-----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, FEIB1UTMG6eKjiUVnZrB3q3UKN1d5aCgHqbNwZAD/Kk0lPcJNgRS0hRfz6Cv09EG ShBpu2NCLwEYhVaazRHr1g== 0000317093-97-000011.txt : 19971224 0000317093-97-000011.hdr.sgml : 19971224 ACCESSION NUMBER: 0000317093-97-000011 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 10 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971223 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: ANDREW CORP CENTRAL INDEX KEY: 0000317093 STANDARD INDUSTRIAL CLASSIFICATION: DRAWING AND INSULATING NONFERROUS WIRE [3357] IRS NUMBER: 362092797 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 000-09514 FILM NUMBER: 97743391 BUSINESS ADDRESS: STREET 1: 10500 W 153RD ST CITY: ORLAND PARK STATE: IL ZIP: 60462 BUSINESS PHONE: 7083493300 MAIL ADDRESS: STREET 1: 10500 WEST 153RD ST CITY: ORLANDO PARK STATE: IL ZIP: 60462 10-K405 1 FORM-10K405 (09/30/97) SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1997. OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER 0-9514 ANDREW CORPORATION (Exact name of Registrant as specified in its charter) DELAWARE 36-2092797 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) identification No.) 10500 W. 153RD STREET, ORLAND PARK, ILLINOIS 60462 (Address of principal executive offices and zip code) (708) 349-3300 (Registrant's telephone number, including area code) SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: TITLE OF EACH CLASS Common Stock, $.01 par value Common Stock Purchase Rights Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period as the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No__ Indicate by check mark if disclosure of delinquent filers pursuant to item 405 of Regulation S-K is not contained herein and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K, or any amendment of this Form 10-K. (X) The aggregate market value of voting stock held by non-affiliates of the Registrant as of December 15, 1997 was $2,122,964,352. The number of outstanding shares of the Registrant's common stock as of that date was 88,456,848. DOCUMENTS INCORPORATED BY REFERENCE: Portions of the Registrant's Annual Report to Stockholders for the year ended September 30, 1997 are incorporated by reference into Parts I and II. Portions of the Proxy Statement for the annual stockholders' meeting to be held, February 10, 1998 are incorporated by reference into Part III. PART I ITEM 1-BUSINESS GENERAL Andrew Corporation ("Andrew" or the "Company") was reincorporated in Delaware in 1987. The Company previously was incorporated in Illinois in 1947 as the successor to a partnership founded in 1937. Its executive offices are located at 10500 West 153rd Street, Orland Park, Illinois, 60462, which is approximately 25 miles southwest of Chicago's loop. Unless otherwise indicated by the context, all references herein to Andrew include Andrew Corporation and its subsidiaries. Andrew is a multinational supplier of communications products and systems to worldwide commercial, industrial, governmental and military customers. Its principal products include coaxial cables, microwave antennas for point-to-point communication systems, special purpose antennas for commercial, government and military end use, antennas and complete earth stations for satellite communication systems, cellular antenna products, cellular telephone accessories, electronic radar systems, communication reconnaissance systems, and related ancillary items and services. These products are frequently sold as integrated systems rather than as separate components. Andrew conducts manufacturing operations, primarily from eight locations in the United States and from six locations in other countries. Sales by non-U.S. operations and export sales from U.S. operations accounted for approximately 48% of Andrew's net sales in 1997 and 1996 and 45% in 1995. In June 1997, the Company decided to exit certain businesses whose performance had not met growth expectations. The Company discontinued the network products business, significantly restructured its European wireless products business and phased out of the fiber optic sensors and global messaging development activities. These actions resulted in total after-tax charges to net income of $22.8 million or $.25 per share. While these steps negatively impacted 1997 results, they enable the company to focus on the growing wireless markets and to further enhance long-term growth opportunities. During fiscal 1996, Andrew completed three acquisitions that provided new products and improved accessibility to expanding markets. In December 1995, the Company purchased a 51% interest in Mapra Industria e Comerico Ltda. and Gerbo Telecommunicacoes e Servicos Ltda., located in Brazil. Mapra and Gerbo manufacture, distribute, and sell antennas, waveguides and towers and provide installation services. Andrew formed a cable manufacturing company with Mapra and Gerbo in which Andrew holds a 70% interest. In March 1996, the Company completed its acquisition of The Antenna Company, a manufacturer and distributor of wireless telephone antennas and accessories for mobile applications. In June 1996, the Company purchased an 80% interest in Satcom Systems, Pty. Ltd., a distributor of commercial products, located in South Africa. During fiscal 1997 the Company operated in a dominant industry segment. Andrew supplies coaxial cable and antenna system equipment to radio equipment companies, dealers and distributors. Andrew also supplies cellular antenna products and cellular phone accessories through retail distribution channels of cellular service providers.The Company also supplies specialized antenna systems, electronic radar systems,communication reconnaissance systems, standard antennas, and fully integrated systems to various United States government agencies and friendly foreign governments. PRODUCTS AND SERVICES The following table sets forth net sales and percentages of total net sales represented by Andrew's principal products during the last three years:
Year Ended September 30 1997 1996 1995 -------------- -------------- -------------- (Dollars in thousands) Coaxial Cable Systems and Bulk Cables $467,774 54% $415,633 54% $324,790 52% Other Products and Services 183,557 21 133,645 18 129,022 20 Microwave Antenna Systems 153,905 18 153,231 20 122,576 20 Wireless Accessories 64,239 7 63,498 8 48,355 8 -------- ---- -------- ---- -------- ---- $869,475 100% $766,007 100% $624,743 100% ======== ==== ======== ==== ======== ====
PRINCIPAL PRODUCTS Coaxial Cable Systems and Bulk Cables: Coaxial cable is a two-conductor, radio frequency transmission line with the smaller of the two conductors centrally located inside the larger, tubular conductor. It is principally used to carry radio frequency signals at frequencies up to 2 GHz. Waveguides are tubular conductors, the dimensions and manufacturing tolerances of which are related to operating frequency. Waveguides find greatest application at frequencies above 2 GHz, although they are also used in UHF-TV broadcasting at frequencies in hundreds of megahertz. Andrew manufactures waveguides with rectangular, circular and elliptical cross-sections. Most of Andrew's waveguides are sold as part of its antenna systems. In addition to bulk cable, coaxial cable systems include: cable connectors, accessories and assemblies. Coaxial cable connectors attach to cable and facilitate transmission line attachment to the antennas and radio equipment. Accessories protect and facilitate installation of coaxial cable on the tower and into the equipment building. Accessories include lightning surge protectors, hangers, adaptors and grounding kits. Together connectors and assemblies combine to form coaxial cable assemblies. Andrew sells its semi-flexible cables, connectors and accessories and waveguides under the trademark HELIAX(R). Other Products and Services: This group includes special application antennas, support products and various electronics. Andrew manufactures and sells several types and configurations of special application antennas. Applications include cellular systems, navigation, FM and television broadcasting, multipoint distribution services and instructional television. As with microwave antennas, Andrew considers sales of special antennas and other various components used in the cellular market (equipment buildings and towers) and the installation of these components to be part of a "cellular system." Support products include equipment buildings, which provide a controlled environment for radio and other equipment, while towers provide support and elevation for antennas. Earth station antenna systems manufactured by Andrew are used at earth terminals to receive signals from, and transmit signals to, communication satellites in equatorial orbit. System elements include an antenna, from 6 to 40 feet in diameter, and may also include electronic controllers, waveguides, polarizers, combiners, special mounting features, motor drives, position indicators, transmitters and receivers. Andrew earth station antenna systems in all sizes are used in various countries to broadcast and transmit programs, both to CATV operators and to VHF or UHF broadcast stations, as well as for the long distance transmission of conventional telecommunications traffic. The Company also designs and installs its proprietary distributed communication systems. These systems permit in-building and enclosed area access for all types of wireless communications. Andrew manufactures electronic scanning and communication receiver systems, which are designed to search and monitor the electromagnetic spectrum from 20 MHz to 40 GHz. These systems are purchased primarily for intelligence gathering in strategic surveillance operations that emphasize highly sensitive reception of weak signals as well as accuracy of signal analysis data. The Company's highly automated receiver systems are subsystems that are incorporated into fully-integrated systems that, in addition to the Company's receiving and analyzing equipment, include antennas and other equipment necessary to carry out the overall electronic reconnaissance operation. The Company is also engaged in the supply of fully integrated electronic surveillance systems, both for military radar reconnaissance and for non-military communications monitoring. These surveillance systems are custom designed by the Company's engineering staff to meet customer requirements. Microwave Antenna Systems: A "microwave antenna system," as this term is used by Andrew, consists of one or more microwave antennas, waveguides or coaxial cables connecting antennas to transmitters or receivers, a tower to support the antennas, an equipment shelter to house transmitters and receivers, various ancillary items and field installation services. If sold without a supporting tower, equipment shelter or field installation, microwave antennas with their connecting cables or waveguides are still considered by Andrew to be "microwave antenna systems." Land-based microwave radio networks are commonly used by telecommunications companies for intercity telephone, telex, video and data transmission. They are also used for more specialized purposes by pipeline companies, electric utilities and railroads. Wireless Accessories: Andrew manufactures and distributes accessories for personal communication systems, cellular handsets and paging devices. Portable antennas, batteries, battery chargers, paging accessories, hands free kits and various other wireless accessories are included in this group. The acquisition of The Antenna Company increased Andrew's product offering and opened domestic distribution channels. INTERNATIONAL ACTIVITIES Andrew's international operations represent a substantial portion of its overall operating results and asset base. Manufacturing facilities are located in Canada, Australia, Scotland, Brazil, Russia, and China. Andrew's plants in the United States also ship significant amounts of manufactured goods to export markets. In Russia and Ukraine, Andrew participates in joint ventures that operate fiber optic telecommunication networks. During fiscal 1997 sales of products exported from the United States or manufactured abroad were $414,749,000 or 48% of total sales compared with $366,324,000, or 48% of total sales in fiscal 1996 and $282,621,000, or 45% of total sales in fiscal 1995. Exports from the United States amounted to $105,147,000 in fiscal 1997, $108,675,000 in fiscal 1996, and $101,305,000 in fiscal 1995. Sales and net income from continuing operations on a country-by-country basis can vary considerably year to year. Further information on Andrew's international operations is contained in the note "Geographic Area Information" to Consolidated Financial Statements included on page 30 of the 1997 Annual Report to Stockholders, incorporated herein by reference. Andrew's international operations are subject to a number of risks including currency fluctuations, changes in foreign governments and their policies, and expropriation or requirements of local or shared ownership. Andrew believes that the geographic dispersion of its sales and assets tends to mitigate these risks. MARKETING AND DISTRIBUTION Sales engineering functions, including product application assistance, are performed by a staff of highly trained applications engineers located at each manufacturing facility. In addition, field sales engineers are located at or near Atlanta, Dallas, Los Angeles, Miami, New York, San Francisco, Washington, D.C., Essen and Munich (Germany), Hong Kong, Johannesburg (South Africa), London (England), Madrid (Spain), Mexico City (Mexico), Milan (Italy), Moscow (Russia), Paris (France), Sorocaba (Brazil), Suzhou (China), Tokyo (Japan) and Zurich (Switzerland). Unlike most of its competitors, Andrew uses its own sales and sales engineering staffs to service its principal markets, but follows the traditional practice of using commissioned sales agents in countries with modest sales potential. Approximately one-half of Andrew's products are sold directly to end users. Most of the remainder is sold to radio equipment companies which install Andrew's products as part of a total system, with the balance being sold through dealers and distributors. Small or medium-size orders are normally shipped from inventory. Delivery schedules on larger orders are negotiated, but seldom exceed five months. Andrew's sales are principally standard, proprietary items although unique specifications or features are incorporated for special order situations. Because most of Andrew's business is derived from large telecommunications system operators and the radio equipment manufacturers who supply this industry, Andrew has tailored its business strategy to serve the needs of technically sophisticated buyers. In particular, Andrew has emphasized the compatibility of antennas, transmission lines and related components in order to optimize their performance as an integrated subsystem. The Company also sells mobile cellular products such as antennas and cellular telephone accessories. These products are sold primarily through the retail distribution channels of cellular service providers ("Carriers"). Mobile cellular products are also sold to distributors who then resell these products to dealers and cellular carriers. MAJOR CUSTOMERS Andrew serves more than 6,000 customers in more than 170 countries. In fiscal 1997, aggregate sales to the ten largest customers accounted for 31% of total consolidated sales compared to 27% in 1996 and 28% in 1995. No single customer has accounted for over 10% of consolidated annual sales in any of the last three years. MANUFACTURING AND RAW MATERIALS Andrew generally develops, designs, fabricates, manufactures and assembles the products it sells. Cable and waveguide products are produced at plants in Illinois, Brazil, Scotland and China. Microwave and earth station antennas are manufactured in Canada, Texas and Australia. Self-supporting and guyed towers are also manufactured in Texas. Equipment shelters are manufactured in Georgia and California. Wireless antennas and accessories for mobile applications are manufactured in Illinois. Andrew's defense electronic products are manufactured in plants located in Texas. The Company's products are manufactured from both standard components and parts that are built to the Company's specifications by other manufacturers. A large number of the Company's products contain multiple microprocessors for which proprietary machine readable software is designed by the Company's engineers and technicians. Andrew considers its sources of supply for all raw materials to be adequate and is not dependent upon any single supplier for a significant portion of materials used in its products. RESEARCH AND DEVELOPMENT Andrew believes that the successful marketing of its products depends upon its research, engineering and production skills. Research and development activities are undertaken for new product development and for product and manufacturing process improvement. In fiscal 1997, 1996 and 1995, Andrew spent $41,076,000, $29,624,000, and $21,041,000, respectively on research and development activities. Andrew holds approximately 320 active patents expiring at various times between 1998 and 2015, relating to its products and attempts to obtain patent protection for significant developments whenever possible. The Company believes that, while patents in the aggregate are important to its business, the loss of any individual patent would not have a material adverse effect on its operations. COMPETITION Many large manufacturers of electrical or radio equipment, some of which have substantially greater financial resources than Andrew, compete with a portion of Andrew's antenna systems equipment, wireless products and coaxial cable product lines. In addition, there are a number of small independent companies that compete with portions of these product lines. Andrew has traditionally focused on specific specialized fields within the marketplace that require sophisticated technology and support services. Andrew competes principally on the basis of product quality, service and continual technological enhancement of its products. There are numerous manufacturers of electronic radar systems, communication reconnaissance systems and specialized antenna systems that supply their equipment to United States government agencies and friendly foreign governments. There is substantial competition within the market and the Company is not a major competitor. Due to fixed-price contracts and pre-defined contract specifications prevalent within this market, the Company competes primarily on the basis of its ability to provide state-of-the-art solutions in this technologically demanding marketplace while maintaining its competitive pricing. BACKLOG AND SEASONALITY The following table sets forth the Company's backlog of orders believed to be firm and due to ship both within the next year and beyond (government orders included herein are funded orders):
Orders to be Shipped as of September 30 ---------------------------------------- (Dollars in thousands) 1997 1996 -------- -------- Within 12 months $132,610 $152,205 After 12 months 5,950 14,756 -------- -------- $138,560 $166,961 ======== ========
Due to variability of shipments under large contracts, customers' seasonal installation considerations, variations in product mix and in profitability of individual orders, the Company can experience wide quarterly fluctuations in net sales and income. These variations can be expected to continue in the future. Consequently, it is more meaningful to focus on annual rather than interim results. ENVIRONMENT The Company engages in a variety of activities to comply with various federal, state and local laws and regulations involving the protection of the environment. Compliance with such laws and regulations does not currently have a significant effect on the Company's capital expenditures, earnings, or competitive position. In addition, the Company has no knowledge of any environmental condition that might individually or in the aggregate have a material adverse effect on the Company's financial condition. EMPLOYEES At September 30, l997, Andrew had 4,227 employees, 3,042 of whom were located in the United States. None of Andrew's employees are subject to collective bargaining agreements. As a matter of policy, Andrew seeks to maintain good relations with employees at all locations and believes that such relations are good. REGULATION Andrew is not directly regulated by any governmental agency in the United States. Most of its customers and the telecommunications industry generally, are subject to regulation by the Federal Communications Commission (the "FCC"). The FCC controls the allocation of transmission frequencies and the performance characteristics of earth station antennas. As a result of these controls, Andrew's antenna design specifications must be conformed on an ongoing basis to meet FCC requirements. This regulation has not adversely affected Andrew's operations. Outside of the United States, where many of Andrew's customers are government owned and operated entities, changes in government economic policy and communications regulation have affected in the past, and may be expected to affect in the future, the volume of Andrew's non-U.S. business. However, the effect of regulation in countries other than the U.S. in which Andrew does business has generally not been detrimental to Andrew's non-U.S. operations taken as a whole. GOVERNMENT CONTRACTS Andrew performs work for the United States Government primarily under fixed-price prime contracts and subcontracts. Under fixed-price contracts, Andrew realizes any benefit or detriment occasioned by lower or higher costs of performance. Total direct and indirect sales to agencies of the United States Government, which are generally fixed-price contracts, were $17,254,000 in 1997, $18,250,000 in 1996, and $22,337,000 in 1995. These contracts are typically less than 12 months in duration. Andrew, in common with other companies that derive a portion of their revenues from the United States Government, is subject to certain basic risks, including rapidly changing technologies, changes in levels of defense spending, and possible cost overruns. Recognition of profits is based upon estimates of final performance that may change as contracts progress. Contract prices and costs incurred are subject to Government Procurement Regulations. Costs may be questioned by the Government and are subject to disallowance. All United States Government contracts contain a provision that they may be terminated at any time for the convenience of the Government. In such event, the contractor is entitled to recover allowable costs plus any profits earned to the date of termination. ITEM 2-PROPERTIES Andrew has fourteen manufacturing facilities, forty engineering and sales administration locations and sixteen distribution facilities. All are equipped with appropriate office space. Andrew's executive offices are located at the facility in Orland Park, Illinois. The following table sets forth certain information regarding significant facilities:
Approximate floor area in Location square feet Owned/Leased - ---------- ------------- ------------ Orland Park, Illinois 571,000 Owned Addison, Illinois 201,000 Leased Denton, Texas 173,000 Owned Newnan, Georgia 110,000 Owned Garland, Texas 88,000 Owned Richardson, Texas 56,000 Leased Tinley Park, Illinois 55,000 Leased Sacramento, California 54,000 Leased --------- U.S. sub-total 1,308,000 Sorocaba, Sao Paulo, Brazil 167,000 Owned Lochgelly, Fife, United Kingdom 167,000 Owned/Leased Campbellfield, Victoria, Australia 110,000 Owned Whitby, Ontario, Canada 92,000 Owned --------- Non-U.S. sub-total 536,000 --------- TOTAL 1,844,000 ========= The Company's properties are in good condition and are suitable for the purposes for which they are used.
Andrew owns a total of 664 acres of land. Of this total, 565 acres are unimproved, including 181 acres in Orland Park, Illinois, 137 acres in Floyd, Texas, l43 acres in Denton, Texas, and 98 acres in Ashburn, Ontario, Canada. Andrew also leases sales offices and facilities in the United States and in thirteen countries outside the United States. ITEM 3-LEGAL PROCEEDINGS Andrew is not involved in any pending legal proceedings that are expected to have a materially adverse effect on its financial position, nor is it aware of any proceedings of this nature or relating to the protection of the environment contemplated by governmental authorities. ITEM 4-SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no matters that required a vote of security holders during the three months ended September 30, l997. PART II ITEM 5- MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS The Company's common stock is traded over-the-counter on the "Nasdaq" Stock Market. The Company had 5,480 holders of common stock of record at December 15, 1997. Information concerning the Company's stock price during the years ended September 30, l997 and 1996 is incorporated herein by reference from Andrew's l997 Annual Report to Stockholders, page 31. All prices represent high and low closing prices as reported by Nasdaq. It is the present practice of Andrew's Board of Directors to retain earnings in the business to finance the Company's operations and investments and the Company does not anticipate payment of cash dividends in the foreseeable future. Long-term debt agreements include restrictive covenants that, among other things, restrict dividend payments. At September 30, l997, $356,707,000 was not restricted for purposes of such payments. ITEM 6-SELECTED FINANCIAL DATA Selected financial data for the last five fiscal years is incorporated herein by reference to the l997 Annual Report to Stockholders, pages 34 and 35. ITEM 7- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Information concerning this item is incorporated herein by reference from the l997 Annual Report to Stockholders, pages 13 through 16. ITEM 8-FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Consolidated Financial Statements of the Company, Notes to Consolidated Financial Statements, Selected Quarterly Financial Information, and the report thereon of the independent auditors are incorporated herein by reference to the 1997 Annual Report to Stockholders, pages 17 through 32. ITEM 9-CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES None PART III ITEM 10-DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Information concerning directors and executive officers of the Registrant is incorporated herein by reference from the Company's l997 Proxy Statement under the captions "Election of Directors" and "Executive Officers." ITEM 11-EXECUTIVE COMPENSATION Information concerning management compensation is incorporated herein by reference from the Company's l997 Proxy Statement under the caption "Executive Compensation." ITEM 12-SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Information concerning security ownership of certain beneficial owners and management is incorporated herein by reference from the Company's l997 Proxy Statement under the caption "Security Ownership." ITEM 13-CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Information concerning certain relationships and related transactions is incorporated herein by reference from the Company's 1997 Proxy Statement under the caption "Security Ownership." PART IV ITEM 14-EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) The following consolidated financial statements of Andrew Corporation and subsidiaries, included in the l997 Annual Report to Stockholders, are incorporated by reference in Item 8 above: Consolidated Statements of Income years ended September 30, l997, 1996 and l995............page 17 Consolidated Balance Sheets September 30, l997 and 1996......................pages 18 and 19 Consolidated Statements of Cash Flows years ended September 30, l997, l996 and l995............page 20 Consolidated Statements of Stockholders' Equity years ended September 30, l997, 1996 and l995............page 21 Notes to Consolidated Financial Statements......pages 22 through 31 Selected Quarterly Financial Information......................page 31 Report of Independent Auditors................................page 32 ITEM 14 CONT. (3) EXHIBIT INDEX:
Exhibit No. Description Reference ---------- ----------- --------- 3.1(i) Certificate of Incorporation Filed as Exhibit 3.1(i) to Form 10-K for fiscal year ended September 30, 1994 and incorporated herein by reference. 3.1(ii) By-Laws of Registrant Filed as Exhibit 3.1(ii) to Form 10-K for fiscal year ended September 30, 1994 and incorporated herein by reference. 4.(a) Note Agreement dated Filed as Exhibit 4(a) to Form 10-K for fiscal year ended September 1, 1990 September 30, 1990 and incorporated herein by reference. 4.(a)a First Amendment to Note Filed as Exhibit 4(a)a to Form 10-K for fiscal year ended Agreement dated September 30, 1992 and incorporated herein by reference. September 1, 1990 4.(b) Stockholder Rights Agreement Filed under Item 5 of Form 8-K dated November 14, 1996 dated November 14, 1996 and incorporated herein by reference. 10.(a) Executive Severance Benefit Plan Filed as Exhibit 10(a) to Form 10-Q for fiscal quarter ended (i) Agreement with Floyd L. English June 30, 1996 and incorporated herein by reference. (ii) Agreement with Charles R. Nicholas 10.(a)a Executive Severance Benefit Plan Filed as Exhibit 10(a)a to Form 10-K for fiscal year ended (i) Agreement with Thomas E. Charlton September 30, 1993 and incorporated herein by reference. (ii) Agreement with John B. Scott 10.(a)b Executive Severance Benefit Plan Filed as Exhibit 10(a)b to Form 10-Q for fiscal quarter ended (i) Agreement with William B. Currer June 30, 1996 and incorporated herein by reference. 10.(b) Management Incentive Plan Filed as Exhibit 10(c) to Form 10-K for fiscal year ended dated February 4, 1988. September 30, 1993 and incorporated herein by reference. 10.(c) Non-employee Directors' Filed as Exhibit 10(d) to Form 10-K for fiscal year ended Stock Option Plan dated September 30, 1993 and incorporated herein by reference. February 4, 1988. 10.(d) Credit Agreement dated as of Filed as Exhibit 10(e) to Form 10-K for fiscal year ended June 16, 1993. September 30, 1993 and incorporated herein by reference. 10.(d)a First Amendment to Credit Filed as Exhibit 10(d)a to Form 10-K for fiscal year ended Agreement dated June 16, 1993. September 30, 1995 and incorporated herein by reference. 10.(d)b Second Amendment to Credit Filed as Exhibit 10(d)b to Form 10-K for fiscal year ended Agreement dated June 16, 1993. September 30, 1995 and incorporated herein by reference. 10.(d)c Third Amendment to Credit Filed as Exhibit 10(d)c to Form 10-Q for fiscal quarter ended Agreement dated June 16, 1993. June 30, 1996 and incorporated herein by reference. 10.(d)d Guaranty dated as of Filed as Exhibit 10(d)d to Form 10-Q for fiscal quarter ended April 11, 1996. June 30, 1996 and incorporated herein by reference. 10.(d)e Replacement Note dated as of Filed as Exhibit 10(d)e to Form 10-Q for fiscal quarter ended April 8, 1996. June 30, 1996 and incorporated herein by reference. 10.(e) 1994 Employee Stock Purchase Filed with Proxy statement in connection with Plan Annual Meeting held February 2, 1994. 10.(f) Credit Agreement dated as of November 1, 1997 11 Computation of Earnings per Share l3 l997 Annual Report to Those portions of the 1997 Annual Report to Shareholders Stockholders expressly incorporated herein by reference. 21 List of Significant Subsidiaries 22 Proxy Statement in connection with Annual Meeting to be held Filed December 19, 1997 and incorporated herein by on February 10, 1998 reference. 23 Consent of Independent Auditors 27 Financial Data Schedules 99.(a) Description of Common stock
(b) Reports on Form 8-K No reports on Form 8-K were filed during the quarter ended September 30, 1997. REPORT OF INDEPENDENT AUDITORS To the Stockholders and Board of Directors Andrew Corporation We have audited the consolidated financial statements of Andrew Corporation and subsidiaries listed in Item 14 (a) of the annual report on Form 10-K of Andrew Corporation for the year ended September 30, 1997. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. 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 consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Andrew Corporation and subsidiaries at September 30, 1997 and 1996, and the consolidated results of their operations and their cash flows for each of the three years in the period ended September 30, 1997 in conformity with generally accepted accounting principles. /s/ Ernst & Young LLP Chicago, Illinois October 24, 1997 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on December 23, 1997. Andrew Corporation By \s\ Floyd L. English ---------------------------------------- Floyd L. English Chairman, President, and Chief Executive Officer By \s\ Charles R. Nicholas ---------------------------------------- Charles R. Nicholas Executive Vice President and Chief Financial Officer By \s\ Gregory F. Maruszak ---------------------------------------- Gregory F. Maruszak Vice President and Controller Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on December 23, 1997, by the following persons on behalf of the Registrant in the capacities indicated. \s\ John G. Bollinger \s\ Jere D. Fluno --------------------- --------------------- John G. Bollinger Jere D. Fluno Director Director \s\ Jon L. Boyes \s\ Ormand J. Wade --------------------- --------------------- Jon L. Boyes Ormand J. Wade Director Director \s\ Kenneth J. Douglas --------------------- Kenneth J. Douglas Director EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION - -------------- --------------- 10.(f) Credit Agreement dated as of November 1, 1997 11 Computation of Earnings per Share 13 Portions of 1997 Annual Report to Shareholders Incorporated by Reference 21 List of Significant Subsidiaries 23 Consent of Independent Auditors 27.1 Article 5 FDS for 09-30-97 27.2 Restated Article 5 FDS for 09-30-96 27.3 Restated Article 5 FDS for 09-30-95 99.(a) Description of Common Stock
EX-10.(F) 2 EXHIBIT-10.(F) CREDIT AGREEMENT AMENDED AND RESTATED CREDIT AGREEMENT, dated as of November 1, 1997 among ANDREW CORPORATION and DESIGNATED SUBSIDIARIES OF ANDREW CORPORATION, as Borrowers, and CERTAIN COMMERCIAL LENDING INSTITUTIONS, as the Lenders, and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION as the Agent for the Lenders. AMENDED AND RESTATED CREDIT AGREEMENT THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of November 1, 1997 among (i) ANDREW CORPORATION, a Delaware corporation (the "COMPANY") and Designated Subsidiaries (hereafter defined) of the Company as are now or may hereafter become parties hereto (collectively, together with the Company, the "BORROWERS"), (ii) the various financial institutions as are now or may become parties hereto (collectively, the "LENDERS"), and (iii) BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("B OF A"), as agent (the "AGENT") for the Lenders. W I T N E S S E T H: WHEREAS, pursuant to the Credit Agreement dated as of June 16, 1993, as amended (as so amended the "EXISTING Agreement"), the Company has obtained Commitments from the Lenders to make Loans; and WHEREAS, the parties hereto have agreed to amend and restate the Existing Agreement so as to, among other things, (a) reduce the maximum aggregate "Commitment Amount" (hereafter defined) at any one time outstanding from $75,000,000 to $50,000,000, and (b) remove from the Existing Agreement the provisions for Loans by B of A to the Designed Joint Ventures. NOW, THEREFORE, in consideration of the mutual agreements contained herein, and subject to the terms and conditions hereof, the Existing Agreement is hereby restated in its entirety, and the parties hereto, intending to be legally bound hereby, further agree as follows: ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS SECTION 1.1. DEFINED TERMS. The following terms (whether or not underscored) when used in this Agreement, including its preamble and recitals, shall, except where the context otherwise requires, have the following meanings (such meanings to be equally applicable to the singular and plural forms thereof): "AGENT" is defined in the PREAMBLE and includes each other Person as shall have subsequently been appointed as the successor Agent pursuant to SECTION 9.4. "AGREEMENT" means, on any date, this Amended and Restated Credit Agreement as originally in effect on the Amendment Effective Time and as thereafter from time to time amended, supplemented, amended and restated, or otherwise modified and in effect on such date. "ALTERNATE REFERENCE RATE" means, on any date and with respect to all Reference Rate Loans, a fluctuating rate of interest per annum (rounded upward to the next highest 1/8 of 1% if not already an integral multiple of 1/8 of 1%) equal to the higher of (a) the rate of interest most recently announced by the Agent at its Domestic Office as its Reference Rate; or (b) the Market Federal Funds Rate most recently determined by the Agent plus one-half percent (.50)%. The Alternate Reference Rate is not necessarily intended to be the lowest rate of interest determined by the Agent in connection with extensions of credit. For purposes of this Agreement (i) any change in the Alternate Reference Rate due to a change in the Reference Rate shall be effective on the date such change in the Reference Rate is announced and (ii) any change in the Alternate Reference Rate due to a change in the Market Federal Funds Rate shall be effective on the effective date of such change in the Market Federal Funds Rate. If for any reason the Agent shall have determined (which determination shall be conclusive in the absence of manifest error) that it is unable to ascertain the Market Federal Funds Rate for any reason, including, without limitation, the inability or failure of the Agent to obtain sufficient bids or publications in accordance with the terms hereof, the Alternate Reference Rate shall be the Reference Rate until the circumstances giving rise to such inability no longer exist. The Agent will give notice promptly to the Company and the Lenders of changes in the Alternate Reference Rate. "AMENDMENT EFFECTIVE TIME" means, the time when the conditions for the effectiveness of this amendment and restatement are met. "ASSIGNEE LENDER" is defined in SECTION 10.11.1. "AUTHORIZED CORPORATE OFFICER" means, relative to any Obligor, those of its officers whose signatures and incumbency shall have been certified to the Agent and the Lenders pursuant to SECTION 5.1.1. "AUTHORIZED CORPORATE OFFICIAL" means, relative to any Obligor and any action to be taken on behalf of any Obligor, any Authorized Corporate Officer of such Obligor and any other employee of such Obligor duly designated and authorized by an Authorized Corporate Officer to take such action. "B OF A" means Bank of America National Trust and Savings Association. "BANKING DAY" means (a) any day which is neither a Saturday or Sunday nor a legal holiday on which banks are authorized or required to be closed in Chicago, Illinois, (b) relative to the making, continuing, prepaying or repaying of (i) any Eurodollar Rate Loans, any day on which dealings in Eurodollars are carried on in the interbank eurodollar market and (ii) any Eurocurrency Loans, any day on which dealings in the applicable currency are carried on in both the country of issue of such currency and in the country where payment or disbursement thereof is to be made. "BORROWER" is defined in the PREAMBLE. "BORROWING" means Loans of the same Type and, in the case of Fixed Rate Loans, having the same Interest Period, made by all Lenders on the same Banking Day and pursuant to the same Borrowing Request in accordance with SECTION 2.1 and 2.3. "BORROWING REQUEST" means a loan request and certificate duly executed by an Authorized Officer of the Company substantially in the form of EXHIBIT B hereto. "CAPITALIZED LEASE LIABILITIES" of any Person means the amount of all capitalized monetary obligations of such Person under any Capitalized Lease, determined in accordance with GAAP, and the stated maturity thereof shall be the date of the last payment of rent or any other amount due under such lease prior to the first date upon which such lease may be terminated by the lessee without payment of a penalty. "CASH EQUIVALENT INVESTMENT" means, at any time as to any Person, any investment that is classified under GAAP as a short term investment and is consistent with such Person's internal guidelines regarding liquidity and short term investments. "CASH FLOW TO CONSOLIDATED FUNDED DEBT RATIO" means, with respect to the Company and its Subsidiaries at any date of determination thereof for any period, the ratio of (a) "cash flow from operations" of the Company and its consolidated Subsidiaries for such period (as indicated in the consolidated financial statements of the Company and its Subsidiaries delivered pursuant to SECTION 7.1.1) TO (b) the sum as of the last day of such period of (i) the Company's Consolidated Funded Debt plus (ii) the Contingent Liabilities of the Company and its consolidated Subsidiaries determined on a consolidated basis. "CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980 as amended by the Superfund Amendments and Reauthorization Action of 1986, as thereafter amended. "CERCLIS" means the Comprehensive Environmental Response Compensation Liability Information System List. "CHANGE IN CONTROL" means the acquisition by any Person, or two or more Persons acting in concert (other than any Person or Persons included in a majority of the Persons named as "Executive Officers" of the Company in the most recent proxy statement or annual report or Form 10-K filed by the Company with the Securities and Exchange Commission, or any successors to such person who were duly elected by the Company's Board of Directors (at least a majority of the members of which shall be the same persons who constituted a majority of the directors during the 12 months preceding such election)) of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of more than fifty percent (50%) of the outstanding shares of voting stock of the Company. "CODE" means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time. "COMMITMENT" means, relative to any Lender, such Lender's obligation to make Loans pursuant to SECTION 2.1.1. "COMMITMENT AMOUNT" means, on any date, $50,000,000 (in Dollars and/or Dollar Equivalent), as such amount may be reduced from time to time pursuant to SECTION 2.2.1. "COMMITMENT TERMINATION DATE" means: (a) the Stated Maturity Date; (b) the date on which the Commitment Amount is terminated in full or reduced to zero pursuant to SECTION 2.2.1; and (c) the date on which any Commitment Termination Event occurs. Upon the occurrence of any event described in CLAUSE (B) or (C), the Commitments shall terminate automatically and without further action. "COMMITMENT TERMINATION EVENT" means (a) the occurrence of any Default described in CLAUSES (A) through (E) of SECTION 8.1.9 with respect to the Company or any Subsidiary; or (b) the occurrence and continuance of any other Event of Default and either (i) the declaration of the Loans to be due and payable pursuant to SECTION 8.3, or (ii) in the absence of such declaration, the giving of notice by the Agent, acting at the direction of the Required Lenders, to the Company, that the Commitments have been terminated. "COMPANY" is defined in the PREAMBLE. "COMPANY GUARANTY" means a Guaranty executed and delivered by the Company pursuant to SECTION 5.2.4. substantially in the form of EXHIBIT C hereto, as amended, supplemented restated or otherwise modified from time to time. "CONSOLIDATED CURRENT LIABILITIES" means, with respect to any Person at any date of determination thereof, the consolidated current liabilities of such Person and its consolidated Subsidiaries as determined in accordance with GAAP. "CONSOLIDATED FUNDED DEBT" means, with respect to any Person at any date of determination thereof, the sum on such date of (a) such Person's Consolidated Long-Term Debt and (b) the aggregate present values of the principal portion of all Capitalized Lease Liabilities of such Person and its consolidated Subsidiaries on a consolidated basis. "CONSOLIDATED LONG-TERM DEBT" means, with respect to any Person at any date of determination thereof, Indebtedness of such Person and its consolidated Subsidiaries which is included in CLAUSES (A), (C) and (F) of the definition of Indebtedness, the final maturity of which is more than twelve (12) months after such date of determination. "CONSOLIDATED NET ASSETS" means, with respect to any Person at any date of determination thereof, such Person's Consolidated Total Assets MINUS such Person's Consolidated Current Liabilities. "CONSOLIDATED NET INCOME" means, with respect to any Person for any period, the net income of such Person and its consolidated Subsidiaries for such period determined on a consolidated basis in accordance with GAAP. "CONSOLIDATED NET WORTH" means, with respect to any Person at any date of determination thereof, the total of shareholders' equity (including capital stock, additional paid-in capital and retained earnings after deducting treasury stock) of such Person and its consolidated Subsidiaries at such date determined on a consolidated basis in accordance with GAAP. "CONSOLIDATED TANGIBLE NET WORTH" means, with respect to any Person at any date of determination thereof, (a) Consolidated Total Assets of such Person at such date minus (b) the sum at such date of (i) Consolidated Total Liabilities of such Person plus (ii) the aggregate Intangibles of such Person and its consolidated Subsidiaries determined on a consolidated basis. "CONSOLIDATED TOTAL ASSETS" means, with respect to any Person at any date of determination thereof, the total amount of all assets of such Person and its consolidated Subsidiaries determined on a consolidated basis in accordance with GAAP. "CONSOLIDATED TOTAL CAPITALIZATION" means, with respect to any Person at any date of determination thereof, the sum on such date of (a) Consolidated Funded Debt of such Person plus (b) Consolidated Tangible Net Worth of such Person. "CONSOLIDATED TOTAL LIABILITIES" means, with respect to any Person at any date of determination thereof, the total of all items which, in accordance with GAAP, would be included as liabilities on the liability side of the consolidated balance sheet of such Person and its consolidated Subsidiaries. "CONTINGENT LIABILITY" means, with respect to any Person, any agreement, undertaking or arrangement by which such Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to, or otherwise to invest in, a debtor, or otherwise to assure a creditor against loss) the indebtedness, obligation or any other liability of any other Person (other than by endorsements of instruments in the course of collection), or guarantees the payment of dividends or other distributions upon the shares of any other Person. The amount of any Person's obligation under any Contingent Liability shall (subject to any limitation set forth therein) be deemed to be the outstanding principal amount (or maximum principal amount, if larger) of the debt, obligation or other liability guaranteed thereby. "CONTINUATION/CONVERSION NOTICE" means a notice of continuation or conversion and certificate duly executed by an Authorized Officer of the Company substantially in the form of EXHIBIT D hereto. "DEFAULT" means any Event of Default or any condition, occurrence or event which, after notice or lapse of time or both, would constitute an Event of Default. "DEMAND DEPOSIT ACCOUNT" means account No. 71-15946 maintained by the Company at B of A's 231 South LaSalle Street, Chicago, Illinois location, and any replacements or substitutions therefor. "DESIGNATED CURRENCY" is defined in the definition of "Eurocurrency". "DESIGNATED SUBSIDIARY" means any Subsidiary identified as such in a Designation Letter. "DESIGNATION LETTER" means a letter in the form of EXHIBIT E signed by an Authorized Officer of the Company and each Designated Subsidiary identified therein. "DETERMINATION DATE" means each of those dates determined in accordance with SECTION 2.5(B). "DOLLAR EQUIVALENT" means, (i) in the case of an amount denominated in Dollars, such amount, and (ii) in any currency other than Dollars, the Dollar equivalent of such amount as determined in accordance with SECTION 2.5. "DOLLARS" and the sign "$" mean lawful money of the United States. "DOMESTIC DOLLARS" means Dollars on deposit in the United States of America. "DOMESTIC OFFICE" means, relative to any Lender, the office of such Lender designated as such below its signature hereto or designated in a Lender Assignment Agreement, or such other office of a Lender (or any successor or assign of such Lender) within the United States as may be designated from time to time by notice from such Lender, as the case may be, to each other Person party hereto. "EFFECTIVE DATE" means the date this Agreement becomes effective pursuant to SECTION 10.8. "ENVIRONMENTAL LAWS" means all applicable federal, state or local statutes, laws, ordinances, codes, rules and regulations (including consent decrees and administrative orders binding on the Company or any of its Subsidiaries) relating to public health and safety and protection of the environment. "ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute of similar import, together with the regulations thereunder, in each case as in effect from time to time. References to sections of ERISA also refer to any successor sections. "ERISA AFFILIATE" means any corporation, partnership, or other trade or business (whether or not incorporated) that is, along with the Company, a member of a controlled group of corporations or a controlled group of trades or businesses, as described in sections 414(b) and 414(c), respectively, of the Code or section 4001 of ERISA, or a member of the same affiliated service group within the meaning of section 414(m) of the Code. "EUROCURRENCY" means (i) each of Pounds Sterling, French Francs, Swiss Francs, Deutschmarks, Canadian Dollars, Australian Dollars, Japanese Yen and European Currency Units (each, a "DESIGNATED CURRENCY"), and (ii) any other currency (other than Dollars) to which all the Lenders shall consent, in each case (x) on deposit outside such currency's country of issuance and (y) as long as such currency is freely transferable and convertible into Dollars. "EUROCURRENCY RATE LOAN" means a Loan made in a Eurocurrency and bearing interest, at all times during an Interest Period applicable to such Loan, at a fixed rate of interest determined by reference to the Interbank Rate (Reserve Adjusted). "EURODOLLAR" mean Dollars on deposit in a bank outside the United States of America, its territories and possessions, which are available for transfer to and from the United States of America, its territories and possessions. "EURODOLLAR RATE LOAN" means a Loan made and payable in Dollars bearing interest, at all times during an Interest Period applicable to such Loan, at a fixed rate of interest determined by reference to the Interbank Rate (Reserve Adjusted). "EVENT OF DEFAULT" is defined in SECTION 8.1. "EXCESS PORTION" is defined in SECTION 7.2.8. "EXTENSION LETTER" is defined in SECTION 2.2.2. "FISCAL QUARTER" means any quarter of a Fiscal Year. "FISCAL YEAR" means any period of twelve consecutive calendar months ending on September 30th; references to a Fiscal Year with a number corresponding to any calendar year (E.G. the "1993 Fiscal Year") refer to the Fiscal Year ending on the September 30th occurring during such calendar year. "FIXED RATE LOAN" means any Eurodollar Rate Loan, Eurocurrency Rate Loan or Quoted Rate Loan. "F.R.S. BOARD" means the Board of Governors of the Federal Reserve System or any successor thereto. "GAAP" is defined in SECTION 1.4. "GROSS INTEREST EXPENSE" means, with respect to any Person for any period of determination thereof, all interest expense (whether cash or accrued) of such Person during such period with respect to any Indebtedness of such Person. "HAZARDOUS MATERIAL" means (a) any "hazardous substance", as defined in Section 101(14) of CERCLA; (b) any petroleum product; or (c) any pollutant or contaminant or hazardous, dangerous or toxic chemical, material or substance within the meaning of any other applicable federal, state or local law, regulation, ordinance or requirement (including consent decrees and administrative orders binding on the Company or any of its Subsidiaries) relating to or imposing liability or standards of conduct concerning any hazardous, toxic or dangerous waste, substance or material, all as amended or hereafter amended. "HEDGING OBLIGATIONS" means, with respect to any Person, all liabilities of such Person under interest rate swap agreements, interest rate cap agreements and interest rate collar agreements, and all other agreements or arrangements designed to protect such Person against fluctuations in interest rates or currency exchange rates. "HEREIN", "HEREOF", "HERETO", "HEREUNDER" and similar terms contained in this Agreement or any other Loan Document refer to this Agreement or such other Loan Document, as the case may be, as a whole and not to any particular Section, paragraph or provision of this Agreement or such other Loan Document. "IMPERMISSIBLE QUALIFICATION" means, relative to the opinion or certification of any independent public accountant as to any financial statement of any Obligor, any qualification or exception to such opinion or certification (a) which is of a "going concern" or similar nature; (b) which relates to the limited scope of examination of matters relevant to such financial statement; or (c) which relates to the treatment or classification of any item in such financial statement and which, as a condition to its removal, would require an adjustment to such item the effect of which would be to cause such Obligor to be in default of any of its obligations under SECTION 7.2. "INCLUDING" means including without limiting the generality of any description preceding such term, and, for purposes of this Agreement and each other Loan Document, the parties hereto agree that the rule of EJUSDEM GENERIS shall not be applicable to limit a general statement, which is followed by or referable to an enumeration of specific matters, to matters similar to the matters specifically mentioned. "INDEBTEDNESS" of any Person means, without duplication: (a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (b) all obligations, contingent or otherwise, relative to the face amount of all letters of credit, whether or not drawn, and banker's acceptances issued for the account of such Person; (c) all obligations of such Person as lessee under leases which have been or should be, in accordance with GAAP, recorded as Capitalized Lease Liabilities; (d) all other items which, in accordance with GAAP, would be included as liabilities on the liability side of the balance sheet of such Person as of the date at which Indebtedness is to be determined; (e) net liabilities of such Person under all Hedging Obligations; (f) whether or not so included as liabilities in accordance with GAAP, all obligations of such Person to pay the deferred purchase price of property or services, and indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse; and (g) all Contingent Liabilities of such Person in respect of any of the foregoing. Notwithstanding the foregoing, for purposes of determining the amount of a Person's Consolidated Long-Term Debt, Indebtedness of such Person of the type described in CLAUSE (C) of this definition shall not be taken into account unless the outstanding amount thereof exceeds $500,000 in the aggregate. Further, for all purposes of this Agreement, the Indebtedness of any Person shall include the Indebtedness of (i) any partnership in which such Person is a general partner and (ii) any joint venture in which such Person is a joint venturer if as the result thereof, such Person is personally liable for such Indebtedness. "INDEMNIFIED LIABILITIES" is defined in SECTION 10.4. "INDEMNIFIED PARTIES" is defined in SECTION 10.4. "INTANGIBLES" means, with respect to any Person, the aggregate amount of any intangible assets of such Person including, without limitation, goodwill, franchises, licenses, patents, trademarks, trade names, copyrights, service marks and brand names. "INTERBANK LENDING OFFICE" means, relative to any Lender, the office of such Lender designated as such below its signature hereto or designated in a Lender Assignment Agreement or such other office of a Lender as designated from time to time by notice from such Lender to the Company and the Agent, whether or not outside the United States, which shall be making or maintaining Eurodollar Rate Loans or Eurocurrency Rate Loans of such Lender hereunder. "INTERBANK RATE" means, relative to any Interest Period for Eurocurrency Rate Loans or Eurodollar Rate Loans, the rate of interest equal to the average (rounded upwards, if necessary, to the nearest 1/16 of 1%) of the rates per annum at which deposits in immediately available funds (a) in the case of a Eurodollar Rate Loan, in Eurodollars and (b) in the case of a Eurocurrency Loan, in either (i) the appropriate Eurocurrency or (ii) Dollars or Eurodollars in an amount equal to the Dollar Equivalent of such Eurocurrency deposits (plus the cost of any contract purchased or sold by the Agent to hedge the conversion of Dollars or Eurodollars, as applicable, into or from such Eurocurrency) are offered to the Agent's Interbank Lending Office by major banks in the interbank eurocurrency market as at or about 9:00 a.m. Chicago, Illinois time two Banking Days prior to the beginning of such Interest Period for delivery on the first day of such Interest Period, and in an amount approximately equal to the amount of the Agent's Eurocurrency Rate Loan or Eurodollar Rate Loan, as applicable, and for a period approximately equal to such Interest Period. "INTERBANK RATE (RESERVE ADJUSTED)" means, relative to any Loan to be made, continued or maintained as, or converted into, a Eurocurrency Rate Loan or a Eurodollar Rate Loan for any Interest Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/16 of 1%) determined pursuant to the following formula: Interbank Rate = INTERBANK RATE/ (Reserve Adjusted) (1.00 - Reserve Percentage) "INTEREST COVERAGE RATIO" means, with respect to any Person for any period of determination thereof, the ratio of (a) the sum of (i) Consolidated Net Income of such Person for such period, plus (ii) consolidated Interest Expense of such Person and its consolidated Subsidiaries for such period, plus (iii) the aggregate amount which was deducted by such Person in respect of Federal, state and local income taxes of such Person and its Subsidiaries in determining such Person's Consolidated Net Income for such period TO (b) consolidated Gross Interest Expense of such Person and its consolidated Subsidiaries for such period. "INTEREST EXPENSE" means, with respect to any Person for any period of determination, Gross Interest Expense of such Person for such period minus all items included therein which are required to be capitalized on a balance sheet of such Person prepared in accordance with GAAP. "INTEREST PERIOD" means, (a) with respect to any Eurodollar Loan or Eurocurrency Loan, the one-month, two-month or three-month period selected by the applicable Borrower and (b) with respect to any Quoted Rate Loan, the one-day, one-week, two-week, three-week, thirty-day, sixty-day or ninety-day period selected by the applicable Borrower, in each case beginning on (and including) the date on which such Fixed Rate Loan is made or continued as, or converted into, a Fixed Rate Loan pursuant to SECTION 2.3 or 2.4, in each case as the applicable Borrower may select in its relevant notice pursuant to SECTION 2.3 or 2.4; PROVIDED, HOWEVER, that (a) a Borrower shall not be permitted to select Interest Periods for Fixed Rate Loans to be in effect at any one time which will have expiration dates occurring on more than twenty (20) different dates; (b) Interest Periods commencing on the same date for Loans comprising part of the same Borrowing shall be of the same duration; (c) if such Interest Period would otherwise end on a day which is not a Banking Day, such Interest Period shall end on the next following Banking Day (unless, if such Interest Period applies to Eurocurrency Rate Loans or Eurodollar Rate Loans, such next following Banking Day is the first Banking Day of a calendar month, in which case such Interest Period shall end on the Banking Day next preceding such numerically corresponding day); and (d) no Interest Period may end later than date described in CLAUSE (A) of the definition of "COMMITMENT TERMINATION DATE". "INVESTMENT" means, relative to any Person, (a) any loan or advance made by such Person to any other Person (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business); (b) any Contingent Liability of such Person; and (c) any ownership or similar interest held by such Person in any other Person. The amount of any Investment shall be the original principal or capital amount thereof less all returns of principal or equity thereon (and without adjustment by reason of the financial condition of such other Person) and shall, if made by the transfer or exchange of property other than cash, be deemed to have been made in an original principal or capital amount equal to the fair market value of such property. "LENDER ASSIGNMENT AGREEMENT" means a Lender Assignment Agreement substantially in the form of EXHIBIT H hereto or such other form as shall be acceptable to the Agent. "LENDERS" is defined in the PREAMBLE. "LEVERAGE RATIO" means, with respect to any Person, the ratio of (a) such Person's Consolidated Total Liabilities TO (b) such Person's Consolidated Tangible Net Worth. "LIEN" means any security interest, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or otherwise), charge against or interest in property to secure payment of a debt or performance of an obligation or other priority or preferential arrangement of any kind or nature whatsoever. "LOAN" is defined in SECTION 2.1.1, and shall be Reference Rate Loans, Eurodollar Rate Loans, Eurocurrency Loans or Quoted Rate Loans. "LOAN DOCUMENT" means this Agreement, the Notes, and each other agreement, document or instrument delivered in connection with this Agreement and the Notes. "LONG TERM LEASE" means any lease of real or personal property (other than a Capitalized Lease) having an original term, including any period for which the lease may be renewed or extended at the option of the lessor or the lease, of more than two years. "MARKET FEDERAL FUNDS" means, for any period, a fluctuating interest rate per annum equal for each day during such period to (a) the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Banking Day, for the next preceding Banking Day) by the Federal Reserve Bank of New York; or (b) if such rate is not so published for any day which is a Banking Day, the average of the quotations for such day on such transactions received by the Agent from three federal funds brokers of recognized standing selected by it. "MONTHLY PAYMENT DATE" means the last day of each calendar month or, if any such day is not a Banking Day, the next succeeding Banking Day. "NEGOTIATED FEDERAL FUNDS RATE" means, for any period, a rate per annum equal to the rate quoted by the Agent as its then current rate for Federal Funds. "NOTE" means a promissory note of the Company or other applicable Borrower payable to any Lender in the form of Exhibit A hereto, as each such promissory note may be amended, or otherwise modified from time to time, evidencing the aggregate Indebtedness of such Borrower to such Lender resulting from outstanding Loans, and also means all other promissory notes accepted from time to time in substitution therefor or renewal thereof. "OBLIGATIONS" means all obligations (monetary or otherwise) of the Company, each other Borrower and each other Obligor arising under or in connection with this Agreement, the Notes and each other Loan Document. "OBLIGOR" means the Company and each other Borrower or any other Person (other than the Agent or any Lender) obligated under any Loan Document. "ORGANIC DOCUMENT" means, relative to any Obligor, its certificate of incorporation, its by-laws and all shareholder agreements, voting trusts and similar arrangements applicable to any of its authorized shares of capital stock. "PARTICIPANT" is defined in SECTION 10.11. "PBGC" means the Pension Benefit Guaranty Corporation and any entity succeeding to any or all of its functions under ERISA. "PENSION PLAN" means a "pension plan", as such term is defined in section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer plan as defined in section 4001(a)(3) of ERISA), and to which the Company or any ERISA Affiliate may have liability, including any liability by reason of having been a substantial employer within the meaning of section 4063 of ERISA at any time during the preceding five years, or by reason of being deemed to be a contributing sponsor under section 4069 of ERISA. "PERCENTAGE" means, relative to any Lender, the percentage set forth opposite its name on SCHEDULE I hereto or set forth in a Lender Assignment Agreement, as such percentage may be adjusted from time to time pursuant to Lender Assignment Agreement(s) executed by such Lender and its Assignee Lender(s) and delivered pursuant to SECTION 10.11. "PERSON" means any natural person, corporation, partnership, firm, joint venture, limited liability company, association, trust, government, governmental agency or any other entity, whether acting in an individual, fiduciary or other capacity. "PLAN" means any Pension Plan or Welfare Plan. "PRIOR CURRENCY" - is defined in SECTION 2.4. "QUARTERLY PAYMENT DATE" means (a) in the case of payment of interest on Reference Rate Loans, the 25th day of each March, June, September, and December or, if any such day is not a Banking Day, the next succeeding Banking Day and (b) in the case of payment of any fee, the last day of each March, June, September, and December or, if any such day is not a Banking Day, the next succeeding Banking Day. "QUOTATION DAY" - is defined in SECTION 2.4.2. "QUOTED RATE" means the rate of interest quoted by the Agent pursuant to SECTION 2.3.2 applicable to a Borrowing of Quoted Rate Loans, provided however, that such rate shall not be less than the Negotiated Federal Funds Rate in effect at the time such Borrowing is made, plus 0.25%. "QUOTED RATE LOAN" means a Loan made in Dollars bearing interest, at all times during an Interest Period applicable to such Loan, at the Quoted Rate applicable thereto. "REFERENCE RATE" means, at any time, the rate of interest then most recently announced by B of A at Chicago, Illinois as its reference rate. "REFERENCE RATE LOAN" means a Loan made and payable in Dollars bearing interest at a fluctuating rate determined by reference to the Alternate Reference Rate. "RELATED PARTY" means, with respect to any Person (i) any director (or Person holding the equivalent position) or officer (or Person holding the equivalent position) of such Person, and (ii) any other Person which, directly or indirectly, controls or is controlled by or under common control with such first Person (excluding any trustee under, or any committee with responsibility for administering, a Plan). A Person shall be deemed to be (a) "controlled by" any other Person if (i) such other Person beneficially owns or holds, or directly or indirectly has the power to vote five percent (5%) or more (on a fully diluted basis) of the equity interest of such first Person or (ii) if such other Person has the power to direct or cause the direction of the management and policies of such first Person (whether by contract or otherwise); or (b) "controlled by" or "under common control with" another Person if such other Person is a member of the immediate family of a Person which is a Related Party of such first Person or is the executor, administrator or other personal representative of such first Person. "RELEASE" means a "release", as such term is defined in CERCLA. "RENTALS" means all fixed payments (including as such all payments which the lessee is obligated to make to the lessor on termination of the lease or surrender of the property) payable by a Person as lessee or sublessee under a lease of real or personal property, but shall be exclusive of any amounts required to be paid by such Person (whether or not designated as rents or additional rents) on account of maintenance, repairs, insurance, taxes and similar charges. Fixed rents under any so-called "percentage leases" shall be computed solely on the basis of the minimum rents, if any, required to be paid by the lessee regardless of sales volume or gross revenues. "REPORTABLE EVENT" has the meaning given to such term in ERISA. "REQUIRED LENDERS" means, (a) at any time that there are three (3) Lenders, any two (2) Lenders holding at least 51% of the then aggregate outstanding principal amount of the Notes then held by the Lenders, or, if no such principal amount is then outstanding, any two (2) Lenders having at least 51% of the Commitments and (b) at all other times, Lenders holding at least 51% of the then aggregate outstanding principal amount of the Notes then held by the Lenders, or, if no such principal amount is then outstanding, Lenders having at least 51% of the Commitments. "RESERVE PERCENTAGE" means, relative to any Interest Period for Eurocurrency Rate Loans or Eurodollar Rate Loans, the reserve percentage (expressed as a decimal) equal to the maximum aggregate reserve requirements (including all basic, emergency, supplemental, marginal and other reserves and taking into account any transitional adjustments or other scheduled changes in reserve requirements) specified under regulations issued from time to time by the F.R.S. Board and then applicable to assets or liabilities consisting of and including "Eurocurrency Liabilities", as currently defined in Regulation D of the F.R.S. Board, having a term approximately equal or comparable to such Interest Period. For purposes of this definition, any Eurocurrency Rate Loans or Eurodollar Rate Loans hereunder shall be deemed to be "Eurocurrency Liabilities" as defined in Regulation D. "SECOND CURRENCY" - is defined in SECTION 2.4. "SENIOR NOTE AGREEMENTS" means, collectively, those Note Agreements, each dated as of September 1, 1990, between the Company and certain purchasers, providing for the sale by the Company of its 9.52% Senior Notes due September 30, 2005, as such Note Agreements are amended, modified or supplemented from time to time. "STATED MATURITY DATE" means March 31, 2000, or as extended, if extended, pursuant to SECTION 2.2.2. "SUBSIDIARY" means, as to any Person, (i) any corporation of which or in which such Person, such Person and one or more of its Subsidiaries, or one or more Subsidiaries of such Person directly or indirectly own 50% or more of the combined voting power of all classes of stock having general voting power under ordinary circumstances to elect a majority of the board of directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have voting power upon the occurrence of any contingency), (ii) any partnership, joint venture or similar entity of which or in which such Person, such Person and one or more of its Subsidiaries, or one or more Subsidiaries of such Person directly or indirectly own 50% or more of the capital interest or profits interest or (iii) any trust, association or other unincorporated organization of which or in which such Person, and one or more of its Subsidiaries, or one or more Subsidiaries of such Person directly or indirectly own 50% or more of the beneficial interest. "TAXES" is defined in SECTION 4.6. "TERMINATION EVENT" with respect to any Pension Plan means (i) the institution by the Company, the PBGC or any other Person of steps to terminate such Plan, (ii) the occurrence of a Reportable Event with respect to such Plan which the Agent or the Required Lenders reasonably believes may be a basis for the PBGC to institute steps to terminate such Plan, or (iii) the withdrawal from such Plan (or deemed withdrawal under section 4062 (f) of ERISA) by the Company or any ERISA Affiliate which is a substantial employer within the meaning of section 4063 of ERISA. "TYPE" means, relative to any Loan, the portion thereof, if any, being maintained as a Reference Rate Loan, Eurocurrency Rate Loan, Eurodollar Rate Loan or Quoted Rate Loan. "UNITED STATES" or "U.S." means the United States of America, its fifty States and the District of Columbia. "WELFARE PLAN" means a "welfare plan", as such term is defined in section 3(1) of ERISA. SECTION 1.2. USE OF DEFINED TERMS. Unless otherwise defined or the context otherwise requires, terms for which meanings are provided in this Agreement shall have such meanings when used in the Schedules to this Agreement and in each Note, Borrowing Request, Continuation/Conversion Notice, Loan Document, notice and other communication delivered from time to time in connection with this Agreement or any other Loan Document. SECTION 1.3. CROSS-REFERENCES. Unless otherwise specified, references in this Agreement and in each other Loan Document to any Article or Section are references to such Article or Section of this Agreement or such other Loan Document, as the case may be, and, unless otherwise specified, references in any Article, Section or definition to any clause are references to such clause of such Article, Section or definition. SECTION 1.4. ACCOUNTING AND FINANCIAL DETERMINATIONS. Unless otherwise specified, all accounting terms used herein or in any other Loan Document shall be interpreted, all accounting determinations and computations hereunder or thereunder (including under SECTION 7.2.4) shall be made, and all financial statements required to be delivered hereunder or thereunder shall be prepared in accordance with, those generally accepted accounting principles ("GAAP") applied in the preparation of the financial statements referred to in SECTION 6.5. ARTICLE II COMMITMENTS, BORROWING PROCEDURES AND NOTES SECTION 2.1. COMMITMENTS. On the terms and subject to the conditions of this Agreement (including ARTICLE V), each Lender severally agrees to make Loans pursuant to the Commitments described in this SECTION 2.1. SECTION 2.1.1. COMMITMENT OF EACH LENDER. From time to time on any Banking Day occurring prior to the Commitment Termination Date, each Lender will make loans (relative to such Lender, and of any Type, the "LOANS") to a Borrower equal to such Lender's Percentage of the aggregate amount of the Borrowing requested by such Borrower to be made on such day. Eurocurrency Rate Loans shall be made in a currency which is not a Designated Currency only with the consent of all Lenders. The commitment of each Lender described in this SECTION 2.1.1 is herein referred to as its "COMMITMENT". On the terms and subject to the conditions hereof, each Borrower may from time to time borrow, repay and reborrow Loans made to it. SECTION 2.1.2. LENDERS NOT PERMITTED OR REQUIRED TO MAKE LOANS. No Lender shall be permitted or required to make any Loan if, (a) after giving effect thereto, the aggregate outstanding principal amount of all Loans of all Lenders (in Dollars and/or the Dollar Equivalent) would exceed the Commitment Amount, or (b) after giving effect thereto, the aggregate outstanding principal amount of all Loans of such Lender would exceed such Lender's Percentage of the Commitment Amount, or (c) the making of such Loan would be in violation of any limitation or prohibition provided by any applicable statute, regulation, directive or guideline, or decision of any court, central bank, regulator or other governmental authority applicable to such Lender or, in the case of Eurocurrency Rate Loans, of the country of issuance and/or the country of disbursement of the applicable currency and including, without limitation, Regulation U of the F.R.S Board. SECTION 2.2. REDUCTION OF COMMITMENT AMOUNT; EXTENSION OF STATED MATURITY DATE. SECTION 2.2.1. REDUCTION OF COMMITMENT AMOUNT. The Company may, from time to time on any Banking Day occurring after the time of the initial Borrowing hereunder, voluntarily reduce the Commitment Amount; PROVIDED, however, that all such reductions shall require at least five (5) Banking Days' prior notice to the Agent and be permanent, and any partial reduction of the Commitment Amount shall be in a minimum amount of $1,000,000 (in Dollars and/or Dollar Equivalent) and in an integral multiple of $1,000,000 (in Dollars and/or Dollar Equivalent). SECTION 2.2.2. EXTENSION OF STATED MATURITY DATE. On any Banking Day during the period between December 1 and December 31 of each year, commencing on December 1, 1998, the Company may request in writing to the Agent (which shall promptly notify each Lender) that the Lenders agree to extend the Stated Maturity Date for a period of one additional year from the scheduled Stated Maturity Date. Each Lender may extend or decline to extend the Stated Maturity Date in its sole discretion. Each Lender that agrees to extend the Stated Maturity Date shall so notify the Agent in writing. If Lenders holding 100% of the Commitments shall agree to extend the Stated Maturity Date, the Agent shall so notify the Company in a letter substantially in the form of EXHIBIT F hereto (an "EXTENSION LETTER") no later than March 1st of the relevant year that, subject to the provisions of this Agreement, the Stated Maturity Date shall be the date specified in such Extension Letter. Upon receipt of an Extension Letter duly executed on behalf of the Company and each other Borrower, together with the documents and instruments specified therein and subject to the conditions precedent set forth in such Extension Letter, the Stated Maturity Date shall be extended to the date specified in such Extension Letter. SECTION 2.3. BORROWING PROCEDURE. By requesting in writing or by telephone (promptly confirmed in writing) on or before 11:00 a.m., Chicago, Illinois time, on a Banking Day, in accordance with the provisions of this SECTION 2.3 applicable to the Type of Borrowing requested, the Company, through one of its Authorized Corporate Officials may, on behalf of the Company or any other Borrower, from time to time irrevocably request that a Borrowing be made (a) in the case of Reference Rate Loans, in a minimum aggregate amount of $500,000 and an integral multiple of $500,000, or in the unused amount of the Commitments and (b) in the case of Fixed Rate Loans of any Type, in a minimum aggregate amount of $500,000 and an integral multiple of $500,000. On the terms and subject to the conditions of this Agreement, each Borrowing shall be comprised of the same Type of Loans, and shall be made on the same Banking Day. On or before 1:00 p.m. (Chicago time) on the Banking Day a requested Borrowing is to be made, each Lender shall deposit with the Agent same day funds in an amount equal to such Lender's Percentage of the requested Borrowing and in the applicable currency. Such deposit will be made to an account which the Agent shall specify from time to time by notice to the Lenders. To the extent funds are received from the Lenders, the Agent shall make such funds available to the applicable Borrower pursuant to SECTION 2.3.4. No Lender's obligation to make any Loan shall be affected by any other Lender's failure to make any Loan. All telephonic or other oral requests for a Borrowing shall be promptly confirmed in writing by delivery to the Agent of a Borrowing Request therefor (including delivery by facsimile transmission in accordance with SECTION 10.2) duly executed by an Authorized Corporate Officer of the Company not later than five (5) Banking Days after the date of any such oral request, PROVIDED, HOWEVER, that a Borrower's failure to comply with any of the above requirements shall not in any manner affect the obligations of the applicable Borrower to repay any Loans made to such Borrower in accordance with the terms of this Agreement and its Notes. SECTION 2.3.1. EUROCURRENCY RATE LOANS AND EURODOLLAR RATE LOANS. Each request for a Borrowing of Eurocurrency Rate Loans or Eurodollar Rate Loans shall be received by the Agent from an Authorized Corporate Official of the Company on or before 11:00 a.m., Chicago, Illinois time, on a Banking Day not less than (a) two (2) Banking Days' prior to the date of the requested Borrowing in the case of Eurodollar Rate Loans and (b) three (3) Banking Days' prior to the date of the requested Borrowing in the case of Eurocurrency Rate Loans. Each request shall specify (i) the applicable Borrower, (ii) the borrowing date, which day shall be a Banking Day, (iii) the amount and, if the Borrowing is to be of Eurocurrency Rate Loans, the currency of the requested Borrowing and (iv) the initial Interest Period for such Borrowing. SECTION 2.3.2. QUOTED RATE LOANS. Each request for a Borrowing of Quoted Rate Loans shall be received by the Agent from an Authorized Corporate Official of the Company on or before 11:00 a.m., Chicago, Illinois time, on the Banking Day of the requested Borrowing. Each request shall specify (i) the applicable Borrower, (ii) the amount of requested Borrowing and (iii) the initial Interest Period for such Borrowing. Each such request shall be deemed to constitute a request to receive by telephone, from the Agent, a quotation of the interest rate that would be applicable to the Borrowing of Quoted Rate Loans identified in such borrowing request for the Interest Period specified therein. If such interest rate is satisfactory to the Company an Authorized Corporate Official of the Company shall, no later than 11:00 a.m. Chicago, Illinois time, on such date, so indicate. Such indication by an Authorized Corporate Official of the Company shall constitute an irrevocable request that such Borrowing of Quoted Rate Loans be made at the rate the Agent quoted or would have quoted to the Company at the time of such indication of acceptance, IT BEING UNDERSTOOD that the Agent and the Lenders do not guarantee that the interest rate quoted with respect to a particular requested Borrowing of Quoted Rate Loans shall continue to be available if such rate is not accepted by an Authorized Corporate Official of the Company at the time of quotation. SECTION 2.3.3. REFERENCE RATE LOANS. Each request for a Borrowing of Reference Rate Loans shall be received by the Agent from an Authorized Corporate Official of the Company on or before 11:00 a.m., Chicago, Illinois time, on the Banking Day of the requested Borrowing. Each request shall specify (i) the applicable Borrower, (ii) the borrowing date, which day shall be a Banking Day and (iii) the amount of requested Borrowing. SECTION 2.3.4. PROCEEDS. Subject to the other provisions of this Agreement, the Agent will pay to the relevant Borrower the amount of a Borrowing on the date designated in the request therefor upon receipt of the documents required under SECTIONS 9 and 10 with respect to such Borrowing. Each Borrowing of Reference Rate Loans, Quoted Rate Loans and Eurodollar Rate Loans shall be disbursed in Dollars, on the applicable borrowing date, to the relevant Borrower through its account with the Agent or if no such account exists, to such account as the Company shall direct on behalf of the relevant Borrower. Each Eurocurrency Rate Loan shall be disbursed in the currency specified by the Company, at such branch or affiliate of the bank or such other bank as the Agent may select. SECTION 2.4. CONTINUATION AND CONVERSION ELECTIONS. By requesting in writing or by telephone (promptly confirmed in writing as hereinafter provided) to the Agent on or before 11:00 a.m., Chicago, Illinois time, on a Banking Day, a Borrower may from time to time irrevocably elect that all or a portion of one Type of Loans be continued as such Type or converted into another Type of Loans, in accordance with the applicable provisions of this SECTION 2.4; PROVIDED, HOWEVER, that (i) the aggregate dollar amount of Loans which may be converted and/or continued at any one time shall not be less than (a) in the case of Reference Rate Loans, a minimum aggregate amount of $500,000 and an integral multiple of $500,000, and (b) in the case of Fixed Rate Loans of any Type, a minimum aggregate amount of $500,000 and an integral multiple of $500,000, (ii) each such conversion or continuation shall be pro rated among the applicable outstanding Loans of all Lenders, and (iii) no portion of the outstanding principal amount of any Loans may be continued as, or be converted into, Fixed Rate Loans when any Default has occurred and is continuing. Each telephonic or other oral conversion or continuation request referred to in SECTION 2.4.1 or SECTION 2.4.2 shall be promptly confirmed in writing by delivery to the Agent of a duly completed Conversion/Continuation Notice duly executed by an Authorized Officer of the Company not later than five (5) Banking Days after the date of any such oral request. In the absence of receipt of a telephonic or written request for continuation or conversion with respect to any Fixed Rate Loan in accordance with the provisions of SECTION 2.4.1 or 2.4.2, as applicable, such Fixed Rate Loan shall, on such last day, automatically convert to a Reference Rate Loan. Each conversion or continuation of a Loan in one currency (the "PRIOR CURRENCY") into a Loan in another currency (the "SECOND CURRENCY") shall result in a Loan in an amount denominated in the Second Currency equal to the equivalent in the Second Currency of the Loan amount denominated in the Prior Currency, in each case determined by the Agent in accordance with the provisions of SECTION 2.5. SECTION 2.4.1. EUROCURRENCY RATE LOANS, EURODOLLAR RATE LOANS AND REFERENCE RATE LOANS. Subject to the other provisions of this Agreement, a Borrower may elect: (a) TO CONTINUE all or any portion of any outstanding Eurodollar Rate Loans or Eurocurrency Rate Loans from the current Interest Period of such Loans into a subsequent Interest Period to begin on the last day of such current Interest Period and in the same currency or, in the case of Eurocurrency Rate Loans, in the same or a different Eurocurrency, (b) TO convert any outstanding Reference Rate Loans into Eurodollar Rate Loans or Eurocurrency Rate Loans or (c) TO CONVERT one Type of Fixed Rate Loan into any other Type of Loan except a Quoted Rate Loan, such conversion to occur on the last day of the then current Interest Period of the Loans being converted. The Company shall give the Agent prior telephonic notice (promptly confirmed in writing) from an Authorized Corporate Official of the Company (x) at least two (2) Banking Days' prior to the date of continuation or conversion in the case of continuation of or conversion into a Eurodollar Rate Loan and (y) at least three (3) Banking Days' prior to the date of continuation or conversion in the case of continuation of or conversion into a Eurocurrency Rate Loan. Each such notice shall specify the Borrower, the date, the amount and the Interest Period, if applicable, and, in the case of a continuation of or conversion into Eurocurrency Rate Loans, the currency of the such Loans. SECTION 2.4.2. QUOTED RATE LOANS. Subject to the other provisions of this Agreement, a Borrower may elect (a) TO CONTINUE all or any portion of any outstanding Quoted Rate Loans from the current Interest Period of such Loans into a subsequent Interest Period to begin on the last day of such current Interest Period and in the same currency, (b) TO CONVERT all or any portion of any outstanding Eurodollar Rate Loans or Eurocurrency Rate Loans to Quoted Rate Loans, such conversion to occur on the last day of the then current Interest Period of the Loans being converted, or (c) TO CONVERT all or any portion of any outstanding Reference Rate Loans into Quoted Rate Loans. If the Company desires to continue or convert outstanding Loans as or into Quoted Rate Loans, the Company shall give the Agent prior telephonic notice (promptly confirmed in writing) from an Authorized Corporate Official of the Company of a requested continuation or conversion under this SECTION 2.4.2, specifying the Borrower, the date, amount and Type of Loans to be continued or converted, the applicable Interest Periods and requesting that the Agent provide the Company by telephone a quotation of the interest rate(s) that would be applicable to the requested Quoted Rate Loans for Interest Period(s) of a duration designated by such Authorized Corporate Official and commencing (a) on the last day of the current Interest Period in the case of outstanding Fixed Rate Loans or (b) on the date such rate quotation is requested in the case of outstanding Reference Rate Loans. Each such notice and request from the Company, to be effective, must be received by the Agent not later than 11:00 a.m., Chicago, Illinois time on the Banking Day such conversion into or continuation of Quoted Rate Loans is to occur. If such interest rate is satisfactory to the Company an Authorized Corporate Official of the Company shall, no later than 11:00 a.m. Chicago, Illinois time, on such date, so indicate. Such indication by an Authorized Corporate Official of the Company shall constitute an irrevocable request that the requested continuation of or conversion into Quoted Rate Loans be consummated at the rate the Agent quoted or would have quoted to the Company at the time of such indication of acceptance, IT BEING understood that the Agent and the Lenders do not guarantee that the interest rate quoted with respect to a particular requested conversion of or continuation into Quoted Rate Loans shall continue to be available if such rate is not accepted by an Authorized Corporate Official of the Company at the time of quotation. SECTION 2.5. CURRENCY EQUIVALENTS. (a) EXCHANGE RATE. Whenever pursuant hereto the Dollar Equivalent of an amount denominated in any currency other than Dollars is to be determined as of a date, such determination shall be made at the spot rate at which the Agent offers to purchase such currency with Dollars at approximately 10:00 am., Chicago, Illinois time on such date. Whenever the equivalent in any currency (other than Dollars) is to be determined as of a date, such determination shall be made in accordance with the preceding sentence, substituting such currency in which such equivalent is being determined for Dollars. (b) DETERMINATION DATE. For purposes of determining the commitment fee referred to in SECTION 3.3.1, the outstanding balance of the Loans and the Commitment Amount from time to time, the Dollar Equivalent of each Loan then denominated in a currency other than Dollars shall be determined as of each of the dates (a "DETERMINATION DATE") as follows: (i) the date ten (10) Banking Days prior to each Quarterly Payment Date; and (ii) the date four Banking Days prior to each of the following dates (unless such of the following dates is also a Quarterly Payment Date): (A) the date a Loan is made; (B) the date a Eurodollar Rate Loan or Eurocurrency Rate Loan is continued from the current Interest Period of such Loan into a subsequent Interest Period; (C) the date an outstanding Loan is converted from one Type of Loan into another Type of Loan; or (D) the date the principal of a Loan, or portion thereof, is paid or prepaid. The Dollar Equivalent of any Loan, or portion thereof, determined as of any Determination Date, shall be deemed to remain unchanged from such determination until the next succeeding Determination Date. SECTION 2.6. FUNDING. As to any Eurodollar Rate Loan or Eurocurrency Rate Loan each Lender may, if it so elects, fulfill its obligation to make, continue or convert such Fixed Rate Loans hereunder by causing one of its foreign branches or Related Parties (or an international banking facility created by such Lender) to make or maintain such Fixed Rate Loan; PROVIDED, HOWEVER, that such Fixed Rate Loan shall nonetheless be deemed to have been made and to be held by such Lender, and the obligation of the applicable Borrower to repay such Fixed Rate Loan shall nevertheless be to such Lender for the account of such foreign branch, Related Party or international banking facility. In addition, each Borrower hereby consents and agrees that, for purposes of any determination to be made for purposes of SECTIONS 4.1, 4.2, 4.3 or 4.5, it shall be conclusively assumed that each Lender elected to fund all Eurodollar Rate Loans and all Eurocurrency Rate Loans by purchasing Eurodollar deposits, or deposits in the applicable Eurocurrency, in its Interbank Lending Office's interbank eurocurrency market. SECTION 2.7. NOTES. Each Lender's Loans to a Borrower under its Commitment shall be evidenced by a Note made by such Borrower payable to the order of such Lender in a maximum principal amount equal to such Lender's Percentage of the original Commitment Amount. Each Borrower hereby irrevocably authorizes each Lender to make (or cause to be made) appropriate notations on the grid attached to such Lender's Note from such Borrower (or on any continuation of such grid), which notations, if made, shall evidence, INTER ALIA, the date of, the outstanding principal of, and the interest rate and Interest Period applicable to the Loans evidenced thereby. Such notations shall be conclusive and binding on each Borrower absent manifest error; PROVIDED, HOWEVER, that the failure of any Lender to make any such notations shall not limit or otherwise affect any Obligations of a Borrower or any other Obligor. ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES SECTION 3.1. REPAYMENTS AND PREPAYMENTS. Each Borrower shall repay in full the unpaid principal amount of each Loan made to such Borrower upon the Stated Maturity Date therefor. Prior thereto, each Borrower (a) may, from time to time on any Banking Day, make a voluntary prepayment, in whole or in part, of the outstanding principal amount of any Loans to such Borrower; PROVIDED, HOWEVER, that (i) any such prepayment shall be made PRO RATA among Loans of the same Type and, if applicable, having the same Interest Period, of all Lenders; (ii) no such prepayment of any Fixed Rate Loan may be made on any day other than the last day of the Interest Period for such Loan; (iii)all such voluntary prepayments shall require at least three but no more than five Banking Days' prior written notice to the Agent; and (iv) all such voluntary partial prepayments shall be in an aggregate minimum amount of $500,000 and an integral multiple of $500,000; (b) shall, on each date when any reduction in the Commitment Amount shall become effective, including pursuant to SECTION 2.2.1, make a mandatory prepayment of all Loans to such Borrower such that the aggregate amount of prepayments made by all Borrowers shall be equal to the excess, if any, of the aggregate, outstanding principal amount of all Loans to all Borrowers over the Commitment Amount as so reduced; and (c) shall, immediately upon any acceleration of the Stated Maturity Date of any Loans pursuant to SECTION 8.2 or SECTION 8.3, repay all Loans to such Borrower unless, pursuant to SECTION 8.3, only a portion of such Loans is so accelerated; and (d) shall, if on any Determination Date, as a result of an increase in the value of a Eurocurrency, the aggregate Dollar Equivalent of the principal amount of all outstanding Loans to all Borrowers exceeds the Commitment Amount, on the last day of the Interest Period during which such Determination Date occurs, make a mandatory prepayment of the aggregate outstanding Loans to such Borrower such that the aggregate amount of prepayments made by all Borrowers shall be equal to the LESSER of (i) the amount of such excess, and (ii) the sum of (x) the amounts of the Reference Rate Loans outstanding, plus (y) the amounts of the Fixed Rate Loans outstanding to which such Interest Period is applicable. Each prepayment of any Loans made pursuant to this Section shall be without premium or penalty, except as may be required by SECTION 4.5. No voluntary prepayment of principal of any Loans shall cause a reduction in the Commitment Amount. SECTION 3.2. INTEREST PROVISIONS. Interest on the outstanding principal amount of Loans shall accrue and be payable in accordance with this SECTION 3.2. SECTION 3.2.1. RATES. (a) REFERENCE RATE LOANS. That portion of the Loans maintained from time to time as a Reference Rate Loans shall accrue and bear interest until maturity at a rate per annum equal to the Alternate Reference Rate from time to time in effect. (b) EURODOLLAR RATE LOANS AND EUROCURRENCY RATE LOANS. That portion of the Loans maintained from time to time as a Eurodollar Rate Loans or Eurocurrency Rate Loans shall accrue and bear interest, during each Interest Period applicable thereto, at a rate per annum equal to the sum of the Interbank Rate (Reserve Adjusted) for such Interest Period plus a margin of 0.25%. (c) QUOTED RATE LOANS. That portion of the Loans maintained from time to time as Quoted Rate Loans shall accrue and bear interest, during each Interest Period applicable thereto, at a rate per annum equal to the Quoted Rate in effect for such Interest Period. SECTION 3.2.2. POST-MATURITY RATES. After the date any principal amount of any Loan is due and payable (whether on the Stated Maturity Date, upon acceleration or otherwise), or after any other monetary Obligation of any Borrower shall have become due and payable, each Borrower shall pay, but only to the extent permitted by law, interest (after as well as before judgment) on each Loan to such Borrower at a rate per annum equal to the greater of (a) two percent (2.0%) in excess of the rate applicable to the unpaid amount of such Loan immediately before it became due and (b) the Alternate Reference Rate in effect from time to time plus a margin of two percent (2.0%). SECTION 3.2.3. PAYMENT DATES. Interest accrued on each Loan shall be payable, without duplication: (a) on the Stated Maturity Date therefor; (b) on the date of any payment or prepayment, in whole or in part, of principal outstanding on such Loan as the result of a reduction in the Commitment Amount pursuant to SECTION 3.1(B); (c) with respect to Reference Rate Loans, on each Quarterly Payment Date occurring after the Effective Date; (d) with respect to Fixed Rate Loans, the last day of each applicable Interest Period; (e) with respect to any Reference Rate Loans converted into Fixed Rate Loans on a day when interest would not otherwise have been payable pursuant to CLAUSE (C), on the date of such conversion; and (f) on that portion of any Loans the Stated Maturity Date of which is accelerated pursuant to SECTION 8.2 or SECTION 8.3, immediately upon such acceleration. Interest accrued on Loans or other monetary Obligations arising under this Agreement or any other Loan Document after the date such amount is due and payable (whether on the Stated Maturity Date, upon acceleration or otherwise) shall be payable upon demand. SECTION 3.3. FEES. The Company agrees to pay the fees set forth in this SECTION 3.3. All such fees shall be non-refundable. SECTION 3.3.1. FACILITY FEE. The Company agrees to pay to the Agent for the account of each Lender, for the period (including any portion thereof when its Commitment is suspended by reason of any Borrower's inability to satisfy any condition of ARTICLE V) commencing on the Effective Date, a facility fee at the rate of fifteen hundredths of one-percent (.15%) per annum on such Lender's Percentage of the Commitment Amount. Such facility fees shall be payable by the Company in arrears on each Quarterly Payment Date, commencing with the first such day following the Amendment Effective Time, and on the Commitment Termination Date for the period then ending. SECTION 3.3.2. AGENT'S FEE. The Company agrees to pay to the Agent for its own account, such non-refundable fees as may be from time to time separately agreed to between the Company and the Agent. SECTION 3.4. COMPUTATION OF INTEREST AND FEES. All Fixed Rate Loans shall bear interest from and including the first day of the applicable Interest Period to (but not including) the last day of such Interest Period at the interest rate determined as applicable to such Fixed Rate Loan. Interest on each Reference Rate Loan, each Fixed Rate Loan and any fees, shall be computed on the basis of a year consisting of 360 days and paid for actual days elapsed. ARTICLE IV CERTAIN INTEREST RATE AND OTHER PROVISIONS SECTION 4.1. FIXED RATE LENDING UNLAWFUL. If any Lender shall determine (which determination shall, upon notice thereof to the Company and the Lenders, be conclusive and binding on all Borrowers) that the introduction of or any change in or in the interpretation of any law makes it unlawful, or any central bank or other governmental authority asserts that it is unlawful, for such Lender to make, continue or maintain any Loan as, or to convert any Loan into, a Fixed Rate Loan of a certain Type, the obligations of all Lenders to make, continue, maintain or convert any such Loans shall, upon such determination, forthwith be suspended until such Lender shall notify the Agent that the circumstances causing such suspension no longer exist, and all Fixed Rate Loans of such Type shall automatically convert into Reference Rate Loans or, subject to compliance with the applicable provisions of SECTION 2.3, another Type of Fixed Rate Loans, at the end of the then current Interest Periods with respect thereto or sooner, if required by such law or assertion. SECTION 4.2. DEPOSITS UNAVAILABLE. If the Agent shall have been notified by any Lender that such Lender has determined that (a) Dollar or Eurocurrency deposits, as the case may be, in the relevant amount and for the relevant Interest Period are not available to such Lender in its relevant market; or (b) by reason of circumstances affecting such Lender's relevant market, adequate means do not exist for ascertaining the interest rate applicable hereunder to Fixed Rate Loans of a particular Type, then, upon notice from the Agent to the Company and the Lenders, the obligations of all Lenders under SECTION 2.3 and SECTION 2.4 to make or continue any Loans as, or to convert any Loans into, Fixed Rate Loans of such Type shall forthwith be suspended until the Agent shall have been notified by the relevant Lender, and the Agent shall have notified the Company and the Lenders, that the circumstances causing such suspension no longer exist. SECTION 4.3. INCREASED FIXED RATE LOAN COSTS, ETC. The Company agrees to reimburse each Lender for any increase in the cost to such Lender of, or any reduction in the amount of any sum receivable by such Lender in respect of, making, continuing or maintaining (or of its obligation to make, continue or maintain) any Loans as, or of converting (or of its obligation to convert) any Loans into, Fixed Rate Loans. Such Lender shall promptly notify the Agent and the Company in writing of the occurrence of any such event, such notice to state, in reasonable detail, the reasons therefor and the additional amount required fully to compensate such Lender for such increased cost or reduced amount. Such additional amounts shall be payable by the Company directly to such Lender within five days of its receipt of such notice, and such notice shall, in the absence of manifest error, be conclusive and binding on the Company. SECTION 4.4. INCREASED CAPITAL COSTS WITH RESPECT TO COMMITMENTS. If any change in, or the introduction, adoption, effectiveness, interpretation, reinterpretation or phase-in of, any law or regulation, directive, guideline, decision or request (whether or not having the force of law) of any court, central bank, regulator or other governmental authority affects or would affect the amount of capital required or expected to be maintained by any Lender or any Person controlling such Lender, and such Lender determines (in its sole and absolute discretion) that the rate of return on its or such controlling Person's capital as a consequence of its Commitment or the Loans made by such Lender is reduced to a level below that which such Lender or such controlling Person could have achieved but for the occurrence of any such circumstance, then, in any such case upon notice from time to time by such Lender to the Company the Company agrees that it shall immediately pay directly to such Lender additional amounts sufficient to compensate such Lender or such controlling Person for such reduction in rate of return at the time suffered or incurred. A statement of such Lender as to any such additional amount or amounts (including calculations thereof in reasonable detail) shall, in the absence of manifest error, be conclusive and binding on the Company. In determining such amount, such Lender may use any reasonable method of averaging and attribution that it (in its sole and absolute discretion) shall deem applicable. SECTION 4.5. FUNDING LOSSES. In the event any Lender shall incur any loss or expense (including any loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to make, continue or maintain any portion of the principal amount of any Loan as, or to convert any portion of the principal amount of any Loan into, a Fixed Rate Loan) as a result of (a) any conversion or repayment or prepayment of the principal amount of any Fixed Rate Loans on a date other than the scheduled last day of the Interest Period applicable thereto, whether pursuant to SECTION 3.1 or otherwise; (b) any Loans not being made as Fixed Rate Loans in accordance with the Borrowing Request therefor; or (c) any Loans not being continued as, or converted into, Fixed Rate Loans in accordance with the Continuation/ Conversion Notice therefor, then, upon the written notice of such Lender to the Company (with a copy to the Agent), the Company agrees that it shall, within five days of the Company's receipt thereof, pay directly to such Lender such amount as will (in the reasonable determination of such Lender) reimburse such Lender for such loss or expense. Such written notice (which shall include calculations in reasonable detail) shall, in the absence of manifest error, be conclusive and binding on the Company. SECTION 4.6. TAXES. All payments by each Borrower of principal of, and interest on, the Loans and all other amounts payable hereunder shall be made free and clear of and without deduction for any present or future income, excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or other charges of any nature whatsoever imposed by any taxing authority, but excluding franchise taxes and taxes imposed on or measured by any Lender's net income or receipts (such non-excluded items being called "TAXES"). In the event that any withholding or deduction from any payment to be made by a Borrower hereunder is required in respect of any Taxes pursuant to any applicable law, rule or regulation, then the Company will cause such Borrower to (a) pay directly to the relevant authority the full amount required to be so withheld or deducted; (b) promptly forward to the Agent an official receipt or other documentation satisfactory to the Agent evidencing such payment to such authority; and (c) pay to the Agent for the account of the Lenders such additional amount or amounts as is necessary to ensure that the net amount actually received by each Lender will equal the full amount such Lender would have received had no such withholding or deduction been required; provided that, a Lender may, in its sole and absolute discretion, and subject to the other requirements of this sentence, return to such Borrower an amount equal to the amount paid by such Borrower pursuant to CLAUSE (A) in respect of amounts paid by such Borrower under this Agreement for the account of such Lender. Moreover, if any Taxes are directly asserted against the Agent or any Lender with respect to any payment received by the Agent or such Lender hereunder, the Agent or such Lender may pay such Taxes and the Company agrees that it will promptly pay such additional amounts (including any penalties, interest or expenses) as is necessary in order that the net amount received by such Person after the payment of such Taxes (including any Taxes on such additional amount) shall equal the amount such Person would have received had not such Taxes been asserted. If any Borrower fail to pay any Taxes when due to the appropriate taxing authority or fails to remit to the Agent, for the account of the respective Lenders, the required receipts or other required documentary evidence, the Company agrees to indemnify the Lenders for any incremental Taxes, interest or penalties that may become payable by any Lender as a result of any such failure. For purposes of this SECTION 4.6, a distribution hereunder by the Agent or any Lender to or for the account of any Lender shall be deemed a payment by the Company. Upon the request of the Company or the Agent, each Lender that is organized under the laws of a jurisdiction other than the United States shall, prior to the due date of any payments under the Notes, execute and deliver to the Company and the Agent, on or about the first scheduled payment date in each Fiscal Year, one or more (as the Company or the Agent may reasonably request) United States Internal Revenue Service Forms 4224 or Forms 1001 or such other forms or documents (or successor forms or documents), appropriately completed, as may be applicable to establish the extent, if any, to which a payment to such Lender is exempt from withholding or deduction of Taxes. If a Lender receives a refund of any amount paid by a Borrower pursuant to this Section in respect of amounts required to be withheld or deducted from amounts due to such Lender under this Agreement and the other Loan Documents, and if as a result of such Lender's receipt of such refund the net amount received by such Lender exceeds the amount to which such Lender is entitled under this Agreement and the other Loan Documents, such Lender shall promptly pay to the Agent, for the account of such Borrower, the amount of such excess. SECTION 4.7. PAYMENTS, COMPUTATIONS, ETC. Unless otherwise expressly provided, all payments by a Borrower pursuant to this Agreement, the Notes or any other Loan Document shall be made by such Borrower to the Agent for the account of each Lender in the amount of its Percentage thereof. All such payments required to be made to the Agent shall be made, without setoff, deduction or counterclaim, not later than 12:30 p.m., Chicago, Illinois time, on the date due, in same day or immediately available funds, to such account as the Agent shall specify from time to time by notice to the Company. Funds received after that time shall be deemed to have been received by the Agent on the next succeeding Banking Day. The Company hereby authorizes the Agent and the Agent may, in its sole and absolute discretion, provide for the payment of any amounts required to be paid in Dollars which are due under this Agreement or the other Loan Documents, by debiting the Demand Deposit Account for the amount then due; PROVIDED, however, that the failure of the Company to maintain sufficient balances in the Demand Deposit Account to provide for such payment shall not affect any Borrower's obligation to pay when due all amounts payable by such Borrower hereunder or under any other Loan Document. The Agent shall remit to each Lender, not later than 5:00 p.m. Chicago, Illinois time on the Banking Day received (the Banking Day of receipt to be determined pursuant to this SECTION 4.7), same day funds in an amount equal to such Lender's share, if any, of such payments received by the Agent from a Borrower for the account of such Lender. Whenever any payment to be made shall otherwise be due on a day which is not a Banking Day, such payment shall (except as otherwise required by CLAUSE (C) of the definition of the term "INTEREST PERIOD" with respect to Eurodollar Rate Loans or Eurocurrency Rate Loans) be made on the next succeeding Banking Day and such extension of time shall be included in computing interest and fees, if any, in connection with such payment. SECTION 4.8. SHARING OF PAYMENTS. Except as contemplated by SECTION 4.7, if any Lender shall obtain any payment or other recovery (whether voluntary, involuntary, by application of setoff or otherwise) on account of any Loan (other than pursuant to the terms of SECTIONS 4.3, 4.4 and 4.5) in excess of its PRO RATA share of payments then or therewith obtained by all Lenders, such Lender shall purchase from the other Lenders such participations in Loans made by them as shall be necessary to cause such purchasing Lender to share the excess payment or other recovery ratably with each of them; PROVIDED, HOWEVER, that if all or any portion of the excess payment or other recovery is thereafter recovered from such purchasing Lender, the purchase shall be rescinded and each Lender which has sold a participation to the purchasing Lender shall repay to the purchasing Lender the purchase price to the ratable extent of such recovery together with an amount equal to such selling Lender's ratable share (according to the proportion of (a) the amount of such selling Lender's required repayment to the purchasing Lender TO (b) the total amount so recovered from the purchasing Lender) of any interest or other amount paid or payable by the purchasing Lender in respect of the total amount so recovered. Each Borrower agrees that any Lender so purchasing a participation from another Lender pursuant to this Section may, to the fullest extent permitted by law, exercise all its rights of payment (including pursuant to SECTION 4.9) with respect to such participation as fully as if such Lender were the direct creditor of such Borrower in the amount of such participation. If under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a setoff to which this Section applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders entitled under this Section to share in the benefits of any recovery on such secured claim. SECTION 4.9. SETOFF. Each Lender shall, upon the occurrence of any Default described in CLAUSES (A) through (D) of SECTION 8.1.9 with respect to any Borrower or, with the consent of the Required Lenders, upon the occurrence of any other Event of Default, have the right to appropriate and apply to the payment of the Obligations owing to it (whether or not then due), any and all balances, credits, deposits, accounts or moneys of such Borrower then or thereafter maintained with such Lender; PROVIDED, HOWEVER, that any such appropriation and application shall be subject to the provisions of SECTION 4.8. Each Lender agrees promptly to notify the Company and the Agent after any such setoff and application made by such Lender; PROVIDED, HOWEVER, that the failure to give such notice shall not affect the validity of such setoff and application. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff under applicable law or otherwise) which such Lender may have. SECTION 4.10. USE OF PROCEEDS. Each Borrower shall apply the proceeds of each Borrowing for general corporate purchases and working capital purposes; without limiting the foregoing, no proceeds of any Loan will be used to acquire any equity security of a class which is registered pursuant to Section 12 of the Securities Exchange Act of 1934 or any "margin stock", as defined in F.R.S. Board Regulation U, if such acquisition would violate or cause any Lender to violate such Regulation U. SECTION 4.11. CURRENCY INDEMNIFICATION. The obligation of any Borrower to make payments hereunder in the currencies specified in Article III shall not be discharged as satisfied by any tender or recovery which is expressed in any other currencies except to the extent that such tender or recovery shall result in the actual receipt by the Lenders of the full amount in the currencies so specified payable hereunder. The Borrowers obligations to make payments in the currencies so specified shall be enforceable as an alternative or additional cause of action for the purpose of recovery in such currencies of the amount, if any, by which such actual receipt shall fall short of the full amount in such currencies payable hereunder, and shall not be affected by judgment being obtained for any sums due hereunder. Without limiting the generality of the previous paragraph, the Company agrees to indemnify each Lender against any loss incurred by it as a result of any judgment or order being given or made for the payment of any Indebtedness hereunder and such judgment or order being expressed in a currency other than the currency of the Indebtedness hereunder and as a result of any variation having occurred in rates of exchange between the date of any such amount becoming due hereunder and the date of actual payment thereof. The foregoing indemnity shall constitute a separate and independent obligation and shall apply irrespective of any indulgence granted from time to time and shall continue in full force and effect notwithstanding any such judgment or order as aforesaid. ARTICLE V CONDITIONS TO BORROWING SECTION 5.1. INITIAL BORROWING OF THE COMPANY. The effectiveness of this amendment and restatement shall be subject to the prior or concurrent satisfaction of each of the conditions precedent set forth in this SECTION 5.1. The obligations of the Lenders to fund an initial Borrowing of the Company shall be subject to the prior or concurrent satisfaction of each of the conditions precedent set forth in this SECTION 5.1, in addition to the applicable conditions precedent set forth in SECTION 5.3. SECTION 5.1.1. RESOLUTIONS, ETC. The Agent shall have received from the Company, in sufficient number of counterpart originals to provide one to each Lender, a certificate, dated the date of the initial Borrowing, of its Secretary or Assistant Secretary as to (a) resolutions of its Board of Directors then in full force and effect authorizing the execution, delivery and performance of this Agreement and the Notes and authorizing the borrowings hereunder and each other Loan Document to be executed by it; (b) all documents evidencing other corporate action necessary for the execution, delivery and performance of any Loan Document; (c) all approvals or consents, if any, with respect to this Agreement and the Notes; and (d) the incumbency and signatures of those of its officers authorized to sign to this Agreement, the Notes and each other Loan Document executed by it, upon which certificate each Lender may conclusively rely until it shall have received a further certificate of the Secretary of the Company canceling or amending such prior certificate. SECTION 5.1.2. DELIVERY OF NOTES. The Agent shall have received, for the account of each Lender, the Notes of the Company duly executed and delivered by the Company. SECTION 5.1.3. PAYMENT OF OUTSTANDING INDEBTEDNESS, ETC. All Indebtedness identified in ITEM 7.2.2(B) of the Disclosure Schedule together with all interest, all prepayment premiums and other amounts due and payable with respect thereto, shall have been paid in full (including, to the extent necessary, from proceeds of the initial Borrowing); and all Liens, if any, securing payment of any such Indebtedness have been released and the Agent shall have received all Uniform Commercial Code Form UCC-3 termination statements or other instruments as may be suitable or appropriate in connection therewith. SECTION 5.1.4. OPINIONS OF COUNSEL. The Agent shall have received, in sufficient number of counterpart originals to provide one to each Lender, an opinion addressed to the Agent and all Lenders, from Gardner, Carton & Douglas, counsel to the Company, substantially in the form of EXHIBIT I hereto; SECTION 5.1.5. EXPENSES, ETC. The Agent shall have received for its own account all reasonable fees, costs and expenses due and payable pursuant to SECTION 10.3, if then invoiced. SECTION 5.2. INITIAL BORROWING OF A DESIGNATED SUBSIDIARY. The obligations of the Lender to fund an initial Borrowing of any Designated Subsidiary shall be subject to the prior or concurrent satisfaction of each of the conditions precedent in this SECTION 5.2., in addition to the applicable conditions precedent set forth in SECTIONS 5.1 and 5.3. SECTION 5.2.1. DESIGNATION LETTER. The Agent shall have received, in sufficient number of counterpart originals to provide one to each Lender, a Designation Letter for such Designated Subsidiary. SECTION 5.2.2. NOTES. The Agent shall have received, for the account of each Lender, the Notes of such Designated Subsidiary, duly executed and delivered by such Designated Subsidiary. SECTION 5.2.3. AUTHORIZATIONS AND APPROVALS. The Agent shall have received authenticated copies of all such governmental authorizations, consents, approvals, and licenses as may be required under applicable law and regulations for each Borrower then borrowing to make and perform this Agreement and the Notes and to borrow and (in the case of the Company) guaranty Loans hereunder. SECTION 5.2.4. GUARANTY. The Agent shall have received, in sufficient number of counterpart originals to provide one to each Lender, a Guaranty, duly executed by the Company, of the obligations of such Designated Subsidiary under this Agreement and the Notes of such Designated Subsidiary. SECTION 5.2.5. RESOLUTIONS. The Agent shall have received a copy, duly certified by the Designated Subsidiary's secretary or an assistant secretary and in sufficient number of counterpart originals to provide one to each Lender, of (i) the resolutions of the Designated Subsidiary's Board of Directors authorizing the execution and delivery of the Designation Letter and the Note of such Designated Subsidiary and authorizing the borrowings thereunder, (ii) all documents evidencing other necessary corporate action, and (iii) all approvals or consents, if any, with respect to the Designation Letter and such Designated Subsidiary's Note. SECTION 5.2.6. INCUMBENCY. The Agent shall have received, in sufficient number of counterpart originals to provide one to each Lender a certificate of the Designated Subsidiary's secretary, assistant secretary or manager certifying the names of the Designated Subsidiary's officers authorized to sign the Designation Letter, the Note of such Designated Subsidiary and all other documents or certificates to be delivered to the Agent or any Lender, together with the true signatures of such officers. SECTION 5.3. ALL BORROWINGS. The obligation of each Lender to fund any Loan on the occasion of any Borrowing (including the initial Borrowing) shall be subject to the satisfaction of each of the conditions precedent set forth in this SECTION 5.3. SECTION 5.3.1. COMPLIANCE WITH WARRANTIES, NO DEFAULT, ETC. Both before and after giving effect to any Borrowing the following statements shall be true and correct and certified as such by a certificate of the president, chief financial officer (or, if none, the chief financial Authorized Corporate Officer) of the Company delivered by the Company to the Agent: (a) the representations and warranties set forth in ARTICLE VI (excluding, however, those contained in SECTION 6.6, 6.7, 6.8 and 6.9) shall be true and correct with the same effect as if then made (unless stated to relate solely to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date) except for such changes as are specifically permitted hereunder; (b) except as disclosed by the Company to the Agent and the Lenders pursuant to SECTION 6.7 (i) no labor controversy, litigation, arbitration or governmental investigation or proceeding shall be pending or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries which might reasonably be expected to materially adversely affect the Company's consolidated business, operations, assets, revenues, properties or prospects or which purports to affect the legality, validity or enforceability of this Agreement, the Notes or any other Loan Document; and (ii) no development shall have occurred in any labor controversy, litigation, arbitration or governmental investigation or proceeding disclosed pursuant to SECTION 6.7 which might reasonably be expected to materially adversely affect the consolidated businesses, operations, assets, revenues, properties or prospects of the Company and its Subsidiaries; (c) no Default shall have then occurred and be continuing, and neither the Company nor any of its Subsidiaries are in material violation of any law or governmental regulation or court order or decree. SECTION 5.3.2 BORROWING REQUEST. The Agent shall have received a request for such Borrowing in accordance with SECTION 2.3. Each of the request for a Borrowing and the acceptance by such Borrower of the proceeds of such Borrowing shall constitute (a) a representation and warranty by the Company and such Borrower that on the date of such Borrowing (both immediately before and after giving effect to such Borrowing and the application of the proceeds thereof) the statements made in SECTION 5.3.1 are true and correct and (b) the certification required by such section. SECTION 5.3.3 INSURANCE. There shall have been no material change, or notice of prospective material change in the nature, extent, scope or cost of the insurance referred to in SECTION 6.12 which change would have a material adverse effect on the financial condition of the Company and its Subsidiaries on a consolidated basis or would significantly adversely affect the Company's or any other Borrower's ability to perform its obligations under this Agreement or under any Note. SECTION 5.3.4 FORM U-1. At any time at which the current value of the margin stock owned by any Borrower exceeds 25% of the value of such Borrower's assets which may not be pledged or made subject to a Lien pursuant to the terms hereof, such Borrower shall have delivered to the Agent with each request for a Borrowing for such Borrower, a statement for such Borrower in conformity with the requirements of Federal Reserve Form U-1 referred to in Regulation U of the F.R.S. Board. SECTION 5.3.5 SATISFACTORY LEGAL FORM. All documents executed or submitted pursuant hereto by or on behalf of the Company, any other Borrower, any of the Company's Subsidiaries or any other Obligors shall be satisfactory in form and substance to the Agent and its counsel; the Agent and its counsel shall have received all information, approvals, opinions, documents or instruments as the Agent or its counsel may reasonably request. ARTICLE VI REPRESENTATIONS AND WARRANTIES In order to induce the Lenders and the Agent to enter into this Agreement and to make Loans hereunder, the Company represents and warrants unto the Agent and each Lender as set forth in this ARTICLE VI. SECTION 6.1. ORGANIZATION, ETC. The Company and each of its Subsidiaries is a corporation validly organized and existing and in good standing under the laws of the jurisdiction of its incorporation or formation and is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the nature of its business requires such qualification, except such jurisdictions where failure to so qualify and be in good standing is not reasonably likely to have a material adverse effect on the operations or financial condition of the Company and its Subsidiaries taken as a whole. The Company has, and each Subsidiary upon becoming a Designated Subsidiary will have, full power and authority and holds, and will hold, all requisite governmental consents and other approvals to enter into, deliver and perform its Obligations under this Agreement, its Notes and each other Loan Document to which it is a party and to own and hold under lease its property and to conduct its business substantially as currently conducted by it. SECTION 6.2. DUE AUTHORIZATION, NON-CONTRAVENTION, ETC. The execution, delivery and performance by the Company of this Agreement, the Notes and each other Loan Document executed or to be executed by it and the execution, delivery and performance by each Designated Subsidiary or other Obligor of each Loan Document executed or to be executed by it are within the Company's and each such Designated Subsidiary's or other Obligor's corporate powers, have been duly authorized by all necessary corporate action, and do not (a) contravene the Company's, any Designated Subsidiary's or any such other Obligor's Organic Documents; (b) contravene any contractual restriction, law or governmental regulation or court decree or order binding on the Company, any such Designated Subsidiary or any such other Obligor; or (c) result in, or require the creation or imposition of, any Lien on any of the Company's, any Designated Subsidiary's or any other Obligor's properties. SECTION 6.3. GOVERNMENT APPROVAL, REGULATION, ETC. The Company and its Subsidiaries are in material compliance with all statutes and governmental rules and regulations applicable to them and no authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body or other Person is required for the due execution, delivery or performance by the Company, any Designated Subsidiary or any other Obligor of this Agreement, the Notes or any other Loan Document to which it is a party. Neither the Company nor any of its Subsidiaries is an "investment company" within the meaning of the Investment Company Act of 1940, as amended, or a "holding company", or a "subsidiary company" of a "holding company", or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended. SECTION 6.4. VALIDITY, ETC. This Agreement constitutes, and the Notes and each other Loan Document executed by the Company, on the due execution and delivery thereof, constitute, the legal, valid and binding obligations of the Company, enforceable in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency or other similar laws of general application affecting the enforcement of creditors' rights or by general principles of equity limiting the availability of equitable remedies; and each Loan Document executed pursuant hereto by each Designated Subsidiary or other Obligor will, on the due execution and delivery thereof by such Designated Subsidiary or other Obligor, be the legal, valid and binding obligation of such Designated Subsidiary or other Obligor enforceable in accordance with its terms, with like exception. SECTION 6.5. FINANCIAL INFORMATION. The audited consolidated balance sheets of the Company and its Subsidiaries as at September 30, 1996 and the unaudited consolidated balance sheets of the Company and its Subsidiaries as at March 31, 1997, and the related statements of earnings and cash flow of the Company and each of its Subsidiaries, copies of which have been furnished to the Agent and each Lender, have been prepared in accordance with GAAP consistently applied, and present fairly the consolidated financial condition of the corporations covered thereby as at the dates thereof and the results of their operations for the periods then ended. SECTION 6.6. NO MATERIAL ADVERSE CHANGE. Since the dates of the financial statements described in SECTION 6.5, there has been no material adverse change in the financial condition, operations, assets, business, properties or prospects of the Company and its Subsidiaries taken as a whole. SECTION 6.7. LITIGATION, LABOR CONTROVERSIES, ETC. There is no pending or, to the knowledge of the Company, threatened litigation, action or proceeding against the Company or any of its Subsidiaries or labor controversy involving the Company or any of its Subsidiaries or any of their respective properties, which might reasonably be expected to materially adversely affect the financial condition, operations, assets, business, properties or prospects of the Company and its Subsidiaries taken as a whole or which purports to affect the legality, validity or enforceability of this Agreement, the Notes or any other Loan Document, except as disclosed in ITEM 6.7 ("Litigation") or ITEM 6.14 ("Environmental Matters") of the Disclosure Schedule. SECTION 6.8. SUBSIDIARIES. The Company has no Subsidiaries, except those Subsidiaries (a) which are identified in ITEM 6.8 ("EXISTING SUBSIDIARIES") of the Disclosure Schedule; or (b) which are permitted to have been acquired after the Effective Date in accordance with SECTION 7.2.5. SECTION 6.9. PARTNERSHIPS; JOINT VENTURES. Neither the Company nor any of its Subsidiaries is a partner or a joint venturer in any partnership or joint venture other than the partnerships and joint ventures which are identified in ITEM 6.9 ("Partnerships and Joint Ventures") of the Disclosure Schedule. SECTION 6.10. OWNERSHIP OF PROPERTIES. The Company and each of its Subsidiaries owns good and marketable title to all of its properties and assets, real and personal, tangible and intangible, of any nature whatsoever (including patents, trademarks, trade names, service marks and copyrights), free and clear of all Liens, charges or claims (including infringement claims with respect to patents, trademarks, copyrights and the like) except as permitted pursuant to SECTION 7.2.2. SECTION 6.11. TAXES. The Company and each of its Subsidiaries has filed all tax returns and reports required by law to have been filed by it and have paid all taxes and governmental charges thereby shown to be owing, except any such taxes or charges which are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books. SECTION 6.12. INSURANCE. The Company and each of its Subsidiaries maintain insurance, including self-insurance, to such extent and against such hazards and liabilities as is commonly maintained by companies similarly situated. SECTION 6.13. PENSION AND WELFARE PLANS. During the twelve- consecutive-month period prior to the date of the execution and delivery of this Agreement and prior to the date of any Borrowing hereunder, no Reportable Event has occurred, no steps have been taken by the PBGC, the Company or an ERISA Affiliate to terminate or withdraw from any Pension Plan, and no contribution failure has occurred with respect to any Pension Plan sufficient to give rise to a Lien under section 302(f) of ERISA. No condition exists or event or transaction has occurred with respect to any Pension Plan which might result in the incurrence by the Company or any ERISA Affiliate of any material liability, fine or penalty. Except as disclosed in ITEM 6.13 ("Employee Benefit Plans") of the Disclosure Schedule, neither the Company nor any ERISA Affiliate has any contingent liability with respect to any post-retirement benefit under a Welfare Plan, other than liability for continuation coverage described in Part 6 of Title I of ERISA. SECTION 6.14. ENVIRONMENTAL WARRANTIES. (a) Except as set forth in ITEM 6.14 ("ENVIRONMENTAL MATTERS") of the Disclosure Schedule, all facilities and property (including underlying groundwater) owned or leased by the Company or any of its Subsidiaries have been, and continue to be, owned or leased by the Company and its Subsidiaries in material compliance with all Environmental Laws. (b) Except as set forth in ITEM 6.14 ("ENVIRONMENTAL MATTERS") of the Disclosure Schedule, there have been no past, and there are no pending or, to the Company's knowledge, threatened (i) claims, complaints, notices or requests for information received by the Company or any of its Subsidiaries with respect to any alleged violation of any Environmental Law, or (ii) complaints, notices or inquiries to the Company or any of its Subsidiaries regarding potential liability under any Environmental Law which might reasonably be expected to materially adversely affect the financial condition, operations, assets, business, properties or prospects of the Company and its Subsidiaries taken as a whole. (c) Except as set forth in ITEM 6.14 ("ENVIRONMENTAL MATTERS") of the Disclosure Schedule, there have been no Releases of Hazardous Materials at, on or under any property now or previously owned or leased by the Company or any of its Subsidiaries that, singly or in the aggregate, have resulted in, or may reasonably be expected to result in, the incurrence by the Company or any of its Subsidiaries of an expense, liability, fine or penalty in an amount which might reasonably be expected to materially adversely affect the operations or financial condition of the Company and its Subsidiaries taken as a whole. (d) Except as set forth in ITEM 6.14 ("ENVIRONMENTAL MATTERS") of the Disclosure Schedule, the Company and its Subsidiaries have been issued and are in compliance with all permits, certificates, approvals, licenses and other authorizations relating to environmental matters and necessary for their businesses except where failure to so comply is not reasonably likely to have a material adverse effect on the operations or financial condition of the Company and its Subsidiaries taken as a whole. (e) Except as set forth in ITEM 6.14 ("ENVIRONMENTAL MATTERS") of the Disclosure Schedule, no property now or previously owned or leased by the Company or any of its Subsidiaries is listed on the National Priorities List pursuant to CERCLA, on the CERCLIS, or on any similar state list of sites requiring investigation or clean-up. (f) Except as set forth in ITEM 6.14 ("ENVIRONMENTAL MATTERS") of the Disclosure Schedule, there are no underground storage tanks, active or abandoned, including petroleum storage tanks, on or under any property now or previously owned or leased by the Company or any of its Subsidiaries that, singly or in the aggregate, have resulted in, or may reasonably be expected to result in, the incurrence by the Company or any of its Subsidiaries of an expense, liability, fine or penalty in an amount which might reasonably be expected to materially adversely affect the operations or financial condition of the Company and its Subsidiaries taken as a whole. (g) Except as set forth in ITEM 6.14 ("ENVIRONMENTAL MATTERS") of the Disclosure Schedule, neither the Company nor any of its Subsidiaries has directly transported or directly arranged for the transportation of any Hazardous Material to any location which is listed on the National Priorities List pursuant to CERCLA, on the CERCLIS, or on any similar state list or which is the subject of federal, state or local enforcement actions or other investigations which has resulted in or may reasonably be expected to result in claims against the Company or such Subsidiary for any remedial work, damage to natural resources or personal injury, including claims under CERCLA, in an amount which might reasonably be expected to materially adversely affect the operations or financial condition of the Company and its Subsidiaries taken as a whole. (h) Except as set forth in ITEM 6.14 ("ENVIRONMENTAL MATTERS") of the Disclosure Schedule, there are no polychlorinated biphenyls or friable asbestos present at any property now or previously owned or leased by the Company or any Subsidiary of the Company that, singly or in the aggregate, have resulted in, or may reasonably be expected to result in, the incurrence by the Company or any of its Subsidiaries of an expense, liability, fine or penalty in an amount which might reasonably be expected to materially adversely affect the operations or financial condition of the Company and its Subsidiaries taken as a whole. SECTION 6.15. REGULATIONS G, U AND X. The Company is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose of, purchasing or carrying margin stock, and no proceeds of any Loans will be used for a purpose which violates, or would be inconsistent with, F.R.S. Board Regulation G, U or X. As of the date of the initial Borrowing and after giving effect to the intended application of the proceeds of each Borrowing thereafter, the current value of the margin stock owned by the Company at such time does not exceed 25% of the value of the Company's assets which may not be pledged or made subject to any Lien pursuant to this Agreement. Terms for which meanings are provided in F.R.S. Board Regulation G, U or X or any regulations substituted therefor, as from time to time in effect, are used in this Section with such meanings. SECTION 6.16. ACCURACY OF INFORMATION. All factual information heretofore or contemporaneously furnished by or on behalf of the Company in writing to the Agent or any Lender for purposes of or in connection with this Agreement or any transaction contemplated hereby taken together does not, and all other such factual information hereafter furnished by or on behalf of the Company to the Agent or any Lender taken together will not, on the date as of which such information is dated or certified, contain any untrue statement of a material fact or omit a material fact necessary to make the factual information contained therein not misleading in light of the circumstances in which it was provided. ARTICLE VII COVENANTS SECTION 7.1. AFFIRMATIVE COVENANTS. The Company agrees with the Agent and each Lender that, until all Commitments have terminated and all Obligations have been paid and performed in full, the Company will perform the obligations set forth in this SECTION 7.1. SECTION 7.1.1. FINANCIAL INFORMATION, REPORTS, NOTICES, ETC . The Company will furnish, or will cause to be furnished, to each Lender and the Agent copies of the following financial statements, reports, notices and information: (a) as soon as available and in any event within 60 days after the end of each of the first three Fiscal Quarters of each Fiscal Year of the Company, consolidated balance sheets of the Company and its Subsidiaries as of the end of such Fiscal Quarter and consolidated statements of earnings and cash flow of the Company and its Subsidiaries for such Fiscal Quarter and for the period commencing at the end of the previous Fiscal Year and ending with the end of such Fiscal Quarter, certified by the chief financial officer or treasurer (or, if none, the chief financial Authorized Corporate Officer) of the Company; (b) as soon as available and in any event within 120 days after the end of each Fiscal Year of the Company, a copy of the annual audit report for such Fiscal Year for the Company and its Subsidiaries, including therein consolidated balance sheets of the Company and its Subsidiaries as of the end of such Fiscal Year and consolidated statements of earnings and cash flow of the Company and its Subsidiaries for such Fiscal Year, in each case certified (without any Impermissible Qualification) in a manner acceptable to the Agent and the Required Lenders by independent public accountants of recognized national standing or other independent public accountants acceptable to the Agent and the Required Lenders; (c) as soon as available and in any event within 60 days after the end of each Fiscal Quarter (except the last Fiscal Quarter of each Fiscal Year) and within 120 days after the end of each Fiscal Year, a certificate, executed by the chief financial officer or treasurer (or, if none, the chief financial Authorized Corporate Officer) of the Company, showing (in reasonable detail and with appropriate calculations and computations in all respects satisfactory to the Agent) compliance with the financial covenants set forth in SECTIONS 7.2.3 and 7.2.8 and stating that no Default has occurred and is continuing or, if there is any such Default, a statement setting forth details of such Default and the action which the Company has taken and proposes to take with respect thereto; (d) together with the information referred to in PARAGRAPH (B) above, a report from an Authorized Corporate Officer (i) setting forth any changes in the identity of the Company's Subsidiaries, joint ventures or partnerships identified in ITEM 6.9 of the Disclosure Schedule and, in the case of new Subsidiaries, joint ventures or partnerships, describing the nature and percentage ownership interest therein of the Company and its Subsidiaries, (ii) describing any change in the nature and extent of the ownership interest in any of the Company's Subsidiaries, joint ventures or partnerships and (iii) to the extent not previously identified, indicating each Subsidiary of the Company having a Consolidated Total Assets equal to or greater than 50% of the Company's Consolidated Total Assets; (e) together with the certificate referred to in PARAGRAPH (C) above, (x) the occurrence of any materially adverse development of which the Company has become aware with respect to any litigation, action, proceeding, or labor controversy described in SECTION 6.7, (y) the commencement of any material labor controversy, litigation, action, proceeding of which the Company has become aware, of the type described in SECTION 6.7, or (z) the occurrence of a Default, notice thereof and, with respect to a Default, the steps being taken by the Company or the Subsidiary, as the case may be, affected with respect thereto, from an Authorized Corporate Officer; (f) promptly after the sending or filing thereof, copies of all reports which the Company sends to its equity securityholders, and all reports and registration statements (other than S-8 registration statements) which the Company or any of its Subsidiaries files with the Securities and Exchange Commission or any national securities exchange; (g) promptly after becoming aware of the institution of any steps by the Company, the PBGC or any ERISA Affiliate to terminate any Pension Plan, or the failure to make a required contribution to any Pension Plan if such failure is sufficient to give rise to a Lien under section 302(f) of ERISA, or the taking of any action with respect to a Pension Plan which could result in the requirement that the Company furnish a bond or other security to the PBGC or such Pension Plan, or the occurrence of any event with respect to any Pension Plan which could result in the incurrence by the Company of any material liability, fine or penalty, or any material increase in the contingent liability of the Company with respect to any post-retirement Welfare Plan benefit, notice thereof and copies of all documentation relating thereto; (h) within five days of any purchase of any "margin stock" as defined in Regulation U of the F.R.S. Board, a written report in the form set forth as EXHIBIT G hereto of the amount and type of any margin stock so purchased; (i) as soon as available and in any event within five days after the effective date thereof, a written report of any written amendment of or waiver with respect to the Senior Note Agreements, together with a copy of the relevant document(s) evidencing such amendment or waiver; and (j) such other information respecting the condition or operations, financial or otherwise, of the Company or any of its Subsidiaries, or the Company's or any other Borrower's compliance with this Agreement, as any Lender through the Agent may from time to time reasonably request. SECTION 7.1.2. COMPLIANCE WITH LAWS, ETC. The Company will, and will cause each of its Subsidiaries to, comply in all material respects with all applicable laws, rules, regulations and orders, such compliance to include (without limitation): (a) except as otherwise permitted by SECTION 7.2.8, the maintenance and preservation of its and each Subsidiary's respective existence and all rights, privileges, licenses, patents, patent rights, copyrights, trademarks, trade names, franchises and other authority necessary for the conduct of their respective businesses in the ordinary course as conducted from time to time; and (b) the payment, before the same become delinquent, of all taxes, assessments, governmental charges or levies imposed upon it or upon its property, franchises or assets except to the extent (i) being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books or (ii) failure to so pay would neither (A) have a material adverse effect on the operations or financial condition of the Company and its Subsidiaries taken as a whole nor (B) otherwise result in the occurrence of a Default. SECTION 7.1.3. INSURANCE. The Company will, and will cause each of its Subsidiaries to, maintain or cause to be maintained insurance with respect to its properties and business (including business interruption insurance) against such casualties and contingencies and of such types and in such amounts as is customary in the case of similar businesses. Nothing contained in this SECTION 7.1.3 shall preclude the Company and its Subsidiaries from maintaining self-insurance and co-insurance to the extent that such self-insurance and co-insurance would not have a material adverse effect on the operations or financial condition of the Company and its Subsidiaries taken as a whole. SECTION 7.1.4. ENVIRONMENTAL COVENANT. The Company will, and will cause each of its Subsidiaries to, (a) use and operate all of its facilities and properties in material compliance with all Environmental Laws, keep all necessary permits, approvals, certificates, licenses and other authorizations relating to environmental matters in effect and remain in material compliance therewith, and handle all Hazardous Materials in material compliance with all applicable Environmental Laws; and (b) immediately notify the Agent and provide copies upon receipt of all written claims, complaints, notices or inquiries relating to the condition of its facilities and properties or compliance with Environmental Laws if such condition may reasonably be expected to result in the incurrence by the Company or any of its Subsidiaries of an expense, liability, fine or penalty in an amount which might reasonably be expected to materially adversely affect the operations or financial condition of the Company and its Subsidiaries taken as a whole. SECTION 7.2. NEGATIVE COVENANTS. The Company agrees with the Agent and each Lender that, until all Commitments have terminated and all Obligations have been paid and performed in full, the Company will perform the obligations set forth in this SECTION 7.2. SECTION 7.2.1. LIENS. The Company will not, and will not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any of its property, revenues or assets (other than capital stock of the Company held as treasury stock), whether now owned or hereafter acquired, except, without duplication: (a) Liens granted to the Agent or any Lender under this Agreement or any other Loan Document; (b) Liens outstanding on the Effective Date and listed on ITEM 7.2.1 to the Disclosure Schedule or disclosed in the financial statements referred to in SECTION 6.5; (c) Liens securing the Indebtedness of a Subsidiary of the Company to the Company or to another such Subsidiary; (d) Liens granted or incurred after the Effective Date to secure the payment of the purchase price or construction costs incurred in connection with the acquisition or construction by the Company or any of its Subsidiaries of fixed assets useful and intended to be used in carrying on the business of the Company or one of its Subsidiaries, including Liens existing on such fixed assets at the time of acquisition or construction thereof or at the time of acquisition by the Company or one of its Subsidiaries of any business entity then owning such fixed assets, whether or not such existing Liens were given to secure the payment of the purchase price or construction costs of the fixed assets to which they attach, so long as they were not incurred, extended or renewed in contemplation of such acquisition or construction; PROVIDED, that (i) the Lien shall attach solely to the fixed assets acquired, constructed or purchased, (ii) at the time of the acquisition, construction or purchase of such fixed assets, the aggregate amount remaining unpaid on all Indebtedness secured by Liens on such fixed assets, whether or not assumed by the Company or one of its Subsidiaries, shall not exceed an amount equal to the lesser of (x) the total purchase price or construction costs, as applicable, thereof or (y) the fair market value thereof at the time of acquisition, construction or purchase (as determined in good faith by the Board of Directors of the Company), and (iii) immediately before and after the granting or incurring of any such Lien no Default exists which is continuing; (e) Liens for taxes, assessments or other governmental charges or levies not at the time delinquent or thereafter payable without penalty or being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books; (f) Liens of carriers, warehousemen, mechanics, materialmen and landlords incurred in the ordinary course of business for sums not overdue for a period of more than 30 days or being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books; (g) Liens incurred in the ordinary course of business in connection with workmen's compensation, unemployment insurance or other forms of governmental insurance or benefits, or to secure performance of tenders, statutory obligations, leases and contracts (other than for borrowed money) entered into in the ordinary course of business or to secure obligations on surety or appeal bonds; (h) Liens other than Liens excepted by CLAUSES (A) through (G) above securing an aggregate amount of Indebtedness not exceeding 10% of the Company's Consolidated Total Capitalization; and (i) any renewal or extension of any Lien permitted by the foregoing CLAUSES (B), (D) or (H) of this Section with extension, refunding or refinancing of the Indebtedness secured thereby made without increase in the then outstanding principal amount thereof and as long as immediately before and after any such extension, refunding or refinancing of Indebtedness no Default exists which is continuing. SECTION 7.2.2. FINANCIAL CONDITION. The Company will not permit: (a) Its Interest Coverage Ratio for any Fiscal Quarter to be less than 3.00 to 1.00. (b) Its Leverage Ratio to be at any time greater than 2.00 to 1.00. SECTION 7.2.3. LONG-TERM LEASES. The Company will not permit the aggregate Rentals for any Long-Term Leases payable in any Fiscal Year by the Company and its Subsidiaries to exceed 20% of the Company's Consolidated Total Capitalization as at the last day of the preceding Fiscal Year. SECTION 7.2.4. INVESTMENTS. The Company will not, and will not permit any of its Subsidiaries to, make, incur, assume or suffer to exist any Investment in any other Person, except: (a) Investments existing on the Effective Date and identified in ITEM 7.2.4(A) ("ONGOING INVESTMENTS") of the Disclosure Schedule; (b) Cash Equivalent Investments; (c) in the ordinary course of business, Investments by the Company in any of its Subsidiaries, or by any such Subsidiary in any of its Subsidiaries, by way of contributions to capital or loans or advances; and (d) other Investments in an aggregate amount at any one time not to exceed the sum of (i) the Company's Consolidated Net Worth as reflected in the Company's most recently issued consolidated balance sheet MINUS $110,000,000 PLUS (ii) fifteen percent (15%) of the Company's Consolidated Net Worth as reflected in the Company's most recently issued consolidated balance sheet MINUS the amount by which the aggregate amount of Intangibles of the Company and its consolidated Subsidiaries determined on a consolidated basis acquired after the Effective Date exceeds fifteen percent (15%) of the Company's Consolidated Net Worth as reflected in the Company's most recently issued consolidated balance sheet; PROVIDED, HOWEVER, that (e) any Investment which when made complies with the requirements of the definition of the term "CASH EQUIVALENT INVESTMENT" may continue to be held notwithstanding that such Investment if made thereafter would not comply with such requirements; and (f) no Investment otherwise permitted by CLAUSE (C) or (D) shall be permitted to be made if, immediately before or after giving effect thereto, any Default shall have occurred and be continuing. SECTION 7.2.5. CONSOLIDATION, MERGER, ETC. The Company will not, and will not permit any of its Subsidiaries to, liquidate or dissolve, consolidate with, or merge into or with, any other corporation, or purchase or otherwise acquire all or substantially all of the assets of any Person (or of any division thereof) other than (a) any such transaction among or between Subsidiaries of the Company as long as the surviving Person (in the case of a liquidation, merger, dissolution or consolidation) or the acquiring Person (in the case of an acquisition) is a wholly-owned Subsidiary of the Company (and if as a result thereof any such Subsidiary which will cease to exist is a Designated Subsidiary, the obligations of such Subsidiary shall be assumed by a Subsidiary which is a Designated Subsidiary) or (b) any such transaction involving the Company if the Company is the surviving corporation, and provided that both before and after giving effect to any such transaction (whether involving the Company or any of its Subsidiaries), no Default has occurred and is continuing and the Company continues to meet all of its obligations under this Agreement and the other Loan Documents. SECTION 7.2.6. ASSET DISPOSITIONS, ETC . Except as otherwise permitted by this Section, the Company will not, and will not permit any of its Subsidiaries to, sell, transfer, lease, contribute or otherwise convey, or grant options, warrants or other rights with respect to, all or any substantial part of its assets (including accounts receivable and capital stock of Subsidiaries) to any Person. Notwithstanding the foregoing: (a) the Company or any of its Subsidiaries may sell, for a cash consideration equal to not less than the fair market value thereof (as determined in good faith by the Board of Directors of the Company) assets which constitute a "substantial part" (as defined below in this Section) of the assets of the Company and its Subsidiaries if, within ninety (90) days after the date of any such sale: (1) the Person selling such assets applies that portion (the "EXCESS PORTION") of the net proceeds received upon such sale which exceeds fifteen percent (15%) of the Company's Consolidated Net Assets (determined as of the last day of the calendar month immediately preceding the month in which such sale occurs), to the purchase (or shall have entered into a firm and binding agreement to purchase, within one hundred eighty (180) days after the date of such sale), for a cost not exceeding the fair market value thereof (as determined in good faith by the Board of Directors of the Company), of other assets which will be used or useful in the ordinary course of the business of the Person selling such assets, or (2) the Company, by written notice to each holder of outstanding Consolidated Funded Debt of the Company not less than thirty (30) days prior to the date fixed by the Company for the prepayment or purchase referred to below (which notice shall state that the same is given pursuant to the provisions of this SECTION 7.2.6 and that any such holder that elects to accept such offer must do so by notice given to the Company, in writing or by telex, not less than ten (10) days prior to such date of prepayment or purchase), shall have offered, pursuant to a pro-rata offer made concurrently to all holders of then outstanding Consolidated Funded Debt, to apply an amount equal to that portion of the Excess Portion not applied as provided in CLAUSE (1) above, to the prepayment or purchase, on the date specified in such notice (which date shall be within such ninety (90) day period) of Consolidated Funded Debt (at a prepayment or purchase price not exceeding the principal amount thereof and accrued interest thereon to the date of such prepayment or purchase, and without premium); provided, however, that, if and to the extent that any holder of Consolidated Funded Debt declines such offer in whole or in part, that portion of the Excess Portion offered to such holder and not applied to the prepayment or purchase of Consolidated Funded Debt held by it shall be offered by the Company (within ten (10) days following the expiration of such ninety (90) day period) to be applied, on a pro-rata basis, to the prepayment or purchase on the date specified in such offer (which date shall be thirty (30) days following the expiration of such ninety (90) day period), on the same terms as provided above, of Consolidated Funded Debt held by all holders of Consolidated Funded Debt which elected to accept the initial prepayment or purchase offer (any such holder electing to accept such offer must notify the Company of such election by notice given to the Company, in writing or by telex, at least ten days prior to the date fixed by the Company for said prepayment or purchase); provided, however, that the aggregate book value of assets sold by the Company and its Subsidiaries in any Fiscal Year pursuant to the provisions of this PARAGRAPH (A) shall not exceed thirty-five percent (35%) of the Company's Consolidated Net Assets, determined as of the last day of the immediately preceding Fiscal Year; and (b) so long as no Event of Default or Unmatured Event of Default exists, the Company or any Subsidiary may sell or factor accounts receivable owned by it, without recourse or liability (except (i) usual and customary contingent liabilities incurred by an endorser without recourse or in connection with customary warranties usually made in connection with sales "without recourse" of accounts receivable and (ii) repurchase or indemnity obligations with respect thereto not exceeding ten percent (10%) of the face amount of such accounts receivable) and for an amount not less than the fair value of such receivables; As used in this SECTION 7.2.6 a sale, lease or other disposition of assets shall be deemed to be a "substantial part" of the assets of the Company and its Subsidiaries only if the book value of such assets, when added to the book value of all other assets sold, leased or otherwise disposed of by the Company and its Subsidiaries (other than (i) the sale or other disposition of property which is worn-out, obsolete or unserviceable and (ii) the sale of goods and services in the ordinary course of business) during the same Fiscal Year, exceeds fifteen percent (15%) of the Company's Consolidated Net Assets, determined as of the end of the immediately preceding Fiscal Year. SECTION 7.2.7. TRANSACTIONS WITH AFFILIATES. The Company will not, and will not permit any of its Subsidiaries to, enter into or be a party to any transaction, arrangement or contract with any of its Related Parties (excluding any transactions, arrangements or contracts entered into by the Company or one of its Subsidiaries with any of its Related Parties in good faith, and which the Company has in good faith determined to be in the long term best interests of the Company and its Subsidiaries taken as a whole), including, without limitation, the purchase from, sale to or exchange of property with, or the rendering of any service by or for, any such Related Party, unless such arrangement or contract is fair and equitable to the Company or such Subsidiary and is a transaction, arrangement or contract of the kind which would be entered into by a prudent Person in the position of the Company or such Subsidiary with a Person which is not one of its Related Parties. SECTION 7.2.8. NEGATIVE PLEDGES, RESTRICTIVE AGREEMENTS, ETC. The Company will not, and will not permit any of its Subsidiaries to, enter into any agreement (excluding this Agreement and any other Loan Document) prohibiting (a) the creation or assumption of any Lien upon its properties, revenues or assets, whether now owned or hereafter acquired, or the ability of the Company or any other Obligor to amend or otherwise modify this Agreement or any other Loan Document; or (b) the ability of any Subsidiary to make any payments, directly or indirectly, to the Company by way of dividends, advances, repayments of loans or advances, reimbursements of management and other intercompany charges, expenses and accruals or other returns on investments, or any other agreement or arrangement which restricts the ability of any such Subsidiary to make any payment, directly or indirectly, to the Company. SECTION 7.2.9. BUSINESS ACTIVITIES. The Company will not, and will not permit any Subsidiary to, engage in any business if, as a result, the general nature of the businesses then to be engaged in by the Company and its Subsidiaries taken as a whole, would be substantially changed from the businesses in which they are currently engaged and other activities related or complementary thereto. ARTICLE VIII EVENTS OF DEFAULT SECTION 8.1. LISTING OF EVENTS OF DEFAULT. Each of the following events or occurrences described in this SECTION 8.1 shall constitute an "EVENT OF DEFAULT". SECTION 8.1.1. NON-PAYMENT OF OBLIGATIONS. Any Borrower shall default in the payment or prepayment when due of any principal on any Loan, or any Borrower shall default (and such default shall continue unremedied for a period of five days) in the payment when due of any fee, any interest or of any other Obligation. SECTION 8.1.2. BREACH OF WARRANTY. Any epresentation or warranty of the Company, any Designated Subsidiary or any other Obligor made or deemed to be made hereunder or in any other Loan Document executed by it or any other writing or certificate furnished by or on behalf of the Company, such Designated Subsidiary or such other Obligor to the Agent or any Lender for the purposes of or in connection with this Agreement or any such other Loan Document (including any certificates delivered pursuant to ARTICLE V) is or shall be incorrect when made or deemed made in any material respect. SECTION 8.1.3. NON-PERFORMANCE OF CERTAIN COVENANTS AND OBLIGATIONS. The Company shall default in the due performance and observance of any of its obligations under SECTION 7.2 (other than SECTION 7.2.3). SECTION 8.1.4. NON-PERFORMANCE OF OTHER COVENANTS AND OBLIGATIONS. The Company, any Designated Subsidiary or any other Obligor shall default in the due performance and observance of any other agreement contained herein or in any other Loan Document executed by it, and such default shall continue unremedied for a period of 30 days after the earlier of (i) the day on which the chief executive officer, chief operating officer, chief financial officer, Treasurer or Secretary of the Company first obtains actual knowledge of such default, or (ii) notice thereof shall have been given to the Company by the Agent or any Lender. SECTION 8.1.5. DEFAULT ON OTHER INDEBTEDNESS. (a) A default shall occur in the payment when due (subject to any applicable grace period), whether by acceleration or otherwise, of (i) any Indebtedness under the Senior Note Agreements or (ii) any other Indebtedness (other than Indebtedness described in SECTION 8.1.1) of, or guaranteed by, the Company or any of its Subsidiaries having a principal amount, individually or in the aggregate, in excess of $5,000,000; or (b) a default shall occur in the performance or observance of any obligation or condition with respect to (i) any Indebtedness under the Senior Note Agreements or (ii) any other Indebtedness of, or guaranteed by, the Company or any of its Subsidiaries having a principal amount, individually or in the aggregate, in excess of $5,000,000, if the effect of such default is to accelerate the maturity of any such Indebtedness or such default shall continue unremedied for any applicable period of time sufficient to permit the holder or holders of such Indebtedness, or any trustee or agent for such holders, to cause such Indebtedness to become due and payable prior to its expressed maturity. SECTION 8.1.6. JUDGMENTS. Any judgments or orders for the payment of money aggregating in excess of $5,000,000 shall be rendered against the Company or any of its Subsidiaries or against any property or assets of either and either (a) enforcement proceedings shall have been commenced by any creditor upon such judgments or orders; or (b) there shall be any period of 60 consecutive days during which a stay of enforcement of such judgment or order, by reason of a pending appeal or otherwise, shall not be in effect. SECTION 8.1.7. PENSION PLANS. Any of the following events shall occur with respect to any Pension Plan: (a) the institution of any steps by the Company, any ERISA Affiliate or any other Person to terminate a Pension Plan if, as a result of such termination, the Company or any such ERISA Affiliate could be required to make a contribution to such Pension Plan, or could reasonably expect to incur a liability or obligation to such Pension Plan, in excess of $1,000,000; or (b) a contribution failure occurs with respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA. SECTION 8.1.8. CONTROL OF THE COMPANY. Any Change in Control shall occur. SECTION 8.1.9. BANKRUPTCY, INSOLVENCY, ETC. The Company or any of its Subsidiaries shall (a) become insolvent or generally fail to pay, or admit in writing its inability or unwillingness to pay, debts as they become due; (b) apply for, consent to, or acquiesce in, the appointment of a trustee, receiver, sequestrator or other custodian for the Company or any of its Subsidiaries or any property of any thereof, or make a general assignment for the benefit of creditors; (c) in the absence of such application, consent or acquiescence, permit or suffer to exist the appointment of a trustee, receiver, sequestrator or other custodian for the Company or any of its Subsidiaries or for a substantial part of the property of any thereof, and such trustee, receiver, sequestrator or other custodian shall not be discharged within 60 days, provided that the Company and each Subsidiary hereby expressly authorizes the Agent and each Lender to appear in any court conducting any relevant proceeding during such 60-day period to preserve, protect and defend their rights under the Loan Documents; (d) permit or suffer to exist the commencement of any bankruptcy, reorganization, debt arrangement or other case or proceeding under any bankruptcy or insolvency law, or any dissolution, winding up or liquidation proceeding, in respect of the Company or any of its Subsidiaries, and, if any such case or proceeding is not commenced by the Company or such Subsidiary, such case or proceeding shall be consented to or acquiesced in by the Company or such Subsidiary or shall result in the entry of an order for relief or shall remain for 60 days undismissed, provided that the Company and each Subsidiary hereby expressly authorizes the Agent and each Lender to appear in any court conducting any such case or proceeding during such 60-day period to preserve, protect and defend their rights under the Loan Documents; or (e) take any action authorizing, or in furtherance of, any of the foregoing. SECTION 8.2. ACTION IF BANKRUPTCY. If any Event of Default described in CLAUSES (A) through (E) of SECTION 8.1.9 shall occur with respect to the Company or any Subsidiary, the Commitments(if not theretofore terminated) shall automatically terminate and be reduced to zero and the and the outstanding principal amount of all outstanding Loans and all other Obligations shall automatically be and become immediately due and payable, without notice or demand. SECTION 8.3. ACTION IF OTHER EVENT OF DEFAULT . If any Event of Default (other than any Event of Default described in CLAUSES (A) through (E) of SECTION 8.1.9 with respect to the Company or any Subsidiary) shall occur for any reason, whether voluntary or involuntary, and be continuing, the Agent, upon the direction of the Required Lenders, shall by notice to the Company declare all or any portion of the outstanding principal amount of the Loans and other Obligations to be due and payable and/or the Commitments (if not theretofore terminated) to be terminated and reduced to zero, whereupon the full unpaid amount of such Loans and other Obligations which shall be so declared due and payable shall be and become immediately due and payable, without further notice, demand or presentment, and/or, as the case may be, the Commitments shall terminate and be reduced to zero. ARTICLE IX THE AGENT SECTION 9.1. ACTIONS. Each Lender hereby appoints B of A as its Agent under and for purposes of this Agreement, the Notes and each other Loan Document. Each Lender authorizes the Agent to act on behalf of such Lender under this Agreement, the Notes and each other Loan Document and, in the absence of other written instructions from the Required Lenders received from time to time by the Agent (with respect to which the Agent agrees that it will comply, except as otherwise provided in this Section or as otherwise determined by the Agent in good faith on advice from legal counsel that to do so could (i) be in violation of the terms of this Agreement or another Loan Document, (ii) be contrary to public policy or in violation of law, regulation, guideline, decision, directive or opinion of any court or regulator or governmental or regulatory body having jurisdiction over the Agent, or (iii) expose the Agent to liability, fine or penalty), to exercise such powers hereunder and thereunder as are specifically delegated to or required of the Agent by the terms hereof and thereof, together with such powers as may be reasonably incidental thereto. Each Lender hereby indemnifies (which indemnity shall survive any termination of this Agreement) the Agent, PRO RATA according to such Lender's Percentage, from and against any and all liabilities, obligations, losses, damages, claims, costs or expenses of any kind or nature whatsoever which may at any time be imposed on, incurred by, or asserted against, the Agent in any way relating to or arising out of this Agreement, the Notes and any other Loan Document, including reasonable attorneys' fees, and as to which the Agent is not reimbursed by the Company; PROVIDED, HOWEVER, that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, claims, costs or expenses which are determined by a court of competent jurisdiction in a final proceeding to have resulted solely from the Agent's gross negligence or wilful misconduct. The Agent shall not be required to take any action hereunder, under the Notes or under any other Loan Document, or to prosecute or defend any suit in respect of this Agreement, the Notes or any other Loan Document, unless it is indemnified hereunder to its satisfaction. If any indemnity in favor of the Agent shall be or become, in the Agent's determination, inadequate, the Agent may call for additional indemnification from the Lenders and cease to do the acts indemnified against hereunder until such additional indemnity is given. SECTION 9.2. FUNDING RELIANCE, ETC. Unless the Agent shall have been notified by telephone, confirmed in writing, by any Lender by 5:00 p.m., Chicago time, on the day prior to a Borrowing that such Lender will not make available the amount which would constitute its Percentage of such Borrowing on the date specified therefor, the Agent may assume that such Lender has made such amount available to the Agent and, in reliance upon such assumption, make available to the Borrower a corresponding amount. If and to the extent that such Lender shall not have made such amount available to the Agent, such Lender and the Company severally agree to repay the Agent forthwith on demand such corresponding amount together with interest thereon, for each day from the date the Agent made such amount available to the Company to the date such amount is repaid to the Agent, at the interest rate applicable at the time to Loans comprising such Borrowing. SECTION 9.3. EXCULPATION. Neither the Agent nor any of its directors, officers, employees or agents shall be liable to any Lender for any action taken or omitted to be taken by it under this Agreement or any other Loan Document, or in connection herewith or therewith, except for its own wilful misconduct or gross negligence, nor responsible for any recitals or warranties herein or therein, nor for the effectiveness, enforceability, validity or due execution of this Agreement or any other Loan Document, nor to make any inquiry respecting the performance by the Company of its obligations hereunder or under any other Loan Document. Any such inquiry which may be made by the Agent shall not obligate it to make any further inquiry or to take any action. The Agent shall be entitled to rely upon advice of counsel concerning legal matters and upon any notice, consent, certificate, statement or writing which the Agent believes to be genuine and to have been presented by a proper Person. SECTION 9.4. SUCCESSOR. The Agent may resign as such at any time upon at least 30 days' prior notice to the Company and all Lenders. If the Agent at any time shall resign, the Required Lenders may appoint another Lender as a successor Agent which shall thereupon become the Agent hereunder. If no successor Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the retiring Agent's giving notice of resignation, then the retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which shall be one of the Lenders or a commercial banking institution organized under the laws of the U.S. (or any State thereof) or a U.S. branch or agency of a commercial banking institution, and having a combined capital and surplus of at least $500,000,000. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall be entitled to receive from the retiring Agent such documents of transfer and assignment as such successor Agent may reasonably request, and shall thereupon succeed to and become vested with all rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations under this Agreement. After any retiring Agent's resignation hereunder as the Agent, the provisions of (a) this ARTICLE IX shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Agent under this Agreement; and (b) SECTION 10.3 and SECTION 10.4 shall continue to inure to its benefit. SECTION 9.5. LOANS BY LENDERS. B of A shall have the same rights and powers with respect to (x) the Loans made by it or any of its Related Parties, and (y) the Notes held by it or any of its Related Parties as any other Lender and may exercise the same as if it were not the Agent. B of A and its Related Parties may accept deposits from, lend money to, and generally engage in any kind of business with the Company or any Subsidiary or Related Party of the Company as if B of A were not the Agent hereunder. SECTION 9.6. CREDIT DECISIONS. Each Lender acknowledges that it has, independently of the Agent and each other Lender, and based on such Lender's review of the financial information of the Company, this Agreement, the other Loan Documents (the terms and provisions of which being satisfactory to such Lender) and such other documents, information and investigations as such Lender has deemed appropriate, made its own credit decision to extend its Commitment. Each Lender also acknowledges that it will, independently of the Agent and each other Lender, and based on such other documents, information and investigations as it shall deem appropriate at any time, continue to make its own credit decisions as to exercising or not exercising from time to time any rights and privileges available to it under this Agreement or any other Loan Document. SECTION 9.7. COPIES, ETC. The Agent shall give prompt notice to each Lender of each notice or request required or permitted to be given to the Agent by the Company pursuant to the terms of this Agreement (unless concurrently delivered to the Lenders by the Company). The Agent will distribute to each Lender each document or instrument received for its account and copies of all other communications received by the Agent from the Company for distribution to the Lenders by the Agent in accordance with the terms of this Agreement. ARTICLE X MISCELLANEOUS PROVISIONS SECTION 10.1. WAIVERS, AMENDMENTS, ETC. The provisions of this Agreement and of each other Loan Document may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and consented to by the Company and the Required Lenders; PROVIDED, HOWEVER, that no such amendment, modification or waiver which would: (a) modify any requirement hereunder that any particular action be taken by all the Lenders or by the Required Lenders, shall be effective unless consented to by each Lender; (b) modify this SECTION 10.1, change the definition of "REQUIRED LENDERS", increase the Commitment Amount, Designated Subsidiary or the Percentage of any Lender (except pursuant to assignments in accordance with SECTION 10.11), reduce any fees described in ARTICLE III, or extend the Commitment Termination Date shall be made without the consent of each Lender and each holder of a Note; (c) extend the due date for, or reduce the amount of, any scheduled repayment or prepayment of principal of or interest on any Loan (or reduce the principal amount of or rate of interest on any Loan) shall be made without the consent of the holder of the Note evidencing such Loan; or (d) affect adversely the interests, rights or obligations of the Agent QUA the Agent shall be made without consent of the Agent. No failure or delay on the part of the Agent, any Lender or the holder of any Note in exercising any power or right under this Agreement or any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right. No notice to or demand on the Company in any case shall entitle it to any notice or demand in similar or other circumstances. No waiver or approval by the Agent, any Lender or the holder of any Note under this Agreement or any other Loan Document shall, except as may be otherwise stated in such waiver or approval, be applicable to subsequent transactions. No waiver or approval hereunder shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder. SECTION 10.2. NOTICES. All notices and other communications provided to any party hereto under this Agreement or any other Loan Document shall be in writing or by Telex or by facsimile and addressed, delivered or transmitted to such party at its address, Telex or facsimile number set forth below its signature hereto or set forth in the Lender Assignment Agreement or at such other address, Telex or facsimile number as may be designated by such party in a notice to the other parties. Any notice, if mailed and properly addressed with postage prepaid or if properly addressed and sent by pre-paid courier service, shall be deemed given when sent; PROVIDED, HOWEVER, that notices to the Agent under SECTIONS 2.3 through 2.5 shall not be effective until actually received by the Agent; any notice, if transmitted by facsimile, shall be deemed given when transmitted. SECTION 10.3. PAYMENT OF COSTS AND EXPENSES. The Company agrees to pay on demand all reasonable expenses of the Agent (including the fees and out-of-pocket expenses of counsel to the Agent and of local counsel, if any, who may be retained by counsel to the Agent) in connection with (a) the negotiation, preparation, execution and delivery of this Agreement and of each other Loan Document, including schedules and exhibits, and any amendments, waivers, consents, supplements or other modifications to this Agreement or any other Loan Document as may from time to time hereafter be required, whether or not the transactions contemplated hereby are consummated, and (b) the preparation and review of the form of any document or instrument relevant to this Agreement or any other Loan Document. The Company further agrees to pay, and to save the Agent and the Lenders harmless from all liability for, any stamp or other taxes which may be payable in connection with the execution or delivery of this Agreement, the borrowings hereunder, or the issuance of the Notes or any other Loan Documents or the acceptance of telephonic or other instructions for making Loans. The Company also agrees to reimburse the Agent and each Lender upon demand its reasonable expenses, including fees and out-of-pocket expenses of counsel (including counsel who may be employees of the Agent or such Lender), incurred by the Agent or such Lender in connection with (x) the negotiation of any restructuring or "work-out", whether or not consummated, of any Obligations and (y) the enforcement of any Obligations. SECTION 10.4. INDEMNIFICATION. In consideration of the execution and delivery of this Agreement by each Lender and the extension of the Commitments, the Company hereby indemnifies, exonerates and holds the Agent and each Lender and each of their respective officers, directors, employees and agents (collectively, the "INDEMNIFIED PARTIES") free and harmless from and against any and all actions, causes of action, suits, losses, costs, liabilities and damages, and expenses incurred in connection therewith (irrespective of whether any such Indemnified Party is a party to the action for which indemnification hereunder is sought), including reasonable attorneys' fees and disbursements (collectively, the "INDEMNIFIED LIABILITIES"), incurred by the Indemnified Parties or any of them as a result of, or arising out of, or relating to (a) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of any Loan; (b) the entering into and performance of this Agreement and any other Loan Document by any of the Indemnified Parties (including any action brought by or on behalf of the Company as the result of any determination by the Required Lenders pursuant to ARTICLE V not to fund any Borrowing); or (c) any investigation, litigation or proceeding related to any acquisition or proposed acquisition by the Company or any of its Subsidiaries of all or any portion of the stock or assets of any Person, whether or not the Agent or such Lender is party thereto, except for any such Indemnified Liabilities arising for the account of a particular Indemnified Party by reason of the relevant Indemnified Party's gross negligence or wilful misconduct, or such Indemnified Party's failure to comply with SECTIONS 10.11 or 10.12. If and to the extent that the foregoing undertaking may be unenforceable for any reason, the Company hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. SECTION 10.5. SURVIVAL. The obligations of the Company under SECTIONS 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the Lenders under SECTION 9.1, shall in each case survive any termination of this Agreement, the payment in full of all Obligations and the termination of all Commitments. The representations and warranties made by each Obligor in this Agreement and in each other Loan Document shall survive the execution and delivery of this Agreement and each such other Loan Document. SECTION 10.6. SEVERABILITY. Any provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such provision and such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement or such Loan Document or affecting the validity or enforceability of such provision in any other jurisdiction. SECTION 10.7. HEADINGS. The various headings of this Agreement and of each other Loan Document are inserted for convenience only and shall not affect the meaning or interpretation of this Agreement or such other Loan Document or any provisions hereof or thereof. SECTION 10.8. EXECUTION IN COUNTERPARTS, EFFECTIVENESS, ETC. This Agreement may be executed by the parties hereto in several counterparts, each of which shall be executed by the Company and the Agent and be deemed to be an original and all of which shall constitute together but one and the same agreement. This Agreement shall become effective when counterparts hereof executed on behalf of the Company and each Lender (or notice thereof satisfactory to the Agent) shall have been received by the Agent and notice thereof shall have been given by the Agent to the Company and each Lender. SECTION 10.9. GOVERNING LAW; ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS. This agreement, the Notes and the other Loan Documents constitute the entire understanding among the parties hereto with respect to the subject matter hereof and supersede any prior agreements, written or oral, with respect thereto. SECTION 10.10. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns; PROVIDED, HOWEVER, that: (a) the Company may not assign or transfer its rights or obligations hereunder without the prior written consent of the Agent and all Lenders; and (b) the rights of sale, assignment and transfer of the Lenders are subject to SECTION 10.11. SECTION 10.11. SALE AND TRANSFER OF LOANS AND NOTE; PARTICIPATIONS IN LOANS AND NOTE . Each Lender may assign, or sell participations in, its Loans and Commitment to one or more other Persons in accordance with this SECTION 10.11. SECTION 10.11.1. ASSIGNMENTS. Any Lender, (a) with the written consents of the Company and the Agent (which consents shall not be unreasonably delayed or withheld and which consent, in the case of the Company, shall be deemed to have been given in the absence of a written notice delivered by the Company to the Agent, on or before the fifth Banking Day after receipt by the Company of such Lender's request for consent, stating, in reasonable detail, the reasons why the Company proposes to withhold such consent) may at any time assign and delegate to one or more commercial banks or other financial institutions, and (b) with notice to the Company and the Agent, but without the consent of the Company or the Agent, may assign and delegate to any of its Affiliates or to any other Lender (each Person described in either of the foregoing clauses as being the Person to whom such assignment and delegation is to be made, being hereinafter referred to as an "ASSIGNEE LENDER"), all or any fraction of such Lender's total Loans and Commitment (which assignment and delegation shall be of a constant, and not a varying, percentage of all the assigning Lender's Loans and Commitment) in a minimum aggregate amount of the lesser of (x) such Lender's total Loans and Commitment and (y) $5,000,000 PROVIDED, HOWEVER, that any such Assignee Lender will comply, if applicable, with the provisions contained in the penultimate sentence of SECTION 4.6 and FURTHER, PROVIDED, HOWEVER, that, the Company and the Agent shall be entitled to continue to deal solely and directly with such Lender in connection with the interests so assigned and delegated to an Assignee Lender until (c) written notice of such assignment and delegation, together with payment instructions, addresses and related information with respect to such Assignee Lender, shall have been given to the Company and the Agent by such Lender and such Assignee Lender, (d) such Assignee Lender shall have executed and delivered to the Company and the Agent a Lender Assignment Agreement, accepted by the Agent, and (e) the processing fees described below shall have been paid. From and after the date that the Agent accepts such Lender Assignment Agreement, (x) the Assignee Lender thereunder shall be deemed automatically to have become a party hereto and to the extent that rights and obligations hereunder have been assigned and delegated to such Assignee Lender in connection with such Lender Assignment Agreement, shall have the rights and obligations of a Lender hereunder and under the other Loan Documents, and (y) the assignor Lender, to the extent that rights and obligations hereunder have been assigned and delegated by it in connection with such Lender Assignment Agreement, shall be released from its obligations hereunder and under the other Loan Documents. Within five Banking Days after its receipt of notice that the Agent has received an executed Lender Assignment Agreement, the Borrower shall execute and deliver to the Agent (for delivery to the relevant Assignee Lender) a new Note evidencing such Assignee Lender's assigned Loans and Commitment and, if the assignor Lender has retained Loans and a Commitment hereunder, a replacement Note in the principal amount of the Loans and Commitment retained by the assignor Lender hereunder (such Note to be in exchange for, but not in payment of, that Note then held by such assignor Lender). Each such Note shall be dated the date of the predecessor Note. The assignor Lender shall mark the predecessor Note "exchanged" and deliver it to the Borrower. Accrued interest on that part of the predecessor Note evidenced by the new Note, and accrued fees, shall be paid as provided in the Lender Assignment Agreement. Accrued interest on that part of the predecessor Note evidenced by the replacement Note shall be paid to the assignor Lender. Accrued interest and accrued fees shall be paid at the same time or times provided in the predecessor Note and in this Agreement. Such assignor Lender or such Assignee Lender must also pay a processing fee to the Agent upon delivery of any Lender Assignment Agreement in the amount of $3,000. Any attempted assignment and delegation not made in accordance with this SECTION 10.11.1 shall be null and void. SECTION 10.11.2. PARTICIPATIONS. Any Lender may at any time sell to one or more commercial banks or other Persons (each of such commercial banks and other Persons being herein called a "PARTICIPANT") participating interests in any of the Loans, its Commitment, or other interests of such Lender hereunder; PROVIDED, HOWEVER, that (a) no participation contemplated in this SECTION 10.11 shall relieve such Lender from its Commitment or its other obligations hereunder or under any other Loan Document, (b) such Lender shall remain solely responsible for the performance of its Commitment and such other obligations, (c) each Borrower and the Agent shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement and each of the other Loan Documents, (d) no Participant, unless such Participant is an Affiliate of such Lender, or is itself a Lender, shall be entitled to require such Lender to take or refrain from taking any action hereunder or under any other Loan Document, except that such Lender may agree with any Participant that such Lender will not, without such Participant's consent, take any actions of the type described in CLAUSE (B) or (C) of SECTION 10.1, and (e) the Company shall not be required to pay any amount under SECTION 4.6 that is greater than the amount which it would have been required to pay had no participating interest been sold. The Company acknowledges and agrees that each Participant, for purposes of SECTIONS 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 10.3 and 10.4, shall be considered a Lender. SECTION 10.12. EXEMPT CHARACTER OF TRANSACTION. The Company, the Lenders and the Agent agree that each will not (and in the case of the Company, it will not permit any Subsidiary to), directly or indirectly, sell or offer, or attempt to or offer to dispose of, any interest in the Notes or any substantially similar instruments of any borrower hereunder, or solicit any offers to buy any interest therein from, or otherwise approach or negotiate with respect thereto with, any Person whatsoever so as to bring the execution and delivery of either this Agreement or the Notes within the provisions of Section 5 of the Securities Act of 1933, as now in effect or later amended. SECTION 10.13. OTHER TRANSACTIONS. Nothing contained herein shall preclude the Agent or any other Lender from engaging in any transaction, in addition to those contemplated by this Agreement or any other Loan Document, with the Company or any of its Affiliates in which the Company or such Affiliate is not restricted hereby from engaging with any other Person. SECTION 10.14. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS OR THE COMPANY SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. THE COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE COMPANY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OF FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE COMPANY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. SECTION 10.15. WAIVER OF JURY TRIAL . THE AGENT, THE LENDERS AND THE COMPANY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENT, THE LENDERS OR THE COMPANY. THE COMPANY ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENT AND THE LENDERS ENTERING INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the day and year first above written. ANDREW CORPORATION By: ______________________________ Title: _________________________ Address: 10500 West 153rd Street Orland Park, IL 60462 Facsimile No.: 708-349-5287 Attention: Mr. M. Jeffrey Gittelman Treasurer BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent By: ______________________________ Title: _________________________ Address: 231 South LaSalle Street Chicago, IL 60697 Facsimile No.: 312-974-9102 Attention: Mr. David Johanson Agency Management Services LENDERS BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION By: _____________________________ Title: ________________________ Domestic Office: 231 South LaSalle Street Chicago, IL 60697 Facsimile No.: 312-828-1974 Attention: Mr. Rob Ritter CBD-I Eurodollar Office: 231 South LaSalle Street Chicago, IL 60697 Facsimile No.: 312-828-1974 Attention: Mr. Rob Ritter ABN AMRO BANK N.V. By: _____________________________ Title: ________________________ By: _____________________________ Title: ________________________ Domestic Office: 135 South LaSalle Street Suite 625 Chicago, IL 60603 Facsimile No.: 312-606-8425 Attention: Joann Holman Eurodollar Office: 135 South LaSalle Street Suite 625 Chicago, IL 60603 Facsimile No.: 312-606-8425 Attention: Joann Holman THE FIRST NATIONAL BANK OF CHICAGO By: _____________________________ Title: ________________________ Domestic Office: One First National Plaza Suite 0088 Chicago, IL 60670 Facsimile No.: 312-732-2715 Attention: Ms. Cheryl McCabe Eurodollar Office: One First National Plaza Suite 0088 Chicago, IL 60670 Facsimile No.: 312-732-2715 Attention: Ms. Cheryl McCabe SCHEDULE I Schedule of Percentages A. LENDER PERCENTAGE Bank of America National Trust and Savings Association 50% ABN AMRO Bank N.V. 25% First National Bank of Chicago 25% SCHEDULE II DISCLOSURE SCHEDULE* ITEM 6.7 LITIGATION. DESCRIPTION OF PROCEEDING ACTION OR CLAIM SOUGHT ITEM 6.8 EXISTING SUBSIDIARIES. State of Ownership Business NAME INCORPORATION % DESCRIPTION ITEM 6.11 EMPLOYEE BENEFIT PLANS. ITEM 6.12 ENVIRONMENTAL MATTERS. ITEM 7.2.2(b) INDEBTEDNESS TO BE PAID. CREDITOR OUTSTANDING PRINCIPAL AMOUNT ITEM 7.2.4(a) ONGOING INVESTMENTS. - -------------------- * Item numbers are keyed to refer to Sections where the item is principally referred to and will have to be revised as such Sections are renumbered. EXHIBIT A REPLACEMENT NOTE __________, 19__ FOR VALUE RECEIVED, the undersigned, [BORROWER'S NAME], a ___________ corporation (the "BORROWER"), promises to pay to the order of ______________________ (the "LENDER") on the Stated Maturity Date, the principal sum of all Loans shown on the schedules attached hereto (and any continuation thereof) made by the Lender pursuant to that certain Amended and Restated Credit Agreement, dated as of November 1, 1997 (together with all amendments and other modifications, if any, from time to time thereafter made thereto, the "AGREEMENT"), among Andrew Corporation (the "COMPANY"), certain Subsidiaries of the Company, including the Borrower, Bank of America National Trust and Savings Association, as Agent, and the various financial institutions (including the Agent) as are, or may from time to time become, parties thereto. The Borrower also promises to pay interest on the unpaid principal amount hereof from time to time outstanding from the date hereof until maturity (whether by acceleration or otherwise) and, after maturity, until paid, at the rates per annum and on the dates specified in the Agreement. Payments of both principal and interest are to be made in U.S. Dollars or the appropriate Eurocurrency, as applicable, in same day or immediately available funds to the account designated by the Agent pursuant to the Agreement. This Note is a Note referred to in, and evidences Indebtedness incurred under, the Agreement, to which reference is made for a statement of the terms and conditions on which the Borrower is permitted and required to make prepayments and repayments of principal of the Indebtedness evidenced by this Note and on which such Indebtedness may be declared to be immediately due and payable. Unless otherwise defined, terms used herein have the meanings provided in the Agreement. This Note constitutes a renewal and restatement of that certain Note of the Borrower, dated June 16, 1993, payable to the order of the Lender in the original principal amount of the appropriate Eurocurrency or U.S. Dollars, as applicable, __________, (the "ORIGINAL NOTE"). The indebtedness evidenced by the Original Note is continuing indebtedness, and nothing contained herein shall be deemed to constitute a payment, settlement or novation of the Original Note. All parties hereto, whether as makers, endorsers, or otherwise, severally waive presentment for payment, demand, protest and notice of dishonor. THIS NOTE HAS BEEN DELIVERED IN CHICAGO, ILLINOIS AND SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF ILLINOIS. [BORROWER NAME] By_________________________ Title: Schedule A to Replacement Note REFERENCE RATE LOANS AND REPAYMENT OF REFERENCE RATE LOANS (2) Amount (4) and (3) Amount and Currency Interest Currency (5) (1) of Period of of Notation DATE LOAN LOAN LOAN REPAID MADE BY ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ Schedule B to Replacement Note EURODOLLAR RATE AND EUROCURRENCY RATE LOANS AND REPAYMENT OF LOANS (2) Amount (4) and (3) Amount and Currency Interest Currency (5) (1) of Period of of Notation DATE LOAN LOAN LOAN REPAID MADE BY ______________ ______________ ______________ ______________ _______________ ______________ ______________ ______________ ______________ _______________ ______________ ______________ ______________ ______________ _______________ ______________ ______________ ______________ ______________ _______________ ______________ ______________ ______________ ______________ _______________ ______________ ______________ ______________ ______________ _______________ ______________ ______________ ______________ ______________ _______________ ______________ ______________ ______________ ______________ _______________ ______________ ______________ ______________ ______________ _______________ ______________ ______________ ______________ ______________ _______________ ______________ ______________ ______________ ______________ _______________ ______________ ______________ ______________ ______________ _______________ ______________ ______________ ______________ ______________ _______________ ______________ ______________ ______________ ______________ _______________ ______________ ______________ ______________ ______________ _______________ Schedule C to Replacement Note QUOTED RATE LOANS AND REPAYMENT OF LOANS (2) Amount (3) of Amount of (4) (1) Quoted Quoted Rate Notation DATE LOAN LOAN REPAID MADE BY ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ ______________ EXHIBIT B BORROWING REQUEST Bank of America National Trust and Savings Association, as Agent 231 South LaSalle Street Chicago, Illinois 60697 Attention: Mr. Rob Ritter CBD-I ANDREW CORPORATION Gentlemen and Ladies: This Borrowing Request is delivered to you pursuant to Section 2.3 of the Amended and Restated Credit Agreement, dated as of November 1, 1997 (the "AGREEMENT"), among Andrew Corporation, a Delaware corporation (the "COMPANY"), certain subsidiaries of the Company, certain financial institutions and Bank of America National Trust and Savings Association ("BofA")(the "AGENT"). Unless otherwise defined herein or the context otherwise requires, terms used herein have the meanings provided in the Agreement. The Company hereby requests that a Borrowing of Loans be made to BORROWER'S NAME in the aggregate principal amount of $______ on ______, 19__ as [Eurodollar Rate Loans having an Interest Period of ______ months] [Quoted Rate Loans having an Interest Period of ______] [Reference Rate Loans]. The Company hereby acknowledges that, pursuant to SECTION 5.3.2 of the Agreement, each of the delivery of this Borrowing Request and the acceptance by the Borrower of the proceeds of the Loans requested hereby constitute a representation and warranty by the Company that, on the date of such Loans, and before and after giving effect thereto and to the application of the proceeds therefrom, all statements set forth in SECTION 5.3.1 are true and correct in all material respects. The Company agrees that if prior to the time of the Borrowing requested hereby any matter certified to herein by it will not be true and correct at such time as if then made, it will immediately so notify the Agent. Except to the extent, if any, that prior to the time of the Borrowing requested hereby the Agent shall receive written notice to the contrary from the Company, each matter certified to herein shall be deemed once again to be certified as true and correct at the date of such Borrowing as if then made. Please wire transfer the proceeds of the Borrowing to the accounts of the following persons at the financial institutions indicated respectively: Amount to be PERSON TO BE PAID Name, Address, etc. TRANSFERRED NAME ACCOUNT NO. OF TRANSFEREE $____________ _____________ _____________ ____________________ ____________________ Attention:__________ $____________ _____________ _____________ ____________________ ____________________ Attention:__________ Balance of [BORROWER'S NAME] _____________ ____________________ such proceeds ____________________ Attention:__________ The Company has caused this Borrowing Request to be executed and delivered, and the certification and warranties contained herein to be made, by its duly Authorized Corporate Officer this ___ day of ____________, 19__ . ANDREW CORPORATION By:__________________________ Name:_____________________ Title:____________________ EXHIBIT C GUARANTY GUARANTY (this "GUARANTY"), dated as of November 1, 1997, made by ANDREW CORPORATION, a Delaware corporation (the "Guarantor"), in favor of each of the Lender Parties (as defined below). W I T N E S S E T H: WHEREAS, pursuant to the Amended and Restated Credit Agreement, dated as of November 1, 1997, (the "AGREEMENT"), among the Guarantor, a Delaware corporation, certain Subsidiaries of the Guarantor, the various commercial lending institutions (individually a "LENDER" and collectively the "LENDERS") as are, or may from time to time become, parties thereto and Bank of America National Trust and Savings Association as agent (together with any successors(s) thereto in such capacity, the "AGENT") for the Lenders, the Lenders have extended Commitments to make Loans to the Borrowers (as defined below); and WHEREAS, as a condition precedent to the Lender making the initial Loans under the Agreement to a Designated Subsidiary, the Guarantor is required to execute and deliver this Guaranty; and WHEREAS, the Guarantor has duly authorized the execution, delivery and performance of this Guaranty; and WHEREAS, it is in the best interests of the Guarantor to execute this Guaranty inasmuch as the Guarantor will derive substantial direct and indirect benefits from the Loans made from time to time to a Designated Subsidiary by the Lenders pursuant to the Agreement; NOW THEREFORE, for good and valuable consideration the receipt of which is hereby acknowledged, and in order to induce the Lenders to make Loans to a Designated Subsidiary pursuant to the Agreement, the Guarantor agrees, for the benefit of each Lender Party, as follows: ARTICLE I DEFINITIONS SECTION 1.1. CERTAIN TERMS. The following terms (whether or not underscored) when used in this Guaranty, including its preamble and recitals, shall have the following meanings (such definitions to be equally applicable to the singular and plural forms thereof): "AGENT" is defined in the FIRST RECITAL. "AGREEMENT" is defined in the FIRST RECITAL. "BORROWERS" mean the Guarantor and the Designated Subsidiary "DESIGNATED SUBSIDIARY" means each subsidiary of the Guarantor identified as a Designated Subsidiary in a Designation Letter delivered to the Agent, from time to time. "GUARANTOR" is defined in the PREAMBLE. "GUARANTY" is defined in the PREAMBLE. "LENDER" is defined in the FIRST RECITAL. "LENDER PARTY" means, as the context may require, any Lender or the Agent and each of its respective successors, transferees and assigns. "LENDERS" is defined in the FIRST RECITAL. "TAXES" is defined in CLAUSE (A) of SECTION 2.8. "U.C.C." means the Uniform Commercial Code as in effect in the State of Illinois. SECTION 1.2. AGREEMENT DEFINITIONS. Unless otherwise defined herein or the context otherwise requires, terms used in this Guaranty, including its preamble and recitals, have the meanings provided in the Agreement. SECTION 1.3. U.C.C. DEFINITIONS. Unless otherwise defined herein or the context otherwise requires, terms for which meanings are provided in the U.C.C. as in effect in the State of Illinois are used in this Guaranty, including its preamble and recitals, with such meanings. ARTICLE II GUARANTY PROVISIONS SECTION 2.1. GUARANTY. The Guarantor hereby absolutely, unconditionally and irrevocably (a) guarantees the full and punctual payment when due, whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise, of all Obligations of any Designated Subsidiary now or hereafter existing under the Agreement, the Notes and each other Loan Document to which any Designated Subsidiary is or may become a party, whether for principal, interest, fees, expenses or otherwise (including, without limitation, all such amounts which would become due but for the operation of the automatic stay under Section 362(a) of the United States Bankruptcy Code, 11 U.S.C. ss.362(a), and the operation of Sections 502(b) and 506(b) of the United States Bankruptcy Code, 11 U.S.C. ss.502(b) and ss.506(b)), and (b) indemnifies and holds harmless each Lender Party and each holder of any Note for any and all costs and expenses (including reasonable attorney's fees (who may be employees of the Lender Party) and expenses) incurred by such Lender Party or such holder, as the case may be, in enforcing any rights under this Guaranty. This Guaranty constitutes a guaranty of payment when due and not of collection, and the Guarantor specifically agrees that it shall not be necessary or required that any Lender Party or any holder of any Note exercise any right, assert any claim or demand or enforce any remedy whatsoever against any Designated Subsidiary (or any other Person) before or as a condition to the obligations of the Guarantor hereunder. SECTION 2.2. ACCELERATION OF GUARANTY. The Guarantor agrees that, in the event of the dissolution or insolvency of any Designated Subsidiary or the Guarantor, or the inability or failure of any Designated Subsidiary or the Guarantor to pay debts as they become due, or an assignment by any Designated Subsidiary or the Guarantor for the benefit of creditors, or the commencement of any case or proceeding in respect of any Designated Subsidiary or the Guarantor under bankruptcy, insolvency or similar laws, and if such event shall occur at a time when any of the Obligations of any Designated Subsidiary may not then be due and payable, the Guarantor will pay to the Lenders forthwith the full amount which would be payable hereunder by the Guarantor if all such Obligations were then due and payable. SECTION 2.3. GUARANTOR ABSOLUTE, ETC. This Guaranty shall in all respects be a continuing, absolute, unconditional and irrevocable guaranty of payment, and shall remain in full force and effect until all Obligations of any Designated Subsidiary have been finally paid in full in cash, all obligations of the Guarantor hereunder shall have been finally paid in full in cash and all Commitments shall have terminated. The Guarantor guarantees that the Obligations of any Designated Subsidiary will be paid strictly in accordance with the terms of the Agreement, the Notes, and each other Loan Document under which they arise, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of any Lender Party or any holder of any Note with respect thereto. The liability of the Guarantor under this Guaranty shall be absolute, unconditional and irrevocable irrespective of: 2.3.1. any lack of validity, legality or enforceability of the Agreement, any Note or any other Loan Document; 2.3.2. the failure of any Lender Party or any holder of any Note (i) to assert any claim or demand or to enforce any right or remedy against any Designated Subsidiary or any other Person (including any other guarantor) under the provisions of the Agreement, any Note, any other Loan Document or otherwise, or (ii) to exercise any right or remedy against any other guarantor of, or collateral securing, any Obligations of any Designated Subsidiary; 2.3.3. any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations of any Designated Subsidiary, or any other extension, compromise or renewal of any Obligation of any Designated Subsidiary; 2.3.4. any reduction, limitation, impairment or termination of any Obligations of any Designated Subsidiary for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to (and the Guarantor hereby waives any right to or claim of) any defense or setoff, counterclaim, recoupment or termination whatsoever by reason of the invalidity, illegality, nongenuineness, irregularity, compromise, unenforceability of, or any other event or occurrence affecting, any Obligations of any Designated Subsidiary or otherwise; 2.3.5. any amendment to, rescission, waiver, or other modification of, or any consent to departure from, any of the terms of the Agreement, any Note or any other Loan Document; 2.3.6 . any addition, exchange, release, surrender or non-perfection of any collateral, or any amendment to or waiver or release or addition of, or consent to departure from, any other guaranty, held by any Lender Party or any holder of any Note securing any of the Obligations of any Designated Subsidiary; or 2.3.7. any other circumstance which might otherwise constitute a defense available to, or a legal or equitable discharge of, any Designated Subsidiary, any surety or any guarantor. SECTION 2.4. REINSTATEMENT, ETC. The Guarantor agrees that this Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time any payment (in whole or in part) of any of the Obligations is rescinded or must otherwise be restored by any Lender Party or any holder of any Note, upon the insolvency, bankruptcy or reorganization of any Designated Subsidiary or otherwise, all as though such payment had not been made. SECTION 2.5. WAIVER, ETC. The Guarantor hereby waives promptness, diligence, notice of acceptance and any other notice with respect to any of the Obligations of any Designated Subsidiary and this Guaranty and any requirement that the Agent, any other Lender Party or any holder of any Note protect, secure, perfect or insure any security interest or Lien, or any property subject thereto, or exhaust any right or take any action against any Designated Subsidiary or any other Person (including any other guarantor) or entity or any collateral securing the Obligations of any Designated Subsidiary. SECTION 2.6. SUBROGATION. The Guarantor will not exercise any rights which it may acquire by reason of any payment made hereunder, whether by way of rights of subrogation, reimbursement or otherwise, until the prior payment, in full and in cash, of all Obligations of the Designated Subsidiary. Any amount paid to the Guarantor on account of any payment made hereunder prior to the payment in full of all Obligations of the Designated Subsidiary shall be held in trust for the benefit of the Lender Parties and each holder of a Note and shall immediately be paid to the Agent and credited and applied against the Obligations of the Designated Subsidiary, whether matured or unmatured, in accordance with the terms of the Agreement; PROVIDED, HOWEVER, that if a. the Guarantor has made payment to the Lender Parties and each holder of a Note of all or any part of the Obligations of the Designated Subsidiary, and b. all Obligations of the Borrower and each other Obligor have been paid in full and all Commitments have been permanently terminated, each Lender Party and each holder of a Note agrees that, at the Guarantor's request, the Agent, on behalf of the Lender Parties and the holders of the Notes, will execute and deliver to the Guarantor appropriate documents (without recourse and without representation or warranty) necessary to evidence the transfer by subrogation to the Guarantor of an interest in the Obligations of the Designated Subsidiary resulting from such payment by the Guarantor. In furtherance of the foregoing, for so long as any Obligations or Commitments remain outstanding, the Guarantor shall refrain from taking any action or commencing any proceeding against the Designated Subsidiary (or its successors or assigns, whether in connection with a bankruptcy proceeding or otherwise) to recover any amounts in respect of payments made under this Guaranty to any Lender Party or any holder of a Note. SECTION 2.7. SUCCESSORS, TRANSFEREES AND ASSIGNS: TRANSFERS OF NOTES, ETC. This Guaranty shall (a) be binding upon the Guarantor, and its successors, transferees and assigns; and (b) inure to the benefit of and be enforceable by the Agent and each other Lender Party. Without limiting the generality of the foregoing CLAUSE (B), any Lender may assign or otherwise transfer (in whole or in part) any Note or Loan held by it to any other Person or entity, and such other Person or entity shall thereupon become vested with all rights and benefits in respect thereof granted to such Lender under any Loan Document (including this Guaranty) or otherwise, subject, however, to any contrary provisions in such assignment or transfer, and to the provisions of Section 10.11 and Article IX of the Agreement. SECTION 2.8. PAYMENTS FREE AND CLEAR OF TAXES, ETC. The Guarantor hereby agrees that: 2.8.1. All payments by the Guarantor hereunder shall be made in accordance with Section 4.7 of the Agreement free and clear of and without deduction for any present or future income, excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or other charges of any nature whatsoever imposed by any taxing authority, but excluding franchise taxes and taxes imposed on or measured by any Lender Party's net income or receipts (such non-excluded items being called "TAXES"). In the event that any withholding or deduction from any payment to be made by the Guarantor hereunder is required in respect of any Taxes pursuant to any applicable law, rule or regulation, then the Guarantor will (a) pay directly to the relevant authority the full amount required to be so withheld or deducted; (b) promptly forward to the applicable Lender Party an official receipt or other documentation satisfactory to such Lender Party evidencing such payment to such authority; and (c) pay to the applicable Lender Party such additional amount or amounts as is necessary to ensure that the net amount actually received by such Lender Party will equal the full amount such Lender Party would have received had no such withholding or deduction been required. Moreover, if any Taxes are directly asserted against any Lender Party with respect to any payment received by such Lender Party hereunder or relating to SECTION 5.1 of the Agreement, such Lender Party may pay such Taxes and the Guarantor will promptly pay such additional amounts (including any penalties, interest or expenses) as is necessary in order that the net amount received by such Lender Party after the payment of such Taxes (including any Taxes on such additional amount) shall equal the amount such Lender Party would have received had no such Taxes been asserted. 2.8.2. If the Guarantor fails to pay any Taxes when due to the appropriate taxing authority or fails to remit to any Lender Party the required receipts or other required documentary evidence, the Guarantor shall indemnify each Lender Party for any incremental Taxes, interest or penalties that may become payable by such Lender Party as a result of any such failure. 2.8.3. Without prejudice to the survival of any other agreement of the Guarantor hereunder, the agreements and obligations of the Guarantor contained in this SECTION 2.8 shall survive the payment in full of the principal of and interest on the Loans. SECTION 2.9. CURRENCY PROTECTION. The Guarantor agrees that if and to the extent that the Obligations are payable in any currency or currencies other than the currency in which such Obligations were created or denominated (the "Eurocurrency"), such aggregate amount of the Eurocurrency shall be increased, to the extent necessary to avoid any loss to the Lender Parties, on account of any change or changes in the value of such other currency or currencies compared to the Eurocurrency at any time or times between the date hereof and the date or dates of payment of the Obligations by the Guarantor. SECTION 2.10. JUDGMENTS. If the Guarantor fails to fulfill its obligations as required by this guaranty, and suit is brought thereunder in any court within the United States, then with respect to any of the Obligations payable in a currency other than United States Dollars and for the purpose of determining the amount of the judgment in United States Dollars, the applicable rate of exchange shall be that at which Bank of America National Trust and Savings Association sells such other currency in Chicago, in exchange for United States Dollars, for cable transfer to the place where such Obligation was payable by the Designated Subsidiary. Such selling rate shall be that which is in effect on the Chicago business day on which judgment is given against the Guarantor, or if such day is not a business day in Chicago, then on the Chicago business day next preceding that on which judgment is given against the Guarantor. The Guarantor agrees that its obligation pursuant to this paragraph shall, notwithstanding any U.S. Dollar judgment, be discharged only to the extent that following receipt by the Agent, for the benefit of the Lender Parties of any sum adjudged to be due hereunder, the Agent is able in accordance with normal banking procedure to purchase such other currency with the amount of U.S. Dollars so adjudged to be due. The Agent shall endeavor to purchase such other currency on the business day following receipt of payment of the U.S. Dollar judgment, but if the other currency so purchased is less than the amount originally due to the Lender Parties in such currency, the Guarantor agrees as a separate obligation and notwithstanding any such judgment to indemnify the Agent and the Lender Parties against such loss. SECTION 2.11. INFORMATION CONCERNING DESIGNATED SUBSIDIARIES; NO RELIANCE ON REPRESENTATIONS BY LENDERS. The Guarantor hereby warrants to the Lenders that the Guarantor now has and will continue to have independent means of obtaining information concerning the affairs, financial conditions and business of each Designated Subsidiary. No Lender shall have any duty or responsibility to provide the Guarantor with any credit or other information concerning the affairs, financial condition or business of any Designated Subsidiary which may come into such Lender's possession. TheGuarantor has executed and delivered this guaranty without reliance upon any representation by any Lender with respect to (a) the due execution, validity, effectiveness or enforceability of any instrument, document or agreement evidencing or relating to any of the Obligations or any Loan, or other financial accommodation made or granted to any Designated Subsidiary; (b) the validity, genuineness, enforceability, existence, value or sufficiency of any property securing any of the Obligations or the creation, perfection or priority of any lien or security interest in such property; or (c) the existence, number, financial condition or creditworthiness of other guarantors or sureties with respect to any of the Obligations. SECTION 2.12. INDEMNIFICATION. In consideration of the execution and delivery of the Agreement by each Lender and the extension of the Commitments, the Guarantor hereby indemnifies, exonerates and holds the Agent and each Lender and each of their respective officers, directors, employees and agents (collectively, the "INDEMNIFIED PARTIES") free and harmless from and against any and all actions, causes of action, suits, losses, costs, liabilities and damages, and expenses incurred in connection therewith (irrespective of whether any such Indemnified Party is a party to the action for which indemnification hereunder is sought), including reasonable attorneys' fees and disbursements (collectively, the "INDEMNIFIED LIABILITIES"), incurred by the Indemnified Parties or any of them as a result of, or arising out of, or relating to (a) any transaction or activity financed or to be financed in whole or in part, directly or indirectly, with the proceeds of any Loan to a Designated Subsidiary; (b) the entering into and performance of the Agreement and any other Loan Document by any of the Indemnified Parties; or (c) any investigation, litigation or proceeding related to the acquisition of a permit or license necessary to borrow hard currency (when applicable); except for any such Indemnified Liabilities arising for the account of a particular Indemnified Party by reason of the relevant Indemnified Party's gross negligence or wilful misconduct. If and to the extent that the foregoing undertaking may be unenforceable for any reason, the Guarantor hereby agrees to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. The obligations of the Guarantor under this SECTION 2.12 shall survive any termination of this Guaranty, the payment in full of all Obligations and the termination of all Commitments. ARTICLE III MISCELLANEOUS PROVISIONS SECTION 3.1. LOAN DOCUMENT. This Guaranty is a Loan Document executed pursuant to the Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions thereof. SECTION 3.2. BINDING ON SUCCESSORS, TRANSFEREES AND ASSIGNS; ASSIGNMENT. In addition to, and not in limitation of, SECTION 2.7, this Guaranty shall be binding upon the Guarantor and its successors, transferees and assigns and shall inure to the benefit of and be enforceable by each Lender Party and each holder of a Note and their respective successors, transferees and assigns (to the full extent provided pursuant to SECTION 2.7); PROVIDED, HOWEVER, that the Guarantor may not assign any of its obligations hereunder without the prior written consent of the Agent and the Required Lenders. SECTION 3.3. AMENDMENTS, ETC. No amendment to or waiver of any provision of this Guaranty, nor consent to any departure by the Guarantor herefrom, shall in any event be effective unless the same shall be in writing and signed by the Agent, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. SECTION 3.4. ADDRESSES FOR NOTICES TO THE GUARANTOR. All notices and other communications hereunder to the Guarantor shall be in writing (including facsimile communication) and mailed or faxed or delivered to it, addressed to it at the address or fax number set forth below its signature hereto or at such other address as shall be designated by the Guarantor in a written notice to the Agent at the address specified in the Agreement complying as to delivery with the terms of this Section. All such notices and other communications shall, when mailed or faxed, respectively, be effective when deposited in the mails or faxed, respectively, addressed as aforesaid. SECTION 3.5. NO WAIVER; REMEDIES. In addition to, and not in limitation of, SECTION 2.3 and SECTION 2.5, no failure on the part of any Lender Party or any holder of a Note to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. SECTION 3.6. SECTION CAPTIONS. Section captions used in this Guaranty are for convenience of reference only, and shall not affect the construction of this Guaranty. SECTION 3.7. SETOFF. In addition to, and not in limitation of, any rights of any Lender Party or any holder of a Note under applicable law, each Lender Party and each such holder shall, upon the occurrence of any Default, have the right to appropriate and apply to the payment of the obligations of the Guarantor owing to it hereunder, whether or not then due, (i) any and all balances, credits, deposits, accounts or moneys of the Guarantor then or thereafter maintained with such Lender Party or such holder, (ii) any and all property of every kind or description of or in the name of the Guarantor now or hereafter, for any reason or purpose whatsoever, in the possession or control of, or in transit to, such Lender Party, such holder or any agent or bailee for such Lender Party or such holder or (iii) any payments owing from any Lender Party to Guarantor; PROVIDED, HOWEVER, that any such appropriation and application shall be subject to the provisions of Section 4.8 of the Agreement. SECTION 3.8. SEVERABILITY. Wherever possible each provision of this Guaranty shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Guaranty shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Guaranty. SECTION 3.9. GOVERNING LAW, ENTIRE AGREEMENT, ETC. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS. THIS GUARANTY AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO. SECTION 3.10. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE LENDER PARTIES OR THE GUARANTOR SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY PROPERTY MAY BE BROUGHT, AT THE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH PROPERTY MAY BE FOUND. THE GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. THE GUARANTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. THE GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT THE GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY AND THE OTHER LOAN DOCUMENTS. SECTION 3.11. WAIVER OF JURY TRIAL. THE GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE LENDER PARTIES OR THE GUARANTOR. THE GUARANTOR ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS ENTERING INTO THE AGREEMENT. IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed and delivered by its officer thereunto duly authorized as of the date first above written. ANDREW CORPORATION By:________________ Title:________________ Address: 10500 West 153rd Street Orland Park, IL 60462 Attention: Mr. Jeffrey Gittelman Facsimile No.: 708-349-5287 EXHIBIT D CONTINUATION/CONVERSION NOTICE Bank of America National Trust and Savings Association, as Agent 231 South LaSalle Street Chicago, Illinois 60697 ANDREW CORPORATION Gentlemen and Ladies: This Continuation/Conversion Notice is delivered to you pursuant to Section 2.4 of the Amended and Restated Credit Agreement, dated as of November 1, 1997, the "AGREEMENT"), among Andrew Corporation, a Delaware corporation (the "COMPANY"), certain subsidiaries of the Company, certain financial institutions and Bank of America National Trust and Savings Association, (the "AGENT"). Unless otherwise defined herein or the context otherwise requires, terms used herein have the meanings provided in the Agreement. The Company hereby requests that on __________, 19___, the following Loans be continued or converted, as applicable: (1) $________ of the presently outstanding principal amount of the Loans to [BORROWER'S NAME] originally made on ________, 19___ presently being maintained as [Reference Rate Loans] [Eurodollar Rate Loans] [Eurocurrency Rate Loans] [Quoted Rate Loans] be [converted into] [continued as] [Eurodollar Rate Loans having an Interest Period of _______ months] [Eurocurrency Rate Loans having an Interest Period of _______ months] [Quoted Rate Loans having an Interest Period of _______] [Reference Rate Loans], and (2) $________ of the presently outstanding principal amount of the Loans to [BORROWER'S NAME] originally made on _______, 19___ presently being maintained as [Reference Rate Loans] [Eurodollar Rate Loans] [Eurocurrency Rate Loans] [Quoted Rate Loans] be [converted into] [continued as] [Eurodollar Rate Loans having an Interest Period of _______ months] [Eurocurrency Rate Loans having an Interest Period of _______ months] [Quoted Rate Loans having an Interest Period of _______] [Reference Rate Loans], The Company hereby: (a) certifies and warrants that no Default has occurred and is continuing; and (b) agrees that if prior to the time of such continuation or conversion any matter certified to herein by it will not be true and correct at such time as if then made, it will immediately so notify the Agent. Except to the extent, if any, that prior to the time of the continuation or conversion requested hereby the Agent shall receive written notice to the contrary from the Company, each matter certified to herein shall be deemed to be certified at the date of such continuation or conversion as if then made. The Company has caused this Continuation/Conversion Notice to be executed and delivered, and the certification and warranties contained herein to be made, by its Authorized Officer this ____ day of ________, 19___ . ANDREW CORPORATION By:_________________________ Name:____________________ Title:___________________ EXHIBIT E Designation Letter [Date] Bank of America National Trust and Savings Association, as Agent 231 South LaSalle Street Chicago, Illinois 60697 Attention: Ladies and Gentlemen: Reference is hereby made to an Amended and Restated Credit Agreement dated as of November 1, 1997 (together with all amendments, if any, from time to time made thereto, the "AGREEMENT") among Andrew Corporation, a Delaware corporation (the "COMPANY"), certain subsidiaries of the Company, certain financial institutions as Lenders and Bank of America National Trust and Savings Association (the "AGENT"). Unless otherwise defined herein or the context otherwise requires, terms used herein have the meanings provided in the Agreement. The Company hereby certifies that ______________, a ___________ _______________ is a Designated Subsidiary of the Company. The Company hereby designates _________________ as a Designated Subsidiary as of the date of this letter and hereby requests that the Lenders make Loans to such Designated Subsidiary pursuant to the terms and conditions of the Agreement. Very truly yours, ANDREW CORPORATION By:________________________________ Title:_____________________________ (Authorized Officer) The undersigned agrees that it shall be a Designated Subsidiary under the Agreement and assumes all obligations as such. [Designated Subsidiary] By:________________________________ Title:_____________________________ (Authorized Officer) EXHIBIT F Form of Extension Letter [Date] Andrew Corporation 10500 West 153rd Street Orland Park, Illinois 60462 Re: EXTENSION OF STATED MATURITY DATE Ladies and Gentlemen: Reference is hereby made to that certain Amended and Restated Credit Agreement dated as of November 1, 1997, (the "AGREEMENT") among Andrew Corporation, a Delaware corporation (the "COMPANY"), certain subsidiaries of the Company, certain financial institutions (the "LENDERS") and Bank of America National Trust and Savings Association (the "AGENT"). Unless otherwise defined herein or the context otherwise requires, terms used herein have the meanings provided in the Agreement. This letter is delivered pursuant to SECTION 2.2.2 of the Agreement. Pursuant to the request of the Company, this is to notify the Company and each other Borrower that the Agent has received written notice from Lenders holding 100% of the Commitments that such Lenders agree to an extension of the Stated Maturity Date to and including ____________. Accordingly, upon fulfillment of the conditions precedent set forth below, all references in the Agreement to the "Stated Maturity Date" shall mean and be a reference to ________ __, 19__. The amendment to the Agreement, as set forth in the preceding paragraph, shall be effective as of the date of this letter upon receipt by the Agent, for the benefit of each Lender, of each of the following, in such number of copies sufficient for each Lender, all in form and substance and dated as of date(s) satisfactory to the Agent and the Lenders: (a) a counterpart original of this letter duly executed by the Company and each other Borrower; (b) resolutions of the Board of Directors of each Borrower, certified by the secretary or an assistant secretary of such Borrower authorizing the extension of the Stated Maturity Date of the Agreement as set forth herein and the execution and delivery of all documents and instruments required to be delivered in connection herewith; (c) a certificate of the secretary or assistant secretary of each Borrower certifying the office held by and the true signatures of the officers of such Borrower authorized to execute and deliver this Extension Letter and all documents and instruments to be delivered herewith; (d) such other documents and instruments as the Agent or any Lender, requesting through the Agent, may reasonably request. The Company agrees to pay the Agent upon demand for all reasonable expenses (including attorneys' fees, which attorneys may be employees of the Agent) incurred in connection with the preparation, negotiation and execution of this Extension Letter. This letter may be executed in as many counterparts as may be deemed necessary or convenient and may be executed by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed an original but all such counterparts shall constitute but one and the same instrument. As amended with this letter, the Agreement shall remain in full force and effect. Each Borrower hereby confirms that each of its Notes remains in full force and effect. This letter shall be binding upon the Company, each other Borrower which is signatory hereto, each Lender and the Agent and their respective successors and assigns, and shall inure to the benefit of the Lenders, the Agent, the Company and any such Borrowers and the successors and assigns of the Lenders and the Agent. Each reference in the Agreement to "this Agreement", "hereunder", "hereof", or words of like import, and each reference to the Agreement in any and all instruments or documents provided for in the Agreement or delivered or to be delivered thereunder or in connection therewith, shall be deemed a reference to the Agreement as amended hereby. BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION By:________________________________ Title: ____________________________ ANDREW CORPORATION By:________________________________ Title:_____________________________ [BORROWER] By:________________________________ Title: ____________________________ EXHIBIT G Form of Notice of Purchase of Margin Stock Bank of America National Trust and Savings Association, as Agent 231 South LaSalle Street Chicago, Illinois 60697 Re: PURCHASE OF MARGIN STOCK Ladies and Gentlemen: Reference is hereby made to that certain Amended and Restated Credit Agreement dated as of November 1, 1997, the "AGREEMENT") among Andrew Corporation, a Delaware corporation (the "COMPANY"), certain subsidiaries of the Company, certain financial institutions (the "LENDERS") and Bank of America National Trust and Savings Association the "AGENT"). Unless otherwise defined herein or the context otherwise requires, terms used herein have the meanings provided in the Agreement. This letter is delivered pursuant to SECTION 7.1.1(H) of the Agreement. The Company hereby notifies the Agent and the Lenders that on ___________, 19__, the Company purchased (common/preferred and other distinguishing characteristics of stock) stock issued by [NAME OF ISSUER] for a purchase price of $___________ per share or $____________ in the aggregate. After such purchase, ______% of the current market value of the Company's Consolidated Net Assets was represented by margin stock. Very truly yours, ANDREW CORPORATION By:_______________________________ Title:____________________________ EXHIBIT H LENDER ASSIGNMENT AGREEMENT THIS LENDER ASSIGNMENT AGREEMENT (the "ASSIGNMENT") is made and entered into as of ______________, 1997 by and between _____________ (the "ASSIGNOR") and ______________ (the "ASSIGNEE"). W I T N E S S E T H WHEREAS, an Amended and Restated Credit Agreement dated as of November 1, 1997, the ("AGREEMENT") has been entered into among Andrew Corporation, a Delaware corporation (the "COMPANY"), certain Designated Subsidiaries of the Company, the financial institutions from time to time party thereto including the Assignor (individually a "LENDER" and collectively, the "LENDERS"), and Bank of America National Trust and Savings Association as agent for the Lenders (in such capacity, the "AGENT"). Unless otherwise defined herein, terms defined in the Agreement are used herein with the same meanings; and WHEREAS, pursuant to the Agreement, on the date hereof, and without giving effect to any other assignments to become effective on the Assignment Effective Date (hereafter defined) or any other assignments thereof which have not yet become effective (a) the Assignor's Commitment (the "ASSIGNOR'S COMMITMENT") is the amount specified in ITEM 1 of SCHEDULE 1 hereto, (b) the aggregate principal amount of outstanding Reference Rate Loans, Eurodollar Loans, Eurocurrency Loans and Quoted Rate Loans made by the Assignor to the Borrowers pursuant to the Assignor's Commitment is specified in ITEM 2 of SCHEDULE 1 hereto and (c) the Assignor's Percentage is the percentage set forth in ITEM 3 of SCHEDULE 1 hereto; and WHEREAS, the Assignor wishes to sell to the Assignee, and the Assignee wishes to purchase and assume from the Assignor (a) the portion of the Assignor's Commitment specified in ITEM 4 of SCHEDULE 1 hereto (the "ASSIGNED COMMITMENT") and (b) the portion of the Assignor's outstanding Reference Rate Loans, Eurodollar Loans, Eurocurrency Loans and Quoted Rate Loans Revolving Loans (the "ASSIGNED LOANS"), specified in ITEM 5 of SCHEDULE 1 hereto. NOW, THEREFORE, the parties hereto agree as follows: 1. Subject to the terms and conditions set forth herein, the Assignor hereby sells and assigns to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, WITHOUT RECOURSE, as of the Assignment Effective Date and without giving effect to other assignments to become effective on the Assignment Effective Date or any other assignments thereof which have not yet become effective (a) all right, title and interest of the Assignor to the Assigned Loans and (b) all obligations of the Assignor under the Agreement with respect to the Assigned Commitment including, without limitation, any Notes held by the Assignor and any interest, fees and commissions which accrue after the Assignment Effective Date; PROVIDED, HOWEVER, that Assignee does not purchase or assume any liability resulting from acts or omissions of Assignor occurring prior to the Assignment Effective Date. After giving effect to the transactions contemplated by this Assignment, (i) the amount of the Assigned Loans shall be the amounts set forth in ITEM 5 of SCHEDULE 1 and (ii) Assignor's and Assignee's respective Percentages and Commitments shall be set forth in ITEM 6 of SCHEDULE 1 hereto. 2. The Assignor (i) represents and warrants that the information set forth in ITEMS 1, 2 and 3 is true and correct as of the date hereof; (ii) represents and warrants that (a) it is the legal and beneficial owner of the Loans and Commitment being assigned by it hereunder, (b) it has the full power and legal right to execute and deliver this Assignment and to perform its obligations hereunder, (c) the execution, delivery of this Assignment, and the performance by it of its obligations hereunder, have been duly authorized by all necessary corporate or other action and do not violate any provisions of its charter or by-laws or any contractual obligation or requirement of law binding upon it and (d) the Assigned Loans and Assigned Commitment are free and clear of any adverse claim; (iii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made by any Borrower or any other Person in or in connection with the Agreement or any other Loan Document or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Agreement or any other Loan Document or any other instrument or document furnished by or on behalf of any Borrower or any other Person pursuant thereto; (iv) makes no representation or warranty and assumes no responsibility with respect to the financial condition of any Borrower or any other Person or the performance or observance by any Borrower or any other Person of any of its obligations under the Agreement or any other Loan Document or any agreement, instrument or document furnished pursuant thereto; and (v) represents and warrants that, to its knowledge, the Agent has not notified the Company of the existence of any Default which currently exists. 3. The Assignee (i) represents and warrants that (a) it has the full power and legal right to execute and deliver this Assignment and to perform its obligations hereunder and, to the extent of its interest therein, under the Agreement and the other Loan Documents, and (b) the execution and delivery by it of this Assignment, and the performance by it of its obligations hereunder and, to the extent of its interest therein, under the Agreement and the other Loan Documents, have been duly authorized by all necessary corporate or other action and do not violate any provisions of its charter or by-laws or any contractual obligation or requirement of law binding upon it; (ii) confirms that it has received a copy of the Agreement and the other Loan Documents, together with copies of the most currently available financial statements referred to in SECTION 7.1.1 of the Agreement and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment; (iii) agrees that it will, independently and without reliance upon the Agent, the Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Agreement; (iv) appoints and authorizes the Agent to take such actions on its behalf and to exercise such powers under the Agreement and the other Loan Documents as are delegated to the Agent by the terms thereof, together with such powers as are reasonably incidental thereto; (v) agrees that it will become a party to and a Lender under the Agreement on the Assignment Effective Date and perform in accordance with their terms all of the obligations which by the terms of the Agreement are required to be performed by it as a Lender; (vi) specifies as its address for notices the office set forth in ITEM 7 of SCHEDULE 1 hereto; and (vii) agrees that no fee is payable by Borrower to Assignee in connection with the execution and delivery of this Assignment. 4. The Assignor agrees that the Assignor shall pay to the Agent, for the account of the Agent, any processing fee required by the Agent to be paid to it pursuant to SECTION 10.11.1 of the Agreement. The Assignor further agrees that, within one Banking Day following receipt of new Notes duly executed by a Borrower reflecting the amount of the Assigned Commitment and the Assigned Loans, it will return its superseded Note(s) to the Agent for the account of such Borrower. 5. The obligations of the Assignee and the Assignor hereunder shall be subject to the requirement that the Assignor (a) shall have received good funds representing payment in full of all amounts due from the Assignee for purchase of the Commitment and Loans being purchased by and assigned to the Assignee and (b) complied with all other provisions of this Assignment and all applicable provisions of SECTION 10.11 of the Agreement. The effective date of this Assignment (the "ASSIGNMENT EFFECTIVE DATE") shall be ______________ or, if later, the first Banking Day on which the requirements of the preceding sentence of this SECTION 5 have been satisfied. Following the execution of this Assignment by the Assignor and the Assignee and the acknowledgment of the same by the Company and each other Borrower, it will be delivered to the Agent for acceptance and recording by the Agent. 6. Upon such acceptance and recording, as of the Assignment Effective Date, (i) the Assignee shall be a party to the Agreement and, to the extent provided in this Assignment, have the rights and obligations of a Lender thereunder and under the other Loan Documents and (ii) the Assignor shall, to the extent provided in this Assignment, relinquish its rights and be released from its obligations under the Agreement and under the other Loan Documents. 7. Upon such acceptance and recording, from and after the Assignment Effective Date, the Agent shall make all payments received by it under the Agreement and the other Loan Documents in respect of the interest assigned hereby (including, without limitation, all payments of principal, interest and fees with respect thereto) to the Assignee. The Assignor and Assignee shall make all appropriate adjustments in payments under the Agreement for periods prior to the Assignment Effective Date directly between themselves. 8. This Assignment shall be governed by, and construed in accordance with, the internal laws and decisions (as opposed to conflicts of law provisions) of the State of Illinois. 9. This Assignment shall inure to the benefit of and be binding upon successors and assigns of the Assignor and the Assignee. 10. This Assignment shall supersede any prior agreement or understanding between the parties (other than the Agreement and the other Loan Documents) as to the subject matter hereof. This Assignment shall be deemed to be a Loan Document for all purposes under the Agreement. 11. This Assignment may be executed by Assignor and Assignee in any number of counterparts and on the same or separate counterparts, each of which, when executed and delivered, shall be an original but all of which taken together, shall be but a single Lender Assignment Agreement. IN WITNESS WHEREOF, the Assignor and the Assignee have executed this Assignment as of this ____ day of _____________, 19___. _____________________, Assignor By: ______________________________ Title: Vice President _____________________, Assignee By: ______________________________ Title: ___________________________ Pursuant to SECTION 10.11.1 of the Agreement, the Company, on behalf of itself and each of the Designated Subsidiaries, hereby agrees, accepts and consents to the foregoing Assignment. The Company further agrees, on behalf of itself and each of the Designated Subsidiaries that, within five Banking Days from Assignment Effective Date, it will execute and deliver, and will cause each Designated Subsidiary to execute and deliver, to the Agent, a new Note to the Assignee and the Assignor, reflecting the amount of the Assignor's Commitment assigned to the Assignee pursuant to this Assignment, and the Assignor's Commitment less the Assigned Commitment respectively. ANDREW CORPORATION By: _____________________________ Title: __________________________ Date: ____________________________ Pursuant to SECTION 10.11.1 of the Agreement the undersigned, as Agent for the Lenders (i) accepts the foregoing Assignment and (ii) agrees that the execution and delivery of the Assignment shall not alter the rights and obligations of the undersigned as Agent. BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as Agent for the Lenders By: ______________________________ Title: Vice President Date: ____________________________ SCHEDULE 1 to Lender Assignment Agreement dated as of ________________, 19___ between _________________________, Assignor and __________________, Assignee ITEM 1. Assignor's Commitment $_______________ ITEM 2. Assignor's Loans Outstanding COMPANY: Reference Rate Loans $_______________ Eurodollar Loans $_______________ Eurocurrency Loans $_______________ Quoted Rate Loans $_______________ [DESIGNATED SUBSIDIARY] Reference Rate Loans $_______________ Eurodollar Loans $_______________ Eurocurrency Loans $_______________ Quoted Rate Loans $_______________ Item 3. Assignor's Percentage _____________ % ITEM 4. Amount of Assigned Commitment $_______________ - ------ ITEM 5. Amount of Assigned Loans COMPANY: Reference Rate Loans $_______________ Eurodollar Loans $_______________ Eurocurrency Loans $_______________ Quoted Rate Loans $_______________ [DESIGNATED SUBSIDIARY] Reference Rate Loans $_______________ Eurodollar Loans $_______________ Eurocurrency Loans $_______________ Quoted Rate Loans $_______________ ITEM 6. Commitments and Percentage After Assignment Commitments a. Assignor $_______________ b. Assignee $_______________ Percentages a. Assignor ______________ % b. Assignee ______________ % ITEM 7. Notice Address of Assignee ========================== -------------------------- Attention: _______________ Telephone: _______________ Facsimile: _______________ NOTES TO SCHEDULE 1 1. Insert the dollar amount of the Assignor's Commitment prior to the assignment. 2. Insert the total amount of outstanding Loans under the Assignor's Commitments prior to the assignment. The descriptions of the Loan Types should conform to the Agreement, and should be broken down by Borrower. 3. Insert the Assignor's Percentage prior to the assignment. 4. Insert the dollar amount of the Assignor's Commitment being assigned. 5. Insert the amount of the outstanding Loans being assigned. Description of Loan Types should be consistent with Item 2 and should be broken down by Borrower. 6. Insert Commitment and Percentages of Assignor and Assignee after giving effect to the assignment. 7. Insert address and notice information for the Assignee. EXHIBIT I November 1, 1997 Bank of America National Trust and Savings Association Individually and as Agent 231 South LaSalle Street Chicago, Illinois 60697 The First National Bank of Chicago One First National Plaza Chicago, Illinois 60670 ABN AMRO Bank N.V. 135 South LaSalle Street Chicago, Illinois 60603 Ladies and Gentlemen: We are counsel for Andrew Corporation (the "Company") and this opinion is delivered at its request pursuant to Section 4.1(d) of the Amended and Restated Credit Agreement dated as of November 1, 1997 (the "Agreement") between the Company, certain Subsidiaries of the Company, the various financial institutions party thereto and Bank of America National Trust and Savings Association, as Agent. Capitalized terms used but not otherwise defined in this opinion have the meanings ascribed in the Agreement. As counsel for the Company, we have examined an executed counterpart of the Agreement and originals of the Replacement Notes. We also have examined originals or copies, certified or otherwise identified to our satisfaction, of such documents, corporate records, certificates of public officials and such other documents as we have deemed necessary for purposes of this opinion. In this examination, we have assumed the genuineness of all signatures (other than those of officers of the Company), the legal capacity of all individuals who have executed the documents we have reviewed, the authenticity of all documents submitted to us as originals and the conformity with the originals of all documents submitted to us as copies. As to matters of fact material to our opinion, we have relied, without independent verification, on the representations in the Agreement and the certificates referred to above. Our examination also extended to such matters of law as we have deemed necessary for purposes of this opinion. For purposes of our opinion in paragraph 1 as to the corporate existence and good standing of the Company under the laws of the State of Delaware and the good standing of the Company under the laws of the State of Illinois, we have relied exclusively upon the certificates issued by the Secretaries of State of Delaware and Illinois. Such opinion is not intended to provide any conclusion or assurance beyond that conveyed by such certificates. Whenever our opinion with respect to factual matters is indicated to be based on our knowledge, we are referring to the actual knowledge of Dewey B. Crawford, the primary lawyer having supervisory responsibility for the Company's relationship with this firm, and of Kimberly K. Rubel, who are the Gardner, Carton & Douglas attorneys who have given substantial attention on behalf of the Company in connection with this matter. Except as expressly set forth herein, we have not undertaken any independent investigation to determine the existence or absence of such facts, and no inference as to our knowledge of the existence or absence of such facts should be drawn from such representation. Based upon the foregoing, and subject to the qualifications hereinafter set forth, we are of the opinion that: 1. The Company is a corporation duly organized and validly existing in good standing under the laws of the State of Delaware, and is duly qualified and in good standing as a foreign corporation in the State of Illinois. 2. The Company has full corporate power and authority to enter into the Agreement, the Replacement Notes and the Guaranty and to perform its obligations under the Agreement, the Replacement Notes and the Guaranty. 3. The execution and delivery of the Agreement, the Replacement Notes and the Guaranty, the performance by the Company of its obligations under the Agreement, the Replacement Notes and the Guaranty, and the borrowings by the Company under the Agreement, have been duly authorized by all necessary corporate action, and the Agreement, the Replacement Notes and the Guaranty have been duly executed and delivered by an authorized officer of the Company, and constitute the legal, valid and binding agreements of the Company, enforceable in accordance with their terms, except to the extent that enforcement thereof may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar laws of general application relating to or affecting the enforcement of the rights of creditors or by equitable principles, regardless of whether enforcement is sought in a proceeding in equity or at law. 4. The execution and delivery of the Agreement, the Replacement Notes and the Guaranty by the Company and the performance by the Company of its obligations under the Agreement, the Replacement Notes and the Guaranty do not violate, result in the breach of, or constitute a default under, (i) any provision in the Company's certificate of incorporation or by-laws, (ii) any provision in any indenture, mortgage, loan agreement or other agreement filed as an exhibit to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1996, (iii) any law, statute, rule or regulation that, in our experience, is normally applicable both to general business corporations that are not engaged in regulated business activities and to transactions of the type contemplated by the Agreement, or (iv) to our knowledge, any writ, order or decision of any court or governmental instrumentality that is binding on the Company. Notwithstanding the preceding sentence, we express no opinion as to whether (w) the execution and delivery of the Agreement, the Replacement Notes or the Guaranty, (x) the performance by the Company of its obligations under the Agreement, Replacement Notes and the Guaranty, (y) the borrowings by the Company under the Agreement, or (z) the compliance by the Company with the terms and provisions thereof will constitute a breach of, or a default under, any covenant or provision that requires financial calculations contained in any agreement to which the Company is a party. 5. No authorization, approval or consent of any governmental or regulatory body is necessary or required in connection with the execution and delivery by the Company of the Amendment, the Replacement Notes or the Guaranty and no registrations or undertakings by or with any governmental authority are required in connection with the borrowings by the Company under the Agreement, as amended by the Amendment. 6. No filings, recordations, notifications, registrations, notarizations or authentications are necessary nor must any stamp or similar taxes be paid in connection with the execution, delivery or performance by the Company of the Guaranty, the Agreement or the Replacement Notes. Our opinion is limited to the laws of the State of Illinois, the General Corporation Law of the State of Delaware and the federal laws of the United States. The foregoing opinions are subject to and qualified by the effect of any requirement that the Agent or the Lenders take certain actions or make certain determinations in a commercially reasonable manner and in good faith. Moreover, we express no opinion as to the enforceability of (a) any waiver of the right to a jury trial, (b) any provision requiring the payment of interest on interest, (c) express or implicit waivers of broad or vaguely stated rights, unknown future rights, defenses to obligations or rights granted by law, where such waivers are against public policy or prohibited by law, or (d) indemnity and contribution rights that may be against public policy. This opinion speaks as of the time of its delivery on the date it bears. We do not assume any obligation to provide you with any subsequent opinion or advice by reason of any fact about which we did not have knowledge at that time, by reason of any change subsequent to that time in any law covered by any of our opinions, or for any other reason. This opinion is solely for the benefit of you, your counsel and your permitted successors and assigns in connection with the transactions contemplated by the Agreement and may not be relied upon by any other Person or for any other purpose, or delivered to any other Person for any purpose, without our prior written consent. Very truly yours, TABLE OF CONTENTS ARTICLE I DEFINITIONS AND ACCOUNTING TERMS...................................1 SECTION 1.1. DEFINED TERMS.........................................1 SECTION 1.2. USE OF DEFINED TERMS ................................17 SECTION 1.3. CROSS-REFERENCES.....................................17 SECTION 1.4. ACCOUNTING AND FINANCIAL DETERMINATIONS17............17 ARTICLE II COMMITMENTS, BORROWING PROCEDURES AND NOTES.......................17 SECTION 2.1. COMMITMENTS..........................................17 SECTION (1) COMMITMENT OF EACH LENDER............................17 SECTION 2.2. REDUCTION OF COMMITMENT AMOUNT; EXTENSION OF STATED MATURITY DATE..............................18 SECTION (1) REDUCTION OF COMMITMENT AMOUNT.......................18 SECTION (2) EXTENSION OF STATED MATURITY DATE....................18 SECTION 2.3. BORROWING PROCEDURE..................................18 SECTION (1) EUROCURRENCY RATE LOANS AND EURODOLLAR RATE LOANS....19 SECTION (2) QUOTED RATE LOANS....................................19 SECTION (3) REFERENCE RATE LOANS.................................20 SECTION (4) PROCEEDS.............................................20 SECTION 2.4. CONTINUATION AND CONVERSION ELECTIONS................20 SECTION (1) EUROCURRENCY RATE LOANS, EURODOLLAR RATE LOANS AND REFERENCE RATE LOANS.............................21 SECTION (2) QUOTED RATE LOANS....................................21 SECTION 2.5. CURRENCY EQUIVALENTS.................................22 SECTION 2.6. FUNDING..............................................23 SECTION 2.7. NOTES................................................23 ARTICLE III REPAYMENTS, PREPAYMENTS, INTEREST AND FEES........................23 SECTION 3.1. REPAYMENTS AND PREPAYMENTS...........................23 SECTION 3.2. INTEREST PROVISIONS..................................24 SECTION (1) RATES................................................24 SECTION (2) POST-MATURITY RATES..................................25 SECTION (3) PAYMENT DATES........................................25 SECTION 3.3. FEES.................................................26 SECTION (1) FACILITY FEE.........................................26 SECTION (2) AGENT'S FEE..........................................26 SECTION 3.4. COMPUTATION OF INTEREST AND FEES.....................26 ARTICLE IV CERTAIN INTEREST RATE AND OTHER PROVISIONS........................26 SECTION 4.1. FIXED RATE LENDING UNLAWFUL..........................26 SECTION 4.2. DEPOSITS UNAVAILABLE.................................27 SECTION 4.3. INCREASED FIXED RATE LOAN COSTS, ETC.................27 SECTION 4.4. INCREASED CAPITAL COSTS WITH RESPECT TO COMMITMENTS..27 SECTION 4.5. FUNDING LOSSES.......................................28 SECTION 4.6. TAXES................................................28 SECTION 4.7. PAYMENTS, COMPUTATIONS, ETC..........................29 SECTION 4.8. SHARING OF PAYMENTS..................................30 SECTION 4.9. SETOFF...............................................31 SECTION 4.10.USE OF PROCEEDS......................................31 SECTION 4.11.CURRENCY INDEMNIFICATION.............................31 ARTICLE V CONDITIONS TO BORROWING...........................................32 SECTION 5.1. INITIAL BORROWING OF THE COMPANY.....................32 SECTION (1) RESOLUTIONS, ETC.....................................32 SECTION (2) DELIVERY OF NOTES....................................32 SECTION (3) PAYMENT OF OUTSTANDING INDEBTEDNESS, ETC.............33 SECTION (4) OPINIONS OF COUNSEL..................................33 SECTION (5) EXPENSES, ETC........................................33 SECTION 5.2. INITIAL BORROWING OF A DESIGNATED SUBSIDIARY.........33 SECTION (1) DESIGNATION LETTER...................................33 SECTION (2) NOTES................................................33 SECTION (3) AUTHORIZATIONS AND APPROVALS.........................33 SECTION (4) GUARANTY.............................................33 SECTION (5) RESOLUTIONS..........................................34 SECTION (6) INCUMBENCY...........................................34 SECTION 5.3. ALL BORROWINGS.......................................34 SECTION (1) COMPLIANCE WITH WARRANTIES, NO DEFAULT, ETC..........34 SECTION (2) BORROWING REQUEST....................................35 SECTION (3) INSURANCE............................................35 SECTION (4) FORM U-1.............................................35 SECTION (5) SATISFACTORY LEGAL FORM..............................35 ARTICLE VI REPRESENTATIONS AND WARRANTIES....................................36 SECTION 6.1. ORGANIZATION, ETC....................................36 SECTION 6.2. DUE AUTHORIZATION, NON-CONTRAVENTION, ETC............36 SECTION 6.3. GOVERNMENT APPROVAL, REGULATION, ETC.................36 SECTION 6.4. VALIDITY, ETC........................................37 SECTION 6.5. FINANCIAL INFORMATION................................37 SECTION 6.6. NO MATERIAL ADVERSE CHANGE...........................37 SECTION 6.7. LITIGATION, LABOR CONTROVERSIES, ETC.................37 SECTION 6.8. SUBSIDIARIES.........................................37 SECTION 6.9. PARTNERSHIPS; JOINT VENTURES.........................38 SECTION 6.10.OWNERSHIP OF PROPERTIES..............................38 SECTION 6.11.TAXES................................................38 SECTION 6.12.INSURANCE............................................38 SECTION 6.13.PENSION AND WELFARE PLANS............................38 SECTION 6.14.ENVIRONMENTAL WARRANTIES.............................38 SECTION 6.15.REGULATIONS G, U AND X...............................40 SECTION 6.16.ACCURACY OF INFORMATION..............................40 ARTICLE VII COVENANTS.........................................................41 SECTION 7.1. AFFIRMATIVE COVENANTS................................41 SECTION (1) FINANCIAL INFORMATION, REPORTS, NOTICES, ETC.........41 SECTION (2) COMPLIANCE WITH LAWS, ETC............................43 SECTION (3) INSURANCE............................................43 SECTION (4) ENVIRONMENTAL COVENANT...............................43 SECTION 7.2. NEGATIVE COVENANTS...................................44 SECTION (1) LIENS................................................44 SECTION (2) FINANCIAL CONDITION..................................45 SECTION (3) LONG-TERM LEASES.....................................46 SECTION (4) INVESTMENTS..........................................46 SECTION (5) CONSOLIDATION, MERGER, ETC...........................47 SECTION (6) ASSET DISPOSITIONS, ETC..............................47 SECTION (7) TRANSACTIONS WITH AFFILIATES.........................49 SECTION (8) NEGATIVE PLEDGES, RESTRICTIVE AGREEMENTS, ETC........49 SECTION (9) BUSINESS ACTIVITIES..................................49 ARTICLE VIII EVENTS OF DEFAULT.................................................50 SECTION 8.1. LISTING OF EVENTS OF DEFAULT.........................50 SECTION (1) NON-PAYMENT OF OBLIGATIONS...........................50 SECTION (2) BREACH OF WARRANTY...................................50 SECTION (3) NON-PERFORMANCE OF CERTAIN COVENANTS AND OBLIGATIONS.50 SECTION (4) NON-PERFORMANCE OF OTHER COVENANTS AND OBLIGATIONS...50 SECTION (5) DEFAULT ON OTHER INDEBTEDNESS........................50 SECTION (6) JUDGMENTS............................................51 SECTION (7) PENSION PLANS........................................51 SECTION (8) CONTROL OF THE COMPANY...............................51 SECTION (9) BANKRUPTCY, INSOLVENCY, ETC..........................51 SECTION 8.2. ACTION IF BANKRUPTCY.................................52 SECTION 8.3. ACTION IF OTHER EVENT OF DEFAULT.....................52 ARTICLE IX THE AGENT.........................................................52 SECTION 9.1. ACTIONS..............................................52 SECTION 9.2. FUNDING RELIANCE, ETC................................53 SECTION 9.3. EXCULPATION..........................................53 SECTION 9.4. SUCCESSOR............................................54 SECTION 9.5. LOANS BY LENDERS.....................................54 SECTION 9.6. CREDIT DECISIONS.....................................54 SECTION 9.7. COPIES, ETC..........................................55 ARTICLE X MISCELLANEOUS PROVISIONS..........................................55 SECTION 10.1. WAIVERS, AMENDMENTS, ETC............................55 SECTION 10.2. NOTICES.............................................56 SECTION 10.3. PAYMENT OF COSTS AND EXPENSES.......................56 SECTION 10.4. INDEMNIFICATION.....................................56 SECTION 10.5. SURVIVAL............................................57 SECTION 10.6. SEVERABILITY........................................57 SECTION 10.7. HEADINGS............................................57 SECTION 10.8. EXECUTION IN COUNTERPARTS, EFFECTIVENESS, ETC.......58 SECTION 10.9. GOVERNING LAW; ENTIRE AGREEMENT.....................58 SECTION 10.10.SUCCESSORS AND ASSIGNS..............................58 SECTION 10.11.SALE AND TRANSFER OF LOANS AND NOTE; PARTICIPATIONS IN LOANS AND NOTE....................58 SECTION (1) ASSIGNMENTS.........................................58 SECTION (2) PARTICIPATIONS......................................60 SECTION 10.12.EXEMPT CHARACTER OF TRANSACTION.....................60 SECTION 10.13.OTHER TRANSACTIONS..................................61 SECTION 10.14.FORUM SELECTION AND CONSENT TO JURISDICTION.........61 SECTION 10.15.WAIVER OF JURY TRIAL................................61 SECTION 2.12. INDEMNIFICATION....................................C-7 - -------- *Item numbers are keyed to refer to Sections where the item is principally referred to and will have to be revised as such Sections are renumbered. EX-11 3 EXHIBIT 11 COMPUTATION OF EPS EXHIBIT 11 ANDREW CORPORATION AND SUBSIDIARIES Computation of Earnings Per Share
Year Ended September 30 1997 1996 1995 ---------- ---------- ---------- (Amounts in thousands, except per share data) PRIMARY EARNINGS PER SHARE Average shares outstanding 90,532 90,263 89,180 Net effect of dilutive stock options-- based on the treasury stock method using average market price 1,075 1,231 1,257 ---------- ---------- ---------- TOTAL 91,607 91,494 90,437 ========== ========== ========== Income from continuing operations $107,758 $ 93,802 $ 71,854 ========== ========== ========== Income from continuing operations per share $ 1.18 $ 1.03 $ .79 ========== ========== ========== Net income $ 88,342 $ 90,397 $ 69,955 ========== ========== ========== Net income per share $ .96 $ .99 $ .77 ========== ========== ========== FULLY DILUTED EARNINGS PER SHARE Average shares outstanding 90,532 90,263 89,180 Net effect of dilutive stock options-- based on the treasury stock method using the greater of year-end or average market price 1,075 1,519 1,548 ---------- ---------- ---------- TOTAL 91,607 91,782 90,728 ========== ========== ========== Income from continuing operations $107,758 $ 93,802 $ 71,854 ========== ========== ========== Income from continuing operations per share $ 1.18 $ 1.02 $ .79 ========== ========== ========== Net income $ 88,342 $ 90,397 $ 69,955 ========== ========== ========== Net income per share $ .96 $ .98 $ .77 ========== ========== ========== Note: The fully diluted earnings per share calculation is submitted in accordance with the Securities Exchange Act of l934 Release No. 9038 although not required by footnote 2 to paragraph l4 of APB Opinion No. l5 because it results in dilution of less than 3%.
EX-13 4 EXHIBIT 13 ANNUAL REPORT TO SHAREHOLDERS OPERATIONS REVIEW Andrew Corporation set record highs for orders, sales, income from continuing operations and net income from continuing operations per share for the fiscal year ended September 30, 1997. Wireless infrastructure and broadcast markets led the sales growth for the year. Domestic personal communication services (PCS) sales increased 33% over last year on a strong first half of 1997. International cellular sales grew consistently throughout the year with sales in each geographic region growing over 30% compared with last year. Broadcast sales were up over 25% on strength in both domestic and international entertainment networks. In July 1997, the company decided to exit certain businesses whose performance had not met growth expectations. The company discontinued the network products business and phased out of its fiber optic sensors and global messaging development activities. It also significantly restructured its European wireless products business. These actions resulted in total after-tax charges to net income of $22.8 million or $.25 per share. While these steps negatively impacted 1997 results, they enable an increased focus on the growing wireless markets and further enhance long term growth opportunities. SALES increased $103.5 million or 13.5% over 1996 to $869.5 million in fiscal 1997. International sales grew 13.2% to $414.7 million in fiscal 1997 compared with $366.3 million in 1996 and $282.6 million in 1995. International sales represented 48% of total revenue in both fiscal 1997 and 1996 and 45% in fiscal 1995. In 1997, coaxial cable sales increased 12.5% and other products and services increased 37.3%, while terrestrial microwave antennas and wireless telephone accessories were flat compared with last year. In 1996, coaxial cable, terrestrial microwave antennas and wireless telephone accessories drove the increase in sales over 1995. COST OF PRODUCTS SOLD, as a percentage of sales revenue, was 59.1% in 1997 compared with 58.2% and 57.7% in 1996 and 1995, respectively. The trend, which began in 1996, continued in 1997 as competitive price pressure and changes in product mix were partially offset by productivity gains, volume efficiencies and manufacturing improvements. 13 RESEARCH AND DEVELOPMENT EXPENSES increased $11.5 million or 38.7% to $41.1 million in 1997. As a percentage of sales revenue, research and development expenses were 4.7%, 3.9% and 3.4% in 1997, 1996 and 1995, respectively. The growth in research and development expenses is expected to slow due to the phase out of the fiber optic sensors and global messaging development activities. The company will focus its research and development efforts in its core products and markets. SALES AND ADMINISTRATIVE EXPENSES increased 4.4% to $145.6 million in 1997 from $139.6 million in 1996. During 1997, sales and marketing activities expanded, especially in the Europe and Asia-Pacific regions, while administrative expenses increased due to investments in information and business systems, partially offset by lower profit sharing and bonus expense. As a percentage of sales revenue, selling and administrative expenses decreased to 16.8% in 1997 compared with 18.2% and 20.2% in 1996 and 1995, respectively. OTHER INCOME AND EXPENSE in 1997 resulted in income of $2.0 million, compared with an expense of $4.7 million and $4.4 million in 1996 and 1995, respectively. In 1997, net interest expense decreased to $.9 million, from $3.4 million in 1996 and $3.2 million in 1995. The decrease of $2.5 million in 1997 was due to higher investment levels resulting from increased cash from operations. Net other income was $2.9 million in 1997 compared with net other expense of $1.4 million in 1996 and $1.2 million in 1995. In 1997, net other income consisted primarily of foreign exchange gains, compared with 1996 when foreign exchange gains were offset by a one-time charge of $1.5 million related to the acquisition of The Antenna Company. INCOME FROM CONTINUING OPERATIONS increased 14.9% to $107.8 million in 1997 compared with the $93.8 million reported in 1996 and $71.9 million in 1995. Excluding the effects of the restructuring charge, income from continuing operations was $111.1 million in 1997, an increase of $17.3 million or 18.4% over 1996. Continued focus on cost containment activities and increased productivity contributed to the increase. 14 During 1997, the company's effective income tax rate for continuing operations decreased to 35% from 36% in 1996 and 1995. NET INCOME decreased 2.3% to $88.3 million in 1997 compared with $90.4 million in 1996 and $69.9 million in 1995. Net income per share decreased 2.0% to $.96 in 1997 compared with $.98 in 1996 and $.77 in 1995. In 1997, net income included a $16.1 million charge (net of applicable taxes) for discontinuing the network products business and losses from operations of the network products business of $3.3 million (net of applicable taxes). In 1996, losses from operations of the network products business totaled $3.4 million (net of applicable taxes). Also, 1997 net income included a $3.3 million charge (net of applicable taxes) for phasing out the company's fiber optic sensor and global messaging development activities, as well as the restructuring of the company's European wireless products business. Net income per share for 1997, excluding the effects of the charges for discontinued operations and restructuring, was $1.21, an increase of 18.6% over 1996. LIQUIDITY: Net cash from operations totaled $151.7 million in 1997, $66.8 million in 1996 and $55.8 million in 1995. Higher income from continuing operations, increased collection of accounts receivable and a decreased investment in inventories contributed to the growth in cash from operations in 1997. Days sales outstanding decreased from 72 days in 1996 and 68 days in 1995 to 67 days in 1997. The increase in net cash from operations in 1996 was due primarily to higher earnings and increased liabilities, which were partially offset by higher accounts receivable balances and an increased investment in inventories. Net cash used in investing activities totaled $61.4 million in 1997 compared with $78.7 million in 1996 and $55.4 million in 1995. The 1997 decrease is due primarily to the company's purchase, in December 1995, of Mapra Industria e Comercio Ltda. and Gerbo Telecommunicacoes e Servicos Ltda. for $14.6 million, net of cash received, and the company's June 1996 purchase of the SATCOM group of companies for $3.2 million. Capital expenditures decreased 15 $3.3 million or 6.3% to $49.1 million from $52.5 million in 1996. The company expects to spend approximately $9.5 million and approximately $7.5 million on its domestic and Chinese facilities, respectively, in 1998. Capital spending increased $4.4 million or 9.2% in 1996 compared with 1995. Investments in and advances to the company's affiliates were $13.1 million in 1997 compared with $9.0 million in 1996. The growth in 1997 is due primarily to initial investments in new ventures, as well as loans to existing joint ventures in Russia and the Ukraine. Net cash used for financing activities totaled $25.5 million in 1997 and $2.0 million in 1996 compared with net cash from financing activities of $4.6 million in 1995. During 1997, the company initiated a stock buy-back program with an authorized limit of 5,000,000 shares. As of September 30, 1997, the company had repurchased 1,545,000 shares at a total cost of $41.6 million. Shares acquired through the stock buy-back program will be held to meet potential employee compensation needs or for use in future acquisitions. Although Andrew has never paid cash dividends, the Board of Directors periodically reviews this practice and to date has elected to retain earnings in the business to finance investments and operations. In 1997, the company acquired $10.7 million in short term local currency debt to help finance the facility expansion in Brazil. The company also maintains a $75 million revolving line of credit agreement with Bank of America, Illinois, under which there was $3.6 million outstanding at September 30, 1997. During 1996, the company liquidated The Antenna Company's short term debt of $5.0 million. As of September 30, 1997, the company had $36.4 million of senior notes outstanding of which $5.1 million was due within one year. RISK FACTORS: This annual report may contain forward-looking statements that involve risks and uncertainties. Factors that could cause actual results to differ materially from forecasts or expectations include, but are not limited to, impact of competitive products and pricing; regional economic and political conditions that may impact customers' ability to fund purchases of our products and services; availability of qualified technical management, principally in emerging markets; and end user demand for wireless communication products. In addition, the company may, from time to time, list risk factors in the company's reports filed with the SEC. 16 CONSOLIDATED STATEMENTS OF INCOME
Year Ended September 30 Amounts in thousands, except per share amounts 1997 1996 1995 - ------------------------------------------------------------------------------------ SALES $869,475 $766,007 $624,743 Cost of products sold 513,809 445,521 360,730 - ------------------------------------------------------------------------------------ GROSS PROFIT 355,666 320,486 264,013 OPERATING EXPENSES Research and development 41,076 29,624 21,041 Sales and administrative 145,647 139,558 126,169 Restructuring 5,150 -- -- - ------------------------------------------------------------------------------------ 191,873 169,182 147,210 - ------------------------------------------------------------------------------------ OPERATING INCOME 163,793 151,304 116,803 OTHER Interest expense 5,003 5,183 5,643 Interest income (4,124) (1,831) (2,487) Other (income) expense (2,868) 1,386 1,206 - ------------------------------------------------------------------------------------ (1,989) 4,738 4,362 - ------------------------------------------------------------------------------------ INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES 165,782 146,566 112,441 Income taxes 58,024 52,764 40,587 - ------------------------------------------------------------------------------------ INCOME FROM CONTINUING OPERATIONS 107,758 93,802 71,854 DISCONTINUED OPERATIONS Loss from operations of Network Products Business, net of applicable tax benefit 3,330 3,405 1,899 Loss on disposal of Network Products Business including provision of $1,040 for operating losses during phase-out period, net of applicable tax benefits 16,086 -- -- - ------------------------------------------------------------------------------------ 19,416 3,405 1,899 - ------------------------------------------------------------------------------------ NET INCOME $ 88,342 $ 90,397 $ 69,955 ==================================================================================== INCOME FROM CONTINUING OPERATIONS PER AVERAGE SHARE OF COMMON STOCK OUTSTANDING $ 1.18 $ 1.02 $ 0.79 NET INCOME PER AVERAGE SHARE OF COMMON STOCK OUTSTANDING $ 0.96 $ 0.98 $ 0.77 ==================================================================================== AVERAGE SHARES OUTSTANDING 91,607 91,782 90,728 ==================================================================================== See Notes to Consolidated Financial Statements.
17 CONSOLIDATED BALANCE SHEETS
September 30 Dollars in thousands 1997 1996 - -------------------------------------------------------------------------------- ASSETS CURRENT ASSETS Cash and cash equivalents $ 93,823 $ 31,295 Accounts receivable, less allowances (1997 - $2,754; 1996 - $3,648) 185,752 197,589 Inventories Finished products 57,458 56,947 Materials and work in process 109,432 109,662 - -------------------------------------------------------------------------------- 166,890 166,609 Assets related to discontinued operations, less allowances 4,811 -- Miscellaneous current assets 8,538 6,491 - -------------------------------------------------------------------------------- TOTAL CURRENT ASSETS 459,814 401,984 OTHER ASSETS Costs in excess of net assets of businesses acquired, less accumulated amortization (1997 - $8,742; 1996 - $19,732) 24,726 42,667 Investments in and advances to affiliates 55,628 42,510 Investments and other assets 13,396 11,368 PROPERTY, PLANT AND EQUIPMENT Land and land improvements 11,646 11,103 Buildings 72,884 68,248 Equipment 275,015 254,737 Allowances for depreciation and amortization (221,955) (201,388) - -------------------------------------------------------------------------------- 137,590 132,700 - -------------------------------------------------------------------------------- TOTAL ASSETS $691,154 $631,229 ================================================================================ See Notes to Consolidated Financial Statements.
18 CONSOLIDATED BALANCE SHEETS
September 30 Dollars in thousands 1997 1996 - -------------------------------------------------------------------------------- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Notes payable $ 14,319 $ -- Accounts payable 37,237 38,887 Accrued expenses and other liabilities 18,978 26,170 Compensation and related expenses 29,312 27,006 Income taxes 16,430 20,367 Restructuring reserve 2,036 -- Liabilities related to discontinued operations 3,637 -- Current portion of long term debt 5,144 4,952 - -------------------------------------------------------------------------------- TOTAL CURRENT LIABILITIES 127,093 117,382 DEFERRED LIABILITIES 10,239 7,919 LONG TERM DEBT, less current portion 35,693 40,423 MINORITY INTEREST 9,006 9,291 STOCKHOLDERS' EQUITY Common stock (par value, $.01 a share: 400,000,000 shares authorized; 102,718,210 shares issued, including treasury) 1,027 685 Additional paid-in capital 51,810 43,257 Foreign currency translation (4,532) 349 Retained earnings 547,256 458,914 Treasury stock, at cost (13,060,876 shares in 1997; 12,070,844 shares in 1996) (86,438) (46,991) - -------------------------------------------------------------------------------- 509,123 456,214 - -------------------------------------------------------------------------------- TOTAL LIABILITIES AND EQUITY $691,154 $631,229 ================================================================================ See Notes to Consolidated Financial Statements.
19 CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended September 30 Dollars in thousands 1997 1996 1995 - ------------------------------------------------------------------------------------------- CASH FLOWS FROM OPERATIONS Net Income $ 88,342 $ 90,397 $ 69,955 ADJUSTMENTS TO NET INCOME Restructuring costs 4,439 -- -- Discontinued operations 22,771 -- -- Depreciation and amortization 39,274 34,334 25,803 Decrease (increase) in accounts receivable 4,074 (45,681) (15,334) Increase in inventories (577) (34,705) (32,078) (Increase) decrease in miscellaneous current and other assets (3,331) (1,663) 5,488 (Increase) decrease in receivables from affiliates (161) 130 (1,171) (Decrease) increase in accounts payable and other liabilities (2,471) 23,321 1,638 Other (680) 663 1,515 - ------------------------------------------------------------------------------------------- NET CASH FROM OPERATIONS 151,680 66,796 55,816 INVESTING ACTIVITIES Capital expenditures (49,144) (52,475) (48,076) Acquisition of businesses, net of cash acquired -- (17,802) -- Investments in and advances to affiliates (13,097) (9,030) (7,823) Proceeds from sale of property, plant and equipment 814 624 532 - ------------------------------------------------------------------------------------------- NET CASH USED FOR INVESTING ACTIVITIES (61,427) (78,683) (55,367) FINANCING ACTIVITIES Proceeds from issuance of long term debt -- -- 3,842 Payments on long term debt (4,524) (5,229) (5,583) Short term borrowings (payments) - net 14,356 (2,455) 750 Stock purchase and option plans 6,297 5,712 5,561 Purchases of treasury stock (41,628) -- -- - ------------------------------------------------------------------------------------------- NET CASH (USED FOR) FROM FINANCING ACTIVITIES (25,499) (1,972) 4,570 Effect of exchange rate changes on cash (2,226) (910) 331 - ------------------------------------------------------------------------------------------- INCREASE (DECREASE) FOR THE YEAR 62,528 (14,769) 5,350 Cash and equivalents at beginning of year 31,295 46,064 40,714 - ------------------------------------------------------------------------------------------- CASH AND EQUIVALENTS END OF YEAR $ 93,823 $ 31,295 $ 46,064 =========================================================================================== See Notes to Consolidated Financial Statements.
20 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Year Ended September 30 Dollars in thousands 1997 1996 1995 - ----------------------------------------------------------------- COMMON STOCK ISSUED Balance at beginning of year $ 685 $ 457 $ 304 Three-for-two stock split 342 228 153 - ----------------------------------------------------------------- BALANCE AT END OF YEAR $ 1,027 $ 685 $ 457 ================================================================= ADDITIONAL PAID-IN CAPITAL Balance at beginning of year $ 43,257 $ 35,588 $ 22,356 Three-for-two stock split (342) (228) (153) Stock purchase and option plans 8,895 7,897 13,385 - ----------------------------------------------------------------- BALANCE AT END OF YEAR $ 51,810 $ 43,257 $ 35,588 ================================================================= RETAINED EARNINGS Balance at beginning of year $458,914 $368,517 $298,562 Net Income 88,342 90,397 69,955 - ----------------------------------------------------------------- BALANCE AT END OF YEAR $547,256 $458,914 $368,517 ================================================================= TREASURY STOCK Balance at beginning of year $(46,991) $(48,448) $(43,419) Repurchase of shares (41,628) -- -- Stock purchase and option plans 2,181 1,457 (5,029) - ----------------------------------------------------------------- BALANCE AT END OF YEAR $(86,438) $(46,991) $(48,448) ================================================================= See Notes to Consolidated Financial Statements.
21 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - ------------------------------------------------------------------------------- PRINCIPLES OF CONSOLIDATION The consolidated financial statements include the accounts of the company and its majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated. CASH EQUIVALENTS The company considers all highly liquid investments purchased with maturities of three months or less to be cash equivalents. The carrying amount of cash equivalents approximates fair value due to the relative short term maturity of these investments. INVENTORIES Inventories are stated at the lower of cost or market. Inventories stated under the last-in, first-out (LIFO) method represent 44% of total inventories in 1997 and 41% of total inventories in 1996. The remaining inventories are valued on the first-in, first-out (FIFO) method and the weighted average method. If the FIFO method, which approximates current replacement cost, had been used for all inventories, the total amount of inventories would have increased by $1,395,000 and $8,435,000 at September 30, 1997 and 1996, respectively. DEPRECIATION AND AMORTIZATION The company provides for depreciation and amortization of property, plant and equipment, all of which are recorded at cost, principally using accelerated methods based on estimated useful lives of the assets for both financial reporting and tax purposes. Costs in excess of net assets of businesses acquired are amortized on the straight-line basis over periods ranging from 10 to 40 years. INVESTMENTS IN AFFILIATES Investments in affiliates are accounted for using the equity method, under which the company's share of earnings or losses of these affiliates is reflected in income as earned and dividends are credited against the investment in affiliates when received. REVENUE RECOGNITION Revenue is recognized from sales, other than long term contracts, when a product is shipped or a service is performed. Sales under long term contracts generally are recognized under the percentage of completion method and include a portion of the earnings expected to be realized on the contract in the ratio that costs incurred bear to estimated total costs. Contracts in progress are reviewed monthly, and sales and earnings are adjusted in current accounting periods based on revisions in contract value and estimated costs at completion. Estimated losses on contracts are provided when identified. FOREIGN CURRENCY TRANSLATION The functional currency for the company's foreign operations is predominantly the applicable local currency. Accounts of foreign operations are translated into U.S. dollars using year-end exchange rates for assets and liabilities and average monthly exchange rates for revenue and expense accounts. Adjustments resulting from translation are included as a separate component of stockholders' equity. Gains and losses resulting from foreign currency transactions are included in determining net income. INCOME TAXES Deferred income taxes reflect the impact of temporary differences between the amounts of assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. 22 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS INCOME FROM CONTINUING OPERATIONS PER SHARE AND NET INCOME PER SHARE Income from continuing operations per share and net income per share are based on the weighted average number of common shares outstanding during each year after giving effect to stock options considered to be dilutive common stock equivalents. Fully diluted per share amounts are not materially different from primary per share amounts. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. ACCOUNTING CHANGES During the first quarter of fiscal year 1995, the company adopted Statement of Financial Accounting Standard (SFAS) No. 115, "Accounting for Certain Investments in Debt and Equity Securities." In the first quarter of fiscal year 1997, the company adopted SFAS No. 121, "Accounting for the Impairment of Long- Lived Assets and for Long-Lived Assets to be Disposed of," which requires long- lived assets to be reviewed for impairment when events or circumstances indicate that an impairment exists. The adoption of these statements did not have a material effect on the company's financial statements. In February 1997, the Financial Accounting Standard Board (FASB) issued SFAS No. 128, "Earnings per Share," which requires the company to change the method currently used to calculate earnings per share and to restate all prior periods. In February 1997, the FASB also issued SFAS No. 129, "Disclosure of Information about Capital Structure." The company is required to adopt both these statements in the first quarter of fiscal year 1998. Adoption of these statements is not expected to have a material effect on the company's financial statements. BUSINESS ACQUISITIONS - ------------------------------------------------------------------------------- In December 1995, the company purchased a 51% interest in Mapra Industria e Comercio, Ltda. and Gerbo Telecommunicacoes e Servicos, Ltda., located in Brazil, for $14.6 million, net of cash received. The acquisition was accounted for as a purchase and, accordingly, the operating results of Mapra and Gerbo have been included in the consolidated operating results since the date of acquisition. Mapra and Gerbo manufacture, distribute and sell antennas, waveguides and towers and also provide installation services. In June 1996, the company purchased an 80% interest in SATCOM Group of Companies, located in South Africa, for $3.2 million, net of cash received. The acquisition of SATCOM was accounted for as a purchase and, accordingly, the operating results of SATCOM have been included in the consolidated operating results since the date of acquisition. If the acquisitions of Mapra Industria e Comercio, Ltda., Gerbo Telecommunicacoes e Servicos, Ltda. and SATCOM Group of Companies had taken place at the beginning of fiscal year 1996, Andrew Corporation's consolidated sales and net income would not have been materially affected. In March 1996, Andrew Corporation completed its acquisition of The Antenna Company, a manufacturer and distributor of wireless telephone antennas and accessories for mobile applications. The transaction has been accounted for as a pooling of interests and, accordingly, the accompanying financial statements have been restated to include the accounts and operations of The Antenna Company for all periods prior to the merger. Andrew Corporation exchanged 2,312,346 shares of its common stock for all the outstanding stock of the privately held The Antenna Company. In addition, $1.5 million in acquisition costs were incurred to complete the merger. 23 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DISCONTINUED OPERATIONS - ------------------------------------------------------------------------------- On July 14, 1997, the company adopted a plan to discontinue the operations of its network products business. The company expects to complete the disposition by the end of the 1997 calendar year. The network products business operating loss of $3.3 million, $3.4 million and $1.9 million (net of applicable taxes of $1.8 million, $1.9 million and $1.1 million) for the fiscal years ended September 30, 1997, 1996 and 1995, respectively, are shown separately under discontinued operations in the accompanying income statement. The estimated loss on disposal of the discontinued operations of $16.1 million (net of applicable taxes of $6.7 million) represents the estimated loss on the disposal of the network products assets and a provision of $1.0 million (net of applicable taxes of $.6 million) for expected operating losses during the phase-out period. Net sales of the network products business were $20.8 million, $27.6 million and $39.2 million for the fiscal years ended September 30, 1997, 1996 and 1995, respectively. The assets of the network products business to be disposed of consist primarily of accounts receivable, inventories and equipment. INVESTMENTS IN AFFILIATES - ------------------------------------------------------------------------------- The company's investments in affiliates represent 40 to 50 percent interests in several start-up network telecommunications joint ventures located in Russia and Ukraine. The combined operating results of the ventures and the company's share thereof were not material to the company's 1997, 1996 and 1995 operating results. UNBILLED RECEIVABLES - ------------------------------------------------------------------------------- At September 30, 1997, unbilled receivables of $8,546,000 are included in accounts receivable, compared with $7,634,000 at September 30, 1996. These amounts will be billed in accordance with contract terms and delivery schedules and are generally expected to be collected within one year. PROFIT SHARING PLANS - ------------------------------------------------------------------------------- Most employees of Andrew Corporation and its subsidiaries participate in various retirement plans, principally defined contribution profit sharing plans. The amounts charged to earnings for these plans in 1997, 1996 and 1995 were $12,933,000, $13,678,000, and $11,696,000, respectively. BORROWINGS - ------------------------------------------------------------------------------- Lines of Credit The company maintains a $75 million revolving line of credit agreement with Bank of America, Illinois. The maximum outstanding during 1997 under the line of credit was $3.6 million with a weighted average interest rate of 3.62%. The outstanding balance at September 30, 1997 was $3.6 million. The company also maintains a $15 million line of credit agreement with ABN-AMRO for its Brazilian operations. The maximum outstanding during 1997 under the line of credit was $10.7 million with a weighted average interest rate of 22.28%. The outstanding line of credit balance at September 30, 1997 was $10.7 million. 24 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS LONG TERM DEBT Long term debt at September 30 consisted of the following:
Dollars in thousands 1997 1996 - ------------------------------------------------------------------------ 9.52% senior notes payable to insurance companies in annual installments through 2005 $36,364 $40,910 Variable rate Industrial Development Revenue Bond with Coweta County, Georgia 3,800 3,800 Other 673 665 Less: Current Portion 5,144 4,952 - ------------------------------------------------------------------------ Total Long Term Debt $35,693 $40,423 ========================================================================
Under the terms of the loan agreements, the company has agreed to maintain certain levels of working capital and net worth. At September 30, 1997, all these requirements had been met. The principal amounts of long term debt maturing after September 30, 1997 are: Dollars in thousands 1998 1999 2000 2001 2002 Thereafter - ------------------------------------------------------------------------ $5,144 $4,619 $4,545 $4,545 $4,545 $17,439 ========================================================================
Cash payments for interest on all borrowings were $4,246,000, $4,752,000 and $5,339,000 in 1997, 1996 and 1995, respectively. The carrying amount of long term debt as of September 30, 1997 approximates fair value. The fair value was determined by discounting the future cash outflows based upon the current market rates for instruments with a similar risk and term to maturity. RESTRUCTURING - ------------------------------------------------------------------------------- During June 1997, the company initiated a plan to restructure its European wireless products business and phase out its fiber optic sensors and global messaging development activities. In connection with the restructuring plan, approximately 300 employees will be terminated at an estimated cost of $1.6 million. In addition to termination costs, the restructuring charge includes an estimated loss on disposal of equipment of $1.7 million. The remaining cash costs at September 30, 1997 will be paid during fiscal 1998. 25 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS INCOME TAXES - ------------------------------------------------------------------------------- The composition of the provision for income taxes follows:
Year Ended September 30 Dollars in thousands 1997 1996 1995 - -------------------------------------------------------------------- Currently Payable: Federal $ 29,636 $ 35,013 $ 22,345 Non-United States 19,852 15,702 12,937 State 5,281 4,779 3,008 - -------------------------------------------------------------------- 54,769 55,494 38,290 Deferred (Credit): Federal and State 3,280 (2,608) 2,199 Non-United States (25) (122) 98 - -------------------------------------------------------------------- 3,255 (2,730) 2,297 - -------------------------------------------------------------------- $ 58,024 $ 52,764 $ 40,587 ==================================================================== Income Taxes Paid $ 44,641 $ 37,041 $ 27,387 ==================================================================== Components of Income from Continuing Operations Before Income Taxes: United States $ 99,782 $ 82,078 $ 70,955 Non-United States 66,000 64,488 41,486 - -------------------------------------------------------------------- $165,782 $146,566 $112,441 ====================================================================
The company's effective income tax rate varied from the statutory United States federal income tax rate because of the following:
1997 1996 1995 - ------------------------------------------------------------------- Statutory United States federal tax rate 35.0% 35.0% 35.0% Foreign Sales Corporation (FSC) (2.8) (2.7) (2.3) State income taxes, net of federal tax effect 2.2 2.1 2.2 Other items 0.6 1.6 1.2 - ------------------------------------------------------------------- Effective Tax Rate 35.0% 36.0% 36.1% ===================================================================
26 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The tax effects of temporary differences have given rise to gross deferred tax assets of $11,333,000, primarily accrued expenses and inventory, and gross deferred tax liabilities of $10,274,000, primarily depreciation, as of September 30, 1997. The company has not recorded a valuation allowance for deferred tax assets because the existing net deductible temporary differences will reverse during periods in which the company expects to generate taxable income. No provision has been made for income taxes of approximately $15,190,000 as of September 30, 1997, which would be payable should undistributed net income of subsidiaries located outside the United States be distributed as dividends. The company plans to continue its non-United States operations, and anticipates the ability to use tax planning opportunities if any dividends are declared or paid from these operations. STOCKHOLDERS' EQUITY - ------------------------------------------------------------------------------- COMMON STOCK The company has authorized 400,000,000 shares of common stock with a par value of $.01 per share. As of September 30, 1997, 89,657,334 shares of common stock were outstanding. Each outstanding common share has attached to it a one Share Purchase Right that, until exercisable, cannot be transferred apart from the company's Common Stock. The Rights will only become exercisable if a person or group acquires 15% or more of the company's Common Stock or announces an offer to acquire 15% or more of the company's Common Stock. In the event the Rights become exercisable, each Right may entitle the holder to purchase Common Stock of either the surviving or acquired company at one-half its market price. During the third quarter of fiscal year 1997, the company implemented a stock buy-back program, which authorized the company to repurchase up to five million shares of its common stock. As of September 30, 1997, the company had repurchased 1,545,000 common shares for a total cost of $41,600,000. The common shares repurchased under this program may be used to meet employee compensation needs or used in future acquisitions. On February 11, 1997, the company's Board of Directors approved a three-for-two stock split to stockholders of record on February 25, 1997, payable March 11, 1997. A three-for-two stock split was also effected in March 1996 and in March 1995. All prior year amounts have been restated to reflect the stock splits. Common Stock issued and outstanding and held in treasury is summarized in the tables below:
Year Ended September 30 1997 1996 1995 - ------------------------------------------------------------------------------ SHARES OF COMMON STOCK - ISSUED Balance at beginning of year 68,479,398 45,653,823 30,435,882 Three-for-two stock split 34,238,812 22,825,575 15,217,941 - ------------------------------------------------------------------------------ Balance at End of Year 102,718,210 68,479,398 45,653,823 ============================================================================== SHARES OF COMMON STOCK - HELD IN TREASURY Balance at beginning of year 8,047,229 5,620,970 4,206,023 Three-for-two stock split 4,023,615 2,809,352 2,103,012 Stock repurchase 1,545,000 -- -- Stock purchase and option plans (554,968) (383,093) (688,065) - ------------------------------------------------------------------------------ Balance at End of Year 13,060,876 8,047,229 5,620,970 ==============================================================================
As of September 30, 1997, 5,105,027 shares of Common Stock were reserved for the various stock plans described in the following Stock-Based Compensation section. 27 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS STOCK-BASED COMPENSATION Statement of Financial Accounting Standards No. 123, "Accounting for Stock- Based Compensation," encourages, but does not require, companies to record compensation expense for stock-based employee compensation plans at fair value. The company has chosen to continue to account for stock-based compensation using the intrinsic value method described in Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," and related Interpretations. Under APB No. 25, compensation expense is measured as the excess of market price over the price the employee must pay to acquire the stock on the grant date. All options are granted by the company at market price and, as a result, no compensation expense is recorded. The company currently maintains a long term Management Incentive Program (MIP), which provides for the issuance of up to 9,112,500 common shares in the form of stock options and awards and the awarding of performance units payable in cash or stock to key officers and other employees. Options under this plan vest over a four-year period. Options granted prior to fiscal year 1996 expire five years after grant, while options granted during fiscal years 1996 and 1997 expire ten years after grant. In fiscal year 1997, there were 572,250 options granted under the plan. The company also maintains a Stock Option Plan for Non-Employee Directors (DSP) that provides for the issuance of up to 1,012,500 common shares. Options under this plan vest over a five year period and expire ten years after grant. In fiscal year 1997, there were 90,000 options granted under the plan. The company also has an Employee Stock Purchase Plan (ESPP) that expires on February 1, 1999. All employees with six months of service as of the annual offering date are eligible to participate in this plan. The plan authorizes up to 1,771,875 shares of Common Stock to be sold to employees at 85% of market value. All shares issued under this plan are restricted and cannot be sold for one year following the date of purchase. In fiscal year 1997, there were 76,387 shares purchased by employees under the plan. Pro forma information regarding net income and earnings per share is required by Statement 123, and has been determined as if the company had accounted for its stock option plans under the fair value method of that Statement. The fair value of these options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted average assumptions for the 1997 and 1996 MIP, DSP, and ESPP, respectively: risk-free interest rate of 6.11% and 6.70%; dividend yield of 0%; a volatility factor of .415, and a weighted average expected life of the options of six years. For purposes of pro forma disclosures, the estimated fair value of the options is amortized to expense over the option's vesting period. The company's pro forma information follows:
Year Ended September 30 Dollars in thousands except per share amounts 1997 1996 - ----------------------------------------------------------------------- Pro forma income from continuing operations $104,485 $92,172 Pro forma net income 85,069 88,767 Pro forma net income from continuing operations per share 1.14 1.00 Pro forma net income per share $ 0.93 $ 0.97 =======================================================================
The effects on pro forma disclosures of applying Statement No. 123 are not likely to be representative of the effects of such disclosures in future years. Because Statement No. 123 is applicable only to options granted subsequent to September 30, 1995, the pro forma effect is not fully reflected in fiscal years 1996 and 1997. 28 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS A summary of the company's stock option activity and related information follows:
Year Ended September 30 1997 1996 1995 - ---------------------------------------------------------------------- Outstanding at beginning of year 2,618,631 2,367,636 3,520,800 Granted 662,250 1,011,825 838,013 Expired or cancelled (143,925) (274,270) (72,152) Exercised (488,923) (486,560) (1,919,025) - ---------------------------------------------------------------------- Outstanding at End of Year 2,648,033 2,618,631 2,367,636 ====================================================================== Exercisable at End of Year 673,147 472,275 306,788 ======================================================================
WEIGHTED AVERAGE EXERCISE PRICE Outstanding at beginning of year $13.92 $ 9.44 $ 3.83 Granted 37.60 20.60 15.65 Expired or cancelled 20.91 12.73 5.08 Exercised 9.55 6.71 2.02 Outstanding at end of year 20.26 13.92 9.44 Exercisable at end of year $11.64 $ 8.16 $ 4.51 ======================================================================
The weighted average fair value of options granted during fiscal years 1997 and 1996 were $13.84 and $10.05 per share, respectively. The weighted average contractual life of options outstanding as of September 30, 1997 is 8.74 years. The range of exercise prices for options outstanding at September 30, 1997 was $1.31 to $38.17. The range of exercise prices for options is wide due primarily to the increasing price of Andrew Corporation stock over the period of the grants. OTHER Foreign currency translation adjustments decreased equity by $4.9 million during the year ended September 30, 1997. Foreign currency translation adjustments decreased equity by $0.7 million and $2.3 million during the years ended September 30, 1996 and 1995, respectively. 29 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS GEOGRAPHIC SEGMENT INFORMATION - ------------------------------------------------------------------------------- As a result of the disposal of the network segment, the company's operations now consist of a dominant industry segment, Commercial Operations. This segment serves commercial markets, including wireless service operators, radio equipment companies, television stations, utilities and distributors. Products include antennas, antenna systems and coaxial cable. Principal financial data by major geographic area is as follows:
Year Ended September 30 Dollars in thousands 1997 1996 1995 - ------------------------------------------------------------------------------- SALES: United States: Customers $559,873 $508,358 $443,427 Intercompany 115,647 87,714 58,271 - ------------------------------------------------------------------------------- 675,520 596,072 501,698 Europe, Africa, Middle East: Customers 178,773 147,917 120,773 Intercompany 8,896 12,024 13,890 - ------------------------------------------------------------------------------- 187,669 159,941 134,663 Asia-Pacific: Customers 51,419 50,344 38,026 Intercompany 3,672 2,298 1,645 - ------------------------------------------------------------------------------- 55,091 52,642 39,671 Other Americas: Customers 79,410 59,388 22,517 Intercompany 6,382 5,557 5,285 - ------------------------------------------------------------------------------- 85,792 64,945 27,802 Eliminations 134,597 107,593 79,091 - ------------------------------------------------------------------------------- CONSOLIDATED SALES $869,475 $766,007 $624,743 =============================================================================== UNITED STATES - EXPORT SALES $105,147 $108,675 $101,305 =============================================================================== OPERATING INCOME: United States $104,154 $ 87,522 $ 75,567 Europe, Africa, Middle East 33,603 36,055 19,359 Asia-Pacific 20,460 23,951 18,199 Other Americas 5,576 3,776 3,678 - ------------------------------------------------------------------------------- CONSOLIDATED OPERATING INCOME $163,793 $151,304 $116,803 =============================================================================== ASSETS IDENTIFIABLE TO: United States $456,566 $442,721 $367,025 Europe, Africa, Middle East 112,726 107,051 101,550 Asia-Pacific 48,362 18,559 17,449 Other Americas 73,500 62,898 19,090 - ------------------------------------------------------------------------------- CONSOLIDATED ASSETS $691,154 $631,229 $505,114 ===============================================================================
30 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Sales and transfers between geographic areas are made at amounts that approximate manufacturing cost and generally consist of products that require additional processing and with respect to which related selling, marketing and engineering expenses are incurred prior to shipment to customers. SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED) - ------------------------------------------------------------------------------- Due to variability of shipments under large contracts, customers' seasonal installation considerations, variations in product mix and in profitability of individual orders, the company can experience wide quarterly fluctuations in net sales and income. Consequently, it is more meaningful to focus on annual rather than quarterly results.
Dollars in thousands except per share amounts December March June September Total - ------------------------------------------------------------------------------------------------------------------- 1997: Sales $225,715 $202,227 $208,911 $232,622 $869,475 Gross profit 87,486 82,729 91,946 93,505 355,666 Income from continuing operations before income taxes 39,333 40,739 38,398 47,312 165,782 Discontinued operations 1,227 968 17,221 - 19,416 Net income 24,340 25,512 7,738 30,752 88,342 Income from continuing operations per share 0.28 0.29 0.27 0.34 1.18 Net income per share 0.26 0.28 0.08 0.34 0.96 Common Stock Price Range: High 41-1/8 42-1/4 36-5/8 33-3/16 Low 31-1/6 33-2/3 22-5/8 24-7/8 =================================================================================================================== 1996: Sales $170,474 $175,437 $189,907 $230,189 $766,007 Gross profit 68,437 69,870 82,211 99,968 320,486 Income from continuing operations before income taxes 27,438 30,212 38,493 50,423 146,566 Discontinued operations 659 1,061 599 1,086 3,405 Net income 16,911 18,292 24,007 31,187 90,397 Income from continuing operations per share 0.19 0.21 0.27 0.35 1.02 Net income per share 0.18 0.20 0.26 0.34 0.98 Common Stock Price Range: High 26-2/9 26 37 35-11/12 Low 16-4/9 13-5/6 25-5/6 27 ====================================================================================================================
31 REPORT OF INDEPENDENT AUDITORS TO THE STOCKHOLDERS AND BOARD OF DIRECTORS ANDREW CORPORATION We have audited the accompanying consolidated balance sheets of Andrew Corporation and subsidiaries as of September 30, 1997 and 1996, and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended September 30, 1997. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. 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 financial statements referred to above present fairly, in all material respects, the consolidated financial position of Andrew Corporation and subsidiaries at September 30, 1997 and 1996, and the consolidated results of their operations and their cash flows for each of the three years in the period ended September 30, 1997, in conformity with generally accepted accounting principles. \s\ Ernst & Young LLP Chicago, Illinois October 24, 1997 32
FIVE YEAR FINANCIAL SUMMARY Dollars in thousands, except per share amounts 1997 1996 1995 1994 1993 - --------------------------------------------------------------------------------------------------- OPERATIONS Sales $869,475 $766,007 $624,743 $536,025 $394,276 Gross profit 355,666 320,486 264,013 217,796 156,130 Operating income 163,793 151,304 116,803 84,497 51,149 Other (income) expense (1,989) 4,738 4,362 7,226 3,145 Income from continuing operations before taxes 165,782 146,566 112,441 77,271 48,004 Income from continuing operations 107,758 93,802 71,854 49,360 30,587 Discontinued Operations Loss (income) from operations of network business, net of taxes 3,330 3,405 1,899 3,593 1,184 Loss on disposal of network business, net of taxes 16,086 - - - - Net income 88,342 90,397 69,955 45,767 29,403 Income from continuing operations per share 1.18 1.02 0.79 0.55 0.34 Net income per share 0.96 0.98 0.77 0.51 0.33 ==================================================================================================== FINANCIAL POSITION Working capital 332,721 284,602 227,164 171,705 142,675 Total assets 691,154 631,229 505,114 425,326 343,876 Long-term debt 35,693 40,423 45,255 46,092 52,467 Stockholders' equity 509,123 456,214 357,191 276,553 221,872 ==================================================================================================== CASH FLOW From operations 151,680 66,796 55,816 52,343 54,911 Used in investing activities (61,427) (78,683) (55,367) (38,692) (33,295) From (used for) financing activities (25,499) (1,972) 4,570 4,259 (5,938) Cash and equivalents $ 93,823 $ 31,295 $ 46,064 $ 40,714 $ 22,001 ==================================================================================================== RATIOS AND OTHER DATA Current ratio 3.6 3.4 3.4 2.8 3.2 Return on Sales: Income from continuing operations 12.4% 12.2% 11.5% 9.2% 7.8% Net income 10.2% 11.8% 11.2% 8.5% 7.5% Return on average assets 13.4% 15.9% 15.0% 11.9% 8.9% Return on average stockholders' equity 18.3% 22.2% 22.1% 18.4% 14.2% ==================================================================================================== Stockholders' equity per share outstanding $ 5.68 $ 5.03 $ 3.97 $ 3.12 $ 2.54 Foreign exchange gain (loss) 3,433 972 (1,612) (1,922) 1,380 Research and development 41,076 29,624 21,041 20,377 17,118 Additions to property, plant and equipment 49,144 52,475 48,076 28,471 18,479 Net assets located outside U.S. at year end 228,488 220,600 160,700 130,900 90,300 Orders entered 864,918 790,621 684,504 532,881 401,284 Order backlog at year end (under 12 months) 132,610 152,205 125,446 83,884 85,170 Order backlog at year end (over 12 months) $ 5,950 $ 14,756 $ 18,529 $ 595 $ 1,573 ==================================================================================================== Number of full time equivalent employees at year end: Outside United States 1,185 1,162 763 661 584 Total employees 4,227 4,622 3,677 3,405 3,110 Average shares of stock outstanding (thousands) 91,607 91,782 90,728 90,462 88,788 Stockholders of record at year end 4,599 3,242 2,340 1,482 1,133 ==================================================================================================== The results of operations for all years have been updated for the disposal of the network products segment in 1997. The results of operations for all years have been updated for the pooling of interests with the Antenna Company in 1996. All other acquisitions have been included in operations since the date of acquisition.
34/35 APPENDIX A
PAGES WHERE GRAPHIC DESCRIPTION OF GRAPHIC AND IMAGE MATERIAL IMAGE APPEARS (In thousands, except per share amounts) 13 Bar graph of Sales (Dollars in Millions) Data points: 1993-$394, 1994-$536, 1995-$625, 1996-$766, 1997-$869 13 Bar graph of Gross Profit (Dollars in Millions) Data points: 1993-$156, 1994-$218, 1995-$264, 1996-$320, 1997-$356 13 Bar graph of Research and Development (Dollars in Millions) Data points: 1993-$17, 1994-$20, 1995-$21, 1996-$30, 1997-$41 14 Bar graph of Sales and Administrative (Dollars in Millions) Data points: 1993-$88, 1994-$113, 1995-$126, 1996-$140, 1997-$146 14 Bar graph of Income from Continuing Operations (Dollars in Millions) Data points: 1993-$31, 1994-$49, 1995-$72, 1996-$94, 1997-$108 14 Bar graph of Net Income (Dollars in Millions) Data points: 1993-$29, 1994-$46, 1995-$70, 1996-$90, 1997-$88 15 Bar graph of Sales per Employee (Dollars in Thousands) Data points: 1993-$147, 1994-$191, 1995-$194, 1996-$192, 1997-$198 15 Bar graph of Net Cash from Operations (Dollars in Thousands) Data points: 1993-$55, 1994-$52, 1995-$56, 1996-$67, 1997-$152 15 Bar graph of Capital Expenditures (Dollars in Thousands) Data points: 1993-$18, 1994-$28, 1995-$48, 1996-$52, 1997-$49
EX-21 5 EXHIBIT 21 LIST OF SIGNIFICANT SUBSIDIARIES EXHIBIT 21 ANDREW CORPORATION AND SUBSIDIARIES List of Significant Subsidiaries Significant subsidiaries of the registrant, all of which are wholly-owned unless otherwise indicated, are as follows: Name of Jurisdiction Sudsidiary of Incorporation Andrew Africa Pty. Ltd................................South Africa (owned 80%) Andrew AG.............................................Switzerland Andrew Canada Inc.....................................Canada Andrew Espana, S.A....................................Spain Andrew GmbH...........................................Germany Andrew Industria e Comercio, Ltda.....................Brazil (owned 70%) Andrew International Corporation......................State of Illinois Andrew Kommunikationssysteme AG.......................Switzerland Andrew Corporation (Mexico), S.A. de C.V..............Mexico Andrew SciComm Inc....................................State of Texas Andrew S.A.R.L........................................France Andrew S.R.L..........................................Italy Andrew Systems Inc....................................State of Delaware Andrew Telecommunications (Suzhou) Co. LTD............China Andrew Wireless Products B.V..........................Netherlands EX-23 6 EXHIBIT 23 CONSENT OF INDEPENDENT AUDITORS EXHIBIT 23 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in Registration Statement No. 2-86070 on Form S-8 dated August 23, 1983; Registration Statement No. 33-30364 on Form S-8 dated August 7, 1989; Registration Statement No. 33-58750 on Form S-8 dated February 24, 1993; Registration Statement No. 33-58752 on Form S-8 dated February 24, 1993; Registration Statement No. 33-52487 on Form S-8 dated March 2, 1994 and Post-Effective Amendment No. 1 to Registration Statement No. 33-52487 on Form S-8 dated March 3, 1994; Registration Statement No. 333-12743 on Form S-4 dated September 26, 1996 of our report dated October 24, 1997, with respect to the consolidated financial statements incorporated by reference in the Annual Report (Form 10-K) of Andrew Corporation for the year ended September 30, 1997. \s\ Ernst & Young LLP Chicago, Illinois December 23, 1997 EX-27.1 7 EXHIBIT 27 ARTICLE 5 FDS FOR 09-30-97 10K
5 1,000 YEAR SEP-30-1997 SEP-30-1997 93,823 0 188,506 2,754 166,890 459,814 359,545 221,955 691,154 127,093 35,693 0 0 1,027 508,096 691,154 869,475 869,475 513,809 513,809 191,873 646 5,003 165,782 58,024 107,758 19,416 0 0 88,342 0.96 0.96
EX-27.2 8 ARTICLE 5 FDS FOR 09-30-96
5 1,000 YEAR SEP-30-1996 SEP-30-1996 31,295 0 201,237 3,648 166,609 401,984 334,088 201,388 631,229 117,382 40,423 0 0 685 455,529 631,229 766,007 766,007 445,521 445,521 169,182 806 5,183 146,566 52,764 93,802 3,405 0 0 90,397 0.99 0.98 All amounts in this exhibit have been restated to reflect the disposal of the company's network products business, as well as a three-for-two stock split for stockholders of record on February 25, 1997.
EX-27.3 9 ARTICLE 5 FDS FOR 09-30-95
5 1,000 YEAR SEP-30-1995 SEP-30-1995 46,064 0 150,669 3,071 124,325 322,745 277,423 174,862 505,114 95,581 45,255 0 0 457 356,734 505,114 624,743 624,743 360,730 360,730 147,210 922 5,643 112,441 40,587 71,854 1,899 0 0 69,955 0.77 0.77 All amounts in this exhibit have been restated to reflect the disposal of the company's network products business, as well as a three-for-two stock split for stockholders of record on February 21, 1996 and a three-for-two stock split for stockholders of record on February 25, 1997
EX-99.(A) 10 DESCRIPTION OF COMMON STOCK DESCRIPTION OF CAPITAL STOCK COMMON STOCK Andrew Corporation ("Andrew" or the "Company") has 400,000,000 authorized shares of Common Stock, $.01 par value (the "Common Stock"), of which 89,657,334 shares were issued and outstanding on September 30, 1997. The Common Stock is listed and traded on The Nasdaq Stock Market under the symbol "ANDW." Each outstanding share of Andrew Common Stock is entitled to one vote. In all matters other than the election of members of Andrew's Board of Directors and certain fundamental transactions, stockholder action is approved by a majority vote of the holders of Andrew Common Stock present in person or represented by proxy at the meeting. The members of Andrew's Board of Directors are elected by a plurality vote of the holders of Andrew Common Stock present in person or represented by proxy at the meeting. Andrew's Board is not classified and Andrew's Certificate of Incorporation does not provide for cumulative voting. Holders of Andrew Common Stock are entitled to such dividends as the Board of Directors may declare out of funds legally available therefor. It is the present policy of Andrew's Board of Directors to retain earnings in the business to finance Andrew's operations and investments, and Andrew does not anticipate payment of cash dividends in the foreseeable future. Long-term debt agreements include restrictive covenants that, among other things, restrict dividend payments and repurchases of Common Stock. At September 30, 1997, $356,707,000 was not restricted for purposes of such payments. RIGHTS The Company has adopted a Stockholder Rights Plan, in the form of a Rights Agreement, under which each share of Common Stock has associated with it one common stock purchase right (a "Right"). Each Right entitles the holder to purchase, under the circumstances described below, one share of Common Stock for a price of $333.33, subject to adjustment pursuant to the Rights Agreement. The Rights are not currently exercisable and, until they are exercisable, are transferable only with the related shares of Common Stock. Separate Rights certificates will be distributed when the Rights become exercisable. The holder of a Right has no rights as a stockholder of the Company, including the right to vote or to receive dividends. The Rights will expire at the close of business on December 16, 2006, unless redeemed by the Company prior to such date. The Rights become exercisable at the specified exercise price upon the earlier to occur of (i) 10 days after a public announcement that any person or group, other than the Company and certain related entities (an "Excluded Person") has acquired (an "Acquiring Person") beneficial ownership of 15% or more of the outstanding shares of Common Stock and (ii) 10 business days (unless delayed by the Board of Directors) after any person or group (other than an Excluded Person) has commenced, or announced the intention to commence, a tender or exchange offer that would, upon its consummation, result in such person or group being the beneficial owner of 15% or more of the outstanding shares of Common Stock. In the event that any person or group becomes an Acquiring Person, each holder of a Right, other than the Acquiring Person (whose Rights thereafter will be void), is entitled to purchase that number of shares of Common Stock having a market value at the time of such acquisition of two times the exercise price of the Right. After a person or group has become an Acquiring Person, if the Company is acquired in a merger or other business combination transaction or 50% or more of its consolidated assets or earning power are sold, each holder of a Right is entitled to purchase that number of shares of common stock of the acquiring company that at the time of such acquisition has a market value of two times the exercise price of the Right. The Rights are redeemable, as a whole, at a redemption price of $.001 per Right, subject to adjustment, at any time prior to the acquisition by a person or group of beneficial ownership of 15% or more of the outstanding shares of Common Stock. At any time after any person or group becomes an Acquiring Person and before such Acquiring Person acquires 50% or more of the outstanding shares of Common Stock, the Board of Directors may exchange the Rights (other than Rights that have become void) in whole or in part, at an exchange ratio of one share of Common Stock per Right (subject to adjustment), or cash, other equity or debt securities of the Company, other assets, or any combination of the foregoing, having an aggregate value equal to the then current market price of one share of Common Stock. Anti-Takeover Effects of Rights. Although the Rights are not intended to prevent an acquisition of the Company on terms that are favorable and fair to all stockholders, the Rights may discriminate against a prospective holder of Andrew Common Stock as a result of such holder owning a substantial amount of shares and may have the effect of delaying, deferring or preventing a change in control of Andrew. The Rights should not interfere, however, with any merger or business combination approved by the Company's Board of Directors since the Rights may be redeemed by the Company prior to the time that a person or group becomes an Acquiring Person. Nonetheless, by causing substantial dilution to a person or group that attempts to acquire the Company on terms not approved by the Company's Board of Directors, the Rights may interfere with certain acquisitions, including acquisitions that may offer a premium over market price to some or all of the Company's stockholders. CERTAIN CORPORATE PROVISIONS Acquisition Proposals. Andrew's Certificate of Incorporation provides that the Board of Directors is entitled to consider subjective factors in determining whether an acquisition proposal is in the best interests of the Company and its stockholders. Such subjective factors include the social, legal and economic effects upon employees, suppliers, customers and the Company's business community as well as the Company's long-term business prospects. The Certificate of Incorporation broadly defines acquisition proposals to include any tender offer, exchange offer or other method of acquiring equity securities of the Company to gain control, merger, consolidation or purchase of all or substantially all of the property and assets of the Company. Special Meetings of Stockholders; No Stockholder Action By Written Consent. The Certificate of Incorporation and By-laws provide that special meetings of stockholders of the Company may be called only by a majority of the Board of Directors. In addition, the Certificate of Incorporation and By-laws provide that the stockholders of the Company may only take actions at a duly called annual or special meeting of stockholders and may not take action by written consent. Advance Notice Requirements for Stockholder Proposals and Nomination of Directors. The By-laws provide that stockholders seeking to bring business before, or nominate directors at, any annual meeting of stockholders, must provide timely notice thereof in writing. To be timely, a stockholder's notice must be given in writing to the Secretary of the Company not more than 90 days in advance of the anniversary of the prior year's annual meeting. With respect to business to be transacted or elections to be held at a special meeting of stockholders, written notice must be given to the Secretary not more than 10 days after the date on which notice of the special meeting is given to such stockholder. The By-laws also specify certain requirements for a stockholder's notice to be in proper written form. DELAWARE ANTI-TAKEOVER LAW Section 203 of the Delaware General Corporation Law prohibits certain transactions between a Delaware corporation and an "interested stockholder," which is defined as a person who, together with any affiliates or associates of such person, beneficially owns, directly or indirectly, 15% or more of the outstanding voting shares of a Delaware corporation. This provision prohibits certain business combinations (defined broadly to include mergers, consolidations, sales or other dispositions of such assets having an aggregate value in excess of 10% of the consolidated assets of the corporation, and certain transactions that would increase the interested stockholder's proportionate share ownership in the corporation) between an interested stockholder and a corporation for a period of three years after the date the interested stockholder becomes an interested stockholder, unless (i) the business combination is approved by the corporation's board of directors prior to the date the interested stockholder becomes an interested stockholder, (ii) the interested stockholder acquired at least 85% of the voting stock of the corporation (other than stock held by directors who are also officers or by certain employee stock plans) in the transaction in which it becomes an interested stockholder or (iii) the business combination is approved by a majority of the board of directors and by the affirmative vote of 662/3% of the outstanding voting stock that is not owned by the interested stockholder. -----END PRIVACY-ENHANCED MESSAGE-----