 8.15. Change in Business. 193 8.16. Accounting Changes. 193 8.17. Prepayments of Senior Subordinated Notes, etc. 193 8.18. Amendments to Other Documents. 194 8.19. Capital Expenditures. 194 8.20. Sale and Lease-Backs. 195 8.21. Sale or Discount of Receivables. 195 8.22. Creation of Subsidiaries. 196 8.23. Designated Senior Debt. 197 8.24. Issuance or Disposal of Subsidiary Stock. 197 8.25. Limitation on Other Restrictions on Amendment of Basic Documents. 197 8.26. Limitation on Swing Line Lenders. 197 ARTICLE IX EVENTS OF DEFAULT 198 9.1. Event of Default. 198 (a) Non-Payment. 198 (b) Representation or Warranty. 198 (c) Specific Defaults. 198 (d) Other Defaults. 198 (e) Cross-Default. 199 (f) Insolvency; Voluntary Proceedings. 199 (g) Involuntary Proceedings. 199 (h) ERISA. 200 (i) Monetary Judgments. 200 (j) Non-Monetary Judgments. 200 (k) Guarantees. 200 (i) Security Documents. 200 (m) Change of Control. 201 (n) Senior Subordinated Notes. 201 (o) Ciba Reimbursement Agreement. 201 (p) Consummation of the M-T Acquisition. 201 (q) Environmental Events. 201 9.2. Remedies. 202 9.3. Rights Not Exclusive. 203 ARTICLE X. THE AGENTS 203 10.1. Appointment and Authorization. 203 10.2. Delegation of Duties. 204 10.3. Exculpatory Provisions. 204 10.4. Reliance by Agents. 205 10.5. Notice of Default. 206 10.6. Credit Decision. 206 10.7. Indemnification. 207 10.8. Agents in Individual Capacity. 208 10.9. Successor Agents. 209 10.10. Holders. 209 10.11. Failure to Act. 209 ARTICLE XI. MISCELLANEOUS 209 11.1. Amendments and Waivers. 210 11.2. Notices. 212 11.3. No Waiver; Cumulative Remedies. 214 11.4. Expenses, Indemnity, etc. 214 11.15. Payments Pro Rata. 217 11.16. Payments Set Aside. 217 11.17. Successors and Assigns. 217 11.18. Assignments and Participations, etc. 217 11.9. Confidentiality. 221 11.10. Set-off. 222 11.11. Notification of Addresses, Lending Offices, etc. 223 11.12. Counterparts. 223 11.13. Severability; Modification to Conform to Law. 223 11.14. No Third Parties Benefitted. 224 11.15. Governing Law; Submission to Jurisdiction; Venue. 224 11.16. Waiver of Jury Trial. 225 11.17. Judgment. 225 11.18 Prior Understandings. 225 11.19. Survival. 226 11.20. CH Foreign Subsidiary Mortgages. 226 ANNEXES Annex A Agent's Payment Offices for Offshore Currency Loans SCHEDULES Schedule 1.1(a) Ciba Loan Documents Schedule 1.1(b) Calculation of the MLA Cost Schedule 1.1(c) Mortgaged Properties Schedule 1.1(d) M-T Acquisition Documents Schedule 1.1(e) Non-Guarantor Subsidiaries Schedule 1.1(f) Safeline Acquisition Documents Schedule 1.7(a) Payment Adjustments for Paid Lenders Relating to Amendment and Restatement Schedule 1.7(b) Payment Adjustments for Paid Existing Lenders Relating to Amendment and Restatement Schedule 1.7(c) Payment Adjustments for Paying Existing Lenders Relating to Amendment and Restatement Schedule 1.7(d) Payment Adjustments for New Lenders Relating to Amendment and Restatement Schedule 1.7(f) Amendment and Restatement Assignments Schedule 1.8 Certain Exempted Transactions Schedule 2.1 Commitments and Pro Rata Shares Schedule 2.1(c) Canadian Lenders and Percentages Schedule 5.1(p) Debt To Be Repaid Schedule 5.1A(o) Debt To Be Repaid of Safeline Limited and Its Subsidiaries Schedule 5.3(a) Subsidiaries To Execute and Deliver Ratification Agreement After Amendment and Restatement Date Schedule 6.5 Litigation Schedule 6.12 Environmental Matters Schedule 6.15 Intellectual Property Schedule 6.16 Subsidiaries and Minority Interests Schedule 6.17 Existing Indebtedness Schedule 6.17A Existing Indebtedness of Safeline Limited and Its Subsidiaries Schedule 6.21 Certain Consents Schedule 6.22 Broker's Fees Schedule 7.22 Subsidiaries To Enter into Loan Documents Post-Closing Schedule 8.1(a) Certain Existing Liens as of the Original Closing Date Schedule 8.1(w) Certain Liens on Safeline Limited and Its Subsidiaries as of the Safeline Closing Date Schedule 8.2(i) Certain Asset Sales Schedule 8.4(j) Investments Made in Connection with the M- T Acquisition Schedule 8.4(o) Existing Investments and Investments To Be Made Under Binding Agreements Schedule 8.8 Contingent Obligations Schedule 8.8A Contingent Obligations of Safeline Limited and Its Subsidiaries Schedule 11.2 Addresses for Notices EXHIBITS Exhibit A-1 Form of Notice of Canadian Borrowing Exhibit A-2 Form of Notice of Committed Borrowing Exhibit B-1 Form of Notice of Conversion/Continuation Exhibit B-2 Form of Canadian Notice of Conversion/Continuation Exhibit C Form of Compliance Certificate Exhibit D Form of Security Agreement Exhibit E-1 Form of CH Borrower Guarantee Exhibit E-2 Form of Amended and Restated Domestic Subsidiary Guarantee Exhibit E-3 [Intentionally Omitted] Exhibit E-4 Form of Amended and Restated Holding Guarantee Exhibit E-5 Form of Amended and Restated US Borrower Guarantee Exhibit F-1 Form of Opinion of Fried, Frank, Harris, Shriver & Jacobson Exhibit F-2 Form of Local Counsel Opinion to the Domestic Loan Parties Exhibit F-3 Form of Opinion of Fried, Frank, Harris, Shriver & Jacobson To Be Delivered on the Amendment and Restatement Date Exhibit F-4 Form of Opinion of Fried, Frank, Harris, Shriver & Jacobson To Be Delivered on the Safeline Closing Date Exhibit F-5 Form of Opinion of Counsel to Canadian Borrower Exhibit F-6 Form of Opinion of Counsel to UK Borrower Exhibit G Form of Assignment and Acceptance Exhibit H-1 Form of Tranche A-CHF Term Note Exhibit H-2 Form of Tranche B Term Note Exhibit H-3 Form of Tranche A-UK Term Note Exhibit H-4 Form of Tranche A-US Term Note Exhibit H-5 Form of Revolving Note Exhibit H-5A Form of Canadian Revolving Note Exhibit H-6 Form of Swing Line Note Exhibit H-7 Form of QFL A-US Note Exhibit H-8 Form of QFL B Note Exhibit H-9 Form of QFL A-UK Note Exhibit I Form of Mortgage Exhibit J-1 Form of Domestic Subsidiary Securities Pledge Agreement Exhibit J-2 [Intentionally Omitted] Exhibit J-3 Form of Holding Securities Pledge Agreement Exhibit J-4 Form of US Borrower Securities Pledge Agreement Exhibit K Form of Interest Rate Certificate Exhibit L-1 Form of Section 4.1(f)(i) Certificate Exhibit L-2 Form of Section 4.1(f)(v) Certificate Exhibit M Form of Assumption Agreement Exhibit N Form of Intercreditor Agreement Exhibit O Form of Ratification Agreement AMENDED AND RESTATED CREDIT AGREEMENT This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of October 15, 1996, among METTLER-TOLEDO HOLDING INC., a Delaware corporation (together with its successors, "Holding"); METTLER-TOLEDO, INC. (the survivor of the merger of MT Acquisition Corp. (a Delaware corporation) and Mettler-Toledo, Inc.), a Delaware corporation (together with its successors, "US Borrower"); METTLER-TOLEDO HOLDING AG, a corporation organized under the laws of Switzerland and, after giving effect to the M-T Acquisition, a Wholly-Owned Subsidiary of US Borrower (together with its successors, "CH Borrower" and, together with US Borrower; the "Borrowers"); SAFELINE HOLDING COMPANY, an unlimited liability company organized under the laws of the United Kingdom, as UK Borrower; METTLER-TOLEDO INC., a Canadian corporation, as Canadian Borrower; the several SUBSIDIARY SWING LINE BORROWERS named herein; the several financial institutions from time to time party to this Agreement (collectively the "Lenders"; individually each a "Lender"); MERRILL LYNCH & CO., MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as documentation agent and arranger (together with its successors, the "Documentation Agent" or "Arranger"); THE BANK OF NOVA SCOTIA ("Scotiabank"), as Administrative Agent (together with its successors, the "Administrative Agent"), a Swing Line Lender and L/C Lender; THE BANK OF NOVA SCOTIA, as Canadian Agent (together with its successors, the "Canadian Agent"); CREDIT SUISSE FIRST BOSTON, as a Swing Line Lender and as a co-agent; and LEHMAN COMMERCIAL PAPER INC., as a co-agent (together with Credit Suisse First Boston in its capacity as a co-agent and each of their respective successors, the "Co-Agents"), as provided herein, and is amended and restated as of May 29, 1997. WHEREAS, subject to the terms and conditions of this Agreement, to finance in part the M-T Acquisition, to repay certain existing Indebtedness of the Borrowers and their Subsidiaries, to pay fees and expenses in connection with the M-T Acquisition Transactions and, after the Original Closing Date, to provide working capital to, and for general corporate purposes of, US Borrower and the Subsidiaries and to provide for the making of the Ciba Loan, (i) the Lenders made the Term Loans (as defined in the Original Credit Agreement) to the Borrowers on the Original Closing Date; and (ii) the Lenders agreed to make available, during the period from the Original Closing Date until 30 Business Days prior to the Revolving Loan Maturity Date, (a) to the Borrowers, a revolving multicurrency credit facility with letter of credit and swing line subfacilities, and (b) to the Subsidiary Swing Line Borrowers, the swing line subfacility and the letter of credit subfacility, WHEREAS, immediately following or in connection with the consummation of the M-T Acquisition the rights and obligations of MT Acquisition Corp. as "US Borrower" under and pursuant to the Loan Documents were assumed (the "Assumption") by Mettler-Toledo, Inc. pursuant to the Assumption Agreement, WHEREAS, the Lenders, MT Acquisition Corp. (which merged into Mettler-Toledo, Inc.), CH Borrower and the Subsidiary Swing Line Borrowers originally entered into that certain Credit Agreement dated as of October 15, 1996 (the "Original Credit Agreement") prior to the consummation of the M-T Acquisition, which has been consummated, and are entering into this Amended and Restated Credit Agreement in order to amend and restate the Original Credit Agreement to provide for Letters of Credit to be issued by the Swing Line Lenders for the account of the Subsidiary Swing Line Borrowers on the terms and conditions herein set forth, to provide for the extensions of credit to be made hereunder in connection with the Safeline Acquisition on the terms and conditions herein set forth, to provide for the conversion of the term extensions of credit existing as of the Amendment and Restatement Date into term extensions of credit under this Agreement as amended and restated, to provide for the increased Revolving Facility Commitments set forth herein, to provide for the Revolving Facility Commitments to be available for UK Borrower (subject to the limitation herein) on the terms and conditions herein set forth, to provide for a Canadian Dollar revolving credit facility to be made available to Canadian Borrower on the terms and conditions herein set forth, and to make such other amendments thereto as are evidenced hereby, and WHEREAS, the Borrowers, the Subsidiary Swing Line Borrowers, the Lenders, the Agents and the Co-Agents intend that (a) all obligations under the Original Credit Agreement of the parties shall continue to exist under and be evidenced by this Agreement and the other Loan Documents, and (b) except as expressly stated herein or amended hereby, the Original Credit Agreement and the other Loan Documents are ratified and confirmed as remaining unmodified and in full force and effect with respect to all Obligations. NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained herein, the parties agree that the Original Credit Agreement is hereby amended and restated in its entirety as follows: ARTICLE 1. DEFINITIONS, ETC. ----------------- 1.1. Certain Defined Terms. The following terms have the following meanings: ABR Loan means a Committed Loan or an L/C Advance that bears interest based on the Alternate Base Rate. ABR Loans may only be made in U.S. Dollars. Acquisition means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of any business or division of a Person, (b) the acquisition of in excess of 50% of the capital stock, partnership interests, membership interests or equity of any Person, or otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other combination with another Person. Additional Collateral - see Section 7.14. Adjusted Working Capital means the remainder of: (a) (i) the consolidated current assets of US Borrower and the Subsidiaries, less (ii) the amount of cash and Cash Equivalents included in such consolidated current assets; less (b) (i) consolidated current liabilities of US Borrower and the Subsidiaries, less (ii) the amount of short-term Indebtedness (including Revolving Facility Loans and current maturities of long-term Indebtedness) of US Borrower and the Subsidiaries included in such consolidated current liabilities. Adjustment Date - see the definition of Assumed Swing Line Loan Amount. Administrative Agent - see the introduction to this Agreement. Administrative Agent's Fee Letter - see subsection 2.11(a). AEA means AEA Investors Inc., a Delaware corporation, and its successors. Affiliate means, as to any Person, any other Person which, directly or indirectly, is in control of, is controlled by, or is under common control with such Person. A Person shall be deemed to control another Person if the controlling Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities or membership interests, by contract, or otherwise. Agents means the Documentation Agent, the Canadian Agent and the Administrative Agent; and Agent means the Documentation Agent, the Canadian Agent or the Administrative Agent. Agent's Payment Office means (i) in respect of payments by the Borrowers or UK Borrower in U.S. Dollars, The Bank of Nova Scotia, One Liberty Plaza, 26th Floor, New York, New York 10006 or such other address as the Administrative Agent may from time to time specify in accordance with Section 11.2, (ii) in the case of payments by the Borrowers, UK Borrower, or the UK Swing Line Borrowers in any Offshore Currency, as set forth in Annex A or such other address as the Administrative Agent may from time to time specify in accordance with Section 11.2, and (iii) in the case of payments by Canadian Borrower, the address for payments set forth on Schedule 11.2 for the Canadian Agent or such other address as the Canadian Agent may from time to time specify in accordance with Section 11.2. Agreed Alternative Currency - see subsection 2.5(e). Agreement means this Amended and Restated Credit Agreement, as amended and in effect from time to time. Aggregate Outstanding Revolving Credit means as to any Revolving Facility Lender at any time an amount equal to the sum of (a) the aggregate unpaid principal Dollar Equivalent amount at such time of all Revolving Loans made by such Revolving Facility Lender, (b) such Revolving Facility Lender's Pro Rata Share of the Effective Amount of all outstanding L/C Obligations (other than Subsidiary L/C Obligations, except those of the UK Swing Line Borrowers) at such time, and (c) such Revolving Facility Lender's Pro Rata Share of the aggregate Dollar Equivalent amount of all outstanding Swing Line Loans (which for all purposes, other than any Revolving Loan made pursuant to Section 2.18, any Swing Line Loan made pursuant to Section 2.16 and any Revolving Loan to be made pursuant to Section 3.3 and except as otherwise expressly provided herein, shall include such Lender's Pro Rata Share of the Assumed Swing Line Loan Amount). Alternate Base Rate means, for any day, with respect to all ABR Loans, a fluctuating rate of interest per annum (rounded, if necessary, to the nearest 1/100 of 1%) equal to the higher of: (a) 0.50% per annum above the latest U.S. Federal Funds Rate; and (b) the per annum rate of interest in effect for such day as published in The Wall Street Journal (or a comparable publication if The Wall Street Journal is not then published) as the "Prime Rate" for major money center banks in the United States. Amendment and Restatement Assignments - see Section 1.7. Amendment and Restatement Date means the date on which all conditions precedent set forth in Section 5.3 are satisfied or waived by the Required Lenders, the Agents, the Swing Line Lenders, each L/C Lender and the Co-Agents. Amortization Payments means, as to any Term Loan Facility, the scheduled repayments of the Term Loans of such Term Loan Facility as set forth in subsections 2.9(a), (b) and (c) and Amortization Payment means any such scheduled repayment. Annualized Interest Expense means, for any period of less than four fiscal quarters, the product of (x) Interest Expense for such period and (y) a fraction, the numerator of which is 365 and the denominator of which is the number of days in such period. Applicable Agent means (a) with respect to all matters other than matters relating to Canadian Loans, the Administrative Agent, and (b) with respect to matters relating to Canadian Loans, the Canadian Agent. Applicable Borrower means, with respect to any Loan, US Borrower, CH Borrower, Canadian Borrower, UK Borrower or a Subsidiary Swing Line Borrower, as applicable, which is the Loan Party to whom such Loan was, or is to be, made. Applicable Currency means, as to any particular payment or Loan, U.S. Dollars, Canadian Dollars or the Offshore Currency in which it is denominated or is payable. Applicable Facility Fee Percentage means (i) 0.50% per annum until the end of the fiscal quarter ending on or immediately after the earlier of (x) the date six months after the Safeline Closing Date, or (y) the date of consummation of a Qualified Public Offering and (ii) thereafter when the Debt to EBITDA Ratio at the end of the most recent fiscal quarter is as set forth below, the percentage per annum set forth opposite such Debt to EBITDA Ratio below:
Applicable Debt to EBITDA Ratio Facility Fee Percentage ---------------------------- ----------------------------- > 5.25 to 1.0 0.50% > 4.75 to 1.0 and 0.50% 5.25 to 1.0 > 4.50 to 1.0 and 0.375% 4.75 to 1.0 > 4.25 to 1.0 and 0.375% 4.50 to 1.0 > 4.00 to 1.0 and 0.375% 4.25 to 1.0 > 3.75 to 1.0 and 0.300% 4.00 to 1.0 > 3.50 to 1.0 and 0.300% 3.75 to 1.0 > 3.25 to 1.0 and 0.250% 3.50 to 1.0 > 2.75 to 1.0 and 0.250% 3.25 to 1.0 2.75 to 1.0 0.200%
Any change in the Debt to EBITDA Ratio shall result in the adjustment of the Applicable Facility Fee Percentage as of the date of receipt by the Administrative Agent and the Canadian Agent of the Interest Rate Certificate most recently delivered pursuant to subsection 7.2(b) to the level applicable to such new Debt to EBITDA Ratio. Applicable Margin means (A) for Tranche B Term Loans, Tranche A Term Loans, Revolving Facility Loans (including Non- U.S. $ Swing Line Loans) and Canadian Loans at any time prior to the end of the fiscal quarter ending on or immediately after the earlier of (x) the date six months after the Safeline Closing Date, or (y) the date of consummation of a Qualified Public Offering (the date of such earlier event to occur, the "Reset Date"), the percentages set forth in the table below:
LIBOR Rate BA Equivalent Prime Rate Type of Loan Loans ABR Loans Rate Loans Loans --------------- ----------- --------- ----------- ----------- Revolving Facility 1.25% 0.25% 1.25% 1.25% Loans (including Non- U.S. $ Swing Line Loans) and Canadian Loans Tranche A Term Loans 1.75% 0.75% N.A. N.A Tranche B Term Loans 2.25% 1.25% N.A. N.A
(B) for Tranche A Term Loans, Tranche B Term Loans, Revolving Facility Loans (including Non-U.S. $ Swing Line Loans), and Canadian Loans, at any time following the end of the fiscal quarter ending on or immediately after the Reset Date, the applicable percentage set forth below opposite the Debt to EBITDA Ratio set forth below as of the end of the most recent Computation Period:
LIBOR Rate Canadian Loans ABR Loans Loans - -------------------------------------------------------------------------------------------------------------------- Debt to Revolving Tranche A Tranche B Revolving Tranche A Tranche B BA Prime Rate EBITDA Ratio Facility Term Loans Term Loans Facility Term Loans Term Loans Equivalent Loans Loans and Non- Loans Rate Loans U.S. $ Swing Line Loans ---------------- --------- -------- -------- -------- -------- -------- -------- -------- > 5.25 to 1.0 1.500% 2.000% 2.500% 0.500% 1.000% 1.500% 1.500% 1.500% > 4.75 to 1.0 and < 5.25 to 1.0 1.250% 1.750% 2.250% 0.250% 0.750% 1.250% 1.250% 1.250% > 4.50 to 1.0 and < 4.75 to 1.0 1.250% 1.625% 2.250% 0.250% 0.625% 1.250% 1.250% 1.250% > 4.25 to 1.0 and < 4.50 to 1.0 1.125% 1.500% 2.000% 0.125% 0.500% 1.000% 1.125% 1.125% > 4.00 to 1.0 and < 4.25 to 1.0 1.000% 1.375% 2.000% 0.000% 0.375% 1.000% 1.000% 1.000% > 3.75 to 1.0 and < 4.00 to 1.0 0.825% 1.125% 1.750% -0.175% 0.125% 0.750% 0.825% 0.825% > 3.50 to 1.0 and < 3.75 to 1.0 0.700% 1.000% 1.750% -0.300% 0.000% 0.750% 0.700% 0.700% > 3.25 to 1.0 and < 3.50 to 1.0 0.625% 0.875% 1.750% -0.250% 0.000% 0.750% 0.625% 0.625% > 2.75 to 1.0 and < 3.25 to 1.0 0.500% 0.750% 1.750% -0.250% 0.000% 0.750% 0.500% 0.500% < 2.75 to 1.0 0.425% 0.625% 1.750% -0.200% 0.000% 0.750% 0.425% 0.425%
Any change in the Debt to EBITDA Ratio shall result in the adjustment of the Applicable Margin as of the date of receipt by the Administrative Agent and the Canadian Agent of the Interest Rate Certificate most recently delivered pursuant to subsection 7.2(b) to the level applicable to such new Debt of EBITDA Ratio. Applicable Swing Line Lender means, with respect to any Swing Line Loan, the Swing Line Lender to whom a request for such Loan has been made hereunder or who has made such Loan. Arranger - see the introduction to this Agreement. Asset Sale shall mean any sale, issuance, conveyance, transfer, lease or other disposition (including by sale- leaseback, merger, consolidation or otherwise) by US Borrower or any Subsidiary, in one or a series of related transactions, of: (a) any capital stock of any Subsidiary; (b) all or substantially all of the properties and assets of any division or line of business of US Borrower or any Subsidiary; (c) any payment, liquidation or realization on any Investment permitted by subsection 8.4(d); or (d) other than inventory in the ordinary course of business, any properties or assets of US Borrower or any Subsidiary. For the purposes of this definition, the term "Asset Sale" shall not include (i) any sale, issuance, conveyance, transfer, lease or other disposition of properties or assets to either Borrower or any Wholly-Owned Subsidiary of US Borrower which is a Qualified Subsidiary Guarantor, (ii) any Asset Sale not resulting in total consideration individually of more than the Dollar Equivalent amount of U.S. $250,000 (calculated only at the time of consummation thereof), (iii) any sale, issuance, conveyance, transfer, lease or other disposition of properties or assets of US Borrower or any Subsidiary permitted by Section 8.2 (other than subsections (d), (i), (j) and (k) thereof), (iv) Takings or Destructions or loss of title to any Mortgaged Real Property, (v) any Lien permitted by Section 8.1, (vi) any Investment permitted by Section 8.4, and (vii) any Restricted Payment permitted by Section 8.13. Assignee - see subsection 11.8(a). Assigning Lender - see subsection 1.7(f). Assignment and Acceptance - see subsection 11.8(b). Assumed Swing Line Loan Amount means the Dollar Equivalent amount of the aggregate total of the Subsidiary Swing Line Borrower Sublimits of the Subsidiary Swing Line Borrowers other than the UK Swing Line Borrowers, which amount shall be adjusted (up or down) after the Original Closing Date not less frequently than on the last Business Day of each fiscal quarter of US Borrower occurring after the Original Closing Date (each such date, an "Adjustment Date") by the amount by which the Dollar Equivalent amount as of such date of the Subsidiary Swing Line Borrower Sublimits of the Subsidiary Swing Line Borrowers other than the UK Swing Line Borrowers is greater than or less than the Assumed Swing Line Loan Amount as of the immediately preceding Adjustment Date (or the Original Closing Date with respect to the first Adjustment Date occurring after the Original Closing Date) (and from the most recent Adjustment Date until the next immediately succeeding Adjustment Date the Administrative Agent shall assume that the Dollar Equivalent amount of Swing Line Loans in an amount of such adjusted amount is then outstanding for all purposes other than any Revolving Loan to be made under Section 2.18, any Swing Line Loan to be made under Section 2.16 and any Revolving Loan to be made pursuant to Section 3.3). Assumption - see the recitals hereto. Assumption Agreement means the Assumption Agreement executed and delivered by a duly authorized officer of Mettler- Toledo, Inc. in connection with or following the consummation of the M-T Acquisition, substantially in the form of Exhibit M with such changes thereto as shall be approved by the Arranger, providing for the Assumption. Attorney Costs means and includes all reasonable fees and charges of any law firm or other external counsel. Available Revolving Facility Commitment means, as to any Revolving Facility Lender at any time, an amount equal to the excess, if any, of (a) the amount of such Revolving Facility Lender's Revolving Facility Commitment at such time, over (b) the sum of (i) the aggregate unpaid principal Dollar Equivalent amount at such time of all Revolving Loans made by such Revolving Facility Lender, (ii) such Revolving Facility Lender's Pro Rata Share of the Effective Amount of all outstanding L/C Obligations (other than Subsidiary L/C Obligations, except those of the UK Swing Line Borrowers) at such time, and (iii) such Revolving Facility Lender's Pro Rata Share of the aggregate Dollar Equivalent amount of all outstanding Swing Line Loans (which for all purposes, other than any Revolving Loan made pursuant to Section 2.18, any Swing Line Loan made pursuant to Section 2.16 and any Revolving Loan made pursuant to Section 3.3 and except as otherwise expressly provided herein, shall include such Lender's Pro Rata Share of the Assumed Swing Line Loan Amount). Average Life means, when applied to any Indebtedness at any date, the number of years obtained by dividing (a) the then outstanding aggregate principal amount of such Indebtedness into (b) the total of the product obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) which will elapse between such date and the making of such payment. BA Equivalent Rate means, for any Interest Period with respect to BA Equivalent Rate Loans comprising part of the same Borrowing, the rate of interest per annum (rounded upward, if necessary, to the next 1/100th of 1%) equal to the market bid rate determined by the Canadian Agent for banker's acceptances (with a tenor comparable to such Interest Period and in an amount comparable to the BA Equivalent Rate Loan of Scotiabank for such Interest Period) accepted by Scotiabank on the first day of such Interest Period. BA Equivalent Rate Loan means a Loan that bears interest based on the BA Equivalent Rate. Bankruptcy Code means the U.S. Federal Bankruptcy Reform Act of 1978 (11 U.S.C. 101, et seq.), as amended. Basic Documents means the Loan Documents, the Transaction Documents and the Other Documents, collectively, and Basic Document means any such agreement. Beneficial Owner shall have the meaning assigned thereto in Rule 13d-3 of the SEC under the Exchange Act as in effect on the date hereof. Benefitted Lender - see Section 2.15. Board of Directors means the Board of Directors of any of US Borrower, Holding and M-T Investors, as the case may be, or a designated committee thereof. Borrowers - see the introduction to this Agreement. Borrowing means a borrowing hereunder consisting of (a) Loans of the same Facility and Type and in the same Applicable Currency made to a Borrower, UK Borrower or a Subsidiary Swing Line Borrower on the same day by one or more Lenders under Article II and, other than in the case of ABR Loans or Swing Line Loans made to any Swing Line Borrower, having the same Interest Period, or (b) Canadian Loans made to Canadian Borrower on the same day by the Canadian Lenders pursuant to Article II and, other than in the case of Prime Rate Loans, having the same Interest Period. Borrowing Date means any date on which a Borrowing occurs under Section 2.3, 2.3A, or 2.17. Business Day means any day other than a Saturday, Sunday or other day on which commercial banks in Luxembourg, London, England, New York, New York or Zurich, Switzerland (and in the case of disbursements and payments in Canadian Dollars, in Toronto, Canada) or, with respect to any Subsidiary Swing Line Borrower, the applicable country of its incorporation or organization are authorized or required by law to close and (i) with respect to disbursements and payments in U.S. Dollars or Canadian Dollars relating to LIBOR Rate Loans, a day on which dealings are carried on in the applicable offshore U.S. Dollar or Canadian Dollar interbank market, and (ii) with respect to disbursements and payments in and calculations pertaining to any Offshore Currency, a day on which commercial banks are open for foreign exchange business in London, England, and on which dealings in the relevant Offshore Currency are carried on in the applicable offshore foreign exchange interbank market in which disbursement of or payment in such Offshore Currency will be made or received hereunder. Canadian Agent - see the introduction to this Agreement. Canadian Borrower means Mettler-Toledo Inc., a Canadian corporation, and its successors. Canadian Borrowing means a Borrowing hereunder consisting of Canadian Loans made by the Canadian Lenders ratably according to their Percentages. Canadian Certificate - see subsection 4.1(f)(vii). Canadian Commitment - see subsection 2.1(c). Canadian Dollars and Cdn. $ each mean lawful money of Canada. Canadian Facility means the revolving facility in an aggregate principal amount of Cdn. $26.3 million provided hereunder as set forth in subsection 2.1(c). Canadian Facility Fee - see subsection 2.11(c). Canadian Federal Funds Rate means the overnight rate established by the Canadian Agent based on its customary practice. Canadian Lender means any Lender listed on Schedule 2.1(c) under the heading "Canadian Lender" and any other Lender that may from time to time hold Canadian Loans. Canadian Loan - see subsection 2.1(c). Canadian Maturity Date means December 31, 2002. Canadian Revolving Note and Canadian Revolving Notes - see Section 2.2. Canadian Termination Date means the earlier to occur of (i) the date 30 Business Days prior to the Canadian Maturity Date and (ii) the date on which the Canadian Commitments are terminated or reduced to zero pursuant to Section 2.6. Capital Adequacy Regulation means, in respect of any Lender, any guideline, request or directive of any central bank or other Governmental Authority, or any other law, rule or regulation, whether or not having the force of law, in each case, regarding capital adequacy of such Lender or of any corporation controlling such Lender which is generally applicable to banks or corporations controlling banks in any applicable jurisdiction (and not applicable to such Lender or the corporation controlling such Lender solely due to the financial or regulatory condition of such Lender or such corporation). Capital Expenditures means all expenditures which, in accordance with GAAP, would be required to be capitalized and shown on the consolidated balance sheet of US Borrower, but excluding (i) expenditures made in connection with the replacement, substitution or restoration of assets to the extent financed (x) from insurance proceeds (or other similar recoveries) paid on account of the loss of or damage to the assets being replaced or restored or (y) with awards of compensation arising from the taking by eminent domain, expropriation or condemnation of the assets being replaced, (ii) the M-T Acquisition, (iii) any Acquisition effected in accordance with subsection 8.4(f), (iv) any Investment (other than pursuant to subsection 8.4(t)) permitted by Section 8.4, and (v) the Safeline Acquisition. Capital Lease, as applied to any Person, shall mean any lease of any property (whether real, personal or mixed) by that Person as lessee which, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of that Person. Cash means money, currency or a credit balance in a deposit account. Cash Collateralize means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of the Administrative Agent and the Revolving Facility Lenders, as collateral for the L/C Obligations, Cash pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent and the L/C Lender (which documents are hereby consented to by the Lenders). Derivatives of such term shall have corresponding meanings. The Revolving Borrowers hereby grant to the Administrative Agent, for the benefit of the Administrative Agent, the L/C Lender and the Revolving Facility Lenders, a security interest in all such Cash. Cash collateral shall be maintained in blocked deposit accounts at Scotiabank. Cash Equivalents means (i) any security, maturing not more than one year after the date of acquisition, issued by the United States of America or an instrumentality or agency thereof and guaranteed fully as to principal, premium, if any, and interest by the United States of America; (ii) any certificate of deposit, time deposit or bankers' acceptance (or, with respect to non-U.S. banking institutions, similar instruments), maturing not more than one year after the day of acquisition, issued by any commercial banking institution that is a member of the U.S. Federal Reserve System or a commercial banking institution organized and located in a country recognized by the United States of America, in each case, having combined capital and surplus and undivided profits of not less than U.S. $500 million (or the foreign currency equivalent thereof), whose short-term debt has a rating, at the time as of which any investment therein is made, of "P-1" (or higher) according to Moody's or "A-1" (or higher) according to S&P; (iii) commercial paper maturing not more than one year after the date of acquisition issued by a corporation (other than an Affiliate or Subsidiary of either Borrower) with a rating, at the time as of which any investment therein is made, of "P-1" (or higher) according to Moody's or "A- 1" (or higher) according to S&P; (iv) any money market deposit accounts issued or offered by a commercial banking institution that is a member of the U.S. Federal Reserve System or a commercial banking institution organized and located in a country recognized by the United States of America, in each case, having combined capital and surplus in excess of U.S. $500 million (or the foreign currency equivalent thereof); and (v) other short- term investments utilized by Foreign Subsidiaries in accordance with normal investment practices for cash management not exceeding a Dollar Equivalent amount of U.S. $5.0 million in aggregate principal amount outstanding at any time. Change in Law means the introduction of any Requirement of Law, or any change in any Requirement of Law or in the interpretation or administration of any Requirement of Law. Change of Control means any of the following events: (a) Holding shall cease to own directly or indirectly 100% on a fully diluted basis of the economic and voting interest in US Borrower's capital stock or shall not have the power to appoint all of the members of the Board of Directors of US Borrower; or (b) US Borrower shall cease to own directly or indirectly 100% on a fully diluted basis of the economic and voting interest in any of CH Borrower's, Canadian Borrower's or UK Borrower's capital stock or shall not have the power to appoint all of the members of the Board of Directors of CH Borrower, Canadian Borrower or UK Borrower; or (c) prior to an initial public offering of common stock of M-T Investors or Holding, the Investors shall cease to own on a fully diluted basis in the aggregate at least a majority of the economic or voting interest in M-T Investors' or Holding's capital stock, as the case may be (or of the capital stock of any other Person of which US Borrower is a Subsidiary), or after such an initial public offering, any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than the Investors, is or becomes (as a result of the acquisition or issuance of securities, by merger or otherwise) the Beneficial Owner, directly or indirectly, on a fully diluted basis of more than 30% of the economic or voting interest in M-T Investors' or Holding's capital stock, as the case may be (or of the capital stock of any other Person of which US Borrower is a Subsidiary); (d) after the initial public offering of common stock of M-T Investors or Holding, during any consecutive two- year period, individuals who at the beginning of such period constituted the Board of Directors of M-T Investors or Holding (or any other parent of US Borrower), as the case may be (together with any new directors whose election by the shareholders of M-T Investors or Holding (or any other Person of which US Borrower is a Subsidiary), as the case may be, was approved by a vote of 66-2/3% of the directors then still in office who were either directors at the beginning of such period or whose election as directors or nomination for election was previously so approved), cease for any reason to constitute a majority of the Board of Directors of M-T Investors or Holding (or any other Person of which US Borrower is a Subsidiary), as the case may be, then in office; or (e) a "Change of Control" or similar event shall occur as provided in the Senior Subordinated Note Indenture; provided, however, that the merger of any of US Borrower, Holding and M-T Investors with and into any other of such three Persons shall not, in and of itself, be deemed a Change of Control so long as the Lenders retain a pledge of 100% of the capital stock of US Borrower or its successor in interest in such merger. CH Borrower - see the introduction to this Agreement. CH Borrower Guarantee means a guarantee substantially in the form of Exhibit E-1 entered into and delivered by CH Borrower. CHF and Swiss Francs mean lawful money of Switzerland. CHF Equivalent means, at any time, (a) as to any amount denominated in CHF, the amount thereof at such time, and (b) as to any amount denominated in any Offshore Currency, the equivalent amount in CHF as determined by Credit Suisse First Boston at such time on the basis of the Spot Rate for the purchase of CHF with such Offshore Currency on the date as is specified herein. CH Foreign Subsidiary means each Foreign Subsidiary which is also a Subsidiary of CH Borrower. Chinese Subsidiaries means each of the following Subsidiaries: Changzhou Toledo Electronic Scale Ltd., Changzhou; Panzhihua Toledo Electronic Scale Ltd., Panzhihua; Mettler-Toledo Instruments (Shanghai) Ltd., Shanghai; Mettler-Toledo International Trading (Shanghai) Corp., and Xinjian Toledo Electronic Scale Ltd., Urumgi, each incorporated in the People's Republic of China, and their respective successors. Ciba Loan means the loan made by CH Borrower to AG fur Prazisioninstrumente, Greifensee, Switzerland, pursuant to the Ciba Loan Documents in the amount of approximately CHF 37.875 million. Ciba Loan Documents means the documents set forth on Schedule 1.1(a), as amended and in effect from time to time in accordance with Section 8.18. Ciba Reimbursement Agreement means the agreement dated as of October 15, 1996 between Ciba-Geigy AG, US Borrower, Holding and Mettler-Toledo, Inc., as amended and in effect from time to time in accordance with Section 8.18. Co-Agents - see the introduction to this Agreement. Code means the United States Internal Revenue Code of 1986, as amended. Collateral means all of the Security Agreement Collateral, Pledged Securities and Mortgaged Real Property. Commitment, as to each Lender, means its Tranche A-CHF Facility Commitment, Tranche A-UK Facility Commitment, Tranche A- US Facility Commitment, Tranche B Facility Commitment, Revolving Facility Commitment, Canadian Commitment or Swing Line Commitment. Committed Borrowing means a Borrowing hereunder consisting of Committed Loans of one Facility made by the Lenders ratably according to their respective Pro Rata Shares in such Facility. Committed Loan means a Canadian Loan, a Revolving Loan, a Swing Line Loan or a Term Loan. Company means Holding or any of its Subsidiaries. Compliance Certificate means a certificate substantially in the form of Exhibit C and delivered by the Borrowers pursuant to subsection 7.2(a). Computation Amount - see subsection 3.8(a). Computation Date means any date on which the Administrative Agent determines the Dollar Equivalent amount of any Offshore Currency Loans or Swing Line Loans pursuant to subsection 2.5(a) or 2.8(b). Computation Period means each period of four full consecutive fiscal quarters most recently ended and for which financial statements are or are required to be available. Prior to such time as four full consecutive fiscal quarters of financial information for US Borrower are available, Computation Period shall include financial information of the Mettler-Toledo Group to the extent necessary such that four full fiscal quarters of financial information form the basis of the Computation Period. Confidential Memorandum shall mean the Confidential Memorandum, dated September 1996, and all written supplemental material thereto prepared by, or on behalf of, the Borrowers and transmitted to the Lenders prior to the Original Closing Date, and the Confidential Memorandum dated April 1997, and all written supplemental material thereto prepared by, or on behalf, of the Borrowers and transmitted to the Lenders prior to the Amendment and Restatement Date. Consolidated Net Income means, for any period, the consolidated net income of US Borrower and the Subsidiaries for such period; provided, however, that there shall be excluded therefrom (i) the income of any Subsidiary to the extent that the transfer of such income by such Subsidiary to either Borrower or its direct parent at the time is restricted in any material way by operation of the terms of its charter or any judgment, decree, order, statute, rule or governmental regulation applicable to such Subsidiary or any agreement or instrument which is binding on such Subsidiary, (ii) the income of any Person which is not a Subsidiary (but any dividends or other distributions received in cash by either Borrower or any Subsidiary from such Person shall be included in Consolidated Net Income), (iii) unrealized gains or losses in respect of Swap Contracts, and (iv) unrealized foreign currency transaction gains or losses in respect of Indebtedness of any Person denominated in a currency other than the functional currency of such Person and permitted by Section 8.5. Consolidated Net Worth means at the date of determination thereof, the sum of (a) all items which in conformity with GAAP would be classified as stockholders' equity on a consolidated balance sheet of US Borrower at such date and (b) preferred stock (whether or not so classified as stockholders' equity) provided that such preferred stock (i) has no mandatory redemptions prior to the Tranche B Term Loan Maturity Date and (ii) was issued and is outstanding on terms and conditions reasonably satisfactory to the Administrative Agent; provided, however, that Consolidated Net Worth shall be calculated without giving effect to (1) any item excluded from the definition of Consolidated Net Income (other than clauses (i) and (ii) thereof), (2) any write-off of deferred financing costs in connection with the early extinguishment of Indebtedness hereunder or under the Senior Subordinated Notes, (3) cumulative currency translation adjustments and net unrealized investment gains and losses, (4) charges relating to the closure of the Westerville, Ohio facility, (5) nonrecurring restructuring charges related to the M-T Acquisition and the Safeline Acquisition and any nonrecurring restructuring charges recorded on or prior to December 31, 1999 in an aggregate amount not to exceed U.S.$30 million, and (6) any expense relating to bonuses paid by Ciba-Geigy AG or its Affiliates (other than an Affiliate that will be an Affiliate of US Borrower after the consummation of the M-T Acquisition) to employees of US Borrower or any Subsidiary pursuant to any agreements entered into in connection with the disposition of the Mettler-Toledo Group by Ciba-Geigy AG or assumed by US Borrower or any Subsidiary in consideration of a reduction in the purchase price for the M-T Acquisition. Contingent Obligation means, as to any Person, any direct or indirect liability of such Person, whether or not contingent, with or without recourse, (a) with respect to any Indebtedness, lease, dividend, letter of credit or other obligation (the "primary obligations") of another Person (the "primary obligor"), including any obligation of such Person (i) to purchase, repurchase or otherwise acquire such primary obligations or any security therefor, (ii) to advance or provide funds for the payment or discharge of any such primary obligation, or to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency or any balance sheet item, level of income or financial condition of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation, or (iv) otherwise to assure or hold harmless the holder of any such primary obligation against loss in respect thereof (each of (i) - (iv), a "Guaranty Obligation"); (b) with respect to any Surety Instrument (other than any Letter of Credit) issued for the account of such Person or as to which such Person is otherwise liable for reimbursement of drawings or payments; (c) to purchase any materials, supplies or other property from, or to obtain the services of, another Person if the relevant contract or other related document or obligation requires that payment for such materials, supplies or other property, or for such services, shall be made regardless of whether delivery of such materials, supplies or other property is ever made or tendered, or such services are ever performed or tendered; or (d) in respect of any Swap Contract. The amount of any Contingent Obligation shall (x) in the case of a Guaranty Obligation, be deemed equal to the stated or determinable amount of the primary obligation in respect of which such Guaranty Obligation is made or, if not stated or if indeterminable, the maximum reasonably anticipated liability in respect thereof, and (y) in the case of other Contingent Obligations, be equal to the maximum reasonably anticipated liability in respect thereof. Contractual Obligation means, as to any Person, any term, covenant, provision of condition of any security issued by such Person or of any agreement, undertaking, contract, indenture, mortgage, deed of trust or other instrument, document or agreement to which such Person is a party or by which it or any of its property is bound. Conversion/Continuation Date means any Business Day on which (a) either Borrower or UK Borrower, as the case may be, (i) converts Committed Loans of a Facility from one Type to the other Type or (ii) continues as Committed Loans of the same Type, but with a new Interest Period, Committed Loans of a Facility having Interest Periods expiring on such date or (b) Canadian Borrower (i) converts Canadian Loans from one Type to another Type or (ii) continues as Canadian Loans of the same Type, but with a new Interest Period, Canadian Loans having Interest Periods expiring on such date. Covered Taxes means any and all Taxes, other than, in the case of each Lender or Agent, Taxes of any jurisdiction (or any political subdivision thereof) imposed on or measured by such Lender's or such Agent's net income or net profits (including any franchise Taxes imposed thereon and any branch profits Taxes) that arise by reason of a former, present or future connection between such Lender or Agent and such jurisdiction (including, without limitation, a connection arising from such Lender or Agent being or having been a citizen or resident of such jurisdiction, or having been organized, present or engaged in a trade or business in such jurisdiction, or having or having had a permanent establishment or fixed place of business in such jurisdiction, but excluding a connection arising solely from such Lender or Agent having executed, delivered, performed its obligations or received a payment under this Agreement). For the avoidance of doubt, Covered Taxes shall include any deductions or withholdings by a Borrower on account of any Taxes from payments made under this Agreement or any other Loan Document. Credit Agreement Loan Parties means the Revolving Borrowers, Canadian Borrower and the Subsidiary Swing Line Borrowers, collectively. Credit Extension means and includes (a) the making of any Loan hereunder and (b) the Issuance of any Letter of Credit hereunder. Credit Facilities means the Revolving Facility, the Canadian Facility and the Term Loan Facilities. Current Liabilities means, at any time, all amounts which, in accordance with GAAP, would be included as current liabilities on a consolidated balance sheet of US Borrower and the Subsidiaries at such time, excluding current maturities of Indebtedness. Debt To Be Repaid means all Indebtedness listed on Schedule 5.1(p) and on Schedule 5.1A(o). Debt to EBITDA Ratio means, as of the last day of any fiscal quarter, the ratio of: (a) the total consolidated Indebtedness of US Borrower and the Subsidiaries as of such day to (b) EBITDA for the Computation Period ending on such day. Defaulting Lender means any Lender with respect to which a Lender Default is in effect. Destruction has the meaning assigned to that term in the Mortgages. Deutschemarks and DM each mean lawful money of Germany. Disinterested Director means a member of a Board of Directors who does not have any material direct or indirect financial interest in or with respect to the transaction being considered. Documentation Agent - see the introduction to this Agreement. Dollar Equivalent means, at any time, (a) as to any amount denominated in U.S. Dollars, the amount thereof at such time, and (b) as to any amount denominated in Canadian Dollars or any Offshore Currency, the equivalent amount in U.S. Dollars as determined by the Administrative Agent at such time on the basis of the Spot Rate for the purchase of U.S. Dollars with such Canadian Dollars or Offshore Currency on the most recent Computation Date provided for in subsection 2.5(a) or such other date as is specified herein. With respect to Swing Line Loans, Dollar Equivalent shall be based upon the Dollar Equivalent of the Subsidiary Currency Equivalent thereof as of the date of the calculation of such Dollar Equivalent. Domestic Guarantors means Holding, US Borrower and the Domestic Subsidiary Guarantors. Domestic Loan Parties means the Domestic Guarantors. Domestic Subsidiary means a Subsidiary that is incorporated under the laws of any State of the United States or Puerto Rico or the District of Columbia and that is a direct Subsidiary of (i) US Borrower, (ii) another Domestic Subsidiary, or (iii) UK Borrower, so long as UK Borrower is treated as a "branch" of US Borrower for U.S. tax purposes. For the avoidance of doubt, UK Borrower itself shall not be considered a Domestic Subsidiary. Domestic Subsidiary Guarantee means a guarantee substantially in the form of Exhibit E-2 entered into and delivered by a Domestic Subsidiary, as amended and restated on the Amendment and Restatement Date. Domestic Subsidiary Guarantor means each Domestic Subsidiary which executes and delivers a Domestic Subsidiary Guarantee. Domestic Subsidiary Securities Pledge Agreement means a securities pledge agreement substantially in the form of Exhibit J-1 entered into and delivered by a Domestic Subsidiary. EBITDA means, for any period, the sum of: (a) Consolidated Net Income of US Borrower and the Subsidiaries for such period excluding, to the extent reflected in determining such Consolidated Net Income, (i) extraordinary gains and losses for such period, (ii) any gain or loss associated with the sale or write-down of assets not in the ordinary course of business, (iii) any deferred financing costs for such period written off in connection with the early extinguishment of Indebtedness hereunder or under the Senior Subordinated Notes, (iv) any charge for such period relating to the closure of the Westerville, Ohio facility, (v) any non-recurring charges related to the M-T Acquisition or the Safeline Acquisition, any non-recurring charges recorded on or prior to December 31, 1999 in an aggregate amount not to exceed $30.0 million and any non-recurring non-cash charges related to any other Acquisition by US Borrower or any Subsidiary occurring after the Original Closing Date, (vi) any expense relating to bonuses paid by Ciba-Geigy AG or its Affiliates (other than an Affiliate that became an Affiliate of US Borrower after the consummation of the M-T Acquisition) to employees of US Borrower or any Subsidiary pursuant to any agreements entered into in connection with the disposition of the Mettler-Toledo Group by Ciba-Geigy AG or assumed by US Borrower or any Subsidiary in consideration of a reduction in the purchase price for the M-T Acquisition and (vii) any other non-cash or non- recurring items of income or expense (other than any non-cash item of expense requiring an accrual or reserve for future cash expense), plus (b) to the extent deducted in determining Consolidated Net Income for such period, Interest Expense, income tax and capital tax expense, depreciation, depletion and amortization expense for such period. Prior to such time as four full fiscal quarters of financial information of US Borrower after (i) the Original Closing Date are available pursuant to this Agreement, EBITDA shall be calculated by taking into account the results of the Mettler-Toledo Group (in accordance with this definition) for such number of fiscal quarters (or part thereof) so that, when added to the financial information of US Borrower, four full fiscal quarters of financial information form the basis for the calculation under this definition, and (ii) the Safeline Closing Date are available pursuant to this Agreement, EBITDA shall be calculated, other than for purposes of Section 8.10, on a pro forma basis consistent with GAAP as if the Safeline Acquisition had been consummated at the beginning of the relevant period. Effective Amount means with respect to any outstanding L/C Obligations on any date, the aggregate Dollar Equivalent amount of such L/C Obligations on such date after giving effect to any Issuances of Letters of Credit occurring on such date and any other changes in the aggregate Dollar Equivalent amount of the L/C Obligations as of such date, including as a result of any reimbursement of outstanding unpaid drawings under any Letter of Credit or any reduction in the maximum amount available for drawing under any Letter of Credit taking effect on such date. Eligible Assignee means (i) a commercial bank organized under the laws of the United States, or any state thereof, and having a combined capital and surplus of at least U.S. $100.0 million; (ii) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development (the "OECD"), or a political subdivision of any such country, and having a combined capital and surplus in a Dollar Equivalent amount of at least U.S. $100.0 million; provided, however, that such bank is acting through a branch or agency located in the country in which it is organized or another country which is also a member of the OECD; (iii) a Person that is primarily engaged in the business of commercial banking and that is (A) a Subsidiary of a Lender, (B) a Subsidiary of a Person of which a Lender is a Subsidiary, or (C) a Person of which a Lender is a Subsidiary; (iv) an "accredited investor" as such term is defined in Rule 501(a) of Regulation D under the U.S. Securities Act of 1933, as amended, and (v) an insurance company, mutual fund or other financial institution organized under the laws of the United States, any state thereof, any other country which is a member of the OECD or a political subdivision of any such country with assets under management in a Dollar Equivalent amount of at least U.S. $100.0 million; provided, however, that no Person shall be an Eligible Assignee in respect of any Tranche A-CHF Facility Commitment, Tranche A-UK Facility Commitment, Revolving Facility Commitment or Canadian Commitment unless, at the time of the proposed assignment to such Person, such Person is able to make (w) with respect to the Tranche A-CHF Facility Commitment, Tranche A-CHF Term Loans, (x) with respect to the Tranche A-UK Facility Commitment, Tranche A-UK Term Loans, (y) with respect to the Revolving Facility Commitments, Revolving Loans in U.S. Dollars and each Offshore Currency, and (z) with respect to the Canadian Commitments, Canadian Loans. Environmental Approvals means any material approval, determination, order, consent, authorization, certificate, license, permit, franchise, concession or validation of, or exemption or other action by, or filing, recording or registration with, or notice to, any Governmental Authority pursuant to or required under any Environmental Law. Environmental Claims means all claims, however asserted, by any Governmental Authority or other Person alleging potential liability under, or responsibility for violation of, any Environmental Law, or for any release or threatened release of a Hazardous Material or injury to the environment. Environmental Laws means all applicable federal, state, local and foreign laws, common law or regulations, treaties, orders, decrees, permits, licenses, authorizations, judgments or injunctions issued, promulgated, approved or entered thereunder, now or hereafter in effect in each case relating to pollution or protection of employee health or safety or the environment (including, without limitation, ambient and indoor air, surface water, groundwater, soil, land surface or subsurface) including, without limitation, laws relating to (a) emissions, discharges, releases or threatened releases of Hazardous Materials into the environment and (b) the manufacture, processing, distribution, use, generation, treatment, storage, disposal, transport or handling of Hazardous Materials. Equipment has the meaning assigned to that term in the Security Agreements. Equity Issuance means the issuance of common equity securities by Holding directly or indirectly to the Investors for gross proceeds of the Dollar Equivalent amount of not less than U.S. $190.0 million on or prior to the Original Closing Date; provided, however, that up to the Dollar Equivalent amount of U.S. $7.50 million to be contributed by employees of the Mettler- Toledo Group may be contributed after the Original Closing Date, but will be contributed by AEA or its designee if not so contributed by employees prior to December 31, 1996 (and the term Equity Issuance shall include such later contributions to the extent made by December 31, 1996). ERISA means the Employee Retirement Income Security Act of 1974. ERISA Affiliate means any trade or business (whether or not incorporated) under common control with a Loan Party within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code). ERISA Event means (a) a Reportable Event with respect to a Pension Plan; (b) the failure to make a required contribution to a Pension Plan if such failure could give rise to a Lien under Section 302(f) of ERISA; (c) a withdrawal by a Loan Party or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations which is treated as such a withdrawal under Section 4062(e) of ERISA; (d) a complete or partial withdrawal by a Loan Party or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (e) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (f) an event or condition which might reasonably be expected to constitute grounds under Section 4042 of ERISA or the commencement of proceedings by the PBGC for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; (g) the imposition of any liability under Title IV of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of ERISA, upon a Loan Party or any ERISA Affiliate; (h) the making of any amendment to a Pension Plan which could result in the imposition of a Lien or the posting of a bond or other security; (i) the engagement in any transaction by a Loan Party or any ERISA Affiliate in connection with which any such entity could be subject to either a tax imposed by Section 4975(a) of the Code or the corresponding civil penalty assessed pursuant to Section 502(i) of ERISA; or (j) the application for a waiver of the minimum funding standard under Section 412 of the Code with respect to a Pension Plan. Event of Default means any of the events or circumstances specified in Section 9.1. Excess Cash Flow means, for any period, the remainder of (a) the sum, without duplication, of (i) Consolidated Net Income for such period (calculated by (x) excluding any gains or losses on the sale or other disposition of assets (other than sales of inventory in the ordinary course of business), (y) adding back the non-cash component of all extraordinary or non-recurring items of expense and (z) deducting the non-cash component of all extraordinary or non-recurring items of income, in each case to the extent taken into account in the calculation of such Consolidated Net Income), plus (ii) all depreciation and amortization of assets (including goodwill and other intangible assets), non-cash interest expense and all other non-cash charges of US Borrower and the Subsidiaries deducted in determining Consolidated Net Income for such period, plus (iii) any net decrease in Adjusted Working Capital (as reflected on the audited consolidated statement of cash flows in accordance with FAS 52) during such period (exclusive of decreases in working capital associated with asset sales), plus (iv) all federal, state, local and foreign income or capital taxes (whether paid or deferred) of US Borrower and the Subsidiaries deducted in determining Consolidated Net Income for such period, minus (b) the sum, without duplication, of (i) regularly scheduled installment payments of principal of Term Loans pursuant to Section 2.9, voluntary prepayments of the Term Loans pursuant to subsection 2.7(g), prepayments of principal of Revolving Facility Loans pursuant to Section 2.8, the aggregate principal amount of permanent principal payments with respect to any other Indebtedness of US Borrower and the Subsidiaries, prepayments of the Revolving Loans and Canadian Loans to the extent of any concurrent permanent reduction in the Revolving Facility Commitments and Canadian Commitments, as the case may be, and the portion of any regularly scheduled payments with respect to Capital Leases allocable to principal, in each case made during such period (in any such case other than to the extent any such payment is made from the proceeds of any capital contribution to US Borrower or any Subsidiary or from any proceeds from the issuance or sale of capital stock of US Borrower or any Subsidiary, any incurrence of Indebtedness by US Borrower or any Subsidiary or from the proceeds of any sale or other disposition of assets by US Borrower or any Subsidiary (other than sales of inventory in the ordinary course of business)), plus (ii) Capital Expenditures for such period and cash paid in connection with any Acquisition during such period (other than to the extent made from any capital contribution to US Borrower or any Subsidiary or from any proceeds from the issuance or sale of capital stock of US Borrower or any Subsidiary, any incurrence of Indebtedness by US Borrower or any Subsidiary or from the proceeds of any sale or other disposition of assets by US Borrower or any Subsidiary or insurance proceeds (other than sales of inventory in the ordinary course of business)), plus (iii) all federal, state, local and foreign income or capital taxes paid by US Borrower and the Subsidiaries during such period, plus (iv) non-cash charges added back in any previous period pursuant to item (a)(ii) above to the extent such charge has become a cash item in the current period, plus (v) any net increase in Adjusted Working Capital (as reflected on the audited consolidated statement of cash flows in accordance with FAS 52) during such period (exclusive of increases in working capital associated with asset sales). No conversion of term extensions of credit made under the Original Credit Agreement as of the Amendment and Restatement Date as contemplated by Section 2.1 shall be taken into account in the calculation of Excess Cash Flow for any period. Exchange Act means the United States Securities Exchange Act of 1934. Exchange Notes - see subsection 2.23(a). Facility means any of the Canadian Facility, the Tranche A-CHF Term Loan Facility, the Tranche A-UK Term Loan Facility, the Tranche A-US Term Loan Facility, the Tranche B Term Loan Facility, or the Revolving Facility. Facility Fee - see subsection 2.11(b). Fee Letters - see subsection 2.11(a). FIRREA means the Financial Institutions Reform, Recovery & Enforcement Act of 1989, as amended from time to time, and any successor statute. Foreign Guarantor means each Foreign Subsidiary which executes and delivers a Foreign Subsidiary Guarantee. Foreign Loan Parties means Canadian Borrower, CH Borrower, UK Borrower, the Subsidiary Swing Line Borrowers and the Foreign Guarantors. Foreign Subsidiary means a direct or indirect Subsidiary of US Borrower which is not a Domestic Subsidiary. Foreign Subsidiary Guarantee means a guarantee substantially in the form of the Domestic Subsidiary Guarantee entered into and delivered by a Foreign Subsidiary, but with such modifications, additions and deletions as may be required to comply with applicable law. Foreign Subsidiary Securities Pledge Agreement means a securities pledge agreement substantially in the form of the Domestic Subsidiary Securities Pledge Agreement entered into and delivered by a Foreign Subsidiary, but with such modifications, additions and deletions as may be required to comply with applicable law. FRB means the Board of Governors of the U.S. Federal Reserve System, and any Governmental Authority succeeding to any of its principal functions. French Francs and FF each mean lawful money of France. GAAP means generally accepted accounting principles set forth as of the relevant date in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession), which are applicable to the circumstances as of the date of determination. German Subsidiary means Mettler-Toledo Management Holding Deutschland GmbH, a German corporation, and its successors. Governmental Authority means any nation or government, any state, provincial, canton or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof (or any central bank or similar monetary or regulatory authority created under the Treaty of Rome (being the treaty establishing the European Economic Community signed in Rome, Italy on 25 March 1957, as amended) or created by any group of nations, governments or states), the NAIC, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing. Guarantees means the Holding Guarantee, the Domestic Subsidiary Guarantees, the Foreign Subsidiary Guarantees, the CH Borrower Guarantee and the US Borrower Guarantee. Guarantors means each of the Domestic Guarantors and the Foreign Guarantors. Guaranty Obligation has the meaning specified in the definition of Contingent Obligation. Hazardous Materials means any pollutant, contaminant, toxic, hazardous or extremely hazardous substance, constituent or waste, or any other constituent, waste, material, compound or substance including, without limitation, petroleum (including crude oil or any fraction thereof) or any petroleum product, subject to regulation under any Environmental Law. Holding - see the introduction to this Agreement. Holding Guarantee means a guarantee substantially in the form of Exhibit E-4 entered into and delivered by Holding, as amended and restated on the Amendment and Restatement Date. Holding Securities Pledge Agreement means a securities pledge agreement substantially in the form of Exhibit J-3 entered into and delivered by Holding. Honor Date - see subsection 3.3(b). Indebtedness of any Person means, without duplication, (a) all indebtedness for borrowed money of such Person; (b) all obligations issued, undertaken or assumed by such Person as the deferred purchase price of property or services (other than trade payables and accrued expenses entered into in the ordinary course of business on ordinary terms); (c) all non-contingent reimbursement or payment obligations of such Person with respect to Surety Instruments (such as, for example, unpaid reimbursement obligations in respect of a drawing under a letter of credit); (d) all obligations of such Person evidenced by notes, bonds, debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses; (e) all indebtedness of such Person created or arising under any conditional sale or other title retention agreement, or incurred as financing, in either case with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property); (f) all obligations of such Person with respect to Capital Leases; (g) all net obligations of such Person with respect to Swap Contracts (such obligations to be equal at any time to the aggregate net amount that would have been payable by such Person at the most recent fiscal quarter end in connection with the termination of such Swap Contracts at such fiscal quarter end); (h) all indebtedness of other Persons referred to in clauses (a) through (g) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including accounts and contracts rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness; and (j) all Guaranty Obligations of such Person in respect of indebtedness or obligations of others of the kinds referred to in clauses (a) through (h) above. Indebtedness shall not include (x) accounts extended by suppliers in the ordinary course on normal trade terms in connection with the purchase of goods and services, or (y) any Indebtedness created by the sale or discount of receivables permitted by Section 8.21. Indemnified Person - see Section 11.4. Independent Auditor - see subsection 7.1(a). Initial Funding Date means the first date on which any Lender makes a Loan hereunder. Initial Public Offering shall mean an underwritten public offering of the common stock of M-T Investors or Holding, other than any public offering or sale pursuant to a registration statement on Form S-8 or a comparable form. Initial Loans means the Loans made on the Initial Funding Date. Insolvency Proceeding means, with respect to any Person, (a) any case, action or proceeding with respect to such Person before any court or by or before any other Governmental Authority relating to bankruptcy, insolvency, reorganization, liquidation, receivership, dissolution, sequestration, conservatorship, winding-up or relief of debtors (or the convening of a meeting or the passing of a resolution for or with a view to any of the foregoing), or (b) any assignment for the benefit of creditors, composition, marshalling of assets for creditors, or other similar arrangement in respect of such Person's creditors generally or any substantial portion of its creditors. Intellectual Property - see Section 6.15. Intercompany Indebtedness - see subsection 8.4(c). Intercreditor Agreement means an Intercreditor Agreement, substantially in the form of Exhibit N with such changes thereto as shall be approved by the Administrative Agent. Interest Expense means for any period the consolidated interest expense of US Borrower and the Subsidiaries for such period (including all imputed interest on Capital Leases, but excluding (i) amortization of fees and expenses in connection with the M-T Acquisition and the Safeline Acquisition, this Agreement and the transactions contemplated by the foregoing, (ii) amortization in connection with Swap Contracts, (iii) expenses relating to the sale or discount of receivables permitted by Section 8.21, and (iv) interest expense on deferred compensation or customer deposits). Interest Payment Date means (a) as to any ABR Loan, the last Business Day of each calendar quarter, (b) as to any Prime Rate Loan and any Non-U.S.$ Swing Line Loan, the last Business Day of each calendar month, and (c) as to any LIBOR Rate Loan, the last day of each Interest Period applicable to such Loan; provided, however, that if any Interest Period for a LIBOR Rate Loan exceeds three months, the date that falls three months (or, in the case of a 12-month Interest Period, three months, six months and nine months) after the beginning of such Interest Period also shall be an Interest Payment Date. Interest Period means, (a) as to any LIBOR Rate Loan, the period commencing on the Borrowing Date of such Loan or, on the Conversion/Continuation Date on which such Loan is converted into or continued as a LIBOR Rate Loan, as applicable, and ending on the date one, two, three, six, or, if available from all of the Lenders, twelve months thereafter as selected by the Applicable Borrower in its Notice of Committed Borrowing or Notice of Conversion/Continuation, as the case may be; and (b) as to any BA Equivalent Rate Loan, the period commencing on the Borrowing Date of such Loan or on the Conversion/Continuation Date on which such Loan is converted into or continued as a BA Equivalent Rate Loan, and ending on the date 30, 60, 90 or 180 days thereafter, as selected by Canadian Borrower in its Notice of Canadian Borrowing or Notice of Continuation/Conversion; provided, however, that: (i) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the following Business Day unless, in the case of a LIBOR Rate Loan, the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the preceding Business Day; (ii) any Interest Period for a LIBOR Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; (iii) no Interest Period for any Revolving Facility Loan shall extend beyond the scheduled Termination Date and no Interest Period for any Canadian Loan shall extend beyond the Canadian Termination Date; (iv) no Interest Period for any Tranche A-CHF Term Loan or Tranche A-UK Term Loan shall extend beyond any scheduled installment date for Term Loans under such Facility unless the aggregate principal amount of Term Loans under such Facility having Interest Periods that will expire on or before such scheduled installment date equals or exceeds the amount of the installment of Term Loans due under such Facility on such date; and (v) no Interest Period for any Term Loan under the Tranche B Term Loan Facility, or the Tranche A-US Term Loan Facility shall extend beyond any scheduled installment date unless the aggregate principal amount of all Term Loans under such Facility that are ABR Loans, plus the aggregate principal amount of all Term Loans under such Facility having Interest Periods that will expire on or before such scheduled installment date, equals or exceeds the amount of the installment of the Term Loans under such Facility due on such date. Interest Rate Certificate means an officers' certificate substantially in the form of Exhibit K, delivered pursuant to subsection 7.2(b), demonstrating in reasonable detail the calculation of the Debt to EBITDA Ratio as of the last day of the subject period. Inventory means all of the inventory of US Borrower and the Subsidiaries, whether now existing or existing in the future, including, without limitation: (i) all raw materials, work in process, parts, components, assemblies, supplies and materials used or consumed in their business, (ii) all goods, wares and merchandise, finished or unfinished, held for sale or lease or leased or furnished or to be furnished under contracts of service, and (iii) all goods returned or repossessed by US Borrower or the Subsidiaries. Investment - see Section 8.4. Investors means AEA and its current, former and future employees, stockholders, directors and officers and the officers of Holding, US Borrower, CH Borrower, UK Borrower and their respective subsidiaries, and (i) trusts for the benefit of such Persons or the spouses, issue, parents or other relatives of such Persons, (ii) entities controlling or controlled by such Persons and (iii) in the event of the death of any such individual Person, heirs or testamentary legatees of such Person. Investors shall also include Novartis and its direct and indirect subsidiaries, the specialty chemicals entity that was spun off from Novartis in connection with the merger of Ciba-Geigy and Sandoz and the direct and indirect subsidiaries of such specialty chemicals entity; provided, however, that no such entity referred to in this sentence owns, directly or indirectly, more than seven and one-half percent (7.50%) on a fully diluted basis of the economic or voting interest in the capital stock of Holding. IRS means the United States Internal Revenue Service, and any Governmental Authority succeeding to any of its principal functions under the Code. Issuance Date - see subsection 3.1(a). Issue means, with respect to any Letter of Credit, to issue or to extend the expiry of, or to renew or increase the amount of, such Letter of Credit; and the terms Issued, Issuing and Issuance have corresponding meanings. Japanese Yen means lawful money of Japan. Joint Venture means a corporation, partnership, limited liability company, joint venture or other similar legal arrangement (whether created by contract or conducted through a separate legal entity) now or hereafter formed by US Borrower or any Subsidiary with another Person or Persons in order to conduct a common venture or enterprise with such Person or Persons and that is not a Subsidiary (whether owned, directly or indirectly, 50% or less by US Borrower or any Subsidiary). L/C Advance means each L/C Lender's participation in any L/C Borrowing in accordance with its Pro Rata Share. L/C Amendment Application means an application form for amendment of outstanding standby or commercial documentary letters of credit as shall at any time be in use by the applicable L/C Lender, as the L/C Lender shall request. L/C Application means an application form for issuances of standby or commercial documentary letters of credit as shall at any time be in use by the applicable L/C Lender, as the L/C Lender shall request. L/C Borrowing means an extension of credit resulting from a drawing under any Letter of Credit (including any Letter of Credit issued for the account of any Subsidiary Swing Line Borrower) which shall not have been reimbursed on the date when made nor converted into a Borrowing of Revolving Facility Loans under subsection 3.3(b). L/C Commitment means the commitment of the L/C Lender (other than the Subsidiary Swing Line Lenders) to Issue Letters of Credit from time to time Issued or outstanding under Article III, in an aggregate Dollar Equivalent amount not to exceed on any date an amount equal to the lesser of U.S. $40.0 million and the amount of the combined Commitments of all L/C Lenders; it being understood that the L/C Commitment is a part of the combined Revolving Facility Commitments of all L/C Lenders, rather than a separate, independent commitment. L/C Lender means (x) with respect to the Borrowers and UK Borrower, the New York agency of Scotiabank or such other Lender or Lenders selected by the Administrative Agent satisfactory to the Borrowers who agrees to act in such capacity to issue Letters of Credit and (y) with respect to each Subsidiary Swing Line Borrower, the Swing Line Lender who is to make Swing Line Loans hereunder to such Subsidiary Swing Line Borrower. All references in this Agreement to the L/C Lender shall be deemed a reference to the applicable L/C Lender issuing the applicable Letter of Credit. L/C Obligations means at any time the sum of (a) the aggregate undrawn Dollar Equivalent amount of all Letters of Credit then outstanding, plus (b) the Dollar Equivalent amount of all unreimbursed drawings under all Letters of Credit, including all outstanding L/C Borrowings. L/C-Related Documents means the Letters of Credit, the L/C Applications, the L/C Amendment Applications and any other document relating to any Letter of Credit, including any of the applicable L/C Lender's standard form documents for letter of credit issuances. Lease means any lease, sublease, franchise agreement, license, occupancy or concession agreement. Lender - see the introduction to this Agreement; Lender shall include (x) any L/C Lender or Swing Line Lender, and (y) at any time prior to the consummation of the transactions to occur on the Amendment and Restatement Date, any Person that is or was a Lender under the Original Credit Agreement as of the time immediately prior to the consummation of the transactions on the Amendment and Restatement Date. Lender Default means (i) the refusal (which has not been retracted) of a Lender to make available its portion of any Borrowing (including pursuant to Section 2.18) or to fund its portion of any unreimbursed payment under Section 3.3, or (ii) a Lender having notified the Applicable Agent and/or any Applicable Borrower that it does not intend to comply with the obligations under Section 2.1, 2.18 or 3.3. Lending Office means, as to any Lender, the office or offices of such Lender (or, in the case of any Offshore Currency Loan or Canadian Loan, of an Affiliate of such Lender) specified to the Administrative Agent and the Borrowers (and Canadian Borrower and the Canadian Agent with respect to Canadian Loans) as its "Lending Office" or "Domestic Lending Office" or "Offshore Lending Office" or "Canadian Lending Office", as the case may be. Letter of Credit means any letter of credit (whether a standby letter of credit or a commercial documentary letter of credit) Issued by an L/C Lender pursuant to Article III. LIBOR Rate means, with respect to each day during each Interest Period pertaining to LIBOR Rate Loans comprising part of the same Borrowing, the rate per annum determined by the Administrative Agent to be the arithmetic mean (rounded to the nearest 1/100th of 1%) of the offered rates for deposits in Dollars or in the Applicable Currency with a term comparable to such Interest Period that appears on the Telerate British Bankers Assoc. Interest Settlement Rates Page (as defined below) at approximately 11:30 a.m., London, England time, on the second full Business Day preceding the first day of such Interest Period (or, in the case of Pounds Sterling, on the first day of such Interest Period); provided, however, that if there shall at any time no longer exist a Telerate British Bankers Assoc. Interest Settlement Rates Page, "LIBOR Rate" shall mean, with respect to each day during each Interest Period pertaining to LIBOR Rate Loans comprising part of the same Borrowing, the rate per annum equal to the rate at which Scotiabank is offered deposits in Dollars or in the Applicable Currency at approximately 11:30 a.m., London, England time, two Business Days prior to the first day of such Interest Period (or, in the case of Pounds Sterling, on the first day of such Interest Period) in the interbank eurocurrency market where the eurocurrency and foreign currency and exchange operations in respect of Dollars or such Applicable Currency, as the case may be, are then being conducted for delivery on the first day of such Interest Period for the number of days comprised therein and in an amount comparable to the amount of its LIBOR Rate Loan to be outstanding during such Interest Period. "Telerate British Bankers Assoc. Interest Settlement Rates Page" shall mean the display designated as Page 3750 (or such other page on which any Applicable Currency then appears) on the Telerate System Incorporated Service (or such other page as may replace such page on such service for the purpose of displaying the rates at which Dollar deposits in any Applicable Currency are offered by leading banks in the London interbank deposit market). LIBOR Rate Loan means any Committed Loan that bears interest based on the LIBOR Rate. Lien means any security interest, mortgage, deed of trust, pledge, claim, hypothecation, assignment for security, charge or deposit arrangement, preferential arrangement in the nature of security or lien (statutory or other), or other encumbrance of any kind in respect of any property (including those created by, arising under or evidenced by any conditional sale or other title retention agreement). Loan means (a) an extension of credit by a Lender to either Borrower, UK Borrower or a Subsidiary Swing Line Borrower under Article II or Article III, which may be a Term Loan, a Revolving Loan, a Swing Line Loan or an L/C Advance, or (b) an extension of credit by a Canadian Lender to Canadian Borrower under Article II. Loan Documents means this Agreement, any Note, the Fee Letters, the L/C-Related Documents, the Guarantees, each Security Document, each Swap Contract entered into with any Lender by any Company and all other documents delivered to any Agent or any Lender in connection herewith. Loan Parties means the Domestic Loan Parties and the Foreign Loan Parties. Losses means as to any Person, the losses, liabilities, claims (including those based upon negligence, strict or absolute liability and liability in tort), damages, expenses, obligations, penalties, actions, judgments, Liens, penalties, fines, suits, costs or disbursements of any kind or nature whatsoever (including Attorney Costs in connection with any Proceeding commenced or threatened, whether or not such Person shall be designated a party thereto) at any time (including following the payment of the Obligations and/or the termination of the Commitments hereunder) incurred by, imposed on or asserted against such Person. Majority Lenders of the Affected Tranche means (i) at any time prior to the Original Closing Date, Non-Defaulting Lenders holding at least a majority of the aggregate amount of the Commitments of the Non-Defaulting Lenders of the applicable Term Loan Facility which would be adversely affected by any amendment, waiver or consent contemplated by clause (6) of the second proviso to subsection 11.1(a) and (ii) at any time after the Original Closing Date, Non-Defaulting Lenders holding at least a majority of the aggregate amount of the outstanding Loans of the Non-Defaulting Lenders of the applicable Term Loan Facility which would be adversely affected by any amendment, waiver or consent contemplated by clause (6) of the second proviso to subsection 11.1(a). Management Services Agreement means the Management Services Agreement dated as of October 15, 1996, between AEA and US Borrower, as in effect on the Original Closing Date and as the same may be amended and in effect from time to time in accordance with Section 8.18. Margin Stock means "margin stock" as such term is defined in Regulation G, T, U or X of the FRB. Material Adverse Effect means (a) a material adverse effect upon the operations, business, assets, nature of assets, properties, condition (financial or otherwise), solvency or prospects of US Borrower and the Subsidiaries taken as a whole (which term "Subsidiary" shall include, on or prior to the Original Closing Date or the Safeline Closing Date, as the case may be, any entity which will become or be merged into or acquired by either Borrower or any of its Subsidiaries on the Original Closing Date or the Safeline Closing Date, as the case may be, in connection with the Transactions); or (b) a material adverse effect on the rights and remedies of the Agents or the Lenders under the Loan Documents. Mettler-Toledo Group means the entities (other than those affiliated solely with Holding immediately prior to the consummation of the M-T Acquisition) set forth in the M-T Acquisition Documents and any additional entities formed by such parties or their Affiliates in connection with consummating the M- T Acquisition. Mettler-Toledo, Inc. means Mettler-Toledo, Inc., a Delaware corporation, the survivor of the merger of itself and MT Acquisition Corp. (a Delaware corporation) and its successors. Minimum Tranche means, in respect of Loans comprising part of the same Borrowing, or to be converted or continued under Section 2.4 or 2.4A, (a) in the case of ABR Loans, U.S. $1.0 million or a higher integral multiple of U.S. $1.0 million, (b) in the case of Canadian Loans, Cdn. $250,000 or a higher integral multiple of Cdn. $250,000, (c) in the case of LIBOR Rate Loans (other than Revolving Loans, Tranche A-CHF Term Loans and Tranche A-UK Term Loans), a minimum Dollar Equivalent amount of U.S. $5.0 million and an integral multiple of U.S. $100,000, (d) in the case of Revolving Loans which are LIBOR Rate Loans (other than Revolving Loans made in Pounds Sterling and CHF), a minimum Dollar Equivalent amount of U.S. $1.0 million and an integral multiple of U.S. $1.0 million, (e) in the case of Revolving Loans made in Pounds Sterling, a minimum of 500,000 Pounds Sterling and an integral multiple of 100,000 Pounds Sterling, (f) in the case of Revolving Loans made in CHF, a minimum of 1,000,000 CHF and an integral multiple of 100,000 CHF, and (g) in the case of Tranche A-CHF Term Loans, a minimum amount of CHF 5.0 million and an integral multiple of CHF 100,000, and (h) in the case of Tranche A-UK Term Loans, a minimum amount of 2.5 million Pounds Sterling and an integral multiple of 100,000 Pounds Sterling. MLA Cost means the cost imputed to a Lender making a Committed Loan in Pounds Sterling of compliance with the Mandatory Liquid Assets requirements of the Bank of England during the Interest Period of that Loan determined in accordance with Schedule 1.1(b). Moody's means Moody's Investors Service, Inc. or its successors. Mortgage means a term loan and revolving credit mortgage, assignment of leases, security agreement and fixture filing, or a term loan and revolving credit deed of trust, assignment of leases, security agreement and fixture filing creating and evidencing a Lien on a Mortgaged Real Property, which shall be substantially in the form of Exhibit I, containing such schedules and including such additional provisions and other deviations from such Exhibits as shall be necessary to conform such document to applicable or local law or as shall be required under local law and which shall be dated as of the date of delivery thereof and made by the owner of the Mortgaged Real Property described therein for the benefit of the Administrative Agent, as mortgagee (grantee or beneficiary), assignee and secured party, as the same may at any time be amended, modified or supplemented in accordance with the terms thereof and hereof. Mortgaged Real Property means each Real Property designated on Schedule 1.1(c) which shall be subject to a Mortgage and each additional Real Property which shall be subject to a Mortgage delivered pursuant to Section 7.14. M-T Acquisition means the acquisition by US Borrower or one or more of the Subsidiaries of the Mettler-Toledo Group pursuant to the M-T Acquisition Documents. M-T Acquisition Documents means the documents listed in Schedule 1.1(d) hereto, in each case as in effect on the Original Closing Date and as amended and in effect from time to time in accordance with Section 8.18. M-T Acquisition Transactions means the M-T Acquisition, the offering and sale of the Senior Subordinated Notes and the other transactions contemplated hereby and thereby to be effected in connection therewith on or about the Original Closing Date. M-T GmbH means Mettler-Toledo GmbH Greifensee, a Swiss corporation and a Subsidiary. M-T Investors means MT Investors Inc., a Delaware corporation, and its successors. M-T Leicester means Mettler-Toledo Ltd., Leicester, an English corporation and a Subsidiary, and its successors. Multiemployer Plan means a "multiemployer plan," within the meaning of Section 4001(a)(3) of ERISA, to which a Loan Party or any ERISA Affiliate makes, is making or is obligated to make contributions or with respect to which it otherwise may have any liability. NAIC means the National Association of Insurance Commissioners. New Lender - see subsection 1.7(d). Net Award has the meaning assigned to that term in each Mortgage. Net Cash Proceeds means (a) with respect to any Asset Sale, the aggregate cash proceeds (including cash proceeds received by way of deferred payment of principal pursuant to a note, installment receivable, liquidation or payment of any Investment permitted by subsection 8.4(d), reserve for adjustment or otherwise, but only as and when received) received by US Borrower or any Subsidiary pursuant to such Asset Sale, net of (i) the direct and indirect costs relating to such Asset Sale (including sales commissions and legal, accounting and investment banking fees), (ii) taxes, fees, impositions and recording charges paid or payable as a result thereof (after taking into account any tax credits or deductions taken in connection with such Asset Sale and any tax sharing arrangements), (iii) amounts applied to the repayment of any Indebtedness secured by a Lien on the asset subject to such Asset Sale (other than the Obligations), (iv) liabilities of the entity, or relating to the business or assets, sold, transferred or otherwise disposed of which are retained by US Borrower or the applicable Subsidiary, (v) amounts required to be paid to any Person (other than US Borrower or any Subsidiary) owning a beneficial interest in the assets subject to the Asset Sale and (vi) appropriate amounts to be provided by US Borrower or any Subsidiary, as the case may be, as a reserve required in accordance with GAAP against any liabilities associated with such Asset Sale and retained by the US Borrower or any Subsidiary, as the case may be, after such Asset Sale (but upon reversal of such reserve, any amount so reserved shall thereupon be Net Cash Proceeds); (b) with respect to any issuance of equity securities or Indebtedness, the aggregate cash proceeds (including cash proceeds received by way of deferred payment of principal pursuant to a note, installment receivable, reserve for adjustment or otherwise, but only as and when received) received by Holding or any of its Subsidiaries pursuant to such issuance, net of the direct costs relating to such issuance (including sales and underwriter's commissions and legal, accounting and investment banking fees); and (c) with respect to any Taking, Destruction, or loss of title to all or a portion of any Mortgaged Real Property, the Net Award, Net Proceeds or title insurance proceeds (net of any reasonable costs incurred to recover such title insurance proceeds), as applicable, resulting therefrom, to be applied as Net Cash Proceeds under this Agreement pursuant to the provisions of the Mortgages; provided, however, such amounts have not been applied to restore or rebuild the Mortgaged Real Property so Taken or Destroyed as permitted or required by the applicable Mortgage and this Agreement. If Holding or any of its Subsidiaries receives Net Cash Proceeds in a currency other than U.S. Dollars, the Dollar Equivalent amount thereof shall be determined as of the earlier of (i) the date on which such Net Cash Proceeds are required to be applied to prepayments under Section 2.7 and (ii) the date on which such Net Cash Proceeds are converted into the currency in which any such prepayment will be required. Net Proceeds has the meaning assigned to that term in each Mortgage. Net Tangible Assets means, at any time, the aggregate amount which, in accordance with GAAP, would be included as total assets (less intangible assets) on the consolidated balance sheet of US Borrower and the Subsidiaries at such time, minus the aggregate amount which, in accordance with GAAP, would be included as Current Liabilities on the consolidated balance sheet of US Borrower and the Subsidiaries at such time. Non-Defaulting Lender means each Lender other than a Defaulting Lender. Non-Guarantor Subsidiary means any Subsidiary set forth on Schedule 1.1(e). Non-U.S. $ Swing Line Loans means any Swing Line Loan that is not made in U.S. Dollars. Notes means the Tranche A-CHF Term Notes, the Tranche A- UK Term Notes, the Tranche A-US Term Notes, the Tranche B Term Notes, the Revolving Notes, the Canadian Revolving Notes and the Swing Line Notes and, if issued, the QFL Notes and Note means any of them. Notice of Canadian Borrowing means a notice in substantially the form of Exhibit A-1. Notice of Committed Borrowing means a notice in substantially the form of Exhibit A-2. Notice of Conversion/Continuation means a notice in substantially the form of Exhibit B-1 (in the case of a notice pursuant to Section 2.4) or Exhibit B-2 (in the case of a notice pursuant to Section 2.4A). Notional BA Proceeds means, relative to a particular BA Equivalent Rate Loan, the aggregate face amount of such BA Equivalent Rate Loan less a discount from the aggregate face amount of such BA Equivalent Rate Loan calculated in accordance with normal market practice based on: (a) the BA Equivalent Rate for the term of such BA Equivalent Rate Loan; and (b) the Applicable Margin for such BA Equivalent Rate Loan. Obligations means all advances, debts, liabilities, obligations, guarantees, covenants and duties arising under any Loan Document, owing by any Loan Party to any Lender, any Agent or any Indemnified Person, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising. Officers' Certificate shall mean, as applied to any corporation, a certificate executed on behalf of such corporation by its Chairman of the Board (if an officer) or its President or one of its Vice Presidents and by its Chief Financial Officer or its Treasurer or, in the case of Foreign Subsidiaries, officers or persons performing comparable functions. Each Officers' Certificate with respect to the compliance with a condition precedent or agreement hereunder shall include (i) a statement that the signers have read such condition or agreement and any definitions or other provisions contained in this Agreement relating thereto, (ii) a statement that, in the opinion of the signers, they have made or have caused to be made such examination or investigation as is reasonably necessary to enable them to express an opinion as to whether or not such condition or agreement has been complied with, and (iii) a statement as to whether, in the opinion of the signers, based upon such examination or investigation, such condition or agreement has been complied with. Offshore Currency means at any time Deutschemarks, French Francs, Japanese Yen, Pounds Sterling, Swiss Francs or any Agreed Alternative Currency. Offshore Currency Loan means any LIBOR Rate Loan denominated in an Offshore Currency. Offshore U.S. Dollar Loan means any LIBOR Rate Loan denominated in U.S. Dollars. Operating Lease Expense means all operating lease expenses of US Borrower and the Subsidiaries. Organization Documents means, for any corporation, the certificate or articles of incorporation or association, the bylaws, any unanimous shareholder agreement or declaration, any certificate of determination or instrument relating to the rights of preferred shareholders of such corporation, any shareholder rights agreement or voting trust agreement, and all applicable resolutions of the board of directors (or any committee thereof) of such corporation and all other documents of a comparable nature and, for each partnership, its partnership agreement, its certificate of partnership and all other documents of the nature previously described as to a corporation. Original Closing Date means the date on which all conditions precedent set forth in Section 5.1 were satisfied or waived by all Lenders (October 15, 1996). Original Credit Agreement -- see the recitals hereto. Other Documents means the Ciba Loan Documents, the Ciba Reimbursement Agreement, the Tax Sharing Agreement, the Management Services Agreement, the Safeline Seller Notes, and all other documents, instruments and agreements entered into in connection with such documents including all appendices, annexes, schedules, attachments and exhibits to any such document, in each case as amended and in effect from time to time in accordance with Section 8.18. Overnight Rate means, for any Committed Loan (other than a Swing Line Loan that is made in any Applicable Currency other than U.S. Dollars or Pounds Sterling) for any day, the rate of interest per annum at which overnight deposits in the Applicable Currency, in an amount approximately equal to the amount with respect to which such rate is being determined, would be offered for such day by the Administrative Agent's London Branch to major banks in the London or other applicable offshore interbank market. The Overnight Rate for any day which is not a Business Day shall be the Overnight Rate for the preceding Business Day. The Overnight Rate for any Swing Line Loan made in any Applicable Currency other than U.S. Dollars or Pounds Sterling means, for any day, the rate of interest per annum determined by the Applicable Swing Line Lender. Participant - see subsection 11.8(d). Paid Lender - see subsection 1.7(a). Paid Lender's Payment - see subsection 1.7(a). Paid Existing Lender - see subsection 1.7(b). Paid Existing Lender Payment Amount - see subsection 1.7(b). Paying Existing Lender - see subsection 1.7(c). Payment Adjustment - see Section 1.7. PBGC means the Pension Benefit Guaranty Corporation, or any Governmental Authority succeeding to any of its principal functions under ERISA. Pension Plan means a pension plan (as defined in Section 3(2) of ERISA) subject to Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code which a Loan Party or any ERISA Affiliate sponsors or maintains, or to which it makes, is making or is obligated to make contributions, or with respect to which it otherwise may have any liability. Percentage means, as to any Canadian Lender at any time, the percentage equivalent (expressed as a decimal, rounded to the ninth decimal place) at such time of such Canadian Lender's portion of the Canadian Commitment divided by the amount of the Canadian Commitment. The initial Percentage of each Canadian Lender is set forth on Schedule 2.1(c), and each Canadian Lender's Percentage shall change simultaneously with any assignment by or to such Canadian Lender pursuant to Section 11.8. Permitted Liens - see Section 8.1. Person means an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or Governmental Authority. Plan means an employee benefit plan (as defined in Section 3(3) of ERISA) which a Loan Party or any ERISA Affiliate sponsors or maintains or to which a Loan Party or any ERISA Affiliate makes, is making or is obligated to make contributions or with respect to which it otherwise may have any liability, and includes any Pension Plan. Pledged Securities means all the Security Agreement Collateral as defined in each of the Securities Pledge Agreements. Pounds Sterling means the lawful money of the United Kingdom. Prime Rate means, for any day, the per annum rate of interest in effect for such day as publicly announced from time to time by Scotiabank in Toronto, Ontario as its "prime rate." (The "prime rate" is a rate set by Scotiabank based upon various factors including Scotiabank's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.) Any change in the prime rate announced by Scotiabank shall take effect at the opening of business on the day specified in the public announcement of such change. Prime Rate Loan means a Canadian Loan that bears interest based on the Prime Rate. Prior Liens means Liens which pursuant to the provisions of any Security Document are or may be superior to the Liens of such Security Document. Proceeding means any claim, action, judgment, suit, hearing, governmental investigation, arbitration (to the extent binding on US Borrower or any Subsidiary) or proceeding, including by or before any Governmental Authority. Pro Rata Share means as to any Lender in respect of any Facility at any time, the percentage equivalent (expressed as a decimal, rounded to the ninth decimal place) at such time of (a) prior to termination of the Commitments in such Facility, (i) such Lender's Commitment in such Facility divided by (ii) the combined Commitments of all Lenders in such Facility, or (b) after termination of the Commitments in such Facility, (i) the aggregate principal Dollar Equivalent amount of such Lender's Loans under such Facility, plus (in the case of the Revolving Facility) (without duplication) the participation of such Lender in the aggregate Effective Amount of all L/C Obligations and the Dollar Equivalent amount of all Swing Line Loans, divided by (ii) the aggregate Dollar Equivalent principal amount of all Loans under such Facility, plus (in the case of the Revolving Facility) (without duplication) the Effective Amount of all L/C Obligations. QFL A-UK Note - see subsection 2.23(a). QFL A-US Note - see subsection 2.23(a). QFL B Note - see subsection 2.23(a). QFL Notes - see subsection 2.23(a). Qualified Public Offering shall mean an Initial Public Offering resulting in gross cash proceeds to M-T Investors or Holding of at least U.S. $75.0 million the proceeds of which have been contributed to US Borrower. Qualified Subsidiary Guarantor means any Subsidiary Guarantor the Guarantee of which does not on its face exclude any Obligations of (i) with respect to any Domestic Subsidiary (other than UK Borrower Guarantor), any Loan Party other than UK Borrower, (ii) with respect to UK Borrower Guarantor, UK Borrower and (iii) with respect to any Foreign Subsidiary, CH Borrower, not taking into account any restrictions resulting from the amount of capital of such Subsidiary Guarantor available for distribution. Quarterly Date means each March 31, June 30, September 30 and December 31 of each year, commencing with and including September 30, 1997 through and including December 31, 2004. Ratification Agreement means a Ratification Agreement substantially in the form of Exhibit O entered into on the Amendment and Restatement Date. Real Property means all right, title and interest of the Borrowers or any of their respective Subsidiaries (including, without limitation, any leasehold estate) in and to a parcel of real property owned or operated by either Borrower or any of its respective Subsidiaries together with, in each case, all improvements and appurtenant fixtures, equipment, personal property, easements and other property and rights incidental to the ownership, lease or operation thereof. Reimbursement Obligations shall mean, at any time, the obligations of the Revolving Borrowers and the Subsidiary Swing Line Borrowers then outstanding, or that may thereafter arise in respect of all Letters of Credit then outstanding, to reimburse amounts paid by the applicable L/C Lender in respect of any drawings under a Letter of Credit issued for the account of such Revolving Borrower or Subsidiary Swing Line Borrower, as the case may be. Related Business means the businesses of US Borrower and the Subsidiaries as conducted on the Original Closing Date, unless the Safeline Acquisition is consummated, and, then, the Safeline Closing Date, and, in each case, any businesses related, ancillary or complementary to such businesses. Replacement Lender - see Section 4.8. Reportable Event means any of the events set forth in Section 4043(b) of ERISA or the regulations thereunder with respect to which a Loan Party or any ERISA Affiliate would be subject to the notice requirements of Section 4043(b), other than any such event for which the 30-day notice requirement under ERISA has been waived in regulations issued by the PBGC. Required Canadian Lenders means (a) at any time prior to the Canadian Termination Date, Canadian Lenders which are Non- Defaulting Lenders then holding at least a majority of the aggregate Canadian Commitments of all Canadian Lenders which are Non-Defaulting Lenders, and (b) otherwise, Canadian Lenders which are Non-Defaulting Lenders then holding at least a majority of the then outstanding aggregate principal amount of Canadian Loans of all Canadian Lenders which are Non-Defaulting Lenders. Required Lenders means (a) at any time prior to the Termination Date, Non-Defaulting Lenders then holding at least a majority of the sum of (i) the then aggregate unused amount of the Commitments of the Non-Defaulting Lenders, plus (ii) the then aggregate unpaid Dollar Equivalent principal amount of the Loans of the Non-Defaulting Lenders, plus (iii) (without duplication) the then aggregate Effective Amount of the L/C Obligations of the Non-Defaulting Lenders, and (b) otherwise, Non-Defaulting Lenders then holding at least a majority of the sum of (i) the then aggregate unpaid Dollar Equivalent principal amount of the Loans of the Non-Defaulting Lenders, plus (ii) (without duplication) the then aggregate Effective Amount of the L/C Obligations of the Non-Defaulting Lenders (it being understood that, for purposes of clauses (a) and (b), the principal amount of each Revolving Facility Lender's Loans shall be deemed to be (i) in the case of any Revolving Facility Lender other than any Applicable Swing Line Lender, increased by such Revolving Facility Lender's participations in the Swing Line Loans of such Applicable Swing Line Lender pursuant to Section 2.19 (whether funded or unfunded), except to the extent such Revolving Facility Lender shall not have funded such participations as required pursuant to Section 2.19, and (ii) in the case of any Applicable Swing Line Lender, decreased by the amount of the participations of all other Revolving Facility Lenders in its Swing Line Loans (whether funded or unfunded), except to the extent any such other Revolving Facility Lender shall not have funded such participations as required pursuant to Section 2.19. For purposes of determining whether the Required Lenders have approved any amendment, waiver or consent or taken any other action hereunder, the Dollar Equivalent amount of all Offshore Currency Loans shall be calculated on the date immediately preceding the date such amendment, waiver or consent is to become effective or such action is to be taken. Required Revolving Facility Lenders means (a) at any time prior to the Termination Date, Revolving Facility Lenders which are Non-Defaulting Lenders then holding at least a majority of the sum of (i) the then aggregate Available Revolving Facility Commitments of all Revolving Facility Lenders which are Non- Defaulting Lenders, plus (ii) the then Aggregate Outstanding Revolving Credit of all Revolving Facility Lenders which are Non- Defaulting Lenders, and (b) otherwise, Revolving Facility Lenders which are Non-Defaulting Lenders then holding at least a majority of the then Aggregate Outstanding Revolving Credit of all Revolving Facility Lenders which are Non-Defaulting Lenders (it being understood that, for purposes of clauses (a) and (b), the principal amount of each Revolving Facility Lender's Revolving Facility Loans shall be deemed to be (i) in the case of any Revolving Facility Lender other than any Applicable Swing Line Lender, increased by such Revolving Facility Lender's participations in the Swing Line Loans pursuant to Section 2.19 (whether funded or unfunded), except to the extent such Revolving Facility Lender shall not have funded such participations as required pursuant to Section 2.19, and (ii) in the case of any Applicable Swing Line Lender, decreased by the amount of the participations of all other Revolving Facility Lenders in its Swing Line Loans (whether funded or unfunded), except to the extent any such other Revolving Facility Lender shall not have funded such participations as required pursuant to Section 2.19. For purposes of determining whether the Required Revolving Facility Lenders have approved any amendment, waiver or consent or taken any other action hereunder, the Dollar Equivalent amount of all Offshore Currency Loans shall be calculated on the date immediately preceding the date such amendment, waiver or consent is to become effective or such action is to be taken. Requirement of Law means, as to any Person, any law (statutory or common), treaty, rule or regulation or determination of an arbitrator or of a Governmental Authority, in each case applicable to or binding upon the Person or any of its property or to which the Person or any of its property is subject. Reset Date - see the definition of Applicable Margin. Responsible Officer means the chief executive officer, the chief financial officer, the president or any vice-president of the Applicable Borrower, or any other officer having substantially the same authority and responsibility; or, with respect to compliance with financial covenants, the chief financial officer, the treasurer or controller of the Applicable Borrower, or any other officer having substantially the same authority and responsibility. Restoration has the meaning assigned to that term in each Mortgage. Restricted Payment - see Section 8.13. Revolving Borrowers means the Borrowers and UK Borrower. Revolving Facility means the revolving multicurrency credit facility in an aggregate principal amount equal to the Dollar Equivalent of U.S. $151.0 million with a letter of credit subfacility and a swing line subfacility provided hereunder as set forth in subsection 2.1(d) and Sections 2.16 and 3.1. Revolving Facility Commitment - see subsection 2.1(d). Revolving Facility Lender means a lender having a Revolving Facility Commitment or a Swing Line Commitment or holding a Revolving Facility Loan or a participation in an L/C Advance. Revolving Facility Loan means an extension of credit by a Revolving Facility Lender to a Revolving Borrower or a Subsidiary Swing Line Borrower under the Revolving Facility pursuant to Article II or Article III, which may be a Revolving Loan, a Swing Line Loan or an L/C Advance. Revolving Loan - see subsection 2.1(d). Revolving Loan Maturity Date means December 31, 2002. Revolving Note and Revolving Notes - see Section 2.2. Safeline Acquisition means the acquisition by US Borrower through UK Borrower and Canadian Borrower of 100% of the issued and outstanding share capital of Safeline Limited pursuant to the Safeline Acquisition Documents. Safeline Acquisition Documents means the documents listed in Schedule 1.1(f), in each case as in effect on the Safeline Closing Date as amended and in effect from time to time in accordance with Section 8.18. Safeline Acquisition Transactions means the Safeline Acquisition, the issuance of the Safeline Seller Notes and each other transaction contemplated hereby and thereby to be effected in connection therewith on, about or after the Safeline Closing Date. Safeline Closing Date means the date on which all conditions precedent set forth in Section 5.1A are satisfied or waived by all Lenders. Safeline Contingent Payment means the contingent payments set forth in Section 1.2(c) of the acquisition agreement relating to the Safeline Acquisition. Safeline Limited means Safeline Limited, an English corporation, and its successors. Safeline Loan Parties means Canadian Borrower, UK Borrower, the UK Borrower Guarantor and each other Subsidiary of UK Borrower which becomes a party to a Loan Document in connection with the Safeline Acquisition. Safeline Seller Notes means the notes of UK Borrower in an aggregate principal amount of 13.7 million Pounds Sterling issued to the sellers in the Safeline Acquisition, as amended and in effect from time to time in accordance with Section 8.18. Same Day Funds means (i) with respect to disbursements and payments in U.S. Dollars, immediately available funds, and (ii) with respect to disbursements and payments in Canadian Dollars or an Offshore Currency, same day or other funds as may be determined by the Applicable Agent, as the case may be (or, with respect to payments made by any Subsidiary Swing Line Borrower, the Swing Line Lender who makes Swing Line Loans to such Subsidiary Swing Line Borrower) to be customary in the place of disbursement or payment for the settlement of international banking transactions in Canadian Dollars or the relevant Offshore Currency. Scotiabank - see the introduction to this Agreement. SEC means the United States Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions. Section 4.1(f)(i) Certificate - see subsection 4.1(f)(i). Section 4.1(f)(v) Certificate - see subsection 4.1(f)(v). Secured Parties has the meaning specified in the Security Documents. Securities Pledge Agreements means the US Borrower Securities Pledge Agreement, the Holding Securities Pledge Agreement, the Domestic Subsidiary Securities Pledge Agreement, the Foreign Subsidiary Securities Pledge Agreement, and any other securities pledge agreements delivered pursuant to Section 5.1A(i), Section 7.14, Section 7.15, or Section 7.23. Security Agreement means a security agreement substantially in the form of Exhibit D entered into and delivered by each of the Borrowers and certain of the Subsidiary Guarantors, and any other security agreement delivered pursuant to Section 7.14, Section 7.15, or Section 7.23. Security Agreement Collateral means all "Collateral" as defined in the Security Agreement. Security Documents means each of the Securities Pledge Agreements, Security Agreements, the Mortgages and any other documents utilized to pledge as Collateral for the Obligations any other property or assets of whatever kind or nature. Senior Subordinated Note Documents shall mean and include each of the documents and other agreements entered into (including, without limitation, the Senior Subordinated Note Indenture) relating to the issuance by US Borrower of the Senior Subordinated Notes, as in effect on the Original Closing Date and as the same may be entered into, modified, supplemented or amended from time to time pursuant to the terms hereof and thereof. Senior Subordinated Note Indenture shall mean the Indenture, dated as of October 15, 1996, entered into by and among US Borrower, Holding and United States Trust Company of New York, as trustee thereunder, as in effect on the Original Closing Date and as amended and in effect from time to time in accordance with Section 8.18. Senior Subordinated Notes means the U.S. $135.0 million 9-3/4% senior subordinated notes due 2006 of US Borrower issued under the Senior Subordinated Note Indenture. S&P means Standard & Poor's Corporation. Specified Subsidiary means any Non-Guarantor Subsidiary or any Subsidiary set forth on Schedule 7.22. Spot Rate means with respect to any Applicable Currency, at any date of determination thereof, the spot rate of exchange with respect to U.S. Dollars for such date in London that appears on the display page applicable to such Applicable Currency on the Telerate System Incorporated Service (or such other page as may replace such page on such service for the purpose of displaying the spot rate of exchange in London); provided, however, that if there shall at any time no longer exist such a page or a relevant spot rate is not shown on such service, the spot rate of exchange shall be determined by reference to another similar rate publishing service selected by the Administrative Agent and if no such similar rate publishing service is available by reference to the published rate of the Administrative Agent in effect at such date for similar commercial transactions. State, Local and Foreign Real Property Disclosure Requirements means any federal, state or local laws requiring notification of the buyer of real property, or notification, registration, or filing to or with any state or local agency, prior to the sale of any real property or transfer of control of an establishment, of the actual or threatened presence or release into the environment, or the use, disposal, or handling of Hazardous Materials on, at, under, or near the real property to be sold or the establishment for which control is to be transferred. Subsidiary of a Person means any corporation, association, partnership, limited liability company, joint venture, business trust or other business entity of which more than 50% of the voting stock, membership interests or other equity interests is owned or controlled directly or indirectly by such Person, or one or more of the Subsidiaries of such Person, or a combination thereof. Notwithstanding the foregoing, any Joint Venture which is not majority owned by, but is controlled by, US Borrower or a Subsidiary and the financial results of which are included in the consolidated financial statements of US Borrower shall be deemed to be a Subsidiary of US Borrower. Unless the context otherwise clearly requires, references herein to a "Subsidiary" refer to a Subsidiary of US Borrower. The term Subsidiary shall also include any Person to become a Subsidiary pursuant to the M-T Acquisition or the Safeline Acquisition. Subsidiary Currency means, as to any Subsidiary Swing Line Borrower, the currency (or currencies with respect to M-T GmbH) in which such Subsidiary Swing Line Borrower may borrow Swing Line Loans pursuant to Section 2.16. Subsidiary Currency Equivalent means at any time with respect to any Subsidiary Swing Line Borrower, (a) with respect to all Subsidiary Swing Line Borrowers other than M-T GmbH, as to any amount denominated in the Subsidiary Currency, the amount thereof at such time, and (b) with respect only to M-T GmbH, as to any amount denominated in any Subsidiary Currency, the CHF Equivalent thereof. Subsidiary Guarantees means each Domestic Subsidiary Guarantee and each Foreign Subsidiary Guarantee. Subsidiary Guarantors means the Domestic Subsidiary Guarantors and the Foreign Guarantors. Subsidiary L/C Borrowing means, as to any Subsidiary Swing Line Borrower, an extension of credit resulting from a drawing under any Letter of Credit issued for the account of such Subsidiary Swing Line Borrower which shall not have been reimbursed on the date when made nor converted into a Borrowing of Revolving Facility Loans under subsection 3.3(b). Subsidiary L/C Commitment means the commitment of each L/C Lender which is a Swing Line Lender to Issue Letters of Credit from time to time under Article III to the Subsidiary Swing Line Borrower to whom it is to make Subsidiary Swing Line Loans, in an aggregate amount not to exceed the Subsidiary Swing Line Borrower Sublimit of such Subsidiary Swing Line Borrower; it being understood that the Subsidiary L/C Commitment is part of the Swing Line Commitment of such Subsidiary Swing Line Lender rather than a separate, independent commitment. Subsidiary L/C Effective Amount means with respect to any outstanding Subsidiary L/C Obligations of any Subsidiary Swing Line Borrower on any date, the aggregate Subsidiary Currency Equivalent of such Subsidiary L/C Obligations on such date after giving effect to any Issuances of Letters of Credit 0occurring on such date for the account of such Subsidiary Swing Line Borrower and any other changes in the aggregate Subsidiary Currency Equivalent amount of the Subsidiary L/C Obligations of such Subsidiary Swing Line Borrower as of such date, including as a result of any reimbursement of outstanding unpaid drawings under any Letter of Credit of such Subsidiary Swing Line Borrower or any reduction in the maximum amount available for drawing under any Letter of Credit of such Subsidiary Swing Line Borrower taking effect on such date. Subsidiary L/C Obligations means at any time, for any Subsidiary Swing Line Borrower, the sum of (a) the aggregate undrawn Subsidiary Currency Equivalent amount of all Letters of Credit Issued for the account of such Subsidiary Swing Line Borrower then outstanding, plus (b) the Subsidiary Currency Equivalent amount of all unreimbursed drawings under all Letters of Credit Issued for the account of such Subsidiary Swing Line Borrower, including all outstanding Subsidiary L/C Borrowings of such Subsidiary Swing Line Borrower. Subsidiary Swing Line Borrowers means each of the following Subsidiaries: the German Subsidiary; Mettler-Toledo S.A., Veroflay, a French corporation; Mettler-Toledo K.K., Takarazuka, a Japanese corporation; M-T GmbH; each of the UK Swing Line Borrowers; and each of their respective successors. Subsidiary Swing Line Borrower Sublimit means the amounts set forth opposite such Subsidiary's (or, in the case of the UK Swing Line Borrowers, their collective) name in the table below (it being understood that for the UK Swing Line Borrowers the amount is an aggregate sublimit for all of them together), as adjusted pursuant to subsection 2.6(a):
Name of Subsidiary(ies) Units of Applicable Currency - ------------------------------------ -------------------------------------- German Subsidiary DM 18.0 million Mettler-Toledo S.A., Veroflay FF 11.0 million Mettler-Toledo K.K., Takarazuka 175.0 million Japanese Yen M-T GmbH CHF 13.0 million UK Swing Line Borrowers 5.0 million Pounds Sterling
Substitute Lender - see Section 2.22. Supermajority Lenders means Non-Defaulting Lenders then holding at least 66-2/3% of the sum of (i) the then aggregate unused amount of the Commitments of the Non-Defaulting Lenders, plus (ii) the then aggregate unpaid Dollar Equivalent principal amount of the Loans of the Non-Defaulting Lenders, plus (iii) (without duplication) the then aggregate Effective Amount of the L/C Obligations of the Non-Defaulting Lenders. For purposes of determining whether the Supermajority Lenders have approved any amendment, waiver or consent or taken any other action hereunder, the Dollar Equivalent amount of all Canadian Loans and all Offshore Currency Loans shall be calculated on the date immediately preceding the date such amendment, waiver or consent is to become effective or such action is to be taken. Surety Instruments means all letters of credit (including standby and commercial), banker's acceptances, bank guaranties, surety bonds and similar instruments. Survey means a survey of any Mortgaged Real Property (and all improvements thereon): (i) prepared by a surveyor or engineer licensed to perform surveys in the state, province or country where such Mortgaged Real Property is located, (ii) dated (or redated) not earlier than six months prior to the date of delivery thereof unless there shall have occurred within the six months prior to such date of delivery any exterior construction on the site of such Mortgaged Real Property, in which event such survey shall be dated (or redated) after the completion of such construction or if such construction shall not have been completed as of such date of delivery, not earlier than 20 days prior to such date of delivery, (iii) certified by the surveyor (in a manner reasonably acceptable to the Administrative Agent) to the Administrative Agent and the Title Company and (iv) complying in all material respects with the minimum detail requirements of the American Land Title Association as such requirements are in effect on the date of preparation of such survey; provided, however, that such survey is in a form reasonably acceptable to the Title Company. Swap Contract means any agreement (including any master agreement and any agreement, whether or not in writing, relating to any single transaction) that is an interest rate swap agreement, basis swap, forward rate agreement, commodity swap, commodity option, equity or equity index swap or option, bond option, interest rate option, foreign exchange agreement, rate cap, collar or floor agreement, currency swap agreement, cross- currency rate swap agreement, swaption, currency option or any other, similar agreement (including any option to enter into any of the foregoing). Swing Line Borrowers means US Borrower and the Subsidiary Swing Line Borrowers. Swing Line Commitment means the commitment of each Swing Line Lender to make Swing Line Loans hereunder in an aggregate Dollar Equivalent amount not to exceed on any date on a combined basis for all the Swing Line Lenders an amount equal to the lesser of U.S. $40.0 million and the amount of the combined Commitments of all Swing Line Lenders, it being understood that the Swing Line Commitment is a part of the combined Revolving Facility Commitments of all Swing Line Lenders, rather than a separate independent commitment. Swing Line Lender means each of Credit Suisse First Boston (with respect solely to Swing Line Loans to be made to M-T GmbH), Scotiabank (with respect solely to Swing Line Loans to be made in U.S. Dollars to US Borrower and Pounds Sterling to the UK Swing Line Borrowers), Commerzbank AG (with respect solely to Swing Line Loans to be made to the German Subsidiary), and such other Lender having a Revolving Facility Commitment as selected by each Subsidiary Swing Line Borrower (or, with respect to the UK Swing Line Borrowers, by them collectively) and agreed to by such Lender (in each case solely with respect to the Offshore Currency in which such Lender agrees to make Swing Line Loans available to such Subsidiary Swing Line Borrower), in each case in its capacity as a swing line lender hereunder, and Swing Line Lenders means all of them. Swing Line Loan - see Section 2.16. Swing Line Loan Calculation Date - see subsection 2.7 (j). Swing Line Note and Swing Line Notes - see Section 2.2. Swiss Francs and CHF each mean lawful money of Switzerland. Taking has the meaning assigned to that term in each Mortgage. Tax Sharing Agreement means the Tax Sharing Agreement dated as of October 15, 1996 between M-T Investors and US Borrower, as amended and in effect from time to time in accordance with Section 8.18. Taxes means any and all present or future income, stamp, documentary, excise, property or other taxes, levies, imposts, duties, deductions, charges, fees or withholdings, now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, and all liabilities with respect thereto, including any present or future Taxes or similar levies which arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Agreement or any other Loan Document. Termination Date means the earlier to occur of (i) the date 30 Business Days prior to the Revolving Loan Maturity Date and (ii) the date on which the Revolving Facility Commitments are terminated or reduced to zero pursuant to Section 2.6. Term Loan Commitments means the Tranche A-CHF Facility Commitments, Tranche A-UK Facility Commitments, the Tranche A-US Facility Commitments, and the Tranche B Commitments of all the Lenders having such commitments. Term Loan Facilities means the Tranche A-CHF Term Loan Facility, the Tranche A-UK Term Loan Facility, Tranche A-US Term Loan Facility, and the Tranche B Term Loan Facility. Term Loans means the loans made under the Term Loan Facilities. Title Company shall mean First American Title Insurance Company or such other title insurance or abstract company as shall be designated by the Required Lenders. Tranche A-CHF Facility Commitment means a Lender's commitment to make a Tranche A-CHF Term Loan hereunder. Tranche A-CHF Lender means a Lender having a Tranche A- CHF Term Loan. Tranche A-CHF Term Loan - see subsection 2.1(a). Tranche A-CHF Term Loan Facility means the term loan facility in an aggregate principal amount of CHF 171.5 million. Tranche A-CHF Term Loan Maturity Date means December 31, 2002. Tranche A-CHF Term Note and Tranche A-CHF Term Notes - see Section 2.2. Tranche A Term Loans means the Tranche A-CHF Term Loans, the Tranche A-UK Term Loans and the Tranche A-US Term Loans, collectively. Tranche A-UK Facility Commitment means a Lender's commitment to make a Tranche A-UK Term Loan hereunder. Tranche A-UK Lender means a Lender having a Tranche A- UK Facility Commitment. Tranche A-UK Term Loan - see subsection 2.1(a). Tranche A-UK Term Loan Facility means the term loan facility in an aggregate principal amount of 26.7 million Pounds Sterling. Tranche A-UK Term Loan Maturity Date means December 31, 2002. Tranche A-UK Term Note and Tranche A-UK Term Notes - see Section 2.2. Tranche A-US Facility Commitment means a Lender's commitment to make a Tranche A-US Term Loan hereunder. Tranche A-US Lender means a Lender having a Tranche A- US Facility Commitment. Tranche A-US Term Loan - see subsection 2.1(a). Tranche A-US Term Loan Facility means the term loan facility in an aggregate principal amount of U.S.$33.8 million. Tranche A-US Term Loan Maturity Date means December 31, 2002. Tranche A-US Term Note and Tranche A-US Term Notes - see Section 2.2. Tranche B Facility Commitment means a Lender's commitment to make a Tranche B Term Loan hereunder. Tranche B Lender means a Lender having a Tranche B Facility Commitment. Tranche B Term Loan - see subsection 2.1(b). Tranche B Term Loan Facility means the term loan facility in an aggregate principal amount of U.S. $100.0 million. Tranche B Term Loan Maturity Date means December 31, 2004. Tranche B Term Note and Tranche B Term Notes - see Section 2.2. Transaction Documents means the M-T Acquisition Documents, the Safeline Acquisition Documents, the Senior Subordinated Note Documents, the Safeline Seller Notes, the documents and instruments entered into in connection with the Equity Issuance and each other document (other than the Loan Documents) relating to the Transactions including all appendices, annexes, schedules, attachments and exhibits to any such document. Transactions means the M-T Acquisition Transactions and the Safeline Acquisition Transactions. Treaty Lender - see the definition of UK Qualifying Lender. Type of Loan means (a) in the case of Committed Loans (other than Canadian Loans), an ABR Loan or a LIBOR Rate Loan, and (b) in the case of Canadian Loans, a Prime Rate Loan or a BA Equivalent Rate Loan. UCC means the Uniform Commercial Code as in effect in the applicable jurisdiction. UK Borrower means Safeline Holding Company, an unlimited liability company organized under the laws of the United Kingdom, and its successors. UK Borrower Guarantor means Safeline Inc., a Florida corporation, and each of its successors which is also a Domestic Subsidiary. The term UK Borrower Guarantor also includes any Domestic Subsidiary of UK Borrower which becomes a Guarantor pursuant to Section 7.20, and each of any such Subsidiary's successors which is also a Domestic Subsidiary. UK Borrower Sublimit -- see subsection 2.1(d) UK Borrower Swing Line L/C means any Letter of Credit Issued for the account of UK Borrower that UK Borrower has notified the Administrative Agent in writing is to be counted against the Subsidiary Swing Line Borrower Sublimit of the UK Swing Line Borrowers. UK Certificate - see subsection 4.1(f)(viii). UK Lender - see subsection 4.1(d)(ii). UK Qualifying Lender means a UK Lender which either: (a)(i) is a bank within the meaning of Section 840A of the Income and Corporation Taxes Act 1988; (ii) will be beneficially entitled to any interest to be paid to it on any advance to UK Borrower under this Agreement; and (iii) is within the charge to United Kingdom corporation tax as respects such interest; provided, however, that, if Section 349 or Section 840A of the Income and Corporation Taxes Act 1988 is repealed, modified, extended or re-enacted, the Administrative Agent may at any time and from time to time (after consultation with UK Borrower) amend this paragraph (a) in such manner as it may reasonably determine to put, so far as practicable, UK Borrower and UK Lenders in the same position as they would otherwise have been in; and provided, further, that an Assignee will not be a UK Qualifying Lender by reason of this paragraph (a) unless the assignor Lender was also a UK Qualifying Lender by reason of this paragraph (a); or (b)is "resident" (as such term is defined in the appropriate double taxation treaty) in a country with which the United Kingdom has a double taxation treaty generally giving residents of that country complete exemption from United Kingdom Tax on interest (and which does not carry on business in the United Kingdom through a permanent establishment with which the indebtedness under this Agreement in respect of which the interest is paid is effectively connected) (a "Treaty Lender") and for this purpose "double taxation treaty" means any convention or agreement between the government of the United Kingdom and any other government for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital gains. UK Swing Line Borrowers means M-T Leicester, Safeline Limited, and UK Borrower. Unfunded Pension Liability means the excess of a Pension Plan's benefit liabilities under Section 4001(a)(16) of ERISA over the fair market value of such Plan's assets (including all accrued contributions required to be made to the Plan in respect of the applicable plan year), determined in accordance with the actuarial assumptions used for funding such Plan pursuant to Section 412 of the Code for the applicable plan year. Unmatured Event of Default means any event or circumstance which, with the giving of notice, the lapse of time, or both, would (if not cured or otherwise remedied during such time) constitute an Event of Default. US Borrower - see the introduction to this Agreement. US Borrower Guarantee means the guarantee agreement substantially in the form of Exhibit E-5 entered into and delivered by US Borrower, as amended and restated on the Amendment and Restatement Date. US Borrower Securities Pledge Agreement means a securities pledge agreement substantially in the form of Exhibit J-4 entered into and delivered by US Borrower. US Borrower Sublimit means U.S. $8.0 million, as adjusted pursuant to subsection 2.6(a). U.S. Dollars and U.S. $ each mean lawful money of the United States. U.S. Federal Funds Rate means, for any day, the rate set forth in the weekly statistical release designated as H.15(519), or any successor publication, published by the U.S. Federal Reserve Bank of New York (including any such successor, "H.15(519)") on the preceding Business Day opposite the caption "U.S. Federal Funds (Effective)"; or, if for any relevant day such rate is not so published on any such preceding Business Day, the rate for such day will be the arithmetic mean as determined by the Administrative Agent of the rates for the last transaction in overnight U.S. Federal funds arranged prior to 9:00 a.m. (New York City time) on that day by each of three leading brokers of U.S. Federal funds transactions in New York City selected by the Administrative Agent. Wholly-Owned Subsidiary means, for any Person, any corporation in which (other than directors' qualifying shares or other shareholdings required by law) 100% of the capital stock of each class having ordinary voting power, and 100% of the capital stock of each other class, at the time as of which any determination is being made, is owned, beneficially and of record, by such Person, or by one or more of the other Wholly- Owned Subsidiaries, or a combination thereof. 1.2. Other Interpretive Provisions. (a) The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms. (b) The words "hereof," "herein," "hereunder" and similar words refer to this Agreement as a whole and not to any particular provision of this Agreement; and subsection, Section, Article, Schedule and Exhibit references are to this Agreement unless otherwise specified. (c)(i) The term "documents" includes any and all instruments, documents, agreements, certificates, indentures, notices and other writings, however evidenced. (ii) The term "including" is not limiting and means "including without limitation." (iii) In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including"; the words "to" and "until" each mean "to but excluding," and the word "through" means "to and including." (d) Unless otherwise expressly provided herein, (i) references to agreements (including this Agreement) and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent such amendments and other modifications are not prohibited by the terms of any Loan Document, and (ii) references to any statute or regulation are to be construed as including all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting the statute or regulation. (e) The captions and headings of this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement. (f) This Agreement and other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are cumulative and shall each be performed in accordance with their terms. (g) This Agreement and the other Loan Documents are the result of negotiations among and have been reviewed by counsel to the Agents, the Borrowers and the other parties, and are the products of all parties. Accordingly, they shall not be construed against the Lenders or any Agent merely because of an Agent's or Lenders' involvement in their preparation. 1.3. Accounting Principles. (a) Unless the context otherwise clearly requires, all accounting terms not expressly defined herein shall be construed, and all financial computations required under this Agreement shall be made, in accordance with GAAP, consistently applied; provided, however, that if the Borrowers notify the Arranger that the Borrowers wish to amend any covenant in Article VIII to eliminate the effect of any change in GAAP on the operation of such covenant (or if the Arranger notifies the Borrowers that the Required Lenders wish to amend Article VIII for such purpose), then the Borrowers' compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrowers and the Required Lenders. (b) References herein to "fiscal year" and "fiscal quarter" refer to such fiscal periods of US Borrower. 1.4. Currency Equivalents Generally. For all purposes of any Loan or other Credit Extension pursuant to this Agreement (but not for purposes of the preparation of any financial statements delivered pursuant hereto), the equivalent in any Offshore Currency or other currency (including Canadian Dollars) of an amount in U.S. Dollars, and the equivalent in U.S. Dollars of an amount in any Offshore Currency or other currency (including Canadian Dollars), shall be determined at the Spot Rate. For purposes of determining compliance with any restriction limited to a Dollar Equivalent amount in this Agreement (other than to the extent relating to any Loan or other Credit Extension under this Agreement), the Dollar Equivalent amount of transactions occurring prior to the date of determination shall be calculated based on the Spot Rate on the date of determination; provided, however, that if such Dollar Equivalent amount shall be exceeded, such restriction shall nonetheless be deemed not violated if such Dollar Equivalent amount of such transactions was calculated based on the relevant currency exchange rate in effect on the date of each such transaction. 1.5. Principle of Deemed Reinvestment. Except to the extent permitted under applicable law, all calculations of interest and fees hereunder are to be made on the basis of the nominal interest rate set forth herein and not using the effective rate method of calculation or on any basis which gives effect to the principle of deemed reinvestment. For the purposes of disclosure under the Interest Act (Canada), if and to the extent applicable, whenever interest is to be paid hereunder and such interest is to be calculated on the basis of a period of less than a calendar year, the yearly rate of interest to which the rate determined pursuant to such calculation is equivalent is the rate so determined multiplied by the actual number of days in the calendar year in which the same is to be ascertained and divided by the number of days in such period. 1.6 Effect on Original Credit Agreement and Other Loan Documents. Upon the execution and delivery by the parties hereto of this Agreement and the satisfaction (or waiver) of the conditions set forth in Section 5.3, (i) this Agreement shall be deemed to amend, restate and supersede the Original Credit Agreement, except that the grants of security interests, mortgages and Liens under and pursuant to the Loan Documents shall continue unaltered and each other Loan Document shall continue in full force and effect in accordance with its terms and the parties hereto hereby ratify and confirm the terms thereof as being in full force and effect and unaltered by this Agreement, (ii) all Obligations under the Original Credit Agreement and the other Loan Documents shall continue to be outstanding except as expressly modified by this Agreement and shall be governed in all respects by this Agreement and the other Loan Documents, it being agreed and understood that this Agreement does not constitute a novation, satisfaction, payment or reborrowing of any Obligation under the Original Credit Agreement or any other Loan Document except as expressly modified by the Agreement, nor does it operate as a waiver of any right, power or remedy of any Lender under any Loan Document (other than the Original Credit Agreement), and (iii) all references to the Original Credit Agreement in any Loan Document or other document or instrument delivered in connection therewith shall be deemed to refer to this Agreement and the provisions hereof. 1.7 Payments on Amendment and Restatement Date; Assignments on Amendment and Restatement Date; etc. Each of the Lenders and each of the Agents consents and agrees to each of the following transactions, all of which shall occur simultaneously with the effectiveness of the transactions to occur on the Amendment and Restatement Date: (a) Each of the Lenders listed in Schedule 1.7(a) (each, a "Paid Lender") shall have all Obligations owing to it under the Loan Documents (whether or not due) paid by the Credit Agreement Loan Party responsible therefor (the "Paid Lender's Payment"). The Paid Lender's Payment shall be paid in each Applicable Currency as set forth opposite such Paid Lender's name in Schedule 1.7(a). All Obligations of the Paid Lenders shall become due and payable on the Amendment and Restatement Date contingent upon the effectiveness of all transactions to occur on such date. The Paid Lender's Payment shall satisfy all obligations to such Paid Lenders under the Loan Documents (other than any amounts which may arise after the Amendment and Restatement Date under Article IV or Section 11.4). (b) Each Lender listed in Schedule 1.7(b) (each, a "Paid Existing Lender") having loans and commitments immediately prior to the Amendment and Restatement Date shall be paid by the Credit Agreement Loan Party responsible therefor in partial satisfaction of such loans and commitments outstanding as of the Amendment and Restatement Date that amount in Japanese Yen, Swiss Francs, U.S. Dollars set forth opposite each such Paid Existing Lender's name in Schedule 1.7(b) (the "Paid Existing Lender Payment Amount"). The Paid Existing Lender Payment Amount shall become due and payable on the Amendment and Restatement Date contingent upon the effectiveness of all transactions to occur on such date. (c) Each of the Lenders (each, a "Paying Existing Lender") listed in Schedule 1.7(c) shall pay to the Administrative Agent on behalf of the Credit Agreement Loan Parties the total amounts in Japanese Yen, Swiss Francs, and U.S. Dollars set forth opposite such Paying Existing Lender's name in Schedule 1.7(c). (d) Each Person which is to become a Lender on the Amendment and Restatement Date (each, a "New Lender") and listed in Schedule 1.7(d) shall pay to the Administrative Agent on behalf of the Credit Agreement Loan Parties that amount in Japanese Yen, Swiss Francs, and U.S. Dollars set forth opposite such New Lender's Name in Schedule 1.7(d). (e) The Borrower will pay all accrued interest, fees, and all other amounts due under Article IV on the Amendment and Restatement Date to the Administrative Agent for the benefit of each of the Lenders (including all Paid Lenders, all Paid Existing Lenders and the Paying Existing Lenders) in accordance with the amount thereof owing to each such Lender as of the Amendment and Restatement Date. The payments contemplated by subsections 1.7(a), 1.7(b), 1.7(c), 1.7(d), and 1.7(e) are herein referred to as the "Payment Adjustments" and will be made in connection with any amendments and modifications including the reallocation of commitments, conversions, or extensions of credit under this Agreement as of the Amendment and Restatement Date. Each Payment Adjustment shall be deemed to have taken place simultaneously with the consummation of all transactions contemplated under this Agreement on the Amendment and Restatement Date and is contingent upon the consummation of all such transactions contemplated under this Agreement as of the Amendment and Restatement Date. If for any reason the amendments contemplated by this Agreement to become effective on the Amendment and Restatement Date do not become effective, then all amounts received by the Administrative Agent or Lenders in connection with the Payment Adjustments shall be returned by the Administrative Agent or Lenders within two Business Days to Credit Agreement Loan Parties, but without interest. (f) Each Lender on Schedule 1.7(f) (each, an "Assigning Lender") will enter into an Assignment and Acceptance agreement (each, an "Amendment and Restatement Assignment") whereby each assignor will assign all rights and obligations under the Loan Documents to the parties set forth across from such Assigning Lenders name on Schedule 1.7(f). Each Amendment and Restatement Assignment shall be deemed to have taken place immediately prior to the effectiveness of the transactions contemplated under this Agreement to take place on the Amendment and Restatement Date. Such Amendment and Restatement Assignment will no longer be effective if the transactions contemplated by the Amendment and Restatement are not consummated. (g) Each Person which is a Lender as of the Amendment and Restatement Date consents to the termination of all Interest Periods relating to Loans which are LIBOR Rate Loans immediately prior to the Amendment and Restatement Date in connection with the transactions to occur on such date. 1.8. Certain Transactions Exempted. Notwithstanding any other provision of this Agreement or any other Loan Document, each of the transactions set forth on Schedule 1.8 effected in connection with UK Borrower Guarantor becoming a direct Subsidiary of UK Borrower shall not be prohibited by, nor shall the consummation thereof be a violation of, any term or provision of this Agreement or any other Loan Document if and so long as such transactions are effected substantially on the terms set forth on Schedule 1.8. 1.9. Repayment of Safeline Funds. Each of the Agents and the Lenders agree that all initial extensions of credit made in connection with the Safeline Acquisition are being made prior to the satisfaction of all conditions precedent set forth in Section 5.1A based upon the Credit Agreement Loan Parties' reasonable expectation of the satisfaction of such conditions and that, pending such satisfaction, such proceeds shall be held in escrow pursuant to arrangements satisfactory to US Borrower and the Administrative Agent, which arrangements shall provide for such funds being held for the benefit of the Credit Agreement Loan Parties pursuant to the terms hereof and the Lenders having made such extensions of credit and for the investment of such funds pending application to the Safeline Acquisition in such high quality investments as are reasonably acceptable to the Administrative Agent and not inconsistent with the terms of this Agreement. The Administrative Agent will hold such funds in escrow until the satisfaction of the conditions precedent set forth in Section 5.1A or until the repayment set forth in the next sentence. Notwithstanding any other provision in this Agreement, the Credit Agreement Loan Parties may, at any time prior to the date on which the conditions set forth in Section 5.1A are not capable of being satisfied, repay the Tranche A-UK Term Loans and any portion of the Tranche B Term Loans made to effect the Safeline Acquisition (not to exceed U.S. $22.2 million in the case of the Tranche B Term Loans) and in such case, the Administrative Agent will release such funds from escrow as appropriate. During such time as the proceeds of any Loans are held in escrow, interest on such Loans shall accrue thereon at the rates set forth herein applicable to the Types of Loans constituting such Loans and shall be payable at the times and as set forth herein applicable to all Loans of such Type. No Credit Agreement Loan Party shall use any funds held pursuant to such escrow arrangements referred to in this Section 1.9 other than to effect the Safeline Acquisition or the repayments set forth in this Section 1.9. ARTICLE II THE CREDITS ------------ 2.1. Amounts and Terms of Commitments and Loans.(a)(1) Each Tranche A-CHF Lender severally agrees, on the terms and conditions set forth herein, that in consideration of the Payment Adjustments (if applicable to such Lender) and the amendment of the extensions of credit under the Original Credit Agreement it shall convert its term extensions of credit under the Original Credit Agreement into, in part, loans in CHF owing by CH Borrower (each such loan, a "Tranche A-CHF Term Loan") and, in connection therewith it shall surrender all notes issued in respect of term extensions of credit under the Original Credit Agreements, all such extensions of credit shall be deemed converted in full by the Payment Adjustments (if applicable to such Lender) and the amended agreements evidenced hereby and by new notes issued at the Amendment and Restatement Date, including Tranche A-CHF Term Loans as of the Amendment and Restatement Date in an amount as is set forth on Schedule 2.1 opposite such Lender's name under the heading "Tranche A-CHF Term Loans as of the Amendment and Restatement Date." Each Tranche A-CHF Lender shall have, as of the Amendment and Restatement Date, Tranche A-CHF Term Loans in the amount set forth on Schedule 2.1 opposite such Lender's name under the heading "Tranche A-CHF Term Loans as of the Amendment and Restatement Date." The parties hereto acknowledge and agree that no Lender having a Tranche A-CHF Term Loan as of the Amendment and Restatement Date shall have any commitment to make any extension of credit on the Amendment and Restatement Date or at any other time in connection with its allocation of Tranche A- CHF Term Loans as of such date, other than the Payment Adjustments. (ii) Each Tranche A-UK Lender severally agrees, on the terms and conditions set forth herein, to make a single loan, in Pounds Sterling, to UK Borrower (each such loan, a "Tranche A-UK Term Loan") on the Safeline Closing Date in an amount of such Lender's Pro Rata Share of 26.7 million Pounds Sterling. The Tranche A-UK Commitment of each Tranche A-UK Lender is set forth on Schedule 2.1 opposite such Lender's name under the heading "Tranche A-UK Commitments." (iii) Each Tranche A-US Lender severally agrees, on the terms and conditions set forth herein, that, in consideration of the Payment Adjustments (if applicable to such Lender) and the amendment of the extensions of credit under the Original Credit Agreement, it shall convert its term extensions of credit under the Original Credit Agreement into, in part, loans in U.S. Dollars owing by US Borrower (each such loan, a "Tranche A-US Term Loan") and, in connection therewith, it shall surrender all notes issued in respect of term extensions of credit under the Original Credit Agreement, all such extensions of credit shall be deemed converted in full by the Payment Adjustments (if applicable to such Lender) and the amended agreements evidenced hereby and by new notes issued at the Amendment and Restatement Date, including loans owing by US Borrower (each such loan, a "Tranche A-US Term Loan") as of the Amendment and Restatement Date in an amount as is set forth on Schedule 2.1 opposite such Lender's name under the heading "Tranche A-US Term Loans as of the Amendment and Restatement Date." Each Tranche A-US Lender shall have, as of the Amendment and Restatement Date, Tranche A- US Term Loans in the amount set forth on Schedule 2.1 opposite such Lender's name under the heading "Tranche A-US Term Loans as of the Amendment and Restatement Date." The parties hereto acknowledge and agree that no Lender having a Tranche A-US Term Loan as of the Amendment and Restatement Date shall have any commitment to make any extension of credit on the Amendment and Restatement Date or at any other time in connection with the allocation of Tranche A-US Term Loans as of such date, other than the Payment Adjustments. (b) Each Tranche B Lender severally agrees, on the terms and conditions set forth herein, that in consideration of the Payment Adjustments (if applicable to such Lender) and the amendment of the extensions of credit under the Original Credit Agreement it shall convert its term extensions of credit under the Original Credit Agreement into, in part, loans in U.S. Dollars owing by US Borrower (each such loan, a "Tranche B Term Loan") and, in connection therewith it shall surrender all notes issued in respect of term extensions of credit under the Original Credit Agreement, all such extensions of credit shall be deemed converted in full by the Payment Adjustments (if applicable to such Lender) and the amended agreements evidenced hereby and by new notes issued at the Amendment and Restatement Date, including Tranche B Term Loans owing by US Borrower as of the Amendment and Restatement Date in an amount as is set forth on Schedule 2.1 opposite such Lender's name under the heading "Tranche B Term Loans as of Amendment and Restatement Date." Each Tranche B Lender shall have, as of the Amendment and Restatement Date, Tranche B Term Loans in the amount set forth on Schedule 2.1 opposite such Lender's name under the heading "Tranche B Term Loans as of the Amendment and Restatement Date." In addition, each Tranche B Lender severally agrees, on the terms and conditions set forth herein, to make a single loan, in U.S. Dollars, to US Borrower (each such loan also being referred to herein as a "Tranche B Term Loan") on the Safeline Closing Date in an amount of such Lender's Pro Rata Share of U.S. $22.2 million. The Tranche B Commitment of each Tranche B Lender is set forth on Schedule 2.1 opposite such Lender's name under the heading "Tranche B Commitments." (c) Each Canadian Lender agrees, on the terms and conditions set forth herein, to make loans in Canadian Dollars to Canadian Borrower (each such loan, a "Canadian Loan") from time to time on any Business Day during the period from the Safeline Closing Date to the Canadian Termination Date, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender's name under the heading "Canadian Commitments" on Schedule 2.1(c) (such amount, as reduced pursuant to Section 2.6 or changed as a result of one or more assignments under Section 4.8 or 11.8, such Lender's "Canadian Commitment"); provided, however, that at no time shall the aggregate principal amount of all Canadian Loans exceed the combined Canadian Commitments of all Canadian Lenders. Subject to the other terms and conditions hereof, Canadian Borrower may borrow under this subsection 2.1(c), prepay pursuant to subsection 2.7(g)(ii) and reborrow pursuant to this subsection 2.1(c) from time to time. (d) Each Revolving Facility Lender severally agrees, on the terms and conditions set forth herein, to make loans to each of the Revolving Borrowers (each such loan, a "Revolving Loan") from time to time on any Business Day during the period from the Original Closing Date to the Termination Date, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender's name under the heading "Revolving Facility Commitments" on Schedule 2.1 (such amount, as reduced pursuant to Section 2.6 or changed as a result of one or more assignments under Section 4.8 or 11.8, such Lender's "Revolving Facility Commitment") and in such currencies as a Revolving Borrower may request pursuant to subsection 2.3(a)(E); provided, however, that (1) Borrowings of Revolving Loans on the Original Closing Date shall in no event exceed the Dollar Equivalent amount of U.S. $75.0 million; (2) after giving effect to any Borrowing of Revolving Loans, the aggregate principal Dollar Equivalent amount of all outstanding Revolving Loans, plus the aggregate principal Dollar Equivalent amount of all outstanding Swing Line Loans, plus (without duplication) the Effective Amount of all L/C Obligations (other than Subsidiary L/C Obligations, except those of the UK Swing Line Borrowers) shall not exceed the combined Revolving Facility Commitments of all Revolving Facility Lenders; (3) the Aggregate Outstanding Revolving Credit of any Revolving Facility Lender shall not at any time exceed such Lender's Revolving Facility Commitment; (4) UK Borrower may borrow under the Revolving Facility only on and after the Safeline Closing Date; and (5) after giving effect to any Borrowing of Revolving Loans by UK Borrower, the aggregate principal Dollar Equivalent amount of outstanding Revolving Loans owing by UK Borrower, plus (without duplication) the Effective Amount of all L/C Obligations of Letters of Credit Issued for the account of UK Borrower (other than any UK Borrower Swing Line L/C) shall not exceed 20.0 million Pounds Sterling (the "UK Borrower Sublimit"). For purposes of making any Revolving Loan or other extension of credit under the Revolving Facility, other than a Revolving Loan pursuant to Section 2.18, any Swing Line Loan pursuant to Section 2.16 and any Revolving Loan pursuant to Section 3.3, there shall be deemed to be outstanding at all times Swing Line Loans in a minimum aggregate amount equal to the Assumed Swing Line Loan Amount. Any Revolving Loan made under Section 2.18 or Section 3.3 shall be made by each Revolving Facility Lender in an amount equal to its Pro Rata Share of the Revolving Loan made thereunder, provided that no Revolving Facility Lender need make such a Revolving Loan to the extent that the sum of the aggregate amount of Swing Line Loans made to any Subsidiary Swing Line Borrower, plus the Subsidiary L/C Effective Amount of all Letters of Credit issued for the account of such Subsidiary Swing Line Borrower exceeds such Subsidiary Swing Line Borrower's Subsidiary Swing Line Borrower Sublimit. Within the limits of each Revolving Facility Lender's Revolving Facility Commitment (and, with respect to UK Borrower, the sublimit set forth in clause (4) of the proviso to the first sentence of this Section 2.1(d)), and subject to the other terms and conditions hereof, each Revolving Borrower may borrow under this subsection 2.1(d), prepay under subsection 2.7(g)(i), and reborrow under this subsection 2.1(d). The Revolving Borrowers shall not request extensions of credit under the Revolving Facility (including pursuant to Article III) that would result in UK Borrower not having availability under its UK Borrower Sublimit of the Revolving Facility to fund its obligations under the Safeline Seller Notes and the Safeline Contingent Obligation. (e) Amounts which are borrowed as Term Loans which are repaid or prepaid may not be reborrowed. 2.2. Notes. Subject to Section 2.23, each Applicable Borrower's obligation to pay the principal of, and interest on, all the Loans made to it by each Lender shall be evidenced (i) if Tranche A-CHF Term Loans, by a promissory note substantially in the form of Exhibit H-1, with blanks appropriately completed (each, a "Tranche A-CHF Term Note" and, collectively, the "Tranche A-CHF Term Notes"), (ii) if Tranche B Term Loans, by a promissory note substantially in the form of Exhibit H-2, with blanks appropriately completed (each, a "Tranche B Term Note" and, collectively, the "Tranche B Term Notes"), (iii) if Tranche A-UK Term Loans, by a promissory note substantially in the form of Exhibit H-3, with blanks appropriately completed (each, a "Tranche A-UK Term Note" and, collectively, the "Tranche A-UK Term Notes"), (iv) if Tranche A-US Term Loans, by a promissory note substantially in the form of Exhibit H-4, with blanks appropriately completed (each, a "Tranche A-US Term Note" and, collectively, the "Tranche A-US Term Notes"), (v) if Revolving Loans, by a promissory note substantially in the form of Exhibit H-5, with blanks appropriately completed (each, a "Revolving Note" and, collectively, the "Revolving Notes"), (vi) if a Canadian Loan, by a promissory note substantially in the form of Exhibit H-5A, with blanks appropriately completed (each, a "Canadian Revolving Note" and, collectively, the "Canadian Revolving Notes"), and (vii) if Swing Line Loans, by a promissory note substantially in the form of Exhibit H-6, with blanks appropriately completed (each, a "Swing Line Note" and, collectively, the Swing Line Notes"). Each such Lender shall make appropriate notations on the schedules annexed to the applicable Note of the date, amount and maturity of each applicable Loan made by it and the amount of each payment of principal made by the Applicable Borrower with respect thereto. Each such Lender is irrevocably authorized by the Applicable Borrower to make such notations on the applicable Note and each such Lender's record shall be conclusive absent manifest error; provided, however, that the failure of a Lender to make, or an error in making, a notation on any Note with respect to any Loan shall not limit or otherwise affect the obligations of the Applicable Borrower hereunder or under such Note to such Lender. In connection with the increase in the Revolving Facility Commitments on the Amendment and Restatement Date as part of the amendments to the Original Credit Agreement, each Revolving Facility Lender shall surrender its notes issued in connection with its revolving facility commitments under the Original Credit Agreement and be issued new Revolving Notes pursuant to this Section 2.2. In connection with the amendment and conversion of the term extensions of credit under the Original Credit Agreement and the new term commitment provided on the terms herein specified pursuant to this Amended and Restated Credit Agreement to finance the Safeline Acquisition, each Lender having Term Loans or Term Loan Commitments as of the Amendment and Restatement Date shall surrender its old notes issued in connection with its term extensions of credit under the Original Credit Agreement and be issued the appropriate Term Notes pursuant to this Section 2.2. 2.3. Procedure for Committed Borrowing (Other than Canadian Borrowings. (a) The provisions of this Section 2.3 shall not apply to any Borrowing of a Canadian Loan, which shall be governed solely by Section 2.3A. Each Committed Borrowing (other than of a Swing Line Loan) shall be made upon the Applicable Borrower's irrevocable written notice (or telephonic notice promptly confirmed in writing) delivered to the Administrative Agent in the form of a Notice of Committed Borrowing (which notice must be received by the Administrative Agent prior to (i) 10:00 a.m. (London, England time), three Business Days prior to the requested Borrowing Date, in the case of Offshore Currency Loans; (ii) 10:00 a.m. (New York City time), three Business Days prior to the requested Borrowing Date, in the case of Offshore U.S. Dollar Loans; and (iii) 10:00 a.m. (New York City time), one Business Day prior to the requested Borrowing Date, in the case of ABR Loans, and in each case not more than five Business Days prior to the requested Borrowing Date) specifying: (A) the amount of the Committed Borrowing, which shall be in an aggregate amount not less than the Minimum Tranche; (B) the requested Borrowing Date, which shall be a Business Day; (C) the Type of Loans comprising the Committed Borrowing; (D) in the case of a Borrowing of LIBOR Rate Loans, the duration of the Interest Period therefor; and (E) in the case of a Borrowing of Offshore Currency Loans, the Applicable Currency. (b) The Dollar Equivalent amount of any Borrowing of Revolving Facility Loans in an Offshore Currency will be determined by the Administrative Agent for such Borrowing on the Computation Date therefor in accordance with subsection 2.5(a). Upon receipt of a Notice of Committed Borrowing, the Administrative Agent will promptly notify each Lender thereof and of the amount of such Lender's Pro Rata Share of the Committed Borrowing. In the case of a Borrowing of Revolving Facility Loans comprised of Offshore Currency Loans, such notice will provide the approximate amount of each Lender's Pro Rata Share of the Borrowing, and the Administrative Agent will, upon the determination of the Dollar Equivalent amount of the Borrowing as specified in the Notice of Committed Borrowing, promptly notify each Lender of the exact amount of such Lender's Pro Rata Share of the Borrowing. (c) Each Lender will make the amount of its Pro Rata Share of each Committed Borrowing available to the Administrative Agent for the account of the Applicable Borrower at the Agent's Payment Office on the Borrowing Date requested by such Applicable Borrower in Same Day Funds and in the requested currency (i) in the case of a Committed Borrowing comprised of Loans in U.S. Dollars, by 11:00 a.m. (New York City time), and (ii) in the case of a Borrowing comprised of Offshore Currency Loans, by such time (London, England time) as the Administrative Agent may specify. The proceeds of all such Committed Loans will promptly be made available to the Applicable Borrower by the Administrative Agent at such office by crediting the account of such Borrower or UK Borrower, as the case may be, where requested by such Applicable Borrower with the aggregate of the amounts made available to the Administrative Agent by the Lenders and in like funds as received by the Administrative Agent. (d) After giving effect to any Committed Borrowing, there may not be more than four different Interest Periods in effect for all Tranche A-CHF Term Loans, four different Interest Periods in effect for all Tranche B Term Loans, four different Interest Periods in effect for all Tranche A-UK Term Loans, four different Interest Periods in effect for all Tranche A-US Term Loans, and six different Interest Periods in effect for all Revolving Loans. No more than four different Applicable Currencies shall be utilized for all outstanding Revolving Loans. (e) ABR Loans shall only be made in U.S. Dollars. 2.3A Procedure for Canadian Borrowings. (a) Each Canadian Borrowing shall be made upon Canadian Borrower's irrevocable written notice delivered to the Canadian Agent in the form of a Notice of Canadian Borrowing (which notice must be received by the Canadian Agent prior to (i) 10:00 a.m. (New York City time) two Business Days prior to the requested Borrowing Date, in the case of BA Equivalent Rate Loans; and (ii) 9:00 a.m. (New York City time) on the requested Borrowing Date, in the case of Prime Rate Loans, and in each case not more than five Business Days prior to the requested Borrowing Date) specifying: (A) the amount of the Canadian Borrowing, which shall be in an aggregate amount not less than the Minimum Tranche; (B) the requested Borrowing Date, which shall be a Business Day; (C) the Type of Loans comprising the Canadian Borrowing; and (D) in the case of a Borrowing of BA Equivalent Rate Loans, the duration of the Interest Period therefor. (b) Upon receipt of a Notice of Canadian Borrowing, the Canadian Agent will promptly notify each Canadian Lender thereof and of the amount of such Canadian Lender's Percentage of the Canadian Borrowing. (c) Each Canadian Lender will make the amount of its Percentage of each Canadian Borrowing available to the Canadian Agent for the account of Canadian Borrower at the applicable Agent's Payment Office by 11:00 a.m. (New York City time) on the Borrowing Date requested by Canadian Borrower in Same Day Funds. The proceeds of all such Canadian Loans will then be made available to Canadian Borrower by the Canadian Agent at such office by crediting the account of Canadian Borrower on the books of the Canadian Agent with the aggregate of the amounts made available to the Canadian Agent by the Canadian Lenders and in like funds as received by the Canadian Agent. Each BA Equivalent Rate Loan shall, notwithstanding any other provision of this Agreement, be advanced to Canadian Borrower in an amount equal to the Notional BA Proceeds. (d) After giving effect to any Canadian Borrowing, there may not be more than four different Interest Periods in effect in respect of all Canadian Loans then outstanding. 2.4. Conversion and Continuation Elections for Committed Borrowings (Other Than Canadian Borrowings).(a) The provisions of this Section 2.4 shall not apply to any conversion or continuation election with respect to Canadian Loans, which shall be governed solely by Section 2.4A. Any Applicable Borrower may, upon irrevocable written notice to the Administrative Agent in accordance with subsection 2.4(b) with respect to Loans made to it: (i) elect, as of any Business Day in the case of ABR Loans, or as of the last day of the applicable Interest Period (other than extensions of credit under the Original Credit Agreement as of the Amendment and Restatement Date, which election may be as of any Business Day), in the case of Offshore U.S. Dollar Loans, to convert any such Committed Loans (or any part thereof in an amount not less than the Minimum Tranche) into Committed Loans in U.S. Dollars of the other Type; or (ii) elect, as of the last day of the applicable Interest Period (other than extensions of credit under the Original Credit Agreement as of the Amendment and Restatement Date, which election may be as of any Business Day), to continue any Committed Loans having Interest Periods expiring on such day (or any part thereof in an amount not less than the Minimum Tranche); provided, however, that if at any time the aggregate amount of Offshore U.S. Dollar Loans in respect of any Committed Borrowing is reduced, by payment, prepayment or conversion of part thereof, to be less than the Minimum Tranche, such Offshore U.S. Dollar Loans shall automatically convert into ABR Loans, and on and after such date the right of the Applicable Borrower to continue such Committed Loans as, and convert such Committed Loans into, Offshore U.S. Dollar Loans shall terminate unless and until such Committed Loans are increased, by additional Borrowings or Conversions, to be at least the Minimum Tranche. (b) The Applicable Borrower shall deliver a Notice of Conversion/Continuation to be received by the Administrative Agent not later than (i) 10:00 a.m. (London, England time), three Business Days prior to the Conversion/Continuation Date, if the Committed Loans are to be continued as Offshore Currency Loans; (ii) 10:00 a.m. (New York City time), three Business Days prior to the Conversion/Continuation Date, if the Committed Loans are to be converted into or continued as Offshore U.S. Dollar Loans; and (iii) 10:00 a.m. (New York City time), one Business Day prior to the Conversion/Continuation Date, if the Committed Loans are to be converted into ABR Loans, and in each case not more than five Business Days prior to the Conversion/Continuation Date, specifying: (A) the proposed Conversion/Continuation Date; (B) the aggregate amount and Type of Committed Loans to be converted or continued; (C) the Type of Committed Loans resulting from the proposed conversion or continuation; and (D) other than in the case of conversions into ABR Loans, the duration of the requested Interest Period. (c) If upon the expiration of any Interest Period applicable to Offshore U.S. Dollar Loans, the Applicable Borrower has failed to select timely a new Interest Period to be applicable to such Offshore U.S. Dollar Loans, the Applicable Borrower shall be deemed to have elected to convert such Offshore U.S. Dollar Loans into ABR Loans effective as of the expiration date of such Interest Period. If the Applicable Borrower has failed to select a new Interest Period to be applicable to Offshore Currency Loans by the applicable time on the third Business Day in advance of the expiration date of the current Interest Period applicable thereto as provided in subsection 2.4(b), the Applicable Borrower shall be deemed to have elected to continue such Offshore Currency Loans on the basis of a one month Interest Period. (d) The Administrative Agent will promptly notify each Lender of its receipt of a Notice of Conversion/Continuation pursuant to this Section 2.4, or, if no timely notice is provided by the Applicable Borrower, the Administrative Agent will promptly notify each Lender of the details of any automatic conversion. All conversions and continuations shall be made ratably according to the respective outstanding principal amounts of the Committed Loans held by each Lender with respect to which the notice was given. (e) Unless the Required Lenders otherwise agree or otherwise as permitted hereby, during the existence of an Event of Default or Unmatured Event of Default, no Applicable Borrower may elect to have a Committed Loan converted into an Offshore U.S. Dollar Loan or continued as a LIBOR Rate Loan. (f) After giving effect to any conversion or continuation of Committed Loans, there may not be more than four different Interest Periods in effect for all Tranche A-CHF Term Loans, four different Interest Periods in effect for all Tranche B Term Loans, four different Interest Periods in effect for all Tranche A-UK Term Loans, four different Interest Periods in effect for all Tranche A-US Term Loans, and six different Interest Periods in effect for all Revolving Loans. 2.4A Conversion and Continuation Elections for Canadian Borrowings. (a) Canadian Borrower may, upon irrevocable written notice to the Canadian Agent in accordance with subsection 2.4A(b): (i) elect, as of any Business Day, in the case of Prime Rate Loans, or as of the last day of the applicable Interest Period, in the case of BA Equivalent Rate Loans, to convert any such Canadian Loans (or any part thereof in an amount not less than the Minimum Tranche) into Canadian Loans of another Type; or (ii) elect, as of the last day of the applicable Interest Period, to continue any Canadian Loans having Interest Periods expiring on such day (or any part thereof in an amount not less than the Minimum Tranche); provided, however, that if at any time the aggregate amount of BA Equivalent Rate Loans in respect of any Canadian Borrowing is reduced, by payment, prepayment or conversion of part thereof, to be less than the Minimum Tranche, such BA Equivalent Rate Loans shall automatically convert into Prime Rate Loans, and on and after such date the right of Canadian Borrower to continue such Canadian Loans as, or convert such Canadian Loans into, BA Equivalent Rate Loans shall terminate. (b) Canadian Borrower shall deliver a Notice of Conversion/Continuation to be received by the Agents not later than (i) 10:00 a.m. (New York City time) two Business Days prior to the Conversion/Continuation Date, if the Canadian Loans are to be converted into or continued as BA Equivalent Rate Loans; and (ii) 9:00 a.m. (New York City time) on the Conversion/Continuation Date, if the Canadian Loans are to be converted into Prime Rate Loans, specifying: (A) the proposed Conversion/Continuation Date; (B) the aggregate amount of Canadian Loans to be converted or renewed; (C) the Type of Canadian Loans resulting from the proposed conversion or continuation; and (D) other than in the case of conversions into Prime Rate Loans, the duration of the requested Interest Period. (c) If upon the expiration of any Interest Period applicable to BA Equivalent Rate Loans, Canadian Borrower has failed to select timely a new Interest Period to be applicable to such BA Equivalent Rate Loans, Canadian Borrower shall be deemed to have elected to convert such BA Equivalent Rate Loans into Prime Rate Loans effective as of the expiration date of such Interest Period. (d) The Canadian Agent will promptly notify each Canadian Lender of its receipt of a Notice of Conversion/Continuation pursuant to this Section 2.4A, or, if no timely notice is provided by Canadian Borrower, the Canadian Agent will promptly notify each Lender of the details of any automatic conversion. All conversions and continuations shall be made ratably according to the respective outstanding principal amounts of the Canadian Loans held by each Canadian Lender with respect to which the notice was given. (e) Unless the Required Lenders otherwise agree, during the existence of an Event of Default or Unmatured Event of Default, Canadian Borrower may not elect to have a Canadian Loan converted into or continued as a BA Equivalent Rate Loan and all Canadian Loans which are BA Equivalent Rate Loans shall be automatically converted into a Prime Rate Loan at the end of the relevant Interest Period so long as an Event of Default or Unmatured Event of Default is in existence. (f) After giving effect to any conversion or continuation of Canadian Loans, there may not be more than four different Interest Periods in effect in respect of all Canadian Loans together then outstanding. 2.5. Utilization of Commitments in Offshore Currencies. (a) The Administrative Agent will determine the Dollar Equivalent amount with respect to: (i) any Borrowing (other than of Swing Line Loans) comprised of Offshore Currency Loans three Business Days prior to the requested Borrowing Date, (ii) any Swing Line Loans made in U.S. Dollars or Pounds Sterling, as of the proposed Borrowing Date thereof, (iii) any Issuance of a Letter of Credit for the account of any Revolving Borrower or any UK Swing Line Borrower in an Offshore Currency as of the requested Issuance Date, (iv) any drawing under a Letter of Credit Issued for the account of any Revolving Borrower or any UK Swing Line Borrower in an Offshore Currency as of the related Honor Date, (v) all outstanding Offshore Currency Loans (other than Swing Line Loans not made in U.S. Dollars or Pounds Sterling), plus all Swing Line Loans made in U.S. Dollars or Pounds Sterling, plus the Effective Amount of all L/C Obligations under Letters of Credit Issued for the account of any Revolving Borrower or any UK Swing Line Borrower as of the last Business Day of each month and as of any other date selected by the Administrative Agent, (vi) the aggregate Dollar Equivalent amount of the Subsidiary Swing Line Borrower Sublimits of all Subsidiary Swing Line Borrowers other than the UK Swing Line Borrowers as of each Adjustment Date, (vii) any ABR Loan to be made in lieu of an Offshore Currency Loan pursuant to subsection 2.5(b) as of the Business Day prior to the proposed Borrowing Date, (viii) the aggregate sum (without duplication) of the amount of all Offshore Currency Loans (other than Swing Line Loans), plus all L/C Obligations of the Revolving Borrowers, plus all Swing Line Loans, plus the Subsidiary L/C Effective Amount of all Subsidiary L/C Obligations immediately prior to and after giving effect to any Revolving Loan made under Section 2.18 as of the proposed date of the making of any such Revolving Loan, (ix) the aggregate sum of the amount of all Offshore Currency Loans (other than Swing Line Loans), plus all L/C Obligations of the Revolving Borrowers, plus all Swing Line Loans of the Subsidiary Swing Line Borrowers other than the UK Swing Line Borrowers, plus the Subsidiary L/C Effective Amount of all Subsidiary L/C Obligations immediately prior to and after giving effect to any Revolving Loan made under Section 3.3 as of the proposed date of the making of any such Revolving Loan, (x) any outstanding Offshore Currency Loan as of any redenomination date pursuant to this Section 2.5 or Section 4.5, and (xi) all Offshore Currency Loans, plus the Effective Amount of all L/C Obligations on any date on which the Revolving Facility Commitments, the US Borrower Sublimit or the Subsidiary Swing Line Borrower Sublimits are reduced pursuant to Section 2.6. (b) In the case of a proposed Borrowing (other than of Swing Line Loans) under the Revolving Facility comprised of Offshore Currency Loans, in the event that any Revolving Facility Lender gives notice to the Administrative Agent not later than 10:00 a.m. (London, England time) one Business Day prior to the proposed Borrowing Date that it is unable to fund Revolving Facility Loans in an Offshore Currency at a reasonable cost to it, such Lender shall make its Pro Rata Share of the proposed Borrowing as an ABR Loan in the Dollar Equivalent amount of the amount it otherwise would have made in such Offshore Currency; provided, however, that the Lenders shall be under no obligation to make Offshore Currency Loans in the requested Offshore Currency as part of such Borrowing if the Administrative Agent has received notice from the Required Revolving Facility Lenders by 10:00 a.m. (London, England time), two Business Days prior to the day of such Borrowing, that such Lenders cannot provide Loans in the requested Offshore Currency, in which event the Administrative Agent will promptly give notice to the applicable Revolving Borrower that the Borrowing in the requested Offshore Currency is not then available, and notice thereof also will be given promptly by the Administrative Agent to the Lenders. If the Administrative Agent shall have so notified the applicable Revolving Borrower that, pursuant to any such notice from the Required Revolving Facility Lenders, any such Borrowing in a requested Offshore Currency is not then available, such Revolving Borrower may, by notice to the Administrative Agent not later than 10:00 a.m. (London, England time), on the requested date of such Borrowing, withdraw the Notice of Committed Borrowing relating to such requested Borrowing. If such Revolving Borrower does so withdraw such Notice of Committed Borrowing, the Borrowing requested therein shall not occur and the Administrative Agent will promptly so notify each Lender. If such Revolving Borrower does not so withdraw such Notice of Committed Borrowing, the Administrative Agent will promptly so notify each Lender and such Notice of Committed Borrowing shall be deemed to be a Notice of Committed Borrowing that requests a Borrowing comprised of ABR Loans in an aggregate amount equal to the Dollar Equivalent of the amount of the originally requested Borrowing in the Notice of Committed Borrowing (however, not in excess of the aggregate Available Revolving Facility Commitment of all Revolving Facility Lenders at such time); and in such notice by the Administrative Agent to each Lender the Administrative Agent will state such aggregate amount of such Borrowing in U.S. Dollars and such Lender's Pro Rata Share thereof. (c) In the case of a proposed continuation of Offshore Currency Loans under the Revolving Facility for an additional Interest Period pursuant to Section 2.4, in the event that any Revolving Facility Lender gives notice to the Administrative Agent that it is unable to continue Revolving Facility Loans in an Offshore Currency at a reasonable cost to it, such Lender's Loans in such Offshore Currency shall be repaid on the last day of the current Interest Period; provided, however, that the Lenders shall be under no obligation to continue such Offshore Currency Loans if the Administrative Agent has received notice from the Required Revolving Facility Lenders by 10:00 a.m. (London, England time), three Business Days prior to the day of such continuation, that such Lenders cannot continue to provide Loans in the relevant Offshore Currency, in which event the Administrative Agent will promptly give notice to the applicable Revolving Borrower that the continuation of such Offshore Currency Loans in the relevant Offshore Currency is not then available, and notice thereof also will be given promptly by the Administrative Agent to the Lenders. If the Administrative Agent shall have so notified such Revolving Borrower that, pursuant to such notice from the Required Revolving Facility Lenders, any such continuation of Offshore Currency Loans is not then available, any Notice of Continuation/Conversion with respect thereto shall be deemed withdrawn and such Offshore Currency Loans shall be repaid on the last day of the Interest Period with respect to such Offshore Currency Loans. (d) Notwithstanding anything herein to the contrary, during the existence of an Event of Default, upon the request of the Required Revolving Facility Lenders (in the case of clause (i) of this subsection), the Lenders holding at least a majority of the Tranche A-CHF (in the case of clause (ii) of this subsection) or the Lenders holding at least a majority of the Tranche A-UK Term Loans (in the case of clause (iii) of this subsection), (i) all or any part of any outstanding LIBOR Rate Loans under the Revolving Facility shall be redenominated (if not Offshore U.S. Dollar Loans) and converted into ABR Loans with effect from the last day of the Interest Period with respect to such LIBOR Rate Loans, (ii) at the end of the current Interest Period therefor, each Tranche A-CHF Term Loan shall not be continued for any Interest Period but instead shall bear interest at a rate per annum equal to the Applicable Margin for Tranche A- CHF Term Loans, plus the Overnight Rate for the Applicable Currency from time to time in effect or such other rate as may be agreed to by CH Borrower and the Lenders holding at least a majority of the Tranche A-CHF Term Loans and specified to the Administrative Agent, and (iii) at the end of the current Interest Period therefor, each Tranche A-UK Term Loan shall not be continued for any Interest Period but instead shall bear interest at a rate per annum equal to the Applicable Margin for Tranche A-UK Term Loans, plus the Overnight Rate for the Applicable Currency from time to time in effect or such other rate as may be agreed to by UK Borrower and the Lenders holding at least a majority of the Tranche A-UK Term Loans and specified to the Administrative Agent. The Administrative Agent will promptly notify the applicable Borrower of any request pursuant to the foregoing sentence. (e) The Revolving Borrowers shall be entitled to request that Revolving Facility Loans hereunder also be permitted to be made in any other lawful currency constituting a eurocurrency, in addition to the eurocurrencies specified in the definition of "Offshore Currency" herein, that in the opinion of the Required Revolving Facility Lenders is at such time freely traded in the offshore interbank foreign exchange markets and is freely transferable and freely convertible into U.S. Dollars (an "Agreed Alternative Currency"). The applicable Revolving Borrower shall deliver to the Administrative Agent any request for designation of an Agreed Alternative Currency not later than 10:00 a.m. (London, England time), at least ten Business Days in advance of the date of any Borrowing hereunder proposed to be made in such Agreed Alternative Currency. Upon receipt of any such request the Administrative Agent will promptly notify the Revolving Facility Lenders thereof, and each Lender will use its best efforts to respond to such request within two Business Days of receipt thereof. If the Administrative Agent has not received any response from a Revolving Facility Lender by the end of the day four Business Days prior to the date of Borrowing to be made in such Agreed Alternative Currency, the Administrative Agent shall conclusively presume the assent of such Lender. Each Revolving Facility Lender may grant or accept such request in its sole discretion. The Administrative Agent will promptly notify the applicable Revolving Borrower of the acceptance or rejection of any such request. 2.6. Reduction or Termination of Commitments. (a) The Borrowers may, upon not less than five Business Days' prior notice to the Administrative Agent, terminate the Commitments in any Facility (other than the Canadian Facility), or permanently reduce the Commitments in any Facility (other than the Canadian Facility) by an aggregate amount equal to the Dollar Equivalent of U.S. $1.0 million or a higher integral multiple of U.S. $1.0 million; unless, in the case of the Revolving Facility, after giving effect thereto and to any prepayments of the Revolving Facility Loans made on the effective date of such termination or reduction, the then outstanding principal Dollar Equivalent amount of all Revolving Facility Loans (including the Assumed Swing Line Loan Amount), plus (without duplication) the Effective Amount of all L/C Obligations (other than Subsidiary L/C Obligation, except those of the UK Swing Line Borrowers) together would exceed the amount of the combined Revolving Facility Commitments of all Revolving Facility Lenders then in effect. The Borrowers may, upon not less than five Business Days' prior notice to the Administrative Agent and the Applicable Swing Line Lender, terminate or permanently reduce the Subsidiary Swing Line Borrower Sublimit of any Subsidiary Swing Line Borrower or the US Borrower Sublimit; unless, after giving effect thereto and to any prepayment of the Swing Line Loans made on the effective date of such termination or reduction the then outstanding Dollar Equivalent amount of all Swing Line Loans, plus the Subsidiary L/C Effective Amount of all Subsidiary L/C Obligations would exceed the Dollar Equivalent amount of the aggregate of the Subsidiary Swing Line Borrower Sublimits then in effect, plus the US Borrower Sublimit then in effect. (b) There are no commitments to make (x) any Tranche A- CHF Term Loans or Tranche A-US Term Loans as of the Amendment and Restatement Date other than by conversion of existing term extensions of credit under the Original Credit Agreement and the Payment Adjustments, or (y) Tranche B Term Loans in excess of U.S. $22.2 million; the aggregate amount thereof as of the Amendment and Restatement Date (before giving effect to the funding of the Safeline Acquisition) reflects an adjustment and conversion of term loan extensions of credit previously made by the Lenders on the Original Closing Date. The Commitments relating to the Tranche A-UK Term Loan Facility and the Tranche B Term Loan Facility shall automatically and permanently expire concurrently with the making of the Term Loans thereunder on the Safeline Closing Date. (c) The aggregate amount of the Canadian Commitments shall be automatically and permanently reduced to zero on the Canadian Termination Date. (d) Canadian Borrower shall have the right at any time or from time to time (i) so long as no Canadian Loans will be outstanding as of the date specified for termination, to terminate the Canadian Commitments and (ii) to permanently reduce the aggregate amount of the unutilized Canadian Commitments of all the Canadian Lenders; provided, however, that (x) Canadian Borrower shall give five Business Days notice of each such termination or reduction to the Canadian Agent and the Canadian Lenders, and (y) each partial reduction shall be in an aggregate amount at least equal to Cdn.$1.0 million (or a larger multiple of Cdn.$1.0 million). (e) Once reduced in accordance with this Section, the Commitments may not be increased or reinstated. Any reduction of the Commitments in any Facility shall be applied to each Lender's Commitment in such Facility according to its Pro Rata Share or Percentage, as applicable. All accrued Facility Fees or Canadian Facility Fees, as the case may be, in respect of any Facility to, but not including, the effective date of any reduction or termination of Commitments in such Facility shall be paid on the effective date of such reduction or termination. 2.7 Prepayments. (a) So long as any Term Loans are outstanding, within 20 days following each date on which US Borrower or any Subsidiary receives any Net Cash Proceeds from any Taking or Destruction or loss of title to any Mortgaged Real Property, a Dollar Equivalent amount equal to 100% of such Net Cash Proceeds shall be applied as a mandatory prepayment of principal of the Term Loans; provided, however, that so long as no Event of Default or Unmatured Event of Default then exists and such proceeds do not exceed the Dollar Equivalent amount of U.S. $10.0 million, such proceeds shall not be required to be so applied on such date to the extent that the Borrowers have delivered an Officers' Certificate to the Administrative Agent on or prior to such date stating that such proceeds shall be used to replace or restore (in accordance with the procedures set forth in the Mortgage) any properties or assets in respect of which such proceeds were paid within 360 days following the date of the receipt of such proceeds (which certificate shall set forth the estimates of the proceeds to be so expended); provided, further, however, that (i) if the amount of such proceeds exceeds the Dollar Equivalent amount of U.S. $10.0 million, then the entire amount and not just the portion in excess of the Dollar Equivalent amount of U.S. $10.0 million shall be applied as a mandatory prepayment of Term Loans as provided above in this subsection 2.7(a) and (ii) if all or any portion of such proceeds not required to be applied to the prepayment of Term Loans pursuant to the preceding proviso are not so used within 360 days after the date of the receipt of such proceeds, such remaining portion shall be applied on the last day of such period (or the next preceding Business Day if such last day is not a Business Day) as a mandatory prepayment of principal of the Term Loans as provided above in this subsection 2.7(a). Each such prepayment shall be applied as set forth in subsection 2.7(f). (b) So long as any Term Loans are outstanding, within 90 days after the end of each fiscal year of US Borrower ending after December 31, 1996, the Term Loans shall be prepaid in a Dollar Equivalent amount equal to 75% of Excess Cash Flow for such fiscal year; provided, however, that if the Debt to EBITDA Ratio as of the end of the fiscal year immediately preceding the date of any such prepayment is less than 3.50 to 1.0, such percentage shall be 50%. Each such prepayment shall be applied as set forth in subsection 2.7(f). (c) So long as any Term Loans are outstanding, within 30 days after the receipt by US Borrower or any Subsidiary of Net Cash Proceeds from any Asset Sale, the Term Loans shall be prepaid in a Dollar Equivalent amount equal to 100% of the Net Cash Proceeds of such Asset Sale; provided, however, that the Net Cash Proceeds from any Asset Sale permitted by each of subsection 8.2(d) and subsection 8.2(i) shall in each case not be required to be so applied to the prepayment of the Term Loans on such date if (i) no Event of Default or Unmatured Event of Default then exists and (ii) the Borrowers deliver an Officers' Certificate to the Administrative Agent on or prior to such date stating that such Net Cash Proceeds shall be reinvested in the business of the Borrowers or any Subsidiary within 180 days following the date of such Asset Sale (which certificate shall set forth the estimates of the proceeds to be so expended); provided, further, however, that if all or any portion of such Net Cash Proceeds not so applied to the prepayment of Term Loans is not so used within such 180 day period, such remaining portion shall be applied on the last day of such period (or the next preceding Business Day if such last day is not a Business Day) as a mandatory prepayment of principal of outstanding Term Loans as provided above in this subsection 2.7(c). Each such prepayment shall be applied as set forth in subsection 2.7(f). (d) So long as any Term Loans are outstanding, the Term Loans shall be prepaid concurrently with the receipt of any Net Cash Proceeds from the issuance of any Indebtedness by US Borrower or any Subsidiary (other than any Indebtedness permitted by Section 8.5) in a Dollar Equivalent amount equal to 100% of such Net Cash Proceeds. Each such prepayment shall be applied as set forth in subsection 2.7(f). (e) So long as any Term Loans are outstanding, the Term Loans shall be prepaid concurrently with the receipt of any Net Cash Proceeds from any capital contribution to US Borrower or any Subsidiary or from the issuance or sale of any equity securities of M-T Investors, Holding or any of its Subsidiaries or any other direct or indirect parent of US Borrower (other than (w) the Equity Issuance, (x) the exercise of employee stock options and the repayment of loans to employees, (y) the issuance of equity to William Donnelly or to the sellers in the Safeline Acquisition (not to exceed U.S. $6.0 million in total proceeds), and (z) in each case, contributions from or issuances to another Company) in a Dollar Equivalent amount equal to 50% of such Net Cash Proceeds; provided, however, that (A) no such prepayment shall be required in connection with the issuance or sale by Holding of any equity securities of Holding to the Investors or from the proceeds of any capital contribution therefrom to US Borrower or any Subsidiary in an aggregate amount of Net Cash Proceeds up to the Dollar Equivalent amount of U.S. $35.0 million since the Original Closing Date (over and above the Equity Issuance) if (i) no Event of Default or Unmatured Event of Default then exists, (ii) such Net Cash Proceeds are contemporaneously utilized by US Borrower and the Subsidiaries in their business, and (iii) such Net Cash Proceeds are not utilized by US Borrower or any Subsidiary, directly or indirectly, to redeem, retire or acquire any other Indebtedness of US Borrower or any Subsidiary, and (B) if a Qualified Public Offering has been consummated, US Borrower may, provided that no Event of Default or Unmatured Event of Default has occurred and is continuing, first use the Net Cash Proceeds thereof to redeem up to U.S. $47.25 million of the Senior Subordinated Notes (plus premiums thereon) in accordance with the terms of the Senior Subordinated Note Indenture which permit such a redemption upon a public equity offering before utilizing the Net Cash Proceeds thereof to prepay the Term Loans, however, in such event, US Borrower shall apply all remaining Net Cash Proceeds thereof to prepay the Term Loans up to such amount thereof that would have been applied if the application to redeem the Senior Subordinated Notes had not taken place. Each such prepayment shall be applied as set forth in subsection 2.7(f). (f) Each prepayment of the Term Loans required by subsections (a)-(e) of this Section 2.7 shall be applied pro rata among the Term Loan Facilities (based on the then remaining amounts of the Amortization Payments of the Term Loan Facilities) and, as to each Term Loan Facility, first, to the next immediately succeeding scheduled quarterly Amortization Payment of such Term Loan Facility as set forth in the relevant subsection of Section 2.9 and, second, pro rata to the remaining Amortization Payments under such Term Loan Facility as set forth in the relevant subsection of Section 2.9. Subject to subsection 2.10(b), all prepayments of Term Loans shall be made together with all accrued interest thereon and any amounts required by Section 4.4, and all such payments shall be applied to the payment of interest and such Section 4.4 amounts before application to principal. Without prejudice to the obligations to prepay as set out in this Section 2.7, any Applicable Borrower proposing to make any prepayment under this Section 2.7 will, prior to making any such prepayment, take all steps required of it to obtain any consents, authorizations or other approvals or take any other action which may at any relevant time be required of it in respect of any such prepayment to be made by it (including taking all requisite steps under Chapter VI of the Companies Act 1985 of Great Britain). (g) (i) Subject to Section 4.4, any Applicable Borrower may, at any time or from time to time, ratably prepay, without premium or penalty, Committed Loans under the Revolving Facility or under the Term Loan Facilities in whole or in part, in an aggregate Dollar Equivalent principal amount of at least U.S. $1.0 million and a higher integral multiple of 1.0 million units of the Applicable Currency. The Applicable Borrower shall deliver a notice of prepayment in accordance with Section 11.2 to be received by the Administrative Agent not later than (i) 10:00 a.m. (London, England time), three Business Days in advance of the prepayment date, if the Committed Loans to be prepaid are LIBOR Rate Loans, and (ii) 10:00 a.m. (New York City time), one Business Day prior to the prepayment date, if the Committed Loans to be prepaid are ABR Loans (and in each case on not more than five Business Days' prior notice). Such notice of prepayment shall specify the date and amount of such prepayment and whether such prepayment is of ABR Loans, LIBOR Rate Loans, or any combination thereof, whether Revolving Loans or Term Loans are being prepaid and the Applicable Currency. Such notice shall not thereafter be revocable by the Applicable Borrower. The Administrative Agent will promptly notify each Lender thereof and of such Lender's Pro Rata Share of such prepayment. If such notice is given by any Applicable Borrower, such Applicable Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein, together with accrued interest to each such date on the amount prepaid and any amounts required pursuant to Section 4.4. Each such prepayment (if a prepayment of Term Loans) shall be applied pro rata among the Term Loan Facilities (based on the then remaining amounts of the Amortization Payments of the Term Loan Facilities) and, as to each Term Loan Facility, first, to the next immediately succeeding scheduled quarterly Amortization Payment of such Term Loan Facility and, second, pro rata to the then remaining amounts of the Amortization Payments under such Term Loan Facility, subject, however, to clause (iii) of subsection 2.7(h). (ii) Subject to Section 4.4, Canadian Borrower may, at any time or from time to time, ratably prepay Canadian Loans in whole or in part, in an aggregate principal amount of at least Cdn. $250,000 and an integral multiple of Cdn. $250,000. Canadian Borrower shall deliver a notice of prepayment in accordance with Section 11.2 to be received by the Canadian Agent not later than (i) 10:00 a.m. (New York City time) at least two Business Days in advance of the prepayment date if the Loans to be prepaid are BA Equivalent Rate Loans and (ii) 9:00 a.m. (New York City time) on the prepayment date if the Loans to be prepaid are Prime Rate Loans. Such notice of prepayment shall specify the date and amount of such prepayment and whether such prepayment is of Prime Rate Loans, BA Equivalent Rate Loans, or any combination thereof. Such notice shall not thereafter be revocable by Canadian Borrower. The Canadian Agent will promptly notify each Canadian Lender thereof and of such Canadian Lender's Percentage of such prepayment. If such notice is given by Canadian Borrower, Canadian Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein, together with, in the case of BA Equivalent Rate Loans, accrued interest to each such date on the amount prepaid and any amounts required pursuant to Section 4.4. (h) With respect to each prepayment of Loans pursuant to Section 2.7, the Applicable Borrower may designate the Types of Loans which are to be repaid and the specific Borrowing(s) under the affected Facility pursuant to which made; provided, however, that (i) LIBOR Rate Loans made pursuant to a specific Facility may be designated for prepayment only on the last day of an Interest Period applicable thereto unless all LIBOR Rate Loans made pursuant to such Facility with Interest Periods ending on such date of prepayment and all ABR Loans made pursuant to such Facility have been paid in full; (ii) if any prepayment of LIBOR Rate Loans made pursuant to a single Borrowing shall reduce the outstanding Loans made pursuant to such Borrowing to an amount less than the Minimum Tranche, such Borrowing shall be immediately converted into, if such Borrowing is Offshore U.S. Dollar Loans, ABR Loans, and, if such Borrowing is Offshore Currency Loans, Offshore Currency Loans having an Interest Period of one month; and (iii) each repayment of any Loans made pursuant to a Borrowing shall be applied pro rata among such Loans, unless an Applicable Borrower shall have become obligated to make any payment pursuant to Section 4.1, in which case such Applicable Borrower may prepay the Loans held solely by the Lender or Lenders to which it is obligated to make such payment. In the absence of a designation by the Applicable Borrower as described in the preceding sentence, the Administrative Agent shall, subject to the above, make such designation in its sole discretion with a view, but no obligation, to minimize funding losses owing under Section 4.4. (i) Notwithstanding subsections 2.7(a) and (c), to the extent that the Net Cash Proceeds required to be applied to a prepayment of the Loans pursuant to such subsections (1) are prohibited or delayed by applicable law from being repatriated to the jurisdiction of the Borrower or UK Borrower, as the case may be, required to make any such prepayment or (2) may not be so repatriated without causing an adverse tax consequence, such Net Cash Proceeds required to be applied to a prepayment of the Loans pursuant to such subsections shall, so long as no Event of Default or Unmatured Event of Default has occurred and is continuing, not be required to be applied as a prepayment of the Loans at the time provided in such subsections to the extent that the aggregate Dollar Equivalent amount of Net Cash Proceeds proposed to be not so applied for such event when added to the aggregate Dollar Equivalent amount of Net Cash Proceeds from all prior or concurrent events which have not been applied by virtue of this subsection 2.7(i) is less than 5.0% of Net Tangible Assets at such time. If and when such repatriation is permitted under the applicable local law or may be made without an adverse tax consequence, as the case may be, such repatriation shall be immediately effected and such Net Cash Proceeds shall be applied in the manner set forth in subsections 2.7(a) and (c), with any time limit therein being deemed to have started upon receipt of such Net Cash Proceeds by any Subsidiary of US Borrower notwithstanding this subsection 2.7(i); provided, however, if the time limit shall have expired, then such Net Cash Proceeds so repatriated shall be applied to the prepayment of the Term Loans as set forth in subsection 2.7(f) within three Business Days. (j) On the last Business Day of each month occurring after October 31, 1996, the Borrowers and the Subsidiary Swing Line Borrowers shall determine the aggregate Dollar Equivalent amount of the total amount of Swing Line Loans actually outstanding, plus the Subsidiary L/C Effective Amount of all Subsidiary L/C Obligations (the date of each such determination, the "Swing Line Loan Calculation Date"). The Swing Line Borrowers shall repay the Swing Line Loans and/or Cash Collateralize Letters of Credit issued for the account of the Subsidiary Swing Line Borrowers within 10 Business Days of any Swing Line Loan Calculation Date if the aggregate Dollar Equivalent amount of Swing Line Loans then outstanding, plus the Subsidiary L/C Effective Amount of all Subsidiary L/C Obligations exceeds U.S. $40.0 million in an amount equal to the amount such that after giving effect thereto the Dollar Equivalent amount of all Swing Line Loans then outstanding, plus the Subsidiary L/C Effective Amount of all Subsidiary L/C Obligations would not exceed U.S. $40.0 million. 2.8 Currency Exchange Fluctuations. (a) The Credit Agreement Loan Parties will implement and maintain internal controls to monitor the borrowings and repayments of Loans by the Credit Agreement Loan Parties and the issuance of and drawings under Letters of Credit, with the object of preventing any request for a Credit Extension that would result in (i) the Aggregate Outstanding Revolving Credit with respect to all of the Revolving Facility Lenders (including the Swing Line Lenders) being in excess of the aggregate Revolving Facility Commitments then in effect or (ii) the Subsidiary Swing Line Borrowers exceeding their respective Subsidiary Swing Line Borrower Sublimits and of promptly identifying and remedying any circumstance where, by reason of changes in exchange rates, the Aggregate Outstanding Revolving Credit with respect to all of the Revolving Facility Lenders (including the Swing Line Lenders) exceeds the aggregate Revolving Facility Commitments then in effect or the aggregate Swing Line Loans made to any Subsidiary Swing Line Borrower, plus the Subsidiary L/C Effective Amount of all Subsidiary L/C Obligations of such Subsidiary Swing Line Borrower exceeds its Subsidiary Swing Line Borrower Sublimit. (b) Subject to Section 4.4, if on any Computation Date the Administrative Agent shall have determined that the Aggregate Outstanding Revolving Credit of all of the Revolving Facility Lenders exceeds the combined Revolving Facility Commitments of all Revolving Facility Lenders by more than the Dollar Equivalent amount of U.S. $5.0 million due to a change in applicable rates of exchange between U.S. Dollars, on the one hand, and Offshore Currencies, on the other hand, then the Administrative Agent shall give notice to the Revolving Borrowers that a prepayment of Loans (or, if no Revolving Credit Loans are outstanding, payment of unreimbursed drawings under Letters of Credit, or if none thereof, Cash Collateralization of outstanding Letters of Credit) is required under this subsection, and the Revolving Borrowers and the Subsidiary Swing Line Borrowers agree if such excess shall not have been prepaid within 30 days of such notice or during such 30 days such excess has not been eliminated by changes in currency exchange rates thereupon to make prepayments (by such repayment of Loans, payment of unreimbursed drawings or Cash Collateralization) of their respective pro rata portion of such excess (determined by reference to the aggregate Dollar Equivalent amount of each Revolving Borrower's outstanding Revolving Facility Loans, plus (without duplication) the Effective Amount of all L/C Obligations relative to the total of such amounts for each Revolving Borrower) such that, after giving effect to such prepayment (or payment or Cash Collateralization and changes in currency exchange rates), the Aggregate Outstanding Revolving Credit of all of the Revolving Lenders does not exceed the combined Revolving Facility Commitments of all Revolving Facility Lenders. 2.9. Repayment. (a) US Borrower shall repay the Tranche A-US Term Loans and the Tranche B Term Loans on the Business Day immediately prior to the Quarterly Dates set forth below in the installments as set forth below; provided, however, that if the Safeline Acquisition is not consummated, then each Amortization Payment in respect of the Tranche B Term Loans due from and including March 31, 2003 to and including December 31, 2004 shall be reduced by U.S. $2.775 million:
EACH QUARTERLY TRANCHE A-US TRANCHE B DATE IN TERM LOANS TERM LOANS CALENDAR YEAR (U.S. $) (U.S. $) ----------------- ----------- -------------------- 1997 $1,500,000.00 $400,000.00 1998 $875,000.00 $250,000.00 1999 $1,500,000.00 $250,000.00 2000 $1,625,000.00 $250,000.00 2001 $1,750,000.00 $250,000.00 2002 $1,950,000.00 $250,000.00 2003 0 $10,000,000.00 2004 0 $13,550,000.00
(b) CH Borrower shall repay the Tranche A-CHF Term Loans on the Business Day immediately prior to the Quarterly Dates set forth below in the installments set forth below:
Tranche A-CHF Each Quarterly Date in Term Loans Calendar Year (CHF) ----------------------- ---------------- 1997 6,988,600.00 1998 4,892,010.00 1999 6,289,732.00 2000 8,735,736.00 2001 9,085,165.00 2002 10,378,057.00
(c) UK Borrower shall repay the Tranche A-UK Term Loans on the Business Day immediately prior to the Quarterly Dates set forth below in the installments set forth below:
Tranche A-UK Each Quarterly Date in Term Loans Calendar Year (Pounds Sterling) --------------------------- ------------------- 1997 920,245.00 1998 920,245.00 1999 996,933.00 2000 1,303,681.00 2001 1,457,055.00 2002 1,536,963.50
(d) Each Amortization Payment as set forth above in subsections 2.9(a), (b) and (c) shall be automatically adjusted upon application of any prepayment pursuant to Section 2.7. (e) Until the Revolving Loan Maturity Date, the Credit Agreement Loan Parties (other than Canadian Borrower) shall from time to time immediately prepay the Revolving Facility Loans (and/or provide cover for L/C Obligations as specified in subsection 2.9(f)) in such amounts as shall be necessary so that at all times the Aggregate Outstanding Revolving Credit of all of the Revolving Facility Lenders shall not (other than as a result of a change in currency exchange rates) exceed the Revolving Facility Commitments of all of the Revolving Facility Lenders, such amount to be applied, first, to Revolving Facility Loans outstanding and, second, as cover for L/C Obligations outstanding as specified in subsection 2.9(f). (f) In the event that the Credit Agreement Loan Parties shall be required pursuant to subsection 2.9(e) to provide cover for L/C Obligations, the Credit Agreement Loan Parties shall effect the same by paying to the Administrative Agent immediately available funds in an amount equal to the required amount, which funds shall be retained by the Administrative Agent pursuant to arrangements and documentation reasonably satisfactory to the Administrative Agent as collateral security in the first instance for the L/C Obligations until such time as all Letters of Credit shall have been terminated and all of the L/C Obligations paid in full. (g) All outstanding Revolving Loans (including Swing Line Loans) shall be repaid in full on the Revolving Loan Maturity Date. (h) Until the Canadian Loan Maturity Date, Canadian Borrower shall from time to time prepay the Canadian Loans in such amounts as shall be necessary so that at all times the aggregate outstanding amount of Canadian Loans shall not exceed the Canadian Commitments of all of the Canadian Lenders. (i) All outstanding Canadian Loans shall be repaid in full on the Canadian Maturity Date. 2.10. Interest. (a) Each Committed Loan (other than a Canadian Loan or any Non-U.S. $ Swing Line Loan) shall, except as otherwise provided herein, bear interest on the outstanding principal amount thereof from the applicable Borrowing Date at a rate per annum equal to the LIBOR Rate or the Alternate Base Rate, as the case may be (and subject to the Applicable Borrowers' right to convert to the other Type of Committed Loans under Section 2.4), plus the Applicable Margin, plus, in the case of Loans made in Pounds Sterling, the MLA Cost. Each Non-U.S. $ Swing Line Loan shall bear interest at the rate per annum equal to (x) if such Loan is in Pounds Sterling, the Overnight Rate from time to time in effect for Pounds Sterling, plus the Applicable Margin, plus the MLA Cost and (y) if such Loan is in any other Offshore Currency, such rate as is agreed to by the Applicable Swing Line Lender and the applicable Swing Line Borrower, plus the Applicable Margin. Each Prime Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable Borrowing Date at a rate per annum equal to the Prime Rate (subject to Canadian Borrower's right to convert to other Types of Canadian Loans under Section 2.4A), plus the Applicable Margin. (b) Interest on each Loan shall be paid in arrears on each Interest Payment Date. Interest shall also be paid on the date of any prepayment of Loans pursuant to Section 2.7 for the portion of the Loans so prepaid; provided, however, that in the event that any Term Loans that are ABR Loans are prepaid pursuant to Section 2.7, interest accrued on such Loans shall be payable on the next succeeding Interest Payment Date thereafter (or at final maturity, if earlier). (c) Notwithstanding subsections (a) and (b) of this Section, if any amount of principal of or interest on any Loan, or any other amount payable hereunder or under any other Loan Document, is not paid in full when due (whether at stated maturity, by acceleration, demand or otherwise), the Applicable Borrower agrees, to the extent permitted by applicable law, to compensate the Lenders for additional administrative and other costs they will thereafter incur and to pay interest on such unpaid principal or other amount from the date such amount becomes due until the date such amount is paid in full, after as well as before any entry of judgment thereon, payable on demand, at a rate per annum equal to (i) in the case of principal due in respect of any Loan prior to the end of an Interest Period applicable thereto, the rate otherwise applicable to such Loan, plus 2%, and (ii) in the case of any other amount, (x) if such amount is payable in U.S. Dollars, the Alternate Base Rate from time to time in effect, plus the Applicable Margin (but not less than 0) for ABR Loans, plus 2%, (y) if such amount is payable in Canadian Dollars, the Prime Rate from time to time in effect, plus 2%, and (z) if such amount is payable in a currency other than U.S. Dollars and Canadian Dollars, the Overnight Rate from time to time in effect, plus the Applicable Margin for LIBOR Rate Loans for Loans under the applicable Facility from time to time in effect, plus 2%, plus, in the case of Loans in Pounds Sterling, the MLA Cost. (d) Anything herein to the contrary notwithstanding, the obligations of each Applicable Borrower to any Lender hereunder shall be subject to the limitation that payments of interest shall not be required for any period for which interest is computed hereunder, to the extent (but only to the extent) that contracting for or receiving such payment by such Lender would be contrary to the provisions of any law applicable to such Lender limiting the highest rate of interest that may be lawfully contracted for, charged or received by such Lender, and in such event the Applicable Borrower shall pay such Lender interest at the highest rate permitted by applicable law. 2.11. Fees. In addition to certain fees described in Section 3.8: (a) Arrangement, Agency Fees. The Borrowers shall pay fees to the Arranger for the Arranger's own account as required by the letter agreement ("Arranger Fee Letter") between the Arranger and AEA dated April 10, 1996 and shall pay agency fees to the Administrative Agent for the Administrative Agent's own account as required by the letter agreement between the Administrative Agent and AEA dated October 7, 1996 (the "Administrative Agent's Fee Letter" and, together with the Arranger Fee Letter, the "Fee Letters"). All fees paid under the Fee Letters shall be paid solely in U.S. Dollars. (b) Facility Fees. The Borrowers shall pay to the Administrative Agent for the account of each Revolving Facility Lender a facility fee computed at a rate per annum equal to the Applicable Facility Fee Percentage (the "Facility Fee") on the average daily effective amount of such Lender's Revolving Facility Commitment, computed on a quarterly basis in arrears on the last Business Day of each calendar quarter. Such Facility Fee shall accrue from the Original Closing Date to the earlier of the Termination Date and the date on which the Revolving Facility Commitments have been terminated in full and shall be due and payable quarterly in arrears on the last Business Day of each calendar quarter (commencing December 31, 1996) through the Termination Date or such earlier date as the Revolving Facility Commitments have been terminated in full. The Facility Fee shall be paid solely in U.S. Dollars. (c) Canadian Facility Fees. Canadian Borrower shall pay to the Canadian Agent for the account of each Canadian Lender a facility fee computed at a rate per annum equal to the Applicable Facility Fee Percentage (the "Canadian Facility Fee") on the average daily effective amount of such Canadian Lender's Canadian Commitment computed on a quarterly basis in arrears on the last Business Day of each calendar quarter. Such Canadian Facility Fee shall accrue from the Safeline Closing Date to the earlier of the Canadian Termination Date and the date on which the Canadian Commitments have been terminated in full and shall be due and payable quarterly in arrears on the last Business Day of each calendar quarter (commencing June 30, 1997) through the Canadian Termination Date or such earlier date as the Canadian Commitments have been terminated in full. The Canadian Facility Fee shall be paid solely in Canadian Dollars. 2.12. Computation of Fees, Interest and Dollar Equivalent Amount. (a) All computations of the Facility Fee and the Canadian Facility Fee shall be made on the basis of a year of 360 days and actual days elapsed. All other computations of interest and fees shall be made on the basis of a 360-day year and actual days elapsed. Interest and fees shall accrue during each period during which interest or such fees are computed from the first day thereof to the last day thereof. If a Loan is repaid on the day on which it is made, one day's interest shall accrue at the rate per annum applicable thereto as determined in accordance with Section 2.10 shall be paid. (b) Each determination of an interest rate or a Dollar Equivalent amount by the Applicable Agent or an Applicable Swing Line Lender, as the case may be, shall be conclusive and binding on each Applicable Borrower and the Lenders in the absence of manifest error. The Applicable Agent or an Applicable Swing Line Lender, as the case may be, will, at the request of the Applicable Borrower or any Lender, deliver to the Borrowers or such Lender, as the case may be, a statement showing the calculations used by the Applicable Agent or such Applicable Swing Line Lender in determining any interest rate or Dollar Equivalent amount. 2.13. Payments by Each Applicable Borrower. (a) All payments to be made by each Applicable Borrower shall be made without set-off, recoupment or counterclaim. Except as otherwise expressly provided herein, all payments by each Applicable Borrower (other than any Subsidiary Swing Line Borrower) shall be made to the Applicable Agent for the account of the Lenders or Scotiabank (with respect to Swing Line Loans made in U.S. Dollars or Pounds Sterling) at the Agent's Payment Office, and all payments to be made by all other Subsidiary Swing Line Borrowers shall be made to the Applicable Swing Line Lender as directed by it for the account of such Applicable Swing Line Lender. Except as otherwise provided herein, all payments by each Applicable Borrower (i) with respect to principal of, interest on, and any other amount relating to any Offshore Currency Loan, shall be made in the Offshore Currency in which such Loan is denominated or payable, (ii) with respect to the Canadian Facility Fee and principal of, interest on and any other amount relating to any Canadian Loan, shall be made in Canadian Dollars, and (iii) with respect to all other amounts payable hereunder, shall be made in U.S. Dollars. Such payments shall be made in Same Day Funds and (x) in the case of Offshore Currency payments, no later than such time on the dates specified herein as may be determined by the Applicable Agent (or the Applicable Swing Line Lender for Swing Line Loans not made in U.S. Dollars or Pounds Sterling) (and advised in writing to each Applicable Borrower) to be necessary for such payment to be credited on such date in accordance with normal banking procedures in the place of payment, and (y) in the case of any U.S. Dollar or Canadian Dollar payments, no later than 11:00 a.m. (New York City time) on the date specified herein. The Applicable Agent will promptly distribute to each Lender its Pro Rata Share of such payment received by it for the account of the Lenders in like funds as received. Any payment received by the Applicable Agent or the Applicable Swing Line Lender, as the case may be, later than the time specified in clause (x) or (y) above, as applicable, shall be deemed to have been received on the following Business Day, and any applicable interest or fee shall continue to accrue. (b) Whenever any payment is due on a day other than a Business Day, such payment shall be made on the following Business Day, and such extension of time shall be included in the computation of interest or fees, as the case may be. (c) Unless the Applicable Agent receives notice from an Applicable Borrower that borrows in Canadian Dollars, U.S. Dollars or Pounds Sterling prior to the date on which any payment is due to the Lenders that such Applicable Borrower will not make such payment in full as and when required, the Applicable Agent may assume that such Applicable Borrower has made such payment in full to the Applicable Agent on such date in Same Day Funds and the Applicable Agent may (but shall not be required to), in reliance upon such assumption, distribute to each Lender on such due date an amount equal to the amount then due such Lender. If and to the extent an Applicable Borrower that borrows in Canadian Dollars, U.S. Dollars or Pounds Sterling, as the case be, has not made such payment in full to the Applicable Agent, each Lender shall repay to the Applicable Agent on demand such amount distributed to such Lender, together with interest thereon at (i) in the case of a payment in an Offshore Currency, the Overnight Rate, (ii) in the case of payment in Canadian Dollars, the Canadian Federal Funds Rate, or (iii) in the case of a payment in U.S. Dollars, the U.S. Federal Funds Rate, in each case for each day from the date such amount is distributed to such Lender until the date repaid. 2.14 Payments by the Lenders to the Applicable Agent. (a) Unless the Applicable Agent receives notice from a Lender on or prior to the Closing Date or, with respect to any Committed Borrowing or Canadian Borrowing after the Original Closing Date, at least one Business Day prior to the date of such Borrowing, that such Lender will not make available as and when required hereunder to the Applicable Agent for the account of the Applicable Borrower the amount of that Lender's Pro Rata Share of the Committed Borrowing or Percentage of the Canadian Borrowing, as applicable, the Applicable Agent may assume that such Lender has made such amount available to the Applicable Agent in Same Day Funds on the Borrowing Date and the Applicable Agent may (but shall not be required to), in reliance upon such assumption, make available to the Applicable Borrower on such date a corresponding amount. If and to the extent any Lender shall not have made its full amount available to the Applicable Agent in Same Day Funds and the Applicable Agent in such circumstances has made available to the Applicable Borrower such amount, such Lender shall on the Business Day following such Borrowing Date make such amount available to the Applicable Agent, together with interest at (i) in the case of a payment in an Offshore Currency, the Overnight Rate, (ii) in the case of payment in Canadian Dollars, the Canadian Federal Funds Rate, and (iii) in the case of a payment in U.S. Dollars, at the U.S. Federal Funds Rate, in each case for each day during such period. A notice of the Applicable Agent submitted to any Lender with respect to amounts owing under this subsection (a) shall be conclusive, absent manifest error. If such amount is so made available, such payment to the Applicable Agent shall constitute such Lender's Loan on the date of Borrowing for all purposes of this Agreement. If such amount is not made available to the Applicable Agent on the Business Day following the Borrowing Date, the Applicable Agent will notify the Applicable Borrower of such failure to fund and, upon demand by the Applicable Agent, the Applicable Borrower shall pay such amount to the Applicable Agent for the Applicable Agent's account, together with interest thereon for each day elapsed since the date of such Committed Borrowing or Canadian Borrowing, at a rate per annum equal to the interest rate applicable at the time to the Committed Loans or Canadian Loans, as the case may be, comprising such Borrowing. (b) The failure of any Lender to make any Loan on any Borrowing Date shall not relieve any other Lender of its obligation hereunder (if any) to make a Loan on such Borrowing Date, but no Lender shall be responsible for the failure of any other Lender to make the Loan to be made by such other Lender on any Borrowing Date. 2.15. Adjustments. If any Lender (a "Benefitted Lender") shall at any time receive any payment of all or part of the Obligations then due and owing to it, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the nature referred to in subsection 9.1(f) or (g), or otherwise (except pursuant to Section 2.6, 2.7, 2.8 or 2.9, Article IV or Section 11.8)), in a greater proportion than any such payment to or collateral received by any other Lender, if any, in respect of the Obligations then due and owing to such other Lender, such Benefitted Lender shall purchase for cash from the other Lenders an interest (by participation or assignment (each in accordance with Section 11.8)) in such portion of each such other Lender's Revolving Facility Loans, Term Loans, Canadian Loans or the L/C Obligations, as the case may be, owing to it, or shall provide such other Lenders with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such Benefitted Lender to share the excess payment or benefits of such collateral or proceeds ratably (based upon Dollar Equivalent amounts) with each of the Lenders; provided, however, that if all or any portion of such excess payment or benefits is thereafter recovered from such Benefitted Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such recovery, but without interest. Each Credit Agreement Loan Party expressly consents to the foregoing arrangement and agrees that any holder of a participation in any such Loan or L/C Obligation, as the case may be, so purchased and any other subsequent holder of a participation in any Loan or L/C Obligation otherwise acquired may exercise any and all rights of banker's lien, set off or counterclaim with respect to any and all monies owing by such Credit Agreement Loan Party to that holder as fully as if that holder were a holder of such a Loan or L/C Obligation in the amount of the participation held by that holder. 2.16. Swing Line Commitment. (a) Subject to the terms and conditions of this Agreement, each Swing Line Lender agrees to make loans to the Swing Line Borrowers on a revolving basis (each such loan, a "Swing Line Loan") from time to time on any Business Day during the period from the Closing Date to the Termination Date in an aggregate principal amount at any one time outstanding for the Swing Line Borrowers collectively not to exceed the Dollar Equivalent amount of U.S. $40.0 million; provided, however, that (i) the aggregate amount (or CHF Equivalent with respect to M-T GmbH) of the sum of Swing Line Loans made and outstanding at any one time to any Subsidiary Swing Line Borrower, plus the Subsidiary L/C Effective Amount of all Subsidiary L/C Obligations of such Subsidiary Swing Line Borrower shall not exceed the Subsidiary Swing Line Borrower Sublimit for such Subsidiary Swing Line Borrower (or with respect to the UK Swing Line Borrowers, the collective sublimit of the UK Swing Line Borrowers) and the aggregate Dollar Equivalent amount of Swing Line Loans made to US Borrower shall not exceed the US Borrower Sublimit, (ii) the sum of the Dollar Equivalent amount of the aggregate principal amount of all outstanding Swing Line Loans, plus the aggregate principal Dollar Equivalent amount of all other outstanding Revolving Facility Loans, plus (without duplication) the Effective Amount of all L/C Obligations (including Subsidiary L/C Obligations) shall not at any time exceed the Revolving Facility Commitments of all Revolving Facility Lenders (which calculation shall not give effect to the Assumed Swing Line Loan Amount) and (iii) Scotiabank need only make Swing Line Loans in U.S. Dollars to US Borrower and in Pounds Sterling to the UK Swing Line Borrowers; Credit Suisse First Boston need only make Swing Line Loans to M-T GmbH in such currencies as it shall agree with such Subsidiary Swing Line Borrower; Commerzbank AG need only make Swing Line Loans in Deutschemarks to the German Subsidiary; and each other Swing Line Lender need only make Swing Line Loans to the Subsidiary Swing Line Borrower as it shall agree with and in the Applicable Currency as it and the applicable Subsidiary Swing Line Borrower shall agree. All Swing Line Loans made in U.S. Dollars shall be made and maintained as ABR Loans. (b) Notwithstanding any other provision of this Agreement, (i) the German Subsidiary shall only borrow Swing Line Loans in, and no Swing Line Lender shall make any Swing Line Loan to any such Subsidiary Swing Line Borrower other than in, Deutschemarks; (ii) Mettler-Toledo S.A., Veroflay shall only borrow Swing Line Loans in, and no Swing Line Lender shall make any Swing Line Loan to such Subsidiary Swing Line Borrower other than in, French Francs; (iii) Mettler-Toledo K.K., Takarazuka shall only borrow Swing Line Loans in, and no Swing Line Lender shall make any Swing Line Loan to such Subsidiary Swing Line Borrower other than in, Japanese Yen; (iv) the UK Swing Line Borrowers shall only borrow Swing Line Loans in, and no Swing Line Lender shall make any Swing Line Loan to such Subsidiary Swing Line Borrower other than in, Pounds Sterling; and (v) US Borrower shall only borrow Swing Line Loans in, and no Swing Line Lender shall make any Swing Line Loan to US Borrower other than in, U.S. Dollars. (c) Credit Suisse First Boston shall not permit the CHF Equivalent amount of all Swing Line Loans outstanding for M-T GmbH, plus the Subsidiary L/C Effective Amount of all Subsidiary L/C Obligations of M-T GmbH to exceed M-T GmbH's Subsidiary Swing Line Borrower Sublimit. 2.17. Borrowing Procedures for Swing Line Loans. (a) A Swing Line Borrower requesting a Swing Line Loan shall give written or telephonic notice to the Applicable Swing Line Lender of each proposed Borrowing pursuant to this Section 2.17 not later than 11:00 a.m. (local time) on the proposed Borrowing Date (promptly followed within one Business Day by delivery of a written notice). Each such notice shall be effective upon receipt by the Applicable Swing Line Lender and shall specify the Borrowing Date and amount of Borrowing. Unless the Applicable Swing Line Lender has received written notice prior to 1:00 p.m. (local time) on the proposed Borrowing Date from the Administrative Agent or any Lender (or otherwise has knowledge) that one or more of the conditions precedent set forth in Article V with respect to such Borrowing is not then satisfied, the Applicable Swing Line Lender shall pay over the requested amount to the applicable Swing Line Borrower on the requested Borrowing Date. Each Swing Line Loan shall be made on a Business Day and shall be in the amount of (x) if made in U.S. Dollars or Pounds Sterling, at least the Dollar Equivalent amount of U.S. $500,000 and an integral multiple of U.S. $500,000 and (y) if made in any Offshore Currency other than Pounds Sterling, at least such number of units of the Applicable Currency and such integral multiple units of such Applicable Currency as is agreed to by the Applicable Swing Line Lender and the applicable Swing Line Borrower. (b) The Applicable Swing Line Lender will determine the Subsidiary Currency Equivalent amount with respect to (i) the sum of Swing Line Loans made by such Swing Line Lender to the Subsidiary Swing Line Borrower to whom it makes Swing Line Loans, plus the Subsidiary L/C Effective Amount of all Subsidiary L/C Obligations of such Subsidiary Swing Line Borrower as of the requested Borrowing Date of any Swing Line Loan, (ii) the sum of all outstanding Swing Line Loans made by such Swing Line Lender to the Subsidiary Swing Line Borrower to whom it makes Swing Line Loans, plus the Subsidiary L/C Effective Amount of all Subsidiary L/C Obligations of such Subsidiary Swing Line Borrower as of the last Business Day of each month, and (iii) the sum of all outstanding Swing Line Loans made by such Swing Line Lender to the Subsidiary Swing Line Borrower to whom it makes Swing Line Loans, plus the Subsidiary L/C Effective Amount of all Subsidiary L/C Obligations of such Subsidiary Swing Line Borrower as of any date on which the Revolving Facility Commitments, the US Borrower Sublimit or the Subsidiary Swing Line Borrower Sublimits are reduced pursuant to Section 2.6. 2.18. Refunding of Swing Line Loans. The Applicable Swing Line Lender may, at any time in its sole and absolute discretion, on behalf of (i) US Borrower, with respect to any Swing Line Loan made to US Borrower, (ii) UK Borrower with respect to any Swing Line Loan made to UK Borrower or Safeline Limited (or if UK Borrower is not able to borrow under the Revolving Facility, US Borrower), or (iii) CH Borrower, with respect to any Swing Line Borrower other than US Borrower, UK Borrower and Safeline Limited (and each such Applicable Borrower hereby irrevocably directs the Applicable Swing Line Lender to act on its behalf), request each Revolving Facility Lender to make a Revolving Loan to the Applicable Borrower (x) with respect to Credit Suisse First Boston, in CHF in an amount equal to such Revolving Facility Lender's Pro Rata Share of the CHF Equivalent amount of the principal amount of the Swing Line Loans made by such Swing Line Lender outstanding on the date such notice is given, and (y) with respect to each other Swing Line Lender other than Credit Suisse First Boston, in the Applicable Currency of the Swing Line Loans made by such Swing Line Lender (or, with respect to Scotiabank, as identified and made by it) in an amount equal to such Revolving Facility Lender's Pro Rata Share of the Subsidiary Currency Equivalent amount of the principal amount of the Swing Line Loans made by such Swing Line Lender outstanding on the date such notice is given. Unless any of the events described in subsection 9.1(f) or (g) shall have occurred (in which event the procedures of Section 2.19 shall apply), and regardless of whether the conditions precedent set forth in this Agreement to the making of a Revolving Loan are then satisfied or the aggregate amount of such Revolving Loans is not in the minimum or integral amount otherwise required hereunder, each Revolving Facility Lender shall make the proceeds of its Revolving Loan available to (x) with respect to US Borrower and UK Borrower, the Administrative Agent for the account of Scotiabank at the office of the Administrative Agent in New York prior to 11:00 a.m. (New York City time with respect to any refunding of a Swing Line Loan made in U.S. Dollars or London, England time with respect to any other Swing Line Loan) in Same Day Funds on the Business Day next succeeding the date such notice is given, and (y) with respect to CH Borrower, the Applicable Swing Line Lender for the account of such Applicable Swing Line Lender at the office of such Applicable Swing Line Lender prior to 11:00 a.m. (local time) in Same Day funds on the Business Day next succeeding the date such notice is given. The proceeds of such Revolving Loans shall be immediately applied to repay the outstanding Swing Line Loans of the Applicable Swing Line Lender. All Revolving Loans made pursuant to this Section 2.18 shall be LIBOR Rate Loans with an Interest Period of one month (but, subject to the other provisions of this Agreement, may be continued as LIBOR Rate Loans with a different Interest Period). No Revolving Facility Lender need make any Loan under this Section 2.18 (x) with respect to Credit Suisse First Boston, other than in CHF and (y) with respect to any other Swing Line Lender, unless the Swing Line Loan has been made in accordance with subsection 2.16(b). Notwithstanding any other provision of this Agreement, if any Swing Line Lender shall have made Swing Line Loans to or Issued Letters of Credit for the account of a Subsidiary Swing Line Borrower such that the sum of the amount of Swing Line Loans made and outstanding to such Subsidiary Swing Line Borrower, plus the Subsidiary L/C Effective Amount of Subsidiary L/C Obligations of such Subsidiary Swing Line Borrower is in excess of the applicable Subsidiary Swing Line Borrower Sublimit of such Subsidiary Swing Line Borrower (or, with respect to M-T GmbH, in excess of the CHF Equivalent of the Subsidiary Swing Line Borrower Sublimit of M-T GmbH), no Lender shall have any obligation to make a Revolving Loan with respect to such excess. 2.19. Participations in Swing Line Loans. (a) If an event described in subsection 9.1(f) or (g) occurs (or for any reason the Revolving Facility Lenders may not make Revolving Loans pursuant to Section 2.18, other than as specified in the last sentence thereof), each Revolving Facility Lender will, upon notice from the Administrative Agent, purchase from the Applicable Swing Line Lender (and the Applicable Swing Line Lender will sell to each such Revolving Facility Lender) an undivided participation interest in all outstanding Swing Line Loans of such Swing Line Lender in an amount equal to its Pro Rata Share of (x) with respect to Credit Suisse First Boston, the CHF Equivalent amount, and (y) with respect to each other Swing Line Lender other than Credit Suisse First Boston, the Subsidiary Currency Equivalent amount of the outstanding principal amount of the Swing Line Loans of such Swing Line Lender (and each Revolving Facility Lender will immediately transfer to the Administrative Agent, for the account of the Applicable Swing Line Lender, in immediately available funds, the amount of its participation and in the same currencies as if it were refunding such Swing Line Loans pursuant to Section 2.18). (b) Whenever, at any time after a Swing Line Lender has received payment for any Revolving Facility Lender's participation interest in the Swing Line Loans of such Swing Line Lender pursuant to subsection 2.19(a), such Swing Line Lender receives any payment on account thereof, such Swing Line Lender will distribute to the Administrative Agent for the account of such Revolving Facility Lender its participation interest in such amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Revolving Facility Lender's participation interest was outstanding and funded) in like funds as received; provided, however, that in the event that such payment received by such Swing Line Lender is required to be returned, such Revolving Facility Lender will return to the Administrative Agent for the account of such Swing Line Lender any portion thereof previously distributed by such Swing Line Lender to it in like funds as such payment is required to be returned by such Swing Line Lender. (c) Notwithstanding any other provision of this Agreement, if any Swing Line Lender shall have made Swing Line Loans to or Issued Letters of Credit for the account of a Subsidiary Swing Line Borrower such that the amount of Swing Line Loans made and outstanding to such Subsidiary Swing Line Borrower, plus the Subsidiary L/C Effective Amount of Subsidiary L/C Obligations of such Subsidiary Swing Line Borrower is in excess of the applicable Subsidiary Swing Line Borrower Sublimit for such Subsidiary Swing Line Borrower (or, with respect to M-T GmbH, in excess of the CHF Equivalent of the Subsidiary Swing Line Borrower Sublimit of M-T GmbH), no Lender shall have any obligation to purchase any participation in the amount of such excess. 2.20. Swing Line Participation Obligations Unconditional. (a) Except as provided in Section 2.18 and Section 2.19, each Revolving Facility Lender's obligation to make Revolving Loans pursuant to Section 2.18 and/or to purchase participation interests in Swing Line Loans pursuant to Section 2.19 shall be absolute and unconditional and shall not be affected by any circumstance whatsoever, including (a) any set- off, counterclaim, recoupment, defense or other right which such Revolving Facility Lender may have against the Applicable Swing Line Lender, any Loan Party or any other Person for any reason whatsoever; (b) the occurrence or continuance of an Event of Default; (c) any adverse change in the condition (financial or otherwise) of any Loan Party or any other Person; (d) any breach of this Agreement by any Loan Party or any other Revolving Facility Lender; (e) any inability of the applicable Swing Line Borrower to satisfy the conditions precedent to borrowing set forth in this Agreement on the date upon which any Swing Line Loan is to be refunded or any participation interest therein is to be purchased; or (f) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. (b) Notwithstanding the provisions of subsection 2.20(a), no Revolving Facility Lender shall be required to make any Revolving Loan to any Applicable Borrower to refund a Swing Line Loan pursuant to Section 2.18 or to purchase a participation interest in a Swing Line Loan pursuant to Section 2.19 if, prior to the making by the Applicable Swing Line Lender of such Swing Line Loan, such Swing Line Lender received written notice from such Revolving Facility Lender specifying that such Revolving Facility Lender believes in good faith that one or more of the conditions precedent to the making of such Swing Line Loan were not satisfied and, in fact, such conditions precedent were not satisfied at the time of the making of such Swing Line Loan; provided, however, that the obligation of such Revolving Facility Lender to make such Revolving Loans and to purchase such participation interests shall be reinstated upon the earlier to occur of (i) the date on which such Revolving Facility Lender notifies the Applicable Swing Line Lender that its prior notice has been withdrawn and (ii) the date on which all conditions precedent to the making of such Swing Line Loan have been satisfied (or waived by the Required Revolving Facility Lenders, the Required Lenders or all Lenders, as applicable). 2.21. Conditions to Swing Line Loans. Notwithstanding any other provision of this Agreement, no Swing Line Lender shall be obligated to make any Swing Line Loan if an Event of Default or Unmatured Event of Default exists or would result therefrom. 2.22. Substitution of Lenders in Certain Circumstances. In the event that (x) S&P or Moody's shall, after the date that any Person becomes a Lender, downgrade the long- term certificate of deposit ratings of such Lender, and the resulting ratings shall be below BBB- or Baa3, respectively, or the equivalent or (y) any Revolving Facility Lender gives notice to the Administrative Agent that it is unable to make, convert or continue any Offshore Currency Loan pursuant to subsection 2.5(b) or (c), then each Applicable Borrower or each Applicable Agent shall each have the right, but not the obligation, upon notice to such Lender and the Applicable Agent, to replace such Lender with a financial institution (a "Substitute Lender") acceptable to each Applicable Borrower and each Applicable Agent (such consents not to be unreasonably withheld or delayed; provided, however, that no such consent shall be required if the Substitute Lender is an existing Lender), and upon any such downgrading of any Lender's long-term certificate of deposit rating or the giving of such notice, each such Lender hereby agrees to transfer and assign (in accordance with and subject to the restrictions contained in Section 11.8) its Commitments, Loans, Notes and other rights and obligations under this Agreement and all other Loan Documents to such Substitute Lender; provided, however, that (i) such assignment shall be without recourse, representation or warranty (other than that such Lender owns the Commitments, Loans, and Notes being assigned, free and clear of any Liens) and (ii) the purchase price paid by the Substitute Lender shall be in the amount of such Lender's Loans and its Pro Rata Share of outstanding L/C Obligations, together with all accrued and unpaid interest and fees in respect thereof, plus all other amounts (other than the amounts (if any) demanded and unreimbursed under Sections 4.1, 4.3 and 4.4, which shall be paid by each Applicable Borrower), owing to such Lender hereunder. Upon any such termination or assignment, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of any provisions of this Agreement which by their terms survive the termination of this Agreement. 2.23. Qualified Foreign Lender Notes. (a) Any Lender that is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code and that is in compliance with the requirements of subsection 4.1(f)(i) (a "Qualified Foreign Lender") shall upon receipt of the written request of US Borrower or the Administrative Agent, and may upon its own written request to the Administrative Agent, (i) exchange any Tranche A-US Term Note held by or assigned to it for a note in the form attached hereto as Exhibit H-7 (a "QFL A-US Note"), (ii) exchange any Tranche B Term Note held by or assigned to it for a note in the form attached hereto as Exhibit H-8 (a "QFL B Note"), and (iii) exchange any Tranche A-UK Term Note held by or assigned to it for a note in the form attached hereto as Exhibit H-9 (a "QFL A-UK Note" and together with the QFL A-US Note and the QFL B Note, the "QFL Notes"); provided, however that, prior to any exchange of Notes, such Lender shall have delivered to US Borrower the certificates, documents and forms described in subsection 4.1(f)(i). Any QFL Notes issued in exchange for any existing Notes pursuant to this subsection 2.23(a) shall be (i) dated the Original Closing Date, (ii) issued in the names of the entities in whose names such existing Notes were issued and (iii) issued in the same principal amounts as such existing Notes. Any Tranche B Term Note or Tranche A-US Term Note exchanged pursuant to this subsection is sometimes referred to herein as an "Exchange Note". (b) US Borrower agrees that, upon the request of or delivery of a request to a Qualified Foreign Lender pursuant to subsection (a) of this Section 2.23, it shall execute and deliver QFL Notes to the Administrative Agent in exchange for the Exchange Note surrendered in connection with such request conforming to the requirements of such subsection (a). Each Qualified Foreign Lender shall surrender its Exchange Notes to the Administrative Agent in connection with any exchange pursuant to this subsection (b). Upon receipt by the Administrative Agent of the Exchange Notes to be exchanged for such QFL Notes in accordance with this subsection (b), the Administrative Agent shall forward the appropriate QFL Notes to the Qualified Foreign Lender which surrendered its Exchange Notes for exchange and shall forward the Exchange Notes to US Borrower marked "cancelled." Once issued, QFL Notes (i) shall be deemed to and shall be "Notes" and Tranche B Term Notes and Tranche A-US Term Notes, as the case may be, for all purposes under this Agreement, the Security Documents and the other Loan Documents, (ii) may not be exchanged for Tranche B Term Notes or Tranche A-US Term Notes, as the case may be, notwithstanding anything to the contrary in this Agreement and (iii) shall at all times thereafter be QFL Notes, including, without limitation, following any transfer or assignment thereof. ARTICLE III. THE LETTERS OF CREDIT --------------------- 3.1. The Letter of Credit Subfacility. (a) On the terms and conditions set forth herein, (i) the L/C Lender agrees, (A) from time to time on any Business Day during the period from the Closing Date to the Termination Date to issue Letters of Credit (including irrevocable standby letters of credit) for the account of any Revolving Borrower (or, if a Letter of Credit is for the account of a Subsidiary, jointly for the account of the applicable Revolving Borrower and such Subsidiary), or, if such L/C Lender is a Swing Line Lender, for the account of the Subsidiary Swing Line Borrower to whom it makes Swing Line Loans, and to amend or renew Letters of Credit previously issued by it, in accordance with subsections 3.2(c) and 3.2(d), and (B) to honor properly drawn drafts under the Letters of Credit; and (ii) the Revolving Facility Lenders severally agree to participate in Letters of Credit Issued for the accounts of the Revolving Borrowers (including any Letter of Credit issued jointly for the account of a Revolving Borrower and any Subsidiary) or the Subsidiary Swing Line Borrowers; provided, however, that the L/C Lender shall not be obligated to Issue, and no Lender shall be obligated to participate in, any Letter of Credit if as of the date of Issuance of such Letter of Credit (the "Issuance Date") (I) with respect to any Issuance for the account of any Revolving Borrower (or jointly for the account of a Revolving Borrower and a Subsidiary), (1) the Effective Amount of all L/C Obligations (other than Subsidiary L/C Obligations, except those of the UK Swing Line Borrowers), plus (without duplication) the outstanding principal Dollar Equivalent amount of all Revolving Loans and Swing Line Loans (including the Assumed Swing Line Loan Amount) exceeds the combined Revolving Facility Commitments of all Revolving Facility Lenders, (2) the participation of such Revolving Facility Lender in the Effective Amount of all L/C Obligations (other than Subsidiary L/C Obligations, except those of the UK Swing Line Borrowers), plus (without duplication) the outstanding principal Dollar Equivalent amount of the Revolving Loans of such Revolving Facility Lender, plus such Revolving Facility Lender's Pro Rata Share of the Dollar Equivalent amount of all outstanding Swing Line Loans (including the Assumed Swing Line Loan Amount) exceeds such Revolving Facility Lender's Revolving Facility Commitment, or (3) the Effective Amount of all L/C Obligations exceeds the L/C Commitment, (II) with respect to any Letter of Credit Issued for the account of UK Borrower (or jointly for the account of UK Borrower and any of its Subsidiaries), such Letter of Credit is requested for Issuance prior to the Safeline Closing Date or the Effective Amount of all L/C Obligations of Letters of Credit Issued for the account of UK Borrower (unless Issued jointly for the account of UK Borrower and a Borrower), plus (without duplication) the outstanding principal Dollar Equivalent amount of all Revolving Loans of UK Borrower exceeds 20.0 million Pounds Sterling or (III) with respect to any Issuance for the account of any Subsidiary Swing Line Borrower (unless such Issuance is jointly for the account of such Subsidiary Swing Line Borrower and a Borrower), the Subsidiary L/C Effective Amount of all Subsidiary L/C Obligations of such Subsidiary Swing Line Borrower, plus the Subsidiary Currency Amount of all Swing Line Loans then outstanding of such Subsidiary Swing Line Borrower exceeds the Subsidiary Swing Line Borrower Sublimit of such Subsidiary Swing Line Borrower. Within the foregoing limits, and subject to the other terms and conditions hereof, the Borrowers' ability to obtain Letters of Credit shall be fully revolving, and, accordingly, the Borrowers may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit which have expired or which have been drawn upon and reimbursed. (b) The L/C Lender is under no obligation to Issue any Letter of Credit if: any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Lender from Issuing such Letter of Credit, or any Requirement of Law applicable to the L/C Lender or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Lender shall prohibit, or request that the L/C Lender refrain from, the Issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Lender with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Lender is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Lender any unreimbursed loss, cost or expense which was not applicable on the Original Closing Date and which the L/C Lender in good faith deems material to it; the L/C Lender has received written notice from any Lender, the Administrative Agent or either Borrower or any Subsidiary Swing Line Borrower, on or prior to the Business Day prior to the requested date of Issuance of such Letter of Credit, that one or more of the applicable conditions contained in Article V is not then satisfied; the expiry date of any requested Letter of Credit is (A) more than twelve months after the date of such Issuance for standby Letters of Credit or more than 180 days after the date of such issuance for commercial documentation Letters of Credit, unless the Required Revolving Facility Lenders have approved such expiry date in writing; provided, however, that any standby Letter of Credit may be automatically extendible for periods of up to one year so long as such Letter of Credit provides that the L/C Lender retains an option reasonably satisfactory to the L/C Lender, to terminate such Letter of Credit prior to each extension date, or (B) after the fifth Business Day prior to the Termination Date, unless all of the Revolving Facility Lenders have approved such expiry date in writing; any requested Letter of Credit does not provide for drafts, or is not otherwise in form and substance reasonably acceptable to the L/C Lender, or the Issuance of a Letter of Credit shall violate any applicable policies of the L/C Lender; such Letter of Credit (other than any Letter of Credit issued solely for the account of M-T GmbH) is denominated in a currency other than U.S. $ or an Offshore Currency; or an Event of Default or Unmatured Event of Default has occurred and is continuing. No L/C Lender need Issue a Letter of Credit for the account of any Subsidiary Swing Line Borrower denominated in a currency other than a currency in which such Subsidiary Swing Line Borrower may borrow Swing Line Loans in accordance with subsection 2.16(b). (c) Notwithstanding the foregoing, in the event a Lender Default exists, the L/C Lender shall not be required to Issue any Letter of Credit unless the L/C Lender has entered into arrangements satisfactory to it and the Revolving Borrowers and the Subsidiary Swing Line Borrowers to eliminate the L/C Lender's risk with respect to the participation in Letters of Credit of the Defaulting Lender or Lenders, including by Cash Collateralizing such Defaulting Lender's or Lenders' Pro Rata Share of the L/C Obligations. (d) Each L/C Lender who is to Issue Letters of Credit for the account of a Subsidiary Swing Line Borrower will determine the Subsidiary Currency Equivalent amount with respect to the sum of Swing Line Loans made by such Swing Line Lender to the Subsidiary Swing Line Borrower to whom it makes Swing Line Loans, plus the Subsidiary L/C Effective Amount of all Subsidiary L/C Obligations of such Subsidiary Swing Line Borrower as of the requested Issuance Date of any Letter of Credit for such Subsidiary Swing Line Borrower. 3.2. Issuance, Amendment and Renewal of Letters of Credit. (a) Each Letter of Credit shall be Issued upon the irrevocable written request of the applicable Revolving Borrower or Subsidiary Swing Line Borrower received by the L/C Lender (with a copy sent by the applicable Revolving Borrower or Subsidiary Swing Line Borrower to the Administrative Agent) at least three Business Days (or such shorter time as the L/C Lender may agree in a particular instance in its sole discretion) prior to the proposed date of Issuance. Each such request for Issuance of a Letter of Credit shall be by facsimile, confirmed in an original writing, in the form of an L/C Application, and shall specify in form and detail reasonably satisfactory to the L/C Lender: (i) the proposed date of Issuance of the Letter of Credit (which shall be a Business Day); (ii) the face amount of the Letter of Credit; (iii) the expiry date of the Letter of Credit; (iv) the name and address of the beneficiary thereof; (v) the documents to be presented by the beneficiary of the Letter of Credit in case of any drawing thereunder; (vi) the full text of any certificate to be presented by the beneficiary in case of any drawing thereunder; (vii) the type of Letter of Credit; (viii) with respect to any Letter of Credit Issued for the account of UK Borrower, whether such Letter of Credit is to be counted against the UK Borrower Sublimit or the Subsidiary Swing Line Borrower Sublimit of the UK Swing Line Borrowers; and (ix) such other matters as the L/C Lender may reasonably require. (b) At least two Business Days prior to the Issuance of any Letter of Credit, the L/C Lender will, other than with respect to the Subsidiary Swing Line Borrowers, confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of the L/C Application or L/C Amendment Application from the applicable Revolving Borrower and, if not, the L/C Lender will provide the Administrative Agent with a copy thereof. Unless the L/C Lender has received, on or before the Business Day immediately preceding the date the L/C Lender is to Issue a requested Letter of Credit, (A) notice from the Administrative Agent directing the L/C Lender (other than any L/C Lender making Swing Line Loans other than to the UK Swing Line Borrowers or US Borrower) not to Issue such Letter of Credit because such Issuance is not then permitted under subsection 3.1(a) as a result of the limitations set forth in clauses (1) through (3) thereof, or (B) a notice described in subsection 3.1(b)(ii), then, subject to the terms and conditions hereof, the L/C Lender shall, on the requested date, Issue a Letter of Credit for the account of the applicable Revolving Borrower (or jointly for the account of the applicable Revolving Borrower and the applicable Subsidiary) or the applicable Subsidiary Swing Line Borrower in accordance with the L/C Lender's usual and customary business practices. (c) From time to time while a Letter of Credit is outstanding and prior to the Termination Date, the L/C Lender will, upon the written request of the applicable Revolving Borrower or the applicable Subsidiary Swing Line Borrower received by the L/C Lender (with a copy sent by the applicable Revolving Borrower or the applicable Subsidiary Swing Line Borrower to the Administrative Agent) at least three days (or such shorter time as the L/C Lender may agree in a particular instance in its sole discretion) prior to the proposed date of amendment, amend any Letter of Credit Issued by it. Each such request for amendment of a Letter of Credit shall be made by facsimile, confirmed immediately in an original writing, made in the form of an L/C Amendment Application and shall specify in form and detail reasonably satisfactory to the L/C Lender: (i) the Letter of Credit to be amended; (ii) the proposed date of amendment of the Letter of Credit (which shall be a Business Day); (iii) the nature of the proposed amendment; and (iv) such other matters as the L/C Lender may reasonably require. The L/C Lender shall be under no obligation to, and shall not, amend any Letter of Credit if: (A) the L/C Lender would have no obligation at such time to Issue such Letter of Credit in its amended form under the terms of this Agreement; or (B) the beneficiary of any such Letter of Credit does not accept the proposed amendment to the Letter of Credit. The Administrative Agent will promptly notify the Revolving Facility Lenders of the receipt by it of any L/C Application or L/C Amendment Application. (d) The L/C Lender and the Revolving Facility Lenders agree that, while a standby Letter of Credit is outstanding and prior to the Termination Date, at the option of the applicable Revolving Borrower or the applicable Subsidiary Swing Line Borrower and upon the written request of the applicable Revolving Borrower or the applicable Subsidiary Swing Line Borrower received by the L/C Lender (with a copy sent by the applicable Revolving Borrower or the applicable Subsidiary Swing Line Borrower to the Administrative Agent) at least three Business Days (or such shorter time as the L/C Lender may agree in a particular instance in its sole discretion) prior to the proposed date of notification of renewal, the L/C Lender shall be entitled to authorize the automatic renewal of any Letter of Credit Issued by it. Each such request for renewal of a Letter of Credit shall be made by facsimile, confirmed in an original writing, in the form of an L/C Amendment Application, and shall specify in form and detail reasonably satisfactory to the L/C Lender: (i) the standby Letter of Credit to be renewed; (ii) the proposed date of notification of renewal of the Letter of Credit (which shall be a Business Day not more than 60 days prior to the expiry date of the Letter of Credit being renewed); (iii) the revised expiry date of the Letter of Credit; and (iv) such other matters as the L/C Lender may reasonably require. The L/C Lender shall be under no obligation so to renew any Letter of Credit and shall not do so if: (A) the L/C Lender would have no obligation at such time to Issue or amend such Letter of Credit in its renewed form under the terms of this Agreement; or (B) the beneficiary of any such Letter of Credit does not accept the proposed renewal of the Letter of Credit. If any outstanding Letter of Credit shall provide that it shall be automatically renewed unless the beneficiary thereof receives notice from the L/C Lender that such Letter of Credit shall not be renewed, and if at the time of renewal the L/C Lender would be entitled to authorize the automatic renewal of such Letter of Credit in accordance with this subsection 3.2(d) upon the request of the applicable Revolving Borrower or the applicable Subsidiary Swing Line Borrower but the L/C Lender shall not have received any L/C Amendment Application from the applicable Revolving Borrower or the applicable Subsidiary Swing Line Borrower with respect to such renewal or other written direction by the applicable Revolving Borrower or the applicable Subsidiary Swing Line Borrower with respect thereto, the L/C Lender shall nonetheless be permitted to allow such Letter of Credit to renew, and the applicable Revolving Borrower and the Revolving Facility Lenders hereby authorize such renewal, and, accordingly, the L/C Lender shall be deemed to have received an L/C Amendment Application from the applicable Revolving Borrower or the applicable Subsidiary Swing Line Borrower requesting such renewal. (e) The L/C Lender may, at its election (or as required by the Administrative Agent at the direction of the Required Revolving Facility Lenders), deliver any notices of termination or other communications to any Letter of Credit beneficiary or transferee, and take any other reasonable action, at any time and from time to time, in order to cause the expiry date of such Letter of Credit to be a date not later than the fifth Business Day prior to the Termination Date. (f) This Agreement shall control in the event of any conflict with any L/C-Related Document (other than any Letter of Credit). (g) The L/C Lender will also deliver to the Administrative Agent, concurrently or promptly following its delivery of a Letter of Credit, or amendment to or renewal of a Letter of Credit, to an advising bank or a beneficiary, a true and complete copy of each such Letter of Credit or amendment to or renewal of a Letter of Credit. 3.3. Risk Participations, Drawings and Reimbursements. (a) Immediately upon the Issuance of each Letter of Credit, each Revolving Facility Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C Lender a participation in such Letter of Credit and each drawing thereunder in an amount equal to the product of (i) the Pro Rata Share of such Revolving Facility Lender times (ii) the maximum amount available to be drawn under such Letter of Credit and the amount of such drawing, respectively. (b) In the event of any request for a drawing under a Letter of Credit by the beneficiary or transferee thereof, the applicable L/C Lender will promptly notify the applicable Revolving Borrower or the applicable Subsidiary Swing Line Borrower (but the failure to so notify any Revolving Borrower or any Subsidiary Swing Line Borrower shall not impair any rights of the Lenders or modify any obligation of the Revolving Borrowers or any Subsidiary Swing Line Borrower). The applicable Revolving Borrower or the applicable Subsidiary Swing Line Borrower shall reimburse the L/C Lender prior to 1:00 p.m. (New York City time or local time with respect to any Letter of Credit Issued for a Subsidiary Swing Line Borrower), on each date that any amount is paid by the L/C Lender under any Letter of Credit issued for the account of such Revolving Borrower or Subsidiary Swing Line Borrower (each such date, an "Honor Date"), in an amount equal to the amount so paid by the L/C Lender. In the event the applicable Revolving Borrower or the applicable Subsidiary Swing Line Borrower fails to reimburse the L/C Lender for the full amount of any drawing under any Letter of Credit by 1:00 p.m. (New York City time or local time with respect to any Subsidiary Swing Line Borrower) on the Honor Date, the L/C Lender will promptly notify the Administrative Agent and the Administrative Agent will promptly notify each Lender thereof. Thereupon US Borrower with respect to all Letters of Credit Issued for its account, UK Borrower with respect to all Letters of Credit Issued for its account or for the account of Safeline Limited (or if UK Borrower is not able to borrow under the Revolving Facility, US Borrower), and CH Borrower with respect to all Letters of Credit Issued for the account of any Subsidiary Swing Line Borrower (other than UK Borrower or Safeline Limited) and itself (unless Issued jointly for the account of US Borrower) shall be deemed to have requested that Revolving Loans be made by the Revolving Facility Lenders to be disbursed on the Honor Date under such Letter of Credit, subject to the amount of the unutilized portion of the Revolving Facility Commitment and subject to the conditions set forth in subsections 5.2(b) and (c), which Loans shall be ABR Loans accruing interest at a rate per annum equal to the Alternate Base Rate, plus the Applicable Margin for ABR Loans which are Revolving Loans, in the case of a drawing in U.S. Dollars, or Loans accruing interest at a rate per annum equal to the Overnight Rate applicable to such Offshore Currency from time to time in effect, plus the Applicable Margin for LIBOR Rate Loans which are Revolving Loans, plus, in the case of Revolving Loans in Pounds Sterling, the MLA Cost, in the case of a drawing in an Offshore Currency. Any notice given by the L/C Lender or the Administrative Agent pursuant to this subsection 3.3(b) may be oral if immediately confirmed in writing (including by facsimile); provided, however, that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice. (c) Each Revolving Facility Lender shall upon any notice pursuant to subsection 3.3(b) make available to the Administrative Agent for the account of the L/C Lender an amount in U.S. Dollars or the Offshore Currency in which such Letter of Credit is denominated, as the case may be, and in Same Day Funds equal to its Pro Rata Share of the amount of the drawing, whereupon the participating Revolving Facility Lenders shall (subject to subsection 3.3(d)) each be deemed to have made a Revolving Loan to the applicable Revolving Borrower in that amount accruing interest at a rate per annum equal to the Alternate Base Rate, plus the Applicable Margin for ABR Loans which are Revolving Loans (in the case of a drawing in U.S. Dollars), or the Overnight Rate applicable to such Offshore Currency from time to time in effect, plus the Applicable Margin for LIBOR Rate Loans which are Revolving Loans (in the case of a drawing in an Offshore Currency), plus, in the case of Revolving Loans in Pounds Sterling, the MLA Cost. If any Revolving Facility Lender so notified fails to make available to the Administrative Agent for the account of the L/C Lender the amount of such Revolving Facility Lender's Pro Rata Share of the amount of the drawing by no later than 1:00 p.m. (New York time) on the Honor Date, then interest shall accrue on such Revolving Facility Lender's obligation to make such payment, from the Honor Date to the date such Revolving Facility Lender makes such payment, at a rate per annum equal to (i) in the case of a drawing in U.S. Dollars, the U.S. Federal Funds Rate in effect from time to time during such period and (ii) in the case of a drawing in an Offshore Currency, the Overnight Rate applicable to such Offshore Currency from time to time in effect. The Administrative Agent will promptly give notice of the occurrence of the Honor Date, but failure of the Administrative Agent to give any such notice on the Honor Date or in sufficient time to enable any Revolving Facility Lender to effect such payment on such date shall not relieve such Revolving Facility Lender from its obligations under this Section 3.3. (d) With respect to any unreimbursed drawing that is not converted into Revolving Loans to the applicable Revolving Borrower in whole or in part, because of such Revolving Borrower's failure to satisfy the conditions set forth in subsections 5.2(b) and (c) or for any other reason, such Revolving Borrower shall be deemed to have incurred from the L/C Lender an L/C Borrowing in the amount of such drawing, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at a rate per annum equal to (i) in the case of a drawing in U.S. Dollars, the Alternate Base Rate, plus 2% per annum, and (ii) in the case of a drawing in an Offshore Currency, the Overnight Rate applicable to such Offshore Currency from time to time in effect, plus 2% per annum, plus, in the case of Revolving Loans in Pounds Sterling, the MLA Cost, and each Revolving Facility Lender's payment to the L/C Lender pursuant to subsection 3.3(c) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Revolving Facility Lender in satisfaction of its participation obligation under this Section 3.3. (e) Each Revolving Facility Lender's obligation in accordance with this Agreement to make the Revolving Loans or L/C Advances, as contemplated by this Section 3.3, as a result of a drawing under a Letter of Credit, shall be absolute and unconditional and without recourse to the L/C Lender and shall not be affected by any circumstance, including (i) any set-off, counterclaim, recoupment, defense or other right which such Revolving Facility Lender may have against the L/C Lender, the applicable Revolving Borrower or any other Person for any reason whatsoever; (ii) the occurrence or continuance of an Event of Default, an Unmatured Event of Default or a Material Adverse Effect; or (iii) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing; provided, however, that each Revolving Facility Lender's obligation to make Revolving Loans under this Section 3.3 is subject to the conditions set forth in Section 5.2. 3.4. Repayment of Participations. (a) Upon (and only upon) receipt by the Administrative Agent for the account of the L/C Lender of Same Day Funds from the applicable Revolving Borrower or the applicable Subsidiary Swing Line Borrower (i) in reimbursement of any payment made by the L/C Lender under the Letter of Credit with respect to which any Revolving Facility Lender has paid the Administrative Agent for the account of the L/C Lender for such Revolving Facility Lender's participation in the Letter of Credit pursuant to Section 3.3 or (ii) in payment of interest thereon, the Administrative Agent will pay to each Revolving Facility Lender, in the same funds as those received by the Administrative Agent for the account of the L/C Lender, the amount of such Revolving Facility Lender's Pro Rata Share of such funds, and the L/C Lender shall receive the amount of the Pro Rata Share of such funds of any Revolving Facility Lender that did not so pay the Administrative Agent for the account of the L/C Lender. (b) If the Administrative Agent or the L/C Lender is required at any time to return to the applicable Revolving Borrower or the applicable Subsidiary Swing Line Borrower, or to a trustee, receiver, liquidator or custodian, or any official in any Insolvency Proceeding, any portion of any payment made by such Revolving Borrower to the Administrative Agent for the account of the L/C Lender pursuant to subsection 3.4(a) in reimbursement of a payment made under any Letter of Credit or interest or fee thereon, each Revolving Facility Lender shall, on demand of the Administrative Agent, forthwith return to the Administrative Agent or the L/C Lender the amount of its Pro Rata Share of any amount so returned by the Administrative Agent or the L/C Lender, plus interest thereon from the date such demand is made to the date such amount is returned by such Revolving Facility Lender to the Administrative Agent or the L/C Lender, at a rate per annum equal to the U.S. Federal Funds Rate in effect from time to time. 3.5. Role of the L/C Lender. (a) Each Revolving Facility Lender, the Revolving Borrowers and the Subsidiary Swing Line Borrowers agree that, in paying any drawing under a Letter of Credit, the L/C Lender shall not have any responsibility to obtain any document (other than any sight draft and certificates or other documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. (b) None of the Agents, any of their respective Affiliates or any of the respective correspondents, participants or assignees of the L/C Lender shall be liable to any Revolving Facility Lender for: (i) any action taken or omitted in connection herewith at the request or with the approval of the Revolving Facility Lenders (including the Required Revolving Facility Lenders, as applicable); (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any L/C-Related Document. (c) Each Revolving Borrower and each Subsidiary Swing Line Borrower hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit issued for its account; provided, however, that this assumption is not intended to, and shall not, preclude a Revolving Borrower's or a Subsidiary Swing Line Borrower's pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the Agents, any of their respective Affiliates or any of the respective correspondents, participants or assignees of the L/C Lender shall be liable or responsible for any of the matters described in clauses (i) through (iv) of Section 3.6; provided, however, that, anything in such clauses to the contrary notwithstanding, a Revolving Borrower or a Subsidiary Swing Line Borrower may have a claim against the L/C Lender, and the L/C Lender may be liable to such Revolving Borrower or such Subsidiary Swing Line Borrower, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by such Revolving Borrower or such Subsidiary Swing Line Borrower which such Revolving Borrower or such Subsidiary Swing Line Borrower proves were caused directly by the L/C Lender's willful misconduct or gross negligence or the L/C Lender's willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing: (i) the L/C Lender may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary; and (ii) the L/C Lender shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason. 3.6. Obligations Absolute. The obligations of the Revolving Borrowers and the Subsidiary Swing Line Borrowers under this Agreement and any L/C-Related Document to reimburse the L/C Lender for a drawing under a Letter of Credit, and to repay any L/C Borrowing and any drawing under a Letter of Credit converted into Committed Loans, shall be unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement and each such other L/C-Related Document under all circumstances, including the following: any lack of validity or enforceability of this Agreement or any L/C-Related Document; the existence of any claim, set-off, defense or other right that a Borrower may have at any time against any beneficiary or any transferee of any Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the L/C Lender or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by the L/C- Related Documents or any unrelated transaction; any draft, demand, certificate or other document presented under any Letter or Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under any Letter of Credit; or any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, a Revolving Borrower or a Subsidiary Swing Line Borrower or a guarantor; provided, however, that the Revolving Borrowers and the Subsidiary Swing Line Borrowers shall not be obligated to reimburse the L/C Lender for any wrongful payment made by the L/C Lender as a result of acts or omissions constituting willful misconduct or gross negligence on the part of the L/C Lender. 3.7. Cash Collateral Pledge. If any Letter of Credit remains outstanding and partially or wholly undrawn as of the Termination Date, then the Revolving Borrowers or the applicable Subsidiary Swing Line Borrower shall immediately Cash Collateralize the L/C Obligations Issued for their respective accounts in an amount equal to the maximum amount then available to be drawn under all Letters of Credit. 3.8 Letter of Credit Fees. (a) The applicable Revolving Borrower or the applicable Subsidiary Swing Line Borrower shall pay to (i) with respect to any Letter of Credit Issued for any Revolving Borrower (other than any UK Borrower Swing Line L/C), the Administrative Agent for the account of each of the Revolving Facility Lenders, and (ii) with respect to Letters of Credit Issued for the account of any Subsidiary Swing Line Borrower (other than UK Borrower if such Letter of Credit is not a UK Borrower Swing Line L/C), the applicable L/C Lender for its account only, a letter of credit fee with respect to the Letters of Credit Issued for their respective accounts at a rate per annum equal to the then Applicable Margin for LIBOR Rate Loans which are Revolving Facility Loans on an amount equal to the average daily maximum amount available to be drawn of the outstanding Letters of Credit Issued for their respective accounts (the "Computation Amount"), computed on a quarterly basis in arrears on the last Business Day of each calendar quarter and on the Termination Date (or such later date on which all outstanding Letters of Credit Issued for their respective accounts have been terminated or have expired) based upon Letters of Credit outstanding Issued for their respective accounts for the applicable period as calculated by (x) the Administrative Agent with respect to Letters of Credit Issued for the account of the Revolving Borrowers, or (y) the applicable L/C Lender with respect to any Letter of Credit Issued solely for the account of a Subsidiary Swing Line Borrower. (b) The applicable Revolving Borrower or the applicable Subsidiary Swing Line Borrower shall pay to (i) with respect to Letters of Credit Issued for the account of any Revolving Borrower, the Administrative Agent, or (ii) with respect to Letters of Credit Issued for the account of any Subsidiary Swing Line Borrower, the applicable L/C Lender, in each case for the account of the L/C Lender a letter of credit fronting fee for each Letter of Credit Issued by the L/C Lender for the account of such Revolving Borrower or Subsidiary Swing Line Borrower, as the case may be, of at least U.S. $100 or, if greater, at the rate per annum equal to 1/4% of the Computation Amount, computed on the last Business Day of each calendar quarter and on the Termination Date (or such later date on which all outstanding Letters of Credit Issued for their respective accounts have been terminated or have expired) based upon the Letters of Credit outstanding for the applicable period as calculated by (x) the Administrative Agent with respect to Letters of Credit Issued for the account of the Revolving Borrowers or (y) the applicable L/C Lender with respect to any Letter of Credit Issued solely for the account of a Subsidiary Swing Line Borrower, which fee, with respect to the L/C Lender's share of the fee set forth in this subsection 3.8(b), shall be credited against the fee payable under subsection 3.8(a). (c) The letter of credit fees payable under subsection 3.8(a) and the fronting fees payable under subsection 3.8(b) shall be due and payable quarterly in arrears on the last Business Day of each calendar quarter during which Letters of Credit are outstanding, commencing on the first such quarterly date to occur after the Closing Date, through the Termination Date (or such later date upon which all outstanding Letters of Credit Issued for the respective account of a Revolving Borrower or a Subsidiary Swing Line Borrower have been terminated or have expired), with the final payment to be made on the Termination Date (or such later termination or expiration date). All fees payable under this Section 3.8 shall be calculated as of their due date based upon the Dollar Equivalent amount of the Computation Amount as of such date based upon the Spot Rate. All such fees shall be payable solely in U.S. Dollars. (d) The Revolving Borrowers and the Subsidiary Swing Line Borrowers shall pay to the L/C Lender from time to time on demand the normal issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the L/C Lender relating to letters of credit as from time to time in effect. 3.9. Uniform Customs and Practice. The Uniform Customs and Practice for Documentary Credits as published by the International Chamber of Commerce most recently at the time of issuance of any Letter of Credit shall (unless otherwise expressly provided in such Letter of Credit) apply to such Letter of Credit. 3.10. Letters of Credit for the Account of Subsidiaries. Each Revolving Borrower and its applicable Subsidiary shall be jointly and severally liable for any Letter of Credit which is issued jointly for the account of that Revolving Borrower and any of its Subsidiaries. ARTICLE IV. NET PAYMENTS, YIELD PROTECTION AND ILLEGALITY ---------------------------------------------- 4.1. Net Payments. (a) Except as provided in subsection 4.1(b), all payments by any Loan Party to any Lender or any Agent under this Agreement and any other Loan Document shall be made free and clear of, and without deduction or withholding for, any Covered Taxes levied or imposed by any Governmental Authority with respect to such payments. The Borrowers covenant and agree on behalf of the Subsidiaries that the provisions of this Section 4.1 shall apply to all payments under any Loan Document. In the event that any Loan Party (other than any Applicable Borrower) is obligated to make any payments described in this Section 4.1 under any Loan Document, the Lenders and Agents covenant and agree to deliver to any such Loan Party any forms or certificates that (i) they are able to deliver, and (ii) they would have been required to deliver to such Loan Party if it were an Applicable Borrower pursuant to this Section 4.1 and the appropriate requests therefor have been made; provided, however, that no Lender or Agent shall have any liability to any Loan Party or any other Person if such Lender or Agent is not in compliance with this sentence. (b) If any Loan Party shall be required by law to deduct or withhold any Covered Taxes from or in respect of any sum payable hereunder to any Lender or any Agent, then except as provided in subsection 4.1(g): (i) the sum payable shall be increased as necessary so that after making all such required deductions and withholdings (including deductions and withholdings applicable to additional sums payable under this Section) such Lender or such Agent, as the case may be, receives an amount equal to the sum it would have received had no such deductions or withholdings been made; (ii) such Loan Party shall make such deductions and withholdings; and (iii) such Loan Party shall pay the full amount deducted or withheld to the relevant taxing authority or other authority in accordance with applicable law. If for any reason CH Borrower, Canadian Borrower or any other Loan Party (other than UK Borrower) fails to make any payments required under the preceding sentence, then US Borrower shall make such payments on behalf of CH Borrower, Canadian Borrower or such Loan Party. Within 30 days after the date of any payment by a Loan Party of Covered Taxes, such Loan Party shall furnish the Administrative Agent or the Applicable Subsidiary Swing Line Lender, in the case of any Subsidiary Swing Line Borrower, the original or a certified copy of a receipt evidencing payment thereof, or other evidence of payment reasonably satisfactory to the Administrative Agent or the Applicable Subsidiary Swing Line Lender, in the case of any Subsidiary Swing Line Borrower. (c) The Loan Parties agree to indemnify and hold harmless each Lender and each Agent for (i) the full amount of Covered Taxes (including any Covered Taxes imposed by any jurisdiction on amounts payable under this Section 4.1) paid by such Lender or such Agent and any liability (including penalties, interest, additions to tax and expenses) arising therefrom or with respect thereto, whether or not such Covered Taxes were correctly or legally asserted, and (ii) any Taxes levied or imposed by any Governmental Authority on any additional amounts paid by any Loan Party under this Section 4.1 that are measured by such Lender's or such Agent's net income by the jurisdiction (or any political subdivision thereof) under the laws of which such Lender or such Agent, as the case may be, is organized or maintains a Lending Office. (d)(i) If a Lender or an Agent receives a refund or credit of Taxes paid or indemnified by a Loan Party pursuant to subsection (b) or (c) of this Section 4.1, then such Lender or such Agent shall promptly repay the applicable Loan Party such refund or the net benefit obtained by such Lender as a consequence of the receipt of such credit (whether paid pursuant to subsection (b) or (c) of this Section 4.1 and whether of the type described in either clause (i) or (ii) of such subsection (c)) net of all out-of-pocket expenses related thereto and without interest (other than interest received as part of such refund or credit); provided, however, that if, due to any adjustment of such Taxes (or of any liability, including penalties, interest, additions to tax and expenses, arising therefrom or with respect thereto), such Lender or such Agent loses the benefit of all or any portion of such refund or credit, the Loan Parties will indemnify and hold harmless such Lender or such Agent in accordance with this subsection. A certificate as to the amount of any such required indemnification payment prepared by the Lender or such Agent and setting forth a reasonable basis for such claim shall be final, conclusive and binding for all purposes (it being understood and agreed that a Lender shall in no circumstances be required to disclose any information or details of or relating to its tax or financial affairs under or pursuant to this Section 4.1(d)(i)). Payment under this indemnification shall be made within 30 days after the date such Lender or such Agent makes written demand therefor by the delivery of such certificate. (ii) In furtherance of the provisions of subsection (d)(i), if a Lender having a Revolving Facility Commitment, Revolving Facility Loan, Tranche A-UK Facility Commitment or Tranche A-UK Term Loan (each, a "UK Lender") is entitled to receive any additional amounts pursuant to this Section 4.1 which are attributable to any withholding imposed prior to or during the time that such Lender's UK Certificate (as defined in subsection 4.1 (f)(viii)) is being processed or considered by Inland Revenue (or by the taxing authority of such Lender's jurisdiction of residence in support thereof), then such UK Lender shall take all reasonable steps which are necessary to obtain (or obtain the benefit of) any refund, credit, relief, remission or repayment of Taxes, including filing such forms, certificates, documents, applications or returns as may be required to obtain such tax benefit and shall take such steps at the earliest reasonable time; provided, however, that the amount of any material expenses or costs incurred by such UK Lender shall be reimbursed by UK Borrower promptly on demand by such Lender. (e) If any Loan Party is required to pay additional amounts to any Lender or any Agent pursuant to this Section 4.1, then such Lender shall use reasonable efforts (consistent with legal and regulatory restrictions) to change the jurisdiction of its Lending Office or take other appropriate action so as to eliminate any obligation to make such additional payment by such Loan Party which may thereafter accrue, if such change or other action in the reasonable judgment of such Lender is not otherwise disadvantageous or burdensome to such Lender. (f)(i) Each Lender (other than a Canadian Lender which is not also making a Revolving Facility Loan or Term Loan to US Borrower or UK Borrower) or Agent which is not a United States person (as such term is defined in Section 7701(a) of the Code) agrees that: (A) it shall, no later than the Original Closing Date (or, in the case of a Lender which becomes a party hereto after the Original Closing Date, the date upon which such Lender becomes a party hereto) deliver to the Administrative Agent and to the Borrowers through the Administrative Agent (x) two accurate and complete signed originals of IRS Form 4224 or any successor thereto ("Form 4224"), or two accurate and complete signed originals of IRS Form 1001 or any successor thereto ("Form 1001"), as appropriate, or (y) if such Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either Form 1001 or Form 4224 pursuant to clause (x) above, a certificate substantially in the form of Exhibit L-1 (any such certificate, a "Section 4.1(f)(i) Certificate") and, in the case of either (x) or (y), two accurate and complete original signed copies of IRS Form W-8 or any successor thereto ("Form W-8") or IRS Form W-9 or any successor thereto ("Form W-9"), whichever is applicable; (B) if at any time such Lender or Agent makes any changes necessitating a new Form 4224, Form 1001, Form W-8, Form W-9 or Section 4.1(f)(i) Certificate, as the case may be, it shall with reasonable promptness deliver to the Administrative Agent and to the Borrowers through the Administrative Agent in replacement for, or in addition to, the forms previously delivered by it hereunder, two accurate and complete signed originals of Form 4224, Form 1001, Form W-8, Form W-9 or Section 4.1(f)(i) Certificate, as appropriate; and (C) it shall, before or promptly after the occurrence of any event (including the passing of time (and in any event (x) in the case of a Form 4224 or Section 4.1(f)(i) Certificate, before the payment of any interest in each succeeding taxable year of such Lender after the Original Closing Date during which interest may be paid under this Agreement, and (y) in the case of a Form 1001, before the payment of any interest in each third succeeding calendar year after the Original Closing Date during which interest may be paid under this Agreement) but excluding any event mentioned in clause (B) above) requiring a change in or renewal of the most recent Form 4224, Form 1001, Form W-8, Form W-9 or Section 4.1(f)(i) Certificate, previously delivered by such Lender or Agent, deliver to the Administrative Agent and to the Borrowers through the Administrative Agent two accurate and complete original signed copies of Form 4224, Form 1001, or Form W-8 and a Section 4.1(f)(i) Certificate, in replacement for the forms previously delivered by such Lender or Agent. (ii) Each Lender or Agent that is incorporated or organized under the laws of the United States of America or a state thereof shall provide two properly completed and duly executed copies of Form W-9, or successor applicable form, at the times specified for delivery of forms under paragraph (f)(i) of this subsection. (iii) Each Form 1001 or 4224 delivered by a Lender or Agent pursuant to this subsection (f) shall certify, unless unable to do so by virtue of a Change in Law occurring after the date such Lender or Agent becomes a party hereto, that the Lender or Agent is entitled to receive payments under this Agreement without deduction or withholding of U.S. federal income taxes and each Form W-9 shall certify, unless unable to do so by virtue of a Change in Law occurring after the date such Lender or Agent becomes a party hereto, that such Lender or Agent is entitled to an exemption from U.S. backup withholding. Each Canadian Certificate (as defined in subsection 4.1(f)(vii)) shall certify, unless unable to do so by virtue of a Change in Law occurring after the date such Lender or Agent becomes a party hereto, that the Lender or Agent is entitled to receive payments under this Agreement without deduction or withholding of Canadian federal income taxes. Each UK Certificate (as defined in subsection 4.1 (f)(viii)) shall certify or establish, unless unable to do so by virtue of a Change in Law occurring after the date such Lender or Agent becomes a party hereto, that the Lender or Agent is entitled to receive payments under this Agreement without deduction or withholding of UK income taxes. (iv) Notwithstanding the foregoing provisions of this subsection (f) or any other provision of this Section 4.1, no Lender or Agent shall be required to deliver any form pursuant to this Section 4.1 if such Lender or Agent is not legally able to do so by virtue of a Change in Law occurring after the date such Lender or Agent becomes a party hereto. (v) Each Revolving Facility Lender and Tranche A-CHF Lender shall, no later than the Original Closing Date (or, in the case of any such Lender which becomes a party hereto after the Original Closing Date, the date upon which such Lender becomes a party hereto) deliver a certificate substantially in the form of Exhibit L-2 or other form of certificate reasonably satisfactory to CH Borrower (any such certificate, a "Section 4.1(f)(v) Certificate"); provided, however, that with respect to any Revolving Facility Loan or Tranche A-CHF Term Loan (a) no Revolving Facility Lender or Tranche A-CHF Lender making Loans or having Commitments as of the Original Closing Date need deliver any Section 4.1(f)(v) Certificate if (i) it is unable to do so and (ii) the total number of Lenders within the same Facility who have not delivered Section 4.1(f)(v) Certificates does not exceed three and (b) after the Original Closing Date no Assignee (or branch or Affiliate designated pursuant to Section 4.9) of a Revolving Facility Lender or Tranche A-CHF Lender need deliver any Section 4.1(f)(v) Certificate if (i) it is unable to do so and (ii) the assignment to such Assignee would not increase beyond three the sum of (a) the total number of Lenders within the same Facility who have not delivered Section 4.1(f)(v) Certificates and (b) the total number of Lenders within the same Facility who have notified CH Borrower or the Administrative Agent that any of the representations made in a previously delivered Section 4.1.(f)(v) Certificate are no longer true and correct. Each Lender delivering a Section 4.1(f)(v) Certificate further agrees to deliver a new Section 4.1(f)(v) Certificate at the times specified for delivery of a Section 4.1(f)(i) Certificate under subsections (f)(i)(B) and (C) of this Section 4.1, unless it is unable to do so by virtue of a Change in Law occurring after the date such Lender becomes a party hereto. (vi) Each Lender or Agent shall, promptly upon a Loan Party's or the Administrative Agent's reasonable request to that effect, deliver to such Loan Party or the Administrative Agent (as the case may be) such other forms or similar documentation or other information as may be required from time to time by any applicable law, treaty, rule or regulation of any Governmental Authority in order to establish such Lender's or Agent's tax status for withholding purposes. (vii) Each Canadian Lender agrees that it shall, no later than the Safeline Closing Date (or, in the case of a Canadian Lender which becomes a party hereto after the Safeline Closing Date, the date upon which such Lender becomes a party hereto), deliver to the Canadian Agent and to Canadian Borrower through the Canadian Agent an instrument in writing (a "Canadian Certificate") certifying one of the following: (A) that such Canadian Lender is not a non-resident of Canada for the purposes of Part XIII of the Income Tax Act (Canada) and that it is the sole beneficial owner of payments of principal and interest on its Canadian Loans under this Agreement; (B) its jurisdiction of incorporation and residence for tax purposes, that it is the sole beneficial owner of payments of principal and interest on its Canadian Loans under this Agreement and the rate of withholding tax applicable to any payment of interest to it as such rate may be reduced by an applicable tax convention entered into by Canada; or (C) its jurisdiction of incorporation and residence for tax purpose, the names of the beneficial owners of payments of principal and interest on its Canadian Loans under this Agreement, the residence for tax purposes of each of such beneficial owners and the rate of withholding tax applicable to any payment of interest in respect of each beneficial owner as such rate may be reduced by an applicable tax convention entered into by Canada. In addition, each Canadian Lender shall notify Canadian Borrower and the Canadian Agent of any changes in respect of (A), (B) or (C), as the case may be, and shall promptly deliver to the Administrative Agent and Borrowers a Canadian Certificate in replacement thereof, which Canadian Certificate shall, in any event, be delivered prior to the next date for the payment of any interest to such Lender. If the Canadian Agent receives a request from Revenue Canada Customs, Excise and Taxation or another taxing authority to provide additional information concerning the withholding tax status of any Canadian Lender, such Canadian Lender shall (upon notice of such request from the Canadian Agent) use reasonable efforts to obtain and deliver such information to such taxing authority, the Canadian Agent and Canadian Borrower. (viii) Each UK Lender: (A) represents and warrants that it is a UK Qualifying Lender and that such warranty will be deemed to be repeated by each UK Lender on the due date for payment of any amount to such Lender under this Agreement; provided, however, that if a UK Lender is not or ceases to be a UK Qualifying Lender as a result of any Change in Law occurring after the date hereof (or the date upon which such Lender becomes a party hereto, if later) such UK Lender shall not be liable to any Credit Agreement Loan Party for a breach of such representation and warranty; (B) agrees to promptly notify the Administrative Agent and the Borrowers of any change in its status as a UK Qualifying Lender of which it is aware; (C) agrees that, if it is a Treaty Lender, it shall (i) no later than the Safeline Closing Date (or in the case of a Lender which becomes a party hereto after the Safeline Closing Date, the date upon which such Lender becomes a party hereto) deliver to the Administrative Agent an accurate and complete signed original of the claim form for relief from the United Kingdom withholding applicable to such Lender's jurisdiction of residence (a "UK Certificate"), which the Administrative Agent shall, if it receives such forms on or prior to the Safeline Closing Date, deliver to US Borrower no later than the Safeline Closing Date, (ii) promptly complete and submit any other Inland Revenue form or forms applicable to such Lender's jurisdiction of residence, together with all necessary certifications as are required to claim exemption from Taxes in the United Kingdom for payments made hereunder, and (iii) do all things reasonably requested by the UK Borrower, the Administrative Agent, the Inland Revenue or the taxing authority of such Lender's jurisdiction of residence with a view to expediting confirmation from the Inland Revenue of such exemption and with a view to ensuring that such exemption is maintained in full force and effect; provided, however, that the amount (as certified by the Lender) of any material expenses or costs incurred by any Lender in compliance with this clause (iii) shall be reimbursed by UK Borrower promptly on demand by such Lender. Each Treaty Lender further agrees to deliver a new UK Certificate in the event of the occurrence of any event requiring a change in or renewal of any UK Certificate. Nothing in this subsection 4.1(f)(viii)(C) shall eliminate any form delivery requirement specified in subsections 4.1(f)(i), (ii), or (v) for any UK Lender. (g) No Loan Party will be required to pay any additional amount in respect of Taxes pursuant to this Section 4.1 to any Lender or to any Agent with respect to any Lender if the obligation to pay such additional amount would not have arisen but for a failure by such Lender or Agent to comply with its obligations under subsection 4.1(f) or Section 11.8 or because such Lender is not or ceases to be a UK Qualifying Lender (other than by reason of a Change in Law occurring after the date hereof or the date upon which such Lender became a party hereto, if later). (h) Each Lender agrees to indemnify and hold harmless the Loan Parties and each Agent from and against any Taxes, penalties, interest and other costs or losses (including Attorney Costs) incurred or payable by the Loan Parties or an Agent as a result of the failure of the Loan Parties or an Agent to comply with its obligations to deduct or withhold any Taxes from any payments made pursuant to this Agreement which failure resulted from such Loan Party's or an Agent's reasonable reliance on any form, statement, certificate or other information provided to it by such Lender pursuant to this Section 4.1. (i) If, at any time, any Applicable Borrower requests any Lender to deliver any forms or other documentation pursuant to subsection 4.1(f)(vi), then such Applicable Borrower shall, on demand of such Lender through the Administrative Agent, reimburse such Lender for any material costs and expenses (including Attorney Costs) reasonably incurred by such Lender in the preparation or delivery of such forms or other documentation. 4.2. Illegality. (a) If any Lender determines that any Change in Law has made it unlawful, or that any central bank or other Governmental Authority has asserted that it is unlawful, for such Lender or its applicable Lending Office to make or maintain LIBOR Rate Loans in any Applicable Currency or, in the case of any Canadian Lender, BA Equivalent Rate Loans, then, on notice thereof by the Lender to the Applicable Borrower through the Applicable Agent any obligation of such Lender to make, convert or continue LIBOR Rate Loans in such Applicable Currency or BA Equivalent Rate Loans, as the case may be, shall be suspended until such Lender notifies the Applicable Agent and the Applicable Borrower that the circumstances giving rise to such determination no longer exist and until such time such Lender's commitment shall be only to make an ABR Loan, or Prime Rate Loan with respect to the Canadian Facility, when a LIBOR Rate Loan is requested in such Applicable Currency or, in the case of any Canadian Lender, when a BA Equivalent Rate Loan is requested. (b) If a Lender determines that it is unlawful to maintain any LIBOR Rate Loan in any Applicable Currency or, in the case of any Canadian Lender, BA Equivalent Rate Loans, (x) with respect to any such LIBOR Rate Loan that is an Offshore U.S. Dollar Loan, such Loan shall be automatically converted to an ABR Loan either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such LIBOR Rate Loan to such day, or immediately if not, and (y) with respect to any other LIBOR Rate Loan or BA Equivalent Rate Loan, the Applicable Borrower shall, upon their receipt of notice of such fact and demand from such Lender (with a copy to the Applicable Agent), prepay in full such LIBOR Rate Loans or BA Equivalent Rate Loans, as applicable, of such Lender then outstanding in such Applicable Currency, together with interest accrued thereon and amounts required under Section 4.4, either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such LIBOR Rate Loan or such BA Equivalent Rate Loan to such day, or immediately, if not. If Canadian Borrower is required to so prepay any BA Equivalent Rate Loan, then concurrently with such prepayment, Canadian Borrower shall borrow from the affected Lender a Prime Rate Loan. (c) Before giving any notice to the Administrative Agent under this Section, the affected Lender shall designate a different Lending Office with respect to its LIBOR Rate Loans or BA Equivalent Rate Loans or take other appropriate action if such designation or other action will avoid the need for giving notice and will not, in the judgment of such Lender, be illegal or otherwise disadvantageous to such Lender. 4.3. Increased Costs and Reduction of Return. (a) If any Lender determines that, due to either (i) the introduction of or any change in or in the interpretation of any law or regulation or (ii) the compliance by such Lender with any guideline or request from any central bank or other Governmental Authority (whether or not having the force of law), in either case after the Original Closing Date, there shall be any increase in the cost to such Lender of agreeing to make or making, funding or maintaining any LIBOR Rate Loan or BA Equivalent Rate Loan or participating in Letters of Credit, or, in the case of the L/C Lender, any increase in the cost to the L/C Lender of agreeing to issue, issuing or maintaining any Letter of Credit or of agreeing to make or making, funding or maintaining any unpaid drawing under any Letter of Credit, then US Borrower (subject to the limitations herein) and each Applicable Borrower shall be liable for, and shall from time to time, upon demand (which demand shall contain a reasonably detailed calculation of any relevant costs and shall be conclusive and binding in the absence of manifest error, and a copy thereof shall be sent to the Administrative Agent), pay to the Administrative Agent for the account of such Lender, additional amounts as are sufficient to compensate such Lender for such increased costs; provided, however, that (i) CH Borrower shall be liable only for those additional amounts relating to the Obligations of CH Borrower and each CH Foreign Subsidiary, (ii) UK Borrower shall be liable only for those additional amounts relating to the Obligations of UK Borrower, (iii) Canadian Borrower shall be liable only for those additional amounts relating to Obligations of Canadian Borrower, and (iv) US Borrower shall not be responsible for any additional amounts relating to the Obligations of UK Borrower. (b) If any Lender shall have determined that (i) the introduction of any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy Regulation, (iii) any change in the interpretation or administration of any Capital Adequacy Regulation by any central bank or other Governmental Authority charged with the interpretation or administration thereof, or (iv) compliance by such Lender (or its Lending Office) or any corporation controlling such Lender with any Capital Adequacy Regulation, in each case after the date of this Agreement, affects or would affect the amount of capital required or expected to be maintained by such Lender or any corporation controlling such Lender and (taking into consideration such Lender's or such corporation's policies with respect to capital adequacy) determines that the amount of such capital is increased as a consequence of its Commitment, Loans, credits or obligations under this Agreement, then, upon demand of such Lender to US Borrower or the Applicable Borrower through the Applicable Agent, US Borrower (subject to the limitations herein) and each Applicable Borrower shall pay to such Lender, from time to time as specified by such Lender, additional amounts reasonably sufficient to compensate such Lender for such increase; provided, however, that (i) CH Borrower shall be liable only for those additional amounts relating to the Obligations of CH Borrower and each CH Foreign Subsidiary, (ii) UK Borrower shall be liable only for those additional amounts relating to the Obligations of UK Borrower, (iii) Canadian Borrower shall be liable only for those additional amounts relating to Obligations of Canadian Borrower, and (iv) US Borrower shall not be responsible for any additional amounts relating to the Obligations of UK Borrower. A statement of such Lender as to any such additional amount or amounts (including calculations thereof in reasonable detail), in the absence of manifest error, shall be conclusive and binding on each Applicable Borrower. In determining such amount or amounts, such Lender may use any method of averaging and attribution that it (in its sole and absolute discretion) shall deem applicable. (c) Nothing in this Section 4.3 shall obligate any Loan Party to make any payments with respect to Taxes of any sort, indemnification for which is governed by Section 4.1. 4.4. Funding Losses. US Borrower and each Applicable Borrower shall, within five days of receipt of written notice thereof, reimburse each Lender and hold each Lender harmless from any loss or expense which such Lender may sustain or incur as a consequence of: (a) the failure of such Applicable Borrower to make on a timely basis any payment of principal of any LIBOR Rate Loan or BA Equivalent Rate Loan; (b) the failure (including by reason of Section 4.5) of such Applicable Borrower to borrow, continue or convert a LIBOR Rate Loan or BA Equivalent Rate Loan after such Applicable Borrower has given (or is deemed to have given) a Notice of Committed Borrowing, Notice of Canadian Borrowing or a Notice of Conversion/Continuation (other than any such failure arising as a result of a default by such Lender or any Applicable Agent); (c) the failure of such Applicable Borrower to make any prepayment of any Committed Loan in accordance with any notice delivered under Section 2.7 or Section 2.3A; (d) the prepayment by such Applicable Borrower (including pursuant to Section 2.7 or 2.8) or other payment (including after acceleration thereof) the principal of any LIBOR Rate Loan or BA Equivalent Rate Loan on a day that is not the last day of the relevant Interest Period; or (e) the conversion by such Applicable Borrower under Section 2.4 or Section 2.4A of any LIBOR Rate Loan to an ABR Loan or a BA Equivalent Rate Loan to a Prime Rate Loan, respectively, on a day that is not the last day of the relevant Interest Period; including any such loss or expense arising from the liquidation or reemployment of deposits or other funds obtained by it to make, continue or maintain the applicable Loans or from fees payable to terminate the deposits from which such funds were obtained. Such written notice (which shall include calculations in reasonable detail) shall, in the absence of manifest error, be conclusive and binding on each Applicable Borrower. For purposes of calculating amounts payable by each Applicable Borrower to any Lender under this Section and under subsection 4.3(a), (i) each LIBOR Rate Loan made by a Lender (and each related reserve, special deposit or similar requirement) shall be conclusively deemed to have been funded at the LIBOR Rate used in determining the interest rate for such LIBOR Rate Loan by a matching deposit or other borrowing in the interbank eurocurrency market for a comparable amount and for a comparable period and in the same Applicable Currency, whether or not such LIBOR Rate Loan is in fact so funded, and (ii) each BA Equivalent Rate Loan made by a Canadian Lender (and each related reserve, special deposit or similar requirement) shall be conclusively deemed to have been funded at the BA Equivalent Rate applicable to such BA Equivalent Rate Loan by the purchase by such Canadian Lender of a bankers' acceptance in a comparable amount and for a comparable period, whether or not such BA Equivalent Rate Loan is in fact so funded. 4.5. Inability to Determine Rates. (a) If the Required Revolving Facility Lenders or Lenders holding a majority of the Loans under the Tranche B Term Loan Facility or the Tranche A-US Term Loan Facility determine that for any reason adequate and reasonable means do not exist for determining the LIBOR Rate for any requested Interest Period with respect to a proposed LIBOR Rate Loan under the applicable Facility, the Administrative Agent will promptly so notify the Applicable Borrower and each Lender under such Facility. Thereafter, the obligation of the Lenders under such Facility to make, convert or maintain LIBOR Rate Loans in the Applicable Currency shall be suspended until the Administrative Agent upon the instruction of the Required Revolving Facility Lenders or Lenders holding a majority of the Loans under the Tranche B Term Loan Facility, or the Tranche A-US Term Loan Facility, as the case may be, revoke such notice in writing. Upon receipt of such notice, the Applicable Borrower may revoke any Notice of Committed Borrowing or Notice of Conversion/Continuation then submitted by it. If the Applicable Borrower does not revoke (x) any such Notice of Committed Borrowing for Revolving Loans or (y) any such Notice of Conversion/Continuation with respect solely to Offshore U.S. Dollar Loans, the Lenders shall make, convert or continue the applicable Loans, as proposed by such Applicable Borrower in the amount specified in the applicable notice submitted by such Applicable Borrower, but such Loans shall be made, converted or continued as ABR Loans instead of LIBOR Rate Loans, and in the case of any Offshore Currency Loans under the Revolving Facility, the Borrowing shall be redenominated and thereby be made in an aggregate amount equal to the Dollar Equivalent amount of the originally requested Borrowing in the Offshore Currency. If the Applicable Borrower does not revoke any Notice of Conversion/Continuation with respect to any outstanding Revolving Loans that are Offshore Currency Loans which are the subject of any such continuation, such Offshore Currency Loans shall from the end of the current Interest Period therefor bear interest at a rate per annum equal to the Applicable Margin for LIBOR Rate Loans which are Revolving Loans, plus the Overnight Rate for the Applicable Currency as in effect from time to time or such other rate as may be agreed to between the Borrowers or UK Borrower, as the case may be, and the Required Revolving Facility Lenders, and specified to the Administrative Agent from time to time. (b) If Lenders holding a majority of the Tranche A-CHF Term Loans or Tranche A-UK Term Loans, as the case may be, determine that for any reason adequate and reasonable means do not exist for determining the LIBOR Rate for any requested Interest Period with respect to Tranche A-CHF Term Loans or Tranche A-UK Term Loans, as the case may be, the Administrative Agent will promptly so notify the Applicable Borrower and each Lender under the Tranche A-CHF Term Loan Facility or the Tranche A-UK Term Loan Facility, as the case may be. Thereafter, until the Administrative Agent upon the instruction of Lenders holding a majority of the Tranche A-CHF Term Loans or Tranche A-UK Term Loans, as the case may be, revokes such notice in writing, the Tranche A-CHF Term Loans or Tranche A-UK Term Loans, as the case may be, shall bear interest at a rate per annum equal to the Applicable Margin for LIBOR Rate Loans which are Tranche A-CHF Term Loans or Tranche A-UK Term Loans, as the case may be, plus the Overnight Rate for the Applicable Currency as in effect from time to time or such other rate as may be agreed to between the Applicable Borrower and Lenders holding a majority of the Tranche A-CHF Term Loans or Tranche A-UK Term Loans, as the case may be, and specified to the Administrative Agent from time to time. (c) If the Canadian Agent shall have determined that for any reason adequate and reasonable means do not exist for ascertaining the BA Equivalent Rate for any requested Interest Period with respect to a proposed BA Equivalent Rate Loan, or any Canadian Lender shall have determined (and notified the Canadian Agent) that the BA Equivalent Rate to be applicable for any requested Interest Period with respect to a proposed BA Equivalent Rate Loan does not adequately and fairly reflect the cost to such Canadian Lender of funding such Loan, the Canadian Agent will forthwith give notice of such determination to Canadian Borrower, the Administrative Agent and each Canadian Lender. Thereafter, the obligation of the Canadian Lenders to make or maintain BA Equivalent Rate Loans for the account of Canadian Borrower hereunder shall be suspended until the Canadian Agent (at the request of the applicable Lender, if applicable) revokes such notice in writing. Upon receipt of such notice, Canadian Borrower may revoke any Notice of Canadian Borrowing or Notice of Conversion/Continuation then submitted by it. If Canadian Borrower does not revoke such notice, the Canadian Lenders shall make, convert or continue the Loans, as proposed by Canadian Borrower, in the amount specified in the applicable notice submitted by Canadian Borrower, but such Loans shall be made, converted or continued as Prime Rate Loans. 4.6. Reserves on LIBOR Rate Loans; MLA Costs. Each Applicable Borrower shall pay to each Lender, as long as such Lender shall be required under regulations of the FRB to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as "Eurocurrency liabilities") and, in respect of any Offshore Currency Loans, under any applicable regulations of the country in which the Offshore Currency of such Offshore Currency Loans circulates, additional costs on the unpaid principal amount of each LIBOR Rate Loan and Offshore Currency Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as calculated by such Lender in good faith, which calculation shall be set forth in reasonable detail and shall be conclusive), payable on each date on which interest is payable on such Loan, provided the Applicable Borrower shall have received at least 15 days' prior written notice (with a copy to the Administrative Agent) of the amount of such additional interest from such Lender. If a Lender fails to give notice 15 days prior to the relevant Interest Payment Date, such additional interest shall be payable 15 days from receipt of such notice. Each Applicable Borrower shall also pay all MLA Cost to each Lender which makes Loans in Pounds Sterling. 4.7. Certificates of Lenders. Any Lender claiming reimbursement or compensation under this Article IV shall deliver to each Applicable Borrower (with a copy to the Administrative Agent) a certificate (a) setting forth in reasonable detail the circumstances giving rise to such claim and a computation of the amount payable to such Lender hereunder in respect thereof and (b) certifying that such Lender is making similar claims based on such circumstances to similarly-situated borrowers from such Lender. Any such certificate shall be conclusive and binding on each Applicable Borrower in the absence of manifest error. 4.8. Substitution of Lenders. Upon (x) the receipt by any Applicable Borrower or either Applicable Agent from any Lender (an "Affected Lender") of a claim for compensation under Section 4.1 or 4.3 (or a Change in Law which could reasonably be determined to allow a Lender to make such a claim) or a notice of the type described in subsection 2.5(b), 2.5(c), 4.2(a) or 4.2(b), (y) any Lender providing notice to any Applicable Borrower that a representation contained in a Section 4.1(f)(i) Certificate, Section 4.1(f)(v) Certificate, Canadian Certificate or UK Certificate is no longer true and correct or (z) the refusal of any Lender to consent to a proposed amendment, waiver or consent with respect to the Loan Documents which has been approved by the Required Lenders as provided in subsection 11.1(b), any Applicable Borrower may: (i) request the Affected Lender to use its best efforts to obtain a replacement bank or financial institution satisfactory to such Applicable Borrower to acquire and assume all or a ratable part of all of such Affected Lender's Loans, participation in L/C Obligations and Commitments (a "Replacement Lender"); (ii) request one more of the other Lenders to acquire and assume all or part of such Affected Lender's Loans and Commitments; or (iii) designate a Replacement Lender. Any such designation of a Replacement Lender under clause (i) or (iii) shall be subject to the prior written consent of the Agents (which consent shall not be unreasonably withheld). 4.9. Right of Lenders to Fund Through Branches and Affiliates. Each Lender may, if it so elects, fulfill its commitment as to any Loan hereunder by designating (in the case of a Term Loan prior to the Original Closing Date, Amendment and Restatement Date or the Safeline Closing Date, as applicable) a branch or Affiliate of such Lender to make such Loan; provided, however, that (a) such Lender shall remain solely responsible for the performances of its obligations hereunder, (b) no such designation shall result in any increased costs to any Applicable Borrower and (c) such branch or Affiliate complies with all form delivery and other requirements hereunder (including pursuant to Section 4.1) as if it were a Lender. ARTICLE V. CONDITIONS PRECEDENT -------------------- 5.1. Conditions of Initial Loans. For purposes of this Article V, the "Subsidiaries" of the Borrowers shall be deemed to include those who will become Subsidiaries of the Borrowers upon consummation of the M-T Acquisition Transactions for purposes of the Initial Loans, and upon consummation of the Safeline Acquisition Transactions for purposes of Loans made to effect the Safeline Acquisition. The obligation of any Lender to make its initial Credit Extension hereunder prior to the Amendment and Restatement Date (whether by making a Loan or issuing a Letter of Credit) is subject to the satisfaction of the following conditions (all references herein in Section 5.1(a) through and including Section 5.1(q) to any Loan Party (by whatever name (e.g. Borrower, Domestic Guarantor, etc.) shall refer to Loan Parties in existence at the Original Closing Date): (a) Credit Agreement; Notes. On the Original Closing Date, this Agreement shall have been duly authorized, executed and delivered to the Lenders by the Borrowers and the Subsidiary Swing Line Borrowers in form and substance acceptable to the Agents and the Lenders. On the Original Closing Date there shall have been duly authorized, executed and delivered to the Lenders in form and substance satisfactory to the Agents and the Lenders (i) the Holding Guarantee by Holding, (ii) the US Borrower Guarantee by US Borrower, (iii) a Domestic Subsidiary Guarantee by each Domestic Subsidiary, (iv) the CH Borrower Guarantee by CH Borrower and (v) to the extent permitted by applicable law, a Foreign Subsidiary Guarantee by each CH Foreign Subsidiary (other than the Specified Subsidiaries). On or prior to the Original Closing Date there shall have been delivered to the Administrative Agent for the account of each Lender the appropriate Note, in each case executed by the appropriate Borrower or Subsidiary Swing Line Borrower and appropriately completed as to amounts and maturities. (b) Transactions. (i) The terms, conditions and structure of each of the M-T Acquisition Transactions and the Transaction Documents shall be in form and substance reasonably satisfactory to the Agents. The terms and conditions of each of the Other Documents shall be in form and substance reasonably satisfactory to the Agents. (ii) US Borrower shall have received aggregate gross cash proceeds of not less than U.S. $135.0 million from the sale of the Senior Subordinated Notes, Holding shall have consummated the Equity Issuance and contributed the proceeds thereof (net of any expenses of the M-T Acquisition) in cash to US Borrower. (iii) On the Original Closing Date, the M-T Acquisition Transactions shall have been consummated in all material respects in accordance with the terms of the Transaction Documents (without any waiver of any material provision thereof). Except as set forth in Schedule 6.17, all Indebtedness of the Mettler-Toledo Group existing immediately prior to the M-T Acquisition shall be repaid in full (or provision made therefor) to the reasonable satisfaction of the Agents and all lending commitments thereunder terminated to the reasonable satisfaction of the Agents with all security interests in favor of existing lenders being unconditionally released and evidence therefor shall have been provided to the Agents to their reasonable satisfaction. (c) Transaction Documents. A certificate of a Responsible Officer certifying as of the Original Closing Date true and complete copies of each of the Transaction Documents relating to the M-T Acquisition and each of the Other Documents shall have been delivered to the Agents. (d) Opinions of Counsel. On the Original Closing Date, the Lenders shall have received an opinion or opinions, addressed to the Agents and each of the Lenders and dated the Original Closing Date, from (i) Fried, Frank, Harris, Shriver & Jacobson, counsel to the Loan Parties, which opinion shall cover the matters contained in Exhibit F-1 and such other matters incident to the transactions contemplated herein as the Agents may reasonably request, (ii) local counsel to the Foreign Loan Parties, which opinion shall be in form and substance reasonably satisfactory to the Agents, (iii) local counsel to the Domestic Loan Parties reasonably satisfactory to the Agents in each jurisdiction in which Collateral is located, which opinions shall cover the matters contained in Exhibit F-2 and such other matters incident to the transactions contemplated herein and in the other Loan Documents as the Agents may reasonably request and (iv) such local, foreign and other counsel reasonably satisfactory to the Agents, which opinions shall cover the perfection of the security interest granted, the enforceability of the Loan Documents and such other matters incident to the transactions contemplated herein as the Agents may reasonably request, and each such opinion shall be in form and substance reasonably satisfactory to the Agents. At the Original Closing Date, the Arranger shall have received the opinions, dated as of the Original Closing Date, and addressed to them on behalf of the Lenders and the Agents, of any counsel delivered to the underwriters of the Senior Subordinated Notes in connection with the issuance and sale thereof or the consummation of the M-T Acquisition, or otherwise, or letters, dated as of the Original Closing Date, from such counsel entitling the Arranger to rely on such opinions, in each case as the Arranger may reasonably request. (e) Corporate Documents. The Agents shall have received on or prior to the Original Closing Date certified copies of the Organization Documents of each Loan Party and of all corporate authority for each Loan Party (including board of director resolutions and evidence of the incumbency, including specimen signatures, of officers) with respect to the execution, delivery and performance of such of the Loan Documents to which such Loan Party is intended to be a party and each other document to be delivered by such Loan Party from time to time in connection herewith and the extensions of credit hereunder (and the Agents and each Lender may conclusively rely on such certificate until it receives notice in writing from such Loan Party to the contrary), the granting of Liens under the Security Documents, the execution, delivery and performance of the Transaction Documents related to the M-T Acquisition and the consummation of the M-T Acquisition Transactions. (f) Adverse Change, etc. On or prior to the Original Closing Date, there shall not have occurred or become known any material adverse change or any condition or event that has had or could reasonably be expected to result in (i) a material adverse change in the business, assets, liabilities (contingent or otherwise), operations, condition (financial or otherwise) or solvency of US Borrower and the Subsidiaries (after giving effect to the M-T Acquisition Transactions), taken as a whole, or any material adverse change in the prospects of US Borrower and the Subsidiaries (after giving effect to the M-T Acquisition Transactions), taken as a whole, in each case since December 31, 1995 or (ii) a material adverse effect on the rights or remedies of the Agents or any Lender under the Loan Documents (except in each case to the extent that the incurrence of the Indebtedness pursuant to this Agreement and the Senior Subordinated Notes or the consummation of the M-T Acquisition would be deemed such an event or condition). (g) Litigation. There shall be no litigation or administrative proceedings or other legal or regulatory developments, actual or threatened, that, singly or in the aggregate, would have a Material Adverse Effect, or a material adverse effect on the ability of the Loan Parties to consummate the Transactions related to the M-T Acquisition or the validity or enforceability of the Loan Documents or the rights, remedies and benefits available to the Agents and the Lenders under the Loan Documents, or which would be materially inconsistent with the stated assumptions underlying the projections previously provided to the Agents. (h) Approvals. All requisite third parties (including Governmental Authorities) shall have approved or consented to the Transactions and the other transactions contemplated hereby to the extent required in each case to the extent that the failure to obtain such consent or approval would have a Material Adverse Effect, and there shall be no governmental or judicial action, actual or threatened, that has or would have, singly or in the aggregate, a reasonable likelihood of restraining, preventing or imposing burdensome conditions on the consummation of the Transactions related to the M-T Acquisition. (i) Security Documents. (i) On or before the Original Closing Date, there shall have been duly authorized, executed and delivered (i) by Holding, the Holding Securities Pledge Agreement, (ii) by US Borrower, the US Borrower Securities Pledge Agreement, (iii) by each Domestic Subsidiary which upon giving effect to the consummation of the M-T Acquisition will hold any capital stock or notes of any other Subsidiary, a Domestic Subsidiary Securities Pledge Agreement and (iv) by CH Borrower and by each CH Foreign Subsidiary (other than any Subsidiary listed on Schedule 7.22) which upon giving effect to the consummation of the M-T Acquisition will hold any capital stock or notes of any other Subsidiary, a Foreign Subsidiary Securities Pledge Agreement and there shall have been delivered to the Administrative Agent, as pledgee thereunder, all of the pledged securities referred to in any such Securities Pledge Agreement, endorsed in blank in the case of promissory notes or accompanied by executed and undated stock powers in the case of certificated capital stock (or otherwise pledged in accordance with applicable law), and the Securities Pledge Agreements shall be in full force and effect. (ii) On or before the Original Closing Date, the Borrowers and each Subsidiary executing and delivering a Subsidiary Guarantee (other than any Subsidiary listed on Schedule 7.22) shall have duly authorized, executed and delivered a Security Agreement and all such Security Agreements shall be in full force and effect. (iii) On or before the Original Closing Date, the Borrowers shall or shall cause to be delivered each of the following documents and instruments: (1) executed copies of Financing Statements (Form UCC-1) (and foreign equivalents thereof) in appropriate form for filing under the UCC and any other applicable foreign, domestic or local law, rules or regulation in each jurisdiction as may be necessary or appropriate to perfect the security interests purported to be created by the Security Documents; and (2) certified copies of Requests for Information (Form UCC-11), or equivalent reports or lien search reports, each of a recent date listing all effective financing statements or comparable documents that name US Borrower or any Subsidiary that will execute a Security Agreement as debtor and that are filed in those jurisdictions in which any of the Collateral is located and the jurisdictions in which US Borrower and such Subsidiaries' principal place of business is located, none of which encumber the Collateral covered or intended or purported to be covered by the Security Documents other than those encumbrances permitted by the Security Documents. (iv) To the extent that a material amount of Inventory is maintained on a leased premise in the United States that is leased by a Domestic Loan Party, such Domestic Loan Party shall request agreements from the respective landlords of such of the Real Property which is being leased by such Domestic Loan Party confirming that such landlords have subordinated their landlord liens in such personal property to the security interests held by Administrative Agent pursuant to the applicable Security Documents and that such landlords will provide Administrative Agent with reasonable access to such facilities to exercise Administrative Agent's remedies pursuant to such applicable Security Documents. (j) Conditions Relating to Mortgaged Real Property and Real Property. On or prior to the Original Closing Date, each Borrower and each Subsidiary to enter into a Mortgage shall have caused to be delivered to the Administrative Agent, on behalf of the Lenders, the following documents and instruments: (i) a Mortgage encumbering each Mortgaged Real Property in favor of the Administrative Agent, for the benefit of the Lenders, in form for recording in the recording office of each political subdivision or foreign jurisdiction where each such Mortgaged Real Property is situated, together with such certificates, affidavits, questionnaires or returns as shall be required in connection with the recording or filing thereof to create a lien under applicable law, and other similar statements as are contemplated by the counsel opinions described in subsection 5.1(e) in respect of such Mortgage, all of which shall be in form and substance reasonably satisfactory to the Arranger, and any other instruments necessary to grant a mortgage lien under the laws of any applicable jurisdiction, which Mortgage and financing statements and other instruments shall be effective to create a first priority Lien on such Mortgaged Real Property subject to no Liens other than Prior Liens applicable to such Mortgaged Real Property and other than Permitted Liens; (ii) with respect to each Mortgaged Real Property, such consents, approvals, estoppels, tenant subordination agreements or other instruments as necessary or required to consummate the transactions contemplated hereby or as shall reasonably be deemed necessary by the Arranger in order for the owner or holder of the fee interest constituting such Mortgaged Real Property to grant the Lien contemplated by the Mortgage with respect to such Mortgaged Real Property; and (iii) the following documents and instruments: (1) with respect to each Mortgage, a policy (or commitment to issue a policy) of title insurance insuring (or committing to insure) the Lien of such Mortgage as a valid first priority Lien on the real property and fixtures described therein in an amount not less than 115% of the fair market value thereof which policy (or commitment) shall (a) be issued by the Title Company, (b) include such reinsurance arrangements (with provisions for direct access) as shall be reasonably acceptable to the Arranger, (c) contain a "tie-in" or "cluster" endorsement (if available under applicable law) (i.e., policies which insure against losses regardless of location or allocated value of the insured property up to a stated maximum coverage amount), (d) have been supplemented by such endorsements (or where such endorsements are not available, opinions of special counsel or other professionals reasonably acceptable to the Arranger) as shall be reasonably requested by the Arranger, (e) such affidavits and instruments of indemnification as shall be reasonably required to induce the Title Company to issue the policy or policies (or commitment) and endorsements contemplated in this subparagraph (iii) and (f) contain no exceptions to title other than exceptions for (x) Liens of the type described in clauses (a), (b), (c), (d), (g), (h), (i), (o) and (p) of the definition of Permitted Liens, (y) any Lien of the type described in clause (r) of the definition of Permitted Liens to the extent the original Lien is permitted hereunder and (z) the Prior Liens applicable to such Mortgaged Real Property; (2) with respect to each Mortgaged Real Property, a Survey; (3) with respect to each Mortgaged Real Property, policies or certificates of insurance as required by the Mortgage relating thereto; (4) with respect to each Mortgaged Real Property, UCC, judgment and tax lien searches (or foreign jurisdictions equivalent) confirming that the personal property comprising a part of such Mortgaged Real Property is subject to no Liens other than Prior Liens; (5) evidence acceptable to the Arranger of payment by the Borrowers of all title insurance premiums, search and examination charges, survey costs and related charges, mortgage recording taxes and related charges required for the recording of the Mortgages and issuance of the title insurance policies referred to in subparagraph (iii) above; (6) with respect to each Real Property or Mortgaged Real Property, copies of all Leases, subleases, leases in which a Loan Party holds the tenant's interest or other agreements relating to possessory interests. To the extent any of the foregoing affect any Mortgaged Real Property, such agreement shall be subordinate to the Lien of the Mortgage to be recorded against such Mortgaged Real Property, and shall otherwise be acceptable to the Arranger; and (7) with respect to each Mortgaged Real Property, an Officers' Certificate or other evidence satisfactory to the Arranger that as of the date thereof there (a) has been issued and is in effect, to the extent required, a valid and proper certificate of occupancy or local or foreign equivalent for the use then being made of such Mortgaged Real Property, (b) has not occurred any material Destruction of any Mortgaged Real Property that has not been restored and there is not pending any Taking of any Mortgaged Real Property and (c) except as may be disclosed in the Survey of such Mortgaged Real Property delivered pursuant to subsection 5.1(j)(iii)(2) above, are no disputes regarding boundary lines, location, encroachment or possession of such Mortgaged Real Property and no state of facts existing which could give rise to any such claim. (k) Solvency Opinion; Environmental Analyses; Evidence of Insurance; Financial Statements. On the Original Closing Date, the Agents and the Lenders shall have received: (i) an opinion (and related going-concern valuation) satisfactory in all respects to the Agents and the Lenders from Appraisal Economics or other independent valuation firm reasonably satisfactory to the Agents and the Lenders to the effect that after giving effect to the Transactions related to the M-T Acquisition, US Borrower, on a consolidated basis, is not and will not be insolvent, will not be left with unreasonably small capital with which to engage in its business and has not incurred and will not have incurred debts beyond its ability to pay such debts as they mature; (ii) Phase I environmental assessments or their substantial equivalent from ICF Kaiser Engineers, Inc. ("ICF") with respect to domestic properties on which manufacturing operations are currently conducted by US Borrower or any Subsidiary (immediately after giving effect to the Transactions related to the M-T Acquisition), and written reports from ICF with respect to (A) foreign properties on which manufacturing operations are currently conducted by US Borrower or any Subsidiary (immediately after giving effect to the Transactions), (B) former manufacturing facilities at Landing, New Jersey and Albstadt, Giessen and Steinbach, Germany, (C) certain non- manufacturing properties in Switzerland and (D) certain representative domestic and foreign sales and service offices in each case the results of which shall be in form and substance reasonably satisfactory to the Agents and the Required Lenders; and (iii) evidence of insurance complying with the requirements of Section 7.5 for the business and properties of US Borrower and the Subsidiaries, in scope, form and substance satisfactory to the Agents and the Required Lenders and naming the Administrative Agent as an additional insured and/or loss payee. (l) Pro Forma Balance Sheet. On or prior to the Original Closing Date, there shall have been delivered to the Agents, an unaudited pro forma consolidated balance sheet of US Borrower and the Subsidiaries as at June 30, 1996, after giving effect to the Transactions and prepared in accordance with GAAP with U.S. $ as the functional currency, together with a related funds flow statement, which pro forma balance sheet and funds flow statement shall be satisfactory in form and substance to the Agents and the Required Lenders. (m) Payment of Fees. On the Original Closing Date, all costs, fees and expenses, and all other compensation contemplated by this Agreement, due to the Arranger, the Administrative Agent or the Lenders (including, without limitation, Attorney Costs of the Agents) shall have been paid to the extent due and if then invoiced. (n) Other Matters. The Agents and the Lenders shall be reasonably satisfied in all respects with (i) the status of all labor, employee benefit, environmental and health and safety matters involving the Loan Parties, after giving effect to the Transactions related to the M-T Acquisition, and their plans with respect thereto; (ii) the corporate and capital structure, and documents and instruments related thereto, of the Loan Parties, after giving effect to the Transactions related to the M-T Acquisition; (iii) the amount, terms and conditions of any Indebtedness of any Loan Party to remain outstanding after the Original Closing Date; (iv) the form and substance of all other material documentation, including any tax sharing agreement, employment agreement, management compensation arrangement (including any agreements entered into with any of the senior management of the Borrowers) or other financing arrangement of the Loan Parties; and (v) all legal, tax, accounting and currency hedging matters relating to the transactions contemplated hereby, including, without limitation, the ability of Subsidiaries of US Borrower to repatriate funds to US Borrower and the withholding tax consequences thereof and the Borrowers' plans and programs with respect to managing currency risk exposure. (o) Certificate. A certificate signed by a Responsible Officer, dated as of the Original Closing Date, stating that: (i) the representations and warranties contained in Article VI are true and correct in all material respects on and as of such date, as though made on and as of such date (ii) no Event of Default or Unmatured Event of Default exists or would result from the initial Credit Extension; and (iii) no event or circumstance has occurred since December 31, 1995 with respect to US Borrower or any of its Subsidiaries (after giving effect to the Transactions related to the M-T Acquisition) that has resulted in a Material Adverse Effect (except to the extent that the incurrence of Indebtedness pursuant to this Agreement and the Senior Subordinated Notes or the consummation of the M-T Acquisition would be deemed such an event or condition). (p) Debt to Be Repaid. All Debt to Be Repaid set forth on Schedule 5.1(p) shall have been repaid in a manner satisfactory to the Agents and the Lenders. (q) Date of Closing. The Original Closing Date shall occur not later than November 15, 1996. 5.1A Conditions of Loans to Effect the Safeline Acquisition. The obligation of any Lender to make any Credit Extension hereunder pursuant to a Tranche A-UK Facility Commitment, Tranche B Facility Commitment, Canadian Commitment or Revolving Facility Commitment to effect the Safeline Acquisition (whether by making a Loan or issuing a Letter of Credit) is subject to the satisfaction of the conditions set forth in Section 5.3 and to the satisfaction of the following conditions: (a) Credit Agreement; Notes. On the Safeline Closing Date, this Agreement shall have been duly authorized, executed and delivered to the Lenders by the Revolving Borrowers, Canadian Borrower and the Subsidiary Swing Line Borrowers in form and substance acceptable to the Agents and the Lenders. On or prior to the Safeline Closing Date there shall have been delivered to the Administrative Agent for the account of each Lender having a Tranche A-UK Facility Commitment, a Tranche A-UK Term Note executed by UK Borrower and appropriately completed as to amounts and maturities; and for the account of each Lender having a Canadian Commitment, a Canadian Revolving Note executed by Canadian Borrower and appropriately completed as to amounts and maturities. (b) Safeline Acquisitions Transactions. (i) The terms, conditions and structure of each of the Safeline Acquisition Transactions and the Safeline Acquisition Documents shall be in form and substance reasonably satisfactory to the Agents. The terms and conditions of the Safeline Seller Notes shall be in form and substance reasonably satisfactory to the Agents. (ii) The Safeline Seller Notes shall have been issued to the sellers in the Safeline Acquisition at 100% of their face value. (iii) On the Safeline Closing Date, the Safeline Acquisition Transactions shall have been consummated in all material respects in accordance with the terms of Safeline Acquisition Documents (without any waiver of any material provision thereof). Except as set forth in Schedule 6.17A, all Indebtedness of Safeline Limited and its Subsidiaries existing immediately prior to the Safeline Acquisition shall be repaid in full (or provision made therefor) to the reasonable satisfaction of the Agents and all lending commitments thereunder terminated to the reasonable satisfaction of the Agents with all security interests in favor of existing lenders being unconditionally released and evidence therefor shall have been provided to the Agents to their reasonable satisfaction. (c) Safeline Acquisition Documents. A certificate of a Responsible Officer certifying as of the Safeline Closing Date true and complete copies of each of the Safeline Acquisition Documents and the Safeline Seller Notes shall have been delivered to the Agents. (d) Opinions of Counsel. On the Safeline Closing Date, the Lenders shall have received an opinion or opinions, addressed to the Agents and each of the Lenders and dated the Safeline Closing Date, from (i) Fried, Frank, Harris, Shriver & Jacobson, counsel to the Loan Parties, which opinion shall cover the matters contained in Exhibit F-4 and such other matters incident to the transactions contemplated herein as the Agents may reasonably request, (ii) Davies Ward & Beck, counsel to Canadian Borrower, which opinion shall cover the matters contained in Exhibit F-5 and such other matters incident to the transactions contemplated herein as the Agents may reasonably request, (iii) S.J. Berwin, counsel to UK Borrower, which opinion shall cover the matters contained in Exhibit F-6 and such other matters incident to the transactions contemplated herein as the Agents may reasonably request, and (iv) such local, foreign and other counsel reasonably satisfactory to the Agents, which opinions shall cover the perfection of the security interest granted, the enforceability of the Loan Documents and such other matters incident to the transactions contemplated herein as the Agents may reasonably request, and each such opinion shall be in form and substance reasonably satisfactory to the Agents. (e) Corporate Documents. The Agents shall have received on or prior to the Safeline Closing Date certified copies of the Organization Documents of each Safeline Loan Party and of all necessary corporate authority for each Safeline Loan Party (including any board of director resolutions and evidence of the incumbency, including specimen signatures, of officers or other customary evidence of the applicable jurisdiction) with respect to the execution, delivery and performance of such of the Loan Documents to which such Safeline Loan Party is intended to be a party on the Safeline Closing Date and each other document to be delivered by such Safeline Loan Party from time to time in connection herewith and the extensions of credit hereunder (and the Agents and each Lender may conclusively rely on such certificate until it receives notice in writing from such Safeline Loan Party to the contrary), the granting of any Liens under the Security Documents, the execution, delivery and performance of the Safeline Acquisition Documents and the consummation of the Safeline Acquisition Transactions. (f) Adverse Change, etc. On or prior to the Safeline Closing Date, there shall not have occurred or become known any material adverse change or any condition or event that has had or could reasonably be expected to result in a material adverse change in the business, assets, liabilities (contingent or otherwise), operations, condition (financial or otherwise) or solvency of Safeline Limited and its Subsidiaries (after giving effect to the Safeline Transactions), taken as a whole, or any material adverse change in the prospects of Safeline Limited and its Subsidiaries (after giving effect to the Safeline Acquisition Transactions), taken as a whole, in each case since March 31, 1996. (g) Litigation. There shall be no litigation or administrative proceedings or other legal or regulatory developments, actual or threatened, that, singly or in the aggregate, would have a Material Adverse Effect, or a material adverse effect on the ability of the Loan Parties to consummate the Safeline Acquisition Transactions or the validity or enforceability of the Loan Documents or the rights, remedies and benefits available to the Agents and the Lenders under the Loan Documents, or which would be materially inconsistent with the stated assumptions underlying the projections previously provided to the Agents in connection with the Safeline Acquisition. (h) Approvals. All requisite third parties (including Governmental Authorities) shall have approved or consented to the Safeline Acquisition Transactions and the other transactions contemplated hereby to the extent required in each case to the extent that the failure to obtain such consent or approval would have a Material Adverse Effect, and there shall be no governmental or judicial action, actual or threatened, that has or would have, singly or in the aggregate, a reasonable likelihood of restraining, preventing or imposing burdensome conditions on the consummation of the Safeline Acquisition Transactions. (i) Security Documents. (i) On or before the Safeline Closing Date, there shall have been duly authorized, executed and delivered, in form and substance satisfactory to the Agents, (i) by US Borrower, a Securities Pledge Agreement, in form and substance satisfactory to the Agents, to effect the pledge of not less than 65% of the capital stock of UK Borrower, and (ii) by UK Borrower, a Securities Pledge Agreement, in form and substance satisfactory to the Agents, to effect the pledge of not less than 65% of the capital stock of Safeline Limited; and there shall have been delivered to the Administrative Agent, as pledgee thereunder, all of the pledged securities referred to in any such Securities Pledge Agreement, accompanied by executed and undated stock powers in the case of certificated capital stock (or otherwise pledged in accordance with applicable law), and such Securities Pledge Agreements shall be in full force and effect. (ii) On or before the Safeline Closing Date, UK Borrower shall or shall cause to be delivered each of the following documents and instruments: (1)executed copies of Financing Statements (Form UCC-1) (and foreign equivalents thereof) in appropriate form for filing under the UCC and any other applicable foreign, domestic or local law, rules or regulation in each jurisdiction as may be necessary or appropriate to perfect the security interests purported to be created by the Security Documents to be delivered on the Safeline Closing Date; and (2)certified copies of Requests for Information (Form UCC-11), or equivalent reports or lien search reports, each of a recent date listing all effective financing statements or comparable documents that name any Safeline Loan Party, Safeline Limited or any of their respective Subsidiaries that will execute a Security Agreement as debtor and that are filed in those jurisdictions in which any of the Collateral is located and the jurisdictions in which any such Safeline Loan Party, Safeline Limited or any such Subsidiary's principal place of business is located, none of which encumber the Collateral covered or intended or purported to be covered by the Security Documents to be delivered on the Safeline Closing Date other than those encumbrances permitted by such Security Documents. (j) Environmental Analyses. On the Safeline Closing Date, the Agents and the Lenders shall have received written environmental assessments from environmental engineers reasonably acceptable to the Agents with respect to all properties of Safeline Limited or any of its Subsidiaries (immediately after giving effect to the Safeline Acquisition Transactions), in each case the results of which shall be in form and substance reasonably satisfactory to the Agents and the Required Lenders. (k) Pro Forma Balance Sheet. On or prior to the Safeline Closing Date, there shall have been delivered to the Agents, an unaudited pro forma consolidated balance sheet of US Borrower and the Subsidiaries as at March 31, 1997, after giving effect to the Safeline Acquisition Transactions, together with a related funds flow statement, which pro forma balance sheet and funds flow statement shall be satisfactory in form and substance to the Agents and the Required Lenders. (l) Payment of Fees. On the Safeline Closing Date, all costs, fees and expenses, and all other compensation contemplated by this Agreement, due to the Arranger, the Administrative Agent or the Lenders (including, without limitation, Attorney Costs of the Agents) shall have been paid to the extent due and if then invoiced. (m) Other Matters. The Agents and the Lenders shall be reasonably satisfied in all respects with (i) the status of all labor, employee benefit, environmental and health and safety matters involving the Safeline Loan Parties, Safeline Limited and its Subsidiaries, after giving effect to the Safeline Acquisition Transactions, and their plans with respect thereto; (ii) the corporate and capital structure, and documents and instruments related thereto, of the Safeline Loan Parties, Safeline Limited and its Subsidiaries, after giving effect to the Safeline Acquisition Transactions; (iii) the amount, terms and conditions of any Indebtedness of any Safeline Loan Party, Safeline Limited or any of its Subsidiaries to remain outstanding after the Safeline Closing Date; (iv) the form and substance of all other material documentation, including any tax sharing agreement, employment agreement, management compensation arrangement (including any agreements entered into with any of the senior management of Safeline Limited and its Subsidiaries) or other financing arrangement of the Safeline Loan Parties, Safeline Limited or any of its Subsidiaries; and (v) all legal, tax, accounting and currency hedging matters relating to the Safeline Acquisition Transactions. (n) Certificate. A certificate signed by a Responsible Officer of Canadian Borrower, CH Borrower, UK Borrower and US Borrower, dated as of the Safeline Closing Date, stating that: (i) the representations and warranties contained in Article VI are true and correct in all material respects on and as of such date, as though made on and as of such date (except to the extent such representations and warranties expressly refer to an earlier date, in which case they shall be true and correct as of such earlier date); (ii) no Event of Default or Unmatured Event of Default exists or would result from the Credit Extensions to effect the Safeline Acquisition; and (iii) no event or circumstance has occurred since December 31, 1996 with respect to US Borrower or any of its Subsidiaries (after giving effect to the Safeline Acquisition Transactions) that has resulted in a Material Adverse Effect (except to the extent that the incurrence of Indebtedness pursuant to this Agreement or the consummation of the Safeline Acquisition would be deemed such an event or condition). (o) Debt to Be Repaid. All Debt to Be Repaid set forth on Schedule 5.1A(o) shall have been repaid in a manner satisfactory to the Agents and the Lenders. (p) Date of Closing. The Safeline Closing Date shall occur not later than June 30, 1997. 5.2. Conditions to All Credit Extensions. The obligation of each Lender to make any Credit Extension (including the initial Credit Extension) is subject to the satisfaction of the following conditions precedent on the relevant Borrowing Date or Issuance Date: (a) Notice, Application. The Applicable Agent shall have received a Notice of Canadian Borrowing, Notice of Committed Borrowing or the Applicable Swing Line Lender shall have received notice from the applicable Swing Line Borrower of a Swing Line Loan or the L/C Lender and the Administrative Agent shall have received an L/C Application or L/C Amendment Application, as required under Section 3.2 (in the case of any Issuance of a Letter of Credit). (b) Continuation of Representations and Warranties. The representations and warranties in Article VI shall be true and correct in all material respects on and as of the date of such Credit Extension with the same effect as if made on and as of such date (except to the extent such representations and warranties expressly refer to an earlier date, in which case they shall be true and correct as of such earlier date). (c) No Existing Default; No Legal Bar. No Event of Default or Unmatured Event of Default shall exist or will result from such Credit Extension. No order, judgment or decree of any court, arbitration or Governmental Authority shall purport to restrain any Lender from making any Loans to be made by it on the date of such Credit Extension; and no injunction or other restraining order shall have been issued and no hearing to cause an injunction or other restraining order to be issued shall be pending or noticed with respect to any action, suit or proceeding seeking to enjoin or otherwise prevent the consummation of, or to recover any damages or obtain relief as a result of, the transactions contemplated by this Agreement or the making of Loans hereunder. Each Notice of Canadian Borrowing, Notice of Committed Borrowing, L/C Application, L/C Amendment Application and Swing Loan request submitted by any Applicable Borrower hereunder shall constitute a representation and warranty by each Applicable Borrower hereunder, as of the date of such notice or request and as of the relevant Borrowing Date or Issuance Date, as applicable, that the applicable conditions in Section 5.1, Section 5.1A, this Section 5.2 and/or Section 5.3 are satisfied. 5.3. Conditions to Effectiveness of Amendment and Restatement. The effectiveness of this Amended and Restated Credit Agreement is subject to the satisfaction of the following conditions: (a) Amended and Restated Credit Agreement; Ratification of Security Documents by Loan Parties; Notes. On the Amendment and Restatement Date, this Agreement and the Notes shall have been duly authorized, executed and delivered to the Lenders by each Credit Agreement Loan Party which is a party thereto (other than UK Borrower and Safeline Limited) in form and substance acceptable to the Agents and the Lenders. On the Amendment and Restatement Date there shall have been duly authorized, executed and delivered to the Lenders in form and substance satisfactory to the Agents and Lenders a Ratification Agreement by Holding, each Domestic Subsidiary and each CH Foreign Subsidiary (other than the Subsidiaries listed on Schedule 5.3(a), which shall take such action as soon as practicable in accordance with Section 7.23, and other than the Subsidiary Swing Line Borrowers) that shall have executed a Loan Document prior to the Amendment and Restatement Date. Each of Holding, US Borrower and each Domestic Subsidiary (other than the UK Borrower Guarantor) shall have duly authorized, executed and delivered a Guarantee in form and substance satisfactory to the Administrative Agent. (b) Opinions of Counsel. On the Amendment and Restatement Date, the Lenders shall have received an opinion or opinions, addressed to the Agents and each of the Lenders and dated the Amendment and Restatement Date, from (i) Fried, Frank, Harris, Shriver & Jacobson, counsel to the Loan Parties, which opinion shall cover the matters contained in Exhibit F-3 and such other matters incident to the transactions contemplated herein to occur on the Amendment and Restatement Date as the Agents may reasonably request, and (ii) such local, foreign and other counsel reasonably satisfactory to the Agents, which opinions shall be in form and substance reasonable satisfactory to the Agents. (c) Corporate Documents. The Agents shall have received on or prior to the Amendment and Restatement Date certified copies of all necessary corporate authority for each Loan Party executing any Loan Document on the Amendment and Restatement Date (including any board of directors resolutions and evidence of the incumbency, including specimen signatures, of officers or other customary evidence of the applicable jurisdictions) with respect to the execution, delivery and performance of this Agreement, the Ratification Agreement and each other Loan Document to be amended or modified in connection with this Amendment and Restatement to which such Loan Party is intended to be a party. (d) Accuracy of Representations and Warranties. The representations and warranties in Article VI shall be true and correct in all material respects on and as of the Amendment and Restatement Date with the same effect as if made on and as of such date (except to the extent such representations and warranties expressly refer to an earlier date, in which case they shall be true and correct as of such earlier date). (e) Adverse Change, etc. On or prior to the Amendment and Restatement Date, there shall not have occurred or become known any material adverse change or any condition or event that has had or could reasonably be expected to result in (i) a material adverse change in the business, assets, liabilities (contingent or otherwise), operations, condition (financial or otherwise) or solvency of US Borrower and the Subsidiaries, taken as a whole, or any material adverse change in the prospects of US Borrower and the Subsidiaries, taken as a whole, in each case since December 31, 1996 or (ii) a material adverse effect on the rights or remedies of the Agents or any Lender under the Loan Documents (except in each case to the extent that the incurrence of the Indebtedness pursuant to this Agreement and the Senior Subordinated Notes or the consummation of the M-T Acquisition would be deemed such an event or condition). (f) Litigation. There shall be no litigation or administrative proceedings or other legal regulatory developments, actual or threatened, that, singly or in the aggregate, would have a Material Adverse Effect, or a material adverse effect on the validity or enforceability of the Loan Documents or the rights, remedies and benefits available to the Agents and the Lenders under the Loan Documents. (g) Approvals. All requisite third parties (including Governmental Authorities) shall have approved or consented to the transactions contemplated hereby to occur on the Amendment and Restatement Date to the extent required in each case to the extent that the failure to obtain such consent or approval would have a Material Adverse Effect, and there shall be no governmental or judicial action, actual or threatened, that has or would have, singly or in the aggregate, a reasonable likelihood of restraining, preventing or imposing burdensome conditions on the consummation of the transaction contemplated hereby to occur on the Amendment and Restatement Date. (h) Payment Adjustments; Amendment and Restatement Assignments. All funds to be received by the Lenders (including Paid Lenders, Paid Existing Lenders and the Paying Existing Lenders) and the Credit Agreement Loan Parties in connection with the Payment Adjustments as set forth in Section 1.7 and Schedule 1.7 shall have been received by the Administrative Agent. The Amendment and Restatement Assignments shall have been executed and delivered by the parties thereto and shall be in full force and effect. (i) Certificate. A certificate signed by a Responsible Officer of CH Borrower and US Borrower, dated as of the Amendment and Restatement Date, stating that: (i) the representations and warranties contained in Article VI are true and correct in all material respects on and as of such date, as though made on and as of such date (except to the extent such representations and warranties expressly refer to an earlier date, in which case they shall be true and correct as of such earlier date); (ii) no Event of Default or Unmatured Event of Default exists or would result from the transactions contemplated to occur on the Amendment and Restatement Date; and (iii) no event or circumstance has occurred since December 31, 1996 with respect to US Borrower or any of the Subsidiaries that has resulted in a Material Adverse Effect (except to the extent that the incurrence of Indebtedness pursuant to this Agreement and the Senior Subordinated Notes or the consummation of the M-T Acquisition would be deemed such an event or condition). 5.4. Delivery of Documents. All of the certificates, legal opinions and other documents and papers referred to in Sections 5.1, 5.1A, 5.2 and 5.3, unless otherwise specified, shall be delivered to each of the Agents at their respective office (or such other location as may be specified by such Agent) for the account of each of the Lenders and in sufficient counterparts for each Lender and, except where specifically otherwise provided, shall be reasonably satisfactory to the Agents and the Lenders; provided, however, that for any Credit Extension other than the initial Credit Extension, Borrower shall not be required to deliver surveys, leases, insurance certificates, opinions, title insurance, UCC, tax lien or judgment searches, or appraisals. ARTICLE VI. REPRESENTATIONS AND WARRANTIES -------------------------------- Each Credit Agreement Loan Party makes the following representations and warranties to each Agent and each Lender, all of which shall survive the execution and delivery of this Agreement and the making of the Loans (with the execution and delivery of this Agreement on the Original Closing Date and on the Amendment and Restatement Date and the making of each Loan thereafter being deemed to constitute a representation and warranty that the matters specified in this Article VI are true and correct in all material respects after giving effect to the M-T Acquisition and (upon consummation of the Safeline Acquisition) the Safeline Acquisition and the related transactions and as of the date of such Loan unless such representation and warranty expressly indicates that it is being made as of any specific date). 6.1. Corporate Status. Each Company (a) is a corporation, partnership, joint stock company, limited liability company; unlimited liability company or other legal entity duly organized, validly existing and, if applicable, in good standing under the laws of its jurisdiction of organization; (b) has full corporate or other power and authority and possesses all governmental franchises, licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its properties and assets and to carry on its business as presently conducted; (c) in the case of the Domestic Loan Parties is duly qualified and in good standing to do business as a foreign corporation in each U.S. state in which the conduct or nature of its business or the ownership, leasing or holding of its properties makes such qualification necessary; and (d) is in compliance with all Requirements of Law, except, in each case referred to in clauses (b), (c) and (d), to the extent that the failure to do so would not, individually or in the aggregate, have a Material Adverse Effect. 6.2. Authority. Each Loan Party has all requisite corporate power and authority to enter into each Basic Document to which it is a party and to perform its obligations thereunder and to consummate the transactions contemplated thereby. All corporate acts and other proceedings required to be taken by each Company to authorize the execution, delivery and performance of each Basic Document to which such entity is a party and the consummation of the transactions contemplated thereby have been duly and properly taken. 6.3. No Conflicts; Consents. (a) The execution, delivery and performance by each Company of each Basic Document to which such entity is a party does not and will not conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to loss of a material benefit under, any provision of (i) the Organization Documents of such Company; (ii) any note, bond, mortgage, indenture, deed of trust, license, lease, contract, commitment, agreement or arrangement to which such Company is a party or by which any of its properties or assets are bound, except for Debt to Be Repaid; or (iii) any judgment, order or decree, or statute, law, ordinance, rule or regulation applicable to such Company or its properties or assets, other than, in the case of clauses (ii) and (iii) above, any such items that would not, individually or in the aggregate, have a Material Adverse Effect. (b) No material consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, any Governmental Authority is required to be obtained or made by or with respect to any Company in connection with the execution, delivery and performance of any Basic Document or the consummation of the Transactions or the other transactions contemplated hereby or thereby, the failure of which to obtain would not, individually or in the aggregate, have a Material Adverse Effect, other than filings required pursuant to applicable antitrust laws, approvals required pursuant to the Lex Friedrich Statute if applicable to the transactions contemplated hereby to occur in connection with the M-T Acquisition, U.S. Federal, state and foreign securities and Blue Sky laws in connection with the offering and sale of the Senior Subordinated Notes and Equity Issuance and Chinese governmental consent to the transfer of the Chinese Subsidiaries. 6.4. Binding Effect. Each Basic Document to which any Company is a party constitutes the legal, valid and binding obligation of such Company, enforceable against such Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors' rights generally or by equitable principles relating to enforceability, or by other laws and regulations of non-U.S. jurisdictions. 6.5. Litigation. Except as may exist with respect to matters specifically disclosed in Schedule 6.5 (as amended and restated as of the Amendment and Restatement Date for matters relating to UK Borrower and its Subsidiaries), there are no actions, suits, proceedings, claims or disputes pending or, to the best knowledge of any Loan Party, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, against any Company or any of its properties which (a) would have a Material Adverse Effect; or (b) would give rise to any legal restraint on or prohibition against the Transactions or any of the transactions contemplated by any Basic Document. No Company is a party or subject to or in default under any material judgment, order, injunction or decree of any Governmental Authority or arbitration tribunal applicable to it or any of its respective properties, assets, operations or businesses, except where such events would not, singly or in the aggregate, have a Material Adverse Effect. There is no pending investigation of any Company, nor has there been any such investigation threatened in writing in either case by any Governmental Authority, except where such events could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 6.6. No Default. No Company is in default in the performance, observance or fulfillment of any Contractual Obligation of such Company which default would, singly or in the aggregate with any other default, have a Material Adverse Effect, and no condition exists which, with the giving of notice or the lapse of time or both, would, individually or in the aggregate with any other condition, constitute such a default. No event has occurred and no condition exists which, singly or in the aggregate with any other event or condition, would constitute an Event of Default or an Unmatured Event of Default. No Company is in violation of any term of its Organization Documents, except where such violation would not, individually or in the aggregate, have a Material Adverse Effect. 6.7. Benefit Plans. (a) Each Company and each of its ERISA Affiliates are in compliance with all applicable provisions and requirements of ERISA, the Code and other applicable laws with respect to each Plan, and have performed all their material obligations under each Plan, except where non-compliance or non- performance would not, individually or in the aggregate, have a Material Adverse Effect. No ERISA Events have occurred or are reasonably expected to occur which individually or in the aggregate resulted in or are reasonably likely to result in (i) a Material Adverse Effect or (ii) the imposition of a lien on the assets of any Company or any of its ERISA Affiliates or a requirement for any Company or any of its ERISA Affiliates to post a bond or other security. As of the most recent valuation date for any Pension Plan, the amount of Unfunded Pension Liabilities individually or in the aggregate for all Pension Plans (excluding for purposes of such computation any Pension Plans which have a negative amount of Unfunded Pension Liabilities) does not exceed $6.5 million. (b) Each Company and each of the Foreign Plans are in compliance with all applicable laws and regulations with respect to the Foreign Plans and the terms of the Foreign Plans, and all required contributions have been made to the Foreign Plans as are consistent with past practice and in the ordinary course of business, except where non-compliance or failure would not, individually or in the aggregate, have a Material Adverse Effect. For purposes hereof, the term "Foreign Plans" shall mean any employee benefit plan, program, policy, arrangement or agreement maintained or contributed to by, or entered into with, a Company with respect to employees employed outside the United States. 6.8. Use of Proceeds; Margin Regulations. The proceeds of the Loans are to be used solely for the purposes set forth in and permitted by Section 7.11 and Section 8.7. No Loan Party is generally engaged in the business of purchasing or selling Margin Stock or extending credit for the purpose of purchasing or carrying Margin Stock. 6.9. Financial Condition; Financial Statements; Solvency; etc. (a) The audited combined balance sheet of the Mettler-Toledo Group dated December 31, 1995 (the "Balance Sheet"), and the audited combined statements of operations and cash flows of the Mettler-Toledo Group for the year ended December 31, 1995, together with the notes to such financial statements, have been prepared in conformity with United States generally accepted accounting principles consistently applied (except in each case as described in the notes thereto) and on that basis fairly present the combined financial condition and results of operations of the Mettler-Toledo Group as of the respective dates thereof and for the respective periods indicated. The audited consolidated balance sheets of Safeline Limited and its Subsidiaries for each of the years ended March 31, 1993, March 31, 1994, March 31, 1995 and March 31, 1996 and the audited consolidated profit and loss account and cash flow statements of Safeline Limited and its Subsidiaries for each fiscal year then ended, together with the notes to such financial statements, have been prepared in conformity with generally accepted accounting practices in the United Kingdom consistently applied (except in each case as described in the notes thereto) and on that basis fairly present the consolidated financial condition and results of operations of Safeline Limited and its Subsidiaries at the respective dates and for the respective periods indicated above. (b) Since December 31, 1995, there has not occurred an event or condition that has had or would have, individually or in the aggregate, a Material Adverse Effect, except to the extent that the incurrence of Indebtedness pursuant to this Agreement and the Senior Subordinated Notes or the consummation of the M-T Acquisition would be deemed such an event or condition. (c) On and as of the Original Closing Date, the Amendment and Restatement Date, the Safeline Closing Date and on and as of each Borrowing Date, on a pro forma basis after giving effect to the Transactions to occur on such date (solely as to the Original Closing Date and the Safeline Closing Date) and to all Indebtedness incurred, and to be incurred, and Liens created, and to be created, by each Loan Party on such date, (x) the sum of the assets, at a fair valuation, of each Loan Party and of US Borrower and the Subsidiaries, on a consolidated basis, will exceed such Person's or Persons' debts, on a consolidated basis, (y) each Loan Party has not and US Borrower and the Subsidiaries, on a consolidated basis, have not incurred or intended to, or believe that they will, incur debts beyond their ability to pay such debts as such debts mature and (z) each Loan Party will have and US Borrower and the Subsidiaries, on a consolidated basis, will have sufficient capital with which to conduct their business. For purposes of this Section 6.9(c), "debt" means any liability on a claim, and "claim" means (i) right to payment whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (ii) right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured. (d) Except as fully reflected in the financial statements delivered at any time pursuant to Section 7.1 or any financial statements delivered in connection with the consummation of the Transactions and except for the Indebtedness incurred under this Agreement and the Senior Subordinated Notes, there were as of the Original Closing Date, the Amendment and Restatement Date, the Safeline Closing Date and on and as of each Borrowing Date (and after giving effect to any Loans made on such date), no liabilities or obligations (excluding current obligations incurred in the ordinary course of business) with respect to US Borrower or any Subsidiary of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether or not due), and the Borrowers do not know of any such liability or obligation which, individually or in the aggregate, has had or would have a Material Adverse Effect. (e) During the period from December 31, 1995 to and including the Original Closing Date, except as provided in the Transaction Documents, there has been no sale, transfer or other disposition by the Mettler-Toledo Group of any material part of the business or property of the Mettler-Toledo Group, taken as a whole, and no purchase or other acquisition by any of them of any business or property (including any capital stock of any other Person) material in relation to the consolidated financial condition of the Mettler-Toledo Group, taken as a whole, in each case, which is not reflected in the financial statements delivered to the Agents and the Lenders or in the notes thereto or otherwise in writing to the Agents and the Lenders on or prior to the Original Closing Date (including the prospectus filed with the SEC for the offering and sale of the Senior Subordinated Notes). 6.10. Properties. US Borrower and each Subsidiary owns or leases, as applicable, all properties and assets reflected in the most recent financial statements delivered pursuant to Section 7.1, except as sold or otherwise disposed of since the date of such financial statements in the ordinary course of business and in accordance with this Agreement and the MT Acquisition Documents and Safeline Acquisition Documents. US Borrower is sole legal and beneficial owner of all shares in UK Borrower. Immediately following the Safeline Acquisition, UK Borrower and Canadian Borrower will be sole legal and beneficial owner of all shares in Safeline Limited and Safeline Limited will be sole legal and beneficial owner of all shares in Safeline Inc., Safeline SA and Safeline GmbH, except in each case as provided for in the Safeline Acquisition Documents. Title to each such property or asset is held by US Borrower or a Subsidiary free and clear of all Liens, except for Prior Liens and Permitted Liens. US Borrower and the Subsidiaries hold all material licenses, certificates of occupancy or operation and similar certificates and clearances of municipal and other authorities necessary to own and operate their properties in the manner and for the purposes currently operated by such parties the absence of which would, individually or in the aggregate, have a Material Adverse Effect. Neither US Borrower nor any Subsidiary has received written notice of defaults of a material nature with respect to any leases of real property under which US Borrower or any Subsidiary, is lessor or lessee that would, individually or in the aggregate, have a Material Adverse Effect. 6.11. Taxes. US Borrower and each Subsidiary (and their predecessors, if any, for whose tax liabilities such Person is or may be liable) has filed all tax returns reports and forms required to be filed by it and has paid all taxes and assessments shown to be due thereon or for which a notice of assessment or deficiency has been received, except for those contested in good faith and for which adequate reserves have been established in accordance with GAAP, and except where failure would not, individually or in the aggregate, have a Material Adverse Effect. US Borrower and any Subsidiary has paid, or provided adequate reserves (established in accordance with GAAP) for the payment of, all U.S. Federal, state, local and foreign income taxes (including franchise taxes based upon income) applicable for all prior fiscal years and for the current fiscal year to the Amendment and Restatement Date, except where failure would not, individually or in the aggregate, have a Material Adverse Effect. Neither Borrower knows of any proposed tax assessment against US Borrower or any Subsidiary that would, individually or in the aggregate, have a Material Adverse Effect, other than any assessment which is being actively contested in good faith by such Borrower or Subsidiary to the extent affected thereby and for which reserves or other appropriate provisions, if any, as shall be required in conformity with GAAP shall have been made or provided therefor. 6.12. Environmental Matters. (A) Except as disclosed in Schedule 6.12 (as amended and restated as of the Amendment and Restatement Date for matters relating to UK Borrower and its Subsidiaries) and except as would not, individually or in the aggregate, have a Material Adverse Effect: (i) US Borrower and each Subsidiary has obtained all permits, licenses and other authorizations which are required under any Environmental Law with respect to the operation of the businesses and facilities and properties owned, leased or operated by any of them including, without limitation, any joint ventures. (ii) US Borrower and each Subsidiary is in compliance with all terms and conditions of the permits, licenses and authorizations specified in subsection (i) above, and is also in compliance with, and has no liability under, any Environmental Laws applicable to it and its business and operations and facilities and properties owned, leased or operated by any of them. (iii) Neither US Borrower nor any Subsidiary has received written notice that it has been identified as a potentially responsible party under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), or any comparable foreign or state law, nor has US Borrower or any Subsidiary received any written notification that any Hazardous Materials that it, or any of their respective predecessors in interest has used, generated, stored, treated, handled, transported or disposed of, or arranged for disposal or treatment of, or arranged with a transporter for transport for disposal or treatment of, have been found at any site at which any governmental agency or private party is conducting or plans to conduct a remedial investigation or other action pursuant to any Environmental Law. (iv) There have been no releases (i.e., any past or present releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, disposing or dumping) of Hazardous Materials by US Borrower or any Subsidiary or, to the knowledge of the Borrowers, their respective predecessors in interest on, at, upon, into or from any facilities or properties owned, leased, or operated by any of them. To the knowledge of the Borrowers, there have been no such releases of Hazardous Materials on, at, under or from any property adjacent to any Mortgaged Real Property that, through soil, air, surface water or groundwater migration or contamination, may reasonably have been expected to have migrated to or under any Mortgaged Real Property. (v) No properties now or formerly owned, leased or operated by US Borrower or any Subsidiary are (i) listed or proposed for listing on the National Priorities List under CERCLA or (ii) listed in the Comprehensive Environmental Response, Compensation, Liability Information System List promulgated pursuant to CERCLA or (iii) to the knowledge of the Borrowers, included on any comparable lists maintained by any Governmental Authority. (vi) To the knowledge of the Borrowers, there are no past or present events, conditions, activities, practices, or actions which would reasonably be expected to prevent US Borrower's or any Subsidiary's compliance with any Environmental Law, or which would reasonably be expected to give rise to any liability under any Environmental Law, including, without limitation, liability under CERCLA or similar state, local or foreign laws. (vii) No Lien has been asserted or recorded, or to the knowledge of the Borrowers threatened under any Environmental Law with respect to any assets, facility, inventory or property owned, leased or operated by US Borrower or any Subsidiary. (viii) Neither US Borrower nor any Subsidiary has assumed by contract any liabilities or obligations arising under any Environmental Law in connection with (i) any properties or facilities currently or formerly (a) owned, leased or operated or (b) used for the storage or disposal of Hazardous Materials, in each case by US Borrower or any Subsidiary (or any of their respective predecessors in interest) or (ii) any divisions, subsidiaries, companies or other entities formerly owned by US Borrower or any Subsidiary. (ix) Neither US Borrower nor any Subsidiary has entered into or agreed to any currently pending or effective judgment, decree or order by any judicial or administrative tribunal and are not subject to any judgment, decree or order relating to compliance with any Environmental Law or to investigation, response or corrective action with respect to any Hazardous Material under any Environmental Law. (x) Neither US Borrower nor any Subsidiary has received any written notice of an Environmental Claim with regard to any properties, facilities or business operated or formerly operated by US Borrower or any Subsidiary or any of their respective predecessors in interest. (xi) To the knowledge of Borrowers, there are no underground storage tanks or related piping at any property owned, operated or leased by US Borrower or any Subsidiary, and any former underground tanks or related piping on any such property have been removed or closed in accordance with any applicable Environmental Law. (B) Environmental Documents. To the knowledge of the Borrowers, all environmental investigations, studies, audits or assessments in the possession or control of US Borrower or any Subsidiary ("Reports") concerning any violation or potential violation of, or liability or potential liability under, any Environmental Law relating to any current or prior business, facilities or properties of US Borrower or any Subsidiary (or any of their respective predecessors in interest) or any property, asset or facility currently or formerly (i) owned, operated or leased or (ii) used for the storage or disposal of Hazardous Materials, in each case by US Borrower or any Subsidiary (or any of their respective predecessors in interest) have been made available to the Arranger, except for Reports concerning such violation or liability, individually or in the aggregate, which would not have a Material Adverse Effect. 6.13. Regulated Entities. No Loan Party is an "Investment Company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940. Neither of the Borrowers nor any other Loan Party is subject to regulation under the Public Utility Holding Company Act of 1935, the U.S. Federal Power Act, the Interstate Commerce Act, any state public utilities code, or any other U.S. Federal or state statute or regulation limiting its ability to incur Indebtedness. 6.14. Employee and Labor Matters. There is (i) no unfair labor practice complaint pending against US Borrower or any Subsidiary or, to the best knowledge of the Borrowers, threatened against any of them, before the National Labor Relations Board or similar foreign entity, and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against US Borrower or any Subsidiary or, to the best knowledge of the Borrowers, threatened against any of them, (ii) no strike, labor dispute, slowdown or stoppage pending against US Borrower or any Subsidiary or, to the best knowledge of the Borrowers, threatened against US Borrower or any Subsidiary, and (iii) to the best knowledge of the Borrowers, no union representation question existing with respect to the employees of US Borrower or any Subsidiary and, to the best knowledge of the Borrowers, no union organizing activities are taking place, except (with respect to any matter specified in clause (i), (ii) or (iii) above, either individually or in the aggregate) such as would not have a Material Adverse Effect. 6.15. Intellectual Property. To the knowledge of the Borrowers, US Borrower and each Subsidiary owns or possesses adequate licenses or otherwise has the right to use all of the patents, patent applications, trademarks, trademark applications, service marks, service mark applications, trade names, copyrights, trade secrets and know-how (whether domestic or foreign) (collectively, "Intellectual Property") that are necessary for the operation of its business as presently conducted, except where the failure to so own or possess licenses or rights would not, individually or in the aggregate, have a Material Adverse Effect. To the knowledge of US Borrower and the Subsidiaries, no claim is pending that US Borrower or any Subsidiary infringe upon the asserted rights of any other Person under any Intellectual Property, except for any such claim which would not, individually or in the aggregate, have a Material Adverse Effect. To the knowledge of the Borrowers, no claim is pending that any such Intellectual Property owned or licensed by US Borrower or any Subsidiary or which US Borrower or any Subsidiary otherwise have the right to use, is invalid or unenforceable, except for any such claim which would not, individually or in the aggregate, have a Material Adverse Effect. Except as set forth in Schedule 6.15 (as amended and restated as of the Amendment and Restatement Date for matters relating to UK Borrower and its Subsidiaries) and except as would not, individually or in the aggregate, have a Material Adverse Effect, US Borrower or a Subsidiary owns or has the right to use all Intellectual Property listed in Schedule 6.15 and the consummation of the transactions contemplated hereby will not, alter or impair any such rights. Subject to the rights of third parties set forth in Schedule 6.15, all Intellectual Property listed in Schedule 6.15 is free and clear of all Liens except such as would not, individually or in the aggregate, have a Material Adverse Effect. 6.16. Subsidiaries. As of the Original Closing Date, US Borrower had no Subsidiaries other than those specifically disclosed in part (a) of Schedule 6.16 hereto and has no equity investments in any other corporation or entity other than those specifically disclosed in part (b) of Schedule 6.16. 6.17. Existing Indebtedness. Schedule 6.17 sets forth a true and complete list of all Indebtedness of US Borrower and the Subsidiaries as of the Original Closing Date and which is to remain outstanding after giving effect to the Transactions occurring on the Original Closing Date and the incurrence of Loans on the Original Closing Date (excluding the Loans, the Letters of Credit and the Senior Subordinated Notes, the "Original Existing Indebtedness"), in each case showing the aggregate principal amount thereof and the name of the respective borrower and any other entity which directly or indirectly guaranteed such debt. Schedule 6.17A sets forth a true and complete list of all Indebtedness of Safeline Limited and its Subsidiaries as of the Safeline Closing Date and which is to remain outstanding after effect to the Safeline Acquisition Transactions and the incurrence of loans on such date (excluding the Loans, the "Safeline Existing Indebtedness" and together with the Original Existing Indebtedness, the "Existing Indebtedness"), in each case showing the aggregate principal amount thereof and the name of the respective borrower and any other entity which directly or indirectly guaranteed such debt. 6.18. True and Complete Disclosure. All factual information (taken as a whole) heretofore or contemporaneously furnished by or on behalf of the Borrowers and the other Loan Parties in writing to any Lender (including, without limitation, all information contained in the M-T Acquisition Documents, the Safeline Acquisition Documents, the Basic Documents and the Confidential Memorandum) for purposes of or in connection with this Agreement or any transaction contemplated herein is (or was, on the date of making the Initial Loans), and all other such factual information (taken as a whole) furnished by or on behalf of the Borrowers in writing to any Lender after the Original Closing Date was and will be, true and accurate in all material respects on the date as of which such information is dated or certified and not incomplete by omitting to state any material fact necessary to make such information, taken as a whole, not misleading at such time in light of the circumstances under which such information was provided. The projections and pro forma financial information contained in or to be contained in such materials (including the pro forma balance sheet furnished pursuant to Section 5.1(l), the projections included in the Confidential Memorandum, and the budgets to be furnished pursuant to Section 7.1(c)) are based on good faith estimates and assumptions believed by the Borrowers to be reasonable at the time made, it being recognized by the Lenders that such projections as to future events are not to be viewed as facts, that actual results during the period or periods covered by any such projections may differ materially from the projected results and that the Borrowers make no representation or warranty that such projections, pro forma results or budgets will be realized. There is no fact known to either Borrower which materially and adversely affects the business, operations, property, assets, nature of assets, liabilities, condition (financial or otherwise) or prospects of US Borrower and the Subsidiaries, taken as a whole, which has not been disclosed herein or in such other documents, certificates and written statements furnished to the Lenders for use in connection with the transactions contemplated hereby. 6.19. Security Interests. The Security Documents, once executed, delivered, filed and/or recorded will create, in favor of the Administrative Agent for the benefit of the Lenders, as security for the obligations purported to be secured thereby, a valid and enforceable perfected first priority security interest in and Lien upon all of the Collateral, superior to and prior to the rights of all third persons and subject to no Liens except the Prior Liens applicable to such Collateral and Permitted Liens. The mortgagor under each Mortgage has good and marketable title to the Mortgaged Real Property free and clear of all Liens other than Permitted Liens and Prior Liens applicable to such Mortgaged Real Property. The respective pledgor or assignor, as the case may be, has (or on and after the time it executes the respective Security Document, will have) good and marketable title to all items of Collateral (other than real property subject to a Mortgage) covered by such Security Document free and clear of all Liens other than Liens permitted by the applicable Security Document. No filings or recordings are required in order to perfect the security interests created under any Security Document delivered on the Original Closing Date or the Safeline Closing Date, except for filings or recordings required in connection with any such Security Document as set forth in the opinions of counsel delivered on the Original Closing Date or the Safeline Closing Date. 6.20. Representations and Warranties in Basic Documents. All representations and warranties set forth in the other Basic Documents were (with respect to representations and warranties of parties other than the Loan Parties, to the knowledge of the Borrowers) true and correct in all material respects as of the time such representations and warranties were made and shall be true and correct in all material respects as of the Original Closing Date and the Safeline Closing Date, as the case may be, as if such representations and warranties were made on and as of such date, unless stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date. 6.21. M-T Acquisition and Safeline Acquisition. At the time of consummation thereof, each of the M-T Acquisition and Safeline Acquisition shall have been consummated substantially in accordance with the terms of the M-T Acquisition Documents or the Safeline Acquisition Documents, as the case may be, and all applicable Requirements of Law. At the time of consummation thereof, all consents and approvals of, and filings and registrations with, and all other actions in respect of, all governmental agencies, authorities or instrumentalities required to make or consummate each of the M-T Acquisition and Safeline Acquisition have been obtained, given, filed or taken or waived and are or will be in full force and effect (or effective judicial relief with respect thereto has been obtained), except as set forth on Schedule 6.21 and except where the failure to obtain, give, file, or take would not have a Material Adverse Effect. All applicable waiting periods with respect thereto have or, prior to the time when required, will have, expired without, in all such cases, any action being taken by any competent Governmental Authority which restrains, prevents, or imposes material adverse conditions upon the M-T Acquisition or the Safeline Acquisition. Additionally, there does not exist any judgment, order or injunction prohibiting or imposing material adverse conditions upon the M-T Acquisition or the Safeline Acquisition or the performance by US Borrower and the Subsidiaries of their obligations under the M-T Acquisition Documents or the Safeline Acquisition Documents, as the case may be, and all applicable Requirements of Law. 6.22. Broker's Fees. Except as disclosed in Schedule 6.22, no broker's or finder's fee or commission will be payable with respect to this Agreement or any of the Transactions contemplated hereby, and the Borrowers hereby jointly and severally indemnify the Agents and the Lenders against, and agree that they will jointly and severally hold the Agents and the Lenders harmless from, any claim, demand or liability for any such broker's or finder's fees alleged to have been incurred in connection herewith or therewith and any expenses (including fees, expenses and disbursements or counsel) arising in connection with any such claim, demand or liability. 6.23. Senior Subordinated Notes. The subordination provisions contained in the Senior Subordinated Note Documents are enforceable against US Borrower and each of its Subsidiaries party thereto, and all Obligations are within the definition of "Senior Indebtedness" or "Guarantor Senior Indebtedness", as the case may be, included in such subordination provisions. Senior Subordinated Notes, when issued and sold, will either (a) have been registered or qualified under applicable federal and state securities laws or (b) be exempt therefrom. The offering documents for the issuance and sale of the Senior Subordinated Notes, as of their date, did not contain an untrue statement of material fact or omit to state a material fact required to be stated therein or necessary to make the statement therein not misleading. 6.24. Assignment of Rights Under M-T Acquisition Documents. All rights of M-T Investors Inc. (formerly named AEA MT Inc.) under the M-T Acquisition Documents will be assigned to US Borrower effective upon the consummation of the merger of US Borrower and Mettler-Toledo, Inc., to Mettler-Toledo, Inc. by operation of law. ARTICLE VII. AFFIRMATIVE COVENANTS ---------------------- So long as any Lender shall have any Commitment hereunder, or any Loan or other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding: 7.1. Financial Statements, etc. The Borrowers shall deliver to the Administrative Agent and each Lender, in form and detail satisfactory to the Administrative Agent and the Required Lenders: (a) as soon as available, but not later than 95 days after the end of each fiscal year, a copy of the audited consolidated (and consolidating with respect to (x) CH Borrower and its Subsidiaries on a consolidated basis and (y) UK Borrower and its Subsidiaries on a consolidated basis) balance sheet of US Borrower and the Subsidiaries as at the end of such year and the related consolidated (and consolidating with respect to (x) CH Borrower and its Subsidiaries on a consolidated basis and (y) UK Borrower and its Subsidiaries on a consolidated basis) statements of operations, retained earnings, shareholders' equity and cash flow for such year, setting forth in each case in comparative form the corresponding consolidated figures for the previous fiscal year and comparable budgeted figures for such fiscal year, and, in the case of the consolidated statements, accompanied by the opinion of KPMG Fides Peat or another nationally recognized independent certified public accounting firm selected by the Borrowers and reasonably acceptable to the Administrative Agent ("Independent Auditor"), which opinion (i) shall state that such consolidated financial statements present fairly the consolidated financial position and results of operations of US Borrower and the Subsidiaries for the periods indicated in conformity with GAAP and (ii) shall not be qualified or limited because of a restricted or limited examination by the Independent Auditor of any material portion of US Borrower's or any Subsidiary's records and shall be delivered to the Administrative Agent pursuant to a reliance agreement between the Administrative Agent and Lenders and such Independent Auditor in form and substance satisfactory to the Agents and a certificate of such accountants stating that in the course of its regular audit of the business of US Borrower and the Subsidiaries no Event of Default or Unmatured Event of Default which has occurred and is continuing has come to their attention or, if such an Event of Default or Unmatured Event of Default has come to their attention, a statement as to the nature thereof; (b) as soon as available, but not later than 50 days after the end of each of the fiscal quarters (other than the fourth quarter which will be delivered in 95 days) of each fiscal year, a copy of the consolidated (and consolidating with respect to (x) CH Borrower and its Subsidiaries on a consolidated basis and (y) UK Borrower and its Subsidiaries on a consolidated basis) balance sheet of US Borrower and the Subsidiaries as of the end of such quarter and the related consolidated (and consolidating with respect to CH Borrower and its Subsidiaries on a consolidated basis and (y) UK Borrower and its Subsidiaries on a consolidated basis) statements of operations, retained earnings and cash flow for the period commencing on the first day and ending on the last day of such quarter, and the period from the beginning of the respective fiscal year to the end of such quarter, setting forth in each case in comparative form the corresponding consolidated figures for the corresponding period in the previous fiscal year, accompanied by a certificate of a Responsible Officer, which certificate shall state that said consolidated financial statements fairly present, in accordance with GAAP (subject to ordinary, good-faith year-end adjustments), the consolidated financial position and the results of operations of US Borrower and the Subsidiaries; (c) within 95 days after the commencement of each fiscal year, budgets of US Borrower and the Subsidiaries in reasonable detail for each fiscal quarter of such fiscal year and for each fiscal quarter of the immediately succeeding fiscal year, in each case, as customarily prepared by management for its internal use, setting forth, with appropriate discussion, the principal assumptions upon which such budgets are based. Together with each delivery of statements of operations pursuant to subsection 7.1(b), a comparison of the current year-to-date financial results against the budgets required to be submitted pursuant to this subsection (c) shall be presented; and (d) promptly upon receipt thereof, a copy of each report or "management letter" submitted to US Borrower or any Subsidiary by its independent accountants in connection with any annual, interim or special audit made by them of the books of US Borrower or any Subsidiary. 7.2. Certificates; Other Information. The Borrowers shall furnish to the Administrative Agent and each Lender: (a) concurrently with the delivery of the financial statements referred to in subsections 7.1(a) and (b), a Compliance Certificate executed by a Responsible Officer stating that the Loan Parties are in compliance with the covenants set forth under this Article VII and Article VIII; (b) on and after the Reset Date, together with the financial statements delivered pursuant to subsections 7.1(a) and 7.1(b), an Interest Rate Certificate; (c) copies of all financial statements and regular, periodical or special reports that US Borrower or any Subsidiary may make to, or file with, the SEC if not otherwise delivered under Section 7.1; and (d) as soon as practicable, such additional information regarding the business, financial or corporate affairs of US Borrower or any Subsidiary as the Administrative Agent or any Lender (through the Administrative Agent) may from time to time reasonably (as to type and interval) request. 7.3. Notices. Promptly upon a Responsible Officer learning thereof, the Borrowers shall notify the Administrative Agent and each Lender: (a) of the occurrence of any Event of Default or Unmatured Event of Default; (b) of any of the following matters that has resulted in a Material Adverse Effect: (i) any breach or non- performance of, or any default under, a Contractual Obligation of US Borrower or any Subsidiary; (ii) any dispute, litigation, investigation, proceeding or suspension by or before any Governmental Authority affecting US Borrower or any Subsidiary; or (iii) to the knowledge of the Borrowers the commencement of, or any material development in, any litigation or proceeding affecting US Borrower or any Subsidiary, including pursuant to any applicable Environmental Laws; (c) of the occurrence of any of the following events if such event has resulted or could reasonably be expected to result in any Material Adverse Effect or in a Lien under ERISA or the Code (but in no event more than ten days after such event), and deliver to the Administrative Agent and each Lender a copy of any notice with respect to such event that is filed with a Governmental Authority and any notice delivered by a Governmental Authority to the Loan Party or any ERISA Affiliate with respect to such event, and upon the request of the Administrative Agent or any Lender shall furnish any Schedule B (Actuarial Information) to the annual report (Form 5500 Series) filed by any Loan Party or ERISA Affiliate with the Internal Revenue Service with respect to any Pension Plan: (i) an ERISA Event; (ii) the adoption after the date hereof of, or the commencement after the date hereof of contributions to, any Plan subject to Section 412 of the Code by US Borrower or any ERISA Affiliate; (iii) the adoption after the date hereof of any amendment to a Plan subject to Section 412 of the Code; (iv) of any pending or threatened Environmental Claim against US Borrower or any Subsidiary or any Real Property owned or operated by US Borrower or any Subsidiary that would, singly or in the aggregate, have a Material Adverse Effect; (v) of any condition or occurrence on any Real Property owned or operated by US Borrower or any Subsidiary that (x) results in noncompliance by US Borrower or any Subsidiary with any applicable Environmental Law or (y) would form the basis of an Environmental Claim against US Borrower or any Subsidiary or any such Real Property in each case to the extent that any such noncompliance or Environmental Claim would, singly or in the aggregate, have a Material Adverse Effect; and (vi) of any condition or occurrence on any Real Property owned or operated by US Borrower or any Subsidiary that could reasonably be expected to cause such Real Property to be subject to any restrictions on the ownership, occupancy, use or transferability by US Borrower or any Subsidiary, as the case may be, of its interest in such Real Property under any Environmental Law which condition or occurrence would, singly or in the aggregate, have a Material Adverse Effect; and (d) of the occurrence of any default or event of default under the Senior Subordinated Notes. Each notice under this Section shall be accompanied by a written statement by a Responsible Officer setting forth details of the occurrence referred to therein, and stating what action the Borrowers or any affected Subsidiary proposes to take with respect thereto. 7.4. Preservation of Corporate Existence, etc. The Borrowers shall, and shall cause each of their respective Subsidiaries to: (a) preserve and maintain in full force and effect its existence and good standing under the laws of its state or jurisdiction of organization, except in a transaction permitted by Section 8.3; (b) preserve and maintain in full force and effect all material governmental rights, privileges, qualifications, permits, licenses and franchises necessary in the normal conduct of its business, except in connection with transactions permitted by Section 8.3 and sales of assets permitted by Section 8.2; (c) use reasonable efforts, in the ordinary course of business, to preserve its business organization and goodwill; (d) preserve or renew all of its Intellectual Property, the non-preservation of which would, singly or in the aggregate, have a Material Adverse Effect; and (e) comply in all material respects with all material Requirements of Law of any Governmental Authority having jurisdiction over it or its business if failure to comply with such requirements would, singly or in the aggregate, have a Material Adverse Effect, except, in the case of clauses (a) (with respect to any Subsidiary which is of de minimis significance to US Borrower and the Subsidiaries taken as a whole), (b), (c) and (d), to the extent no longer economically desirable, in the commercially reasonable opinion of management and except for the M-T Acquisition. 7.5. Maintenance of Property; Insurance.(a) Each Borrower will, and will cause each of its Subsidiaries (i) to exercise commercially reasonable efforts to maintain or cause to be maintained in good repair, working order and condition (subject to normal wear and tear) all properties used in its businesses and from time to time will make or cause to be made all repairs, renewals and replacements thereof, which the applicable Borrower or the applicable Subsidiary deems appropriate in its commercially reasonable opinion so that the business carried on in connection therewith may be properly and advantageously conducted and will maintain and renew as necessary all licenses, permits and other clearances reasonably necessary in the applicable Borrower's or the applicable Subsidiary's commercially reasonable opinion to use and occupy such properties, except to the extent no longer economically desirable in the commercially reasonable opinion of the applicable Borrower or the applicable Subsidiary, and (ii) promptly to pay all calls, installments and other payments which may be made or become due in respect of any shares held by US Borrower or any Subsidiary. (b) The Borrowers shall, and shall cause each of their respective Subsidiaries to, maintain in full force and effect, with financially sound and reputable independent insurers, insurance or reinsurance with respect to their properties and business against loss or damage of the kinds customarily insured against by corporations of established reputation engaged in the same or similar business and similarly situated, of such types and in such amounts as are customarily carried under similar circumstances by such other corporations. The Borrowers and each of their respective Subsidiaries, as applicable, shall furnish to the Administrative Agent on the Closing Date a summary of the material insurance carried in respect of US Borrower and the Subsidiaries and the assets of US Borrower and the Subsidiaries, together with certificates of insurance and other evidence of such insurance, if any, naming the Administrative Agent as an additional insured and/or loss payee. (c) Without duplicating the requirements of subsection 7.5(b) above, each Borrower will, and will cause each of its Subsidiaries to, maintain in full force the insurance coverages specified in the Mortgages and the other Security Documents. 7.6. Payment of Obligations. The Borrowers shall, and shall cause each of their respective Subsidiaries to, pay and discharge as the same shall become due and payable all of their obligations and liabilities, including: (a) all material tax liabilities, assessments and governmental charges or levies upon them or their properties or assets; and (b) all lawful claims which, if unpaid, would by law become a Lien (other than a Permitted Lien) upon their property; unless, in each case, the same are being contested in good faith by appropriate proceedings and adequate reserves in accordance with GAAP are being maintained by such Borrower or such Subsidiary with respect thereto, or the failure to so pay or discharge would not, individually or in the aggregate, have a Material Adverse Effect. 7.7. Compliance with Environmental Laws. (a) Each Borrower shall comply and if any of its Subsidiaries fails to comply, shall cause such Subsidiary to comply with all Environmental Laws; (b) each Borrower will pay, and, if any of its Subsidiaries fails to pay, will cause each such Subsidiary to pay, all costs and expenses incurred by it in complying in all material respects with all Environmental Laws, and will keep or cause to be kept all Real Property owned, operated or leased by any of them free and clear of any Liens imposed pursuant to such Environmental Laws unless the failure to comply with these requirements specified in clause (a) or (b) above would not, individually or in the aggregate, have a Material Adverse Effect; (c) in the event of the presence of any Hazardous Material at, on, under or upon any property owned, operated or leased by either Borrower or any Subsidiary which would reasonably be expected to result in liability under or a violation of any Environmental Law, in each case which would, individually or in the aggregate, have a Material Adverse Effect, the Borrowers agree to undertake, and/or to cause any of their respective Subsidiaries, tenants or occupants to undertake, at their sole expense, any investigation, removal, remedial or other action required pursuant to Environmental Laws to mitigate and eliminate any such adverse effect; provided, however, that neither Borrower nor any of their respective Subsidiaries shall be required to comply with any order or directive which is being contested in good faith and by proper proceedings so long as it has maintained adequate reserves with respect to such compliance to the extent required in accordance with GAAP; and (d) each Borrower shall as promptly as practicable notify the Administrative Agent of the occurrence of any event specified in clause (c) of this Section 7.7 and shall thereafter keep the Administrative Agent informed on a periodic basis of any actions taken in response to such event and the results of such actions. 7.8. Compliance with ERISA. The Borrowers shall, and shall cause each of their respective ERISA Affiliates to: (a) maintain each Plan in compliance in all material respects with the applicable provisions of ERISA, the Code and other applicable law; (b) cause each Plan which is qualified under Section 401(a) of the Code to maintain such qualification; and (c) make all required contributions to any Plan subject to Section 412 of the Code, except where failure would not, individually or in the aggregate, have a Material Adverse Effect. 7.9. Inspection of Property and Books and Records. The Borrowers shall, and shall cause each of their respective Subsidiaries to, maintain proper books of record and account, in which full, true and correct entries in order to permit the preparation of US Borrower's consolidated financial statements in conformity with GAAP shall be made of all financial transactions and matters involving the assets and business of US Borrower and the Subsidiaries. The Borrowers shall, and shall cause each of their respective Subsidiaries to, permit representatives and independent contractors of the Administrative Agent or any Lender to visit and inspect any of their respective properties or assets, to examine their respective corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss their respective affairs, finances and accounts with their respective directors, officers, and independent public accountants (provided that officers of a Borrower or such Subsidiary are offered the reasonable opportunity to be present at such discussion), all at the expense of the Borrowers (it being understood that travel and out-of- pocket expenses of the Agents and the Lenders in connection therewith shall not be for the account of the Borrowers) and at such reasonable times and intervals during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrowers or to the applicable Subsidiary and in connection with commercially reasonable informational needs of the Administrative Agent or any Lender; provided, however, when an Event of Default or emergency exists the Administrative Agent or any Lender may do any of the foregoing at any time and without advance notice in a commercially reasonable manner. 7.10. End of Fiscal Years; Fiscal Quarters. US Borrower will, for financial reporting purposes, cause (i) each of its, and each of its Subsidiaries', fiscal years to end on December 31 of each year and (ii) each of its, and each of its Subsidiaries', fiscal quarters to end on March 31, June 30, September 30 and December 31 of each year. 7.11. Use of Proceeds. On the Original Closing Date, the Borrowers shall use the proceeds of all of the Term Loans and a borrowing of not more than U.S. $75 million of the Revolving Facility Loans solely to (i) finance a portion of the M-T Acquisition and (ii) pay fees and expenses in connection with the M-T Acquisition. After the Original Closing Date, the Revolving Facility will be used solely to provide working capital and for general corporate purposes of the Credit Agreement Loan Parties and their Subsidiaries (including the Safeline Contingent Payment and the repayment of the Safeline Seller Notes) and to make the Ciba Loan. On the Safeline Closing Date US Borrower and the other Loan Parties shall use the proceeds of all Loans made on such date solely to (i) finance the Safeline Acquisition and (ii) pay fees and expenses in connection with the Safeline Acquisition. After the Safeline Closing Date, the Canadian Facility will be used solely to provide working capital and for general corporate purposes of Canadian Borrower and its Subsidiaries (including the Safeline Contingent Payment and the repayment of the Safeline Seller Notes). 7.12. Further Assurances. The Borrowers shall take such actions as are reasonably necessary, or as the Administrative Agent or any Lender may reasonably request from time to time, to (A) ensure that (i) the Obligations of the Credit Agreement Loan Parties (other than UK Borrower) are unconditionally guaranteed by each of the Domestic Subsidiaries, and (ii) the Obligations of CH Borrower are unconditionally guaranteed (subject to limitations under applicable law) by each of the CH Foreign Subsidiaries (other than, subject to Section 7.22, the Specified Subsidiaries), (B) cause any Subsidiaries created or acquired by US Borrower or any Subsidiary in which the aggregate amount invested therein by any Company is in excess of the Dollar Equivalent of U.S. $1.0 million after the Original Closing Date to (i) execute and deliver (x) a Domestic Subsidiary Guarantee, in the case of any Domestic Subsidiary, or (y) a Foreign Subsidiary Guarantee (to the extent permitted by and subject to limitations under applicable law (including limitations as to the nature of the Obligations which may be guaranteed)), in the case of any CH Foreign Subsidiaries (other than any CH Foreign Subsidiary that cannot, by virtue of applicable law, enter into a Foreign Subsidiary Guarantee), and (ii) (other than, subject to Section 7.22, any Specified Subsidiary or any Subsidiary that cannot, by virtue of applicable law, enter into security documents in respect of the Obligations) enter into any security documents that the Administrative Agent may reasonably require (consistent with the principles of this Agreement) to ensure that the Obligations are secured by perfected Liens in favor of the Administrative Agent, for the benefit of the Administrative Agent and the applicable Lenders, on all of the Collateral (subject to limitations under applicable law), and (C) ensure that UK Borrower, Safeline Limited and M-T Leicester comply at all times with the provisions of Section 151 of the Companies Act 1985 of Great Britain and take promptly any action required under Chapter VI of the Companies Act 1985 of Great Britain to relax the requirements of Section 151 of the Companies Act 1985 of Great Britain where necessary to enable such corporation to comply with any provision of any of the Loan Documents, and each of UK Borrower, Safeline Limited and M-T Leicester agrees to take any such action accordingly. 7.13. Equal Security for Loans and Notes; No Further Negative Pledges. (a) If either Borrower or any of their respective Subsidiaries shall create or assume any Lien upon any of their respective property or assets, whether now owned or hereafter acquired and whether or not such property or assets constitute Collateral, other than any Lien permitted by the Loan Documents, it shall make or cause to be made effective provisions whereby the Obligations will be secured by such Lien equally and ratably with any and all other Indebtedness thereby secured as long as any such Indebtedness shall be secured; provided, however, that this covenant shall not be construed as consent by the Administrative Agent and the Required Lenders to any violation by either Borrower or any of their respective Subsidiaries of the provisions of Section 8.1. (b) Except with respect to prohibitions against other encumbrances on specific property encumbered to secure payment of particular Indebtedness permitted hereunder, neither Borrower nor any of their respective Subsidiaries shall enter into any agreement prohibiting the creation or assumption of any Lien upon its properties or assets, whether now owned or hereafter acquired. 7.14. Pledge of Additional Collateral. Subject to Section 7.13, as soon as reasonably practicable after the acquisition of any property or assets by US Borrower or any Subsidiary with a Dollar Equivalent Value of in excess of U.S. $100,000 individually and U.S. $5.0 million or more in the aggregate of the type that would have constituted Collateral (if the Person acquiring such assets had executed an appropriate Security Document on the Original Closing Date (whether or not actually so executed)) at the Original Closing Date (the "Additional Collateral"), the Borrowers will, and will cause each of their respective Subsidiaries to, take all reasonably necessary or desirable action, including the filing of appropriate financing statements under the provisions of the UCC and applicable foreign, domestic or local laws, rules or regulations in each of the offices where such filing is necessary or appropriate, to grant to the Administrative Agent for the benefit of, (i) with respect to any such Additional Collateral acquired by US Borrower or any Domestic Subsidiary (other than UK Borrower Guarantor), all of the Lenders (other than the UK Lenders), and, with respect to UK Borrower Guarantor, the Lenders with Obligations owing by UK Borrower, (ii) with respect to any such Additional Collateral acquired by CH Borrower and CH Foreign Subsidiaries, the Lenders owed Obligations by CH Borrower and/or CH Foreign Subsidiaries, and (iii) with respect to any such Additional Collateral acquired by UK Borrower, the Lenders owed Obligations by UK Borrower, a perfected first priority Lien in such Collateral (or comparable interest under foreign law in the case of foreign Collateral) pursuant to and to the full extent required by the applicable Security Documents and this Agreement; provided, however, that notwithstanding the foregoing, (1) none of US Borrower, UK Borrower or any Domestic Subsidiary shall be required, subject to Section 7.18, to pledge more than 65% of the capital stock of any Foreign Subsidiary and no capital stock of any Foreign Subsidiary which is not a "first tier" Subsidiary of US Borrower, UK Borrower or any Domestic Subsidiary need be pledged by US Borrower, UK Borrower or any Domestic Subsidiary, (2) none of US Borrower or any Subsidiary shall be required, subject to Section 7.18, to pledge any property or assets which in accordance with the terms of the Loan Documents was not pledged (or would not have been so pledged if then in existence) on the Original Closing Date, other than any property to be pledged on the Safeline Closing Date, and (3) no Foreign Subsidiary need pledge any property or assets to the extent prohibited by applicable law, to the extent such pledge would secure the Obligations of US Borrower or UK Borrower, or to the extent such pledge would cause adverse tax consequences. In the event that (x) US Borrower or any Domestic Subsidiary acquires an interest in any additional real property which is a manufacturing or significant assembly facility or of a character and importance similar at such time to the facilities that are subject to the Mortgages on the Original Closing Date, US Borrower or such Subsidiary, as the case may be, will take such reasonable actions and execute such documents as the Administrative Agent shall reasonably require to confirm the Lien of a Mortgage, if applicable, or to create a new Mortgage for the benefit of the Lenders (it being agreed, however, that any real property owned by UK Borrower Guarantor as of the Safeline Closing Date need not be subject to a Mortgage pursuant to this Section 7.14), or (y) CH Borrower or any CH Foreign Subsidiary acquires an interest in any additional real property which is a manufacturing or significant assembly facility or of a character and importance similar at such time to the facilities that are subject to the Mortgages on the Original Closing Date, CH Borrower or such Subsidiary, as the case may be, will take such reasonable actions and execute such documents as the Administrative Agent will reasonably require to confirm the lien of a Mortgage, if applicable, or to create a new Mortgage for the benefit of the Lenders which are owed Obligations by CH Borrower or any CH Foreign Subsidiary. All actions taken by the parties in connection with the pledge of Additional Collateral, including, without limitation, reasonable costs of counsel for the Lenders, shall be for the account of the Borrowers, which shall pay all reasonable sums due on demand. 7.15. Security Interests. (a) The Borrowers will, and will cause each of their respective Subsidiaries to, perform any and all reasonable acts and execute any and all documents (including, without limitation, the execution, amendment or supplementation of any financing statement, continuation statement or other statement) for filing in any appropriate jurisdiction under the provisions of the UCC and applicable foreign, domestic or local law or any statute, rule or regulation of any applicable jurisdiction, including any filings in local real estate land record offices and the United States Patent and Trademark Office, or the United States Copyright Office or similar foreign offices, which are reasonably necessary or advisable, from time to time, in order to grant, continue or maintain in favor of the Administrative Agent for the benefit of the applicable Lenders a valid and perfected Lien on the Collateral and any Additional Collateral, subject to no Liens except for Prior Liens, Permitted Liens and Liens permitted by the applicable Security Documents. (b) The Borrowers shall, and shall cause each of their respective Subsidiaries to, deliver or cause to be delivered to the Administrative Agent from time to time such other reasonable documentation, consents, authorizations, approvals and orders in form and substance reasonably satisfactory to the Administrative Agent as the Administrative Agent shall deem reasonably necessary or advisable to perfect or maintain the Liens on the Collateral. Furthermore, with respect to any Additional Collateral, the Borrowers shall cause to be delivered to the Administrative Agent such opinions of counsel, title insurance and other related documents as may reasonably be requested by the Administrative Agent to assure itself that this Section 7.15 has been complied with. (c) If the Administrative Agent or the Required Lenders determine that they are required by law or regulation to have appraisals prepared in respect of the Real Property of the Borrowers and their respective Subsidiaries constituting Collateral, the Borrowers shall provide to the Administrative Agent appraisals which satisfy the applicable requirements of the Real Estate Appraisal Reform Amendments of FIRREA and which shall be in form and substance satisfactory to the Administrative Agent. 7.16. Interest Rate Protection. The Borrowers shall obtain, on or within 60 days after the Amendment and Restatement Date (and, in addition, within 60 days of the Safeline Closing Date, if later), interest rate protection having terms and with counterparties reasonably satisfactory to the Administrative Agent as shall result in effectively limiting the interest cost to the Borrowers of 50% of the aggregate Dollar Equivalent principal amount of then outstanding Term Loans for a period of at least three years from the date the initial interest rate protection was obtained. The Lenders waive any failure to comply with this covenant prior to the Amendment and Restatement Date. 7.17. Currency and Commodity Hedging Transactions. The Borrowers and each of the Subsidiaries shall only enter into, purchase or otherwise acquire agreements or arrangements relating to currency or commodity hedging to the extent and only to the extent that such agreements or arrangements are entered into, purchased or otherwise acquired in the ordinary course of business of the Borrowers or any of the Subsidiaries with reputable financial institutions and not for purposes of speculation. 7.18. Foreign Subsidiaries Security. If following a change in the relevant sections of the Code or the regulations, rules, rulings, notices or other official pronouncements issued or promulgated thereunder, counsel for the Borrowers reasonably acceptable to the Arranger does not within 30 days after a request from the Arranger or the Required Lenders deliver its opinion (in form reasonably acceptable to the Arranger) with respect to any Foreign Subsidiary which has not already had all of its stock owned by Holding or any of its Subsidiaries pledged pursuant to a Securities Pledge Agreement, that (i) a pledge to secure the Obligations of US Borrower or the Domestic Subsidiary Guarantor which is the parent of such Foreign Subsidiary, as the case may be, (x) of 66-2/3% or more of the total combined voting power of all classes of capital stock of such Foreign Subsidiary entitled to vote and (y) of any promissory note issued by such Foreign Subsidiary, if wholly-owned, to US Borrower or any of its Domestic Subsidiaries, (ii) the entering into by such Foreign Subsidiary, if wholly-owned, of a security agreement in substantially the form of the Security Agreement executed and delivered by the Domestic Subsidiary Guarantors (with appropriate modifications to conform to applicable law) and (iii) the entering into by such Foreign Subsidiary, if wholly-owned, of a guaranty in substantially the form of the Domestic Subsidiary Guarantee guaranteeing the Obligations of US Borrower and CH Borrower, in any such case could reasonably be expected to cause (I) the undistributed earnings of such Foreign Subsidiary as determined for U.S. Federal income tax purposes to be treated as a deemed dividend to such Foreign Subsidiary's United States parent for U.S. Federal income tax purposes or (II) any other material adverse U.S. Federal income tax consequences to the Loan Parties, then in the case of a failure to deliver the opinion with respect to the factors described in clause (i) above, that portion of such Foreign Subsidiary's outstanding capital stock or any promissory notes so issued by such Foreign Subsidiary, in each case not theretofore pledged pursuant to a Securities Pledge Agreement, shall be pledged to the Administrative Agent pursuant to a Securities Pledge Agreement (with appropriate modifications to conform to and subject to limitations of law) (or another pledge agreement in substantially similar form, if needed) and, in the case of a failure to deliver the opinion with respect to the factors described in clause (ii) above, such Foreign Subsidiary shall execute and deliver a Security Agreement in substantially the form executed and delivered by the Foreign Subsidiary Guarantors (with appropriate modifications to conform to and subject to limitations of law) (or another security agreement in substantially similar form, if needed) securing the Obligations of US Borrower and CH Borrower and their obligations under any Swap Agreement with a Lender and, in the event a Guarantee guaranteeing the Obligations of US Borrower and/or CH Borrower shall have been executed by such Foreign Subsidiary, the obligations of such Foreign Subsidiary thereunder and, in the case of a failure to deliver the opinion with respect to the factors described in clause (iii) above, such Foreign Subsidiary shall execute and deliver a Guarantee guaranteeing the Obligations of US Borrower and CH Borrower (with appropriate modifications to conform to and subject to limitations of law) (or another guaranty in substantially similar form, if needed), and their obligations under any Swap Agreement with a Lender, in each case to the extent that the entering into of such Security Agreement or Guarantee is permitted by the laws of the respective foreign jurisdiction and with all documents delivered pursuant to this Section 7.18 to be in form and substance reasonably satisfactory to the Arranger; provided, however, that such Foreign Subsidiary shall not be required to pledge pursuant to a Foreign Subsidiary Security Agreement any property or assets that it would not have been required to pledge had it executed a Foreign Subsidiary Security Agreement at the Original Closing Date. 7.19. Register. The Borrowers and UK Borrower hereby designate the Administrative Agent to serve as the Borrowers' agent, solely for purposes of this Section 7.19, to maintain a register (the "Register") on which it will record the Commitment from time to time of each of the Lenders, the Loans made by each of the Lenders (other than any Swing Line Loan made in other than U.S. Dollars or Pounds Sterling) and each repayment in respect of the principal amount of the Loans of each Lender (other than any Swing Line Loan made in other than U.S. Dollars or Pounds Sterling). Failure to make any such recordation or any error in such recordation shall not affect either Borrower's or UK Borrower's obligations in respect of such Loans. The entries in the Register shall be conclusive, in the absence of manifest error, and the applicable Borrower, UK Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register as the owner of such a Loan or other obligation hereunder as the owner thereof for all purposes of this Agreement and the other Loan Documents, notwithstanding any notice to the contrary. With respect to any Lender, the transfer of any Commitment of such Lender or the rights to the principal of, and interest on, any Loan (other than any Swing Line Loan made in other than U.S. Dollars or Pounds Sterling) shall not be effective until such transfer is recorded on the Register maintained by the Administrative Agent with respect to ownership of such Commitment or Loans and prior to such recordation all amounts owing to the transferor with respect to such Commitment or Loans shall remain owing to the transferor. The registration of assignment or transfer of all or part of any Commitment or Loans (other than any Swing Line Loan made in other than U.S. Dollars or Pounds Sterling) shall be recorded by the Administrative Agent on the Register only upon the acceptance by the Administrative Agent of a properly executed and delivered Assignment and Acceptance pursuant to Section 11.8. Coincident with the delivery of such an Assignment and Acceptance to the Administrative Agent for acceptance and registration of assignment or transfer of all or part of a Loan, or as soon thereafter as practicable, the assigning or transferor Lender shall surrender the Note evidencing such Loan and thereupon one or more new Notes in the same aggregate principal amount shall be issued to the assigning or transferor Lender and/or the new Lender. The Borrowers and the UK Borrower agree to indemnify the Administrative Agent from and against any and all losses, claims, damages and liabilities of whatsoever nature which may be imposed on, asserted against or incurred by the Administrative Agent in performing its duties under this Section 7.19. 7.20. New Subsidiaries. In addition to their obligations with respect to Sections 7.14, 7.15 and 7.18, if, after the Original Closing Date, the Borrowers or any Subsidiary shall create or acquire any Subsidiary, the Borrowers shall, concurrently with the creation or acquisition of such Subsidiary, (i) cause such Subsidiary (other than (subject to Section 7.18) a Foreign Subsidiary that is not a CH Foreign Subsidiary) to execute and deliver to the Administrative Agent a Subsidiary Guarantee, as appropriate (with appropriate modifications to conform to and subject to the limitations of foreign law), guaranteeing (1) with respect to any Domestic Subsidiary (other than UK Borrower Guarantor), the Obligations of the Credit Agreement Loan Parties (other than UK Borrower), (2) with respect to UK Borrower Guarantor, UK Borrower and (3) with respect to any CH Foreign Subsidiary, the Obligations of CH Borrower, and (ii) take all necessary actions and execute such agreements, instruments and documents, including, without limitation, stock powers executed in blank, and deliver such opinions of counsel with respect thereto, as the Administrative Agent may reasonably require to cause, subject to Section 7.18, (x) 100%, with respect to Domestic Subsidiaries, (y) at least 65% with respect to Foreign Subsidiaries that are "first tier" Foreign Subsidiaries of US Borrower or any Domestic Subsidiary, or (z) such amount as may be pledged under applicable law without causing adverse tax consequences, with respect to CH Foreign Subsidiaries, of the capital stock of such Subsidiary owned or controlled by the Borrowers or any Subsidiary to be pledged to the Administrative Agent to secure such Guarantees hereunder such that the Administrative Agent has a valid and perfected first-priority security interest in such pledged capital stock or the equivalent under applicable law. 7.21. Assumption by Mettler-Toledo, Inc. Holding shall cause MT Acquisition Corp. and Mettler-Toledo, Inc. to enter into the Assumption Agreement by the Original Closing Date. 7.22. Post-Closing Obligations. (a) US Borrower shall, and shall cause each of the Subsidiaries set forth on Schedule 7.22, to, as expeditiously as possible after the Original Closing Date: (i) execute and deliver each of the Loan Documents as set forth on Schedule 7.22 identified thereon to be executed and delivered by such Subsidiary, subject to limitations under applicable law and any required third-party consents (which consents US Borrower shall use its best efforts to procure but such efforts need not include the payment of money); (ii) use commercially reasonably efforts to obtain and deliver to the Administrative Agent a Mortgage encumbering the Real Property located in Ithaca, New York in favor of the Administrative Agent, for the benefit of the Lenders, duly executed and acknowledged by the Loan Party that is the owner of or holder of an interest in such real property and otherwise in compliance with and in accordance with the provisions of subsection 5.1(j), except that any opinion of counsel in connection therewith need only be customary for Mortgages of a similar nature; (iii) request, and if obtained deliver to the Administrative Agent zoning letters with respect to each Mortgaged Property, for which a zoning endorsement from the title insurance company has not been obtained, confirming that each such Mortgaged Property is in compliance with applicable zoning regulations; and (iv) obtain and deliver to the Administrative Agent, to the extent not previously delivered prior to the Original Closing Date, UCC, judgment and the tax lien search reports each of a recent date listing all effective financing statements or comparable documents that name Mettler- Toledo, Inc., as debtor in each of the jurisdictions set forth below: (1) Maricopa County, Arizona; (2) New Haven County, Connecticut; (3) Howard County, Maryland; (4) Oakland County, Michigan; (5) Independent City of Richmond, Virginia; (6) Independent City of Winchester, Virginia; and (7) Hancock County, West Virginia. (b) The certificate of merger with respect to the merger of MT Acquisition Corp. and Mettler-Toledo, Inc. shall be filed with the Secretary of State of the State of Delaware on or promptly after the Closing Date. (c) Within a reasonable period of time after the Original Closing Date, the Borrowers shall or shall cause to be delivered evidence of the completion of all recordings and filings of, or with respect to, the Security Documents and delivery of such other security and other documents as may be necessary or, in the opinion of the Arranger, desirable to perfect the Liens created, or purported or intended to be created, by the Security Documents. 7.23. Post-Amendment and Restatement and Post- Safeline Closing Obligations. As soon as practicable (but with respect to clause (b), no later than 180 days after the Safeline Closing Date) following (a) the Amendment and Restatement Date, the Borrowers will cause each Subsidiary listed in Schedule 5.3(a) to duly authorize, execute and deliver to the Administrative Agent the Ratification Agreement, and provide to the Administrative Agent the documents specified in subsection 5.3(c) as if such execution and delivery were on the Amendment and Restatement Date, and (b) the Safeline Closing Date, US Borrower shall cause (i) UK Borrower Guarantor to become a direct Wholly-Owned Subsidiary of UK Borrower, (ii) UK Borrower Guarantor to duly authorize, execute and deliver to the Administrative Agent, in form and substance satisfactory to the Administrative Agent, a Domestic Subsidiary Guarantee (but only guaranteeing the Obligations of UK Borrower), a Domestic Subsidiary Securities Pledge Agreement (but only for the benefit of the UK Lenders) and a Security Agreement (but only for the benefit of the UK Lenders), (iii) UK Borrower to duly authorize, execute and deliver to the Administrative Agent, in form and substance satisfactory to the Administrative Agent, a Securities Pledge Agreement pledging not less than 100% of the capital stock of UK Borrower Guarantor to the Administrative Agent on behalf of the UK Lenders and the Agents, and (iv) UK Borrower and UK Borrower Guarantor to deliver to the Administrative Agent copies of all corporate resolutions authorizing the foregoing actions and all other documents and instruments specified in subsection 5.1A(i) as if UK Borrower and UK Borrower Guarantor took each of the foregoing actions on the Safeline Closing Date. ARTICLE VIII. NEGATIVE COVENANTS ------------------- So long as any Lender shall have any Commitment hereunder, or any Loan or other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit shall remain outstanding: 8.1. Limitation on Liens. The Borrowers shall not, and will not cause or permit any Subsidiary to, create, incur, assume or suffer to exist any Lien upon or with respect to any property or assets of either Borrower or any Subsidiary, whether now owned or hereafter acquired, or sell any such property or assets subject to an understanding or agreement, contingent or otherwise, to repurchase such property or assets or assign any right to receive income, or file or permit the filing of any financing statement under the UCC or any other similar effective notice of Lien under any similar recording or notice statute, except Prior Liens and other Liens expressly permitted by the Security Documents, and except the following, which are herein collectively referred to as "Permitted Liens" (each of which shall be given independent effect): (a) any Lien existing on property of either Borrower or any Subsidiary (including any member of the Mettler- Toledo Group) on the Original Closing Date and set forth in Schedule 8.1(a) covering only the property or assets set forth in such Schedule 8.1(a) and securing Indebtedness outstanding on such date (other than any Debt to Be Repaid); (b) any Lien created under any Loan Document; (c) to the extent complying with the provisions of the Security Documents, Liens for taxes, fees, assessments or other governmental charges which are not yet delinquent, or to the extent that non-payment thereof is permitted by Section 7.6; (d) to the extent complying with the provisions of the Security Documents, Liens in respect of property or assets of US Borrower or any Subsidiary imposed by law which were incurred in the ordinary course of business and have not arisen to secure Indebtedness, such as landlords', carriers', warehousemen's, mechanics', materialmen's, workmen's and repairmen's Liens, equipment leases and other similar Liens arising in the ordinary course of business, and (x) which do not in the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business of US Borrower and the Subsidiaries or (y) which are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the property or asset subject to such Lien; (e) Liens (other than any Lien imposed by ERISA) consisting of pledges or deposits required in the ordinary course of business in connection with workers' compensation, unemployment insurance and other social security or similar legislation; (f) Liens on the property of US Borrower or any Subsidiary (other than Collateral) securing (i) the non- delinquent performance of bids, trade contracts (other than for borrowed money), leases or statutory obligations, (ii) contingent obligations on surety or appeal bonds, and (iii) other non-delinquent obligations of a like nature, in each case, incurred in the ordinary course of business; provided, however, that all such Liens individually or in the aggregate would not (even if enforced) cause a Material Adverse Effect; (g) Liens consisting of judgment or judicial attachment liens (including prejudgment attachment), provided that the enforcement of such Liens is effectively stayed or payment of which is covered in full (subject to a customary deductible) by insurance or which do not otherwise result in an Event of Default under subsection 9.1(i); (h) easements, rights-of-way, servitudes, covenants, restrictive covenants, encumbrances, minor defects or irregularities in title and other similar restrictions which, individually or in the aggregate, do not materially interfere with the ordinary conduct of the businesses of US Borrower and the Subsidiaries and which do not materially impair for its intended purpose the Mortgaged Real Property to which they relate; (i) security interests (whether purchase money or otherwise) on any property acquired, constructed or improved after the Original Closing Date by US Borrower or any Subsidiary securing Indebtedness incurred or assumed for the purpose of financing all or any part of the cost of acquiring, constructing or improving such property; provided, however, that (i) any such Lien attaches to such property concurrently with or within 180 days after the acquisition thereof or the completion of construction or improvement, (ii) such Lien attaches solely to the property so acquired, constructed or improved in such transaction, (iii) the principal amount of the Indebtedness secured thereby does not exceed 100% of the fair market value of such property at the time of incurrence of such Indebtedness, plus the cost of construction or improvement, and (iv) the principal amount of the Indebtedness secured by any and all such security interests, plus the aggregate amount of all Indebtedness arising under Capital Leases permitted solely by subsection (j) below of this Section 8.1, shall not at any time exceed a Dollar Equivalent amount of U.S. $10.0 million; (j) Liens securing obligations in respect of Capital Leases on assets subject to such leases; provided, however, that the aggregate amount of all Indebtedness arising under Capital Leases permitted solely by this subsection (j) (other than in respect of Capital Leases for automobiles leased in the ordinary course of business that are not required to be capitalized under International Accounting Standards), plus the aggregate amount of all Indebtedness secured by security interests permitted solely by subsection (i) above of this Section 8.1, shall not at any time exceed a Dollar Equivalent amount of U.S. $10.0 million; (k) Liens arising solely by virtue of any statutory or common law provision relating to banker's liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution; provided, however, that (i) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by US Borrower or any Subsidiary in excess of those set forth by regulations promulgated by the FRB, and (ii) such deposit account is not intended by US Borrower or any Subsidiary to provide collateral to the depository institution; (l) Liens existing on any asset (other than of Safeline Limited and its Subsidiaries as of the Safeline Closing Date) prior to the date of acquisition thereof by US Borrower or any Subsidiary which (i) were not created in contemplation of or in connection with such acquisition and (ii) do not extend to or cover any other property or assets of US Borrower or any Subsidiary; (m) Liens existing on any asset of any Person (other than Safeline Limited and its Subsidiaries as of the Safeline Closing Date) at the time such Person becomes a Subsidiary or is merged, amalgamated or consolidated with or into a Subsidiary which (i) were not created in contemplation of or in connection with such event and (ii) do not extend to or cover any other property or assets of US Borrower or any Subsidiary; (n) Liens (excluding Liens on Collateral) not otherwise permitted hereunder securing obligations not at any time exceeding in the aggregate a Dollar Equivalent amount of U.S. $5.0 million; (o) subject to the provisions of Section 8.20, Leases with respect to the assets or properties of US Borrower or any Subsidiary, subordinate in all respects to the Liens granted and evidenced by the Security Documents; (p) Liens evidenced by UCC financing statements regarding operating and equipment leases permitted by this Agreement or in respect of consigned goods; (q) any encumbrance or restriction (including, without limitation, any put and call agreements) with respect to the capital stock of any Joint Venture or Subsidiary pursuant to the agreement governing such Joint Venture or Subsidiary; provided, however, that no such encumbrance or restriction affects in any way the ability of US Borrower or any Subsidiary to comply with Section 8.22; (r) any Lien arising out of the refinancing, extension, renewal or refunding of any Indebtedness secured by any Lien permitted by any of subsection 8.1(a), (i), (j), (l), (m), (n) or (v); provided, however, that such Indebtedness is not increased, except as permitted under subsection 8.5(o) and is not secured by any additional assets as to which a Lien is not otherwise permitted hereunder; (s) Liens solely in favor of either Borrower or, if granted by any Qualified Subsidiary Guarantor, any Subsidiary which is a Qualified Subsidiary Guarantor or, if granted by any other Subsidiary, any Subsidiary; (t) Liens securing obligations under Swap Contracts with Lenders; (u) Liens securing Guaranty Obligations of US Borrower or any Subsidiary in respect of Indebtedness incurred pursuant to subsection 8.5(g); provided, however, that the creditor in respect of such Indebtedness (or an agent on behalf of the creditors) shall have executed and delivered an Intercreditor Agreement which is in full force and effect; (v) Liens on cash in a deposit account securing Indebtedness incurred under subsection 8.5(n) to the extent that such deposit account is established in connection therewith, not to exceed an amount of cash equal to such Indebtedness; and (w) Liens set forth on Schedule 8.1(w) and existing on the assets of Safeline Limited and its Subsidiaries as in effect on the Safeline Closing Date. 8.2 Consolidations, Mergers and Disposition of Assets. The Borrowers shall not, and shall not cause or permit any Subsidiary to, directly or indirectly, consummate any Asset Sale or wind up, liquidate or dissolve its affairs or merge, amalgamate, consolidate with or into, or convey, transfer, lease or otherwise dispose of (whether in one transaction or in a series of transactions) all or substantially all of their respective properties or assets (whether now owned or hereafter acquired) to or in favor of any Person, except (each of which shall be given independent effect): (a) dispositions of inventory and of used, worn-out or surplus equipment, all in the ordinary course of business; provided, however, that the proceeds thereof are reinvested in the business of US Borrower or the Subsidiaries; (b) the sale of equipment to the extent that such equipment is exchanged for credit against the purchase price of similar replacement equipment, or the proceeds of such sale are reasonably promptly applied to the purchase price of similar replacement equipment; (c) the Liens permitted by Section 8.1, the Investments permitted pursuant to Section 8.4 and the Restricted Payments permitted by Section 8.13; (d) US Borrower or any Subsidiary may sell assets; provided, however, that (x) the aggregate sale proceeds from all such Assets Sales shall not exceed the Dollar Equivalent amount of U.S. $2.0 million in any fiscal year of US Borrower and (y) the Net Cash Proceeds therefrom are either applied to prepay Term Loans as provided in subsection 2.7(c) or reinvested as provided in subsection 2.7(c); (e) US Borrower or any Subsidiary may sell or discount, in each case without recourse, accounts receivables arising in the ordinary course of business, but only in connection with the compromise or collection thereof or as permitted by Section 8.21; provided, however, that any Foreign Subsidiary may effect such sale or discount with recourse if such is consistent with ordinary business terms in such Subsidiary's country of business; (f) US Borrower or any Subsidiary may, in the ordinary course of business, license patents, trademarks, copyrights and know-how to third Persons, so long as each such license is permitted to be assigned pursuant to the Security Agreement and does not otherwise prohibit the granting of a Lien therein by US Borrower or any Subsidiary pursuant to the Security Agreement; (g) any Subsidiary may be merged or consolidated with or into either Borrower or any Wholly-Owned Subsidiary of US Borrower which is a Qualified Subsidiary Guarantor and may transfer assets to either Borrower or any Wholly-Owned Subsidiary of US Borrower which is a Qualified Subsidiary Guarantor; provided, however, that (w) in any merger or consolidation involving either Borrower, such Borrower (or CH Borrower if between the Borrowers) shall be the surviving corporation (provided that upon CH Borrower being the survivor of any merger or consolidation between the Borrowers, CH Borrower shall assume all Obligations of US Borrower pursuant to documentation in form and substance satisfactory to the Administrative Agent), (x) in any merger or consolidation involving UK Borrower, the survivor (if not UK Borrower) shall assume all Obligations of UK Borrower pursuant to documentation in form and substance satisfactory to the Administrative Agent, and (y) if the surviving corporation of such merger or consolidation or the transferee of such assets is a Subsidiary, (i) all of the capital stock of such Subsidiary is pledged pursuant to a Securities Pledge Agreement, (ii) such surviving Subsidiary is a Qualified Subsidiary Guarantor, and (iii) the assets of such surviving Subsidiary are pledged pursuant to an appropriate Security Document, except in each case to the extent prohibited by law or such as would cause adverse tax consequences; and (z) UK Borrower Guarantor may not merge or consolidate with or into any Person unless the surviving entity would be a Guarantor of all Obligations of UK Borrower; (h) the consummation of the M-T Acquisition in accordance with the M-T Acquisition Documents and the Safeline Acquisition in accordance with the Safeline Acquisition Documents; (i) US Borrower or any Subsidiary may sell assets set forth on Schedule 8.2(i); provided, however, that the Net Cash Proceeds therefrom are either applied to prepay Term Loans as provided in subsection 2.7(c) or reinvested as provided in subsection 2.7(c); (j) US Borrower or any Subsidiary may sell surplus real property and improvements thereon not utilized in the business of US Borrower or any Subsidiary; provided, however, that the Net Cash Proceeds therefrom are applied to prepay Term Loans as provided in subsection 2.7(c); (k) US Borrower or any Subsidiary may sell a line of business if the portion of the consolidated EBITDA of US Borrower and the Subsidiaries for the latest twelve months immediately prior to such sale attributable to such business, plus the trailing twelve month EBITDA of all other businesses sold pursuant to this subsection 8.2(k) (measured at the time of sale) does not exceed 5.0% of the consolidated EBITDA of US Borrower and the Subsidiaries for the latest twelve months (before giving effect to the current contemplated sale); (l) any Acquisition permitted by Section 8.4; (m) any Foreign Subsidiary which is not a Qualified Subsidiary Guarantor may merge or consolidate with or into or sell, assign or transfer its assets to any other Foreign Subsidiary which is not a Qualified Subsidiary Guarantor, except that no Subsidiary which is a CH Foreign Subsidiary may enter into any such transaction with a Subsidiary that is not a CH Foreign Subsidiary unless the CH Foreign Subsidiary is the surviving or transferee corporation; and (n) the abandonment or other disposition of patents, trademarks or other intellectual property that is, in the reasonable judgment of US Borrower, no longer economically practicable to maintain or useful in the conduct of the business of US Borrower and the Subsidiaries, taken as a whole. To the extent the Required Lenders waive the provisions of this Section 8.2 with respect to the sale or other disposition of any Collateral, or any Collateral is sold or otherwise disposed of as permitted by this Section 8.2 (and such Collateral is released (or permitted to be released) from the Liens created by the respective Security Document), such Collateral in each case shall be sold or otherwise disposed of free and clear of the Liens created by the Security Documents and the Administrative Agent shall take such actions as are appropriate in connection therewith. 8.3. Leases. The Borrowers shall not permit, and shall not cause or permit any Subsidiary to permit, the aggregate lease payments calculated in accordance with GAAP (including, without limitation, any property taxes paid as additional rent or lease payments) by US Borrower and the Subsidiaries on a consolidated basis under any agreement to rent or lease any real or personal property (or any extension or renewal thereof) (excluding Capital Leases) to exceed in any fiscal year (commencing with fiscal 1996) the Dollar Equivalent amount of U.S. $21.0 million, increased each fiscal year after fiscal 1998 by the Dollar Equivalent amount of U.S. $2.0 million. 8.4. Loans and Investments. The Borrowers shall not, and shall not cause or permit any Subsidiary to, directly or indirectly, purchase or acquire, or make any commitment to purchase or acquire, any capital stock, equity interest, or obligations or other securities of, or any interest in, any Person, or make or commit to make any Acquisition, or make or commit to make any advance, loan, extension of credit or capital contribution to, or guarantee of any obligation of, or any other investment in, or incur Guaranty Obligations on behalf of, any Person (including any Affiliate of US Borrower) (any of the foregoing, an "Investment"), except for (each of which shall be given independent effect): (a) Investments by US Borrower and the Subsidiaries in Cash and Cash Equivalents; (b) extensions of credit in the nature of accounts receivable or notes receivable arising from the sale or lease of goods or services in the ordinary course of business; (c) Investments (including extensions of credit (such extensions of credit, "Intercompany Indebtedness") and Guaranty Obligations) by US Borrower or any Subsidiary in or to US Borrower, CH Borrower or any Wholly-Owned Subsidiary of US Borrower which is a Qualified Subsidiary Guarantor (or in any Person that thereby becomes a Wholly-Owned Subsidiary of US Borrower which is a Qualified Subsidiary Guarantor or is merged or consolidated into US Borrower, CH Borrower or any Wholly-Owned Subsidiary of US Borrower which is a Qualified Subsidiary Guarantor); provided, however, that (x) with respect to any Guaranty Obligation issued by any Subsidiary of either Borrower's obligations, such Subsidiary has entered into a Subsidiary Guarantee at least as favorable as such Guaranty Obligation, (y) upon request of the Required Lenders, all such Intercompany Indebtedness shall be evidenced by subordinated promissory notes in form, and shall be pledged to the Administrative Agent pursuant to documentation, reasonably satisfactory to the Required Lenders, and (z) such Subsidiary shall have entered into the appropriate Security Documents pursuant to Section 7.14 and taken all necessary action pursuant to Section 7.15; (d) Investments consisting of non-cash consideration received in the form of securities, notes or similar obligations in connection with disposition of assets permitted by subsection 8.2(d), (i), (j) or (k); provided, however, that (i) the aggregate amount of such non-cash consideration received in connection with any such disposition shall not exceed 25% with respect to subsections 8.2(d), (i) and (j) and 15% with respect to subsection 8.2(k) of the total consideration received in connection with such disposition and (ii) such non-cash consideration is pledged pursuant to the appropriate Security Document; (e) Investments in Joint Ventures or non-Wholly-Owned Subsidiaries (other than any Investment made to consummate any Acquisition); provided, however, that the aggregate amount of any such Investment, plus the aggregate value of all such Investments (excluding Investments which constitute part of the M-T Acquisition and the Safeline Acquisition) made by US Borrower or any Subsidiary after the Original Closing Date and (without duplication) the aggregate amount of all Guaranty Obligations permitted solely by subsection 8.8(f) paid after the Original Closing Date or outstanding as of the date of such Investment, shall not exceed a Dollar Equivalent amount of U.S. $25.0 million (exclusive of any Investment pursuant to subsection 8.4(f)); provided, however, that any such Investment shall comply with Section 8.6; (f) Investments made in order to consummate Acquisitions (other than the M-T Acquisition and the Safeline Acquisition); provided, however, that (i) no Event of Default or Unmatured Event of Default exists or will result therefrom (including any such event under Section 8.15), (ii) on a pro forma basis, after giving effect to such Acquisition(s), US Borrower would have been in compliance with Sections 8.10, 8.11 and 8.12 on the last day of the most recently completed fiscal quarter (assuming, for purposes of Sections 8.10 and, if applicable, 8.12, that such Acquisition had occurred on the first day of the Computation Period ending on such last day) which compliance shall, for any Acquisition involving consideration of the Dollar Equivalent amount of U.S. $10.0 million, be demonstrated in an Officers' Certificate delivered to the Administrative Agent and each Lender and (iii) the aggregate Dollar Equivalent amount of the consideration (which for each Acquisition shall be measured at the date of consummation thereof and which shall include debt assumed, earn outs, working capital deficits and deferred payments) paid for all Acquisitions (other than the M-T Acquisition and the Safeline Acquisition) consummated since the Original Closing Date shall not exceed the Dollar Equivalent amount of U.S. $30.0 million; (g) pledges or deposits required in the ordinary course of business in connection with workmen's compensation, unemployment insurance and other social security or similar legislation; (h) pledges or deposits in connection with (i) the non- delinquent performance of bids, trade contracts (other than for borrowed money), leases or statutory obligations, (ii) contingent obligations on surety or appeal bonds (including those permitted by subsection 8.8(d)), and (iii) other non-delinquent obligations of a like nature, in each case incurred in the ordinary course of business; (i) advances, loans or extensions of credit to suppliers in the ordinary course of business by US Borrower or any Subsidiary consistent with past practice as of the Original Closing Date; (j) advances, loans or extensions of credit by US Borrower or any Subsidiary to employees of US Borrower or any Subsidiary; provided, however, that the aggregate amount of all such loans, advances and extensions of credit, other than those entered into in connection with the consummation of the M-T Acquisition and the Safeline Acquisition and set forth on Schedule 8.4(j) and other than advances for travel and entertainment expenses in the ordinary course of business, shall not at any time exceed in the aggregate a Dollar Equivalent amount of U.S. $5.0 million; (k) other advances, loans or extensions of credit (excluding advances, loans or extensions of credit of the types described in subsection 8.4(j)) in the ordinary course of business by US Borrower or any Subsidiary not at any time exceeding in the aggregate a Dollar Equivalent amount of U.S. $2.50 million; (l) Investments to consummate the M-T Acquisition on the terms set forth in the M-T Acquisition Documents and Investments to consummate the Safeline Acquisition on the terms set forth in the Safeline Acquisition Documents, including Investments in UK Borrower or Canadian Borrower necessary to repay the Safeline Seller Notes or pay the Safeline Contingent Obligation; (m) Investments (including debt obligations) received in connection with the bankruptcy or reorganization of suppliers and customers and in settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business; provided, however, that any securities or other property so received is pledged pursuant to the appropriate Security Document; (n) Swap Contracts entered into in compliance with subsection 8.8(b); (o) Investments in existence on the Original Closing Date and listed in Schedule 8.4(o), without giving effect to any additions thereto and Investments to be made pursuant to binding agreements in existence on the Original Closing Date set forth on Schedule 8.4(o) to the extent made in accordance with the terms of such agreements as in effect on the Original Closing Date; (p) Investments (including Intercompany Indebtedness and Guaranty Obligations) by US Borrower or any Subsidiary in any Subsidiary which is not a Qualified Subsidiary Guarantor or which is not a Wholly-Owned Subsidiary of US Borrower and not otherwise permitted by subsections (e), (q), (v) and (w) of this Section 8.4, not to exceed an aggregate amount outstanding at any time (net of returns, dividends in cash, net cash proceeds on sale or other cash realizations thereof) of the Dollar Equivalent amount of U.S. $10.0 million; provided, however, that upon request of the Required Lenders, all such Intercompany Indebtedness shall be evidenced by subordinated promissory notes in form, and shall be pledged to the Administrative Agent pursuant to documentation, reasonably satisfactory to the Required Lenders; (q) US Borrower and the Subsidiaries may hold additional Investments in any Subsidiary which is not a Qualified Subsidiary Guarantor or a Wholly-Owned Subsidiary to the extent that such Investments reflect an increase in the value of such Subsidiary resulting from retained earnings of such Subsidiary; (r) any Subsidiary which is not a Qualified Subsidiary Guarantor may make Investments in or to any other Subsidiary which is not a Qualified Subsidiary Guarantor (other than by a CH Foreign Subsidiary to a non-CH Foreign Subsidiary); (s) Investment made in connection with the Ciba Loan; provided, however, that (x) the Administrative Agent shall have received evidence reasonably satisfactory to it from Swiss tax authorities that the Swiss tax authorities will refund the Swiss withholding tax payments for which substantially all of such loan is the interim source pending such repayment and (y) the Ciba Loan Documents are pledged pursuant to the Security Documents; (t) without duplication, Capital Expenditures permitted by Section 8.19 and the Contingent Obligations permitted by subsections 8.8(d), (g) and (i); (u) US Borrower or any Subsidiary may make Investments (including Intercompany Indebtedness and Guaranty Obligations) in any Subsidiary Guarantor which is not a Qualified Subsidiary Guarantor in an amount not to exceed the Dollar Equivalent amount of the Obligations guaranteed by such Subsidiary Guarantor; provided, however, that upon request of the Required Lenders, all such Intercompany Indebtedness shall be evidenced by subordinated promissory notes in form, and shall be pledged to the Administrative Agent pursuant to documentation, reasonably satisfactory to the Required Lenders; (v) Investments by US Borrower or any Subsidiary in any Wholly-Owned Subsidiary which is not a Qualified Subsidiary Guarantor to the extent that contemporaneously with such Investment such entity in which the Investment is being made issues an unsubordinated note to US Borrower or a Qualified Subsidiary Guarantor in a Dollar Equivalent amount equal to the Dollar Equivalent amount of the value of such Investment at such time; provided, however, that (i) such note is fully secured by all assets of the entity in which the Investment is being made to the extent permitted by applicable law; (ii) such note is pledged to the Administrative Agent on behalf of the Lenders pursuant to the Security Documents; and (iii) such security interests securing such note, if any, are collaterally assigned to the Administrative Agent on behalf of the Lenders; (w) Investments (including Intercompany Indebtedness and Guaranty Obligations) by either Borrower or any Subsidiary in any Wholly-Owned Subsidiary to the extent made in the ordinary course to fund or support the ordinary course operations of such Wholly-Owned Subsidiary; provided, however, that upon the request of the Required Lenders all such Intercompany Indebtedness shall be evidenced by promissory notes in form, and shall be pledged to the Administrative Agent pursuant to documentation, reasonably satisfactory to the Required Lenders; (x) Investments by UK Borrower in any Subsidiary of UK Borrower which is a Wholly-Owned Subsidiary of US Borrower or Safeline S.A., or by any Subsidiary of UK Borrower in UK Borrower or any other Subsidiary of UK Borrower; and (y) Investments in UK Borrower (i) to prepay or to repay Loans owing by UK Borrower or Safeline Limited or other payment obligations under this Agreement or (ii) in an amount at any time outstanding not to exceed the Dollar Equivalent amount of U.S. $5 million. 8.5. Limitation on Indebtedness. The Borrowers shall not, and shall not cause or permit any Subsidiary to, directly or indirectly, create, incur, assume, suffer to exist, or otherwise become or remain directly or indirectly liable with respect to, any Indebtedness, except (each of which shall be given independent effect): (a) the Obligations; (b) Indebtedness consisting of Contingent Obligations permitted pursuant to Section 8.8; (c) Indebtedness existing on the Original Closing Date or the Safeline Closing Date which is Debt to Be Repaid (which Indebtedness may not be outstanding beyond the Original Closing Date or the Safeline Closing Date, as the case may be) or is set forth in Schedule 6.17 or Schedule 6.17A; (d) Indebtedness incurred in connection with Capital Leases to the extent permitted by subsection 8.1(j) and Indebtedness incurred in connection with the acquisition, construction or improvement of property to the extent permitted by subsection 8.1(i); (e) Indebtedness of any Subsidiary to US Borrower or CH Borrower and, to the extent the credit extension creating such Indebtedness is permitted by subsection 8.4(c), (e), (l), (p), (r), (u), (v) or (w) or (x), of any Subsidiary to any other Subsidiary; (f) Indebtedness of US Borrower under the Senior Subordinated Notes in an aggregate principal amount not to exceed U.S. $135.0 million, less any prepayments or repayments thereof, and any guarantee of the Senior Subordinated Notes by any Domestic Subsidiary in accordance with the terms of the Senior Subordinated Note Documents as in effect on the Original Closing Date; (g) Indebtedness of Foreign Subsidiaries in an aggregate principal amount not to exceed in the aggregate at any time outstanding for all Foreign Subsidiaries (exclusive of any amount incurred pursuant to subsection 8.5(n) below) the Dollar Equivalent amount of U.S. $30.0 million (which amount shall be increased to (x) U.S. $40.0 million after the consummation of a Qualified Public Offering and (y) U.S. $50.0 million after the consummation of a Qualified Public Offering so long as the Debt to EBITDA Ratio as of the end of the most recently completed fiscal quarter is less than 3.5 to 1.0); provided, however, that not more than the Dollar Equivalent amount of U.S. $15.0 million (which amount shall be increased to (x) U.S. $20.0 million after the consummation of a Qualified Public Offering and (y) U.S. $30.0 million after the consummation of a Qualified Public Offering so long as the Debt to EBITDA Ratio as of the end of the most recently completed fiscal quarter is less than 3.5 to 1.0) in the aggregate may be incurred and outstanding at any time pursuant to any agreement that is for permanent funded debt or pursuant to agreements which individually do not provide for annual clean down provisions (i.e., reducing outstanding Indebtedness to zero) for not less than 30 days per year; (h) unsecured Indebtedness not to exceed in the aggregate at any time outstanding the Dollar Equivalent amount of U.S. $10.0 million; (i) Indebtedness arising from honoring a check, draft or similar instrument against insufficient funds; provided, however, that such Indebtedness is extinguished within five Business Days of its incurrence; (j) obligations under operating leases permitted by Section 8.3 or Section 8.20; (k) the Safeline Seller Notes as in effect on the Safeline Closing Date; (l) Indebtedness of a Person (other than Indebtedness of Safeline Limited and its Subsidiaries as of the Safeline Closing Date) existing at the time such Person became a Subsidiary or assets were acquired from such Person, to the extent such Indebtedness was not incurred in connection with, or in contemplation of, such Person becoming a Subsidiary or the acquisition of such assets, not to exceed in the aggregate at any time outstanding the Dollar Equivalent amount of U.S. $10.0 million; (m) unsecured Indebtedness incurred by US Borrower to former employees in connection with the purchase or redemption of stock of US Borrower, Holding or M-T Investors not to exceed in aggregate amount outstanding the Dollar Equivalent amount of U.S. $2.50 million; (n) Indebtedness of the Chinese Subsidiaries pursuant to local working capital facilities and other Indebtedness not to exceed in the aggregate at any time outstanding for all Chinese Subsidiaries the Dollar Equivalent amount of U.S. $15.0 million; and (o) any renewals, extensions, substitutions, refinancings or replacements (each, for purposes of this subsection (o), a "refinancing") of any Indebtedness permitted by this Section 8.5, including any successive refinancings, so long as any such refinancing Indebtedness shall (w) not be on financial and other terms, in the reasonable judgment of the Borrowers, that are more onerous than the Indebtedness being refinanced, (x) not have a stated maturity or Average Life that is shorter than the Indebtedness being refinanced, (y) be at least as subordinate to the Obligations as the Indebtedness being refinanced (and unsecured if the refinanced Indebtedness is unsecured) and (z) be in principal amount that does not exceed the principal amount so refinanced, plus the lesser of (I) the stated amount of any premium or other payment required to be paid in connection with such refinancing pursuant to the terms of the Indebtedness being refinanced and (II) the amount of premium or other payment actually paid at such time to refinance the Indebtedness, plus, in either case, the amount of reasonable expenses of the Borrowers or any Subsidiary incurred in connection with such refinancing. If such Indebtedness is incurred to refinance Indebtedness denominated in a currency other than U.S. Dollars and such refinancing would cause a Dollar Equivalent restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such Dollar Equivalent restriction shall not be deemed to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced, but the ability to make subsequent incurrences of Indebtedness subject to the applicable Dollar Equivalent restriction shall be determined as if the relevant currency exchange rate applied to any such previous refinancing was the rate in effect on the date of such refinancing. 8.6. Transactions with Affiliates. The Borrowers shall not, and shall not cause or permit any Subsidiary to, directly or indirectly, enter into any transaction with any Affiliate of US Borrower (other than a Borrower or a Subsidiary if no portion of such Subsidiary is owned (other than through US Borrower or the Subsidiaries) by Persons who control (directly or indirectly) Holding), except upon fair and reasonable terms no less favorable to such Borrower or such Subsidiary than would obtain in a comparable arm's-length transaction with a Person not an Affiliate of US Borrower or such Subsidiary; provided, however, that the following shall in any event be permitted: (a) the payment on the Original Closing Date of one time fees to AEA in an aggregate amount not to exceed U.S. $5.50 million (plus reasonable out-of-pocket expenses incurred by AEA in providing services to US Borrower, including monies advanced for the purchase of currency options and contracts entered into in connection with consummation of the M-T Acquisition); (b) the payment, on a quarterly basis, of management fees to AEA pursuant to the Management Services Agreement in an aggregate amount (for all such Persons taken together) not to exceed U.S. $250,000 in any fiscal quarter of US Borrower; provided, however, that no Event of Default or Unmatured Event of Default pursuant to Section 9.1(a) then exists or would result therefrom; (c) the reimbursement of AEA for its reasonable out-of-pocket expenses incurred by it in connection with performing management services to US Borrower and the Subsidiaries pursuant to the Management Services Agreement; (d) Restricted Payments permitted by Section 8.13; (e) US Borrower and the Domestic Subsidiaries may enter into the Tax Sharing Agreement and may make payments thereunder; (f) the payment of reasonable and customary regular fees to directors of US Borrower or any Subsidiary who are not employees of US Borrower or any Subsidiary; (g) any transaction with an officer or member of the board of directors of US Borrower or any Subsidiary in the ordinary course of business involving compensation, indemnity or employee benefit arrangements; (h) loans or advances to employees permitted by subsection 8.4(j); (i) the M-T Acquisition and all transactions related thereto (including but not limited to the financing thereof) to the extent consummated in accordance with the M-T Acquisition Documents and the Safeline Acquisitions and all transactions related thereto (including but not limited to the financing thereof) to the extent consummated in accordance with the Safeline Acquisition Documents; (j) any transaction in the ordinary course of business or approved by a majority of the Disinterested Directors, between US Borrower or any Subsidiary and any Affiliate of US Borrower controlled by US Borrower that is a Joint Venture or similar entity primarily engaged in a Related Business; provided, however, that no person or entity which has an economic interest in M-T Investors or Holding has an interest in such Joint Venture other than through US Borrower or any Subsidiary; (k) US Borrower and the Subsidiaries may enter into and perform its obligations under the Ciba Reimbursement Agreement and the Ciba Loan Documents; and (j) the payment on the Safeline Closing Date of one time fees to AEA in an aggregate amount not to exceed U.S. $1.5 million (plus reasonable out-of- pocket expenses incurred by AEA in connection with the Safeline Acquisition). 8.7. Use of Proceeds. (a) No Credit Agreement Loan Party shall, and the Borrowers shall not cause or permit any Subsidiary to, directly or indirectly, use any portion of the Loan proceeds or any Letter of Credit, directly or indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise refinance Indebtedness of any Loan Party or others incurred to purchase or carry Margin Stock or (iii) to extend credit for the purpose of purchasing or carrying any Margin Stock. (b) No Credit Agreement Loan Party shall, directly or indirectly, use any portion of the Loan proceeds or any Letter of Credit (i) knowingly to purchase Ineligible Securities from the Arranger during any period in which the Arranger makes a market in such Ineligible Securities, (ii) knowingly to purchase during the underwriting or placement period Ineligible Securities being underwritten or privately placed by the Arranger, or (iii) to make payments of principal or interest on Ineligible Securities underwritten or privately placed by the Arranger and issued by or for the benefit of a Borrower or any Affiliate of a Borrower. The Arranger is a registered broker-dealer and permitted to underwrite and deal in certain Ineligible Securities; and "Ineligible Securities" means securities which may not be underwritten or dealt in by member banks of the U.S. Federal Reserve System under Section 16 of the Banking Act of 1933 (12 U.S.C. 24, Seventh), as amended. 8.8. Contingent Obligations. The Borrowers shall not, and shall not cause or permit any Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist any Contingent Obligations, except: (a) endorsements for collection or deposit in the ordinary course of business; (b) Swap Contracts entered into in the ordinary course of business and designed to protect against fluctuations in interest rates, currency exchange rates, commodity prices or similar risks (including any Swap Contract entered into pursuant to Section 7.16 or Section 7.17); (c) Contingent Obligations of US Borrower and the Subsidiaries existing as of the Original Closing Date and listed in Schedule 8.8 and Contingent Obligations of Safeline Limited and its Subsidiaries existing as of the Safeline Closing Date and listed in Schedule 8.8A; (d) Contingent Obligations arising under (i) Surety Instruments arising in the ordinary course of business of US Borrower or any Subsidiary or (ii) any guaranty of the performance of contractual obligations (other than obligations to pay money) of other Persons that are not Subsidiaries so long as such guaranty arises in connection with a project in which a Borrower or the applicable Subsidiary is otherwise involved in the ordinary course of business, not to exceed in the aggregate for all Contingent Obligations pursuant to this subclause (d) the Dollar Equivalent amount of U.S. $25.0 million; (e) Guaranty Obligations permitted by subsections 8.4(c), (i), (j), (k), (p), (r), (u) and (w); (f) Guaranty Obligations in respect of the Indebtedness or other liabilities of Joint Ventures or Persons in which a Borrower or any Subsidiary has a minority interest or in non-Wholly-Owned Subsidiaries of US Borrower; provided, however, that the aggregate amount of all such Guaranty Obligations at any time outstanding, plus the aggregate amount of all Guaranty Obligations permitted solely by this subsection (f) which are paid after the date hereof and (without duplication) the aggregate amount of all Investments (excluding Investments which constitute part of the M-T Acquisition or the Safeline Acquisition) made after the Original Closing Date which are permitted solely by subsection 8.4(e), shall not exceed in the aggregate a Dollar Equivalent amount of U.S. $25.0 million; (g) other Contingent Obligations not at any time exceeding in the aggregate outstanding a Dollar Equivalent amount of U.S. $5.0 million; (h) the Guarantees and reimbursement obligations arising under the Loan Documents in respect of drawings under Letters of Credit; (i) Guaranty Obligations by Domestic Subsidiaries of US Borrower in respect of US Borrower's obligations under the Senior Subordinated Notes pursuant to the Senior Subordinated Note Documents as in effect on the Original Closing Date; (j) the Ciba Reimbursement Agreement; (k) Guaranty Obligations of Foreign Subsidiaries under letters of credit; (l) Guaranty Obligations by US Borrower or any Subsidiary of Indebtedness of Foreign Subsidiaries permitted by subsection 8.5(g) or (n); (m) Guaranty Obligations in connection with sales and other dispositions of assets permitted under Section 8.2, arising in connection with indemnification and other agreements in respect of any contract relating to such sale, not to exceed the consideration received by US Borrower or any Subsidiary in connection with such sale and excluding in all cases any Guaranty Obligation with respect to any obligation of any third person incurred in connection with the acquisition of such assets; and (n) the Safeline Contingent Payment. 8.9. Restrictions on Subsidiaries. The Borrowers shall not cause or permit any Subsidiary to, directly or indirectly, enter into any agreement or instrument (other than (i) the Senior Subordinated Note Documents as in effect on the Closing Date, (ii) the Loan Documents and (iii) any agreement or instrument relating to Indebtedness permitted by subsection 8.5(c), provided that such restriction relates solely to such Foreign Subsidiary) which by its terms restricts the ability of such Subsidiary (a) to declare or pay dividends or make similar distributions, (b) to repay principal of, or pay any interest on, any indebtedness owed to a Borrower or any other Subsidiary, (c) to make payments of royalties, licensing fees and similar amounts to a Borrower or any other Subsidiary or (d) to make loans or advances to, or guarantee any Indebtedness or other obligation of, a Borrower or any other Subsidiary, except for such encumbrances or restrictions existing under or by reason of (i) customary provisions restricting subletting or assignment of any lease governing a leasehold interest of US Borrower or a Subsidiary, (ii) customary provisions restricting assignment of any agreement or license entered into by US Borrower or any Subsidiary in the ordinary course of business, (iii) customary provisions restricting the transfer of assets subject to Liens permitted under subsections 8.1(a), (i), (j), (l), (m), (n) and (q) and (iv) applicable law (including minimum capital requirements). 8.10. Fixed Charge Coverage Ratio. The Borrowers shall not permit, as of the last day of any fiscal quarter (beginning with the fiscal quarter ending December 31, 1996) ending during any period set forth below, the ratio of (a) EBITDA less Capital Expenditures for the Computation Period ending on such day, to (b) (x) prior to the first such time as four fiscal quarters of financial information of US Borrower after the Original Closing Date shall have been provided pursuant to this Agreement, Annualized Interest Expense at the end of such fiscal quarter and (y) thereafter, Interest Expense of US Borrower and the Subsidiaries for such Computation Period, to be less than the ratio set forth opposite such period in the table below:
Period Ratio - --------------------------------------- --------- Original Closing Date through 9/30/1997 1.20:1.0 10/1/1997 through 9/30/1998 1.30:1.0 10/1/1998 through 9/30/1999 1.50:1.0 10/1/1999 through 9/30/2000 1.75:1.0 10/1/2000 through 9/30/2001 2.00:1.0 10/1/2001 through 9/30/2002 2.25:1.0 10/1/2002 through 9/30/2003 2.50:1.0 10/1/2003 and thereafter 3.00:1.0
8.11. Minimum Net Worth. The Borrowers shall not permit Consolidated Net Worth (to be calculated for the purposes of this Section 8.11 without giving effect to cumulative depreciation and amortization of intangibles and excluding net gains (but not losses) resulting from asset sales) at the end of any fiscal quarter (beginning with the fiscal quarter ended December 31, 1996) occurring during any period set forth below to be less than the amount set forth opposite such period:
Consolidated Period Net Worth - --------------------- ------------ Original Closing Date through 9/30/1998 U.S.$40.0 million 10/1/1998 through 9/30/1999 U.S.$50 million 10/1/1999 through 9/30/2000 U.S.$65 million 10/1/2000 through 9/30/2001 U.S.$80 million 10/1/2001 through 9/30/2002 U.S.$110 million 10/1/2002 through 9/30/2003 U.S.$135 million 10/1/2003 through 9/30/2004 U.S.$155 million 10/1/2004 and thereafter U.S.$175 million
To the extent that the final adjustments to stockholders' equity (which shall be finalized not later than such time as necessary to be reflected in the March 31, 1997 financial statements delivered hereunder) relating to the write- down of research and development expense and inventory (of the nature reflected in the pro forma financial statements in the prospectus filed with the SEC relating to the Senior Subordinated Notes) is greater than or less than U.S.$141.5 million (adjusted to give effect to the effect of applicable taxes to the extent relating to inventory), the amount of such excess or deficit (as the case may be) shall be added to or subtracted from (as the case may be) each amount set forth in the table above for each fiscal year. 8.12. Debt to EBITDA Ratio. The Borrowers shall not permit, as of the last day of any fiscal quarter (beginning with the fiscal quarter ending March 31, 1997) ending during any period set forth below, the Debt to EBITDA Ratio to exceed the ratio set forth opposite such period in the table below:
Period Ratio - --------------------------------------- ------------ Original Closing Date through 9/30/1997 6.25:1.0 10/1/1997 through 3/31/1998 5.75:1.0 4/1/1998 through 12/30/1998 5.50:1.0 12/31/1998 through 3/31/1999 5.25:1.0 4/1/1999 through 9/30/1999 5.00:1.0 10/1/1999 through 9/30/2000 4.50:1.0 10/1/2000 through 9/30/2001 4.00:1.0 10/1/2001 through 9/30/2002 3.50:1.0 10/1/2002 and thereafter 3.00:1.0
8.13. Restricted Payments. Neither Borrower shall (i) declare or make any dividend payment or other distribution of assets, properties, cash, rights, obligations or securities on account of any shares of any class of the capital stock of US Borrower or any Subsidiary (other than to US Borrower or any Subsidiary) or (ii) purchase, redeem or otherwise acquire for value, or permit any Subsidiary to purchase or otherwise acquire for value, any shares of US Borrower's or any Subsidiary's capital stock or any warrants, rights or options to acquire such shares, now or hereafter outstanding owned by any Person other than US Borrower or any Wholly-Owned Subsidiary of US Borrower (any such prohibited transaction, a "Restricted Payment"), except that (each of which shall be given independent effect): (a) US Borrower or any Subsidiary may declare and make dividend payments or other distributions payable solely in its common stock; (b) US Borrower or any Subsidiary may purchase, redeem, defease or otherwise acquire or retire for value shares of its common stock or warrants or options to acquire any such shares with shares of its common stock; (c) any Subsidiary may pay dividends and distributions or purchase, redeem, defease or otherwise acquire or retire for value shares of its common stock or warrants or options to acquire any such shares so long as any such payments pursuant thereto by any non-Wholly-Owned Subsidiary of US Borrower are made on a pro rata basis to such Subsidiary's shareholders generally or are paid solely to a Loan Party; (d) US Borrower may pay cash loans, advances, dividends or distributions to Holding to permit Holding or M- T Investors to purchase capital stock (or options or other rights in respect thereof) of Holding or M-T Investors held by former employees of Holding or any of its Subsidiaries following termination of their employment or pursuant to repurchase provisions under employee stock option agreements or employee stock purchase agreements; provided, however, that (i) no Event of Default or Unmatured Event of Default shall then exist or would arise therefrom and (ii) the aggregate amount of such dividends shall not exceed U.S. $2.0 million in any fiscal year and U.S. $5.0 million in the aggregate since the Original Closing Date; (e) US Borrower may pay cash dividends to Holding to enable Holding or M-T Investors to pay operating expenses (including fees and indemnification payments to directors and officers) in the ordinary course of business; provided, however, that (i) no Event of Default or Unmatured Event of Default under subsection 9.1(a) shall then exist or would arise therefrom and (ii) the aggregate amount of such dividends shall not exceed U.S. $1.0 million in any fiscal year; (f) US Borrower may pay dividends to Holding in connection with the payment of items specified in clauses (b) and (c) of the proviso to Section 8.6; and (g) US Borrower may make any payments to Holding or any parent company of Holding to enable Holding or any parent company of Holding, as applicable, to make payments, to holders of the common stock of US Borrower, Holding or any parent company of Holding, as applicable, in lieu of issuance of fractional shares of such common stock, in connection with any recapitalization of US Borrower, Holding or any parent company of Holding, as applicable, such payments not to exceed U.S. $100,000 in the aggregate. 8.14. ERISA. The Loan Parties shall not, and shall not permit any of their ERISA Affiliates to, engage in a transaction that could be subject to Section 4069 or 4212(c) of ERISA. 8.15. Change in Business. (a) The Borrowers shall not, and shall not cause or permit any Subsidiary to, directly or indirectly, engage in any material line of business substantially different from those lines of business carried on by US Borrower and the Subsidiaries (including the Mettler-Toledo Group) on the Original Closing Date, unless the Safeline Acquisition is consummated, and, then, on the Safeline Closing Date. (b) Holding will engage in no business other than its ownership of the capital stock of US Borrower and having those liabilities which it is responsible for under the Basic Documents to which it is a party. Notwithstanding the foregoing, Holding may engage in those activities that are incidental to (a) the maintenance of its corporate existence in compliance with applicable law, (b) legal, tax and accounting matters in connection with any of the foregoing activities and (c) the entering into, and performing its obligations under, the Basic Documents to which it is a party. 8.16. Accounting Changes. The Borrowers shall not, and shall not cause or permit any Subsidiary to, make any significant change in accounting principles or reporting practices, except as required by GAAP, or change their fiscal years. 8.17. Prepayments of Senior Subordinated Notes, etc. Holding and the Borrowers shall not, and shall not cause or permit any Subsidiary to: (a) make (or give any notice in respect of) any voluntary or optional payment or prepayment or redemption or acquisition for value of the Senior Subordinated Notes (including, without limitation, by way of depositing with any trustee with respect thereto money or securities before such Indebtedness is due for the purpose of paying such Indebtedness when due) or exchange of any such Indebtedness, except that (i) a refinancing thereof may be effected in accordance with subsection 8.5(o), and (ii) provided that no Event of Default or Unmatured Event of Default shall have occurred and be continuing, US Borrower may, prior to December 1, 1999, redeem Senior Subordinated Notes with any Net Cash Proceeds of a Qualified Public Offering not required by subsection 2.7(e) to be applied to the prepayment of the Term Loans so long as after giving effect thereto not less than U.S. $87.75 million in aggregate principal amount of the Senior Subordinated Notes remain outstanding; (b) amend, modify or change its certificate of incorporation (including, without limitation, by the filing of any certificate of designation) or its by-laws or any other organizational document or the foreign equivalent thereof with respect to Foreign Subsidiaries (other than such changes with respect to Subsidiaries (other than CH Borrower) as are necessary to effect changes in organizational structure (whether under applicable corporate law or for tax purposes) from corporate to partnership form in connection with the M-T Acquisition), or any agreement entered into by it with respect to its capital stock, or enter into any new agreement with respect to its capital stock in any manner which would be materially adverse to the Lenders; or (c) issue any capital stock other than non-redeemable common stock. 8.18. Amendments to Other Documents. Holding and the Borrowers shall not and shall not cause or permit any Subsidiary to, directly or indirectly, make any amendment, supplement or other modification of, or enter into any consent or waiver with respect to, the subordination provisions of the Senior Subordinated Note Documents or make any material amendment, supplement or other modification of, or enter into any consent or waiver with respect to, any Transaction Document or Other Document. 8.19. Capital Expenditures. The Borrowers shall not permit the aggregate amount of all Capital Expenditures made by US Borrower and the Subsidiaries for any fiscal year to exceed a Dollar Equivalent amount set forth in the table below:
Fiscal Year U.S. Dollars ------------------------ ------------------------- 1996 30 million 1997 35 million 1998 35 million 1999 40 million 2000 40 million 2001 45 million 2002 45 million 2003 and thereafter 50 million
; provided, however, that the unused permitted amount of such Capital Expenditures in any fiscal year may be carried over and used in the following fiscal year if and to the extent that such carryover amount would not result in the amount expended in any fiscal year exceeding 125% of the amount set forth in the above table for such year (it being understood that in any fiscal year the base permitted amount shall be counted first towards total expenditures); provided, further, however, that the limitation set forth above shall not include (1) Capital Expenditures made with (i) the proceeds of additional capital contributions by Holding or the proceeds of additional equity issuances and (ii) Net Cash Proceeds of Asset Sales to the extent reinvested in the business as permitted hereby, (2) Capital Expenditures related to integration costs that arise out of the M-T Acquisition in an amount not exceeding a Dollar Equivalent amount of U.S. $5.0 million at any time prior to December 31, 1997, and (3) Capital Leases with respect to automobiles leased in the ordinary course of business that are not required to be capitalized under International Accounting Standards. 8.20. Sale and Lease-Backs. The Borrowers shall not, and shall not cause or permit any Subsidiary to, directly or indirectly, become or thereafter remain liable as lessee or as guarantor or other surety with respect to the lessee's obligations under any lease, whether an operating lease or a Capital Lease, of any property (whether real or personal or mixed), whether now owned or hereafter acquired, (i) which US Borrower or any Subsidiary has sold or transferred or is to sell or transfer to any other Person (other than US Borrower or any Wholly-Owned Subsidiary which is a Qualified Subsidiary Guarantor) or (ii) which US Borrower or any Subsidiary intends to use for substantially the same purpose as any other property which has been or is to be sold or transferred by Borrower or any Subsidiary to any Person in connection with such lease, if in the case of clause (i) or (ii) above, such sale and such lease are part of the same transaction or a series of related transactions or such sale and such lease occur within one year of each other or are with the same other Person, except for any transaction permitted by subsection 8.2(d). 8.21. Sale or Discount of Receivables. Each Borrower shall not, nor shall it cause or permit any Subsidiary to, directly or indirectly, sell, with or without recourse, or discount (other than in connection with trade discounts or arrangements necessitated by the creditworthiness of the other party, in each case in the ordinary course of business consistent with past practice) or otherwise sell for less than the face value thereof, notes or accounts receivable, except (i) to US Borrower or any Wholly-Owned Subsidiary which is a Qualified Subsidiary Guarantor, (ii) by Foreign Subsidiaries (x) in the ordinary course and either (I) consistent with past practice as of the Original Closing Date or (II) consistent with the customary practices of the applicable country, and (iii) by Mettler-Toledo (Albstadt) GmbH, Albstadt and Mettler-Toledo GmbH, Greifensee in connection with the transfer of distribution rights relating to the business in Japan, not to exceed the Dollar Equivalent amount of U.S. $4.0 million. 8.22. Creation of Subsidiaries. The Borrowers shall not, and shall not cause or permit any Subsidiary to, establish, create or acquire after the Original Closing Date any Subsidiary; provided, however, that, US Borrower and its Wholly- Owned Subsidiaries shall be permitted to establish, create or acquire Wholly-Owned Subsidiaries or any non-Wholly-Owned Subsidiary in connection with any Investment permitted by subsections 8.4(e) or (f) so long as, with respect to any such new Subsidiary in which US Borrower or any Subsidiary has made Investments of the Dollar Equivalent of U.S. $1.0 million or more, (i) at least 30 days' prior written notice thereof is given to the Administrative Agent, (ii) all of the capital stock of such new Subsidiary held by US Borrower or any Subsidiary is pledged pursuant to a Securities Pledge Agreement and the certificates representing such stock, together with stock powers duly executed in blank are delivered to the Administrative Agent; provided, however, that (subject to Section 7.18) not more than 65% of the capital stock of Foreign Subsidiaries which are not CH Foreign Subsidiaries need be pledged and no capital stock of any such Foreign Subsidiary which is not a "first tier" Subsidiary of US Borrower or any Domestic Subsidiary need be pledged by US Borrower or any Domestic Subsidiary or Foreign Subsidiary that is not a CH Foreign Subsidiary, (iii) any such new Subsidiary which is a Domestic Subsidiary shall have executed and delivered a Domestic Subsidiary Guarantee and, subject to Section 7.14, each other Security Document executed and delivered by the Domestic Subsidiaries on the Original Closing Date and each such new CH Foreign Subsidiary shall have executed a Foreign Subsidiary Guarantee and each other Security Document executed and delivered by CH Foreign Subsidiaries on the Original Closing Date (subject to applicable limitations under foreign law); provided, however, that any Subsidiary which is prohibited by applicable local law from entering into a Subsidiary Guarantee need not do so, and (iv) to the extent requested by the Administrative Agent or the Required Lenders, such Subsidiary takes all actions required pursuant to Section 7.14 and Section 7.15. In addition, each new Subsidiary which is a Domestic Subsidiary or a CH Foreign Subsidiary, as the case may be, shall execute and deliver or cause to be executed and delivered all other relevant documentation of the type described in Section 5 as such new Subsidiary would have had to deliver if such new Subsidiary were a Domestic Subsidiary or CH Foreign Subsidiary, as the case may be, on the Original Closing Date. 8.23. Designated Senior Debt. Neither Holding nor US Borrower will, and each of them will not permit any Subsidiary to, designate or permit the designation of any Indebtedness (other than the Obligations) as "Designated Senior Indebtedness" or "Designated Guarantor Senior Indebtedness" for purposes of, and as defined in, the Senior Subordinated Note Documents. 8.24. Issuance or Disposal of Subsidiary Stock. The Borrowers shall not, directly or indirectly: (a) issue, sell, assign, pledge or otherwise encumber or dispose of any shares of capital stock, partnership interests, or other equity securities of (or warrants, rights or options to acquire shares or other equity securities of) any Subsidiary; or (b) cause or permit any Subsidiary to, directly or indirectly, issue, sell, assign, pledge or otherwise encumber or dispose of any of their respective or any of their respective Subsidiaries' shares of capital stock, partnership interests, or other securities (or warrants, rights or options to acquire any such shares or other securities), except, in each case under clause (a) or (b), (i) to US Borrower or any of its Wholly-Owned Subsidiaries, (ii) to qualify directors if required by applicable law, (iii) the pledge thereof pursuant to the Security Documents and (iv) as permitted by subsection 8.2(d) or (k) (provided, in each case, such sale is for all of the capital stock of such Subsidiary) or by subsection 8.13(a) or (b). 8.25. Limitation on Other Restrictions on Amendment of Basic Documents. None of Holding, the Borrowers or the Subsidiaries shall enter into, suffer to exist or become or remain subject to any agreement or instrument to which any of them is a party or to which any of them or any property of any of them (now owned or hereafter acquired) may be subject or bound (except for the Loan Documents or the other Basic Documents (but with respect to the Basic Documents that are not Loan Documents, only as to themselves)) that would prohibit or restrict (including by way of any covenant, representation or warranty or event of default), or require the consent of any Person to any amendment to, or waiver or consent to departure from the terms of, any Basic Document (which, in the case of the Basic Documents that are not Loan Documents, would be materially adverse to the Lenders). 8.26. Limitation on Swing Line Lenders. No Subsidiary Swing Line Borrower shall, and US Borrower shall not cause or permit any Subsidiary Swing Line Borrower to, have or arrange for, or enter into any agreement or understanding with respect to, more than one Lender acting at any one time as a Swing Line Lender for any Subsidiary Swing Line Borrower (or, for the UK Swing Line Borrowers, for them collectively), or for any Lender to replace any Swing Line Lender for any Subsidiary Swing Line Borrower unless all extensions of credit hereunder to the Subsidiary Swing Line Borrower to whom such replaced Swing Line Lender made extensions of credit hereunder have been paid in full and arrangements for potential L/C Obligations with respect to all Letters of Credit Issued and outstanding by such replaced Swing Line Lender have been provided for to the satisfaction of such replaced Swing Line Lender. ARTICLE IX EVENTS OF DEFAULT ------------------ 9.1. Event of Default. Any of the following shall constitute an "Event of Default": (a) Non-Payment. Any Loan Party fails to pay, (i) when and as required to be paid herein, any principal of any Loan or of any L/C Obligation or (ii) within three days after the same becomes due, any interest, fee or any other amount payable under any Loan Document. (b) Representation or Warranty. Any representation or warranty by any Loan Party made or deemed made in any Loan Document, or which is contained in any certificate, document or financial or other statement by any Loan Party or any Responsible Officer furnished at any time under any Loan Document, is incorrect in any material respect on or as of the date made or deemed made. (c) Specific Defaults. Any Loan Party fails to perform or observe any term, covenant or agreement contained in Section 7.3(a) or in Article VIII. (d) Other Defaults. Any Loan Party fails to perform or observe any term, covenant or agreement (other than those referred to in subsections 9.1(a), (b) or (c) above) contained in any Loan Document, and such failure shall continue unremedied for a period of at least 30 days after the date upon which written notice thereof is given to the Borrowers by any Agent or any Lender. (e) Cross-Default. (i) Any Company fails to make any payment in respect of any one or more issues of Indebtedness (other than the Obligations) or Contingent Obligation having an aggregate principal of more than the Dollar Equivalent amount of U.S. $5.0 million beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness or Contingent Obligation was created or by which it is governed; or (ii) any Company fails to perform or observe any other term, condition or covenant, or any other event shall occur or condition exist, under any agreement or instrument relating to any Indebtedness or Contingent Obligation, if the effect of such failure, event or condition is to cause, or to permit the holder or holders of such Indebtedness or beneficiary or beneficiaries of such Indebtedness or Contingent Obligation (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause (with or without notice or passage of time or both), such Indebtedness to be declared to be due and payable prior to its stated maturity or to require any Company to redeem or purchase, or offer to redeem or purchase, all or any portion of such Indebtedness, or any such Indebtedness shall be required to be prepaid (other than by a regularly scheduled required prepayment or redemption) prior to the stated maturity thereof or such Contingent Obligation to become payable or cash collateral in respect thereof to be demanded; provided, however, that the aggregate amount of all such Indebtedness or Contingent Obligations so affected and cash collateral so required shall be in a Dollar Equivalent amount of U.S. $5.0 million or more. (f) Insolvency; Voluntary Proceedings. Any Company (i) ceases or fails to be solvent, or generally fails to pay, or admits in writing its inability to pay, its debts as they become due; (ii) commences or consents to any Insolvency Proceeding with respect to itself; or (iii) takes any action to effectuate or authorize any of the foregoing. (g) Involuntary Proceedings. (i) Any involuntary Insolvency Proceeding is commenced or filed against any Company, or any writ, judgment, warrant of attachment, execution or similar process is issued or levied against a Company, and such proceeding or petition shall not be dismissed, or such writ, judgment, warrant of attachment, execution or similar process shall not be released, vacated or fully bonded, within 60 days after commencement, filing or levy; (ii) any Company admits the material allegations of a petition against it in any Insolvency Proceeding, or an order for relief (or similar order under non-U.S. law) is ordered in any Insolvency Proceeding; or (iii) any Company acquiesces in the appointment of a receiver, receiver and manager, trustee, custodian, conservator, liquidator, mortgagee in possession (or agent therefor), or other similar person for itself or a substantial portion of its property or business. (h) ERISA. (i) An ERISA Event shall occur with respect to a Pension Plan or a Multiemployer Plan which has resulted or is reasonably likely to result in liability of a Loan Party under Title IV of ERISA to such Pension Plan or Multiemployer Plan or to the PBGC in an aggregate Dollar Equivalent amount in excess of U.S. $5.0 million; or (ii) the aggregate Dollar Equivalent amount of Unfunded Pension Liability among all Pension Plans at any time exceeds U.S. $5.0 million and as a result thereof a lien shall be imposed, a security interest shall be granted or a material liability is incurred, which lien, security interest or liability, in the reasonable judgment of the Required Lenders, is reasonably likely to result in a Material Adverse Effect. (i) Monetary Judgments. One or more non-interlocutory judgments, non-interlocutory orders, decrees or arbitration awards is entered against any Company involving in the aggregate a liability (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage) as to any single or related series of transactions, incidents or conditions, of a Dollar Equivalent amount of U.S. $5.0 million or more, and the same shall remain unvacated and unstayed pending appeal for a period of 30 days after the entry thereof. (j) Non-Monetary Judgments. Any non-monetary judgment, order or decree is entered against any Company which does or would reasonably be expected to have a Material Adverse Effect, and there shall be any period of 30 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect. (k) Guarantees. Any Guarantee ceases to be in full force and effect (other than due to any effect of applicable foreign law or action by any foreign government) or any of the Guarantors repudiates, or attempts to repudiate, any of its obligations under any of the Guarantees. (i) Security Documents. Any Security Document shall cease to be in full force and effect (other than due to any effect of applicable foreign law or action by any foreign government), or shall cease to give the Administrative Agent the Liens, rights, powers and privileges purported to be created thereby, in favor of the Administrative Agent, superior to and prior to the rights of all third Persons and subject to no Liens other than Prior Liens and Liens expressly permitted by the applicable Security Document, or any judgment creditor having a Lien against any item of Collateral shall commence legal action to foreclose such Lien or otherwise exercise its remedies against any item of Collateral or either Borrower or any Subsidiary fails to comply with or to perform any material obligation or agreement under any Security Document within ten days after being requested by the Administrative Agent or any Lender. (m) Change of Control. Any Change of Control shall occur. (n) Senior Subordinated Notes. The subordination provisions relating to the any Senior Subordinated Note Document (the "Subordination Provisions") shall fail to be enforceable by the Lenders (which have not effectively waived the benefits thereof) in accordance with the terms thereof, or any Obligation shall fail to constitute Senior Indebtedness or Guarantor Senior Indebtedness (as defined in the Senior Subordinated Note Documents); or Holding, US Borrower or any Subsidiary shall, directly or indirectly, disavow or contest in any manner any of the Subordination Provisions. (o) Ciba Reimbursement Agreement. Any Borrower shall be in breach of its obligations under the Ciba Reimbursement Agreement. (p) Consummation of the M-T Acquisition. The M-T Acquisition shall fail to be consummated promptly after the making of the Loans on the Original Closing Date. (q) Environmental Events. There shall have been asserted against any Company, claims, whether accrued, absolute or contingent, based on or arising from the generation, storage, transport, handling or disposal of Hazardous Materials by any Company or any Affiliate, or any predecessor in interest of any Company or any Affiliate, which claims are reasonably likely to be determined adversely to any Company and the amount of any such claim (insofar as it is payable by any Company but after deducting any portion thereof which is reasonably expected to be paid, discharged or forgiven by other creditworthy Persons jointly and severally liable therefor), is, singly or in the aggregate, reasonably likely to have a Material Adverse Effect. 9.2. Remedies. If any Event of Default occurs, the Administrative Agent shall, at the request, or may, with the consent, of the Required Lenders: (a) declare the commitment of each Lender to make Loans and the obligation of the L/C Lender to Issue Letters of Credit to be terminated, whereupon such commitments and obligation shall be terminated; (b) declare an amount equal to the maximum aggregate amount that is or at any time thereafter may become available for drawing under any outstanding Letters of Credit (whether or not any beneficiary shall have presented, or shall be entitled at such time to present, the drafts or other documents required to draw under such Letters of Credit) to be immediately due and payable, and declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by the Credit Agreement Loan Parties; (c) direct the Credit Agreement Loan Parties to pay (and the Credit Agreement Loan Parties agree that upon receipt of such notice, or upon the occurrence of an Event of Default specified in subsection 9.1(f) or (g) with respect to any Credit Agreement Loan Party, such Credit Agreement Loan Party will pay) to the Applicable Agent at the Agent's Payment Office such additional amount of cash, to be held as security by the Administrative Agent, as is equal to the aggregate undrawn face amount of all Letters of Credit issued for the account of any Credit Agreement Loan Party and then outstanding; and (d) exercise on behalf of the Administrative Agent and the Lenders all rights and remedies available to the Administrative Agent and the Lenders under the Loan Documents or applicable law; provided, however, that upon the occurrence of any event specified in subsection (f) or (g) of Section 9.1, the obligation of each Lender to make Loans and any obligation of the L/C Lender to Issue Letters of Credit, shall automatically terminate and the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable without further act of the Administrative Agent, the L/C Lender or any other Lender. 9.3. Rights Not Exclusive. The rights provided for in this Agreement and the other Loan Documents are cumulative and are not exclusive of any other rights, powers, privileges or remedies provided by law or in equity, or under any other instrument, document or agreement now existing or hereafter arising. ARTICLE X. THE AGENTS -------------- 10.1. Appointment and Authorization. (a) Each Lender hereby irrevocably (subject to Section 10.9) appoints, designates and authorizes each Agent to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. The Administrative Agent is expressly authorized to (A) execute and deliver, and approve the form and substance of, all Security Documents on the Original Closing Date and the Safeline Closing Date and take all actions incidental or related thereto and to execute and deliver, and approve the form and substance of, the Ratification Agreement and each Intercreditor Agreement entered into in connection with any Lien granted pursuant to subsection 8.1(u), (B) approve and agree with the Credit Agreement Loan Parties each form of Exhibit to this Agreement modified or added in connection with the amendments hereto effected on the Amendment and Restatement Date and (C) execute and deliver, and approve the form and substance of, any release of all or part of security comprised in any Security Document which is necessary to ensure no transaction set forth on Schedule 1.8 (if and so long as such transactions are effected substantially on the terms set forth on Schedule 1.8) results in a pledge of more than 65% of the capital stock of Safeline Limited, and take all actions incidental or related thereto. Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document, none of any Agent, the Arranger or any Co-Agent shall have any duties or responsibilities except those expressly set forth herein, nor shall any of any Agent, the Arranger or any Co-Agent have or be deemed to have any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against any of any Agent, the Arranger or any Co-Agent or any of their affiliates. The provisions of this Article X are solely for the benefit of the Agents, the Arranger, the Co-Agents and the Lenders, and no Loan Party shall have any rights as a third party beneficiary of any of the provisions hereof. In performing its functions and duties under this Agreement, each Agent shall act solely as an Agent of the Lenders as provided for herein and no Agent assumes and shall not be deemed to have assumed any obligation or relationship of agency or trust with or for any Loan Party. None of the Documentation Agent, the Arranger or any Co-Agent shall have any responsibilities under any Loan Document, except as expressly set forth therein. (b) The L/C Lender shall act on behalf of the Revolving Facility Lenders with respect to any Letters of Credit Issued by it and the documents associated therewith until such time and except for so long as the Administrative Agent may agree at the request of the Required Lenders to act for the L/C Lender with respect thereto; provided, however, that the L/C Lender shall have all of the benefits and immunities (i) provided to the Administrative Agent in this Article X with respect to any acts taken or omissions suffered by the L/C Lender in connection with Letters of Credit Issued by it or proposed to be Issued by it and the application and agreements for letters of credit pertaining to the Letters of Credit as fully as if the term "Administrative Agent," as used in this Article X, included the L/C Lender with respect to such acts or omissions and (ii) as additionally provided in this Agreement with respect to the L/C Lender. (c) Each Swing Line Lender shall have all of the benefits and immunities (i) provided to the Administrative Agent in this Article X with respect to any acts taken or omissions suffered by such Swing Line Lender in connection with Swing Line Loans made or proposed to be made by it as fully as if the term "Administrative Agent," as used in this Article X, included the Swing Line Lenders with respect to such acts or omissions and (ii) as additionally provided in this Agreement with respect to the Swing Line Lenders. 10.2. Delegation of Duties. Each Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. No Agent shall be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects with reasonable care. 10.3. Exculpatory Provisions. None of any Agent, the Arranger, any Co-Agent or any of their respective Affiliates shall (i) be liable for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or under any other document or instrument referred to or provided for herein or therein or the transactions contemplated hereby or thereby (except for its own gross negligence or willful misconduct), (ii) be responsible in any manner to any of the Lenders for any recital, statement, representation or warranty made by any Loan Party or any Subsidiary or Affiliate of any Loan Party, or any officer thereof, contained in this Agreement or in any other Loan Document, under or in connection with, this Agreement or any other Loan Document, or the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document or any other document referred to or provided for herein or therein, or for any failure of any Loan Party or any other party to any Loan Document to perform its obligations hereunder or thereunder, (iii) except to the extent that, with respect to any Agent, it is expressly instructed by the Lenders with respect to collateral security under the Security Documents, be required to initiate or conduct any litigation or collection proceedings hereunder or under any other Loan Document or (iv) with respect to any Agent, be under any obligation to take any action hereunder or under any other Loan Document if such Agent believes in good faith that taking such action may conflict with any law or any provision of any Loan Document, or may require such Agent to qualify to do business in any jurisdiction where it is not then so qualified. None of any Agent, the Arranger, any Co-Agent or any of their respective Affiliates shall be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Loan Party or any Subsidiary or Affiliate of any Loan Party. 10.4. Reliance by Agents. (a) Each Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by or on behalf of the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to any Loan Party or any Subsidiary), independent accountants and other experts selected by any Agent. Each Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document, unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate and, if it so requests, it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Each Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document, in accordance with a request or consent of the Required Lenders, and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Lenders. (b) For purposes of determining compliance with the conditions specified in Section 5.1, each Lender that has executed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with each document or other matter either sent by any Agent to such Lender for consent, approval, acceptance or satisfaction, or required thereunder to be consented to or approved by or acceptable or satisfactory to the Lender. 10.5. Notice of Default. No Agent shall be deemed to have knowledge or notice of the occurrence of any Event of Default or Unmatured Event of Default, unless such Agent shall have received written notice from a Lender or a Borrower referring to this Agreement, describing such Event of Default or Unmatured Event of Default and stating that such notice is a "notice of default." If an Agent receives such a notice, such Agent will notify the Lenders of its receipt thereof. Each Agent shall take such action with respect to such Event of Default or Unmatured Event of Default as may be requested by the Required Lenders in accordance with Article IX; provided, however, that, unless and until an Agent has received any such request, such Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Event of Default or Unmatured Event of Default as it shall deem advisable or in the best interest of the Lenders except to the extent that this Agreement expressly requires otherwise. 10.6. Credit Decision. Each Lender acknowledges that none of any Agent, the Arranger, any Co-Agent or any of their respective Affiliates has made any representation or warranty to it, and that no act by any Agent hereafter taken, including any review of the affairs of any Loan Party, shall be deemed to constitute any representation or warranty by any Agent, the Arranger, any Co-Agent or any Lender. None of any Agent, the Arranger or any Co-Agent shall be required to keep itself informed as to the performance or observance by any Lender of this Agreement or any of the other Loan Documents or any other document referred to or provided for herein or therein or to inspect the properties or books of any Loan Party. Each Lender represents to each Agent, the Arranger and the Co-Agents that it has, independently and without reliance upon any Agent, the Arranger, any Co-Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Loan Parties, and all applicable bank regulatory laws relating to the transactions contemplated hereby, and made its own decision to enter into this Agreement and to extend credit hereunder. Each Lender also represents that it will, independently and without reliance upon any Agent, the Arranger, any Co-Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement or any other Loan Document, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Loan Parties. Except for notices, reports and other documents and information expressly herein required to be furnished to the Lenders by any Agent, none of any Agent, the Arranger or any Co-Agent shall have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial and other condition or creditworthiness of the Loan Parties which may come into the possession of any Agent, the Arranger, any Co-Agent or any of their respective Affiliates. 10.7. Indemnification. Whether or not the transactions contemplated hereby are consummated, the Lenders shall indemnify upon demand each Agent, the Arranger, the Co- Agents and each of their respective Affiliates (to the extent not reimbursed by or on behalf of the Loan Parties in accordance with the terms hereof and without limiting the obligation of the Borrowers to do so), pro rata (determined on the same basis used in determining Required Lenders), from and against any and all Losses which may at any time be imposed on, incurred by or asserted against any Agent, the Arranger or any Co-Agent in their respective capacity as such (including by any Lender) arising out of or by reason of any investigation in any way relating to or arising out of this Agreement or any other Loan Document, or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or the enforcement of any of the terms hereof or thereof or of any such other documents; provided, however, that (A) no Lender shall be liable for the payment to, the Arranger or any Co-Agent or any of their respective Affiliates of any portion of the Losses resulting from such Person's gross negligence or willful misconduct and (B) no non-Canadian Lender shall have any obligation to the Canadian Agent. Without limitation of the foregoing, each Lender shall reimburse the Administrative Agent upon demand for its ratable share (determined on the same basis used in determining Required Lenders) of any costs or out-of-pocket expenses (including Attorney Costs) incurred by such Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein or therein, to the extent that any Agent is not reimbursed for such expenses by or on behalf of the Loan Parties. The agreements set forth in this Section 10.7 shall survive the payment of all Loans and other obligations hereunder and the resignation or replacement of any Agent and shall be in addition to and not in lieu of any other indemnification agreements contained in any other Loan Document. 10.8. Agents in Individual Capacity. Each Agent and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with the Loan Parties and Affiliates of the Loan Parties as though such Agent were not an Agent hereunder, without notice to or consent of the Lenders. The Lenders acknowledge that, pursuant to such activities, an Agent and its Affiliates may receive information regarding the Loan Parties or their Affiliates (including information that may be subject to confidentiality obligations in favor of the Borrowers or such Affiliates) and acknowledge that no Agent or any of its Affiliates shall be under any obligation to provide such information to them. With respect to its Loans, an Agent (and any of its Affiliates which may become a Lender) shall have the same rights and powers under this Agreement as any other Lender and may exercise the same as though it were not an Agent or the L/C Lender. The terms "Lender" and "Lenders" shall, unless the context otherwise indicates, include Agent in its individual capacity. 10.9. Successor Agents. Any Agent may, and at the request of the Required Lenders shall, resign as an Agent upon 30 days' notice to the Lenders and the Borrowers. If an Agent resigns under this Agreement, the Required Lenders shall appoint from among the Lenders a successor Agent, as applicable, which successor agent shall, so long as no Event of Default exists, be subject to the approval of the Borrowers (which approval shall not be unreasonably withheld or delayed). If no successor agent is appointed prior to the effective date of the resignation of an Agent, such Agent may appoint, after consulting with the Lenders and the Borrowers, a successor agent, from among the Lenders. Upon the acceptance of its appointment as successor agent hereunder, such successor agent shall succeed to all the rights, powers and duties of the retiring Agent, and the term "Administrative Agent," "Canadian Agent" or "Documentation Agent" shall mean such successor agent and the retiring Agent's appointment, powers and duties as such Agent shall be terminated. After the retiring Agent's resignation hereunder as such Agent, the provisions of this Article X and Section 11.4 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was such Agent under this Agreement. If no successor agent has accepted appointment as the applicable Agent by the date which is 30 days following the retiring Agent's notice of resignation, the retiring Agent's resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of such Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above. Each successor Agent shall comply with subsection 4.1(f). 10.10. Holders. Each Agent may deem and treat the payee of any Note as the owner thereof for all purposes hereof unless and until a written notice of the assignment, transfer or endorsement thereof, as the case may be, shall have been filed with such Agent. Any request, authority or consent of any Person or entity who, at the time of making such request or giving such consent, is the holder of any Note shall be conclusive and binding on any subsequent holder, transferee, assignee or indorsee, as the case may be, of such Note or of any Note or Notes issued in exchange therefor. 10.11. Failure to Act. Except for action expressly required of an Agent hereunder and under the other Loan Documents, each Agent shall in all cases be fully justified in failing or refusing to act hereunder and thereunder unless it shall receive further assurances to its satisfaction from the Lenders of their indemnification obligations under Section 10.7 against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action. ARTICLE XI. MISCELLANEOUS -------------- 11.1. Amendments and Waivers. (a) The Administrative Agent, each Swing Line Lender affected thereby and the Credit Agreement Loan Parties, without notice to or consent of any Lender or other Agent, may (i) modify or amend the definition of Subsidiary Swing Line Borrowers, including by naming additional Subsidiaries as Subsidiary Swing Line Borrowers, or (ii) modify or amend the definition of the Subsidiary Swing Line Borrower Sublimits or US Borrower Sublimit so long as the Dollar Equivalent amount thereof on the date of such modification or amendment is not greater than the Swing Line Commitment; provided, however, that no additional currencies to be made available to any Subsidiary Swing Line Borrower beyond that in effect on the Amendment and Restatement Date or thereafter approved in accordance with this Agreement may be effected pursuant to this sentence. No other amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent with respect to any other departure by any Credit Agreement Loan Party therefrom, shall be effective unless the same shall be in writing and signed by the Required Lenders (or by the Administrative Agent at the written request of the Required Lenders) and the Credit Agreement Loan Parties and acknowledged by the Administrative Agent, and then any such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such waiver, amendment or consent shall, unless in writing and signed by all the Non-Defaulting Lenders and the Credit Agreement Loan Parties and acknowledged by the Administrative Agent, do any of the following: (i) increase or extend the term of any of the Commitments (it being understood that a waiver of any condition, covenant violation, Event of Default or Unmatured Event of Default shall not constitute a change in the terms of any Commitment of any Lender) or extend the time or waive any requirement for the reduction or termination of any of the Commitments (or reinstate any Commitment terminated pursuant to Section 9.2) or change the currency in which any Loan or L/C Obligation is payable, except as expressly permitted herein (provided that the consent of the Lenders whose Loans or Commitments are being so changed (and none other) shall be required); (ii) postpone or delay any date fixed by subsection 2.9(a), (b) or (c) for any payment of any Amortization Payment or for any payment of interest, fees or other amounts (other than any prepayment of the Term Loans as a result of any of the events set forth in Section 2.7) due to the Lenders (or any of them) under any Loan Document; (iii) reduce the principal of, or the rate of interest specified herein (other than as a result of waiving the applicability of any post-default increase in interest rates) on, any Loan or (subject to clause (5) below) any fees or other amounts payable under any Loan Document; (iv) modify the definition of the term "Required Canadian Lenders", "Required Lenders", "Required Revolving Facility Lenders", "Majority Lenders of the Affected Tranche" or "Supermajority Lenders" or change the percentage of the Commitments or of the aggregate unpaid principal amount of the Loans and L/C Obligations which is required for the Non- Defaulting Lenders or any of them to take any action hereunder (it being understood that, with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of the Required Lenders on substantially the same basis as the Commitments (and related extensions of credit) are included on the Amendment and Restatement Date); (v) release any material portion of the Collateral (except as expressly permitted by the Loan Documents); (vi) amend this Section 11.1, Section 2.15, Article IV, or Section 11.4 or any provision herein or under any Loan Document providing for consent or other action by all Lenders; (vii) release any Guarantor from its obligations under its Guarantee (except upon a permitted sale of such Guarantor); or (viii) consent to the assignment or transfer by any Loan Party of its rights and obligations under any Loan Document or the making of any assignment of Loans or other Obligations or participation therein to any Loan Party or any Affiliate thereof; provided, further, however, that (1) no amendment, waiver or consent shall, unless in writing and signed by the L/C Lender in addition to the Required Lenders or all Non-Defaulting Lenders, as the case may be, affect the rights or duties of the L/C Lender under this Agreement or any L/C-Related Document, (2) no amendment, waiver or consent shall, unless in writing signed by each Swing Line Lender affected thereby in addition to the Required Lenders or all Non-Defaulting Lenders, as the case may be, affect the rights or duties of any Swing Line Lender under any Loan Document, (3) no amendment, waiver or consent shall, unless in writing and signed by the Applicable Agent in addition to the Required Lenders or all Non-Defaulting Lenders, as the case may be, affect the rights or duties of the Applicable Agent under any Loan Document, (4) no amendment, waiver or consent (including any of the foregoing with respect to any representation, warranty, covenant, default or other matter which is otherwise effective for purposes of this Agreement) shall, unless in writing and signed by the (I) Required Revolving Facility Lenders, be effective for determining whether the conditions precedent to any Credit Extension under the Revolving Facility have been satisfied or (II) Required Canadian Lenders, be effective for determining whether the conditions precedent to any Credit Extension under the Canadian Facility have been satisfied, (5) the Fee Letters may be amended, or rights or privileges thereunder waived, in accordance with their respective terms, (6) no amendment, waiver or consent shall, unless in writing signed by the Majority Lenders of the Affected Tranche, in addition to the Required Lenders, change the application of prepayments under Section 2.7 as among the Term Loan Facilities or the order in which such prepayments are applied to any such Facility (although any required prepayment under Section 2.7 may be waived or amended, in whole or in part, by the Supermajority Lenders so long as the application of any such prepayment which is still made is not altered), and (7) no amendment, waiver or consent shall, unless in writing and signed by all Canadian Lenders in addition to the Required Lenders or all Lenders, as the case may be, affect the rights or duties of the Canadian Lenders under this Agreement or any other Loan Document; provided, further, still, however, that no amendment, waiver or consent shall, unless in writing signed by the Supermajority Lenders, amend, waive or consent to the departure from any required prepayment under Section 2.7. In the case of any waiver effected in accordance with this Section 11.1, the Loan Parties, the Lenders and the Agents shall be restored to their former position and rights under each Loan Document, and any Event of Default or Unmatured Event of Default waived shall be deemed to be cured and not continuing; but no such waiver shall extend to any subsequent or other Event of Default or Unmatured Event of Default, or impair any right consequent thereon. Any amendment, waiver or consent effected in accordance with this Section 11.1 shall be binding upon each holder of the Notes at the time outstanding, each future holder of the Notes and, if signed by the Credit Agreement Loan Parties, on the Credit Agreement Loan Parties and the other Loan Parties. (b) If, in connection with any proposed amendment, waiver or consent to any of the provisions of this Agreement as contemplated by clauses (i)-(viii), inclusive, of the first proviso to subsection 11.1(a), the consent of the Required Lenders is obtained but the consent of one or more of such other Lenders whose consent is required is not obtained, then the Credit Agreement Loan Parties shall have the right to replace each such non-consenting Lender or Lenders (so long as all non- consenting Lenders are so replaced) with one or more Replacement Lenders pursuant to Section 4.8 so long as at the time of such replacement each such Replacement Lender consents to the proposed amendment, waiver or consent; provided, however, that the Credit Agreement Loan Parties shall not have the right to replace a Lender solely as a result of the exercise of such Lender's rights (and the withholding of any required consent by such Lender) pursuant to the second or third proviso to subsection 11.1(a). 11.2. Notices. (a) Except as otherwise expressly provided herein, all notices, requests and other communications hereunder and under the Security Documents (including any modifications of, or waivers, requests or consents under, this Agreement) shall be in writing (including, unless the context expressly otherwise provides, by facsimile transmission; provided, however, that any matter transmitted by any Credit Agreement Loan Party (x) to any Agent or any Applicable Swing Line Lender by facsimile shall be immediately confirmed by a telephone call to the recipient at the number specified on Schedule 11.2 and (y) to any Lender by facsimile shall be immediately confirmed by a telephone call to the recipient at the number specified on Schedule 11.2 or by overnight mail to the recipient at the address specified on Schedule 11.2) and mailed, faxed or delivered to the applicable party at the address or facsimile number specified for notices on Schedule 11.2 (which such facsimile notices shall be confirmed by overnight mail); or, as directed to any Credit Agreement Loan Party or any Agent or any Applicable Swing Line Lender, to such other address as shall be designated by such party in a written notice to the other parties, and as directed to any other party, at such other address as shall be designated by such party in a written notice to the Credit Agreement Loan Parties and the Agents and the Applicable Swing Line Lenders (it being understood that these provisions with respect to any Applicable Swing Line Lenders and any Subsidiary Swing Line Borrower to which it has agreed to make Swing Line Loans shall apply only to such parties.) (b) All such notices, requests and communications shall be effective, (i) if transmitted by overnight delivery or faxed, when delivered or transmitted in legible form by facsimile machine, respectively, (ii) if mailed, upon receipt or (iii) if delivered, upon delivery; except that notices pursuant to Article II, III or X to an Agent shall not be effective until actually received by such Agent, and notices pursuant to Article III to the L/C Lender shall not be effective until actually received by the L/C Lender. (c) Any agreement of any Agent and the Lenders herein to receive certain notices by telephone or facsimile is solely for the convenience and at the request of the Credit Agreement Loan Parties. The Agents and the Lenders shall be entitled to rely on the authority of any Person purporting to be a Person authorized by a Credit Agreement Loan Party to give such notice, and neither any Agent nor any Lenders shall have any liability to any Credit Agreement Loan Party or any other Person on account of any action taken or not taken by an Agent or any Lender in reliance upon such telephonic or facsimile notice. The obligation of the Credit Agreement Loan Parties to repay the Loans and L/C Obligations shall not be affected in any way or to any extent by any failure by any Agent or any Lender to receive written confirmation of any telephonic or facsimile notice or the receipt by the Administrative Agent or any Lender of a confirmation which is at variance with the terms understood by such Agent or such Lender to be contained in the telephonic or facsimile notice. (d) All notices to the Canadian Agent shall also be sent simultaneously to the Administrative Agent. 11.3. No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of any Agent or any Lender, any right, remedy, power or privilege hereunder or under any other Loan Document, and no course of dealing between any Loan Party and any Agent or Lenders shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or under any other Loan Document preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege hereunder or under such other Loan Document. The rights and remedies expressly provided herein are cumulative and not exclusive of any rights or remedies provided by law. No notice to or demand upon 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 Agents or the Lenders to any other or further action in any circumstance without notice or demand. 11.4. Expenses, Indemnity, etc. Each Credit Agreement Loan Party agrees: (a) to pay or reimburse the Agents for its proportionate share of all of their reasonable out-of- pocket costs and expenses (including the reasonable fees and expenses of Cahill Gordon & Reindel and of all local and foreign counsel) in connection with (i) the negotiation, preparation, execution and delivery of this Agreement and the other Loan Documents and the extensions of credit hereunder, the administration of the transactions contemplated hereby (including the monitoring of the Collateral) and the Arranger's syndication efforts (including the Agents' due diligence investigation expenses) with respect to this Agreement and (ii) the negotiation or preparation of any modification, supplement or waiver of any of the terms of this Agreement or any of the other Loan Documents (whether or not consummated or effective); (b) to pay or reimburse each of the Lenders and each Agent for its proportionate share of all reasonable out-of-pocket costs and expenses of the Lenders and each Agent (including Attorney Costs of each Agent and the Lenders) in connection with (i) protection of the Lenders' rights following any Event of Default and any enforcement or collection proceedings resulting therefrom, including all manner of participation in or other involvement with (x) bankruptcy, insolvency, receivership, foreclosure, winding up, dissolution or liquidation proceedings, (y) judicial or regulatory proceedings, and (z) workout, restructuring or other negotiations or proceedings (whether or not the workout, restructuring or transaction contemplated thereby is consummated), and (ii) the enforcement of this Section 11.4; and (c) to pay or reimburse each of the Lenders and each Agent for its proportionate share of all transfer, stamp, documentary or other similar taxes, assessments or charges levied by any governmental or revenue authority in respect of this Agreement or any of the other Loan Documents or any other document referred to herein or therein and all costs, expenses, taxes, assessments and other charges (including title insurance and Attorney Costs) incurred in connection with any filing, registration, recording or perfection of any security interest contemplated by any Loan Document or any other document referred to therein. Subject to the limitations under Article IV, each Credit Agreement Loan Party agrees, whether or not the transactions contemplated hereby are consummated, to indemnify each Lender, each Agent, each Co-Agent and each of their respective directors, officers, employees, attorneys, trustees and agents (each, an "Indemnified Person") from, and hold each of them harmless against, its proportionate share of any and all Losses incurred by any of them in connection with any Proceeding (whether or not any Agent, any Co-Agent or any Lender is a party thereto and whether or not brought by or on behalf of any Loan Party or any other Person) arising out of or by reason of relating to any of the Loan Documents, the extensions of credit hereunder or any actual or proposed use by any Credit Agreement Loan Party or any Subsidiary of the proceeds of any of the extensions of credit hereunder or the use of any collateral security for the Loans (including the exercise by any Agent or any Lender of the rights and remedies or any power of attorney with respect thereto and any action or inaction in respect thereof), but excluding any such Losses to the extent resulting from the gross negligence or bad faith of the Indemnified Person. Without limiting the generality of the foregoing, each Credit Agreement Loan Party agrees to (x) indemnify each Agent for any payments that any Agent is required to make under any indemnity issued to any Lender referred to in any Security Document, and (y) indemnify each Lender and each other Indemnified Person from, and hold each Lender and each other Indemnified Person harmless against, any Losses described in the preceding sentence (net of insurance proceeds actually received but excluding, as provided in the preceding sentence, any Loss to the extent resulting from the gross negligence or bad faith of such Indemnified Person) arising under any Environmental Law based on or arising out of (A) the past, present or future operations of either Borrower or any Subsidiary (or any predecessor in interest to either Borrower or any Subsidiary), (B) the past, present or future condition of any facility or property owned, operated or leased at any time by either Borrower or any Subsidiary (or any of their respective predecessors in interest), or (C) any Release or threatened Release of any Hazardous Materials at, under or from any such facility or property, including, without limitation, any such Release or threatened Release that shall occur during any period when any Lender or other Indemnified Person shall be in possession of any such facility or property following the exercise by such Lender or other Indemnified Person of any of its rights and remedies hereunder or under any of the Security Documents, and the alleged disposal or alleged arranging for disposal or treatment of any Hazardous Materials by either Borrower or any Subsidiary (or any of their respective predecessors in interest) at any third-party site. To the extent that the undertaking to indemnify and hold harmless set forth in this Section 11.4 is unenforceable because it is violative of any law or public policy or otherwise, each Credit Agreement Loan Party shall contribute the maximum portion that each of them is permitted to pay and satisfy under applicable law to the payment and satisfaction of all indemnified liabilities incurred by any of the Persons indemnified hereunder. Each Credit Agreement Loan Party also agrees that no Indemnified Person shall have any liability (whether direct or indirect, in contract or tort or otherwise) for any Losses to any Loan Party or any Loan Party's security holders or creditors resulting from, arising out of, in any way related to or by reason of, any matter referred to in the second paragraph of this Section 11.4, except to the extent that any Loss resulted from the gross negligence or bad faith of such Indemnified Person. In the event that any Indemnified Person is requested or required to appear as a witness in any Proceeding brought by or on behalf of or against any Loan Party or any affiliate of any Loan Party in which such Indemnified Person is not named as a defendant, each Credit Agreement Loan Party agrees to reimburse each Indemnified Person for all reasonable out-of-pocket expenses and all reasonable allocable costs of in-house legal counsel incurred by each Indemnified Person in connection with such Indemnified Person's appearing and preparing to appear as such a witness, including the reasonable fees and disbursements of one common counsel for all Indemnified Persons. Each Credit Agreement Loan Party agrees that, without the prior written consent of the Administrative Agent, the Arranger and the Required Lenders, no Loan Party will settle, compromise or consent to the entry of any judgment in any pending or threatened Proceeding in respect of which indemnification could be sought under the indemnification provisions of this Section 11.4 (whether or not any Indemnified Person is an actual or potential party to such Proceeding), unless such settlement, compromise or consent includes an unconditional written release reasonably satisfactory to the Administrative Agent, the Arranger and the Required Lenders of each Indemnified Person from all liability arising out of such Proceeding and does not include any statement as to an admission of fault, culpability or failure to act by or on behalf of any Indemnified Person and does not involve any payment of money or other value by any Indemnified Person or any injunctive relief or factual findings or stipulations binding on any Indemnified Person. No Indemnified Person shall settle, compromise or consent to the entry of any judgment in any pending or threatened Proceeding without the prior written consent of the Borrowers, which consent shall not be unreasonably withheld or delayed. 11.15. Payments Pro Rata. Subject to Section 2.15, each Applicable Agent agrees that promptly after its receipt of each payment from or on behalf of any Loan Party in respect of any Obligations of such Loan Party, it shall distribute such payment to the Lenders based upon their respective Pro Rata Shares, if any, of the Obligations with respect to which such payment was received. 11.16. Payments Set Aside. To the extent that a Credit Agreement Loan Party makes a payment to an Applicable Agent or any Lender, or an Applicable Agent or any Lender exercises its right of set-off, and such payment or the proceeds of such set-off or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by an Applicable Agent or such Lender in its discretion) to be repaid to a trustee, receiver, receiver manager or any other party, in connection with any Insolvency Proceeding or otherwise, then (a) to the extent of such recovery the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such set-off had not occurred and (b) each Lender severally agrees to pay to such Applicable Agent upon demand its pro rata share of any amount so recovered from or repaid by such Applicable Agent. 11.17. Successors and Assigns. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 11.18. Assignments and Participations, etc. (a) No Credit Agreement Loan Party may assign its rights or obligations hereunder or under the Notes without the prior written consent of all of the Lenders and the Agents. (b) Any Lender may, with the written consent of the Borrowers and the Agents (and Scotiabank in its capacity as a Swing Line Lender and Scotiabank in its capacity as an L/C Lender in the case of any assignment of Revolving Facility Commitments) (which consent, in each case, shall not be unreasonably withheld or delayed) , at any time assign and delegate to one or more Eligible Assignees (provided that, except with respect to any assignment of a Tranche A-CHF Note or Revolving Note, each of which shall require the consent of the Borrowers as described above, no written consent of the Borrowers, any Agent, any Swing Line Lender or any L/C Lender shall be required in connection with any assignment and delegation by a Lender to an Eligible Assignee that is an Affiliate of such Lender or to another Lender) (each an "Assignee") (in which case, the Assignee and assignor Lenders shall give notice of the assignment to the Agents) all or any part of the Loans, the Commitments, the L/C Obligations and the other rights and obligations of such Lender hereunder, which assignment, other than to a Lender or an Affiliate of a Lender, shall be in a minimum (unless the Borrowers and the Agents agree to a lesser amount) Dollar Equivalent amount of U.S. $5.0 million (or, in the case of any assignment of a portion of the Canadian Commitment, a minimum amount of Cdn. $5.0 million) or, if less, the entire amount of all Loans, the Commitments, L/C Obligations and other rights and obligations of such Lender hereunder in any Facility; provided, however, that (i) in no event may any such assignment be made to the Credit Agreement Loans Party or any of their Affiliates; (ii) the Credit Agreement Loan Parties and the Agents may continue to deal solely and directly with such Lender in connection with the interest so assigned to an Assignee until (x) written notice of such assignment, together with payment instructions, addresses and related information with respect to the Assignee, shall have been given to any Credit Agreement Loan Party and the Agents by such Lender and the Assignee, (y) such Lender and its Assignee shall have delivered to the Borrowers and the Administrative Agent an Assignment and Acceptance in the form of Exhibit G ("Assignment and Acceptance") together with any Note or Notes subject to such assignment, and (z) the assignor Lender shall have paid to the Administrative Agent a processing fee in the amount of U.S. $3,000 (except that no such fee shall apply to assignments by any Lender to any of its Affiliates); and (iii) no Canadian Lender may assign any of its rights and obligations hereunder unless arrangements satisfactory to Canadian Borrower and the Canadian Agent have been made for one or more Lenders to act (or to cause their respective Affiliates to act) as Canadian Lenders hereunder in the full amount of the Canadian Commitment of such Lender. Notwithstanding any other term of this subsection 11.8(b), the agreement of any Swing Line Lender to provide the Swing Line Commitment shall not impair or otherwise restrict in any manner the ability of such Swing Line Lender to make any assignment of its Loans or Commitments in accordance with the provisions of this Section 11.8, it being understood and agreed that such Swing Line Lender may terminate its Swing Line Commitment, either in whole or in part, in connection with the making of any assignment; provided, however, that the Assignee assumes the Swing Line Commitment of such Swing Line Lender. At the time of each assignment pursuant to this subsection 11.8(b) to a Person which is not already a Lender hereunder within the same Facility, the Assignee shall provide to the Credit Agreement Loan Parties and the Agents the appropriate forms and certificates described in subsection 4.1(f) (except to the extent expressly provided otherwise). To the extent that an assignment of all or any portion of a Lender's Commitments and related outstanding Obligations pursuant to this subsection 11.8(b) would, at the time of such assignment, result in increased costs payable to such assignee Lender under Section 4.1, 4.3 or 4.4 from those being charged by the respective assigning Lender prior to such assignment, then no Credit Agreement Loan Party shall be obligated to pay such increased costs (although the Credit Agreement Loan Parties shall be obligated to pay any other increased costs of the type described above resulting from changes after the date of the respective assignment). In connection with any assignment it is agreed that, among other things, the imposition of any withholding tax applicable at the time of assignment on payments to an Eligible Assignee at the time of assignment or the inability of an Eligible Assignee to provide Loans in any Offshore Currency in which Loans under the Facility being assigned are made at the time of assignment (unless all Lenders are then so unable) shall be reasonable grounds to withhold consent required from the Borrowers; provided, however, that in connection with any assignment by a UK Lender, the parties acknowledge that (i) in the case of an Eligible Assignee that qualifies as a UK Qualifying Lender by reason of being a Treaty Lender, if such Eligible Assignee shall have delivered a UK Certificate in compliance with the provisions of Section 4.1(f)(viii)(C), the potential imposition of UK withholding tax while such UK Certificate is being processed or considered by the appropriate taxing authorities shall not be reasonable grounds for withholding such consent, but (ii) the Borrowers shall have reasonable grounds to withhold consent in the case of an assignment by a Treaty Lender to an Eligible Assignee that is not a UK Qualifying Lender (including certain banks which generally would qualify as UK Qualifying Lenders). (c) From and after the date that the Agents notify the assignor Lender that they have received (and provided their consent and, to the extent required, received the consents of the Credit Agreement Loan Parties and the L/C Lender with respect to) an executed Assignment and Acceptance and payment of the above- referenced processing fee, (i) the Assignee thereunder shall be a party hereto and, to the extent that rights hereunder have been assigned to it and obligations hereunder have been assumed by it pursuant to such Assignment and Acceptance, shall have the rights and obligations of a Lender under the Loan Documents, and (ii) the assignor Lender shall, to the extent that rights and obligations hereunder and under the other Loan Documents have been assigned by it pursuant to such Assignment and Acceptance, relinquish its rights and be released from its obligations under the Loan Documents. (d) Any Lender may at any time sell to one or more commercial banks or other Persons that are not Affiliates of either Borrower (a "Participant") participating interests in any Loan, the Commitment of such Lender and the other interests of such Lender (the "originating Lender") hereunder and under the other Loan Documents; provided, however, that (i) the originating Lender's obligations under this Agreement shall remain unchanged, (ii) the originating Lender shall remain solely responsible for the performance of such obligations, (iii) the Credit Agreement Loan Parties, the Swing Line Lenders, the L/C Lender and the Agents shall continue to deal solely and directly with the originating Lender in connection with the originating Lender's rights and obligations under this Agreement and the other Loan Documents, and (iv) no Lender shall transfer or grant any participating interest under which the Participant has rights to approve any amendment to, or any consent or waiver with respect to, this Agreement or any other Loan Document, except to the extent such amendment, consent or waiver would (1) extend the final scheduled maturity of any Loan, Note or Letter of Credit (unless such Letter of Credit is not extended beyond the Termination Date) in which such Participant is participating, or reduce the rate or extend the time of payment of interest or fees thereon (except in connection with a waiver of applicability of any post-default increase in interest rates) or reduce the principal amount thereof, or increase the amount of the Participant's participation over the amount thereof then in effect (it being understood that a waiver of any condition, covenant, violation, Event of Default or Unmatured Event of Default shall not constitute a change in the terms of such participation, and that an increase in any Revolving Facility Commitment or Revolving Facility Loan shall be permitted without the consent of any Participant if the Participant's participation is not increased as a result thereof), (2) consent to the assignment or transfer by any Credit Agreement Loan Party of any of its rights and obligations under this Agreement or (3) release all or substantially all of the Collateral under all of the Security Documents (except as expressly provided in the Loan Documents) supporting the Loans hereunder in which such Participant is participating. In the case of any such participation, the Participant shall be entitled to the benefit of Sections 2.15, 4.1, 4.3, 4.4, 4.6 and 11.4 as though it were also a Lender hereunder (provided that the originating Lender and not any Credit Agreement Loan Party shall be obligated to pay any amount under Section 4.1, 4.3, 4.4 or 4.6 to any Participant which is greater than a Credit Agreement Loan Party would have been required to pay to the originating Lender if no such participation had been sold), and if amounts outstanding under this Agreement are due and unpaid, or shall have been declared or shall have become due and payable upon the occurrence of an Event of Default, the Participant shall be deemed to have the right of set-off in respect of its participating interest in amounts owing under this Agreement to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement. Each originating Lender shall indemnify and hold harmless each Credit Agreement Loan Party and each Agent from and against any taxes, penalties, interest and other costs and losses (including Attorney Costs) incurred or payable by any Credit Agreement Loan Party or any Agent as a result of the failure of any Credit Agreement Loan Party or any Agent to comply with its obligations to deduct or withhold any Taxes from any payments made pursuant to this Agreement to such Lender or any Agent, as the case may be, which Taxes would not have been incurred or payable if such Participant had been a Lender that had complied with the requirements of subsection 4.1(f) (including subsection 4.1(f)(iii)). (e) Notwithstanding any other provision in this Agreement, any Lender may at any time create a security interest in, or pledge, all or any portion of its rights under and interest in this Agreement and any Note held by it in favor of any U.S. Federal Reserve Bank in accordance with Regulation A and any Operating Circular issued by such U.S. Federal Reserve Bank. No such assignment shall release the assigning Lender from its obligations hereunder. (f) Each Credit Agreement Loan Party shall and shall cause each of its Subsidiaries to assist any Lender in effectuating any assignment or participation pursuant to this subsection 11.8(f) (including during syndication) in whatever manner such Lender reasonably deems necessary, including the participation in meetings with prospective Assignees. 11.9. Confidentiality. (a) Each of the Lenders agrees that it will use its reasonable efforts not to disclose without the prior consent of the Borrowers (other than to its employees, auditors, counsel or other professional advisors, to Affiliates or to another Lender if the Lender or such Lender's holding or parent company in its sole discretion determines that any such party should have access to such information) any information with respect to the Borrowers or any of their Subsidiaries which is furnished pursuant to this Agreement; provided, however, that any Lender may disclose any such information (i) as has become generally available to the public, (ii) as may be required or appropriate in any report, statement or testimony submitted to any municipal, state, provincial or U.S. Federal or foreign regulatory body having or claiming to have jurisdiction over such Lender or to the U.S. Federal Reserve Board or the U.S. Federal Deposit Insurance Corporation or the NAIC or similar organizations (whether in the United States or elsewhere) or their successors, (iii) as may be required or appropriate in response to any summons or subpoena or in connection with any litigation (provided that, where practicable, the Borrowers shall be afforded prior notice thereof and a reasonable opportunity to contest such summons or subpoena; it being understood, however, that the Agents and Lenders shall be permitted in any event to comply with such summons or subpoena), (iv) to comply with any law, order, regulation or ruling applicable to such Lender, (v) to any prospective transferee in connection with any contemplated transfer of any of the Notes or any interest therein by such Lender; provided, however, that the transferring Lender shall use reasonable efforts to procure that such prospective transferee (unless it is a Lender) executes an agreement with such Lender containing provisions substantially identical to those contained in this Section 11.9, and (vi) to any direct or indirect contractual counterparties in swap agreements or such contractual counterparties' professional advisors provided that such contractual counterparty or professional advisor to such contractual counterparty agrees in writing to keep such information confidential to the same extent required of the Lenders hereunder. (b) Each Credit Agreement Loan Party hereby acknowledges and agrees that each Lender may share with any of its Affiliates any information related to any Credit Agreement Loan Party or any of its Subsidiaries (including, without limitation, any nonpublic customer information regarding the creditworthiness of any Credit Agreement Loan Party and its Subsidiaries, provided that such Persons shall be subject to the provisions of this Section 11.9 to the same extent as such Lender). (c) Notwithstanding anything herein to the contrary, each Credit Agreement Loan Party hereby acknowledges and agrees that each Lender may share any information with respect to any Credit Agreement Loan Party or any of its Subsidiaries furnished pursuant to this Agreement to any Person which shares or bears, whether directly or indirectly, such Lender's economic benefits or burdens hereunder; provided, however, that such Person shall be subject to the provisions of this Section 11.9 to the same extent as such Lender. 11.10. Set-off. In addition to any right or remedy of the Lenders now or hereafter provided by law, and not by way of limitation of any such right or remedy, during the continuance of an Event of Default such Lender is authorized at any time and from time to time, without prior notice to any Credit Agreement Loan Party, any such notice being waived by the Credit Agreement Loan Parties to the fullest extent permitted by law, to set off and to appropriate and apply any and all deposits (general or special, time or demand, provisional or final) at any time held by, and other indebtedness at any time owing by, such Lender (including by branches and agencies of such Lender wherever located) to or for the credit or the account of the applicable Credit Agreement Loan Party against such amount, irrespective of whether or not any Agent or such Lender shall have made demand under this Agreement or any Loan Document, including all interests in Obligations of such Loan Party purchased by such Lender pursuant to Section 2.19 and all other claims of any nature or description arising out of or connected with any Loan Document, irrespective of whether or not such Lender shall have made any demand hereunder and although said Obligations, liabilities or claims, or any of them, shall be contingent or unmatured. Each Lender agrees promptly to notify the applicable Credit Agreement Loan Party and the Agents after any such set-off and application made by such Lender; provided, however, that the failure to give such notice shall not affect the validity of such set-off and application. 11.11. Notification of Addresses, Lending Offices, etc. Each Lender shall notify the Agents in writing of any change in the address to which notices to such Lender should be directed, of addresses of any Lending Office, of payment instructions in respect of all payments to be made to it hereunder and of such other administrative information as the Agents shall reasonably request. 11.12. Counterparts. This Agreement may be executed in any number of separate counterparts, each of which, when so executed, shall be deemed an original, and all of which taken together shall be deemed to constitute but one and the same instrument. Any of the parties hereto may execute this Agreement by signing any such counterpart. 11.13. Severability; Modification to Conform to Law. It is the intention of the parties that this Agreement be enforceable to the fullest extent permissible under applicable law, but that the unenforceability (or modification to conform to such law) of any provision or provisions hereof shall not render unenforceable, or impair, the remainder hereof. If any provision of this Agreement shall be held invalid or unenforceable in whole or in part in any jurisdiction, this Agreement shall, as to such jurisdiction, be deemed amended to modify or delete, as necessary, the offending provision or provisions and to alter the bounds thereof in order to render it or them valid and enforceable to the maximum extent permitted by applicable law, without in any manner affecting the validity or enforceability of such provision or provisions in any other jurisdiction or the remaining provisions hereof in any jurisdiction. 11.14. No Third Parties Benefitted. This Agreement is made and entered into for the sole protection and legal benefit of the Credit Agreement Loan Parties, the Lenders, the Agents and the Affiliates of the Agents, and their permitted successors and assigns, and no other Person shall be a direct or indirect legal beneficiary of, or have any direct or indirect cause of action or claim in connection with, this Agreement or any other Loan Document. 11.15. Governing Law; Submission to Jurisdiction; Venue. (a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE SET FORTH THEREIN, BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW THEREOF. Any legal action or proceeding with respect to this Agreement or any other Loan Document may be brought in the courts of the State of New York or of the United States for the Southern District of New York and, by execution and delivery of this Agreement, each Loan Party hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. Each Loan Party hereby further irrevocably waives any claim that any such courts lack jurisdiction over such Loan Party, and agrees not to plead or claim, in any legal action or proceeding with respect to this Agreement or any other Loan Document brought in any of the aforesaid courts, that any such court lacks jurisdiction over such Loan Party. Each Loan Party irrevocably consents to the service of process in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to such Loan Party, at its address for notices pursuant to Section 11.2, such service to become effective 30 days after such mailing. Each Loan Party hereby irrevocably waives any objection to such service of process and further irrevocably agrees not to plead or claim in any action or proceeding commenced hereunder or under any other Loan Document that service of process was in any way invalid or in effective. Nothing herein shall affect the right of any Agent, any Lender or the holder of any Note to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against any Loan Party in any other jurisdiction. (b) Each Credit Agreement Loan Party on its own behalf and each Borrower on behalf of each other Loan Party hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid proceedings arising out of or in connection with this Agreement or any other Loan Document brought in the courts referred to in clause (a) above and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such proceeding brought in any such court has been brought in an inconvenient forum. 11.16. Waiver of Jury Trial. Each of the parties to this Agreement hereby irrevocably waives all right to a trial by jury in any proceeding or counterclaim arising out of or relating to this Agreement, any other Loan Document or any of the transactions contemplated hereby or thereby. In the event of litigation, this Agreement may be filed as a written consent to a trial by the court. 11.17. Judgment. If, for the purpose of obtaining judgment in any court, it is necessary to convert a sum due hereunder or any other Loan Document in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures the Agent could purchase the first currency with such other currency on the Business Day preceding that on which final judgment is given. The obligation of each Credit Agreement Loan Party in respect of any such sum due from it to the Administrative Agent hereunder or under any other Loan Document shall, notwithstanding any judgment in a currency (the "Judgment Currency") other than that in which such sum is denominated in accordance with the applicable provisions of this Agreement (the "Agreement Currency"), be discharged only to the extent that on the Business Day following receipt by the Applicable Agent of any sum adjudged to be so due in the Judgment Currency, such Agent may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency. If the amount of the Agreement Currency so purchased is less than the sum originally due to the Applicable Agent in the Agreement Currency, each Credit Agreement Loan Party agrees, as a separate obligation and notwithstanding any such judgment, to indemnify such Agent or the Person to whom such obligation was owing against such loss. If the amount of the Agreement Currency so purchased is greater than the sum originally due to the Applicable Agent in such currency, such Agent agrees to return the amount of any excess to the applicable Credit Agreement Loan Party (or to any other Person who may be entitled thereto under applicable law). 11.18 Prior Understandings. This Agreement, together with the other Loan Documents, embodies the entire agreement and understanding among the Credit Agreement Loan Parties, the Lenders and the Agents, and supersedes all prior or contemporaneous agreements and understandings of such Persons, verbal or written, relating to the subject matter hereof and thereof, except that as between the Loan Parties and the Arranger and the Agent the following shall continue to remain in effect: (a) the Commitment Letter (other than (A) the Term Sheet (as defined in the Commitment Letter) and (B) the commitments of Merrill Lynch Capital Corporation thereunder), and (b) the Fee Letters. 11.19. Survival. The obligations of the Credit Agreement Loan Parties under Article IV and Sections 11.4, 11.15 and 11.16 shall survive the repayment of the Loans and other Obligations and the termination of the Commitments and, in the case of any Lender that may assign any interest in its Commitments, Loans or Letter of Credit interest hereunder, shall survive the making of such assignment, notwithstanding that such assigning Lender may cease to be a "Lender" hereunder. 11.20. CH Foreign Subsidiary Mortgages. Notwithstanding anything else herein to the contrary, after the Original Closing Date, in order to reduce or eliminate the potential imposition of withholding taxes, at CH Borrower's request, the Agent shall permit Mortgages with respect to Mortgaged Properties securing any Foreign Subsidiary Guarantee to be released and to be replaced by Mortgages in favor of CH Borrower securing intercompany indebtedness owed from the applicable Foreign Subsidiary Guarantor to CH Borrower; provided, however, that (i) such intercompany indebtedness is pledged by CH Borrower to secure its Obligations hereunder pursuant to the Securities Pledge Agreement entered into by CH Borrower and the documents evidencing such intercompany indebtedness and such Mortgages are delivered to the Administrative Agent; (ii) the Administrative Agent receives opinions of counsel satisfactory to the Administrative Agent with respect to the validity, binding effect and enforceability of such mortgages and the perfection of the security interest created by such mortgages, which opinions of counsel shall be substantially equivalent in form and substance to the opinions of counsel delivered with respect to the Mortgages being replaced; and (iii) all other matters relating to such transactions shall be in form and substance reasonably satisfactory to the Administrative Agent and its counsel and the Loan Parties shall take all action and execute all such documents and instruments as are reasonably requested by the Administrative Agent to provide for the security interest therein of the Lenders. The Administrative Agent and the Lenders shall take all actions, at the expense of the Borrowers, reasonably requested by the Borrowers to effect such transactions. [Signature Pages Follow] IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written. METTLER-TOLEDO, INC. (the survivor of the merger of MT Acquisition Corp. and Mettler-Toledo, Inc.), as a Borrower By: /s/ William P. Donnelly -------------------------------- Name: William P. Donnelly Title: METTLER-TOLEDO HOLDING AG, as a Borrower By: /s/ William P. Donnelly -------------------------------- Name: William P. Donnelly Title: METTLER-TOLEDO HOLDING INC., as Guarantor By: /s/ William P. Donnelly -------------------------------- Name: William P. Donnelly Title: SAFELINE HOLDING COMPANY, as UK Borrower and as a Subsidiary Swing Line Borrower By: /s/ William P. Donnelly -------------------------------- Name: William P. Donnelly Title: METTLER-TOLEDO INC., as Canadian Borrower By: /s/ William P. Donnelly -------------------------------- Name: William P. Donnelly Title: METTLER TOLEDO MANAGEMENT HOLDING DEUTSCHLAND GMBH, as a Subsidiary Swing Line Borrower By: /s/ William P. Donnelly -------------------------------- Name: William P. Donnelly Title: METTLER-TOLEDO S.A., VEROFLAY, as a Subsidiary Swing Line Borrower By: /s/ William P. Donnelly -------------------------------- Name: William P. Donnelly Title: METTLER-TOLEDO K.K., TAKARAZUKA, as a Subsidiary Swing Line Borrower By: /s/ William P. Donnelly -------------------------------- Name: William P. Donnelly Title: METTLER-TOLEDO GMBH, GREIFENSEE, as a Subsidiary Swing Line Borrower By: /s/ William P. Donnelly -------------------------------- Name: William P. Donnelly Title: METTLER-TOLEDO LTD., LEICESTER, as a Subsidiary Swing Line Borrower By: /s/ William P. Donnelly -------------------------------- Name: William P. Donnelly Title: SAFELINE LIMITED, as a Subsidiary Swing Line Borrower By: /s/ Lukas Braunschweiler -------------------------------- Name: Lukas Braunschweiler Title: MERRILL LYNCH & CO., MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as Arranger and Documentation Agent By: /s/ Christopher K. Stout -------------------------------- Name: Christopher K. Stout Title: Vice President THE BANK OF NOVA SCOTIA, as Administrative Agent By: /s/ Todd Meller -------------------------------- Name: Todd Meller Title: Senior Relationship Manager THE BANK OF NOVA SCOTIA, as Canadian Agent By: /s/ Stephen P. Heart -------------------------------- Name: Stephen P. Heart Title: Vice President and Unit Head CREDIT SUISSE FIRST BOSTON, as Co-Agent By: /s/ Karl Studer -------------------------------- Name: Karl Studer Title: Director LEHMAN COMMERCIAL PAPER INC., as Co-Agent By: /s/ Michele Swanson -------------------------------- Name: Michele Swanson Title: Authorized Signatory MERRILL LYNCH CAPITAL CORPORATION, as a Lender By: /s/ Christopher K. Stout ---------------------------------- Name: Christopher K. Stout Title: Vice President MERRILL LYNCH, PIERCE, FENNER & SMTIH INCORPORATED, as a Lender By: /s/ Neil Brisson ---------------------------------- Name: Neil Brisson Title: CREDITANSTALT-BANKVEREIN, as a Lender By: /s/ Christina T. Schoen ---------------------------------- Name: Christina T. Schoen Title: Vice President By: /s/ Richard P. Buckanavage ---------------------------------- Name: Richard P. Buckanavage Title: Vice President CRESTAR BANK, as a Lender By: /s/ Linda L. Bergmann ---------------------------------- Name: Linda L. Bergmann Title: Vice President DG BANK, as a Lender By: /s/ Norah McCann ---------------------------------- Name: Norah McCann Title: Senior Vice President By: /s/ Karen A. Brinkman ---------------------------------- Name: Karen A. Brinkman Title: Vice President CREDIT SUISSE FIRST BOSTON, as a Lender By: /s/ Karen Studer ---------------------------------- Name: Karl Studer Title: Director By: /s/ Martin Lasance ---------------------------------- Name: Martin Lasance Title: Associate BANK OF TOKYO-MITSUBISHI TRUST COMPANY, as a Lender By: /s/ Paul P. Malecki ---------------------------------- Name: Paul P. Malecki Title: Vice President CREDIT AGRICOLE, as a Lender By: /s/ David Bouhl ---------------------------------- Name: David Bouhl Title: F.V.P., Head of Corporate Banking, Chicago TCW ASSET MANAGEMENT COMPANY, as Attorney-in-Fact for Integon Life Insurance Corporation, as a Lender By: /s/ Justin Driscoll ---------------------------------- Name: Justin Driscoll Title: Vice President TCW ASSET MANAGEMENT COMPANY, as Attorney-in-Fact for United Companies Life Insurance Corporation, as a Lender By: /s/ Justin Driscoll ---------------------------------- Name: Justin Driscoll Title: Vice President CRESCENT/MACH I PARTNERS, L.P. By: TCW Asset Management Company Its Investment Manager, as a Lender By: /s/ Justin Driscoll ---------------------------------- Name: Justin Driscoll Title: Vice President COMMERZBANK AG, New York and/or Grand Cayman Branches, as a Lender By: /s/ Andreas Schwung ---------------------------------- Name: Andreas Schwung Title: Vice President By: /s/ Andrew R. Campbell ---------------------------------- Name: Andrew R. Campbell Title: Assistant Treasurer THE INDUSTRIAL BANK OF JAPAN TRUST COMPANY, as a Lender By: /s/ Takuya Honjo ---------------------------------- Name: Takuya Honjo Title: Senior Vice President PRIME INCOME TRUST, as a Lender By: /s/ Rafael Scolari ---------------------------------- Name: Rafael Scolari Title: Vice President, Portfolio Manager METROPOLITAN LIFE INSURANCE COMPANY, as a Lender By: /s/ James R. Dingler ---------------------------------- Name: James R. Dingler Title: Assistant Vice President UNITED OF OMAHA LIFE INSURANCE COMPANY, as a Lender By: /s/ Edwin H. Garrison Jr. ---------------------------------- Name: Edwin H. Garrison Jr. Title: First Vice President ABN AMRO BANK N.V., as a Lender By: /s/ J. Gregory Seibly ---------------------------------- Name: J. Gregory Seibly Title: Vice President By: /s/ Kathryn C. Toth ---------------------------------- Name: Kathryn C. Toth Title: Group Vice President and Operating Manager CAMPAGNIE FINANCIERE DE CIC ET DE L'UNION EUROPEENNE, as a Lender By: /s/ Sean Mounier ---------------------------------- Name: Sean Mounier Title: First Vice President By: /s/ Brian O'Leary ---------------------------------- Name: Brian O'Leary Title: Vice President PILGRIM AMERICA PRIME RATE TRUST, as a Lender By: /s/ Michael J. Bacevich ---------------------------------- Name: Michael J. Bacevich Title: Vice President OCTAGON CREDIT INVESTORS LOAN PORTFOLIO (a unit of the Chase Manhattan Bank), as a Lender By: /s/ Joyce C. DeLucca ---------------------------------- Name: Joyce C. DeLucca Title: Managing Director THE BANK OF NOVA SCOTIA, as a Lender By: /s/ Todd Meller ---------------------------------- Name: Todd Meller Title: Senior Relationship Manager BANKBOSTON, N.A., as a Lender By: /s/ Diane J. Exter ---------------------------------- Name: Diane J. Exter Title: Managing Director KEYPORT LIFE INSURANCE COMPANY, as a Lender By: /s/ Daniel T.H. Yin ---------------------------------- Name: Daniel T. H. Yin Title: Assistant Vice President PNC BANK, OHIO, NATIONAL ASSOCIATION, as a Lender By: /s/ Toby B. Rau ---------------------------------- Name: Toby B. Rau Title: Assistant Vice President NATIONAL WESTMINSTER BANK Plc, as a Lender By: /s/ Phillip Krall ---------------------------------- Name: Phillip Krall Title: Vice President MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY, as a Lender By: /s/ Andrew C. Dickey ---------------------------------- Name: Andrew C. Dickey Title: Managing Director BANQUE FRANCAISE du COMMERCE EXTERIEUR, as a Lender By: /s/ Kevin Dorley ---------------------------------- Name: Kevin Dorley Title: Vice President By: /s/ William C. Maier ---------------------------------- Name: William C. Maier Title: Vice President-Group Manager LTCB TRUST COMPANY, as a Lender By: /s/ Shuichi Tajima ---------------------------------- Name: Shuichi Tajima Title: Senior Vice President OAK HILL SECURITIES FUND, L.P. By: Oak Hill Securities GenPar, L.P. its General Partner By: Oak Hill Securities MGP, Inc. its General Partner By: /s/ Scott D. Krase ---------------------------------- Name: Scott D. Krase Title: Vice President THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, as a Lender By: /s/ Richard A. Strait ---------------------------------- Name: Richard A. Strait Title: Vice President THE FUJI BANK AND TRUST COMPANY, as a Lender By: /s/ Toshiaki Yakura ---------------------------------- Name: Toshiaki Yakura Title: Executive Vice President INDOSUEZ CAPITAL FUNDING III, LIMITED, by Indosuez Capital Luxembourg, as Collateral Manager By: /s/ Philipp Debin ---------------------------------- Name: Philipp Debin Title: Authorized Signatory VAN KAMPEN AMERICAN CAPITAL PRIME RATE INCOME TRUST, as a Lender By: /s/ Jeffrey W. Maillet ---------------------------------- Name: Jeffrey W. Maillet Title: Senior Vice President and Director UNION DES BANQUES SUISSES (Luxembourg) S.A., as a Lender By: /s/ Wolfgang Schwartzkopf ---------------------------------- Name: Wolfgang Schwartzkopf Title: KZH HOLDING CORPORATION, as a Lender By: /s/ Andrew Taylor ---------------------------------- Name: Andrew Taylor Title: Authorized Agent ML CBO IV (CAYMAN) LTD., By: Protective Asset Management, L.L.C. as Collateral Manager, as a Lender By: /s/ James Dondero ---------------------------------- Name: James Dondero Title: President, Protective Asset Management, L.L.C. NEW YORK LIFE INSURANCE COMPANY, as a Lender By: /s/ Steven M. Benevento ---------------------------------- Name: Steven M. Benevento Title: Investment Manager MERITA BANK LTD., New York Branch, as a Lender By: /s/ Frank Mapps ---------------------------------- Name: Frank Mapps Title: Vice President By: /s/ Charles Fester ---------------------------------- Name: Charles Fester Title: Vice President THE MITSUBISHI TRUST AND BANKING CORPORATION, as a Lender By: /s/ Patricia Loret de Mola ---------------------------------- Name: Patricia Loret de Mola Title: Senior Vice President BANQUE PARIBAS, as a Lender By: /s/ Mary Finnegan ---------------------------------- Name: Mary Finnegan Title: Group Vice President By: /s/ Robert Carino ---------------------------------- Name: Robert Carino Title: Vice President LEHMAN COMMERCIAL PAPER INC., as a Lender By: /s/ Michele Swanson ---------------------------------- Name: Michele Swanson Title: Authorized Signatory SOCIETE GENERALE, as a Lender By: /s/John J. Wagner ---------------------------------- Name: John J. Wagner Title: Vice President EX-27 3
5 3-MOS YEAR YEAR DEC-31-1997 DEC-31-1996 DEC-31-1995 MAR-31-1997 DEC-31-1996 DEC-31-1995 40,599 60,696 41,402 0 0 0 159,124 159,549 168,510 (6,928) (8,388) (9,292) 104,474 102,526 110,986 323,163 339,216 372,327 255,076 262,429 460,973 (16,857) (7,137) (219,955) 728,891 771,888 724,094 236,584 255,269 281,587 0 0 0 0 0 0 0 0 0 0 25 0 2,982 12,401 193,254 728,891 771,888 724,094 197,402 849,133 850,415 197,402 849,133 850,415 114,120 532,059 508,089 114,120 532,059 508,089 76,659 425,350 304,933 (614) 467 3,287 9,446 22,606 18,219 (2,209) (134,923) 27,804 (1,087) 9,117 8,782 (1,122) (144,585) 18,254 0 0 0 0 0 0 0 0 0 (1,122) (144,585) 18,254 0.00 (59.51) 0.00 0.00 (59.51) 0.00
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