-----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, HwMByJP2qVBcImPsjkpK7bQ0siqAjfKS0WNrcDStSkaUEwRnwdNoCRSj0qkHAOV5 hAdHoeFLF1pzbJ/DLu3mNA== 0000950131-01-501362.txt : 20010514 0000950131-01-501362.hdr.sgml : 20010514 ACCESSION NUMBER: 0000950131-01-501362 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20010509 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010511 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MANITOWOC CO INC CENTRAL INDEX KEY: 0000061986 STANDARD INDUSTRIAL CLASSIFICATION: CONSTRUCTION MACHINERY & EQUIP [3531] IRS NUMBER: 390448110 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-11978 FILM NUMBER: 1630560 BUSINESS ADDRESS: STREET 1: 500 S 16TH ST STREET 2: STE B CITY: MANITOWOC STATE: WI ZIP: 54221-0066 BUSINESS PHONE: 9206844410 MAIL ADDRESS: STREET 1: 500 S 16TH ST CITY: MANITOWOC STATE: WI ZIP: 54221-0066 8-K 1 d8k.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________ FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 ______________________ Date of Report: May 9, 2001 (Date of earliest event reported) The Manitowoc Company, Inc. (Exact name of registrant as specified in its charter) Wisconsin 1-11978 39-0448110 ----------------- ----------------- ---------------- (State or other (Commission File (IRS Employer jurisdiction of Number) Identification No.) incorporation) 500 South 16th Street, Manitowoc, Wisconsin 54221-0066 ----------------------------------------------------------- (Address of principal executive offices including zip code) (920) 684-4410 ------------------------------- (Registrant's telephone number) INFORMATION TO BE INCLUDED IN THE REPORT Item 2. Acquisition or Disposition of Assets On May 9, 2001, The Manitowoc Company, Inc. ("Manitowoc") acquired from Legris Industries SA ("Legris") all of the outstanding capital stock of Potain SA ("Potain"), pursuant to a Share Purchase Agreement, dated May 9, 2001, among Manitowoc, Manitowoc France SAS and Legris (the "Acquisition"). The total purchase price for the Acquisition was approximately FRF 2.3 billion (approximately U.S. $307.1 million, based upon exchange rates as of May 7, 2001), plus a post-closing adjustment for Potain's net income from January 1, 2001 through the closing date. The purchase price paid by Manitowoc was determined on the basis of arm's length negotiations between the parties. There is no material relationship between Legris and Manitowoc or any of its affiliates, directors or officers or any of their associates. Potain is a leading designer, manufacturer and supplier of tower cranes for the building and construction industry. Manitowoc intends to operate the business of Potain at its present locations and to conduct the business of Potain in substantially the same manner as it had been conducted prior to the Acquisition. The Acquisition was financed by a new $475.0 million senior credit facility (the "Senior Credit Facility") syndicated by Bankers Trust Company, as agent, and the issuance of (euro) 175.0 million of Manitowoc's 10 3/8% Senior Subordinated Notes due 2011. The Senior Credit Facility is comprised of a $125.0 million revolving credit facility, under which Manitowoc borrowed $40.0 million at the closing of the Acquisition, and term loans aggregating $350.0 million. Item 7. Financial Statements and Exhibits (a) Financial Statements of Business Acquired. ----------------------------------------- The financial statements of Potain SA are included as follows: (i) Report of Independent Auditors. (ii) Consolidated Statements of Income for the Years Ended December 31, 2000 and 1999. (iii) Consolidated Balance Sheets as of December 31, 2000 and 1999. (iv) Consolidated Statements of Cash Flow for the Years Ended December 31, 2000 and 1999. (v) Notes to Consolidated Financial Statements. 1 (b) Pro Forma Financial Information. ------------------------------- (i) Unaudited Pro Forma Condensed Consolidated Statement of Earnings for the Year Ended December 31, 2000. (ii) Notes to Unaudited Pro Forma Condensed Consolidated Statement of Earnings. (iii) Unaudited Pro Forma Condensed Consolidated Balance Sheet as of December 31, 2000. (iv) Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet. (c) Exhibits. -------- See the Exhibit Index following the Signature page of this report, which is incorporated herein by reference. 2 POTAIN SA REPORT OF INDEPENDENT AUDITORS To the Board of Directors of Potain SA We have audited the accompanying consolidated balance sheets of Potain Group as of December 31, 2000 and 1999, and the related consolidated statements of income and cash flows for the years then ended, which have been prepared on the basis of accounting principles generally accepted in France. 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 auditing standards generally accepted in the United States. 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 Potain Group at December 31, 2000 and 1999, and the consolidated results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in France which differ in certain respects from those generally accepted in the United States (see Note IV to the financial statements). Ernst & Young Audit Daniel Mary-Dauphin April 19, 2001 F-1 POTAIN SA CONSOLIDATED STATEMENTS OF INCOME December 31, 2000 and 1999
Note 12/31/2000 12/31/1999 ---- ---------- ---------- (in thousands Euros) Operating revenues Sales...................... 1 286,974 239,644 Other operating revenues... 2 33,018 29,870 Operating expenses Raw material, supplies and services.................. (185,935) (160,748) Payroll expenses........... 3 (69,276) (64,204) Other operating expenses... 4 (32,504) (30,119) -------- -------- Current operating income... 32,277 14,443 ======== ======== Non recurring operating income (expenses)......... 5 (553) (343) -------- -------- Operating income........... 31,724 14,100 -------- -------- Interest expense, net...... 6 868 (1,408) Amortization of goodwill, net....................... (429) (391) Other income and (expense), net....................... 7 (564) 0 -------- -------- Income before taxes........ 31,599 12,301 ======== ======== Income taxes, current and deferred.................. 8 (11,559) (4,433) -------- -------- Net income before minority interests of fully consolidated entities..... 20,040 7,868 ======== ======== Minority interests......... 14 24 1,592 Results of entities accounted for by the equity method............. 0 (4) -------- -------- Net income................. 20,016 6,272 ======== ======== Number of shares at December 31............... 909,945 909,945 Net income per share (in euros).................... 22.0 6.9
F-2 POTAIN SA CONSOLIDATED BALANCE SHEETS December 31, 2000 and 1999
Note 12/31/2000 12/31/1999 ---- ---------- ---------- (in thousands Euros) ASSETS Intangible assets.................................... 7,241 6,850 Goodwill............................................. 2,616 2,075 Property, plant and equipment........................ 62,421 59,902 Financial assets..................................... 3,197 3,941 ------- ------- Total Fixed Assets............................... 9 75,475 72,768 ======= ======= Inventories.......................................... 10 60,070 48,722 Accounts receivable.................................. 11 81,743 76,577 Other receivables.................................... 36,788 9,977 Cash................................................. 12 16,637 14,949 ------- ------- Total Current Assets............................. 195,238 150,225 ======= ======= Deferred tax assets.................................. 13 2,147 7,546 ------- ------- Total Assets..................................... 272,860 230,539 ======= ======= LIABILITIES Share capital........................................ 13,649 13,649 Additional paid-in capital........................... 12,495 12,495 Retained earnings.................................... 93,869 84,833 Net income for the year.............................. 20,016 6,272 Translation adjustment............................... (857) 834 ------- ------- Shareholders' Equity............................... 139,172 118,083 ======= ======= Minority interests................................... 93 5,624 ------- ------- Shareholders' Equity & Minority Interests.......... 14 139,265 123,707 ======= ======= Reserves for losses and contingencies.............. 15 12,535 7,260 Borrowings........................................... 16 23,316 12,940 Accounts payable..................................... 17 84,311 70,843 Other liabilities.................................... 7,070 8,522 ------- ------- Total Liabilities................................ 114,697 92,305 ======= ======= Deferred tax liabilities............................. 13 6,363 7,267 ------- ------- Total Liabilities & Shareholders' Equity......... 272,860 230,539 ======= =======
F-3 POTAIN SA CONSOLIDATED STATEMENTS OF CASH FLOW December 31, 2000 and 1999
Note 12/31/00 12/31/99 ---- -------- -------- (in thousands Euros) Cash Flows from Operations.............................. 18 31,088 19,648 Change in working capital............................... (5,160) 1,748 Cash Flows from Operating Activities.................... 25,928 21,396 (Increase)/decrease in fixed assets (excluding rented equipment)........................................... (8,035) (6,309) (Increase)/decrease in rented equipment............... (5,495) (4,927) Investing activities.................................. 4,722 227 ------ ------- Total Cash Used in Investing Activities............. (8,808) (11,009) ====== ======= Financing Activities.................................... (489) (17) Exchange rate fluctuation............................. (679) (514) (Increase) Decrease in Net Indebtedness................. 15,952 9,856
F-4 POTAIN SA NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 31, 2000 AND 1999 I--KEY EVENTS 1--Purchase of the minority interests of Zhangjiagang Potain An agreement was negotiated in 1999 and finalized in early 2000 under which Potain acquired the minority interest in its joint venture in China. All items affecting earnings, including planned restructuring expense, appear in 1999 financial statements. 2--Acquisition of the Liftlux business The group created Liftlux Potain GmbH as of July 1st, 2000, in connection with the acquisition of the Liftlux assets. This company was included in the consolidation in 2000. 3--Application of the new French regulation for the consolidated financial statements Potain group accounting principles were changed in 2000 in order to include the effects of the new R99-02 regulation. The effective application of this new regulation induced: . the full consolidation of B.P.G.R. S.A.R.L., previously accounted for by the equity method, . the full consolidation of Solum Grundstuck Vermietung GmbH and Axiome de Re, entities being considered as controlled by Potain SA, previously not included in consolidation, . the accounting for part of pensions and similar benefits for France and Portugal employees, which were previously considered as fully covered by the insurance premiums paid and expensed when paid, . the accounting for deferred tax (a) considering deferred tax assets on all existing tax losses, (b) considering deferred tax on a purchase accounting and (c) netting the deferred tax assets and liabilities positions of each subsidiary, with (d) adequate valuation allowance when necessary of the net assets. As a consequence of the above modifications, the movements in equity between December 31, 1999 and December 31, 2000 include: . the first consolidation of Axiome de Re, increasing net equity by an amount of 676 K(Euro) . the partial accounting for the first year of pensions and similar benefits, increasing net equity by 390 K(Euro) The income statement of year 2000 is impacted by the December 31, 1999 effect of the new deferred tax accounting method. It represents a deferred tax benefit of K(Euro).547. II--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 1--General principles The consolidated financial statements as of December 31, 2000 are prepared in accordance with accounting principles generally accepted in France, as stated in the R99-02 regulation issued by the "Comite de Reglementation Comptable", the regulatory authority for accounting in France, and comply with: . the Law dated January 3, 1985 . the ministerial decree dated February 17, 1986 . methodology of the C.R.C. (June 22, 1999 decision enacting the 99.02 regulation of the C.R.C.) F-5 POTAIN SA NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 2--Consolidation principles The consolidated financial statements include the financial statements of all significant companies directly or indirectly controlled by Potain SA. All companies included in the scope of consolidation are fully consolidated, with the exception of B.P.G.R. in 1999, which was consolidated by the equity method. The financial year of all consolidated companies ends on December 31. A full list of consolidated companies appears in Note 21 to consolidated financial statements. A full list of non-consolidated entities is presented in Note 6 hereafter. 3--Foreign currency translation The financial statements of foreign subsidiaries are translated into euros at year-end exchange rates for their assets and liabilities and at weighted average exchange rates for the year for their income statement. Resulting translation adjustments are recorded to shareholders' equity. 4--Intangible assets & goodwill Internally generated goodwill, start-up costs and research and development costs are expensed as incurred. Significant software costs are amortized using the straight-line method over the estimated useful life of the software, which may not exceed three years. Patents, trademarks and licenses are amortized over 20 years. Goodwill on first consolidation consists of costs in excess of net assets of acquired businesses. It is amortized on a straight-line basis over 15 years. 5--Property, plant and equipment Property, plant and equipment are stated at historical acquisition or production cost. Maintenance and repair costs, other than those intended to extend the life of an asset, are expensed when incurred. Leased equipment is recorded as an asset when the terms of the lease are those of a capital lease. Depreciation is calculated on a straight-line basis over the following estimated useful lives: Buildings and improvements................................. 20 to 25 years Machinery and equipment.................................... 5 to 10 years Leased cranes.............................................. 6 to 8 years Others..................................................... 3 to 10 years
6--Financial assets Financial assets mainly include investments in non-consolidated entities and housing contribution loans. The housing contribution loans are non-interest bearing loans over 20 years. They are recorded at discounted value, assuming a 2% interest rate per year. Subsidiaries with low materiality (less than 0.6 million (Euro) sales or total balance sheet) are not included in the consolidation. F-6 POTAIN SA NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Investments in non-consolidated companies are stated at cost and written down when economic value falls below cost. The list of non-consolidated entities as of December 31, 2000 is as follows:
Net share Non-consolidated entities % ownership value Equity ------------------------- ----------- -------- -------- Potain Ireland.............................. 51,0% 0 KEUR 10 Potain Inc (Philippines).................... 70,0% KEUR 249 KEUR 698 Potain Pty (Australia)...................... 100,0% KEUR 2 KEUR 596 SCI Les Aulnettes (France).................. 100,0% KEUR 155 KEUR 20
7--Inventories and work in progress Inventories of all group companies are stated at lower of cost or market. Cost is defined as acquisition or production cost and is computed using the weighted average cost method. Production costs include direct and indirect production costs and an allocation of overheads assuming normal levels of activity. Intercompany margins are eliminated. Intercompany goods in transit are included both in inventories and purchases of the receiving company. Allowances to write down inventories to their net realizable value and for surplus inventories are recorded in the year in which they become known. 8--Receivables Receivables are stated at their nominal value and provisions are recorded when appropriate to cover any risk of non-recovery. 9--Other accounts receivables and other liabilities The Potain group is owned by Legris Industries. In connection therewith, the management of excess cash or cash requirements is done at Legris level through a cash pooling agreement. The cash lended to the cash pooling is recorded as other accounts receivable respectively for 4,159 K(Euro) and 28,539 k(Euro) as of December 31, 1999 and 2000. The cash borrowed from the cash pooling is recorded as other liabilities respectively for 3,842 K(Euro) and 3,582 k(Euro) as of December 31, 1999 and 2000. 10--Social contributions Potain SA benefits since 1997 from the "De Robien" social law, which enables the company to pay reduced social contributions over the seven-year period ending June 30, 2003, provided that Potain SA keeps a minimum headcount level. Related benefits are recorded on the respective years and represented respectively (Euro)2,871 and (Euro)2,865 for 1999 and 2000. 11--Transactions in foreign currencies Monetary assets and liabilities denominated in foreign currencies that are not hedged are translated at year-end exchange rates. Hedged foreign currency transactions are translated at the hedging rate. Differences arising from translation, together with gains and losses realized on transactions carried out during the year, are included in income statement. The potential differences arising from fair value of the hedging positions related to the backlog orders are considered as off-balance sheet commitments. F-7 POTAIN SA NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 12--Taxation Tax charged to earnings corresponds to the tax due from each taxable consolidated entity after correction of deferred taxes. The company uses the deferral method to recognize deferred tax assets and liabilities for the expected future income tax consequences of events that have been recognized in the company's financial statements. Under this method, deferred tax assets and liabilities are determined based on the temporary differences between financial statements carrying amounts and the tax basis of assets and liabilities. The deferred tax liability on the restatement of the "Foreign Investment reserve" is recorded at its discounted value assuming a 5% rate. Where taxable entities show a loss, the deferred tax assets recorded for loss carry forwards were limited until December 31, 1999 to the losses over two financial years. This is no longer applicable beginning in 2000, under the new enacted 99-02 French GAAP. Deferred tax assets on loss carry forwards and deemed deferred depreciation are fully depreciated if their application to future earnings is uncertain. 13--Pensions and similar benefits Commitments to employees relating to retirement, or seniority bonuses, or other deferred benefits, are partly accrued for since 2000 in accordance with generally accepted accounting principles in France. The overall impact of this change of method on shareholders' equity on the opening balance sheet is not significant, amounting to (Euro)0.39 million, and does not require the presentation of pro forma accounts. The accrual recorded in the consolidated financial statements, K(Euro)4,989, does not take into account the preferred method for computation of the full commitment. The schedule below shows the assumptions used for valuation of the liability:
Assumptions As computed under IAS 19 ----------- ------------------------ Retirement age...................... 60 for executive and 63 for employees Type of departure................... Voluntary Discount rate....................... 4.9% (incl. inflation) Inflation rate...................... 2% Social contributions................ 47% Salary increase..................... Depends on age & category Turnover............................ Depends on age & category Commitment.......................... K(Euro) 9,123
Out of the K(Euro)9,123, K(Euro)1,073 were paid to an external insurance company. F-8 POTAIN SA NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) III--NOTES TO FINANCIAL STATEMENTS (in thousands Euros) 1--SALES
By business 2000 1999 ----------- ------- ------- Cranes.................................................... 286,974 239,644 ------- ------- Total................................................... 286,974 239,644 ======= ======= By geographic area 2000 1999 ------------------ ------- ------- France.................................................... 83,021 70,097 Europe (excl France and Eastern Europe)................... 159,812 138,283 Asia--Pacific............................................. 16,485 11,864 America................................................... 13,260 8,322 Near and middle East...................................... 5,236 4,210 Africa.................................................... 4,130 2,190 Eastern Europe............................................ 5,028 4,680 ------- ------- Total................................................... 286,974 239,644 ======= ======= 2--OTHER OPERATING REVENUES 2000 1999 ------- ------- Change in inventory....................................... 1,113 4,652 Capitalized production.................................... 14,476 10,589 Operating subsidies....................................... 103 151 Reversals of accruals, expense transfers.................. 4,327 5,097 Other revenues (1)........................................ 13,000 9,392 ------- ------- Total................................................... 33,018 29,870 ======= ======= - -------- (1)including sale of capitalized rented cranes 11,277 8,015
3--PAYROLL EXPENSES
2000 1999 ------- ------- Wages and salaries...................................... (52,938) (48,190) Social security contributions........................... (16,338) (16,014) ------- ------- Total................................................. (69,276) (64,204) ======= =======
Headcounts average 2000 12/31/00 12/31/99 ---------- ------------ -------- -------- Cranes.................................. 2,464 2,285 2,558 ----- ------- ------- Total................................. 2,464 2,285 2,558 ===== ======= ======= - -------- (1)out of which Potain China headcounts: 397 231 616 4--OTHER OPERATING EXPENSES 2000 1999 -------- -------- Total................................. (32,504) (30,119) ======= ======= - -------- (1)out of which, net book value of sold rented cranes (7,058) (6,353)
F-9 POTAIN SA NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 5--NON RECURRING OPERATING INCOME (EXPENSES)
2000 1999 ------- ------ Non recurring operating expenses....................... (5,166) (5,545) Non recurring operating income......................... 4,613 5,202 Non recurring operating items.......................... (553) (343) 6--INTEREST EXPENSE, NET 2000 1999 ------- ------ Interest expense, net of interest income............... (514) (1,303) Net gains on disposal of short term investments........ 7 0 Subtotal............................................. (507) (1,303) Foreign exchange gains (losses)........................ 716 (325) Amortizations and provisions........................... (404) (212) Reversal of reserves and expense transfers............. 152 222 Other financial income (expense)....................... 912 210 ------- ------ Subtotal............................................. 1,375 (105) ======= ====== Interest expense, net.............................. 868 (1,408) 7--OTHER INCOME AND (EXPENSE) NET 2000 1999 ------- ------ Non operating expenses................................. (2,664) 0 Non operating income................................... 2,100 0 ------- ------ Non operating items.................................. (564) 0 ======= ====== 8--INCOME TAXES 8a--Detail 2000 1999 ------- ------ Current income tax..................................... (11,221) (5,380) Deferred income tax.................................... (338) 947 ------- ------ Total................................................ (11,559) (4,433) ======= ====== The total income tax charge can be analyzed as follows: Tax on operating income.............................. (11,559) (4,433) Decrease/(increase) in tax linked to non operating items............................................... ------- ------ Total.............................................. (11,559) (4,433) ======= ======
F-10 POTAIN SA NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 8b--Tax rationalization
2000 ------- Income before income taxes................................... 31,559 Corporate income tax rate.................................... 36.3% Theoretical tax charge....................................... (11,456) Impact of permanent differences --Potain China net loss.................................... (671) --Goodwill amortization.................................... (161) --Tax credit on previously not recognized tax losses....... 1,658 --Changes in income tax rate............................... (144) --Change in consolidation principles....................... (1,175) --Other.................................................... 390 ------- Effective tax charge......................................... (11,559) =======
9--FIXED ASSETS 9a--Fixed assets, at cost and net
2000 1999 -------- -------- At cost: Intangible assets..................................... 12,403 10,204 Goodwill.............................................. 6,686 5,716 Property, plant & equipment........................... 159,846 153,509 Financial assets...................................... 3,774 3,070 Investments accounted for by the equity method........ 0 1,194 -------- -------- Total fixed assets at cost.......................... 182,709 173,693 ======== ======== Amortization/depreciation Intangible assets..................................... (5,163) (3,353) Goodwill.............................................. (4,070) (3,641) Property, plant & equipment........................... (97,424) (93,607) Financial assets...................................... (577) (323) Investments accounted for by the equity method........ 0 0 -------- -------- Total fixed assets depreciation/amortization........ (107,234) (100,925) ======== ======== Net book value Intangible assets..................................... 7,241 6,850 Goodwill.............................................. 2,616 2,075 Property, plant & equipment........................... 62,421 59,902 Financial assets...................................... 3,197 2,747 Investments accounted for by the equity method........ 0 1,194 -------- -------- Fixed assets, net................................... 75,475 72,768 ======== ========
9b--Movements in fixed assets
Gross Dep. Net ------- -------- ------- Value as of December 31, 1999................. 173,693 (100,925) 72,768 Acquisitions.................................. 26,037 (13,189) 12,848 Disposals..................................... (24,300) 7,091 (17,209) Other......................................... 7,279 (211) 7,068 ------- -------- ------- Value as of December 31, 2000............... 182,709 (107,234) 75,475 ======= ======== =======
F-11 POTAIN SA NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 9c--Assets acquired under capital leases
2000 1999 ------ ------ At cost................................................... 12,861 10,879 Depreciation.............................................. (5,546) (5,115) Net assets acquired under capital lease................... 7,315 5,764 ------ ------ Obligations under capital lease........................... 6,298 6,269 ------ ------
9d--Goodwill Goodwill at December 31, 1999.................................. 2,075 Exchange rate difference on amortization Acquisitions................................................... 970 Amortization................................................... (429) ----- --- Goodwill at December 31, 2000.................................. 2,616 ===== ===
Goodwill breakdown by companies
12/31/99 Net book Gross value Accumulated Depreciation Translat. value at 12/31/00 amortization For the year adjustment at 12/31/00 ----------- ------------ ------------ ---------- ----------- Potain Industria Spa.... 5,716 (3,641) (391) 1,684 Liftux Potain........... 970 (38) 932 ----- ------ ---- --- ----- Total................. 6,686 (3,641) (429) 0 2,616 ===== ====== ==== === =====
10--INVENTORIES
2000 1999 ------ ------ Raw materials and other supplies.......................... 23,166 15,642 Work in Process........................................... 21,338 16,879 Semi-finished and finished goods.......................... 12,167 14,491 Resale goods.............................................. 8,414 6,230 Inventories--gross value.................................. 65,085 53,242 Provision for decline in value............................ (5,015) (4,520) ------ ------ Inventories--net book value............................. 60,070 48,722 ====== ======
11--ACCOUNTS RECEIVABLES
2000 1999 ------ ------ Prepayments............................................. 211 397 Accounts receivables from customers..................... 82,966(1) 79,109 Other receivables....................................... 2,392 907 Gross trade accounts receivable......................... 85,569 80,413 Provision for depreciation.............................. (3,826) (3,836) ------ ------ Net trade accounts receivables........................ 81,743 76,577 ====== ======
- -------- (1) out of which receivables over 1 year : 0.5 Me F-12 POTAIN SA NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 12--CASH AND SHORT-TERM INVESTMENTS
2000 1999 ------ ----- Short term investments at cost........................... 11,544 0 Depreciation............................................. 0 0 Short-term investment, net............................... 11,544 0 Cash..................................................... 5,093 14,949 Other.................................................... 0 0 Cash..................................................... 5,093 14,949 ------ ------ Total.................................................. 16,637 14,949 ====== ====== 13--DEFERRED TAXES BALANCE AT YEAR-END 13a--Movements in deferred tax balances 2000 1999 ------ ------ Net opening deferred tax assets/liabilities.............. 279 (705) Net deferred taxes....................................... (338) 947 Impact of deferred taxes on pensions & similar benefits.. (222) Impact of changes in consolidation area (3,979) Other changes............................................ 44 37 ------ ------ Net closing deferred tax assets/liabilities............ (4,216) 279 ====== ======
13b--Deferred tax analysis by sources of deferred tax (Presented before netting by company)
2000 ------------------------ Gross Dep. Net ------- ------ ------- Deferred tax assets arising from --Book to tax adjustments..................... 2,730 0 2,730 --Restatements of local books................. 3,942 (694) 3,248 --Tax losses and tax credits.................. 6,201 (5,276) 925 12,873 (5,970) 6,903 Deferred tax liabilities arising from --Book to tax adjustments..................... (5,556) 0 (5,556) --Restatements of local books................. (5,563) 0 (5,563) (11,119) 0 (11,119) ------- ------ ------- Total net................................... 1,754 (5,970) (4,216) ======= ====== =======
F-13 POTAIN SA NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 14--SHAREHOLDERS' EQUITY
Capital and Retained Net premiums earnings Income Other Total ----------- -------- ------ ----- ------- Shareholders' equity at December 31, 1999............. 115,843 7,864 123,707 Dividend distribution........ (497) (497) Capital increase............. Capital reduction............ Net income for the year........ 20,040 20,040 Translation adjustment....... 472 472 Acquisition of Potain China minority interests.......... (5,550) (5,550) Other........................ 1,092 7,367 (7,367) 1,092 ------- ----- ------ --- ------- Shareholders' equity at December 31, 2000............. 111,857 7,367 20,040 0 139,264 ======= ===== ====== === ======= Number of shares 1999......................... 909,945 2000......................... 909,945
15--RESERVE FOR LOSSES AND CONTINGENCIES
2000 1999 ------ ----- Reserve for contingencies Claims and litigations....................................... 520 438 Warranty costs(1)............................................ 2,582 2,440 Technical updates(2)......................................... 1,083 475 Technical and industrial risks............................... 518 517 Miscellaneous................................................ 860 433 Total...................................................... 5,563 4,303 Reserve for losses Pensions and other benefits(3)............................... 4,989 624 Restructuring................................................ 1,006 1,719 Initial assembly costs....................................... 121 171 Miscellaneous................................................ 857 433 Total........................................................ 6,972 2,957 ------ ----- Total...................................................... 12,535 7,260 ====== =====
___________ (1) Contractual warranty on sold cranes (2) Covers the estimated cost of parts replacement initiated by the group (3) Change in accounting method for pensions and similar benefits accruals Corresponding value at December 31, 1999: 4,2 millions Euros F-14 POTAIN SA NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 16--BORROWINGS
2000 1999 ------ ------ 16a--Breakdown by nature Bank borrowings......................................... 16,831 6,542 Subordinated debts...................................... 0 65 Other................................................... 5,486 6,333 ------ ------ Total................................................. 23,317 12,940 ====== ====== 16b--Breakdown by maturity Less than 1 year........................................ 9,170 5,362 From 1 to 5 years....................................... 8,215 4,427 More than 5 years....................................... 5,931 3,151 ------ ------ Total*................................................ 23,316 12,940 ====== ====== *of which obligations under capital lease............... 6,298 6,269 16c--Financial instruments As of December 31, 2000, there is no interest rate hedging. 17--ACCOUNTS PAYABLE 2000 1999 ------ ------ Prepayments received.................................... 1,509 1,276 Trade accounts payable.................................. 51,543 46,086 Tax and social contributions payable.................... 20,273 18,113 Debt related to fixed assets............................ 299 676 Corporate income tax payable............................ 7,358 3,431 Other liabilities....................................... 3,328 1,262 ------ ------ Total accounts payable................................ 84,311 70,843 ====== ====== 18--CASH FLOWS FROM OPERATIONS 2000 1999 ------ ------ Consolidated net income................................. 20,039 7,864 Income from companies accounted for by the equity method................................................. 0 Depreciation, amortization and operating provisions..... 18,032 16,489 Reversals of operating provisions....................... (4,326) (4,988) Allowance for financial provisions...................... 404 212 Reversals of financial provisions....................... (152) (222) Allowance for non recurring provisions.................. 179 1,004 Reversals of exceptional provisions..................... (3,918) (246) Gains on disposal of fixed assets....................... 58 (408) Amortization of goodwill, net........................... 429 381 Net movement in deferred taxes.......................... 338 (947) ------ ------ Total cash flows from operations...................... 31,088 19,648 ====== ======
F-15 POTAIN SA NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 19--IMPACT OF CHANGES IN CONSOLIDATION SCOPE
2000 ------- Fixed assets............................................ 6,897 Current assets*......................................... 19,711 Deferred tax assets..................................... ------- Total assets.......................................... 26,608 ======= Equity.................................................. 7,646 Reserves................................................ 5,990 Liabilities*............................................ 8,993 Deferred tax liabilities................................ 3,979 ------- Total liabilities..................................... 26,608 ======= *of which, net borrowings............................... (10,984) 20--OFF-BALANCE SHEET COMMITMENTS 2000 1999 ------- ------ Given commitments Guaranties given to banks (incl. Discounted bills)...... 11,217 14,244 Future lease payments................................... 0 0 Buy-back commitments.................................... 14,253 11,682 Other................................................... 0 0 ------- ------ Total................................................. 25,470 25,926 ======= ====== Received commitments Discounted bills........................................ 1,358 631 Discounted bills secured by collateral/Sabatini law, Italy(1)............................................... 2,616 2,709 Backlog orders received................................. 52,537 55,796 Buy-back commitments.................................... 14,253 11,682 Other(2)................................................ 11,766 13,643 ------- ------ Total................................................. 82,530 84,461 ======= ====== Debts secured by collateral Mortgages and pledges................................... 0 0 Obligations under capital lease......................... 6,298 6,269 ------- ------ Total................................................. 6,298 6,269 ======= ======
__________ (1) guaranted by pledge on material (2) export guarantees, other guarantees, equipment lodged as collateral for payment guarantees given, excluding discounted bills F-16 POTAIN SA NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) 21--CONSOLIDATION AREA
% % ownership ownership at at Entities City Country 31/12/2000 31/12/1999 - -------- ------------- ------------------ ---------- ---------- Potain.................. Ecully France Mother Mother B.P.G.R................. Ecully France 100.00% 100.00% Sam Sologat............. Bretigny France 99.80% 99.80% Sci Les Sthenes du Plateau................ Ecully France 100.00% 100.00% Cadillon GmbH........... Moerfelden Allemagne 100.00% 100.00% Potain GmbH............. Moerfelden Allemagne 100.00% 100.00% Potain Technik Gmbh..... Arneburg Allemagne 100.00% 100.00% Potain Belgium.......... Malines Belgique 100.00% 100.00% Potain UK............... West-Drayton Grande-Bretagne 100.00% 100.00% Potain Hungaria......... Budapest Hongrie 100.00% 100.00% Potain Industrie Spa.... Niellatanaro Italie 99.98% 99.98% Potain Spa.............. Parabiago Italie 99.97% 99.97% Potain Italia........... Cuggiono Italie 99.97% 99.97% Potain International.... Cuggiono Italie 99.97% 99.97% Potain Polska........... Varsovie Pologne 100.00% 100.00% Noe Pereira............. Fanzeres Portugal 99.64% 99.64% Potain Portugal......... Ermesinde Portugal 99.56% 99.56% Potain S.R.O............ Netvorice Republique tcheque 100.00% 100.00% Potain Corporation...... Miami Etats-Unis 100.00% 100.00% Potain Ltda............. Sao-Paulo Bresil 99.91% 99.91% Zhangjiagang Potain..... Zhangjiagang Chine 100.00% 62.77% Potain Pte Ltd.......... Singapour Singapour 100.00% 100.00% Liftlux Potain Gmbh..... DILLINGEN Allemagne 100.00% Solum................... Dusseldorf Allemagne 100.00% Axiome de Re............ Senningerberg Luxembourg 100.00%
F-17 POTAIN SA NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) IV--PROFIT AND LOSS PRESENTATION Under French accounting principles, profit and loss statement can be presented either by nature or by destination. Below is a presentation of profit and loss statement by destination under French GAAP.
(in thousands Euros) 12/31/2000 (12/31/1999 - -------------------- ---------- ----------- Sales.................................................. 286,974 239,644 Cost of sales.......................................... (206,503) (182,032) Gross profit........................................... 80,471 57,612 Engineering, selling & administrative expenses......... (48,747) (43,512) Operating profit....................................... 31,724 14,100 Interest expense, net.................................. 868 (1,408) Goodwill amortization.................................. (429) (391) Other income and (expense), net........................ (564) 0 Income before taxes.................................... 31,599 12,301 Income tax............................................. (11,559) (4,433) Net income before minority interests of fully consolidated entities................................. 20,040 7,868 Minority interests..................................... 24 1,592 Results of entities accounted for by the equity method................................................ 0 (4) Net income............................................. 20,016 6,272
The cost of sales includes the following: . logistic expenses such as inventory warehousing and transportation costs, . manufacturing costs including direct and indirect standard costs, variances with actual costs and allowances for inventory depreciation, . margin on sale of capitalized cranes. Engineering, selling & administrative expenses include all operating expenses not included in cost of sales. V--COMPARISON BETWEEN FRENCH AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES The Group's consolidated financial statements are prepared in accordance with accounting principles generally accepted in France ("French GAAP") which differ in certain respects from accounting principles generally accepted in the United States ("U.S. GAAP"). The significant differences applicable to the Group are summarized below. Revenue recognition on sales with guaranteed buyback commitments Under French GAAP, revenue related to sales with guaranteed buyback commitments are recognized and a liability is established at the time of sale for the difference, if any, between the amount of the buyback commitment and the estimated fair value of the equipment at the foreseeable buyback commitment date. Under U.S. GAAP, revenue related to such sales is recorded in accordance with EITF 95-1, "Revenue Recognition on Sales with Guaranteed Minimum Resale Value" which states that a manufacturer is precluded from recognizing a sale of equipment if the manufacturer guarantees the resale value of the equipment to the F-18 POTAIN SA NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) purchaser. Rather, the manufacturer should account for the transaction as a lease, using the principles of lease accounting in Statement 13. Revenue recognition on sales with guarantees The Company enters into sales agreements with financing companies who in turn lease equipment to third parties. Under some of these agreements, the Company has guaranteed the third party lease payments to the financing companies. Under other such agreements, the Company has agreed to absorb a portion of the losses resulting from default by the third parties. Under French GAAP, revenue related to such transactions is recorded upon delivery of the equipment and a liability, if necessary, is established for any anticipated future losses related to the guarantees. The guarantees are considered to be off-balance sheet commitments. Under U.S. GAAP, revenue related to such transactions in which the Company retains substantial risks of ownership in the property is recorded as if the transaction was a lease. Deferred taxation For French GAAP purposes, on January 1, 2000, the Group adopted French accounting standard 99-02 which addresses the accounting for income taxes. This new rule is effective from January 1, 2000. This standard is similar to U.S. GAAP in that deferred taxes are computed for all temporary differences between the tax and book bases of assets and liabilities. Deferred tax assets are recognized to the extent their realization is more likely than not. The main difference between this standard and U.S. GAAP is that long-term deferred tax liabilities are discounted. For U.S. GAAP purposes, deferred taxes are computed for all temporary differences between the tax and book bases of assets and liabilities. Deferred tax assets are recognized to the extent their realization is more likely than not. Consolidation and tax provisions Under French GAAP, prior to the issuance of accounting standard 99-02, companies were not required to consolidate majority-owned subsidiaries which operated in a different business activity. Therefore, Axiome, a wholly-owned subsidiary was not consolidated in 1998 and 1999 as a result of which provisions recorded to obtain certain tax benefits were not reversed for consolidation purposes under French GAAP. Starting from January 1, 2000, the application of accounting standard 99-02 requires that all majority-owned subsidiaries for which a company has control be consolidated and as a consequence, such provisions have been reversed. Under U.S. GAAP, all majority-owned subsidiaries for which a company has control are consolidated and as a consequence, provisions recorded to obtain certain tax benefits are reversed all over the periods presented with the related deferred tax effect. Pensions and retirement indemnities Under French GAAP, companies have the option of recording pension liabilities in full in the balance sheet, partially in the balance sheet and partially as an off balance sheet commitment, or entirely as an off balance sheet commitment. Under U.S. GAAP, pensions are accounted for in accordance with Statement of Financial Accounting Standards No. 87, "Employers' Accounting for Pensions" (FAS 87). Under FAS 87, pension assets or liabilities are recorded in the balance sheet for the difference between the projected benefit obligation and the fair value of any plan assets. Annual pension costs are recorded in the income statement. F-19 POTAIN SA NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) IBNR Reserves For French GAAP purposes, liabilities for amounts due related to deductibles for insurance claims are recorded when the invoices are received from the insuror. For U.S. GAAP purposes, such liabilities are recorded when they are incurred. Therefore, an estimate of claims incurred but not yet reported (IBNR) is calculated by an actuary and the estimated amount is recorded in the balance sheet. Foreign currency hedges Under French GAAP, gains and losses on foreign currency hedges can be deferred until the hedged transaction actually occurs. Under U.S. GAAP, hedging of foreign currency transactions with forward exchange contracts is only permissible for transactions which are firm commitments. Some of the Group's foreign currency contracts hedge forecasted or budgeted transactions which do not meet the definition of a firm commitment. Gains and losses on these contracts cannot be deferred but must be recognized in net income. Restructuring costs For French GAAP purposes, the Group recorded a restructuring reserve for Potain China in December 1999 because it was considered that management had approved the plan and communicated the plan and related benefits to be received to the employees affected by the plan. However, the plan was not officially approved by the Board and other regulatory authorities until January 2000. For U.S. GAAP purposes, restructuring costs are recognized when the following have occurred: management approves and commits the company to the restructuring plan; the benefit arrangement for any employees to be terminated has been communicated to employees in sufficient detail to enable them to determine the type and amount of benefits they will receive if terminated; the plan of termination specifically identifies the number of employees to be terminated, their job classifications or functions and their locations; and the period of time to complete the plan indicates that changes to the plan are not likely. It was considered for U.S. GAAP purposes that Potain China was not committed to the plan until January 2000. Impairment of assets Under French GAAP, there are no specific rules specifying impairment criteria and how impairment should be measured. Under U.S. GAAP, long-lived assets and certain identifiable intangibles to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If the sum of the estimated future cash flows expected to result from the asset and its eventual disposition is less than the carrying value of the asset, an impairment loss is recognized. Non-interest bearing notes receivable Under French GAAP, non-interest bearing notes receivable are recorded at the amounts stipulated in the agreements. No consideration is given to the impact of imputed interest. Under U.S. GAAP, non-interest bearing notes receivable exchanged for property, goods or services are recorded at their present value by discounting all future payments on the notes using an imputed rate of interest. Premiums are amortized into income over the life of the notes. F-20 POTAIN SA NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS--(Continued) Rental agreement The Group has a lease agreement for 20 years and for which the lease payments are not uniform throughout the term of the lease. For French GAAP purposes, payments under operating leases are recorded as rent expense for the amounts incurred according to the lease agreement. Under U.S. GAAP, the total expense to be incurred under the lease is amortized uniformly on a straight-line basis over the term of the lease. The following is a summary of the significant adjustments to net income and shareholders' equity which would be required if U.S. GAAP were to be applied instead of French GAAP:
Shareholders' Shareholders' Adoption Shareholders' Equity Net Equity Net of Equity December 31, income December 31, income Standard December 31, In thousands of Euros 1998 1999 1999 2000 99-02 2000 - --------------------- ------------- ------- ------------- ------- -------- ------------- Amount in accordance with French GAAP....... 111,005 6,272 118,083 20,016 1,106 139,172 Revenue recognition..... (1,746) (897) (2,643) (1,790) (4,433) Deferred taxation....... 1,428 (994) 434 (697) (263) Consolidation........... 811 (95) 716 (716) Pensions & retirement indemnities............ (2,266) (184) (2,450) 183 (612) (2,879) IBNR reserve............ (115) 2 (113) (6) (119) Foreign currency hedge.. (82) (82) 82 Restructuring--China.... 902 902 (902) Impairment of assets.... (181) (181) Non-interest bearing notes receivable....... (412) (15) (427) 13 (414) Rental agreement........ (67) (67) Tax effect of the above adjustments............ 1,731 342 2,073 572 222 2,867 Amount in accordance with U.S. GAAP......... 110,435 5,261 116,493 17,224 0 133,683 Number of shares........ 909,945 909,945 Net income per share U.S. GAAP (Euros)...... 5.77 18.93
VI--SUPPLEMENTAL CASH FLOW INFORMATION
December 31 ------------------------- (in thousands Euros) 2000 1999 1998 -------------------- ------- ------- ------- Cash......................................... 16,637 14,949 6,838 Borrowings................................... (23,316) (12,940) (15,693) Amounts due from affiliates (included in other receivables).......................... 28,538 4,158 3,388 Amounts due to affiliates (included in other liabilities)................................ (3,582) (3,842) (2,064) ------- ------- ------- Net indebtedness............................. 18,277 2,325 (7,531)
F-21 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The following unaudited pro forma condensed financial statements are based on our historical financial statements and the historical financial statements of Potain and should be read in conjunction with the historical financial statements included as part of this Current Report on Form 8-K. The pro forma financial statements reflect the following: . the acquisition of Potain; . the issuance of (Euro)175.0 million (approximately U.S. $164.3 million computed at the noon buying rate on December 29, 2000) of senior subordinated notes; . borrowings of $387.7 million under Manitowoc's new senior credit facility; and . the prepayment of outstanding borrowings under Manitowoc's existing revolving credit facility and Manitowoc's existing senior notes due 2010. Pro forma adjustments to historical financial statements include adjustments that Manitowoc deems appropriate, reflecting items of recurring significance and which are factually supported based on currently available information. Manitowoc assumed that the acquisition of Potain and related financing transactions, including the issuance of the senior subordinated notes, occurred on January 1, 2000 for purposes of preparing the pro forma condensed consolidated statement of earnings and on December 31, 2000 for purposes of preparing the condensed consolidated balance sheet. The pro forma financial statements may not be indicative of what actual results would have been, nor do the pro forma financial statements purport to present Manitowoc's condensed consolidated financial results for future periods. The unaudited pro forma condensed consolidated financial data have been derived from the historical consolidated financial statements of Manitowoc and Potain. The pro forma adjustments, as described in the notes that follow, are based upon available information and upon certain assumptions that management believes are reasonable. This information should be read in conjunction with the financial statements of Manitowoc and Potain included elsewhere in this Current Report on Form 8-K. The unaudited pro forma condensed consolidated financial statements are included for comparative purposes only and do not purport to be indicative of the results of Manitowoc in the future or what the financial position and results of operations would have been had Manitowoc acquired Potain on the dates described above. Amounts in U.S. dollars have been translated from euro at the rate of (Euro)1.00 to $0.94, the noon buying rate on December 29, 2000, in the unaudited pro forma condensed consolidated balance sheet and at the rate of (Euro)1.00 to $0.92, the average noon buying rate on the last business day of each month during 2000, in the unaudited pro forma condensed consolidated statement of earnings. P-1 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS (In thousands, except per share data and ratios)
Year Ended December 31, 2000 ----------------------------------------------- Manitowoc Potain(1) Pro Forma Pro Historical Historical Adjustments Forma ---------- ---------- ----------- ---------- Net sales...................... $873,272 $259,962 $ -- $1,133,234 Costs and expenses: Cost of sales................ 637,538 184,697 -- 822,235 Engineering, selling and administrative expenses..... 114,901 45,672 -- 160,573 Amortization................. 8,181 2,335 4,518 (2) 15,034 -------- -------- -------- ---------- Total costs and expenses... 760,620 232,704 4,518 997,842 Earnings from operations....... 112,652 27,258 (4,518) 135,392 Interest expense............... (14,508) (192) (34,802)(3) (49,502) Other (expense) income, net.... (2,024) (472) (305)(4) (2,801) -------- -------- -------- ---------- Earnings before income taxes... 96,120 26,594 (39,625) 83,089 Provision for taxes on income.. 35,852 10,750 (12,536)(5) 34,066 -------- -------- -------- ---------- Net earnings(6)................ $ 60,268 $ 15,844 $(27,089) $ 49,023 ======== ======== ======== ========== Per Share Data: Earnings per share--basic...... $ 2.42 $ 1.97 ======== ========== Weighted average shares outstanding--basic............ 24,891 24,891 ======== ========== Earnings per share--diluted.... $ 2.40 $ 1.95 ======== ========== Weighted average shares outstanding--diluted.......... 25,123 25,123 ======== ========== Other financial data: Depreciation................... $ 9,872 $ 11,940 $ 21,812 Amortization................... 8,181 2,335 15,034 EBITDA(7)...................... 130,705 41,533 172,238 Capital expenditures(8)........ 13,415 30,309 43,724 Ratio of EBITDA to interest expense....................... 9.0x 216.3x 3.5x Ratio of earnings to fixed charges(9).................... 6.5x 37.7x 2.6x
The accompanying notes are an integral part of these pro forma consolidated financial statements. P-2 NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS The following adjustments have been made to the historical condensed consolidated historical statements of earnings of Manitowoc and Potain to compute the unaudited pro forma amounts. (1) The table below sets out the adjustments necessary to convert the Potain historical statement of earnings from French GAAP to U.S. GAAP. The Potain historical financial information and U.S. GAAP adjustments have been derived from the Potain consolidated financial statements included elsewhere in this Current Report on Form 8-K.
Potain U.S. GAAP Potain French GAAP Adjustments U.S. GAAP ----------- ----------- --------- Net sales............................. $264,016 $(4,054) $259,962 Costs and expenses: Cost of sales....................... 188,210 (3,513) 184,697 Engineering, selling and administrative..................... 44,847 825 45,672 Amortization........................ 2,168 167 2,335 -------- ------- -------- Total costs and expenses.......... 235,225 (2,521) 232,704 Earnings from operations.............. 28,791 (1,533) 27,258 Interest (expense) income--net........ 799 (991) (192) Other (expense) income--net........... (541) 69 (472) -------- ------- -------- Earnings before income taxes.......... 29,049 (2,455) 26,594 Provision for taxes on income......... 10,634 116 10,750 -------- ------- -------- Net income............................ $ 18,415 $(2,571) $ 15,844 ======== ======= ========
(2) To adjust amortization based on the increase in goodwill in connection with the Potain acquisition. Goodwill is being amortized over forty years. (3) To adjust interest expense to reflect the issuance of debt in connection with the acquisition of Potain and the repayment of existing debt:
Pro forma Interest Interest Instrument Amount Rate Expense ---------- -------- -------- --------- Senior credit facility: Revolving credit facility..................... $ 37,700 7.350% $ 2,771 Term loan A................................... 200,000 7.350 14,700 Term loan B................................... 150,000 7.850 11,775 -------- Total....................................... 387,700 Senior subordinated notes....................... 164,300 10.375 17,046 Miscellaneous................................... 19,532 Various 1,023 Amortization of financing costs................. -- -- 2,187 -------- ------- $571,532 $49,502 ======== =======
The revolving credit facility, which provides for maximum borrowings of $125.0 million, has a 0.375% commitment fee on the unused balance (see Note (4) below). The above interest amounts related to the revolving credit facility and term loans assume a LIBOR rate of 5.1%. A 0.125% increase or decrease in the assumed average interest rate would change the pro forma interest expense for the year ended December 31, 2000 by approximately $485,000. (4) To record the commitment fee related to the assumed unused balance of the new revolving credit facility which provides for maximum borrowings of $125.0 million. P-3 (5) To adjust the provision for taxes on income to an effective income tax rate of 41%. (6) Manitowoc recognized an extraordinary loss ($2.1 million, net of income tax effects) related to the early extinguishment of our existing debt which was paid from proceeds from the financing. (7) EBITDA consists of earnings from operations plus depreciation and amortization. Manitowoc has presented EBITDA information solely as a supplemental disclosure because management believes that it is generally accepted as providing useful information regarding a company's ability to service and/or incur debt. EBITDA should not be construed as an alternative to earnings from operations as determined in accordance with generally accepted accounting principles as an indicator of Manitowoc's operating performance, or as an alternative to cash flows from operating activities as determined in accordance with generally accepted accounting principles as a measure of liquidity. Manitowoc has significant uses of cash flows, including capital expenditures and debt principal repayments that are not reflected in EBITDA. It should also be noted that not all companies that report EBITDA information calculate EBITDA in the same manner as Manitowoc does. (8) Potain capital expenditures of $30.3 million represent additions to gross fixed assets, which include intangible assets; goodwill; property, plant and equipment; financial assets and investments accounted for by the equity method. Approximately $20.5 million of these capital expenditures represent investment in Potain's crane rental fleet, including an $8.1 million one-time conversion of certain sales contracts for capital leases in reconciliation to U.S. GAAP. Management estimates that the portion of pro forma capital expenditures related to additions to property, plant and equipment (excluding the crane rental fleet) was approximately $23.2 million. (9) For purposes of computing the ratio of earnings to fixed charges, earnings consist of earnings from operations before income taxes and fixed charges, excluding capitalized interest. Fixed charges consist of interest expensed and capitalized, amortization of debt issuance costs and the interest component of rent expense. P-4 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (In thousands)
December 31, 2000 ------------------------------------------------ Manitowoc Potain(1) Pro Forma Historical Historical Adjustments Pro Forma ---------- ---------- ----------- ---------- ASSETS Current Assets: Cash and cash equivalents... $ 13,983 $ 11,009 $ (11,009)(2) $ 13,983 Accounts receivable--net.... 88,231 111,419 -- 199,650 Inventories................. 91,178 56,466 -- 147,644 Other current assets........ 9,523 -- -- 9,523 Future income tax benefits.. 20,592 -- -- 20,592 --------- -------- --------- ---------- Total current assets...... 223,507 178,894 (11,009) 391,392 --------- -------- --------- ---------- Intangible assets--net........ 308,073 9,096 196,523 (3) 513,692 Property, plant and equipment--net............... 99,940 74,269 -- 174,209 Deferred income taxes......... -- 4,713 (4,713)(2) -- Deferred financing costs...... 678 -- 14,522 (4) 15,200 Other non-current assets...... 10,332 2,614 -- 12,946 --------- -------- --------- ---------- Total assets.............. $ 642,530 $269,586 $ 195,323 $1,107,439 ========= ======== ========= ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable and accrued expenses................... $ 144,713 $ 79,315 $ (1,260)(5) $ 222,768 Short-term borrowings....... 81,000 8,620 (82,009)(6) 7,611 Current portion of long-term debt....................... 270 -- 31,125 (6) 31,395 Product warranties.......... 13,507 3,557 -- 17,064 Other current liabilities... -- 16,819 -- 16,819 --------- -------- --------- ---------- Total current liabilities.............. 239,490 108,311 (52,144) 295,657 --------- -------- --------- ---------- Non-Current Liabilities: Long-term debt, less current portion.................... 137,668 13,297 (139,314)(6) 11,651 Senior subordinated notes... -- -- 164,300 (6) 164,300 Senior credit facility...... -- -- 356,575 (6) 356,575 Postretirement benefit obligation................. 20,341 2,767 -- 23,108 Deferred income taxes....... -- 6,228 (6,228)(2) -- Other non-current liabilities................ 11,262 13,235 -- 24,497 --------- -------- --------- ---------- Total non-current liabilities.............. 169,271 35,527 375,333 580,131 --------- -------- --------- ---------- Minority interest............. -- 87 (87)(2) -- Stockholders' Equity: Common stock................ 367 12,830 (12,830)(2) 367 Additional paid-in capital.. 31,602 11,745 (11,745)(2) 31,602 Accumulated other comprehensive loss......... (2,569) (806) 806 (2) (2,569) Retained earnings........... 334,433 101,892 (101,892)(2) 332,315 (2,118)(5) Treasury stock.............. (130,064) -- -- (130,064) --------- -------- --------- ---------- Total stockholders' equity................... 233,769 125,661 (127,779) 231,651 --------- -------- --------- ---------- Total liabilities and stockholders' equity..... $ 642,530 $269,586 $ 195,323 $1,107,439 ========= ======== ========= ==========
The accompanying notes are an integral part of these pro forma consolidated financial statements. P-5 NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET The following adjustments have been made to the condensed consolidated historical balance sheets of Manitowoc and Potain to compute the unaudited pro forma condensed consolidated balance sheet. (1) The table below sets out the adjustments necessary to convert the Potain historical balance sheet from French GAAP to U.S. GAAP. The Potain historical financial information and U.S. GAAP adjustments have been derived from the Potain consolidated financial statements included elsewhere in this Current Report on Form 8-K.
Potain Potain French U.S. GAAP U.S. GAAP Adjustments GAAP -------- ----------- -------- Assets Current Assets: Cash and cash equivalents.............. $ 15,639 $(4,630) $ 11,009 Accounts receivable--net.. 111,419 -- 111,419 Inventories............... 56,466 -- 56,466 Other current assets...... -- -- -- Future income tax benefits................. -- -- -- -------- ------- -------- Total current assets.... 183,524 (4,630) 178,894 Intangible assets--net...... 9,266 (170) 9,096 Property, plant and equipment--net............. 58,676 15,593 74,269 Deferred income taxes....... 2,018 2,695 4,713 Deferred financing costs.... -- -- -- Other non-current assets.... 3,003 (389) 2,614 -------- ------- -------- Total assets............ $256,487 $13,099 $269,586 ======== ======= ======== Liabilities and Stockholders' Equity Current Liabilities: Accounts payable and accrued expenses......... $ 79,252 $ 63 $ 79,315 Short-term borrowings..... 8,620 -- 8,620 Current portion of long- term debt................ -- -- -- Product warranties........ 3,445 112 3,557 Other current liabilities.............. 10,294 6,525 16,819 -------- ------- -------- Total current liabilities............ 101,611 6,700 108,311 Non-current Liabilities: Long-term debt, less current portion.......... 13,297 -- 13,297 Senior subordinated notes.................... -- -- -- Senior credit facility.... -- -- -- Post retirement benefit obligation............... 4,690 (1,923) 2,767 Deferred income taxes..... 5,981 247 6,228 Other non-current liabilities.............. -- 13,235 13,235 -------- ------- -------- Total non-current liabilities............ 23,968 11,559 35,527 Minority interest........... 87 -- 87 Stockholders' Equity: Common stock.............. 12,830 -- 12,830 Additional paid-in capital.................. 11,745 -- 11,745 Accumulated other comprehensive loss....... (806) -- (806) Retained earnings......... 107,052 (5,160) 101,892 Treasury stock............ -- -- -- -------- ------- -------- Total stockholders' equity................. 130,821 (5,160) 125,661 -------- ------- -------- Total liabilities and stockholders' equity... $256,487 $13,099 $269,586 ======== ======= ========
P-6 (2) Represents the elimination of Potain historical amounts related to cash, deferred income taxes, minority interest, and stockholders' equity. (3) To record goodwill of $196.5 million in connection with the Potain acquisition. The purchase price of $312.7 million includes the amount to be paid to Group Legris Industries SA (seller) of $307.7 million plus estimated direct acquisition costs of $5.0 million. In addition, the seller will be paid the cash balance of Potain at December 31, 2000 of $11.0 million. The purchase price is subject to an adjustment for the net earnings of Potain from January 1, 2001, to the closing date. The excess of the purchase consideration over the net assets acquired (goodwill) is required to be applied to write-up assets to their fair market value. No appraisals of assets have yet to be performed and all of the excess of purchase consideration over the net assets to be acquired is being recorded as goodwill. Subsequent valuation analyses could potentially change the purchase price allocation. Goodwill is being amortized over forty years for purposes of the unaudited pro forma condensed consolidated statement of earnings. (4) Reflects estimated new debt issuance costs of approximately $15,200 that will be incurred as a result of the acquisition of Potain and related debt financing, net of a write-off of $678 of unamortized debt issuance costs related to existing debt which is paid with the proceeds of the financing. The deferred financing fees are being amortized over the term of the related debt, which ranges from 6 to 10 years. (5) To record the effects of the extraordinary loss related to the early extinguishment of the existing Manitowoc debt as follows: Prepayment penalty............................................... $ 2,700 Write-off of deferred financing costs............................ 678 ------- 3,378 Less-income tax benefit.......................................... (1,260) ------- Retained earnings adjustment..................................... $ 2,118 =======
(6) The pro forma adjustments required to record the financing portion of the transactions are as follows: Payment of short-term borrowings: Manitowoc................................................... $ (81,000) Potain...................................................... (1,009) --------- $ (82,009) ========= Payment of long-term borrowings: Manitowoc revolving credit facility......................... $ (59,319) Manitowoc senior notes due 2010............................. (75,000) Potain debt................................................. (4,995) --------- Total..................................................... $(139,314) ========= Proceeds from senior subordinated notes....................... $ 164,300 ========= Proceeds from senior credit facility: Revolving credit facility................................... $ 37,700 Term loan A................................................. 200,000 Term loan B................................................. 150,000 --------- 387,700 Current portion............................................. (31,125) --------- Total..................................................... $ 356,575 =========
P-7 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. THE MANITOWOC COMPANY, INC. Date: May 11, 2001 /s/ Maurice D. Jones ------------------------------------------------ Maurice D. Jones, General Counsel and Secretary 3 THE MANITOWOC COMPANY, INC. EXHIBIT INDEX TO FORM 8-K CURRENT REPORT DATED AS OF MAY 9, 2001 Exhibit Number Description 2 Share Purchase Agreement, dated May 9, 2001, among The Manitowoc Company, Inc., Manitowoc France SAS and Legris Industries SA. Schedules and exhibits to the Share Purchase Agreement have not been filed herewith. The Company agrees to furnish a copy of any omitted schedule or exhibit to the Commission upon request. 4.1 Credit Agreement, dated May 9, 2001, among The Manitowoc Company, Inc., the lenders party thereto and Bankers Trust Company, as Agent. 4.2 Indenture, dated May 9, 2001, among The Manitowoc Company, Inc., the Guarantors named therein and The Bank of New York, as Trustee. 23 Consent of Ernst & Young Audit. 99 Press Release of The Manitowoc Company, Inc., dated May 9, 2001. EX-2 2 dex2.txt SHARE PURCHASE AGREEMENT EXECUTION COPY EXHIBIT 2 - -------------------------------------------------------------------------------- May 9, 2001 LEGRIS INDUSTRIES SA and MANITOWOC FRANCE SAS SHARE PURCHASE AGREEMENT relating to the Sale and Purchase of the Shares of Potain SA 2 SHARE PURCHASE AGREEMENT This Share Purchase Agreement (the "Agreement") is entered into on May 9, 2001 by and between: 1. Legris Industries SA, a societe anonyme a directoire et conseil de surveillance with a share capital of Euro 26,313,792, whose registered office is situated at 74 rue de Paris, 35000 Rennes, France, registered with the Rennes registry under the number 786 450 197, represented by Mr. Thierry Perennec duly authorised pursuant to a power of attorney dated as of 7 May 2001. (the "Vendor") 2. Manitowoc France SAS, a societe par actions simplifiee with a share capital of Euro 40,000, whose registered office is situated at 125 rue de Montreuil, 75011 Paris, France, registered with the Paris commercial registry under the temporary number 2001B07673, represented by Mr. Edwin Verhulst acting as President. (the "Purchaser") WHEREAS: The Vendor wishes to sell to the Purchaser, and the Purchaser wishes to purchase from the Vendor, 100% of the shares of Potain SA, a company incorporated under the laws of France, having its registered office at 18 rue de Charbonnieres, 69130 Ecully, France and registered at the commercial court of Lyon under the number 632 045 837 (the "Company"), upon the terms hereinafter set out. IT IS HEREBY AGREED AS FOLLOWS: 1. DEFINITIONS / INTERPRETATION ---------------------------- 1.1 Definitions ----------- In this Agreement, the following terms shall have the following meanings unless the context otherwise requires: "Accounts" means the unaudited subconsolidated annual accounts closed as of 31 December 2000 of the Company and the Subsidiaries; 3 "Ancillary" has the meaning given to it in Clause 7.2.1; "Ancillary Instruments" means the agreements, instruments and documents contemplated by this Agreement; "Assets" means all of the tangible and intangible assets owned by the Company and its Subsidiaries or which the Company and its Subsidiaries have a valid right to use, of whatever description, used in connection with the ownership, use or operation of their respective businesses but excluding assets disposed of between the Balance Sheet Date and the date hereof in the ordinary course of business; "Balance Sheet Date" means 31 December 2000; "Business Day" means any day (other than Saturday) upon which banks are open for business in Paris and in New York; "Company" has the meaning given to it in the recitals; "Company Employees" has the meaning given to it in Clause 9.8.2; "Completion or Completion Date" means the date of completion of the transfer of ownership of the Shares which is the date hereof; "Completion Financial Statements" means the consolidated balance sheet of the Company and the Subsidiaries as of 30 April 2001 and the consolidated income statement of the Company and its Subsidiaries for the period from 1 January 2001 through 30 April 2001, as each is determined pursuant to Clause 2.2.4; "Consolidated Net Worth" has the meaning given to it in Clause 10.5.1(e); "Disclosure Schedule" has the meaning given to it in Clause 1.2.5; "Employee Plans/Agreements" has the meaning given to it in Clause 9.8.2; "Environmental Action" means any pollution or exposure to, or manufacture, processing, distribution, use, treatment, generation, existence, transport, handling, holding, removal, abatement, remediation, recycling, reclamation, management, disposal, emission, discharge, storage, escape, seepage, leakage or release of any Waste; "Environmental Claim Notice" has the meaning given to it in Clause 13.1; 4 "Environmental Laws" has the meaning given to it in Clause 9.5.3; "Environmental Non-Compliance Condition" means (a) any Environmental Action existing as of the date hereof at any property owned, leased or previously owned or leased by the Company or any Subsidiary or their respective predecessors in interest or at any location where the Company or any Subsidiary could be held responsible for investigation or cleanup activities resulting from actual or alleged offsite disposal of Waste, (b) non-compliance as of the date hereof with any Environmental Law, Order or Permit or (c) any third party demands, claims, suits, actions, proceedings or assessments, whether or not ultimately determined to be valid, against the Company or any Subsidiary with respect to items (a) or (b) above; "Environmental Non-Compliance Costs" means an amount necessary to indemnify the Purchaser, the Company, any Subsidiary and any of the successors and assigns of the foregoing for (a) all debts, liabilities and obligations and (b) all losses, damages, judgements, awards, settlements, costs and expenses (including, without limitation, interest (including prejudgement interest in any litigated matter), penalties, court costs and reasonable attorneys' and consultants' fees and expenses) associated with any action that would need to be taken to evaluate, defend a proceeding, investigate, remediate or otherwise respond to, or liabilities resulting from, an Environmental Non-Compliance Condition; "Environmental Non-Compliance Schedule" has the meaning given to it in Clause 6.2; "Estimated Known Environmental Non-Compliance Costs" has the meaning given to it in Clause 6.2; "Expert Accountant" means Deloitte & Touche or, if that firm is unable or unwilling to act in any matter referred to it under this Agreement, a firm of "commissaires aux comptes" to be agreed by the Parties within seven (7) days of a notice by one Party to the other Party requiring such agreement or, failing such agreement, to be nominated on the application of either Party by the President of the Tribunal of Commerce of Paris acting in summary proceedings (refere); "Global Exemption" has the meaning given to it in Clause 10.3.2; "Governmental Entities" means any court, arbitrator, department, commission, board, bureau, agency, authority, instrumentality or other body, whether federal, state, municipal, foreign or other; "Individual Exemption" has the meaning given to it in Clause 10.3.1; 5 "Intellectual Property" means, in respect of the Company and its Subsidiaries, (i) all trademark rights, business identifiers, trade dress, service marks, trade names and brand names, all registrations thereof and applications therefor and all goodwill associated with the foregoing; (ii) all copyrights, copyright registrations and copyright applications, and all other rights associated with the foregoing and the underlying works of authorship; (iii) all patents and patent applications, and all international proprietary rights associated therewith; (iv) all contracts or agreements granting any right, title, license or privilege to the Company or its Subsidiaries under the intellectual property rights of any third party; and (v) all inventions, know-how, models, discoveries, improvements, designs, trade secrets, shop and royalty rights, employee covenants and agreements respecting intellectual property and non-competition and all other types of intellectual property; "Interim Income" means the consolidated net income or loss (resultat net) of the Company and its Subsidiaries for the period from 1 January 2001 through the Completion Date (it being understood that for the period from 1 May 2001 to the Completion Date, the interim income shall be calculated as follows: 5/84 of the interim income for the period from 1 January 2001 to 30 April 2001) as determined in accordance with French generally accepted accounting principles applied on a consistent basis with past practice, plus interest from the Completion Date through the date of payment to the Vendor or the Purchaser, as the case may be, pursuant to Clause 2.2.2(ii), computed based on the three (3) month EURIBOR rate; "Intra-Group Payables" means all outstanding loans or amounts owed by the Company or the Subsidiaries to the Vendor or a member of the Vendor's Group as of the close of business immediately prior to the date hereof, but excluding, for the avoidance of doubt, trade payables arising in the ordinary course of business; "Intra-Group Receivables" means all outstanding loans or amounts owed by the Vendor or a member of the Vendor's Group to the Company and/or the Subsidiaries as of the close of business immediately prior to the date hereof, but excluding, for the avoidance of doubt, trade payables arising in the ordinary course of business; "IT and Telecommunications Systems and Equipment" means the information technology system and all means of telecommunication of the Company or its Subsidiaries, as the case may be, including without any limitation any operating, software, data processing software, hardware, routers modem farms, servers, telephones and fax machines; "Known Environmental Non-Compliance Conditions" has the meaning given to it in Clause 6.2; 6 "Known Environmental Non-Compliance Costs" has the meaning given to it in Clause 6.2; "Laws" means any enforceable statute, law, ordinance, rule or regulation; "Letter of Credit" has the meaning given to it in Clause 10.5.2; "Lien" means any mortgage, lien (statutory or otherwise), security interest, claim, pledge, license, conditional sales contract, option, proxy, assessment, levy, easement, covenant, reservation, restriction, right-of-way, exception, limitation, charge, claim or encumbrance of any nature whatsoever, including, without limitation, any nantissement, gage or any other right restricting in any manner the ownership or the transfer of the relevant asset; "Loss" has the meaning given to it in Clause 10.1; "Material Adverse Effect" means any facts or events which would affect detrimentally in any material respect the financial situation of the Company and its Subsidiaries taken as a whole; "Material Contracts" means, as regards the Company and its Subsidiaries, those contracts (i) involving a payment in excess of Euro 500,000 per year or which cannot be terminated with a notice period of less than one (1) year or (ii) contracts which if terminated would result in a Material Adverse Effect; "Net Loss" has the meaning given to it in Clause 10.2.5; "Notified Claim" has the meaning given to it in Clause 11; "Order" means any order, writ, injunction, decree or judgement of any Governmental Entity; "Party" or "Parties" means either or both of the parties to this Agreement; "Period 1" has the meaning given to it in Clause 10.5.1(a); "Period 2" has the meaning given to it in Clause 10.5.1(b); "Period 3" has the meaning given to it in Clause 10.5.1(c); "Period 4" has the meaning given to it in Clause 10.5.1(d); 7 "Permits" has the meaning given to it in Clause 9.3.2; "Private Claim" has the meaning given to it in Clause 11.2.1; "Proceedings Notice" has the meaning given to it in Clause 11.1.3; "Products" means any and all products currently or at any time previously designed, manufactured, distributed or sold by the Company and/or its Subsidiaries, or by any predecessor of the Company and/or its Subsidiaries, under any brand name or mark under which products are or have been manufactured, distributed or sold by the Company and/or its Subsidiaries or any predecessors thereto; "Purchaser" has the meaning given to it in the recitals; "Purchaser's Environmental Consultant" means Dames & Moore Group or another mutually agreed nationally recognized environmental consultant; "Purchaser Indemnified Parties" has the meaning given to it in Clause 13.2; "Purchase Price" means the price payable by the Purchaser to the Vendor pursuant to Clause 2; "Real Property" means all real property owned, used or occupied by the Company and/or its Subsidiaries; "Related Parties" has the meaning given to it in Clause 9.7.4; "Remedial Action" has the meaning given to it in Clause 13.3.5; "Shares" means 100% percent of the share capital and voting rights of the Company; "Subsidiary" or "Subsidiaries" has the meaning given to it in Clause 9.3.1; "Taxation" or "Tax" means all income, profit, payroll, social security, turnover, withholding, franchise, gross receipts, sales, use, transfer, registration, recording, value added, ad valorem, real or personal property, excise, occupation, customs, import and export or other taxes and governmental fees imposed by France or any other country, any state, municipality, subdivision or agency of France or any other country or any other governmental or other authority charged with levying taxes or fees, and all interest, penalties, deficiencies and assessments due on account thereof, whether disputed or undisputed, including, without limitation, 8 impot sur les societes, taxe sur la valeur ajoutee, droits d'enregistrement, taxe professionnelle, taxe fonciere, cotisations sociales and any other forms of taxation or contributions and levies in France or any other country arising pursuant to French Tax, "parafiscalite", social security or customs laws, and all penalties and interest for late payment relating thereto; "Technical Update Procedures" means Mises a Jour Techniques (M.J.T.) which is any preventive repair made on any Products in accordance with the past practice and procedure of the Company and the Subsidiaries and which cost is borne by the Company or the Subsidiaries; the Mises a Jour Techniques is further detailed in Schedule 9.6.5; "Third Party Proceedings" has the meaning given to it in Clause 11.1.1; "Vendor's Best Knowledge" means the particular knowledge of the Vendor (which shall be deemed to be the particular knowledge of Pierre-Yves Legris, Thierry Perennec, Erwan Taton, Laurence Nunzi and Pierre Busnel) and the particular knowledge of Jean-Yves Bouffault, Marc Frustie, Gerard Muller Catherine Vittoz, M.F. Pommaret, J.P. Roudier, E. Etchart, D. Gonzales, Richard Leclair and Pierre-Yves LeDaeron, which knowledge any such person actually has or should be deemed to have, based on prudent and diligent behavior; "Unknown Environmental Non-Compliance Costs" has the meaning given to it in Clause 13.1; "Vendor" has the meaning given to it in the recitals; "Vendor's Completion Financial Statement Draft" has the meaning given to it in Clause 2.2.4(a); "Vendor's Group" means any person or entity which (i) is controlled, directly or indirectly, by the Vendor, (ii) controls, directly or indirectly, the Vendor or (iii) is under the control, direct or indirect, of any entity which controls the Vendor; provided, however, that the definition of the Vendor's Group shall exclude the Company and the Subsidiaries; "control" shall have the meaning ascribed to it under Article L. 233-3 of the French Commercial Code; and "Waste" means pollutants, contaminants, chemicals, compounds or industrial, toxic, hazardous or petroleum or petroleum-based substances or wastes, waste waters or byproducts, including without limitation asbestos, polychlorinated biphenyls (PCBs) or urea formaldehyde, and any substance subject to regulation under any Environmental Law. 1.2 Interpretation -------------- 9 In this Agreement unless otherwise specified: 1.2.1. References to clauses References to clauses, sub-clauses, paragraphs, sub-paragraphs and schedules are to clauses, sub-clauses, paragraphs, sub- paragraphs of, and schedules to, this Agreement. 1.2.2. References to an "entity" References to an "entity" shall be construed so as to include any entity, wherever and however incorporated or established. 1.2.3. References to a "person" References to a "person" shall be construed so as to include any individual, entity, firm, company, government, state or agency of a state or any undertaking, joint venture, association or partnership (whether or not having separate legal personality). 1.2.4. Headings to clauses and schedules Headings to clauses and schedules are for convenience only and do not affect the interpretation of this Agreement. 10 1.2.5. Disclosure Schedule On the date hereof, the Vendor has delivered to the Purchaser a disclosure schedule that includes the numbered schedules specifically referred to in this Agreement (the "Disclosure Schedule"). The Disclosure Schedule forms a part of this Agreement and shall have the same force and effect as if expressly set out in the body of this Agreement and any reference to this Agreement shall include the Disclosure Schedule. The information contained in the Disclosure Schedule is complete and accurate in all respects, and all documents that are attached to or that form a part of the Disclosure Schedule are true and complete copies of the genuine original documents that such documents purport to represent. Information set forth in the Disclosure Schedule specifically refers to the clause and section of this Agreement to which such information is responsive and such information shall not be deemed to have been disclosed with respect to any other clause or section of this Agreement or for any other purpose except (i) where otherwise indicated by an appropriate cross-reference or (ii) where the information disclosed for a clause or section of this Agreement obviously relates to another clause or section of this Agreement (for instance, a product liability litigation disclosed under Clause 9.6.5 would also relate to Clause 9.9.2). The Disclosure Schedule shall not vary, change or alter the language of representations and warranties contained in this Agreement. 1.2.6. References to French legal terms References to any French legal term for any action, remedy, method or judicial proceeding, legal document, legal status, court, official, or any legal concept or thing shall, in respect of any jurisdiction other than France, be deemed to include the term, concept, thing or procedure that most nearly approximates in that jurisdiction the French term, concept, thing or procedure. 1.2.7. Singular and plural words Words importing the singular shall also include the plural and vice versa. 2. SALE OF THE SHARES ------------------ 2.1 Sale and Purchase ----------------- Subject to the terms and conditions of this Agreement, the Vendor hereby sells all of the Shares to the Purchaser, who purchases all of the Shares free from any Liens and together with all rights (including the right to receive dividends relating to the fiscal year ended on 31 December 2000) attached to the Shares as of the date hereof. 11 2.2 Consideration ------------- 2.2.1. Purchase Price The Purchase Price payable for the Shares shall be Two Billion Two Hundred Fifty-Eight Million One Hundred Forty-One Thousand French Francs (FRF 2,258,141,000), plus or minus, as the case may be, the Interim Income as determined pursuant to Clause 2.2.4. 2.2.2. Payment of Purchase Price The Purchase Price shall be paid by the Purchaser as follows: (i) On the date hereof, the Purchaser shall pay to the Vendor Two Billion Two Hundred Fifty-Eight Million One Hundred Forty-One Thousand French Francs (FRF 2,258,141,000). (ii) The Interim Income shall be paid by the Purchaser to the Vendor (or, in the case of a net loss, paid by the Vendor to the Purchaser) on or before the tenth Business Day following the final determination thereof. 2.2.3. Method of Payment All payments under this Clause 2 shall be made in the form of wire transfer of immediately available funds to an account designated by the recipient not less than 48 hours prior to the time for payment specified herein. 2.2.4. Determination of Interim Income The calculation of the Interim Income shall be finally established as follows: (a) Within ninety (90) days after the date hereof, the Vendor shall deliver to the Purchaser a consolidated balance sheet and income statement of the Company and its Subsidiaries as of and for the interim period ended on 30 April 2001, prepared by the Vendor (with the Company's assistance) and audited by Ernst & Young (accounting firm), in accordance with French generally accepted accounting principles applied on a consistent basis with past practice, from the books and records of the Company and its Subsidiaries, and fairly presenting the financial position and results of operations of the Company and its Subsidiaries as of and for the interim period ended on 30 April 2001 (the "Vendor's Completion Financial Statement Draft"). The Vendor's Completion Financial Statement Draft shall be accompanied by the work papers used in the preparation and audit of such financial statements and by a report (1) setting forth the Vendor's calculation 12 of the Interim Income and (2) stating that the calculation has been prepared in accordance with French generally accepted accounting principles (applied on a consistent basis with past practice) from the books and records of the Company and its Subsidiaries. (b) Within forty-five (45) days following the delivery of the Vendor's Completion Financial Statement Draft and other calculations, the Purchaser may object to any of the information contained in the Vendor's Completion Financial Statement Draft or accompanying work papers delivered pursuant to Clause 2.2.4(a), provided that such information relates to the determination of the Interim Income. Any such objection shall be made in writing and shall state the Purchaser's determination of the Completion Financial Statements and the amount of the Interim Income. (c) In the event of a dispute or disagreement relating to the Vendor's determination of the Interim Income, which the Purchaser and the Vendor are unable to resolve in good faith, such dispute or disagreement shall be resolved by the Expert Accountant. In the event of such disagreement or dispute, either Party shall have the right to submit the matter to the Expert Accountant for resolution. (d) The Expert Accountant shall make a resolution of the Interim Income, in accordance with French generally accepted accounting principles applied on a consistent basis. The Expert Accountant shall be instructed to use every reasonable effort to perform its services within thirty (30) days of submission of the Vendor's Completion Financial Statement Draft and other calculations and the Purchaser's comments thereon and, in any case, as soon as practicable after such submission. Notwithstanding the foregoing, the Expert Accountant shall not consider any accruals for environmental liabilities not specified by the Vendor. (e) The Expert Accountant shall: . give the Purchaser and the Vendor a reasonable opportunity to make written and oral representations to it; . require that the Parties supply each other with a copy of any written representations at the same time as they are made to the Expert Accountant; and . permit each Party to be present while oral submissions are being made by the other Party. (f) The determination of the Expert Accountant shall (i) be made in writing and sent to the Parties at such time as it is completed and 13 (ii) unless otherwise agreed by the Parties, include reasons for each relevant determination. (g) The Expert Accountant shall act as expert and not as arbitrator and its determination of any matter falling within its jurisdiction shall be final and binding on the Parties in accordance with Article 1592 of the French Civil Code. The calculation of the Interim Income as determined by the Expert Accountant shall be final and binding on the Parties. (h) The Parties shall cooperate with the Expert Accountant and comply with its reasonable requests made in connection with the carrying out of its duties under this Agreement. (i) The Purchaser agrees to permit the Vendor and its respective representatives, during normal business hours, to have reasonable access to, and to examine, all books and records of the Company and its Subsidiaries in order to prepare the Vendor's Completion Financial Statement Draft and other calculations delivered by the Vendor in accordance with Clause 2.2.4(a), which shall include, without limitation, the books, records, schedules, work papers and audit programs of the Purchaser. The Purchaser shall permit the same access to the Expert Accountant for the performance of its duties. (j) In addition, the Purchaser shall use its best efforts, until the determination and calculation of the Interim Income, to not change the Company's internal accountants. (k) Each Party shall instruct the Expert Accountant to keep all information and documents provided to it confidential and to not use the same for any purpose, except in connection with the preparation of the calculation of the Interim Income. (l) The fees of the Expert Accountant shall be shared equally by the Purchaser and the Vendor. 3. REPAYMENT OF PAYABLES AND RECEIVABLES ------------------------------------- Within two (2) Business Days after the date hereof, the Vendor shall pay or cause to be paid the Intra-Group Receivables and the Purchaser shall pay or cause to be paid the Intra-Group Payables. 4. TRANSFER OF OWNERSHIP OF THE SHARES ----------------------------------- Ownership of the Shares is transferred to the Purchaser on the date hereof, subject to the payment of the Purchase Price as per Clause 2.2.2. 14 5. OBLIGATIONS OF THE VENDOR AND THE COMPANY ON THE DATE HEREOF ------------------------------------------------------------ On the date hereof, the Vendor and the Company, as relevant, have delivered to the Purchaser the following documents, in each case duly executed or otherwise in proper form: 5.1 a duly completed, executed and dated ordre de mouvement in respect of the Shares in favour of the Purchaser; 5.2 the general releases referred to in Clause 7.1, duly executed by the persons referred to in such Clause; 5.3 to the extent requested by the Purchaser, the written resignations with effect from the date hereof of each of the directors of the Company listed in Schedule 5.3 and, to the extent any such person is an employee or affiliate of the Vendor, the directors of the Subsidiaries, and the Vendor agrees to indemnify the Purchaser in case of liabilities incurred towards these directors for dismissal from their office as contemplated in Clause 10.3.4(v); 5.4 a certified copy of the minutes of the board of directors' meeting of the Company authorising and approving: 5.4.1. the transfer of the Shares in favour of the Purchaser and the subsequent transfer of the Shares in favour of the new directors of the Company in accordance with Article 11 of the articles of association of the Company; and 5.4.2. the appointment of such persons as the Purchaser has notified to the Vendor as directors of the Company and any Subsidiary, in substitution of the persons who have resigned according to Clause 5.3 and a list, as of the date hereof, of the officers and directors of the Company and its Subsidiaries; 5.5 a certified copy of the minutes of the Supervisory Board meeting of the Vendor authorising and approving this Agreement and the Ancillary Instruments and the transactions contemplated hereby and thereby; 5.6 the original statutory documents and corporate records (including the share transfer registers) of the Company and its Subsidiaries, certified as such by the legal representative of the Company or its Subsidiaries; 5.7 documentation certified by the legal representative of the appropriate Subsidiary evidencing that the Subsidiaries listed in Schedule 5.7 are existing and duly organised under the laws of their respective jurisdictions of organisation; 5.8 the names and locations of all banks, trust companies, savings and loan associations and other financial institutions at which the Company and its 15 Subsidiaries maintain a safe deposit box, lock box or checking, savings, custodial or other account of any nature, the type and number of each such account and the signatories therefor, a description of any compensating balance arrangements, and the names of all persons authorised to draw thereon, make withdrawals therefrom or have access thereto, all as listed in Schedule 5.8; and 5.9 such other documents, instruments and writings as mutually agreed between the Parties acting in good faith. 6. OBLIGATIONS OF THE PURCHASER ON THE DATE HEREOF ----------------------------------------------- On the date hereof, the Purchaser has delivered to the Vendor the following documents, in each case duly executed or otherwise in proper form: 6.1 the wire transfer to the Vendor as required by Clause 2.2.2(i); and 6.2 a schedule (the "Environmental Non-Compliance Schedule") that sets forth (a) the Environmental Non-Compliance Conditions identified by the Purchaser and Purchaser's Environmental Consultant during their due diligence investigations prior to the date hereof (the "Known Environmental Non-Compliance Conditions"), and (b) the good faith estimate (the "Estimated Known Environmental Non-Compliance Costs") of the Purchaser's Environmental Consultant of the amount that could be necessary to indemnify the Purchaser and/or the Company or any Subsidiary for the Environmental Non-Compliance Costs arising from or related to the Known Environmental Non-Compliance Conditions, it being understood that the Estimated Known Environmental Non-Compliance Costs (i) are estimates only and do not purport to represent the actual Known Environmental Non-Compliance Costs, if any, incurred by the Purchaser and/or the Company or any Subsidiary, (ii) have not been approved by the Vendor and (iii) do not constitute per se an agreement of the Vendor to indemnify the Purchaser, such an obligation to arise only pursuant to Clause 13. "Known Environmental Non-Compliance Costs" shall mean the actual Environmental Non-Compliance Costs arising from or relating to the Known Environmental Non-Compliance Conditions as defined in this Clause 6.2. Notwithstanding anything to the contrary set forth above, Known Environmental Non-Compliance Costs shall not include those budgeted capital expenditures set forth in Schedule 6.2 notwithstanding the fact that such capital expenditures may be set forth on the Environmental Non-Compliance Schedule. 7. COVENANTS --------- 7.1 General releases ---------------- On the date hereof, the Vendor has delivered, and the Vendor has caused Pierre-Yves Legris, Thierry Perennec, Erwan Taton, Laurence Nunzi, Pierre Busnel, Jean-Yves Bouffault, Marc Frustie and Gerard Muller to deliver, general releases to the Purchaser, in the form attached hereto as Schedule 7.1, releasing the 16 Company and its Subsidiaries and the directors, officers, agents and employees of any of them from all claims to the date hereof, except (i) as may be described in written contracts disclosed in the Disclosure Schedule and expressly described and excepted from such releases, and (ii) in the case of persons who are employees of the Company or any Subsidiary, compensation for current periods expressly described and excepted from such releases. Notwithstanding the foregoing, in no event shall any such general release limit the liability to the Vendor of any person identified in the definition of the term "To Vendor's Best Knowledge" for acts of gross negligence or willful misconduct by such person in connection with the delivery of a certification to the Vendor with respect to the representations and warranties made by the Vendor pursuant to this Agreement. 7.2 Non competition / Non solicitation / Confidentiality ---------------------------------------------------- 7.2.1. Non competition The Vendor shall not, for a period of five (5) years from the date hereof, directly or indirectly, including through any controlled entity of the Vendor's Group, (i) carry out an activity (other than an ancillary activity) that competes with the current activities of the Company or any of its Subsidiaries, including by acquiring a participation, establishing a company or operating (including but not limited to developing, manufacturing and/or selling) under whatever form an entity or taking any interest in any company that competes with the Company or any Subsidiary, (ii) advise or assist in any way, whether or not for consideration, any corporation, partnership, firm or other business organisation the primary (as opposed to ancillary) activity of which now or in the future competes with the Company or any Subsidiary, including, but not limited to, advertising or otherwise endorsing the products of any such competitor, or loaning money or rendering any other form of financial assistance to, or engaging in any form of business transaction other than at an arm's length basis with, any such competitor, or (iii) engage in any practice the purpose of which is to evade the provisions of this covenant not to compete or commit any act which adversely affects the business of the Company and/or its Subsidiaries. "Ancillary" means for the purpose of this Clause an activity representing less than 10% of the aggregate revenues of the competing person. The Purchaser however acknowledges and agrees that the foregoing covenant shall not be deemed to be violated solely if the Vendor retains or acquires a shareholding interest of up to 5% of a company or other entity (provided that none of the relevant Vendor's managers will manage the concerned company or entity nor act as a member of the Board of Directors of that company or entity) which competes with the Company or any Subsidiary as contemplated above. 7.2.2. Non solicitation 17 The Vendor shall not, directly or indirectly, for a period of five (5) years from the date hereof, for itself, and, for the same period, any successor, assign, agent, representative, employee, director or officer of the Vendor or the Vendor's Group and members of the Vendor's Group shall not, solicit (other than through general forms of solicitation) for employment or hire any officer, director or employee when employed by the Company or any Subsidiary or do anything to influence or encourage any such person to leave his or her employ with the Company or any Subsidiary. 7.2.3. Confidentiality The Vendor shall maintain all non-public information and materials, written and oral, including, but not limited to, any and all Intellectual Property applications, drawings, specifications, know-how, processes and records, and all other technical, business, commercial and financial information regarding the Company and the Subsidiaries, in confidence, and shall not disclose it to any third party nor use it, directly or indirectly, for any use or purpose whatsoever. This covenant shall survive the Completion of the transaction herein contemplated without any limitation as to time. 7.2.4. Insurance The Purchaser agrees, for a period of sixteen (16) months from the date hereof, to maintain in force policies of insurance for the Company and its Subsidiaries substantially similar (in terms of scope, coverage and nature) as the policies in force for the Company and its Subsidiaries on the date hereof. 18 8. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER ----------------------------------------------- The Purchaser hereby makes the following representations and warranties to the Vendor, each of which is true and correct on the date hereof. 8.1 Existence-Incorporation ----------------------- The Purchaser is a corporate body duly incorporated and validly existing under the laws of France. 8.2 Authority and Capacity ---------------------- The Purchaser has full corporate power and capacity to enter into this Agreement and the Ancillary Instruments and to carry out the transactions contemplated hereby and thereby. 8.3 Authorisations -------------- This Agreement and the Ancillary Instruments have been executed by a duly authorised person of the Purchaser and the completion by the Purchaser of the transactions contemplated hereby and thereby has been duly authorised by all necessary corporate actions. No further proceeding, action or consent on the part of the Purchaser, its corporate bodies or shareholders or from any other entity or any other person, administrative or regulatory body is necessary to authorise this Agreement (except for any applicable antitrust approvals, the obtaining of which will be the responsibility of the Purchaser) or the Ancillary Instruments or to consummate the transactions contemplated hereby and thereby. This Agreement and the Ancillary Instruments have been duly executed and delivered on behalf of the Purchaser and constitute valid and binding obligations of the Purchaser, enforceable against it in accordance with their respective terms. 8.4 Absence of violation -------------------- The execution by the Purchaser of this Agreement and the Ancillary Instruments and the consummation of the transactions contemplated hereby and thereby by the Purchaser shall not constitute a violation of, or a default under, or conflict with (i) any term or provision of the statutes or the articles of association of the Purchaser, (ii) any contract of the Purchaser, the effect of which would impair the ability of the Purchaser to perform its obligations pursuant to this Agreement or the Ancillary Instruments, or (iii) any Order, Law or any other legal obligation to which the Purchaser is a party or by which the Purchaser or any of its properties and assets are bound, the effect of which would impair the ability of the Purchaser 19 to perform its obligations pursuant to this Agreement or the Ancillary Instruments. 9. REPRESENTATIONS AND WARRANTIES OF THE VENDOR -------------------------------------------- The Vendor hereby makes the following representations and warranties to the Purchaser, each of which is true and correct on the date hereof, except where another date is expressly provided hereafter. 9.1 Representations and warranties in relation to the Shares -------------------------------------------------------- The Vendor is the full owner of the Shares. It has full power and capacity to transfer the ownership of the Shares to the Purchaser, with good and valid title thereto, free of any Liens on the date hereof. Upon consummation of the transactions contemplated by this Agreement, the Purchaser will acquire the Shares with good and marketable title, free of any Liens. 9.2 Representations and warranties relating to the Vendor ----------------------------------------------------- 9.2.1. Existence - Incorporation The Vendor is a corporate body duly incorporated and validly existing under the laws of France. 9.2.2. Authority and Capacity The Vendor has full power and capacity to enter into this Agreement and the Ancillary Instruments and to carry out the transactions contemplated hereby and thereby. 9.2.3. Authorisations This Agreement and the Ancillary Instruments have been executed by a duly authorised person of the Vendor and the completion by the Vendor of its obligations contemplated hereby and thereby has been duly authorised by all necessary corporate actions. This Agreement and the Ancillary Instruments have been duly executed and delivered on behalf of the Vendor and constitute valid and binding obligations of the Vendor, enforceable against the Vendor in accordance with their respective terms. No further proceeding, action or consent on the part of the Vendor, its corporate body or shareholders or from any other entity or any other person, administrative or regulatory body (except for any applicable anti- trust approvals in Germany, the obtaining of which will be the responsibility of the Purchaser) is necessary to authorise the execution and delivery of this Agreement or the Ancillary Instruments or the consummation of the transactions contemplated hereby and thereby and the transfer to the Purchaser of good and valid title to the Shares. 20 9.2.4. Absence of violation The execution and performance of this Agreement and/or the Ancillary Instruments and the completion by the Vendor of its obligations contemplated hereby and thereby by the Vendor shall not (i) constitute a violation of, or a default under, or conflict with or breach the terms, conditions or provisions of (a) any term or provision of the statutes or the articles of association of the Vendor, the Company and/or the Subsidiaries, (b) any Material Contract or similar agreement to which the Vendor is a party, the effect of which would impair the ability of the Vendor to perform its obligations pursuant to this Agreement, or (c) any Law, Order or any other legal obligation to which the Vendor, the Company or any Subsidiary is a party or by which any of their respective properties and assets are bound, the effect of which would impair the ability of the Vendor to perform its obligations pursuant to the Agreement, or (ii) result in the creation or execution of any Liens upon the Shares or any of the Assets of the Company or any of the Subsidiaries or constitute a violation of or a default under, or conflict with or breach the terms, conditions or provisions of, any Material Contract to which the Company and/or any Subsidiary is a party. 9.3 General Representations and warranties in relation to the Company ----------------------------------------------------------------- and its Subsidiaries -------------------- 9.3.1. Constitution, existence and conformity The Company is a corporate body incorporated under the laws of France duly organised and validly existing. Schedule 9.3.1 sets forth the name, jurisdiction of incorporation, capitalisation, ownership and officers and directors (which list of officers and directors shall be as of March 2, 2001) of the Company and all of the entities in which the Company has a direct or indirect majority equity interest (individually, a "Subsidiary" and collectively, the "Subsidiaries"). The Company, directly or indirectly, has good and valid title to the equity it holds in the Subsidiaries as set forth in Schedule 9.3.1, free of any Liens on the date hereof. The equity held by the Company in the Subsidiaries, whether held directly or indirectly, is validly issued and fully paid. Each Subsidiary is a corporation duly organised, validly existing and in good standing under the laws of its country/state of incorporation and each of the Company and its Subsidiaries is in good standing and is duly qualified or licensed to do business in all jurisdictions where it is required to be so qualified or licensed. The Company and its Subsidiaries are not and have never been insolvent or subject to liquidation (whether amicable or judicial), bankruptcy or similar procedure and there is no threat of such procedure save as disclosed in Schedule 9.3.1. 21 9.3.2. Permits Each of the Company and its Subsidiaries has all licenses, permits, approvals, authorisations and consents of all Government Entities and all certification organisations required for the conduct of its business (as presently conducted) and the operation of its facilities (collectively, "Permits"). All such Permits are in full force and effect and will not be affected or made subject to loss, limitation or any obligation to reapply as a result of the transactions contemplated hereby and by the Ancillary Instruments. All Permits have been and are being complied with in all respects. 9.3.3. Share capital The Shares represent the aggregate outstanding shares of the capital stock of the Company. The Shares are validly issued and fully paid. The rights attached to the Shares are identical (subject to the specific rights attached to the Class A and Class B Shares). There are no (i) securities convertible into or exchangeable for the capital stock or other securities of the Company and/or any Subsidiary, (ii) options, warrants or other rights to purchase or subscribe to capital stock or other securities of the Company or any Subsidiary or securities which are convertible into or exchangeable for capital stock or other securities of the Company and/or any Subsidiary, or (iii) contracts, commitments, agreements, understandings or arrangements of any kind relating to the issuance, sale or transfer of any capital stock or other equity securities of the Company or any Subsidiary, any such convertible or exchangeable securities or any such options, warrants or other rights. No person has the right to call for the allotment or conversion of any share or other securities giving rise to a right over the share capital of the Company or any Subsidiary except as disclosed in Schedule 9.3.3. The share capital of the Company and its Subsidiaries has not been subject to any amortisation or redemption. The Shares and the shares of the Subsidiaries have not been and are not listed on any stock exchange or regulated market. 9.3.4. Statutory documents All statutory books and corporate records of the Company and its Subsidiaries required by applicable Laws and Orders, a true, correct and complete copy of all of which have been delivered by the Vendor to the Purchaser on the date hereof, accurately reflect, taken as a whole, all material corporate action taken by the Company and the Subsidiaries and contain information recorded in accordance with applicable Laws, save for minor irregularities. 22 All deeds or other documents evidencing the ownership of the Assets by the Company and its Subsidiaries and signed copies of all Material Contracts are in the possession of the Company and its Subsidiaries. 9.4 Representations and warranties relating to the Accounts ------------------------------------------------------- 9.4.1. Accounts The Accounts, of which a true and complete copy is included as Schedule 9.4.1, are true, complete and accurate and have been prepared in accordance with French generally accepted accounting principles, all applied on a consistent basis, in accordance with the books and records of the Company and its Subsidiaries, on a consolidated basis, and fairly present the assets, liabilities, financial position, the results of operations and cash flows of the Company and its Subsidiaries on a consolidated basis as of the date and for the year indicated. The Completion Financial Statements shall be prepared in accordance with French generally accepted accounting principles applied on a consistent basis, in accordance with the books and records of the Company and its Subsidiaries, on a consolidated basis, and shall fairly present the assets, liabilities, financial position and results of operations of the Company and its Subsidiaries as of and for the interim period ended on 30 April 2001. 9.4.2. Accounts receivable Subject to Clause 14, all notes, drafts and accounts receivable of the Company and its Subsidiaries reflected on the Accounts, and as incurred in the normal course of business since the date thereof, represent arm's length sales actually made in the ordinary course of business, are collectible (net of the reserve for doubtful receivables ultimately shown in the Completion Financial Statements) in the ordinary course of business without the necessity of commencing legal proceedings, are subject to no counterclaim or setoff, and are not in dispute. Schedule 9.4.2 contains an aged schedule of accounts receivable of the Company and its Subsidiaries included in the Accounts. 9.4.3. Changes since the Balance Sheet Date Since the Balance Sheet Date: (i) the Company and its Subsidiaries have been managed and have conducted their operations in the ordinary course of business; (ii) except as set forth in Schedule 9.4.3(ii), neither the Company nor any Subsidiary has increased, or committed to increase, its share capital; 23 (iii) except as set forth in Schedule 9.4.3(iii), neither the Company nor any Subsidiary has sold, leased or otherwise transferred, or committed to sell, lease or otherwise transfer, any Asset except in the ordinary course of business; (iv) neither the Company nor any Subsidiary has terminated, or done or omitted to do anything which would result in the termination of, a Material Contract; (v) except as set forth in Schedule 9.4.3(v), neither the Company nor any Subsidiary has made or agreed to make any increase in the compensation, salaries or wages payable or to become payable to any employee or agent (including, without limitation, any increase or change pursuant to any bonus, pension, profit sharing, retirement or other plan or commitment) or any bonus or other employee benefit granted, made or accrued, other than (x) those provided for in employment agreements existing on the date hereof, (y) for the applicable collective bargaining agreements listed in Schedule 9.4.3(v) or (z) in the ordinary course of business consistent with past practice; (vi) neither the Company nor any Subsidiary has declared, set aside or made payment of any dividend or other distribution in respect of the capital stock of the Company or any Subsidiary or made any other payment to any shareholder of the Company or any Subsidiary as such a shareholder, save for pro rata distributions of dividends made by any Subsidiary to another Subsidiary or to the Company; (vii) neither the Company nor any Subsidiary has redeemed, purchased or otherwise acquired or agreed to redeem, purchase or otherwise acquire any of its share capital or any security relating thereto; (viii) except as otherwise contemplated by Clauses 9.4.3(ix), 9.8.1(v) and 9.12, the Company and the Subsidiaries, taken together as a whole, have not experienced any event or circumstance that has resulted or that is reasonably likely to result in a Material Adverse Effect; (ix) except as disclosed in Schedule 9.4.3(ix), neither the Company nor any Subsidiary has experienced any labour disputes or disturbances which would be material to its business, financial condition and results of operations, except for any such disputes or disturbances arising out of the announcement of the transaction contemplated by this Agreement; 24 (x) except as disclosed in Schedule 9.4.3(x), neither the Company nor any Subsidiary has entered into any commitments or transactions (including, without limitation, any borrowing or capital expenditure) other than in the ordinary course of business consistent with past practice; (xi) neither the Company nor any Subsidiary has incurred, assumed or guaranteed any indebtedness for borrowed money, except as disclosed in Schedule 9.4.3(xi) or as arising in the ordinary course of business; (xii) except as disclosed in Schedule 9.4.3(xii), neither the Company nor any Subsidiary has made any mortgage, pledge, Lien or encumbrance on any of its properties or Assets except in connection with the acquisition of Assets in the ordinary course of business; (xiii) neither the Company nor any Subsidiary has entered into or amended or terminated any contract, or waived any material rights thereunder, other than in the ordinary course of business; (xiv) neither the Company nor any Subsidiary has made any loans or advances to any person or entity, other than advances to employees for travel and entertainment in the ordinary course of business in accordance with past practices; (xv) neither the Company nor any Subsidiary has granted any credit to any customer or distributor on terms or in amounts materially more favourable than those which have been extended to such customer or distributor in the preceding fiscal year, made any other change in the terms of any credit heretofore extended or made any other change in the Company's or any Subsidiary's policies or practices with respect to the granting of credit, except in the ordinary course of business; and (xvi) neither the Company nor any Subsidiary has entered into buy-back arrangements relating to the sale of Products either outside of the ordinary course of business or at levels in excess of those experienced in the fiscal year ended 31 December 2000. 9.4.4. Axiome de Re The restructuring of Axiome de Re as detailed in Schedule 9.4.4 was implemented in compliance with applicable Laws and at arms' length and such restructuring 25 shall not adversely affect the respective businesses of the Company and the Subsidiaries nor create any liabilities or obligations other than reflected in the Accounts. The only liabilities of Axiome de Re are those specifically quantified and disclosed on the balance sheet of Axiome de Re as of 31 December 2000, which balance sheet is attached hereto in Schedule 9.4.4. 9.5 Representations and warranties in relation to the Assets of the --------------------------------------------------------------- Company and its Subsidiaries ---------------------------- 9.5.1. Assets The Company and its Subsidiaries have good and marketable title to, or a valid right to use, the Assets, free of any Liens, other than Liens shown in the Accounts or as disclosed in Schedule 9.5.1. The Company and its Subsidiaries have the continued right to the quiet enjoyment (jouissance paisible) of the Assets that they own, rent or use; the Assets are used in the normal course of the businesses of the Company and its Subsidiaries as currently carried on and for the purpose only of carrying out the usual activities of such businesses; the Assets are in a reasonable state of maintenance, repair and use given their respective life duration, and are suitable for the purpose for which they are presently used. The Assets are sufficient to carry on the respective businesses of the Company and the Subsidiaries as conducted during the preceding twelve (12) months. The level of the Assets has not changed over the last twelve (12) months other than in the ordinary course of business. Except as provided in Schedule 9.5.1, the buildings which constitute part of the Assets are in good condition and repair, reasonable wear and tear excepted. The Assets comply with the currently applicable Laws or contractual requirements with regard to the Company's and its Subsidiaries' use of them in their respective country of use, except where such non compliance would not materially affect the businesses thereof. 9.5.2. Properties Schedule 9.5.2 contains a complete and accurate list of the Real Property. The Company and its Subsidiaries have full, good and marketable title to all Real Property owned by them, and the Real Property owned by the Company and its Subsidiaries is not subject to any Lien other than referred to and disclosed in Schedule 9.5.2. There are no leases, subleases, concessions or other agreements, written or oral, granting to any party other than the Company and its Subsidiaries the right of use or occupancy of any Real Property. 26 The Real Property is free and clear of any rights-of-way and other similar restrictions of any nature whatsoever, except zoning, building and similar restrictions and, more generally, those restrictions resulting from applicable Law or those restrictions that would not materially affect the ongoing use of the Real Property by the Company and/or its Subsidiaries. The Company and its Subsidiaries have obtained all necessary approvals or authorisations relating to any construction or building they have undertaken on the Real Property. The Real Property does not encroach on any third party's rights. Schedule 9.5.2 also sets forth, with respect to each Real Property which is leased, the material terms of such lease. There are now in full force and effect duly issued certificates of occupancy permitting the Real Property and improvements located thereon to be legally used and occupied as the same are now constituted. The Company and its Subsidiaries have full and good title as lessee to all Real Property leased by them. 9.5.3. Environmental issues Save as disclosed in Schedule 9.5.3, the Company and its Subsidiaries are in compliance with, and the respective businesses of the Company and its Subsidiaries have been carried out in accordance with, all applicable limitations, restrictions, conditions, standards, prohibitions, requirements, obligations, schedules and timetables contained in all environmental, zoning and planning Laws in force from time to time in any country in which any business or Assets of the Company or any Subsidiary is conducted or located, including, without limitation, all regulations, codes, plans, orders, decrees, judgements, injunctions, notices or demand letters issued, entered, promulgated or approved thereunder as of the date hereof (the "Environmental Laws"), and the respective businesses of the Company and its Subsidiaries may continue to be conducted on the premises occupied, owned, leased or used by the Company and its Subsidiaries. There are no litigation, investigations, actions or proceedings nor any demand, claim, hearing or notice of violation notified in writing pending or, to the Vendor's Best Knowledge, threatened against the Company or any Subsidiary, or any person or entity whose liability therefor may have been retained or assumed by or could be imputed on or attributed to the Company or any Subsidiary, pertaining in any way to the protection of the environment or to the discharge of matter into the air, soil or water. Save as disclosed in Schedule 9.5.3, there are no past or present events, conditions, circumstances, activities, practices, incidents, actions, omissions or plans which may interfere with or prevent compliance or continued compliance 27 with the Environmental Laws or with any Order issued, entered, promulgated or approved thereunder as of the date hereof, or which may give rise to any liability or otherwise form the basis of any litigation, hearing, notice of violation, study or investigation, based on or related to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling, or the emission, discharge, release or threatened release into the environment, of any Waste. All environmental studies in the possession and control of the Vendor, the Company or any Subsidiary or to which the Vendor, the Company or any Subsidiary has access relating to any property with respect to which the Company or any Subsidiary may have incurred liability or for which liability may be asserted against the Company or any Subsidiary have been delivered to the Purchaser and are attached in Schedule 9.5.3. Without limitation, no portion of any of the Real Property has been used as a landfill or for storage or disposal of hazardous or toxic materials. For the avoidance of doubt, the representations and warranties set forth in this Clause 9.5.3 are the only representations and warranties made by the Vendor in relation to environmental matters. No claim in respect of such matters may be pursued by the Purchaser under any other representations or warranties contained in this Agreement. 28 9.5.4 IT and communications Except as disclosed in Schedule 9.5.4, IT and Telecommunications Systems and Equipment are adapted and substantially satisfactory having regard to the material requirements of the respective businesses of the Company and its Subsidiaries, and those which are material to the running of the business of the Company and its Subsidiaries are subject to maintenance agreements where necessary and, to the extent necessary, are compliant with Euro adoption plans (except for configuration changes that can be accomplished with existing software). The IT and Telecommunications Systems and Equipment operate solely independent of the comparable systems and equipment operated by the Vendor and/or the Vendor's Group. 9.5.5. Intellectual Property The Company and its Subsidiaries have good title to or, with respect to items not owned by the Company or any Subsidiary, sufficient rights to use, all Intellectual Property that is material to the operation of their respective businesses. The Intellectual Property owned by the Company and its Subsidiaries is in full force and effect. The consummation of the transactions contemplated herein will not alter or impair any Intellectual Property used in connection with the businesses of the Company and the Subsidiaries. To the Vendor's Best Knowledge, there are no infringements by others of Intellectual Property owned or used by the Company or any Subsidiary nor the misappropriation of any trade secrets owned or used by the Company or any Subsidiary. The conduct of the respective businesses of the Company and its Subsidiaries does not infringe on any Intellectual Property rights of others nor does it involve the misappropriation of any trade secrets of others. Schedule 9.5.5 sets forth (i) a complete and accurate list of all of the Intellectual Property owned by the Company and its Subsidiaries and (ii) all of the Intellectual Property currently used (but not owned by the Company or any Subsidiary) in connection with the business of the Company and the Subsidiaries, including licenses and other agreements to which the Company and any Subsidiary is a party and pursuant to which the Company or any Subsidiary is authorised to use any Intellectual Property (excluding license agreements for generally commercially available software). No claims with respect to any Intellectual Property have been filed or, to the Vendor's Best Knowledge, are threatened by any person or entity, and no person or entity has any valid grounds for any claims (i) to the effect that the manufacture, sale or use of any product, process or service as now used or offered or proposed for use or sale by the Company or any Subsidiary infringes on any Intellectual Property right of any person or entity, (ii) against the use by the Company or any Subsidiary of any Intellectual Property or (iii) challenging the ownership, validity, enforceability or effectiveness of any of the Intellectual Property owned or used by the Company or any Subsidiary. The Company and its Subsidiaries have taken reasonable steps to protect the Company's and its 29 Subsidiaries' rights in all inventions, processes, designs, formulae, know-how, trade secrets and other confidential information of the Company and its Subsidiaries and have taken reasonable steps to enforce rights in Intellectual Property owned or used by the Company and its Subsidiaries against known infringement by third parties. The Company and its Subsidiaries have taken reasonable steps, including all steps that the Company and its Subsidiaries may be contractually obligated to undertake, to protect confidential information or trade secrets provided by another person or entity to the Company and/or its Subsidiaries. 9.5.6. Shareholdings All of the shareholdings (titres de placement) and any other equity interests owned by the Company and its Subsidiaries in any company or entity (except for the Subsidiaries), whether French or foreign, are set out in Schedule 9.5.6. Save as disclosed in Schedule 9.5.6, the Company and its Subsidiaries have never been and are not a member or manager of any unlimited liability entity, including but not limited to a Societe Civile, Societe en Nom Collectif, Societe en Commandite Simple, Societe en Commandite par Actions (as commandite). 9.5.7. Business The Company and its Subsidiaries are not party to any contract (i) relating to the whole or part of its business (fonds de commerce), such as a societe en participation (or location-gerance), or (ii) which in any way restricts their freedom to carry on the whole or any part of their respective businesses, except as disclosed in Schedule 9.5.7. 9.5.8. Inventory All inventory of the Company and its Subsidiaries reflected on the Accounts is of merchantable quality and quantity and is capable of being sold or used in the ordinary course of business and, save for provisions reflected in the Accounts, has a commercial value at least equal to the value shown on such Accounts and is valued in accordance with generally accepted accounting principles at the lower of cost or market. Since the date of the Accounts, all inventory purchased is of merchantable quality and quantity and is capable of being sold or used in the ordinary course of business and the level has not changed other than in the ordinary course of business. Save as disclosed in Schedule 9.5.8, all inventory of the Company and its Subsidiaries is located on premises owned or leased by the Company and its Subsidiaries as reflected in this Agreement. Save as disclosed in Schedule 9.5.8, there is no inventory owned by third parties that is located on premises owned or leased by the Company and the Subsidiaries. 30 All work-in-process contained in inventory constitutes items in process of production pursuant to contracts or open orders taken in the ordinary course of business, from customers of the Company and its Subsidiaries with no recent history of credit problems with respect to the Company and its Subsidiaries; neither the Company or any Subsidiary nor any customer is in breach of the terms of any obligation to the other, and no valid grounds exist for any set-off of amounts billable to such customers on the completion of orders to which work-in-process relates. All work-in-process is of a quality and quantity ordinarily produced in accordance with the requirements of the orders to which such work-in-process is identified. 9.5.9. Loans No loans or advances have been granted by the Company or any Subsidiary to third parties, other than standard advances or deposit with suppliers and/or clients carried out in the ordinary course of business. 9.6 Representations and warranties in relation to Liabilities --------------------------------------------------------- 9.6.1. Off-balance sheet and other liabilities Schedule 9.6.1 sets forth the off-balance sheet liabilities of the Company and its Subsidiaries as of 31 December 2000, except for individual liabilities less than Ten Thousand French Francs (FRF 10,000) provided that the aggregate amount of such liabilities does not exceed One Hundred Thousand French Francs (FRF 100,000). Except as and to the extent described in the Accounts, the Completion Financial Statements or Schedule 9.6.1, to Vendor's Best Knowledge, there is no basis for the assertion against the Company or any Subsidiary of any liability and there are no circumstances, conditions, happenings, events or arrangements, contractual or otherwise, which may give rise to liabilities, except commercial liabilities and obligations incurred in the ordinary course of the respective businesses of the Company and its Subsidiaries and consistent with past practice. 9.6.2. Reserves All reserves (reserves legales et statutaires) appearing in the Accounts have been properly provided for. 9.6.3. Subsidies, support Save as disclosed in Schedule 9.6.3, the Company and its Subsidiaries do not have the benefit of any subsidy, support or financial assistance. With respect to the subsidies disclosed in Schedule 9.6.3, the Company and the Subsidiaries have 31 complied with all of their obligations in relation thereto as imposed by the relevant authorities in connection with the granting of such subsidies. 9.6.4. Debts of the Company and its Subsidiaries All accounted debts have been properly paid on the relevant due date and the Company and its Subsidiaries are not liable as a result for any interest for late payment, penalty or indemnity of any sort. The Company and its Subsidiaries have duly made all necessary declarations to the relevant administrative body and all debts have been paid on the relevant due date. 9.6.5. Product warranty and product liability Schedule 9.6.5 contains a complete and accurate copy of the Company's and each Subsidiary's standard warranty or warranties for sales of Products, and except as expressly identified therein, there are no warranties, deviations from standard warranties, commitments or obligations with respect to the return, repair or replacement of Products except in the ordinary course of business consistent with past practice. Schedule 9.6.5 contains a complete and accurate description of all product liability claims and similar litigation relating to Products manufactured or sold, or services rendered, which are presently pending, or which have been asserted or commenced against the Company or any Subsidiary within the last three (3) years. Schedule 9.6.5 also sets forth all Technical Update Procedures undertaken within the last three (3) years. There are no defects in design, construction or manufacture of Products which would adversely affect performance or create an unusual risk of injury to persons or property, except for Technical Update Procedures relating to Products manufactured or sold by the Company or its Subsidiaries prior to the date hereof which shall not entail future costs to the Company and its Subsidiaries in excess of Six Million Six Hundred Sixty-Six Thousand Six Hundred Sixty-Six French Francs (FRF 6,666,666). The Products have been designed and manufactured so as to meet and comply with all applicable Laws and Orders. Such Products have received all approvals required by all applicable Laws and Orders necessary to allow for their sale and use except as set forth in Schedule 9.6.5. None of the Products have been the subject of any general recall campaign during the last three (3) years, and, to Vendor's Best Knowledge, no facts or conditions exist which could reasonably be expected to result in such a general recall campaign. 9.7 Representations and warranties in relation to Contracts ------------------------------------------------------- 9.7.1. Material Contracts 32 The Material Contracts entered into by the Company and its Subsidiaries are: (a) in full force and effect and are valid and binding and have been concluded and have been and are performed in accordance with their terms and conditions and under usual and arm's length conditions; and (b) enforceable in accordance with their respective terms. To Vendor's Best Knowledge, there is no fact or event which could provide a basis for preventing the performance of the Material Contracts, leading to their amendment or termination or giving rise to any material claim by or against the Company or any Subsidiary. Except as disclosed in Schedule 9.7.1, the consummation of the transactions contemplated herein will not enable the contracting parties to terminate or modify any Material Contract or accelerate or provide for any additional benefit thereunder. Except as disclosed in Schedule 9.7.1, there are no contracts which materially restrict the ability of the Company and its Subsidiaries to carry on their respective businesses. 9.7.2. No default Neither the Company nor any Subsidiary is in default under any lease, contract or commitment whatsoever, nor has any event or omission occurred which through the passage of time or the giving of notice, or both, would constitute a default thereunder or cause the acceleration of any of the Company's or any Subsidiary's obligations or result in the creation of any Liens on any of the Assets. To Vendor's Best Knowledge, no third party is in default under any lease, contract or commitment to which the Company or any Subsidiary is a party, nor has any event or omission occurred which, through the passage of time or the giving of notice, or both, would constitute a default thereunder or give rise to an automatic termination, or the right of discretionary termination, thereof. 33 9.7.3. Brokers or finders None of the Company or its Subsidiaries have retained, employed or used any broker or finder for the purpose of the sale of the Shares as contemplated by this Agreement. 9.7.4. Related parties' relationships to the Company and its Subsidiaries All leases, contracts, agreements or other arrangements between the Company or any Subsidiary and Related Parties as well as all respective obligations of the Company, any Subsidiary and any Related Party are described on Schedule 9.7.4. No Related Party has any direct or indirect interest in (i) any entity which does business with the Company and/or its Subsidiaries or is competitive with the respective businesses of the Company and/or its Subsidiaries or (ii) any property, asset or right which is used by the Company and/or its Subsidiaries in the conduct of their respective businesses. "Related Parties" pursuant to this Clause includes the Vendor and any entity of the Vendor's Group or any person affiliated with the Vendor's Group. 9.8 Representations and warranties in relation to personnel -------------------------------------------------------- 9.8.1. Labour matters The Company and its Subsidiaries have complied with all applicable labour Laws and have satisfied all of their obligations vis-a-vis their employees and the labour and social security authorities save for minor irregularities. Except to the extent set forth in Schedule 9.8.1: (i) no sum is due to any present or former employee, agent or representative of the Company or any Subsidiary in connection with his or her employment and/or other contracts or agreements with the Company or any Subsidiary, other than disclosed in the Accounts; (ii) there are no obligations of any kind made in writing or owed by the Company or any Subsidiary to former or existing employees except as disclosed in the Accounts. In this respect, no employment agreement entered into by the Company or its Subsidiaries with any employee provides for the payment of a termination indemnity the amount of which is greater than that resulting from a strict application of the applicable labour Laws and collective bargaining agreements; 34 (iii) neither the Company nor any Subsidiary is engaged or involved in any litigation with its employees or any trade union or other organisation formed for a similar purpose; (iv) at all times, the Company and its Subsidiaries have complied with all of their statutory and other obligations concerning the health and safety at work of their employees. To Vendor's Best Knowledge, there are no written claims by any employee or third party in respect of any accident or injury which is not adequately covered by insurance; (v) there is no labour strike, dispute, request for representation, slowdown or stoppage currently pending against or affecting the Company or any Subsidiary, except for any such strike, dispute or the like arising out of the announcement of the transactions contemplated by this Agreement; (vi) to Vendor's Best Knowledge, no grievance which might have a Material Adverse Effect, nor any arbitration proceeding arising out of or under collective bargaining agreements, is pending and no such claim therefor exists; (vii) to Vendor's Best Knowledge, there are no administrative charges or court complaints against the Company or any Subsidiary concerning alleged employment discrimination or other employment related matters pending or threatened before any Government Entity; (viii) the Company and its Subsidiaries have duly informed/consulted the labour councils or similar bodies of the transactions contemplated herein, in compliance with applicable Laws; and (ix) within the last three (3) years, neither the Company nor any Subsidiary has experienced any general labour disputes, union organisation attempts or any general work stoppage due to labour disagreements in connection with its business exceeding five (5) days over any rolling twelve (12) month period. 9.8.2. Employee benefit plans Schedule 9.8.2 contains, in relation to the Company and its Subsidiaries, a complete and accurate list of all material pension, savings, profit sharing, retirement, retirement indemnity, incentive bonus or other bonus, medical, dental, life, accident insurance, benefit, employee welfare, disability, group insurance, 35 stock purchase, stock option, stock appreciation, stock bonus, executive or deferred compensation, hospitalisation and other similar fringe or employee benefit plans, programs and arrangement, and any employment or consulting contracts, "golden parachutes," collective bargaining agreements, severance agreements or plans, vacation and sick leave plans, programs, arrangements and policies, including, without limitation, all "employee benefit plans" or arrangements, all employee manuals, and all written statements of policies, practices or understandings relating to employment, which are provided to, for the benefit of, or relate to, any persons ("Company Employees") employed by Company or the Subsidiaries. The items described in the foregoing sentence are hereinafter sometimes referred to collectively as "Employee Plans/Agreements," and each individually as an "Employee Plan/Agreement." True and correct copies of all the Employee Plans/Agreements, including all amendments thereto, have heretofore been provided to the Purchaser. Except as disclosed in Schedule 9.8.2, all liabilities relating to the Employee Plans/Agreements, other than those resulting from the mandatory retirement Employee Plans/Agreements applicable by Law to Company Employees and accrued through the date hereof, have been adequately reserved in the Accounts as required by applicable Laws for each jurisdiction. 9.8.3. Full funding The funds available under each Employee Plan/Agreement which is intended to be a funded plan equal or exceed the amounts required to be paid, or which would be required to be paid if such Employee Plan/Agreement were terminated, on account of rights vested or accrued as of the Completion Date (using the actuarial methods and assumptions then used by the Company's and/or its Subsidiaries' actuaries in connection with the funding of such Employee Plan/Agreement). 9.8.4. Payments and compliance With respect to each Employee Plan/Agreement, (i) all payments due from the Company and its Subsidiaries have been made and all amounts properly accrued as liabilities of the Company and its Subsidiaries which have not been paid have been properly recorded on the books of the Company and its Subsidiaries (to the extent such books are closed) and, to the extent in existence as of 31 December 2000, are reflected in the Accounts; (ii) the Company and its Subsidiaries have complied with, and each such Employee Plan/Agreement conforms in form and operation to, all applicable Laws in all respects and all reports and information relating to such Employee Plan/Agreement required to be disclosed or provided to participants or their beneficiaries have been timely disclosed or provided; and (iii) there are no actions, suits or claims pending (other than routine claims for benefits) or threatened with respect to such Employee Plan/Agreement or against the assets of such Employee Plan/Agreement. 36 9.8.5. Post-retirement benefits Except as set forth in Schedule 9.8.5, no Employee Plan/Agreement provides benefits, including, without limitation, death or medical benefits (whether or not insured) with respect to current or former Company Employees beyond their retirement or other termination of service other than (i) coverage mandated by applicable Law, (ii) death or retirement benefits under any Employee Plan/Agreement that is an employee pension benefit plan, (iii) deferred compensation benefits accrued as liabilities on the books of the Company and its Subsidiaries (including the Accounts), (iv) disability benefits under any Employee Plan/Agreement that is an employee welfare benefit plan and which have been fully provided for by insurance or (v) benefits in the nature of severance pay. 9.8.6. No triggering of obligations Except as set forth in Schedule 9.8.6, the consummation of the transactions contemplated by this Agreement will not (i) entitle any current or former employee of the Company or any Subsidiary to severance pay, unemployment compensation or any other payment, (ii) accelerate the time of payment or vesting, or increase the amount, of compensation due to any such employee or former employee or (iii) result in any prohibited transaction under applicable Laws. 9.8.7. Delivery of documents Schedule 9.8.7 lists with respect to each Employee Plan/Agreement: A copy of the funding agreement and the latest financial statements thereof if the Employee Plan/Agreement is funded through a third party funding vehicle (other than an insurance policy). 9.8.8. Future commitments Neither the Company nor any Subsidiary has an announced plan or legally binding commitment to create any additional Employee Plans/Agreements or to amend or modify any existing Employee Plan/Agreement. 37 9.8.9. Employees Schedule 9.8.9 contains a complete and accurate list of those of the employees to whom the Company and its Subsidiaries are paying compensation, including bonuses and incentives, at an annual rate in excess of Three Hundred Thousand French Francs (FRF 300,000) for services rendered or otherwise; and in the case of salaried employees such list identifies the current annual rate of compensation for each employee and in the case of hourly or commission employees identifies certain reasonable ranges of rates and the number of employees falling within each such range. Neither the Company nor any Subsidiary has made an undertaking verbally or in writing which would entail future liabilities or obligations whatsoever in favour of any of its employees, except as set forth in Schedule 9.8.9. 9.9 Representations and warranties in relation to regulatory matters ---------------------------------------------------------------- and litigation -------------- 9.9.1. Compliance with Laws Except as disclosed in Schedule 9.9.1, neither the Company nor any Subsidiary has done or omitted to do anything which may have an adverse effect on the operations of the businesses of the Company and its Subsidiaries which is in contravention of any Law or Order. 9.9.2. Litigation Save as disclosed in Schedule 9.9.2, the Company and its Subsidiaries are not parties to any claim, legal action, proceeding, suit, litigation, prosecution, investigation, enquiry, arbitration (including investigations or public enquiries) or settlement of any nature whatsoever and the Company and its Subsidiaries have not received any notification of any of the foregoing. To Vendor's Best Knowledge, no such claim is being threatened against the Company or any Subsidiary. The Company and its Subsidiaries are not, and no director or legal representative of the Company and its Subsidiaries, is the subject of any investigation, inquiry, control or other procedure by the administration (particularly the Tax, customs, competition, fraud or health and social security authorities) which would have resulted in a notification in writing being delivered to the Company or any Subsidiary regarding the operations and activities of the Company and its Subsidiaries. 38 9.10 Representations and warranties in relation to insurance ------------------------------------------------------- Schedule 9.10 sets forth a complete and accurate list of all policies of fire, liability, product liability, workers compensation, health and other forms of insurance presently in effect with respect to the businesses and properties of the Company and its Subsidiaries, true and correct copies of which have heretofore been delivered to the Purchaser. Schedule 9.10 includes the carrier, the type of coverage and any pending claims in excess of Five Hundred Thousand French Francs (FRF 500,000). All such policies are valid, outstanding and enforceable policies and provide insurance coverage for the properties, assets and operations of the Company and its Subsidiaries, of the kinds, in the amounts and against the losses and risks customarily maintained by companies carrying on similar activities, and having or using equivalent goods or assets; all premiums relating to such insurance have always been duly paid; and no such policy (or any previous policy) provides for or is subject to any currently enforceable retroactive rate or premium adjustment, loss sharing arrangement or other actual or contingent liability arising wholly or partially out of events arising prior to the date hereof. The Company and its Subsidiaries and, where applicable, the person insured, have not committed any act or omission capable of leading to the termination, rescission or detrimental amendment of any or all of the insurance policies. The Company and its Subsidiaries have not received in writing notice of cancellation of any insurance, and To Vendor's Best Knowledge, there are no facts or events that provide a basis for cancellation. Except as disclosed in Schedule 9.10, the Company and its Subsidiaries have not been refused any insurance with respect to any aspect of the operations of their businesses nor have their coverages been limited by any insurance carrier to which they have applied for insurance or with which they have carried insurance during the last three (3) years. Neither the Company nor any Subsidiary has received any written notice from or on behalf of any insurance carrier issuing any such policy that insurance rates therefor will be substantially increased or that there will be a cancellation or an increase in a deductible (or an increase in premiums in order to maintain an existing deductible) or a non renewal of any such policy. 9.11 Representations and warranties in relation to Taxation 9.11.1. Provision for Taxes The provision made for Taxes on the Accounts is sufficient for the payment of all Taxes at the date of the Accounts and for all years and periods prior thereto. Since the date of the Accounts, neither the Company nor any Subsidiary has incurred any Taxes other than Taxes incurred in the ordinary course of business consistent with past practice. 9.11.2. Tax returns filed / Tax payments 39 Save as disclosed in Schedule 9.11.2, all Tax returns required to be filed by or on behalf of the Company and its Subsidiaries have been timely filed and when filed were true and correct in all respects, and the Taxes shown as due thereon were paid or adequately accrued. True and complete copies of corporate income Tax and social security returns filed by the Company and its Subsidiaries for their most recent fiscal years have been delivered to the Purchaser. Each of the Company and its Subsidiaries have duly withheld and paid all Taxes which it is required to withhold and pay. 9.11.3. Tax audits The income Tax returns of the Company and its Subsidiaries for the immediately preceding three (3) years have not been audited by the appropriate Tax authorities except for the periods and to the extent set forth in Schedule 9.11.3, and neither the Company nor any Subsidiary has received from the Tax authorities of any country, state, county, local or other jurisdiction any written notice of underpayment of Taxes or other deficiency which has not been paid or any objection to any return or report filed by the Company or any Subsidiary. There are outstanding no agreements or waivers extending the statutory period of limitations applicable to any Tax return or report. 9.11.4. Consolidated group ("integration fiscale") Neither the Company nor any Subsidiary is or was a member of an affiliated group of corporations for Tax purposes that filed a consolidated Tax return on which the statute of limitations does not bar a Tax assessment. 9.11.5. Tax basis Schedule 9.11.5 sets forth the following information with respect to the Company and each Subsidiary as of the most recent practicable date: (i) the original and adjusted Tax basis of its assets; (ii) the amount of any net operating loss, net capital loss, unused investment or other credit, unused foreign Tax or excess charitable contribution allocable to the Company and each Subsidiary; and (iii) the amount of any deferred gain or loss allocable to the Company and each Subsidiary arising out of any deferred intercompany transaction. 9.11.6. Other The Vendor represents that neither the Company nor any Subsidiary is a company for any Tax evasion purpose, whether in France or elsewhere. 9.12 Representations and warranties relating to customers, suppliers, --------------------------------------------------------------- dealers and distributors ------------------------ 9.12.1. Customers and Suppliers 40 Except to the extent arising out of the announcement of the transactions contemplated by this Agreement, neither the Company nor any Subsidiary has been notified by any of the twenty-five (25) largest customers by sales value or any of the twenty-five (25) largest suppliers by purchase value that they will not continue to be respectively customers or suppliers of the respective businesses of the Company and its Subsidiaries at substantially the same level of purchases or the same quantity and quality of goods at competitive prices as heretofore. 9.12.2. Dealers and Distributors Except to the extent arising out of the announcement of the transactions contemplated by this Agreement, neither the Company nor any Subsidiary has been notified by any of the twenty-five (25) largest dealers, distributors and franchisees of the Company and each Subsidiary by value that they will not continue to be dealers, distributors and franchisees to the respective businesses of the Company and its Subsidiaries and will not continue to supply the respective businesses of the Company and its Subsidiaries with substantially the same quantity and quality of services at competitive prices. 9.13 Scope of the Representations ---------------------------- All statements and information contained in the Disclosure Schedule delivered by or on behalf of the Vendor shall be deemed to be representations and warranties by the Vendor. 10. INDEMNITY --------- 10.1 Principle of Indemnification ---------------------------- The Vendor shall indemnify and hold harmless the Purchaser and/or the Company or any Subsidiary (if Purchaser so requests) and the successors and assigns of any of the foregoing from and against all Losses (as defined below) asserted against, resulting to, imposed upon or incurred by the Purchaser, the Company and/or any Subsidiary by reason of, arising out of or resulting from the inaccuracy or breach of any representation or warranty or any covenant of the Vendor contained in or made pursuant to this Agreement. As used in this Clause 10, the term "Loss" as it relates to breaches of representations and warranties or covenants shall include (i) all debts, liabilities and obligations; and (ii) all losses, damages, judgements, awards, settlements, costs and expenses (including, without limitation, interest (including prejudgment interest in any litigated matter), penalties, court costs and reasonable attorneys' fees and expenses). Notwithstanding the foregoing, any indemnification for a breach of the representations and warranties set forth in Clause 9.5.3 or for the matters specified in Clause 13 shall be governed by Clause 13. 41 Without prejudice to the foregoing and for the avoidance of doubt, the measure of damages of the Purchaser or the Company and/or any Subsidiary as a result of a Loss shall not be calculated by reference to any loss in the value of the Shares purchased pursuant to this Agreement, or by application of any multiple in respect thereof, but shall instead be calculated in accordance with the Clauses below on a "franc for franc" basis. The decision of the Purchaser to proceed to the Completion despite the initiation by Georgette Potain of a summary procedure on the ground of an allegedly existing or imminent rescission claim regarding the sale of her Company Shares to U.E.I and Unidev shall in no way be considered as a waiver to the statutory and contractual rights of the Purchaser under this Agreement. Accordingly, the provisions of this Agreement and in particular Clauses 10.3.4(i) and 10.4 shall apply in order to indemnify the Purchaser, the Company and/or any Subsidiary in respect of any possible rescission action or other procedures which may be started by Georgette Potain, including, without limitation, any recourse exercised against the order rendered by the summary judge on May 4, 2001 rejecting her claim for judicial escrow on the Company Shares she previously owned. 10.2 Method of calculation --------------------- 10.2.1. Remedies The Purchaser acknowledges and agrees that the only right and remedy which shall be available to it in connection with or arising out of or related to any breach of any representation and warranty contained in this Agreement shall be damages under the terms and conditions set out in this Agreement except in case of dol (as such term is defined under French law). 10.2.2. Deductions from Loss In order to identify and calculate the amount of the Loss, the following shall be taken into account. To the extent not previously applied, the amounts relating to the following items shall be deducted from the amount of the corresponding Loss: (i) the amount of any provision booked in the Accounts and the Completion Financial Statements that relates to any fact, event, matter or circumstance that was accounted in the Accounts or the Completion Financial Statements in the same account category (e.g., stock, trade debts, --- fixed assets, provisions for risks, etc.) as the fact, event, matter or circumstance giving rise to the Loss; (ii) any recovery of a sum that had been previously written off against a reserve established in the Accounts or the Completion Financial Statements in the same account category as the fact, event, matter or circumstance giving rise to the Loss; and 42 (iii) the amount of any net reduction in any applicable Tax liability actually realised by the Purchaser, the Company or any Subsidiary indemnified in connection with the satisfaction by the Vendor of the Loss with respect to which indemnification is sought hereunder; provided, however, that the amount of such offset shall be adjusted by the amount of the actual Tax liability incurred by the Purchaser, the Company or any Subsidiary indemnified upon receipt of the payment of the Loss (taking into account any net operating loss, capital loss or credit carryover of such party). 10.2.3. Change to Tax position Any Loss resulting from a Tax reassessment of the expenses or revenue, which materializes in (i) a mere interval of the time or a shift of a Tax from one financial year to another, or (ii) a time-lag in a charge from one financial year to the next, or which would result in (iii) a Tax credit relating to a right to a deduction or imputation without any limitation in time, shall only give rise to an indemnification up to the amount of penalties, fines, increases or late interest due by the Company and its Subsidiaries. In respect of VAT, the adjustments relating to a Tax which can be deducted from or recovered from third parties shall not be taken into consideration. However, the amount of the penalties, fines, increases or late interest due by the Company and its Subsidiaries shall be taken into account in the Loss. 10.2.4. Indemnification by a third party The amount of any Loss for which indemnification is provided under this Clause 10 shall be net of any amounts actually recovered from a third party by the Purchaser, the Company or any Subsidiary seeking indemnification hereunder under insurance policies or otherwise with respect to such Loss; provided, however, that the amount of such Loss will not be reduced by the amount of any net increase in insurance premiums through the applicable duration as specified in Clause 10.4 which the Purchaser, the Company or any Subsidiary can demonstrate has occurred or is reasonably likely to occur as a result of such claim (whether by prospective or retroactive premium adjustment); and provided further that this Clause 10.2.4 will not be applicable to the extent it constitutes an improper waiver of the insurer's rights of subrogation against the Vendor. Notwithstanding the foregoing, the Purchaser, the Company or any Subsidiary seeking indemnification hereunder will not have any obligation to seek insurance recovery in respect of Losses to the extent such recovery would be precluded or would preclude other (i) pending claims or (ii) claims reasonably likely, based upon past claims experience, to be submitted as being within the applicable policy coverage limit. Subject to the foregoing, the Purchaser, the Company or any Subsidiary seeking indemnification hereunder shall use commercially reasonable efforts to effect the recovery from a third party as contemplated by this Clause 10.2.4. 43 10.2.5. Net Loss The amount of any Loss calculated in accordance with the provisions of this Clause 10.2 shall be referred to as "Net Loss". 10.3 Limitations on liability-Exceptions ----------------------------------- 10.3.1. Individual Exemption The Vendor shall not be liable, and therefore shall not be required to indemnify or pay, in respect of a Loss related to a breach of a representation and warranty pursuant to a Notified Claim, in the event that such Loss results from a single event or fact and the amount of such Loss does not exceed One Hundred Fifty Thousand French Francs (FRF 150,000) before the calculation process set out in Clause 10.2 has been applied. All Losses having a similar initiating fact or cause shall be taken into account as one cumulated amount (the "Individual Exemption"). 10.3.2. Global Exemption Except as provided below, the Vendor, with respect to a breach or breaches of representations and warranties, shall not be liable to pay all or part of a Loss hereunder, pursuant to a Notified Claim, unless the amount of such Loss, together with the Losses relating to previous Notified Claims, shall be more than or equal to Thirty Million French Francs (FRF 30,000,000) (the "Global Exemption"). In respect of any Losses, unless and to the extent that the aggregate amount of all Losses for which the Vendor would otherwise be liable under this Clause 10 exceeds the Global Exemption, then the Vendor shall only be liable for those amounts exceeding such Global Exemption, subject to Clause 10.3.1. 10.3.3. Ceiling Except as provided below, the total cumulated amount of payments which the Vendor may be obliged to make to the Purchaser, the Company and/or any Subsidiary in accordance with this Clause 10 for breaches of representations and warranties shall not exceed Four Hundred Thirty Million French Francs (FRF 430,000,000). 10.3.4. Exceptions / Specific Indemnification Notwithstanding any provision herein contained, it is hereby agreed that: (i) the Vendor shall have liability for any breach of the representations and warranties set forth in Clauses 9.1, 9.2.1 to 9.2.3, 9.3.1 (strictly 44 limited to the ownership of the shares of the Subsidiaries), 9.3.3. and 9.7.3 without any application of the above-mentioned exemptions and ceiling set forth in Clauses 10.3.1 to 10.3.3; (ii) the Vendor shall have liability for any Loss relating to a dol (as such term is defined under French law) for which the Vendor shall indemnify and hold harmless the Purchaser, the Company and/or any Subsidiary without any application of the above-mentioned exemptions and ceiling set forth in Clauses 10.3.1 to 10.3.3; (iii) the Vendor shall have liability for any Loss relating to any participation of the Company or any Subsidiary existing on or prior to the date hereof in unlimited liability entities for which the Vendor shall indemnify and hold harmless the Purchaser, the Company and/or any Subsidiary without any application of the above-mentioned exemptions and ceiling set forth in Clauses 10.3.1 to 10.3.3; (iv) the Vendor shall have liability for any Loss relating to the pending litigation described in Schedule 9.9.2 (the Rentakran litigation) for which the Vendor shall indemnify and hold harmless the Purchaser, the Company and/or any Subsidiary without any application of the above mentioned exemptions and ceiling set forth in Clauses 10.3.1 to 10.3.3, provided that in the event the Company exercises its option to repurchase any cranes that are subject to the Rentakran litigation, as provided in the underlying buy back agreements with Rentakran, the Vendor shall be entitled to the net profit from any subsequent sale of the crane(s) that is consummated within a twenty-four (24) month period from the date of the recovery of the crane(s); the Purchaser and the Company will use commercially reasonable efforts to recover and sell such cranes; (v) the Vendor shall have liability for any Loss relating to the dismissal of directors as contemplated by Clause 5.3 and the Vendor shall indemnify and hold harmless the Purchaser, the Company and/or any Subsidiary with respect thereto without any application of the above mentioned exemptions and ceiling set forth in Clauses 10.3.1 to 10.3.3; and (vi) the Vendor shall have liability for any breach of the representation and warranty set forth in Clause 9.4.4 as well as any Tax liability that the Purchaser, the Company or any Subsidiary may have for all periods prior to the date hereof which relate to Axiome de Re and/or the arrangements between Axiome de Re and the Vendor, 45 the Vendor's Group, the Company or its Subsidiaries existing on or before the date hereof, without application of the above mentioned exemptions and ceiling set forth in Clauses 10.3.1 to 10.3.3. 10.3.5. Non bis in idem The Purchaser, the Company and/or any Subsidiary (taken as a whole) shall not be entitled to recover from the Vendor under this Clause 10 more than once in respect of the same Loss, and accordingly the Vendor shall not be liable under this Clause 10 if and to the extent that the Loss is or has been recovered from the Vendor following any claim whatsoever made by the Purchaser, the Company and/or any Subsidiary under any ground other than under this Clause 10. 10.3.6. Variation The Vendor shall not be liable for, nor shall it be obliged to pay, all or any part of any Loss arising under a Notified Claim (as defined herein) in so far as the amount of such Loss results solely from a causatory fact or event which is: (i) the adoption of, or modification of, the legal requirements occurring after the date hereof, including those having a retroactive effect; or (ii) any change in the accounting principles of the Company or any Subsidiary made by the Purchaser. Notwithstanding the foregoing, this Clause 10.3.6 shall be inapplicable in the event that the changes contemplated by subparagraphs (i) or (ii) were effected to remedy any breach (which existed on the date hereof) in a representation or warranty contained in this Agreement. 10.3.7. Mitigation of the Loss by the Purchaser and the Vendor In the case where a Loss would give rise to a payment of compensation by the Vendor, the Purchaser shall, and, after a Notified Claim has been submitted, the Purchaser and the Vendor shall cooperate to, take reasonable steps and provide all reasonable assistance, so far practicable and at the sole cost of the Vendor, to avoid or mitigate any Loss which in the absence of mitigation might give rise to a liability in respect of any claim under Clause 10. If a breach of any of the representations occurs, without prejudice to the right of the Purchaser to claim damages under Clause 10, to the extent that a breach of any of the representations is capable of being remedied, the Vendor shall be afforded a reasonable opportunity to remedy the matter. The remedy may include the 46 payment by the Vendor to the Purchaser of such compensation as shall place the Purchaser in an equivalent position to that in which it would have been had such breach of the representations not occurred. 10.4 Duration of a request made by notified claim -------------------------------------------- Except as provided in Clause 13, in order to be valid and qualified for indemnification hereunder, a Notified Claim with respect to any Loss must be delivered to the Vendor by the Purchaser within sixteen (16) months following the date hereof, except for claims relating to: . taxation, including, without limitation, Tax matters contemplated by Clause 10.3.4(vi), and social security matters, for which the Notified Claim shall be delivered no later than ten (10) days following the expiration of the applicable statute of limitations; . any matter referred to in Clauses 9.1, 9.3.1 (strictly limited to the ownership of the shares of the Subsidiaries), 9.3.3 and 10.3.4(ii), for which the Notified Claim shall be delivered no later than ten (10) days following the expiration of the applicable statute of limitations; and . any matter referred to in Clause 10.3.4(iv), for which the Notified Claim shall be delivered no later than three (3) years from the date hereof. After the expiration of the applicable survival period, the Vendor will be released from all non-Notified Claims related to breaches of representations and warranties covered by this Clause 10. Once a Notified Claim has been made prior to the expiration of the survival period, such claim shall be preserved despite the subsequent termination of the survival period. 10.5 Indemnification Security ------------------------ 10.5.1. Definitions For purposes of this Clause 10.5, the following capitalized terms shall have the following meanings: (a) "Period 1" means the period commencing on the date hereof and ending at 11:59 p.m. (Paris time) on the day immediately preceding the date which is sixteen (16) months from the date hereof. (b) "Period 2" means the period commencing at 12:00 a.m. (Paris time) on the day immediately following Period 1 and ending at 47 11:59 p.m. (Paris time) on the day immediately preceding the date which is twenty-four (24) months from the date hereof . (c) "Period 3" means the period commencing at 12:00 a.m. (Paris time) on the day immediately following Period 2 and ending at 11:59 p.m. (Paris time) on the day immediately preceding the date which is thirty-six (36) months from the date hereof. (d) "Period 4" means the period commencing at 12:00 a.m. (Paris time) on the day immediately following Period 3 and ending at 11:59 p.m. (Paris time) on the day immediately preceding the date which is forty-eight (48) months from the date hereof . (e) "Consolidated Net Worth" means the sum of (i) the paid up share capital, (ii) plus the capital surplus (primes d'emission, de fusion, d'apport), (iii) plus the consolidated reserves, (iv) plus the exchange rate difference (ecarts de conversion), (v) plus the consolidated profits not yet allocated, (vi) less the accumulated consolidated losses of prior years and (vii) plus the consolidated net profit (or less the consolidated net loss) for the current period of the Vendor and its subsidiaries, determined in accordance with French generally accepted accounting principles applied on a consistent basis with past practice. The Vendor shall certify in writing to the Purchaser the Vendor's Consolidated Net Worth as of the end of each calendar year no later than 120 days after such year end. 10.5.2. Indemnification Security During Period 1 At any such time during Period 1 that the Consolidated Net Worth is less than Five Hundred Thirty-Seven Million Five Hundred Thousand French Francs (FRF 537,500,000), the Vendor shall immediately secure for the benefit of the Purchaser, the Company and its Subsidiaries a letter of credit (from a commercial bank with a combined capital and surplus of at least Ten Billion French Francs (FRF 10,000,000,000)) (a "Letter of Credit") in an amount equal to Four Hundred Thirty Million French Francs (FRF 430,000,000) less the amount of any Notified Claims which have been paid by the Vendor prior to such time. Such Letter of Credit shall remain in full force and effect during the unexpired term of Period 1. 10.5.3. Indemnification Security During Period 2 At any such time during Period 2 that the Consolidated Net Worth is less than Three Hundred Sixty-Two Million Five Hundred Thousand French Francs (FRF 362,500,000), the Vendor shall immediately secure for the benefit of the Purchaser, the Company and its Subsidiaries a Letter of Credit (which shall replace and be in lieu of any Letter of Credit obtained during Period 1) in an 48 amount equal to Two Hundred Ninety Million French Francs (FRF 290,000,000) less the amount of any Notified Claims which have been paid by the Vendor prior to such time. Such Letter of Credit shall remain in full force and effect during the unexpired term of Period 2. 10.5.4. Indemnification Security During Period 3 At any such time during Period 3 that the Consolidated Net Worth is less than Three Hundred Sixty-Two Million Five Hundred Thousand French Francs (FRF 362,500,000), the Vendor shall immediately secure for the benefit of the Purchaser, the Company and its Subsidiaries (to the extent the same does not already exist) a Letter of Credit (which shall replace and be in lieu of any Letter of Credit obtained during any prior period) in an amount equal to One Hundred Fifty Million French Francs (FRF 150,000,000) less the amount of any Notified Claims which have been paid by the Vendor prior to such time. Such Letter of Credit shall remain in full force and effect during the unexpired term of Period 3. 49 10.5.5. Indemnification Security During Period 4 At any such time during Period 4 that the Consolidated Net Worth is less than Three Hundred Sixty-Two Million Five Hundred Thousand French Francs (FRF 362,500,000), the Vendor shall immediately secure for the benefit of the Purchaser, the Company and its Subsidiaries (to the extent the same does not already exist) a Letter of Credit (which shall replace and be in lieu of any Letter of Credit obtained during any prior period) in an amount equal to Seventy-Five Million French Francs (FRF 75,000,000) less the amount of any Notified Claims which have been paid by the Vendor prior to such time. Such Letter of Credit shall remain in full force and effect during the unexpired term of Period 4. 11. PROCEDURE TO MAKE A CLAIM ------------------------- Except for claims relating to breaches of the representations and warranties set forth in Clause 9.5.3, which shall be governed by Clause 13 hereof, any demand or claim in respect of the indemnification of a Loss by the Purchaser, the Company and/or any Subsidiary against the Vendor shall be notified in writing to the Vendor and shall specify the basis, acts or events on which it is based, indicating the amounts claimed in respect of the Loss (if such amount is known), and shall be submitted together with such documents available and appropriate to evidence the existence of the Loss (hereafter referred to as "Notified Claim"). Except as otherwise provided above, all Notified Claims submitted to the Vendor shall be subject to the following procedures. 11.1 Notified Claims based on third party proceedings ------------------------------------------------ 11.1.1. In the event that the grounds for a Notified Claim are (i) a demand or claim in writing notified by a third party or (ii) judicial or arbitral proceedings or any other proceedings commenced or ongoing (for example in relation to a counterclaim) by a third party, against the Purchaser, the Company or any Subsidiary after the date hereof and giving rise to, or which may give rise to, a Loss (hereafter referred to as "Third Party Proceedings"): . The Purchaser, the Company and/or any Subsidiary shall submit the Notified Claim to the Vendor promptly but no more than thirty (30) days after becoming aware of the matter which might give rise to a Loss (and no later than within eight (8) days for matters concerning Taxes); provided, however, that the failure to provide such notice shall not affect the Purchaser's rights hereunder, except to the extent that the Vendor is materially prejudiced thereby. . The Vendor shall promptly, but not more than thirty (30) days following receipt of the Notified Claim, notify the Purchaser of its view as to whether it wishes to object to the basis of the Notified Claim or not. This period shall be reduced in the circumstances where necessary to enable the Purchaser, the Company or any Subsidiary to reply in due time (such as for Tax matters where 50 such period shall be reduced to fifteen (15) days or court proceedings where such period shall be reduced appropriately). In the absence of notification by the Vendor within the specified time frame, the Purchaser shall then submit again to the Vendor a second Notified Claim for the Vendor to submit its views. In the absence of notification of its views by the Vendor within eight (8) days following the sending of the second Notified Claim, then the Vendor shall be deemed not to have objected to the Notified Claim. 11.1.2. In the case where the Vendor has remained silent or has replied to the Purchaser in the period stated in Clause 11.1.1 and has stated that it does not object to the grounds for the Notified Claim: . The Vendor (at its own expense) shall have the right to participate (together with its advisors) in the defense of the interests of the Purchaser, the Company or any Subsidiary in respect of the Third Party Proceedings. The Purchaser and the concerned Company or Subsidiary shall take reasonable steps to ensure that the Vendor shall be included at each important step of the proceedings and, in particular, the Purchaser, the Company or Subsidiary shall seek the approval of the Vendor in respect of any strategic choices relating to the defense, which approval shall not be unreasonably withheld, delayed or conditioned. . Notwithstanding the foregoing, the Vendor (at its expense) shall have the right at its request to independently organize the defense of the Purchaser, the Company or any Subsidiary with respect to any claim relating to Tax matters. The Vendor shall take reasonable steps to ensure that the Purchaser, the Company or any Subsidiary, as the case may be, shall be informed and consulted at each important step of the proceedings. 11.1.3. In the case where the Vendor has replied to the Purchaser in the period stated in Clause 11.1.1 and has stated that it objects to the grounds for the Notified Claim: . The Vendor shall be deemed to have contested the Notified Claim, in which case the Purchaser, the Company or any Subsidiary may initiate and notify the commencement of proceedings concerning such Notified Claim (the "Proceedings Notice"). Such proceedings shall be commenced within six (6) months from the date of the receipt of the Vendor's reply. In the event the Purchaser, the Company or any Subsidiary does not commence said proceedings within such six-month period, the Purchaser shall be deemed to have irrevocably waived its rights with respect to the Notified Claim in question. 51 . Thereafter, reasonable steps shall be taken to inform the Vendor of each important step of the proceedings in respect of the Third Party Proceedings. The Purchaser, the Company or any Subsidiary during the Third Party Proceedings shall take charge of the defense of the matter and the management of the judicial, arbitral or other proceedings and shall conduct the litigation in respect of the Third Party Proceedings. However, the Purchaser, the Company or any Subsidiary shall not draw up, agree, settle, defend or commence any appeal or counterclaim and assert all the elements and means of defense in respect of the Third Party Proceedings, without the Vendor having been consulted; provided, however, that the Purchaser shall be entitled to enter into a settlement or to take such other action as it shall determine in its sole discretion and notwithstanding any position the Vendor may have taken after being so consulted. 11.2 Notified Claims based upon a Private Claim ------------------------------------------ 11.2.1. In the case where a Notified Claim gives rise or which may give rise to a Claim in respect of the Purchaser, the Company or any Subsidiary and which does not involve Third Party Proceedings (hereafter referred to as a "Private Claim"): . The Purchaser shall submit the Notified Claim to the Vendor promptly but no more than thirty (30) days after becoming aware of the matter which might give rise to a Loss (and no later than within eight (8) days for matters concerning Taxes); provided, however, that the failure to provide such notice shall not affect the Purchaser's rights hereunder, except to the extent that the Vendor is materially prejudiced thereby. . The Vendor shall promptly, but not more than thirty (30) days following receipt of the Notified Claim, notify the Purchaser of its view as to whether it wishes to object to the basis of the Notified Claim or not. This period shall be reduced in the circumstances where necessary to enable the Purchaser, the Company or any Subsidiary to reply in due time (such as for Tax matters where such period shall be reduced to fifteen (15) days or court proceedings, where such period shall be reduced appropriately). In the absence of notification by the Vendor within the specified time frame, the Purchaser shall then submit again to the Vendor a second Notified Claim for the Vendor to submit its views. In the absence of notification of its views by the Vendor within eight (8) days following the sending of the second Notified Claim, then the Vendor shall be deemed not to have objected to the Notified Claim. 52 In the case where the Vendor either fails to respond in a timely manner or states explicitly that it does not object to the grounds for the Notified Claim, the amount of Loss shall be payable by the Vendor under the terms of Clause 12 below. 11.2.2. In the case where the Vendor has replied to the Purchaser in the period stated in Clause 11.2.1 stating that it objects to the grounds for the Notified Claim or in the absence of any settlement between the Purchaser, the Company or any Subsidiary and the Vendor, the Purchaser may take legal action against the Vendor in connection with the Notified Claim under Clause 15.12. Such proceedings shall be commenced within six (6) months from the date of the receipt of the Vendor's reply. In the event the Purchaser, the Company or any Subsidiary does not commence said proceedings within such six-month period, the Purchaser shall be deemed to have irrevocably waived its rights with respect to the Notified Claim in question. 11.3 Access to information --------------------- On condition that the Vendor has agreed to provide indemnification to the Purchaser, the Company or any Subsidiary within the periods set out at Clauses 11.1.1 and 11.2.1 above, the Purchaser and the Vendor shall cooperate with each other in all reasonable respects from the date the Notified Claim relating to Third Party Proceedings or relating to a Private Claim is submitted. The Purchaser undertakes to (i) send to the Vendor, without undue delay, all information and documents relating to the Notified Claim within its possession and (ii) permit the Vendor to consult freely all relevant information or documents held by it, the Company or any Subsidiary, and conduct all reasonable investigations in the Company and any Subsidiary, in relation to the Third Party Proceedings or to a Private Claim, to assist in reaching a full understanding of the conditions and circumstances of the Notified Claim. The Vendor shall keep strictly confidential all information and documents which it may receive in the performance of this Agreement. 53 12. PAYMENT OF A CLAIM ------------------ 12.1 Private Claim ------------- 12.1.1. In the event that the Vendor is required to pay an indemnity in respect of a debt which has become unrecoverable, the Purchaser shall allow the Vendor to take action for its own account to recover such debt from the debtor. In the case of a Notified Claim which has been accepted in accordance with the provisions of Clause 11.2, the amounts corresponding to that Private Claim shall be due and payable by the Vendor immediately. 12.1.2. In the event that a legal action has been commenced against the Vendor by the Purchaser in accordance with Clause 11.2.2, the Notified Claim shall become payable (i) where there is an agreement between the Purchaser and the Vendor as a result of a settlement in accordance with article 2044 of the French Code Civil or (ii) if a judicial decision with the "execution provisoire" has been rendered in the litigation proceedings regarding such Notified Claim between the Vendor and the Purchaser. 12.2 Claim in respect of Third Party Proceedings ------------------------------------------- 12.2.1. In the case where the Vendor has not responded to the Purchaser during the period referred to under Clause 11.1.1, or in the case where the Vendor has indicated to the Purchaser that it does not object to the grounds for the Notified Claim in connection with a Third Party Proceeding, a Notified Claim will be due and payable (i) on the date of a judgement or administrative decision with the "execution provisoire" against the Company or any Subsidiary or a non retractable non appealable arbitral decision against the Company or any Subsidiary or (ii) on the date on which a settlement is completed (relating to legal proceedings by a third party), but (iii) in any case not before the actual payment by the Purchaser, the Company or any Subsidiary of the amount due under the Third Party Proceedings; provided, however, that in any such case the Purchaser shall be entitled to be reimbursed for costs, fees, expenses and the like falling within the definition of Loss incurred in connection with the Notified Claim as such costs, fees and expenses are incurred. 12.2.2. In the event that the Purchaser has initiated and notified the Vendor of a Notified Claim in respect of any Third Party Proceedings to which the Vendor has objected, the Claim shall become payable under this Agreement on the latest of: . the date of delivery of a judgement with the "execution provisoire" by a court against the Vendor, or . the date when the Vendor has agreed to a settlement in accordance with Article 2044 of the French Code Civil with respect to its obligations relative to the Notified Claim; but in either case above not before the actual payment by the Purchaser, the Company or 54 any Subsidiary of the amount due under the Third Party Proceeding. 12.3 Reimbursement ------------- In accordance with Clause 10.2, in order to determine the final amount of the Notified Claim, if one of the amounts to deduct from a Loss is only known after the Notified Claim has been paid by the Vendor to the Purchaser, the Company or Subsidiary, the Purchaser, the Company or Subsidiary shall reimburse to the Vendor an amount equal to the difference between (i) the amounts paid by the Vendor in relation to such Notified Claim and (ii) the amounts which would have been paid if the amount to be deducted from the Loss in accordance with Clause 10.2 had been known before the date of payment of such Net Loss. When a Loss in respect of which payment was made by the Vendor to the Purchaser, the Company or any Subsidiary for an amount corresponding to the Net Loss is reduced or recovered, in whole or in part, from a third party by the Purchaser, the Company or its Subsidiaries no later than the two (2) year anniversary of the date of payment of the Net Loss, the Purchaser shall pay to the Vendor an amount corresponding to the net amount received from third parties or an amount corresponding to the reduction of the Loss in accordance with this Agreement. 13. ENVIRONMENTAL MATTERS --------------------- 13.1 Environmental Claim Notices --------------------------- After the date hereof, the Purchaser shall have the right to deliver one or more written claims (each, an "Environmental Claim Notice") to the Vendor specifying any and all amounts necessary to indemnify the Purchaser and/or the Company or any Subsidiary for the Environmental Non-Compliance Costs arising from or related to Environmental Non-Compliance Conditions that were not set forth in the Environmental Non-Compliance Schedule (the "Unknown Environmental Non-Compliance Costs"). Any Environmental Claim Notice delivered to the Vendor pursuant to this Clause 13.1 shall set forth in reasonable detail the nature of the claim and be accompanied by reports of Purchaser's Environmental Consultant with respect to the Environmental Non-Compliance Conditions, which reports shall provide reasonable backup for such claims. 13.2 Indemnification --------------- The Vendor shall, for a period of three (3) years from the date hereof, indemnify and hold harmless the Purchaser and/or the Company or any Subsidiary (if the Purchaser so requests) and the successors and assigns of any of the foregoing (the "Purchaser Indemnified Parties") from and against any breach of the representations and warranties set forth in Clause 9.5.3 and all Environmental 55 Non-Compliance Costs (except those specifically disclosed as budgeted capital expenditures on Schedule 6.2) asserted against, resulting to, imposed upon or incurred by the Purchaser Indemnified Parties, subject to the limitations described in Clause 13.3. A notice of a claim hereunder shall be submitted in and subject to payment substantially in accordance with the provisions of Clauses 11 and 12 except as otherwise expressly contemplated in this Clause 13. The Vendor's obligation to provide indemnification pursuant to this Clause 13.2 shall continue beyond the three-year period specified herein to the extent the notice of claim is submitted prior to the end of such three-year period. In calculating the Known Environmental Non- Compliance Costs and the Unknown Environmental Non-Compliance Costs, the provisions of Clauses 10.2.2(i) and (iii) shall apply. 13.3 Allocation of Liability ----------------------- 13.3.1. Known Environmental Non-Compliance Costs Subject to Clause 13.3.3, the Purchaser and the Vendor agree that Known Environmental Non-Compliance Costs shall be borne as follows: (a) The Vendor shall be responsible for one hundred percent (100%) of the first Five Million French Francs (FRF 5,000,000) of Known Environmental Non-Compliance Costs; (b) The Purchaser shall be responsible for twenty-five percent (25%) and the Vendor shall be responsible for seventy-five percent (75%) of Known Environmental Non- Compliance Costs to the extent such costs exceed Five Million French Francs (FRF 5,000,000) and are less than or equal to Fifteen Million French Francs (FRF 15,000,000); and (c) The Vendor shall be responsible for one hundred percent (100%) of Known Environmental Non-Compliance Costs to the extent that such costs exceed Fifteen Million French Francs (FRF 15,000,000) (for the portion exceeding Fifteen Million French Francs (FRF 15,000,000)). 13.3.2. Unknown Environmental Non-Compliance Costs Subject to Clause 13.3.3, the Purchaser and the Vendor agree that Unknown Environmental Non-Compliance Costs shall be borne as follows: (a) The Purchaser shall be responsible for one hundred percent (100%) of the first One Million French Francs (FRF 1,000,000) of Unknown Environmental Non-Compliance Costs; (b) The Vendor shall be responsible for one hundred percent (100%) of Unknown Environmental Non-Compliance Costs to the extent 56 such costs exceed One Million French Francs (FRF 1,000,000) and are less than or equal to Four Million French Francs (FRF 4,000,000); and (c) The Purchaser shall be responsible for twenty-five percent (25%) and the Vendor shall be responsible for seventy-five percent (75%) of Unknown Environmental Non-Compliance Costs to the extent such costs exceed Four Million French Francs (FRF 4,000,000). 13.3.3. Limitation on the Purchaser's Obligation for Environmental Costs Notwithstanding anything to the contrary set forth in Clauses 13.3.1 and 13.3.2, in no event shall the Purchaser's obligation with respect to Known Environmental Non-Compliance Costs and Unknown Environmental Non-Compliance Costs exceed Ten Million French Francs (FRF 10,000,000) in the aggregate. In the event that the Purchaser's obligation reaches said Ten Million French Francs (FRF 10,000,000) limit, the Vendor shall thereafter be responsible for one hundred percent (100%) of all additional Known Environmental Non-Compliance Costs and Unknown Environmental Non-Compliance Costs. 13.3.4. Limitation of the Vendor's Obligation for Environmental Costs The total amount for which the Vendor may be obligated to provide indemnification under this Clause 13 shall not exceed One Hundred Million French Francs (FRF 100,000,000). For the avoidance of doubt, this amount shall be included in the ceiling provided under Clause 10.3.3 so that the total amount due by the Vendor under Clauses 10 and 13 shall not exceed the amount indicated in Clause 10.3.3. Furthermore, once the ceiling provided under this Clause 13.3.4 has been reached, the Purchaser may not claim any other indemnification for environmental matters under this Agreement even if the ceiling under Clause 10.3.3 has not been reached. 13.3.5. Environmental Procedures Any investigation, removal, remedial, cleanup, corrective or compliance action relating to any Environmental Non-Compliance Condition (any "Remedial Action") shall be mutually agreed upon in good faith between the Purchaser and the Vendor. The Purchaser shall keep the Vendor reasonably apprised of any material developments relating to any Remedial Action, including providing the Vendor with copies of material reports, agency notices, correspondence to and from Governmental Entities and other material documents related to such Remedial Action. 14. COVENANT - COLLECTION OF RECEIVABLES ------------------------------------ 57 Purchaser shall, for at least sixteen (16) months from the date hereof, take customary action - at least equal to the action generally used by the Company and its Subsidiaries in connection with the collection of their accounts receivables before the date hereof - in order to collect in a timely manner the accounts receivables of the Company and the Subsidiaries existing as of the date hereof as reflected in the Accounts and/or in the Completion Financial Statements. 15. GENERAL ------- 15.1 Successors and Assigns ---------------------- The Vendor may not, without the prior written consent of the Purchaser, assign any of its obligations under this Agreement, nor any benefit arising under or out of this Agreement. The Purchaser may assign its rights under this Agreement to any party controlled or controlling the Purchaser with the meaning of Article L. 233-3 of the French Commercial Code prior to the Completion Date, provided that the Purchaser shall remain jointly and severally liable for its obligations hereunder with such party. Thereafter, the Purchaser may assign its rights under this Agreement to any third party subject to the Vendor's prior consent, which consent shall not be unreasonably withheld, and to any lender group providing financing for the Purchaser (or any collateral agent for such lender group); in such a case the representations and warranties shall remain in full force and effect in favour of the assignee notwithstanding any subsequent assignment of the Shares or any other portion of the business of the Company or any Subsidiaries and the Purchaser shall remain a party to this Agreement and the Ancillary instruments. 15.2 Variation --------- No variation of this Agreement shall be effective unless in writing and signed by or on behalf of each of the Parties to this Agreement. 58 15.3 Prior Agreements ---------------- This Agreement (including the Ancillary Instruments) cancels and replaces all prior agreements, arrangements and communications whether oral or written with respect to the subject matter hereof. 15.4 Entire Agreement ---------------- This Agreement including the Disclosure Schedule (as well as the Ancillary Instruments) contains the whole agreement among the Parties with respect to the subject matter hereof. 15.5 Restructuring ------------- Subject to the provisions of Clause 15.1, the rights and obligations of the Parties under this Agreement shall not be affected by any merger or apport partiel d'actif or the transfer of all or part of the assets and liabilities of any of the Parties. 15.6 Further Assurance / Cooperation ------------------------------- From time to time, at the Purchaser's request and without further consideration, the Vendor shall execute and deliver to the Purchaser such documents and take such other action as Purchaser may reasonably request in order to consummate the transactions contemplated hereby. 15.7 Disclosures and Announcements ----------------------------- Announcements concerning the transactions provided for in this Agreement by the Vendor or the Purchaser shall be subject to the approval (which shall not be unreasonably withheld) of the other Party, except that such approval shall not be required as to any statements and other information which either Party may submit due to mandatory disclosure Laws and under any stock exchange rules. In this latter case, the disclosing Party shall, to the extent reasonably practicable, nonetheless inform the other Party of such disclosure before the actual disclosure takes place. 15.8 Waivers ------- A waiver by any Party of any of its rights under this Agreement must, in order to be valid, be made in writing. 59 15.9 Notices ------- Any demand, notice or communication under this Agreement shall be in writing and (i) delivered by hand with acknowledgement of receipt, (ii) sent by registered post with acknowledgement of receipt or telex or facsimile transmission or (iii) sent by private expedited mail courier (such as Federal Express or DHL): . in the case of the Purchaser, to: Manitowoc France SAS c/o The Manitowoc Company, Inc. 500 South 16/th/ Street Manitowoc, Wisconsin 54220 United States of America Attention: Secretary and General Counsel Facsimile: (920) 683-8123 . in the case of the Vendor, to: Legris Industries SA 74 rue de Paris 35000 Rennes France Attention: President Facsimile: +33-2 99 25 56 88 If delivered by hand, such communication shall be deemed delivered upon actual receipt; if delivered by telex or facsimile transmission, such communication shall be deemed delivered the next Business Day after transmission (and sender shall bear the burden of proof of delivery); if sent by expedited courier pursuant to this clause, such communication shall be deemed delivered upon receipt; and if sent by registered post pursuant to this clause such communication shall be deemed delivered as of the date of delivery indicated on the receipt issued by the relevant postal service, or, if the addressee fails or refuses to accept delivery, as of the date of such failure or refusal. Any Party may change its address for purposes of this Agreement by giving notice thereof in accordance with this Clause 15.9. 15.10 Expenses and taxes ------------------ Each Party hereto shall bear its own fees and expenses (including intermediaries' fees) in connection with this Agreement and the transactions contemplated herein as well as any taxes required by Law to be paid by such Party; provided, however, that the Purchaser shall bear the transfer taxes associated with the sale of the Shares as per Article 726 of the French Tax Code. 15.11 Governing Law ------------- 60 This Agreement is governed by French law. 15.12 Competent Court --------------- All disputes, controversies or claims arising out of or in connection with the existence, validity, interpretation or performance of the present agreement shall be finally settled by the Tribunal de Commerce de Paris. 15.13 Parties in Interest ------------------- This Agreement shall be binding upon, inure to the benefit of, and be enforceable by the Vendor, the Purchaser, the Company, the Subsidiaries and their respective successors and permitted assigns. Nothing contained herein shall be deemed to confer upon any other person any right or remedy under or by reason of this Agreement. [signature page follows] 61 Signed in Paris, France and Milwaukee, Wisconsin, U.S.A. On May 9, 2001 In three (3) originals LEGRIS INDUSTRIES SA MANITOWOC FRANCE SAS By: /s/ Thierry Perennec By: /s/ Edwin Verhulst -------------------- ------------------ Name: Thierry Perennec Name: Edwin Verhulst Title: Directeur de la strategie et du Title: President developpement The Manitowoc Company, Inc., a Wisconsin company having its executive offices at 500 South 16/th/ Street, Manitowoc, Wisconsin 54220, United States of America, represented by Maurice D. Jones acting as Secretary and General Counsel, (a) hereby guarantees the obligations of the Purchaser hereunder and shall be jointly and severally liable therefor, and (b) in consideration thereof, shall have all rights under this Agreement as though it were the Purchaser hereunder and shall have the right to enforce the provisions of this Agreement as though it were the Purchaser hereunder, including in each case, without limitation, the right to indemnification pursuant to Clauses 10 and 13 hereof. The Manitowoc Company, Inc. and Manitowoc France SAS shall jointly be deemed to be "the Purchaser" for purposes of the application of Clause 10.3.5 of the Agreement. THE MANITOWOC COMPANY, INC. By: /s/ Maurice D. Jones ---------------------------- Name: Maurice D. Jones Title: Secretary and General Counsel Acknowledged on this 9th day of May, 2001. LEGRIS INDUSTRIES SA By: /s/ Thierry Perennec -------------------- Name: Thierry Perennec Title: Directeur de la strategie et du developpment 62 LIST OF SCHEDULES Schedule 5.3: Resignations of Directors of the Company Schedule 5.7: Organization of the Subsidiaries Schedule 5.8: Bank Accounts Schedule 6.2: Budged Capital Expenditures Schedule 7.1: Form of General Release Schedule 9.3.1: Constitution, Existence and Conformity Schedule 9.3.3: Share Capital Schedule 9.4.1: Accounts Schedule 9.4.2: Accounts Receivable Schedule 9.4.3(ii): Increase in Share Capital Schedule 9.4.3(iii): Transfer of Assets Schedule 9.4.3(v): Increase in Compensation Schedule 9.4.3(ix): Labour Disputes or Disturbances Schedule 9.4.3(x): Commitments or Transactions Schedule 9.4.3(xi): Indebtedness for Borrowed Money Schedule 9.4.3(xii): Liens Schedule 9.4.4: Axiome de Re Schedule 9.5.1: Assets Schedule 9.5.2: Properties Schedule 9.5.3: Environmental Issues Schedule 9.5.4: IT and Communications Schedule 9.5.5: Intellectual Property Schedule 9.5.6: Shareholdings Schedule 9.5.7: Business 63 Schedule 9.5.8: Inventory Schedule 9.6.1: Off-Balance Sheet and Other Liabilities Schedule 9.6.3: Subsidies, Support Schedule 9.6.5: Product Warranty and Product Liability Schedule 9.7.1: Material Contracts Schedule 9.7.4: Related Parties' Relationships to the Company and its Subsidiaries Schedule 9.8.1: Labour Matters Schedule 9.8.2: Employee Benefit Plans Schedule 9.8.6: No Triggering of Obligations Schedule 9.8.7: Delivery of Documents Schedule 9.8.9: Employees Schedule 9.9.1: Compliance with Laws Schedule 9.9.2: Litigation Schedule 9.10: Insurance Schedule 9.11.2: Tax Returns Filed/Tax Payments Schedule 9.11.3: Tax Audits Schedule 9.11.5: Tax Basis EX-4.1 3 dex41.txt CREDIT AGREEMENT DATED MAY 9, 2001 ================================================================================ CREDIT AGREEMENT among THE MANITOWOC COMPANY, INC., VARIOUS LENDERS, and BANKERS TRUST COMPANY, as ADMINISTRATIVE AGENT ________________________________ Dated as of May 9, 2001 ________________________________ DEUTSCHE BANC ALEX. BROWN INC., as LEAD ARRANGER and BOOK MANAGER BANC ONE CAPITAL MARKETS, INC., as SYNDICATION AGENT FLEET BANK, N.A., as DOCUMENTATION AGENT ================================================================================ TABLE OF CONTENTS -----------------
Page ---- SECTION 1. Amount and Terms of Credit............................... 1 1.01 The Commitments........................................... 1 1.02 Minimum Amount of Each Borrowing.......................... 4 1.03 Notice of Borrowing....................................... 5 1.04 Disbursement of Funds..................................... 6 1.05 Notes..................................................... 7 1.06 Conversions............................................... 8 1.07 Pro Rata Borrowings....................................... 9 1.08 Interest.................................................. 9 1.09 Interest Periods.......................................... 10 1.10 Increased Costs, Illegality, etc.......................... 12 1.11 Compensation.............................................. 14 1.12 Change of Lending Office; etc............................. 15 1.13 Replacement of Lenders.................................... 15 1.14 Incremental B Term Loan Commitments....................... 17 1.15 Incremental Revolving Loan Commitments.................... 19 1.16 Limitation on Additional Amounts.......................... 21 1.17 Special Provisions Regarding Revolving Loan Commitments and Indemnifying Lenders............................... 21 SECTION 2. Letters of Credit........................................ 25 2.01 Letters of Credit......................................... 25 2.02 Maximum Letter of Credit Outstandings; Final Maturities... 26 2.03 Letter of Credit Requests; Minimum Stated Amount.......... 26 2.04 Letter of Credit Participations........................... 27 2.05 Agreement to Repay Letter of Credit Drawings.............. 29 2.06 Increased Costs........................................... 30 SECTION 3. Commitment Commission; Fees; Reductions of Commitment.... 31 3.01 Fees...................................................... 31 3.02 Voluntary Termination of Unutilized Revolving Loan Commitments............................................ 32 3.03 Mandatory Reduction of Commitments........................ 33 SECTION 4. Prepayments; Payments; Taxes............................. 33 4.01 Voluntary Prepayments..................................... 33 4.02 Mandatory Repayments...................................... 36 4.03 Method and Place of Payment............................... 42 4.04 Net Payments.............................................. 42
(i)
Page ---- SECTION 5. Conditions Precedent to Credit Events on the Initial Borrowing Date........................................... 44 5.01 Effective Date; Notes..................................... 45 5.02 Officer's Certificate..................................... 45 5.03 Opinions of Counsel....................................... 45 5.04 Corporate Documents; Proceedings; etc..................... 45 5.05 Shareholders' Agreements; Tax Sharing Agreements; Existing Indebtedness Agreements....................... 46 5.06 Consummation of the Transaction........................... 46 5.07 Adverse Change, Approvals................................. 47 5.08 Litigation................................................ 48 5.09 Pledge Agreement.......................................... 48 5.10 Security Agreement........................................ 48 5.11 Subsidiaries Guaranty..................................... 49 5.12 Mortgages; Title Insurance; Surveys; Landlord Waivers..... 49 5.13 Financial Statements; Pro Forma Balance Sheet; Projections 50 5.14 Solvency Certificate; Insurance Certificates.............. 50 5.15 Environmental and Hazardous Substance Analyses; etc....... 50 5.16 Fees, etc................................................. 51 SECTION 6. Conditions Precedent to All Credit Events................ 51 6.01 No Default; Representations and Warranties................ 51 6.02 Notice of Borrowing; Letter of Credit Request............. 51 6.03 Regulation U.............................................. 51 SECTION 7. Representations, Warranties and Agreements............... 52 7.01 Organizational Status..................................... 52 7.02 Power and Authority....................................... 52 7.03 No Violation.............................................. 52 7.04 Approvals................................................. 53 7.05 Financial Statements; Financial Condition; Undisclosed Liabilities; Projections............................... 53 7.06 Litigation................................................ 54 7.07 True and Complete Disclosure.............................. 55 7.08 Use of Proceeds; Margin Regulations....................... 55 7.09 Tax Returns and Payments.................................. 55 7.10 Compliance with ERISA..................................... 56 7.11 The Security Documents.................................... 57 7.12 Properties................................................ 58 7.13 Capitalization............................................ 58 7.14 Subsidiaries.............................................. 58 7.15 Compliance with Statutes, etc............................. 58 7.16 Investment Company Act.................................... 59 7.17 Public Utility Holdings Company Act....................... 59 7.18 Environmental Matters..................................... 59
(ii)
Page ---- 7.19 Labor Relations..................................................... 60 7.20 Intellectual Property, etc.......................................... 60 7.21 Indebtedness........................................................ 60 7.22 Insurance........................................................... 60 7.23 Representations and Warranties in Other Documents................... 60 7.24 Subordination....................................................... 61 SECTION 8. Affirmative Covenants.............................................. 61 8.01 Information Covenants............................................... 61 (a) Quarterly Financial Statements............................... 61 (b) Annual Financial Statements.................................. 61 (c) Management Letters........................................... 62 (d) Budgets...................................................... 62 (e) Officer's Certificates....................................... 62 (f) Notice of Default, Litigation and Material Adverse Effect.... 63 (g) Other Reports and Filings.................................... 63 (h) Environmental Matters........................................ 63 (i) Bank Debt Ratings............................................ 64 (j) Other Information............................................ 64 8.02 Books, Records and Inspection; Annual Meetings...................... 64 8.03 Maintenance of Property; Insurance.................................. 64 8.04 Existence; Franchises............................................... 65 8.05 Compliance with Statutes, etc....................................... 65 8.06 Compliance with Environmental Laws.................................. 65 8.07 ERISA............................................................... 66 8.08 End of Fiscal Years; Fiscal Quarters................................ 67 8.09 Performance of Obligations.......................................... 68 8.10 Payment of Taxes.................................................... 68 8.11 Use of Proceeds..................................................... 68 8.12 Additional Security; Further Assurances; etc........................ 68 8.13 Foreign Subsidiaries Security....................................... 69 8.14 Permitted Acquisitions.............................................. 70 8.15 Ownership of Subsidiaries; etc...................................... 71 8.16 Interest Rate Protection............................................ 72 8.17 Margin Regulations.................................................. 72 SECTION 9. Negative Covenants................................................. 72 9.01 Liens............................................................... 72 9.02 Consolidation, Merger, Purchase or Sale of Assets, etc.............. 75 9.03 Dividends........................................................... 78 9.04 Indebtedness........................................................ 79 9.05 Advances, Investments and Loans..................................... 81 9.06 Transactions with Affiliates........................................ 83 9.07 Capital Expenditures................................................ 84 9.08 Minimum Consolidated Interest Coverage Ratio........................ 85
(iii)
Page ---- 9.09 Minimum Consolidated EBITDA............................... 85 9.10 Maximum Consolidated Senior Leverage Ratio................ 86 9.11 Maximum Consolidated Total Leverage Ratio................. 86 9.12 Minimum Consolidated Fixed Charge Coverage Ratio.......... 87 9.13 Limitations on Prepayments of Certain Indebtedness; Modifications of Certain Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain Other Agreements, etc................................. 87 9.14 Limitation on Certain Restrictions on Subsidiaries........ 88 9.15 Limitation on Issuance of Capital Stock................... 88 9.16 Business.................................................. 88 9.17 Limitation on Creation of Subsidiaries.................... 89 9.18 Rental Fleet.............................................. 89 SECTION 10. Events of Default....................................... 89 10.01 Payments................................................. 89 10.02 Representations, etc..................................... 89 10.03 Covenants................................................ 89 10.04 Default Under Other Agreements........................... 90 10.05 Bankruptcy, etc.......................................... 90 10.06 ERISA.................................................... 90 10.07 Security Documents....................................... 91 10.08 Subsidiaries Guaranties.................................. 91 10.09 Judgments................................................ 91 10.10 Change of Control........................................ 92 SECTION 11. Definitions and Accounting Terms........................ 92 11.01 Defined Terms............................................ 92 SECTION 12. Administrative Agent.................................... 124 12.01 Appointment.............................................. 124 12.02 Nature of Duties......................................... 124 12.03 Lack of Reliance on the Administrative Agent............. 124 12.04 Certain Rights of the Administrative Agent............... 125 12.05 Reliance................................................. 125 12.06 Indemnification.......................................... 125 12.07 The Administrative Agent in its Individual Capacity...... 125 12.08 Holders.................................................. 126 12.09 Resignation by the Administrative Agent.................. 126 SECTION 13. Miscellaneous........................................... 127 13.01 Payment of Expenses, etc................................. 127 13.02 Right of Setoff.......................................... 128 13.03 Notices.................................................. 129 13.04 Benefit of Agreement; Assignments; Participations........ 129
(iv)
Page ---- 13.05 No Waiver; Remedies Cumulative........................... 133 13.06 Payments Pro Rata........................................ 133 13.07 Calculations; Computations............................... 134 13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL. ....................................... 135 13.09 Counterparts............................................. 136 13.10 Effectiveness............................................ 136 13.11 Headings Descriptive..................................... 136 13.12 Amendment or Waiver; etc................................. 136 13.13 Survival................................................. 138 13.14 Domicile of Loans........................................ 139 13.15 Register................................................. 139 13.16 Confidentiality.......................................... 139 13.17 Judgment Currency........................................ 140 13.18 Euro..................................................... 141 13.19 Post-Closing Actions..................................... 141
(v) SCHEDULE I Commitments SCHEDULE II Lender Addresses SCHEDULE III Real Property SCHEDULE IV Plans SCHEDULE V Subsidiaries SCHEDULE VI Existing Indebtedness SCHEDULE VII Insurance SCHEDULE VIII Existing Liens SCHEDULE IX Existing Investments SCHEDULE X Associated Costs SCHEDULE XI Buy-Back Arrangements SCHEDULE XII Indebtedness to be Refinanced SCHEDULE XIII Post-Closing Matters EXHIBIT A-1 Notice of Borrowing EXHIBIT A-2 Notice of Conversion/Continuation EXHIBIT B-1 A Term Note EXHIBIT B-2 B Term Note EXHIBIT B-3 Revolving Note EXHIBIT B-4 Swingline Note EXHIBIT C Incremental B Term Loan Commitment Agreement EXHIBIT D Incremental Revolving Loan Commitment Agreement EXHIBIT E Letter of Credit Request EXHIBIT F Section 4.04(b)(ii) Certificate EXHIBIT G Opinion of Foley & Lardner EXHIBIT H Officers' Certificate EXHIBIT I Pledge Agreement EXHIBIT J Security Agreement EXHIBIT K Subsidiaries Guaranty EXHIBIT L Solvency Certificate EXHIBIT M Compliance Certificate EXHIBIT N Assignment and Assumption Agreement EXHIBIT O Intercompany Note (vi) CREDIT AGREEMENT, dated as of May 9, 2001, among THE MANITOWOC COMPANY, INC., a Wisconsin corporation (the "Borrower"), the Lenders party hereto from time to time and BANKERS TRUST COMPANY, as Administrative Agent (in such capacity, the "Administrative Agent") (all capitalized terms used herein and defined in Section 11 are used herein as therein defined). W I T N E S S E T H: - - - - - - - - - - WHEREAS, subject to and upon the terms and conditions set forth herein, the Lenders are willing to make available to the Borrower the respective credit facilities provided for herein; NOW, THEREFORE, IT IS AGREED: SECTION 1. Amount and Terms of Credit. -------------------------- 1.01 The Commitments. (a) Subject to and upon the terms and --------------- conditions set forth herein, each Lender with an A Term Loan Commitment severally agrees to make a term loan or term loans (each an "A Term Loan" and, collectively, the "A Term Loans") to the Borrower, which A Term Loans (i) shall be incurred pursuant to a single drawing on the Initial Borrowing Date, (ii) shall be denominated in Dollars, (iii) except as hereinafter provided, shall, at the option of the Borrower, be incurred and maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans, provided that, (A) except as -------- otherwise specifically provided in Section 1.10(b), all A Term Loans comprising the same Borrowing shall at all times be of the same Type, and (B) unless either the Administrative Agent has otherwise determined in its sole discretion or has determined that the Syndication Date has occurred (at which time this clause (B) shall no longer be applicable), prior to the 90th day following the Initial Borrowing Date, A Term Loans may only be incurred and maintained as, and/or converted into, Eurodollar Loans so long as all such outstanding Eurodollar Loans, together with all outstanding B Term Loans that are maintained as Eurodollar Loans and all outstanding Revolving Loans that are maintained as Euro Rate Loans, are subject to an Interest Period of one month which begins and ends on the same day, and (iv) shall be made by each such Lender in that aggregate principal amount which does not exceed the A Term Loan Commitment of such Lender on the Initial Borrowing Date. Once repaid, A Term Loans incurred hereunder may not be reborrowed. (b) Subject to and upon the terms and conditions set forth herein, each Lender with an Initial B Term Loan Commitment severally agrees to make a term loan or term loans (each an "Initial B Term Loan" and, collectively, the "Initial B Term Loans") to the Borrower, which Initial B Term Loans (i) shall be incurred pursuant to a single drawing on the Initial Borrowing Date, (ii) shall be denominated in Dollars, (iii) except as hereinafter provided, shall, at the option of the Borrower, be incurred and maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans, provided that, (A) except as otherwise -------- specifically provided in Section 1.10(b), all Initial B Term Loans comprising the same Borrowing shall at all times be of the same Type, and (B) unless either the Administrative Agent has otherwise determined in its sole discretion or has determined that the Syndication Date has occurred (at which time this clause (B) shall no longer be applicable), prior to the 90th day following the Initial Borrowing Date, Initial B Term Loans may only be incurred and maintained as, and/or converted into, Eurodollar Loans so long as all such outstanding Eurodollar Loans, together with all outstanding A Term Loans that are maintained as Eurodollar Loans and all outstanding Revolving Loans that are maintained as Euro Rate Loans, are subject to an Interest Period of one month which begins and ends on the same day, and (iv) shall be made by each such Lender in that aggregate principal amount which does not exceed the Initial B Term Loan Commitment of such Lender on the Initial Borrowing Date. Once repaid, Initial B Term Loans incurred hereunder may not be reborrowed. (c) Subject to Section 1.14 and the other terms and conditions set forth herein, each Lender with an Incremental B Term Loan Commitment severally agrees to make a term loan or term loans (each, an "Incremental B Term Loan" and, collectively, the "Incremental B Term Loans") to the Borrower, which Incremental B Term Loans (i) shall be incurred pursuant to a single drawing on the Incremental B Term Loan Borrowing Date (which date, in any event, shall be the date of the effectiveness of the Incremental B Term Loan Commitment Agreement pursuant to which such Incremental B Term Loans are to be made and shall not be later than the Incremental Commitment Expiry Date), (ii) shall be denominated in Dollars, (iii) shall be added to the then outstanding Borrowings of Initial B Term Loans as provided in Section 1.14(c), and (iv) shall be made by each such Lender in that aggregate principal amount which does not exceed the Incremental B Term Loan Commitment of such Lender on the Incremental B Term Loan Borrowing Date. Once repaid, Incremental B Term Loans incurred hereunder may not be reborrowed. (d) Subject to and upon the terms and conditions set forth herein, each Lender with a Revolving Loan Commitment severally agrees to make, at any time and from time to time on or after the Initial Borrowing Date and prior to the Revolving Loan Maturity Date, a revolving loan or revolving loans (each a "Revolving Loan" and, collectively, the "Revolving Loans") to the Borrower, which Revolving Loans (i) shall be incurred and maintained in the Approved Currency or Currencies as may be elected by the Borrower, (ii) if denominated in Dollars, shall, at the option of the Borrower, be incurred and maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans, provided that, (A ) -------- except as otherwise specifically provided in Section 1.10(b), all Dollar Revolving Loans comprising the same Borrowing shall at all times be of the same Type, and (B) unless either the Administrative Agent has otherwise determined in its sole discretion or has determined that the Syndication Date has occurred (at which time this clause (B) shall no longer be applicable), prior to the 90th day following the Initial Borrowing Date, Dollar Revolving Loans may only be incurred and maintained as, and/or converted into, Eurodollar Loans so long as all such outstanding Eurodollar Loans, together with all outstanding Foreign Currency Revolving Loans and all outstanding Term Loans that are maintained as Eurodollar Loans, are subject to an Interest Period of one month which begins and ends on the same day, (iii) if denominated in a Foreign Currency, shall be incurred and maintained as one or more Borrowings of Euro Rate Loans denominated in such Foreign Currency, provided that, (A) no Foreign Currency Revolving Loans -------- may be incurred if, after giving effect to such incurrence, the aggregate Principal Amount of all outstanding Foreign Currency Revolving Loans would exceed the lesser of (x) $50,000,000 and (y) the Total Available Revolving Loan Commitment then in effect, and (B) unless the Administrative Agent has otherwise determined in its sole -2- discretion or has determined that the Syndication Date has occurred (at which time this clause (B) shall no longer be applicable), prior to the 90th day following the Initial Borrowing Date, all outstanding Foreign Currency Revolving Loans, together with all outstanding Revolving Loans and Term Loans that are maintained as Eurodollar Loans, shall be subject to an Interest Period of one month which begins and ends on the same day, (iv) may be repaid and reborrowed in accordance with the provisions hereof, (v) shall not exceed for any such Lender at any time outstanding that aggregate Principal Amount which, when added to the product of (x) such Lender's RL Percentage and (y) the sum of (I) the aggregate amount of all Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid with the proceeds of, and simultaneously with the incurrence of, the respective incurrence of Revolving Loans) at such time and (II) the aggregate Principal Amount of all Swingline Loans (exclusive of Swingline Loans which are repaid with the proceeds of, and simultaneously with the incurrence of, the respective incurrence of Revolving Loans) then outstanding, equals the Available Revolving Loan Commitment of such Lender at such time, and (vi) shall not exceed for all such Lenders at any time outstanding that aggregate Principal Amount which, when added to the sum of (I) the aggregate amount of all Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid with the proceeds of, and simultaneously with the incurrence of, the respective incurrence of Revolving Loans) at such time and (II) the aggregate Principal Amount of all Swingline Loans (exclusive of Swingline Loans which are repaid with the proceeds of, and simultaneously with the incurrence of, the respective incurrence of Revolving Loans) then outstanding, equals the Total Available Revolving Loan Commitment at such time. (e) Subject to and upon the terms and conditions set forth herein, the Swingline Lender agrees to make, at any time and from time to time on or after the Initial Borrowing Date and prior to the Swingline Expiry Date, a revolving loan or revolving loans (each a "Swingline Loan" and, collectively, the "Swingline Loans") to the Borrower, which Swingline Loans (i) shall be incurred and maintained as Base Rate Loans, (ii) shall be denominated in Dollars, (iii) may be repaid and reborrowed in accordance with the provisions hereof, (iv) shall not exceed in aggregate Principal Amount at any time outstanding, when combined with the aggregate Principal Amount of all Revolving Loans then outstanding and the aggregate amount of all Letter of Credit Outstandings at such time, an amount equal to the Total Available Revolving Loan Commitment at such time, and (v) shall not exceed in aggregate Principal Amount at any time outstanding the Maximum Swingline Amount. Notwithstanding anything to the contrary contained in this Section 1.01(e), (i) the Swingline Lender shall not be obligated to make any Swingline Loans at a time when a Lender Default exists with respect to an RL Lender unless the Swingline Lender has entered into arrangements satisfactory to it and the Borrower to eliminate the Swingline Lender's risk with respect to the Defaulting Lender's or Lenders' participation in such Swingline Loans, including by cash collateralizing such Defaulting Lender's or Lenders' RL Percentage of the outstanding Swingline Loans, and (ii) the Swingline Lender shall not make any Swingline Loan after it has received written notice from the Borrower, any other Credit Party or the Required Lenders stating that (x) one or more of the conditions specified in Section 5 or 6 are not then satisfied, (y) the making of such Swingline Loans would violate Section 1.01(e), or (z) a Default or an Event of Default exists and is continuing until such time as the Swingline Lender shall have received written notice (A) of rescission of all such -3- notices of Default or Event of Default from the party or parties originally delivering such notice or notices or (B) of the waiver of such Default or Event of Default by the Required Lenders. (f) On any Business Day, the Swingline Lender may, in its sole discretion, give notice to the RL Lenders that the Swingline Lender's outstanding Swingline Loans shall be funded with one or more Borrowings of Revolving Loans (provided that such notice shall be deemed to have been -------- automatically given upon the occurrence of a Default or an Event of Default under Section 10.05 or upon the exercise of any of the remedies provided in the last paragraph of Section 10), in which case one or more Borrowings of Dollar Revolving Loans constituting Base Rate Loans (each such Borrowing, a "Mandatory Borrowing") shall be made on the immediately succeeding Business Day by all RL Lenders pro rata based on each such RL Lender's RL Percentage (determined before --- ---- giving effect to any termination of the Revolving Loan Commitments pursuant to the last paragraph of Section 10) and the proceeds thereof shall be applied directly by the Swingline Lender to repay the Swingline Lender for such outstanding Swingline Loans. Each RL Lender hereby irrevocably agrees to make Revolving Loans upon one Business Day's notice pursuant to each Mandatory Borrowing in the amount and in the manner specified in the preceding sentence and on the date specified in writing by the Swingline Lender notwithstanding (i) the amount of the Mandatory Borrowing may not comply with the Minimum Borrowing Amount otherwise required hereunder, (ii) whether any conditions specified in Section 6 are then satisfied, (iii) whether a Default or an Event of Default then exists, (iv) the date of such Mandatory Borrowing, and (v) the amount of the Total Revolving Loan Commitment or the Total Available Revolving Loan Commitment at such time. In the event that any Mandatory Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code with respect to the Borrower), then each RL Lender hereby agrees that it shall forthwith purchase (as of the date the Mandatory Borrowing would otherwise have occurred, but adjusted for any payments received from the Borrower on or after such date and prior to such purchase) from the Swingline Lender such participations in the outstanding Swingline Loans as shall be necessary to cause the RL Lenders to share in such Swingline Loans ratably based upon their respective RL Percentages (determined before giving effect to any termination of the Revolving Loan Commitments pursuant to the last paragraph of Section 10), provided that (x) all interest payable on the Swingline Loans shall be for the - -------- account of the Swingline Lender until the date as of which the respective participation is required to be purchased and, to the extent attributable to the purchased participation, shall be payable to the participant from and after such date and (y) at the time any purchase of participations pursuant to this sentence is actually made, the purchasing RL Lender shall be required to pay the Swingline Lender interest on the principal amount of participation purchased for each day from and including the day upon which the Mandatory Borrowing would otherwise have occurred to but excluding the date of payment for such participation, at the overnight Federal Funds Rate for the first three days and at the rate otherwise applicable to Revolving Loans maintained as Base Rate Loans hereunder for each day thereafter. 1.02 Minimum Amount of Each Borrowing. The aggregate principal -------------------------------- amount of each Borrowing of Loans under a respective Tranche shall not be less than the Minimum Borrowing Amount applicable to such Tranche. More than one Borrowing may occur on the same date, but at no time shall there be outstanding more than twenty Borrowings of Eurodollar -4- Loans in the aggregate for all Tranches of Loans; provided, however, for every -------- ------- $20,000,000 in the aggregate of Incremental B Term Loan Commitments and Incremental Revolving Loan Commitments that the Borrower has obtained pursuant to this Agreement, the Borrower shall be entitled to five additional Borrowings of Euro Rate Loans hereunder. 1.03 Notice of Borrowing. (a) Whenever the Borrower desires to incur ------------------- (x) Eurodollar Loans hereunder, it shall give the Administrative Agent at the Notice Office at least three Business Days' prior notice of each Eurodollar Loan to be incurred hereunder, (y) Foreign Currency Revolving Loans hereunder, it shall give the Administrative Agent at the Notice Office at least four Business Days' prior notice of each Foreign Currency Revolving Loan to be incurred hereunder and (z) Base Rate Loans hereunder (excluding Swingline Loans and Revolving Loans made pursuant to a Mandatory Borrowing), it shall give the Administrative Agent at the Notice Office at least one Business Day's prior notice of each Base Rate Loan to be incurred hereunder, provided that (in each -------- case) any such notice shall be deemed to have been given on a certain day only if given before 12:00 Noon (New York time) on such day. Each such notice (each a "Notice of Borrowing"), except as otherwise expressly provided in Section 1.10, shall be irrevocable and shall be in writing, or by telephone promptly confirmed in writing, in the form of Exhibit A-1, appropriately completed to specify: (i) the aggregate principal amount of the Loans to be incurred pursuant to such Borrowing (stated in the applicable Approved Currency), (ii) the date of such Borrowing (which shall be a Business Day), (iii) whether the Loans being incurred pursuant to such Borrowing shall constitute A Term Loans, Initial B Term Loans, Incremental B Term Loans or Revolving Loans, (iv) in the case of Revolving Loans, the Approved Currency for such Revolving Loans, (v) in the case of Term Loans and Dollar Revolving Loans, whether such Loans being incurred pursuant to such Borrowing are to be initially maintained as Base Rate Loans or, to the extent permitted hereunder, Eurodollar Loans and, if Eurodollar Loans, the initial Interest Period to be applicable thereto, (vi) in the case of Foreign Currency Revolving Loans, the initial Interest Period to be applicable thereto, (vii) in the case of a Borrowing of Revolving Loans the proceeds of which are to be utilized to finance, in whole or in part, the purchase price of a Permitted Acquisition, the amount of the Total Unutilized Revolving Loan Commitment (less the amount of the Blocked Revolving Loan Commitment then in effect) after giving effect to such Borrowing, and (viii) in the case of a Borrowing of Revolving Loans, the amount of the Blocked Revolving Loan Commitment in effect immediately prior to giving effect to such Borrowing. The Administrative Agent shall promptly give each Lender which is required to make Loans of the Tranche specified in the respective Notice of Borrowing, notice of such proposed Borrowing, of such Lender's proportionate share thereof and of the other matters required by the immediately preceding sentence to be specified in the Notice of Borrowing. (b) (i) Whenever the Borrower desires to incur Swingline Loans hereunder, the Borrower shall give the Swingline Lender no later than 2:00 P.M. (New York time) on the date that a Swingline Loan is to be incurred, written notice or telephonic notice promptly confirmed in writing of each Swingline Loan to be incurred hereunder. Each such notice shall be irrevocable and specify in each case (A) the date of Borrowing (which shall be a Business Day), (B) the aggregate principal amount of the Swingline Loans to be incurred pursuant to such Borrowing and (C) the amount of the Blocked Revolving Loan Commitment in effect immediately prior to giving effect to such Borrowing. -5- (ii) Mandatory Borrowings shall be made upon the notice specified in Section 1.01(f), with the Borrower irrevocably agreeing, by its incurrence of any Swingline Loan, to the making of the Mandatory Borrowings as set forth in Section 1.01(f). (c) Without in any way limiting the obligation of the Borrower to confirm in writing any telephonic notice of any Borrowing or prepayment of Loans, the Administrative Agent or the Swingline Lender, as the case may be, may act without liability upon the basis of telephonic notice of such Borrowing or prepayment, as the case may be, believed by the Administrative Agent or the Swingline Lender, as the case may be, in good faith to be from the Chairman of the Board, the President, the Vice President-Finance, the Chief Executive Officer, the Chief Financial Officer, the Treasurer or any Assistant Treasurer of the Borrower, or from any other authorized officer of the Borrower designated in writing by the Borrower to the Administrative Agent as being authorized to give such notices, prior to receipt of written confirmation. In each such case, the Borrower hereby waives the right to dispute the Administrative Agent's or Swingline Lender's record of the terms of such telephonic notice of such Borrowing or prepayment of Loans, as the case may be, absent manifest error. 1.04 Disbursement of Funds. No later than 1:00 P.M. (New York time) on --------------------- the date specified in each Notice of Borrowing (or (x) in the case of Foreign Currency Revolving Loans, no later than 10:00 A.M. (New York time) on the date specified in the respective Notice of Borrowing, (y) in the case of Swingline Loans, no later than 4:00 P.M. (New York time) on the date specified pursuant to Section 1.03(b)(i) or (z) in the case of Mandatory Borrowings, no later than 1:00 P.M. (New York time) on the date specified in Section 1.01(f)), each Lender with a Commitment of the respective Tranche will make available its pro rata --- ---- portion (determined in accordance with Section 1.07) of each such Borrowing requested to be made on such date (or in the case of Swingline Loans, the Swingline Lender will make available the full amount thereof). All such amounts will be made available in the relevant Approved Currency and in immediately available funds at the Payment Office, and the Administrative Agent will, except in the case of Revolving Loans made pursuant to a Mandatory Borrowing, make available to the Borrower at the Payment Office, in the relevant Approved Currency and in immediately available funds, the aggregate of the amounts so made available by the Lenders. Unless the Administrative Agent shall have been notified by any Lender prior to the date of Borrowing that such Lender does not intend to make available to the Administrative Agent such Lender's portion of any Borrowing to be made on such date, the Administrative Agent may assume that such Lender has made such amount available to the Administrative Agent on such date of Borrowing and the Administrative Agent may (but shall not be obligated to), in reliance upon such assumption, make available to the Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent by such Lender, the Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender. If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent's demand therefor, the Administrative Agent shall promptly notify the Borrower and the Borrower shall immediately pay such corresponding amount to the Administrative Agent. The Administrative Agent also shall be entitled to recover on demand from such Lender or the Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to the Borrower until the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to (i) -6- if recovered from such Lender, the overnight Federal Funds Rate (or, in the case of Foreign Currency Revolving Loans, the Administrative Agent's customary rate for interbank advances) for the first three days and at the interest rate otherwise applicable to such Loans for each day thereafter and (ii) if recovered from the Borrower, the rate of interest applicable to the respective Borrowing, as determined pursuant to Section 1.08. Nothing in this Section 1.04 shall be deemed to relieve any Lender from its obligation to make Loans hereunder or to prejudice any rights which the Borrower may have against any Lender as a result of any failure by such Lender to make Loans hereunder. 1.05 Notes. (a) The Borrower's obligation to pay the principal of, ----- and interest on, the Loans made by each Lender shall be evidenced in the Register maintained by the Administrative Agent pursuant to Section 13.15 and shall, if requested by such Lender, also be evidenced (i) if A Term Loans, by a promissory note duly executed and delivered by the Borrower substantially in the form of Exhibit B-1, with blanks appropriately completed in conformity herewith (each an "A Term Note" and, collectively, the "A Term Notes"), (ii) if B Term Loans, by a promissory note duly executed and delivered by the Borrower substantially in the form of Exhibit B-2, with blanks appropriately completed in conformity herewith (each a "B Term Note" and, collectively, the "B Term Notes"), (iii) if Revolving Loans, by a promissory note duly executed and delivered by the Borrower substantially in the form of Exhibit B-3, with blanks appropriately completed in conformity herewith (each a "Revolving Note" and, collectively, the "Revolving Notes"), and (iv) if Swingline Loans, by a promissory note duly executed and delivered by the Borrower substantially in the form of Exhibit B-4, with blanks appropriately completed in conformity herewith (the "Swingline Note"). (b) The A Term Note issued to each Lender that has an A Term Loan Commitment or outstanding A Term Loans shall (i) be executed by the Borrower, (ii) be payable to such Lender or its registered assigns and be dated the Initial Borrowing Date (or, if issued after the Initial Borrowing Date, be dated the date of issuance thereof), (iii) be in a stated principal amount (expressed in Dollars) equal to the A Term Loans made by such Lender on the Initial Borrowing Date (or, in the case of any A Term Note issued after the Initial Borrowing Date, be in a stated principal amount (expressed in Dollars) equal to the outstanding principal amount of the A Term Loans of such Lender on the date of the issuance thereof) and be payable in the outstanding principal amount of A Term Loans evidenced thereby, (iv) mature on the A Term Loan Maturity Date, (v) bear interest as provided in the appropriate clause of Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to voluntary prepayment as provided in Section 4.01, and mandatory repayment as provided in Section 4.02, and (vii) be entitled to the benefits of this Agreement and the other Credit Documents. (c) The B Term Note issued to each Lender that has a B Term Loan Commitment or outstanding B Term Loans shall (i) be executed by the Borrower, (ii) be payable to such Lender or its registered assigns and be dated the Initial Borrowing Date (or, if issued after the Initial Borrowing Date, be dated the date of issuance thereof), (iii) be in a stated principal amount (expressed in Dollars) equal to the B Term Loans made by such Lender on the Initial Borrowing Date (or, in the case of any B Term Note issued after the Initial Borrowing Date, be in a stated principal amount (expressed in Dollars) equal to the outstanding principal amount of the B Term -7- Loans of such Lender on the date of the issuance thereof) and be payable in the outstanding principal amount of B Term Loans evidenced thereby, (iv) mature on the B Term Loan Maturity Date, (v) bear interest as provided in the appropriate clause of Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to voluntary prepayment as provided in Section 4.01, and mandatory repayment as provided in Section 4.02, and (vii) be entitled to the benefits of this Agreement and the other Credit Documents. (d) The Revolving Note issued to each Lender that has a Revolving Loan Commitment or outstanding Revolving Loans shall (i) be executed by the Borrower, (ii) be payable to such Lender or its registered assigns and be dated the Initial Borrowing Date (or, if issued after the Initial Borrowing Date, be dated the date of the issuance thereof), (iii) be in a stated principal amount (expressed in Dollars) equal to the Revolving Loan Commitment of such Lender (or, if issued after the termination thereof, be in a stated principal amount (expressed in Dollars) equal to the outstanding Revolving Loans of such Lender at such time) and be payable in the applicable Approved Currency in the outstanding principal amount of the Revolving Loans evidenced thereby, provided -------- that if, because of fluctuations in exchange rates after the issuance of any Revolving Note, the stated principal amount of such Revolving Note of any such Lender would not be at least as great as the principal amount (taking the Dollar Equivalent of all Foreign Currency Revolving Loans evidenced thereby) of such Revolving Loans made by such Lender to the Borrower at any time outstanding, such Lender may request (and in such case the Borrower shall promptly execute and deliver) a new Revolving Note in an amount equal to the aggregate principal amount (taking the Dollar Equivalent of all Foreign Currency Revolving Loans evidenced thereby) of such Revolving Loans of such Lender outstanding on the date of the issuance of such new Revolving Note, (iv) mature on the Revolving Loan Maturity Date, (v) bear interest as provided in the appropriate clause of Section 1.08 in respect of the Base Rate Loans and Euro Rate Loans, as the case may be, evidenced thereby, (vi) be subject to voluntary prepayment as provided in Section 4.01, and mandatory repayment as provided in Section 4.02, and (vii) be entitled to the benefits of this Agreement and the other Credit Documents. (e) The Swingline Note issued to the Swingline Lender shall (i) be executed by the Borrower, (ii) be payable to the Swingline Lender or its registered assigns and be dated the Initial Borrowing Date, (iii) be in a stated principal amount (expressed in Dollars) equal to the Maximum Swingline Amount and be payable in the outstanding principal amount of the Swingline Loans evidenced thereby from time to time, (iv) mature on the Swingline Expiry Date, (v) bear interest as provided in the appropriate clause of Section 1.08 in respect of the Base Rate Loans evidenced thereby, (vi) be subject to voluntary prepayment as provided in Section 4.01, and mandatory repayment as provided in Section 4.02, and (vii) be entitled to the benefits of this Agreement and the other Credit Documents. (f) Each Lender will note on its internal records the amount of each Loan made by it and each payment in respect thereof and will prior to any transfer of any of its Notes endorse on the reverse side thereof the outstanding principal amount of Loans evidenced thereby. Failure to make any such notation or any error in such notation shall not affect the Borrower's obligations in respect of such Loans. -8- 1.06 Conversions. The Borrower shall have the option to convert, on ----------- any Business Day, all or a portion equal to at least the Minimum Borrowing Amount of the outstanding principal amount of Loans (other than Foreign Currency Revolving Loans and Swingline Loans which may not be converted pursuant to this Section 1.06) made pursuant to one or more Borrowings (so long as of the same Tranche) of one or more Types of Loans into a Borrowing (of the same Tranche) of another Type of Loan, provided that, (i) except as otherwise provided in Section -------- 1.10(b), Eurodollar Loans may be converted into Base Rate Loans only on the last day of an Interest Period applicable to the Loans being converted and no such partial conversion of Eurodollar Loans shall reduce the outstanding principal amount of such Eurodollar Loans made pursuant to a single Borrowing to less than the Minimum Borrowing Amount applicable thereto, (ii) Base Rate Loans may not be converted into Eurodollar Loans if a Default or an Event of Default is in existence on the date of the conversion and either the Administrative Agent or the Required Lenders have notified the Borrower that such conversions are no longer permitted (which notice may be given by the Administrative Agent or the Required Lenders in their sole discretion), provided that no such notice shall -------- be required if a Default or an Event of Default under Section 10.05 exists and is continuing (in which case Base Rate Loans may not be converted into Eurodollar Loans), (iii) unless the Administrative Agent has otherwise determined in its sole discretion or has determined that the Syndication Date has occurred (at which time this clause (iii) shall no longer be applicable), prior to the 90th day following the Initial Borrowing Date, conversions of Base Rate Loans into Eurodollar Loans shall be subject to the provisions of clause (B) of the proviso in each of Sections 1.01(a)(iii), 1.01(b)(iii) and 1.01(d)(ii), and (iv) no conversion pursuant to this Section 1.06 shall result in a greater number of Borrowings of Euro Rate Loans than is permitted under Section 1.02. Each such conversion shall be effected by the Borrower by giving the Administrative Agent at the Notice Office prior to 12:00 Noon (New York time) at least three Business Days' prior notice (each a "Notice of Conversion/Continuation") in the form of Exhibit A-2, appropriately completed to specify the Loans to be so converted, the Borrowing or Borrowings pursuant to which such Loans were incurred and, if to be converted into Eurodollar Loans, the Interest Period to be initially applicable thereto. The Administrative Agent shall give each Lender prompt notice of any such proposed conversion affecting any of its Loans. Upon any such conversion the proceeds thereof will be deemed to be applied directly on the day of such conversion to prepay the outstanding principal amount of the Loans being converted. 1.07 Pro Rata Borrowings. All Borrowings of Loans under this Agreement ------------------- shall be incurred from the Lenders pro rata on the basis of their A Term Loan --- ---- Commitments, Initial B Term Loan Commitments, Incremental B Term Loan Commitments or Revolving Loan Commitments, as the case may be. It is understood that no Lender shall be responsible for any default by any other Lender of its obligation to make Loans hereunder and that each Lender shall be obligated to make the Loans provided to be made by it hereunder, regardless of the failure of any other Lender to make its Loans hereunder. 1.08 Interest. (a) The Borrower agrees to pay interest in respect of -------- the unpaid principal amount of each Base Rate Loan from the date of Borrowing thereof until the earlier of (i) the maturity thereof (whether by acceleration or otherwise) and (ii) the conversion of such Base Rate Loan to a Eurodollar Loan pursuant to Section 1.06 or 1.09, as applicable, at a rate per -9- annum which shall be equal to the sum of the Applicable Margin plus the Base Rate each as in effect from time to time. (b) The Borrower agrees to pay interest in respect of the unpaid principal amount of each Euro Rate Loan from the date of Borrowing thereof until the earlier of (i) the maturity thereof (whether by acceleration or otherwise) and (ii) the conversion of such Euro Rate Loan to a Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10, as applicable, at a rate per annum which shall, during each Interest Period applicable thereto, be equal to the sum of the Applicable Margin as in effect from time to time during such Interest Period plus the applicable Euro Rate for such Interest Period plus, in the case of a Foreign Currency Revolving Loan, any Associated Costs. (c) Overdue principal and, to the extent permitted by law, overdue interest in respect of each Loan and any other overdue amounts payable hereunder or under any other Credit Document shall, in each case, bear interest at a rate per annum (i) in the case of overdue principal of, and interest on, Foreign Currency Revolving Loans, equal to 2% in excess of the rate then borne by such Foreign Currency Revolving Loans plus any Associated Costs, (ii) in the case of overdue principal of, and interest on, Term Loans and Dollar Revolving Loans, equal to the greater of (x) the rate which is 2% in excess of the rate then borne by such Loans and (y) the rate which is 2% in excess of the rate otherwise applicable to Base Rate Loans of the respective Tranche from time to time, and (iii) in the case of all other overdue amounts payable hereunder and under any other Credit Document, equal to the rate per annum equal to the rate which is 2% in excess of the rate applicable to Dollar Revolving Loans maintained as Base Rate Loans from time to time. Interest which accrues under this Section 1.08(c) shall be payable on demand. (d) Accrued (and theretofore unpaid) interest shall be payable (i) in respect of each Base Rate Loan, (x) quarterly in arrears on each Quarterly Payment Date, (y) on the date of any repayment or prepayment in full of all outstanding Base Rate Loans of any Tranche, and (z) at maturity (whether by acceleration or otherwise) and, after such maturity, on demand, and (ii) in respect of each Euro Rate Loan, (x) on the last day of each Interest Period applicable thereto and, in the case of an Interest Period in excess of three months, on each date occurring at three month intervals after the first day of such Interest Period, and (y) on the date of any repayment or prepayment (on the amount repaid or prepaid), at maturity (whether by acceleration or otherwise) and, after such maturity, on demand. (e) Upon each Interest Determination Date, the Administrative Agent shall determine the applicable Euro Rate for each Interest Period applicable to the respective Euro Rate Loans and shall promptly notify the Borrower and the Lenders thereof. Each such determination shall, absent manifest error, be final and conclusive and binding on all parties hereto. 1.09 Interest Periods. At the time the Borrower gives any Notice of ---------------- Borrowing or Notice of Conversion/Continuation in respect of the making of, or conversion into, any Euro Rate Loan (in the case of the initial Interest Period applicable thereto) or prior to 12:00 Noon (New York time) on the third Business Day (or, in the case of a Foreign Currency Revolving Loan, prior to 12:00 Noon (New York time) on the fourth Business Day) prior to the expiration -10- of an Interest Period applicable to such Euro Rate Loan (in the case of any subsequent Interest Period), the Borrower shall have the right to elect the interest period (each an "Interest Period") applicable to such Euro Rate Loan, which Interest Period shall, at the option of the Borrower (but otherwise subject to the provisions of clause (B) of the proviso in each of Sections 1.01(a)(iii), 1.01(b)(iii), 1.01(d)(ii) and 1.01(d)(iii)), be a one, two, three, six, or to the extent consented to by all of the Lenders under a respective Tranche, a nine-month period, provided that (in each case): -------- (i) all Euro Rate Loans comprising a Borrowing shall at all times have the same Interest Period; (ii) the initial Interest Period for any Euro Rate Loan shall commence on the date of Borrowing of such Euro Rate Loan (including, in the case of Eurodollar Loans, the date of any conversion thereto from a Base Rate Loan) and each Interest Period occurring thereafter in respect of such Euro Rate Loan shall commence on the day on which the next preceding Interest Period applicable thereto expires; (iii) if any Interest Period for a Euro Rate Loan begins on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period, such Interest Period shall end on the last Business Day of such calendar month; (iv) if any Interest Period for a Euro Rate Loan would otherwise expire on a day which is not a Business Day, such Interest Period shall expire on the next succeeding Business Day; provided, however, that if any -------- ------- Interest Period for a Euro Rate Loan would otherwise expire on a day which is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the next preceding Business Day; (v) unless the Required Lenders otherwise agree, no Interest Period of longer than one month may be selected for a Foreign Currency Revolving Loan at any time when a Default or an Event of Default is then in existence; (vi) no Interest Period for a Term Loan or a Dollar Revolving Loan may be selected at any time when a Default or an Event of Default is then in existence and either the Administrative Agent or the Required Lenders have notified the Borrower that such selections are no longer permitted (which notice may be given by the Administrative Agent or the Required Lenders in their sole discretion), provided that no such notice -------- shall be required if a Default or an Event of Default under Section 10.05 exists and is continuing (in which case Interest Periods may not be selected); (vii) no Interest Period in respect of any Borrowing of any Tranche of Loans shall be selected which extends beyond the respective Maturity Date for such Tranche of Loans; and (viii) no Interest Period in respect of any Borrowing of A Term Loans or B Term Loans shall be selected which extends beyond any date upon which a mandatory repayment of such A Term Loans or B Term Loans will be required to be made under Section -11- 4.02(b) or (c) if the aggregate principal amount of such A Term Loans or B Term Loans which have Interest Periods which will expire after such date will be in excess of the aggregate principal amount of such A Term Loans or B Term Loans then outstanding less the aggregate amount of such required repayment. If by 12:00 Noon (New York time) on the third Business Day (or, in the case of a Foreign Currency Revolving Loan, by 12:00 Noon (New York time) on the fourth Business Day) preceding the expiration of any Interest Period applicable to a Borrowing of Euro Rate Loans, the Borrower has failed to elect, or is not permitted to elect, a new Interest Period to be applicable to such Euro Rate Loans as provided above, the Borrower shall be deemed to have elected (x) in the case of Eurodollar Loans, to convert such Eurodollar Loans into Base Rate Loans, and (y) in the case of Foreign Currency Revolving Loans, a one-month Interest Period for such Foreign Currency Revolving Loans, in each case effective as of the expiration of such current Interest Period. 1.10 Increased Costs, Illegality, etc. (a) In the event that any --------------------------------- Lender shall have determined (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto but, with respect to clauses (i) and (iv) below, may be made only by the Administrative Agent): (i) on any Interest Determination Date that, by reason of any changes arising after the date of this Agreement affecting the relevant interbank market, adequate and fair means do not exist for ascertaining the applicable interest rate on the basis provided for in the definition of the relevant Euro Rate; or (ii) at any time, that such Lender shall incur increased costs or reductions in the amounts received or receivable hereunder with respect to any Euro Rate Loan because of (x) any change since the Effective Date in any applicable law or governmental rule, regulation, order, guideline or request (whether or not having the force of law) or in the interpretation or administration thereof and including the introduction of any new law or governmental rule, regulation, order, guideline or request, such as, for example, but not limited to: (A) a change in the basis of taxation of payment to any Lender of the principal of or interest on such Euro Rate Loans or any other amounts payable hereunder (except for changes in the rate of tax on, or determined by reference to, the net income or net profits of such Lender pursuant to the laws of the jurisdiction in which it is organized or in which its principal office or applicable lending office is located or any subdivision thereof or therein) or (B) a change in official reserve requirements, but, in all events, excluding reserves required under Regulation D to the extent included in the computation of the Eurodollar Rate and/or (y) other circumstances arising since the Effective Date affecting such Lender, the relevant interbank market or the position of such Lender in such market; or (iii) at any time, that the making or continuance of any Euro Rate Loan has been made (x) unlawful by any law or governmental rule, regulation or order, (y) impossible by compliance by any Lender in good faith with any governmental request (whether or not -12- having force of law) or (z) impracticable as a result of a contingency occurring after the Effective Date which materially and adversely affects the relevant interbank market; or (iv) at any time that any Foreign Currency is not available in sufficient amounts to fund any Borrowing of Foreign Currency Revolving Loans denominated in such Foreign Currency; then, and in any such event, such Lender (or the Administrative Agent, in the case of clause (i) or (iv) above) shall promptly give notice (by telephone promptly confirmed in writing) to the Borrower and, except in the case of clauses (i) and (iv) above, to the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each of the other Lenders). Thereafter (w) in the case of clause (i) above, (A) in the event that Eurodollar Loans are so affected, Eurodollar Loans shall no longer be available until such time as the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice by the Administrative Agent no longer exist, and any Notice of Borrowing or Notice of Conversion/Continuation given by the Borrower with respect to Eurodollar Loans which have not yet been incurred (including by way of conversion) shall be deemed rescinded by the Borrower, and (B) in the event that any Foreign Currency Revolving Loans are so affected, the applicable Euro Rate shall be determined on the basis provided in the last sentence of the definition of EURIBOR or Sterling LIBOR, as the case may be, (x) in the case of clause (ii) above, the Borrower agrees, subject to Section 1.16, to pay to such Lender, upon such Lender's written request therefor, such additional amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender in its sole discretion shall determine) as shall be required to compensate such Lender for such increased costs or reductions in amounts received or receivable hereunder (a written notice as to the additional amounts owed to such Lender, showing in reasonable detail the basis therefor and the calculation thereof, submitted to the Borrower by such Lender shall, absent manifest error, be final and conclusive and binding on all the parties hereto), (y) in the case of clause (iii) above, the Borrower shall take one of the actions specified in Section 1.10(b) as promptly as possible and, in any event, within the time period required by law, and (z) in the case of clause (iv) above, Foreign Currency Revolving Loans in the affected Foreign Currency (other than any such Foreign Currency Revolving Loans which have theretofore been funded) shall no longer be available until such time as the Administrative Agent notifies the Borrower and the Lenders that the circumstances giving rise to such notice by the Administrative Agent no longer exist, and any Notice of Borrowing given by the Borrower with respect to such Foreign Currency Revolving Loans which have not yet been incurred shall be deemed rescinded by the Borrower. (b) At any time that any Euro Rate Loan is affected by the circumstances described in Section 1.10(a)(ii), the Borrower may, and in the case of any Euro Rate Loan affected by the circumstances described in Section 1.10(a)(iii), the Borrower shall, either (x) if the affected Euro Rate Loan is then being made initially or pursuant to a conversion, cancel such Borrowing by giving the Administrative Agent telephonic notice (confirmed in writing) on the same date that the Borrower was notified by the affected Lender or the Administrative Agent pursuant to Section 1.10(a)(ii) or (iii) or (y) if the affected Euro Rate Loan is then outstanding, upon at least three Business Days' written notice to the Administrative Agent and the affected Lender, (A) in the case of a Eurodollar Loan, require the affected Lender to convert such -13- Eurodollar Loan into a Base Rate Loan and (B) in the case of a Foreign Currency Revolving Loan, repay such Foreign Currency Revolving Loan in full; provided -------- that (i) if the circumstances described in Section 1.10(a)(iii) apply to any Foreign Currency Revolving Loan, the Borrower may, in lieu of taking the actions described above in this Section 1.10(b), maintain such Foreign Currency Revolving Loan outstanding, in which case the applicable Euro Rate shall be determined on the basis provided in the last sentence of the definition of EURIBOR or Sterling LIBOR, as the case may be, unless the maintenance of such Foreign Currency Revolving Loan outstanding on such basis would not stop the conditions described in Section 1.10(a)(iii) from existing (in which case the actions described above, without giving effect to this proviso, shall be required to be taken), and (ii) if more than one Lender is affected at any time, then all affected Lenders must be treated the same pursuant to this Section 1.10(b). (c) If any Lender determines that after the Effective Date the introduction of or any change in any applicable law or governmental rule, regulation, order, guideline, directive or request (whether or not having the force of law) concerning capital adequacy, or any change in interpretation or administration thereof by the NAIC or any governmental authority, central bank or comparable agency, will have the effect of increasing the amount of capital required or expected to be maintained by such Lender or any corporation controlling such Lender based on the existence of such Lender's Commitments hereunder or its obligations hereunder, then the Borrower agrees to pay to such Lender, upon its written demand therefor, such additional amounts as shall, subject to Section 1.16, be required to compensate such Lender or such other corporation for the increased cost to such Lender or such other corporation or the reduction in the rate of return to such Lender or such other corporation as a result of such increase of capital. In determining such additional amounts, each Lender will act reasonably and in good faith and will use averaging and attribution methods which are reasonable, provided that such Lender's -------- determination of compensation owing under this Section 1.10(c) shall, absent manifest error, be final and conclusive and binding on all the parties hereto. Each Lender, upon determining that any additional amounts will be payable pursuant to this Section 1.10(c), will give prompt written notice thereof to the Borrower, which notice shall show in reasonable detail the basis therefor and the calculation thereof. (d) In the event that any Lender shall determine (which determination shall, absent manifest error, be final and conclusive and binding on all parties hereto) at any time that such Lender is required to maintain reserves (including, without limitation, any marginal, emergency, supplemental, special or other reserves required by applicable law) which have been established by any Federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory body with jurisdiction over such Lender (including any branch, Affiliate or funding office thereof) in respect of any Foreign Currency Revolving Loans or any category of liabilities which includes deposits by reference to which the interest rate on any Foreign Currency Revolving Loan is determined or any category of extensions of credit or other assets which includes loans by a non-United States office of any Lender to non-United States residents, then, unless such reserves are included in the calculation of the interest rate applicable to such Foreign Currency Revolving Loans or in Section 1.10(a)(ii), such Lender shall promptly notify the Administrative Agent and the Borrower in writing specifying the additional amounts required to indemnify such Lender against the cost of maintaining such reserves (such written notice to provide in reasonable detail a computation of such additional amounts) and, subject to Section -14- 1.16, the Borrower shall, and shall be obligated to, pay to such Lender such specified amounts as additional interest at the time that the Borrower is otherwise required to pay interest in respect of such Foreign Currency Revolving Loan or, if later, on written demand therefor by such Lender. 1.11 Compensation. The Borrower agrees to compensate each Lender, upon ------------ its written request (which request shall set forth in reasonable detail the basis for requesting such compensation), for all losses, expenses and liabilities (including, without limitation, any loss, expense or liability incurred by reason of the liquidation or reemployment of deposits or other funds required by such Lender to fund its Euro Rate Loans but excluding loss of anticipated profits) which such Lender may sustain: (i) if for any reason (other than a default by such Lender or the Administrative Agent) a Borrowing of, or conversion from or into, Euro Rate Loans does not occur on a date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation (whether or not withdrawn by the Borrower or deemed withdrawn pursuant to Section 1.10(a)); (ii) if any prepayment or repayment (including any prepayment or repayment made pursuant to Section 4.01, Section 4.02 or as a result of an acceleration of the Loans pursuant to Section 10) or conversion of any of its Euro Rate Loans occurs on a date which is not the last day of an Interest Period with respect thereto; (iii) if any prepayment of any of its Euro Rate Loans is not made on any date specified in a notice of prepayment given by the Borrower; or (iv) as a consequence of (x) any other default by the Borrower to repay Euro Rate Loans when required by the terms of this Agreement or any Note held by such Lender or (y) any election made pursuant to Section 1.10(b). 1.12 Change of Lending Office; etc. (a) Each Lender may at any time or ------------------------------ from time to time designate, by written notice to the Administrative Agent to the extent not already reflected on Schedule II, one or more lending offices (which, for this purpose, may include lending affiliates of the respective Lender) for the various Foreign Currency Revolving Loans made by such Lender (including, without limitation, by designating a separate lending office (or affiliate) to act as such with respect to Dollar Revolving Loans versus Foreign Currency Revolving Loans); provided that for designations made after the -------- Effective Date, to the extent such designation shall result in increased costs under Section 1.10, 2.06 or 4.04 in excess of those which would be charged in the absence of the designation of a different lending office (including a different affiliate of the respective Lenders), then the Borrower shall not be obligated to pay such excess increased costs (although the Borrower, in accordance with and pursuant to the other provisions of this Agreement, shall be obligated to pay the costs which would apply in the absence of such designation and any subsequent increased costs of the type described in Section 1.10, 2.06 or 4.04 resulting from changes after the date of the respective designation). Each lending office and affiliate of any Lender designated as provided above shall, for all purposes of this Agreement, be treated in the same manner as the respective Lender (and shall be entitled to all indemnities and similar provisions in respect of its acting as such hereunder). (b) Each Lender agrees that on the occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 1.10(d), Section 2.06 or Section 4.04 with respect to such Lender, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans or Letters of Credit affected by such event, provided that such designation is -------- made on such terms that such Lender and its lending office suffer no economic, legal or regulatory -15- disadvantage, with the object of avoiding the consequence of the event giving rise to the operation of such Section. Nothing in this Section 1.12 shall affect or postpone any of the obligations of the Borrower or the right of any Lender provided in Sections 1.10, 2.06 and 4.04. 1.13 Replacement of Lenders. (x) If any Lender becomes a Defaulting ---------------------- Lender or otherwise defaults in its obligations to make Loans, (y) upon the occurrence of an event giving rise to the operation of Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 1.10(d), Section 2.06 or Section 4.04 with respect to any Lender which results in such Lender charging to the Borrower increased costs in excess of those being generally charged by the other Lenders or (z) in the case of a refusal by a Lender or an Indemnifying Lender to consent to certain proposed changes, waivers, discharges or terminations with respect to this Agreement which have been approved by the Required Lenders as (and to the extent) provided in Section 13.12(b), the Borrower shall have the right, if no Default or Event of Default then exists (or, in the case of preceding clause (z), will exist immediately after giving effect to such replacement), to replace such Lender (the "Replaced Lender") or such Indemnifying Lender (the "Replaced Indemnifying Lender"), as the case may be, with one or more other Eligible Transferees, none of whom shall constitute a Defaulting Lender at the time of such replacement (collectively, the "Replacement Lender" or "Replacement Indemnifying Lender," as the case may be) and each of whom shall be required to be reasonably acceptable to the Administrative Agent, provided that: -------- (i) at the time of any replacement of a Lender pursuant to this Section 1.13, the Replacement Lender shall enter into one or more Assignment and Assumption Agreements pursuant to Section 13.04(b) (and with all fees payable pursuant to said Section 13.04(b) to be paid by the Replacement Lender) pursuant to which the Replacement Lender shall acquire all of the Commitments and outstanding Loans of, and in each case participations in Letters of Credit by, the Replaced Lender and, in connection therewith, shall pay to (x) the Replaced Lender in respect thereof an amount equal to the sum of (I) an amount equal to the principal of, and all accrued interest on, all outstanding Loans of the Replaced Lender, (II) an amount equal to all Unpaid Drawings that have been funded by (and not reimbursed to) such Replaced Lender, together with all then unpaid interest with respect thereto at such time, and (III) an amount equal to all accrued, but theretofore unpaid, Fees owing to the Replaced Lender pursuant to Section 3.01, (y) the Issuing Lender an amount equal to such Replaced Lender's RL Percentage of any Unpaid Drawing (which at such time remains an Unpaid Drawing) to the extent such amount was not theretofore funded by such Replaced Lender to the Issuing Lender and (z) the Swingline Lender an amount equal to such Replaced Lender's RL Percentage of any Mandatory Borrowing to the extent such amount was not theretofore funded by such Replaced Lender to the Swingline Lender; (ii) at the time of any replacement of an Indemnifying Lender pursuant to this Section 1.13, the Replacement Indemnifying Lender shall enter into one or more Assignment and Assumption Agreements pursuant to Section 13.04(c) and shall have obtained the written consent of the Fronting Lender (and with all fees payable pursuant to said Section 13.04(c) to be paid by the Replacement Indemnifying Lender) pursuant to which the Replacement Indemnifying Lender shall acquire all Indemnity Participations (and related Indemnity Amounts) of the Replaced Indemnifying Lender and, in -16- connection therewith, shall pay to (x) the Replaced Indemnifying Lender an amount equal to the sum of (I) the aggregate amount of all Obligations funded by the Replaced Indemnifying Lender pursuant to Section 1.17(a), and (II) an amount equal to all accrued, but theretofore unpaid, interest and Fees which would be owing to the Replaced Indemnifying Lender at such time had the Borrower paid all interest and Fees pursuant to the terms of this Agreement through the date upon which the respective replacement occurred (whether or not such amounts would otherwise be then due and payable pursuant to the terms of this Agreement) and (y) the Fronting Lender an amount equal to all amounts required to be paid to the Fronting Lender by the Replaced Indemnifying Lender through and including the date of the respective replacement pursuant to this Section 1.13, to the extent that such amounts have not theretofore been actually paid by the Replaced Indemnifying Lender to the Fronting Lender, in each case determined in accordance with the relevant provisions of Section 1.17; and (iii) all obligations of the Borrower due and owing to the Replaced Lender or Replaced Indemnifying Lender, as the case may be, at such time (other than those specifically described in clause (i) or (ii) above, as the case may be, in respect of which the assignment purchase price has been, or is concurrently being, paid) shall be paid in full to such Replaced Lender or Replaced Indemnifying Lender, as the case may be, concurrently with such replacement. Upon the execution of the respective Assignment and Assumption Agreement, the payment of all relevant amounts referred to in clauses (i), (ii) and (iii) above and, if so requested by the Replacement Lender, delivery to the Replacement Lender of the appropriate Note or Notes executed by the Borrower, the Replacement Lender or Replacement Indemnifying Lender, as the case may be, shall become a Lender or Indemnifying Lender, as the case may be, hereunder and the Replaced Lender or Replaced Indemnifying Lender, as the case may be, shall cease to constitute a Lender or Indemnifying Lender, as the case may be, hereunder, except with respect to indemnification provisions under this Agreement (including, without limitation, Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01), which shall survive as to such Replaced Lender or Replaced Indemnifying Lender, as the case may be. 1.14 Incremental B Term Loan Commitments. (a) So long as no Default ----------------------------------- or Event of Default then exists or would result therefrom, the Borrower, with the prior consent of the Administrative Agent (which consent shall not be unreasonably withheld or delayed), shall have the right to request on one occasion on or before the Incremental Commitment Expiry Date that one or more Lenders (and/or one or more other Persons which will become Lenders as provided below) provide Incremental B Term Loan Commitments and, subject to the terms and conditions contained in this Agreement, make Incremental B Term Loans pursuant thereto; it being understood and agreed, however, that (i) no Lender shall be obligated to provide an Incremental B Term Loan Commitment as a result of any such request by the Borrower, and until such time, if any, as such Lender has agreed in its sole discretion to provide an Incremental B Term Loan Commitment and executed and delivered to the Administrative Agent an Incremental B Term Loan Commitment Agreement as provided in clause (b) of this Section 1.14, such Lender shall not be obligated to fund any Incremental B Term Loans, (ii) any Lender (or, in the circumstances contemplated by clause (v) below, any other Person which will qualify as an -17- Eligible Transferee) may so provide an Incremental B Term Loan Commitment without the consent of any other Lender, (iii) the Incremental B Term Loan Commitments provided pursuant to this Section 1.14 shall be in a minimum aggregate amount (for all Lenders (including in the circumstances contemplated by clause (v) below, Eligible Transferees who will become Lenders)) of at least $25,000,000 and in integral multiples of $1,000,000 in excess thereof, (iv) the aggregate amount of all Incremental B Term Loan Commitments permitted to be provided pursuant to this Section 1.14, when combined with the aggregate amount of all Incremental Revolving Loan Commitments permitted to be provided pursuant to Section 1.15, shall not exceed $100,000,000, (v) if, after the Borrower has requested the then existing Lenders (other than Defaulting Lenders) to provide Incremental B Term Loan Commitments pursuant to this Section 1.14, the Borrower has not received Incremental B Term Loan Commitments in an aggregate amount equal to that amount of Incremental B Term Loan Commitments which the Borrower desires to obtain pursuant to such request (as set forth in the notice provided by the Borrower as provided below), then the Borrower may request Incremental B Term Loan Commitments from Persons which would qualify as Eligible Transferees hereunder in an aggregate amount equal to such deficiency, provided that any such Incremental B Term Loan Commitment provided by any such Eligible Transferee -------- which is not already a Lender shall be in a minimum amount (for such Eligible Transferee) of at least $1,000,000, (vi) prior to the Incremental B Term Loan Borrowing Date, the Borrower shall have certified to the Administrative Agent that the aggregate principal amount of all Incremental B Term Loans being incurred is permitted to be incurred under, and in accordance with, the Senior Subordinated Note Indenture (including, without limitation, by providing to the Administrative Agent (x) an officer's certificate of the Borrower's chief financial officer or treasurer demonstrating (in reasonable detail) that the incurrence of such Incremental B Term Loans may be incurred in accordance with, and will not violate the provisions of, the Senior Subordinated Note Indenture (including, to the extent applicable, the proviso to Section 4.03 of the Senior Subordinated Note Indenture), and (y) the officers' certificate referred to in clause (6) of the definition of "Senior Debt" set forth in the Senior Subordinated Note Indenture), and (vii) all actions taken by the Borrower pursuant to this Section 1.14 shall be done in coordination with the Administrative Agent. (b) In connection with the Incremental B Term Loan Commitments to be provided pursuant to this Section 1.14, (i) the Borrower, the Administrative Agent and each such Lender or other Eligible Transferee (each, an "Incremental B Term Loan Lender") which agrees to provide an Incremental B Term Loan Commitment shall execute and deliver to the Administrative Agent an Incremental B Term Loan Commitment Agreement substantially in the form of Exhibit C (appropriately completed), with the effectiveness of such Incremental B Term Loan Lender's Incremental B Term Loan Commitment to occur upon delivery of such Incremental B Term Loan Commitment Agreement to the Administrative Agent, the payment of any fees required in connection therewith (including, without limitation, any fees payable pursuant to clause (ii) below) and the satisfaction of any other conditions precedent that may be set forth in such Incremental B Term Loan Commitment Agreement, (ii) the Administrative Agent shall receive from the Borrower (or, to the extent agreed to by the Borrower and the respective Incremental B Term Loan Lender, from such respective Incremental B Term Loan Lender) the payment of a non-refundable fee of $3,500 for each Eligible Transferee which -18- becomes a Lender pursuant to this Section 1.14 and (iii) the Borrower shall deliver to the Administrative Agent an opinion or opinions, in form and substance reasonably satisfactory to the Administrative Agent, from counsel to the Borrower reasonably satisfactory to the Administrative Agent and dated such date, covering such of the matters set forth in the opinions of counsel delivered to the Administrative Agent on the Initial Borrowing Date pursuant to Section 5.03 as may be reasonably requested by the Administrative Agent, and such other matters as the Administrative Agent may reasonably request. The Administrative Agent shall promptly notify each Lender as to the effectiveness of the Incremental B Term Loan Commitment Agreement, and at such time Schedule I shall be deemed modified to reflect the Incremental B Term Loan Commitments of such Incremental B Term Loan Lenders. (c) In connection with the incurrence of Incremental B Term Loans pursuant to Section 1.01(c), the Lenders and the Borrower hereby agree that, notwithstanding anything to the contrary contained in this Agreement, the Borrower and the Administrative Agent may take all such actions as may be necessary to ensure that all Lenders with outstanding B Term Loans continue to participate in each Borrowing of outstanding B Term Loans (after giving effect to the incurrence of Incremental B Term Loans pursuant to Section 1.01(c)) on a pro rata basis, including by adding the Incremental B Term Loans to be so - --- ---- incurred to the then outstanding Borrowings of B Term Loans on a pro rata basis --- ---- even though as a result thereof such new Incremental B Term Loans (to the extent required to be maintained as Eurodollar Loans) may effectively have a shorter Interest Period than the then outstanding Borrowings of B Term Loans, and it is hereby agreed that to the extent any then outstanding Borrowings of B Term Loans that are maintained as Eurodollar Loans are affected as a result thereof, any costs of the type described in Section 1.11 incurred by such Lenders in connection therewith shall be for the account of the Borrower. 1.15 Incremental Revolving Loan Commitments. (a) So long as no -------------------------------------- Default or Event of Default then exists or would result therefrom, the Borrower, with the prior consent of the Administrative Agent (which consent shall not be unreasonably withheld or delayed), shall have the right to request on up to three occasions on or prior to the Incremental Commitment Expiry Date that one or more Lenders (and/or one or more other Persons which will become Lenders as provided below) provide Incremental Revolving Loan Commitments and, subject to the applicable terms and conditions contained in this Agreement, make Revolving Loans pursuant thereto; it being understood and agreed, however, that (i) no Lender shall be obligated to provide an Incremental Revolving Loan Commitment as a result of any such request by the Borrower, and until such time, if any, as such Lender has agreed in its sole discretion to provide an Incremental Revolving Loan Commitment and executed and delivered to the Administrative Agent an Incremental Revolving Loan Commitment Agreement in respect thereof as provided in clause (b) of this Section 1.15, such Lender shall not be obligated to fund any Revolving Loans in excess of its Revolving Loan Commitment as in effect prior to giving effect to such Incremental Revolving Loan Commitment provided pursuant to this Section 1.15, (ii) any Lender (or, in the circumstances contemplated by clause (v) below, any other Person which will qualify as an Eligible Transferee) may so provide an Incremental Revolving Loan Commitment without the consent of any other Lender, (iii) each provision of Incremental Revolving Loan Commitments on a given date pursuant to this Section 1.15 shall be in a minimum aggregate amount (for all Lenders (including, in the circumstances contemplated by clause (v) below, -19- Eligible Transferees who will become Lenders)) of at least $25,000,000 and in integral multiples of $1,000,000 in excess thereof, (iv) the aggregate amount of all Incremental Revolving Loan Commitments permitted to be provided pursuant to this Section 1.15, when combined with the aggregate amount of all Incremental B Term Loan Commitments permitted to be provided pursuant to Section 1.14, shall not exceed $100,000,000, (v) if, after the Borrower has requested the then existing Lenders (other than Defaulting Lenders) to provide Incremental Revolving Loan Commitments pursuant to this Section 1.15, the Borrower has not received Incremental Revolving Loan Commitments in an aggregate amount equal to that amount of the Incremental Revolving Loan Commitments which the Borrower desires to obtain pursuant to such request (as set forth in the notice provided by the Borrower to the Administrative Agent as provided above), then the Borrower may request Incremental Revolving Loan Commitments from Persons which would qualify as Eligible Transferees hereunder in an aggregate amount equal to such deficiency, provided that any such Incremental Revolving Loan Commitments provided by any such Eligible Transferee which is not already a Lender shall be in a minimum amount (for such Eligible Transferee) of at least $1,000,000, (vi) prior to the effectiveness of any Incremental Revolving Loan Commitments, the Borrower shall have certified to the Administrative Agent that the aggregate principal amount of all Revolving Loans permitted to be incurred pursuant to such Incremental Revolving Loan Commitments is permitted to be incurred under, and in accordance with, the Senior Subordinated Note Indenture (including, without limitation, by providing to the Administrative Agent (x) an officer's certificate of the Borrower's chief financial officer or treasurer demonstrating (in reasonable detail) that the incurrence of all such Revolving Loans may be incurred in accordance with, and will not violate the provisions of, the Senior Subordinated Note Indenture (including, to the extent applicable, the proviso to Section 4.03 of the Senior Subordinated Note Indenture), and (y) officers' certificate referred to in clause (6) of the definition of "Senior Debt" set forth in the Senior Subordinated Note Indenture), and (vii) all actions taken by the Borrower pursuant to this Section 1.15 shall be done in coordination with the Administrative Agent. (b) In connection with the Incremental Revolving Loan Commitments to be provided pursuant to this Section 1.15, (i) the Borrower, the Administrative Agent and each Lender or other Eligible Transferee (each, an "Incremental RL Lender") which agrees to provide an Incremental Revolving Loan Commitment shall execute and deliver to the Administrative Agent an Incremental Revolving Loan Commitment Agreement substantially in the form of Exhibit D (appropriately completed), with the effectiveness of such Incremental RL Lender's Incremental Revolving Loan Commitment to occur upon delivery of such Incremental Revolving Loan Commitment Agreement to the Administrative Agent, the payment of any fees required in connection therewith (including, without limitation, any fees payable pursuant to clause (ii) below) and the satisfaction of any other conditions precedent that may be set forth in such Incremental Revolving Loan Commitment Agreement, (ii) the Administrative Agent shall receive from the Borrower (or, to the extent agreed to by the Borrower and the respective Incremental RL Lender, from such respective Incremental RL Lender) the payment of a non-refundable fee of $3,500 for each Eligible Transferee which becomes a Lender pursuant to this Section 1.15 and (iii) the Borrower shall deliver to the Administrative Agent an opinion or opinions, in form and substance reasonably satisfactory to the Administrative Agent, from counsel to the Borrower reasonably satisfactory to the Administrative Agent and dated such date, -20- covering such of the matters set forth in the opinions of counsel delivered to the Administrative Agent on the Initial Borrowing Date pursuant to Section 5.03 as may be reasonably requested by the Administrative Agent, and such other matters as the Administrative Agent may reasonably request. The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Incremental Revolving Loan Commitment Agreement, and at such time, (i) the Total Revolving Loan Commitment under, and for all purposes of, this Agreement shall be increased by the aggregate amount of such Incremental Revolving Loan Commitments, and (ii) Schedule I shall be deemed modified to reflect the revised Revolving Loan Commitments of the affected Lenders. (c) At the time of any provision of Incremental Revolving Loan Commitments pursuant to this Section 1.15, the Borrower shall, in coordination with the Administrative Agent, repay outstanding Revolving Loans of certain of the RL Lenders, and incur additional Revolving Loans from certain other RL Lenders (including the Incremental RL Lenders), in each case to the extent necessary so that all of the RL Lenders participate in each outstanding Borrowing of Revolving Loans pro rata on the basis of their respective Revolving --- ---- Loan Commitments (after giving effect to any increase in the Total Revolving Loan Commitment pursuant to this Section 1.15) and with the Borrower being obligated to pay to the respective RL Lenders any costs of the type referred to in Section 1.11 in connection with any such repayment and/or Borrowing. 1.16 Limitation on Additional Amounts. Notwithstanding anything to -------------------------------- the contrary contained in Section 1.10 or 2.06, unless a Lender gives notice to the Borrower that the Borrower is obligated to pay any amount under Section 1.10 or 2.06 within 120 days after the later of (x) the date such Lender incurs the respective increased costs, reduction in the amounts received or receivable hereunder or reduction in return of capital or (y) the date such Lender has actual knowledge of its incurrence of the respective increased costs, reduction in the amounts received or receivable hereunder or reduction in return of capital, such Lender shall only be entitled to be compensated for any such amount by the Borrower pursuant to Section 1.10 or 2.06 to the extent that any such amounts are incurred or suffered on or after the date which occurs 120 days prior to such Lender giving notice to the Borrower that it is obligated to pay the respective amounts pursuant to Section 1.10 or 2.06; provided, however, that -------- ------- if the circumstances giving rise to such claims have a retroactive effect, such 120-day period shall be extended to include the period of such retroactive effect. This Section 1.16 shall have no applicability to any Section of this Agreement other than to Sections 1.10 and 2.06. 1.17 Special Provisions Regarding Revolving Loan Commitments and ----------------------------------------------------------- Indemnifying Lenders. (a) Upon the execution of this Agreement or an - -------------------- Assignment and Assumption Agreement with respect to an Indemnity Participation, as the case may be, each Indemnifying Lender shall be deemed to, and hereby agrees to, have irrevocably purchased a participation (each, an "Indemnity Participation") from the Fronting Lender in the Revolving Loan Commitment of the Fronting Lender (including, without limitation, the related Revolving Loans of the Fronting Lender, the obligations of the Fronting Lender to fund its share of Mandatory Borrowings and the participation of the Fronting Lender in outstanding Letters of Credit and Unpaid Drawings with respect thereto), in a proportionate amount based on such Indemnifying Lender's Indemnity Amount. Upon the occurrence of a Triggering Event, each Indemnifying Lender, upon one Business Day's notice from the Fronting Lender (provided that such notice -21- shall not be required if a Triggering Event has occurred and a Default or Event of Default of the type described in Section 10.05 is then in existence, in which case the respective Indemnifying Lender shall immediately pay all amounts described below to the Fronting Lender), shall deliver to the Fronting Lender by wire transfer in immediately available funds and in the relevant Approved Currency (x) its proportionate share, based on its Indemnity Amount, of the aggregate unpaid principal amount of the Fronting Lender's Revolving Loans, (y) its proportionate share, based on its Indemnity Amount, of each Mandatory Borrowing thereafter made pursuant to this Agreement and (z) its proportionate share, based on its Indemnity Amount, of the aggregate amount of Unpaid Drawings from time to time hereunder with respect to Letters of Credit. Each Indemnifying Lender's obligations under this Section 1.17 shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (a) any set-off, counterclaim, recoupment, defense or other right which the Administrative Agent, the Fronting Lender or any Lender may have against the Fronting Lender, any Credit Party or any other Person for any reason whatsoever, (b) the occurrence or continuance of a Default or an Event of Default, (c) any adverse change in the condition (financial or otherwise) of any Credit Party, (d) any breach of this Agreement by any Credit Party, the Administrative Agent, the Fronting Lender or any Lender, or (e) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing. (b) For periods prior to the date of the required funding by an Indemnifying Lender of the respective Obligations in accordance with the second sentence of Section 1.17(a), the Fronting Lender shall promptly pay by wire transfer of immediately available funds and in the relevant Approved Currency to each applicable Indemnifying Lender, as an indemnity fee for the Indemnity Participation provided to the Fronting Lender by such Indemnifying Lender in this Section 1.17, the following amounts, in each case in a proportionate amount based on the relationship of the respective Indemnifying Lender's Indemnity Amount (or, in the case of clause (iii) below, the unused amount thereof) to the Fronting Lender's Revolving Loan Commitment (or, in the case of clause (iii) below, the unused amount thereof): (i) an amount equal to (x) the excess of the interest actually received by the Fronting Lender pursuant to Section 1.08 from the Borrower over the applicable Euro Rate or Base Rate, as the case may be, on such Revolving Loans less (y) 0.250% per annum (or such different percentage per ---- annum as may be agreed to by the Fronting Lender and an Indemnifying Lender in any given case) to be retained by the Fronting Lender as an Indemnity Participation fee, (ii) an amount equal to (x) the amount of Letter of Credit Fees actually received pursuant to Section 3.01(b) less (y) 0.250% per annum (or ---- such different percentage per annum as may be agreed to by the Fronting Lender and an Indemnifying Lender in any given case) to be retained by the Fronting Lender as an Indemnity Participation fee and (iii) the Commitment Commission actually received by the Fronting Lender pursuant to Section 3.01(a) from the Administrative Agent; provided that if any such indemnity fee payable to an -------- Indemnifying Lender is less than $10,000, the Fronting Lender shall not be required to so pay such indemnity fee to an Indemnifying Lender until the aggregate unpaid amount of indemnity fees payable to such Indemnifying Lender accumulates to an amount exceeding $10,000. The excess, if any, of the interest paid to the Fronting Lender on the Revolving Loans over the interest distributable to an Indemnifying Lender under this Section 1.17(b) in respect thereof, and the excess, if any, of the Letter of Credit Fees paid to the Fronting Lender over the Letter of Credit Fees distributable to such Indemnifying Lender under this Section 1.17(b), shall -22- be retained by the Fronting Lender. After an Indemnifying Lender has funded any Obligations required to be funded by it pursuant to the second sentence of Section 1.17(a), then any interest actually received by the Fronting Lender with respect to the Obligations so funded (with any such payments so received by the Fronting Lender to be allocated proportionally to its Obligations in respect of which received) shall be paid by it to the respective Indemnifying Lender. (c) After an Indemnifying Lender is required to fund Obligations pursuant to the second sentence of Section 1.17(a), and so long as the respective Indemnifying Lender shall have made all payments to the Fronting Lender so required by this Section 1.17, the Fronting Lender shall promptly pay by wire transfer of immediately available funds to such Indemnifying Lender any principal or other payments thereafter recovered by the Fronting Lender from the Borrower to the extent allocable to such Indemnifying Lender's funded Indemnity Participation. If the Fronting Lender shall pay any amount to an Indemnifying Lender pursuant to this Section 1.17 in the belief or expectation that a related payment has been or will be received or collected and such related payment is not received or collected by the Fronting Lender, then such Indemnifying Lender will promptly on demand by the Fronting Lender return such amount to the Fronting Lender, together with interest thereon at such rate as the Fronting Lender shall determine to be customary between Lenders for correction of errors. If the Fronting Lender determines at any time that any amount received or collected by the Fronting Lender pursuant to this Agreement is to be returned to the Borrower under this Agreement or paid to any other Person or entity pursuant to any insolvency law, any sharing clause in this Agreement or otherwise then, notwithstanding any other provision of this Agreement, the Fronting Lender shall not be required to distribute any portion thereof to any Indemnifying Lender, and each Indemnifying Lender will promptly on demand by the Fronting Lender repay any portion that the Fronting Lender shall have distributed to such Indemnifying Lender, together with interest thereon at such rate, if any, as the Fronting Lender shall pay to the Borrower or such Person or entity with respect thereto. If any amounts returned by the Fronting Lender to the Borrower pursuant to this Section 1.17 are later recouped by the Fronting Lender, the Fronting Lender shall promptly pay to each Indemnifying Lender a proportionate amount based on such Indemnifying Lender's funded Indemnity Amount. (d) If the Fronting Lender incurs any costs or expenses (including, without limitation, in indemnifying the Administrative Agent pursuant to Section 11.07) pursuant to this Agreement or any other Credit Document, or in connection with any effort to enforce or protect the Fronting Lender's or any Indemnifying Lender's rights or interests with respect to this Agreement or the other Credit Documents, then, except to the extent resulting from the Fronting Lender's gross negligence or willful misconduct (as determined by a final and non-appealable judgment by a court of competent jurisdiction), each Indemnifying Lender will reimburse the Fronting Lender on demand for each such Indemnifying Lender's proportionate share (based on the relationship of such Indemnifying Lender's Indemnity Amount to the Revolving Loan Commitment of the Fronting Lender) of any portion of such costs or expenses which is not reimbursed by or on behalf of the Borrower. If the Fronting Lender recovers any amounts for which the Fronting Lender has previously been reimbursed by an Indemnifying Lender hereunder, the Fronting Lender shall promptly distribute to such Indemnifying Lender such Indemnifying Lender's proportionate share thereof. -23- (e) Each Indemnifying Lender hereby agrees to indemnify and hold harmless the Fronting Lender from any applicable taxes, penalties, interest and other expenses, costs and losses incurred or payable by the Fronting Lender as a result of either (i) such Indemnifying Lender's failure to submit any statement, document, form or certificate or other evidence that such Indemnifying Lender is required to provide pursuant to Section 4.04(b) or (ii) the Fronting Lender's reliance on any such statement, document, form or certificate or other evidence which such Indemnifying Lender has provided to the Fronting Lender pursuant to Section 4.04(b). (f) Notwithstanding any provision to the contrary contained in this Agreement or in the other Credit Documents and so long as an Indemnifying Lender has not failed to make any payments required to be made by such Indemnifying Lender under this Section 1.17 or is not otherwise in default under its obligations under this Section 1.17, the Fronting Lender hereby agrees that, with respect to any amendment, modification, termination or waiver of any provision of this Agreement or the other Credit Documents, or any departure by any Credit Party therefrom, if votes or consents are solicited from Lenders holding Revolving Loan Commitments pursuant to Section 13.12, then the Indemnity Amount of the respective Indemnifying Lender shall only be voted if, and as, directed by the respective Indemnifying Lender. It is understood and agreed that the Fronting Lender shall be entitled to vote that portion of its Revolving Loan Commitment which is not subject to one or more Indemnity Participations in such manner as it shall determine in its sole discretion, and that the Fronting Lender may give votes with respect to its outstanding Term Loans as determined by it in its sole discretion. (g) Except as otherwise expressly provided herein, in the event that any Person obligated to make a payment to any other Person pursuant to this Section 1.17 fails to make available to the Person entitled to receive such payment the amount of such payment, the Person entitled to receive such payment shall be entitled to recover such amount on demand from such other Person, together with interest at the customary rate set by the Administrative Agent for the correction of errors among the Lenders for three Business Days and thereafter at the sum of the Base Rate plus 2.00% per annum. ---- (h) The Fronting Lender may from time to time sell or transfer to other Persons assignments or participations or other interests in the Fronting Lender's Revolving Loans and Revolving Loan Commitment, but not in the portion thereof allocated to the Indemnity Participation hereunder. An Indemnifying Lender's Indemnity Participation may not be sold, pledged, assigned or otherwise transferred without the Fronting Lender's and the Administrative Agent's prior written consent. (i) No increase to the Revolving Loan Commitment of the Fronting Lender (whether pursuant to Section 1.15, Section 13.04 or otherwise) shall have any effect on the Indemnity Amount of any Indemnity Participant, in each case except as may be otherwise agreed in writing by the respective Indemnity Participant and the Fronting Lender. Upon any reduction to the Revolving Loan Commitment of the Fronting Lender (excluding any termination or reduction of such Revolving Loan Commitment pursuant to Section 10 and excluding any reduction to the Revolving Loan Commitment to the extent that, after giving effect thereto, the aggregate Principal Amount of the Revolving Loans of the Fronting Lender then outstanding, when added to the Fronting Lender's RL Percentage of the aggregate Principal Amount of all -24- Swingline Loans then outstanding and the Fronting Lender's RL Percentage of all Letter of Credit Outstandings at such time, would exceed Revolving Loan Commitment of the Fronting Lender), such reduction shall apply to proportionally reduce the Indemnity Amounts of the various Indemnifying Lenders pursuant to this Section 1.17; provided that reductions to the Revolving Loan Commitment of -------- the Fronting Lender pursuant to Section 3.02(b) and/or 13.12(b), as the case may be, shall be applied only to reduce the Indemnity Amount of any Indemnifying Lender to the extent such reduction is made for purpose of removing the respective Indemnifying Lender. (j) In no event shall (x) the Indemnity Participation be construed as a loan or other extension of credit by an Indemnifying Lender to the Fronting Lender or (y) this Agreement be construed to require an Indemnifying Lender to fund or pay to the Fronting Lender such Indemnifying Lender's Indemnity Amount except upon the occurrence of a Triggering Event pursuant to Section 1.17(a). Each Indemnifying Lender agrees that the Fronting Lender may take legal action to enforce or protect an Indemnifying Lender's or the Fronting Lender's interests in respect of this Agreement and the other Credit Documents. (k) All determinations by the Fronting Lender pursuant to this Section 1.17 (including, without limitation, with respect to the Indemnity Amounts from time to time in effect, and with respect to amounts owing by or to the various Indemnifying Lenders) shall, absent manifest error, be conclusive and binding on all parties hereto. (l) The Fronting Lender hereby agrees that, if an Indemnifying Lender has arranged for an assignment of a portion of the Revolving Loan Commitment of the Fronting Lender which does not exceed the Indemnity Amount of the respective Indemnifying Lender (and if, in connection therewith, the Indemnity Participation of the respective Indemnifying Lender in the portion of the Revolving Loan Commitment so assigned is to be terminated), then so long as all of the applicable requirements of Section 13.04(b) are satisfied (including obtaining the consents required thereunder), then the Fronting Lender shall, upon the request of the respective Indemnifying Lender, enter into an assignment of the related portion of the Revolving Loan Commitment of the Fronting Lender so long as (x) at such time, an Assignment and Assumption Agreement is executed by all parties required to execute same (or consent thereto) in form and substance reasonably satisfactory to the Fronting Lender and (y) concurrently therewith, the Indemnity Participation in the portion of the Revolving Loan Commitment so assigned is terminated pursuant to an agreement in form and substance reasonably satisfactory to the Fronting Lender. It is understood and agreed that, after the Effective Date, the Fronting Lender shall have no obligation to agree to any subsequent Indemnity Participation with respect to all or any portion of the Revolving Loan Commitment from time to time held by the Fronting Lender (although the Fronting Lender may, in its sole discretion, agree to subsequent Indemnity Participations from time to time after the Effective Date). SECTION 2. Letters of Credit. ----------------- 2.01 Letters of Credit. (a) Subject to and upon the terms and ----------------- conditions set forth herein, the Borrower may request that the Issuing Lender issue, at any time and from time to time on and after the Initial Borrowing Date and prior to the 60th day prior to the Revolving Loan -25- Maturity Date, for the account of the Borrower and for the benefit of (x) any holder (or any trustee, agent or other similar representative for any such holders) of L/C Supportable Obligations, an irrevocable standby letter of credit, in a form customarily used by the Issuing Lender or in such other form as is reasonably acceptable to the Issuing Lender, and (y) sellers of goods to the Borrower or any of its Subsidiaries, an irrevocable trade letter of credit, in a form customarily used by the Issuing Lender or in such other form as has been approved by the Issuing Lender (each such letter of credit, a "Letter of Credit" and, collectively, the "Letters of Credit"). All Letters of Credit shall be issued on a sight basis only and shall be denominated in an Approved Currency. (b) Subject to and upon the terms and conditions set forth herein, the Issuing Lender agrees that it will, at any time and from time to time on and after the Initial Borrowing Date and prior to the 60th day prior to the Revolving Loan Maturity Date, following its receipt of the respective Letter of Credit Request, issue for account of the Borrower, one or more Letters of Credit as are permitted to remain outstanding hereunder without giving rise to a Default or an Event of Default, provided that the Issuing Lender shall not be -------- under any obligation to issue any Letter of Credit of the types described above if at the time of such issuance: (i) any order, judgment or decree of any governmental authority or arbitrator shall purport by its terms to enjoin or restrain the Issuing Lender from issuing such Letter of Credit or any requirement of law applicable to the Issuing Lender or any request or directive (whether or not having the force of law) from any governmental authority with jurisdiction over the Issuing Lender shall prohibit, or request that the Issuing Lender refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the Issuing Lender with respect to such Letter of Credit any restriction or reserve or capital requirement (for which the Issuing Lender is not otherwise compensated hereunder) not in effect with respect to the Issuing Lender on the date hereof, or any unreimbursed loss, cost or expense which was not applicable or in effect with respect to the Issuing Lender as of the date hereof and which the Issuing Lender reasonably and in good faith deems material to it; or (ii) the Issuing Lender shall have received from the Borrower, any other Credit Party or the Required Lenders prior to the issuance of such Letter of Credit notice of the type described in the second sentence of Section 2.03(b). 2.02 Maximum Letter of Credit Outstandings; Final Maturities. ------------------------------------------------------- Notwithstanding anything to the contrary contained in this Agreement, (i) no Letter of Credit shall be issued the Stated Amount of which, when added to the Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and prior to the issuance of, the respective Letter of Credit) at such time would exceed either (x) $50,000,000 or (y) when added to the sum of (I) the aggregate Principal Amount of all Revolving Loans then outstanding and (II) the aggregate Principal Amount of all Swingline Loans then outstanding, an amount equal to the Total Available Revolving Loan Commitment at such time, and (ii) each Letter of Credit shall by its terms terminate on or before the earlier of (A) the date which occurs 12 months after the date of the issuance thereof (although any such Letter of Credit may be extendible for successive periods of up to 12 months, but, in each case, not beyond the tenth Business Day (or the 30/th/ day in the -26- case of trade Letters of Credit) prior to the Revolving Loan Maturity Date, on terms acceptable to the Issuing Lender) and (B) ten Business Days (or 30 days in the case of trade Letters of Credit) prior to the Revolving Loan Maturity Date. 2.03 Letter of Credit Requests; Minimum Stated Amount. (a) Whenever ------------------------------------------------ the Borrower desires that a Letter of Credit be issued for its account, the Borrower shall give the Administrative Agent and the Issuing Lender at least four Business Days' written notice thereof (including by way of facsimile) (or such shorter period as is acceptable to the Issuing Lender). Each notice shall be in the form of Exhibit E, appropriately completed (each a "Letter of Credit Request"). (b) The making of each Letter of Credit Request shall be deemed to be a representation and warranty by the Borrower to the Administrative Agent, the Issuing Lender and the Lenders that such Letter of Credit may be issued in accordance with, and will not violate the requirements of, Section 2.02. Unless the Issuing Lender has received notice from the Borrower, any other Credit Party or the Required Lenders before it issues a Letter of Credit that one or more of the conditions specified in Section 5 or 6 are not then satisfied, or that the issuance of such Letter of Credit would violate Section 2.02, then the Issuing Lender shall, subject to the terms and conditions of this Agreement, issue the requested Letter of Credit for the account of the Borrower in accordance with the Issuing Lender's usual and customary practices. Upon the issuance of or modification or amendment to any standby Letter of Credit, the Issuing Lender shall promptly notify the Borrower and the Administrative Agent, in writing of such issuance, modification or amendment and such notice shall be accompanied by a copy of such issuance, modification or amendment, as the case may be. Promptly after receipt of such notice, the Administrative Agent shall notify the Participants, in writing, of such issuance, modification or amendment. In addition, with respect to trade Letters of Credit, the Issuing Lender shall on the first Business Day of each week furnish to the Administrative Agent and the Borrower, by facsimile, a report detailing the aggregate Stated Amount of all trade Letters of Credit outstanding during the preceding week. Notwithstanding anything to the contrary contained in this Agreement, in the event that a Lender Default exists with respect to an RL Lender, the Issuing Lender shall not be required to issue any Letter of Credit unless the Issuing Lender has entered into arrangements satisfactory to it and the Borrower to eliminate the Issuing Lender's risk with respect to the participation in Letters of Credit by the Defaulting Lender or Lenders, including by cash collateralizing such Defaulting Lender's or Lenders' RL Percentage of the Letter of Credit Outstandings. (c) The initial Stated Amount of each Letter of Credit shall not be less than $50,000 (or, in the case of a Letter of Credit issued in a Foreign Currency, the Dollar Equivalent thereof) or such lesser amount as is acceptable to the Issuing Lender. 2.04 Letter of Credit Participations. (a) Immediately upon the ------------------------------- issuance by the Issuing Lender of any Letter of Credit, the Issuing Lender shall be deemed to have sold and transferred to each RL Lender (each such RL Lender, in its capacity under this Section 2.04, a "Participant"), and each such Participant shall be deemed irrevocably and unconditionally to have purchased and received from the Issuing Lender, without recourse or warranty, an undivided interest and participation, to the extent of such Participant's RL Percentage, in such Letter of -27- Credit, each drawing or payment made thereunder and the obligations of the Borrower under this Agreement with respect thereto, and any security therefor or guaranty pertaining thereto. Upon any change in the Revolving Loan Commitments or RL Percentages of the Lenders pursuant to Section 1.13, 1.15 or 13.04(b), it is hereby agreed that, with respect to all outstanding Letters of Credit and Unpaid Drawings relating thereto, there shall be an automatic adjustment to the participations pursuant to this Section 2.04 to reflect the new RL Percentages of the assignor and assignee Lender, as the case may be. (b) In determining whether to pay under any Letter of Credit, the Issuing Lender shall not have any obligation relative to the other Lenders other than to confirm that any documents required to be delivered under such Letter of Credit appear to have been delivered and that they appear to substantially comply on their face with the requirements of such Letter of Credit. Any action taken or omitted to be taken by the Issuing Lender under or in connection with any Letter of Credit issued by it shall not create for the Issuing Lender any resulting liability to the Borrower, any other Credit Party, any Lender or any other Person unless such action is taken or omitted to be taken with gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision). (c) In the event that the Issuing Lender makes any payment under any Letter of Credit issued by it and the Borrower shall not have reimbursed such amount in full to the Issuing Lender pursuant to Section 2.05(a), the Issuing Lender shall promptly notify the Administrative Agent, which shall promptly notify each Participant of such failure, and each Participant shall promptly and unconditionally pay to the Issuing Lender the amount of such Participant's RL Percentage of such unreimbursed payment in Dollars (or, in the case of any unreimbursed payment made in a Foreign Currency, of the Dollar Equivalent of such unreimbursed payment, as determined by the Issuing Lender on the date on which such unreimbursed payment was made by the Issuing Lender) and in same day funds. If the Administrative Agent so notifies, prior to 12:00 Noon (New York time) on any Business Day, any Participant required to fund a payment under a Letter of Credit, such Participant shall make available to the Issuing Lender in Dollars (or, in the case of any unreimbursed payment made in a Foreign Currency, of the Dollar Equivalent thereof) such Participant's RL Percentage of the amount of such payment on such Business Day in same day funds. If and to the extent such Participant shall not have so made its RL Percentage of the amount of such payment available to the Issuing Lender, such Participant agrees to pay to the Issuing Lender, forthwith on demand such amount, together with interest thereon, for each day from such date until the date such amount is paid to the Issuing Lender at the overnight Federal Funds Rate (or, in the case of amounts owned in a Foreign Currency, at the Issuing Lender's customary rate for interbank advances) for the first three days and at the interest rate applicable to Revolving Loans that are maintained as Base Rate Loans for each day thereafter. The failure of any Participant to make available to the Issuing Lender its RL Percentage of any payment under any Letter of Credit shall not relieve any other Participant of its obligation hereunder to make available to the Issuing Lender its RL Percentage of any payment under any Letter of Credit on the date required, as specified above, but no Participant shall be responsible for the failure of any other Participant to make available to the Issuing Lender such other Participant's RL Percentage of any such payment. -28- (d) Whenever the Issuing Lender receives a payment of a reimbursement obligation as to which it has received any payments from the Participants pursuant to clause (c) above, the Issuing Lender shall pay to each such Participant which has paid its RL Percentage thereof, in Dollars (or, in the case of any payment received in a Foreign Currency, of the Dollar Equivalent thereof) and in same day funds, an amount equal to such Participant's share (based upon the proportionate aggregate amount originally funded by such Participant to the aggregate amount funded by all Participants) of the principal amount of such reimbursement obligation and interest thereon accruing after the purchase of the respective participations. (e) Upon the request of any Participant, the Administrative Agent shall furnish to such Participant copies of any standby Letter of Credit issued by it and such other documentation as may reasonably be requested by such Participant. (f) The obligations of the Participants to make payments to the Issuing Lender with respect to Letters of Credit shall be irrevocable and not subject to any qualification or exception whatsoever and shall be made in accordance with the terms and conditions of this Agreement under all circumstances, including, without limitation, any of the following circumstances: (i) any lack of validity or enforceability of this Agreement or any of the other Credit Documents; (ii) the existence of any claim, setoff, defense or other right which the Borrower or any of its Subsidiaries may have at any time against a beneficiary named in a Letter of Credit, any transferee of any Letter of Credit (or any Person for whom any such transferee may be acting), the Administrative Agent, any Participant, or any other Person, whether in connection with this Agreement, any Letter of Credit, the transactions contemplated herein or any unrelated transactions (including any underlying transaction between the Borrower or any Subsidiary of the Borrower and the beneficiary named in any such Letter of Credit); (iii) any draft, certificate or any other document presented under any Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; (iv) the surrender or impairment of any security for the performance or observance of any of the terms of any of the Credit Documents; or (v) the occurrence of any Default or Event of Default. 2.05 Agreement to Repay Letter of Credit Drawings. (a) The Borrower agrees to reimburse the Issuing Lender, by making payment to the Administrative Agent in Dollars (or, in the case of any payment or disbursement made by the Issuing Lender in a Foreign Currency, of the Dollar Equivalent of such payment or disbursement as determined by the Issuing Lender on the date of such payment or disbursement) in immediately available funds at the Payment Office, for any payment or disbursement made by the Issuing Lender under any Letter of Credit -29- issued by it (each such amount (or the Dollar Equivalent thereof, as the case may be), so paid until reimbursed, an "Unpaid Drawing"), not later than one Business Day following receipt by the Borrower of notice of such payment or disbursement (provided that (x) to the extent that any such notice is received by the Borrower after 12:00 Noon (New York time) on any Business Day, such reimbursement shall be required on the immediately succeeding Business Day, and (y) notwithstanding the foregoing, no such notice shall be required to be given if a Default or an Event of Default under Section 10.05 shall have occurred and be continuing, in which case the Unpaid Drawing shall be due and payable immediately without presentment, demand, protest or notice of any kind (all of which are hereby waived by the Borrower)), with interest on the amount so paid or disbursed by the Issuing Lender, to the extent not reimbursed prior to 12:00 Noon (New York time) on the date of such payment or disbursement, from and including the date paid or disbursed to but excluding the date such Issuing Lender was reimbursed by the Borrower therefor at a rate per annum equal to the Base Rate in effect from time to time plus the Applicable Margin as in effect from time to time for Revolving Loans that are maintained as Base Rate Loans; provided, however, to the extent such amounts are not reimbursed prior to 12:00 - -------- ------- Noon (New York time) on the third Business Day following the receipt by the Borrower of notice of such payment or disbursement or following the occurrence of a Default or an Event of Default under Section 10.05, interest shall thereafter accrue on the amounts so paid or disbursed by the Issuing Lender (and until reimbursed by the Borrower) at a rate per annum equal to the Base Rate in effect from time to time plus the Applicable Margin for Revolving Loans that are maintained as Base Rate Loans as in effect from time to time plus 2%, with such interest to be payable on demand. The Issuing Lender shall give the Borrower prompt written notice of each Drawing under any Letter of Credit issued by it, provided that the failure to give any such notice shall in no way affect, impair - -------- or diminish the Borrower's obligations hereunder. (b) The obligations of the Borrower under this Section 2.05 to reimburse the Issuing Lender with respect to drafts, demands and other presentations for payment under Letters of Credit issued by it (each a "Drawing") (including, in each case, interest thereon) shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which the Borrower or any Subsidiary of the Borrower may have or have had against any Lender (including in its capacity as the Issuing Lender or as a Participant), including, without limitation, any defense based upon the failure of any drawing under a Letter of Credit to conform to the terms of the Letter of Credit or any nonapplication or misapplication by the beneficiary of the proceeds of such Drawing; provided, -------- however, that the Borrower shall not be obligated to reimburse the Issuing - ------- Lender for any wrongful payment made by the Issuing Lender under a Letter of Credit issued by it as a result of acts or omissions constituting willful misconduct or gross negligence on the part of the Issuing Lender (as determined by a court of competent jurisdiction in a final and non-appealable decision). 2.06 Increased Costs. If at any time after the Effective Date, the --------------- introduction of or any change in any applicable law, rule, regulation, order, guideline or request or in the interpretation or administration thereof by the NAIC or any governmental authority charged with the interpretation or administration thereof, or compliance by the Issuing Lender or any Participant with any request or directive by the NAIC or by any such governmental authority (whether or not having the force of law), shall either (i) impose, modify or make applicable any reserve, deposit, capital adequacy or similar requirement against letters of credit issued by the Issuing Lender or -30- participated in by any Participant, or (ii) impose on the Issuing Lender or any Participant any other conditions relating, directly or indirectly, to this Agreement or any Letter of Credit; and the result of any of the foregoing is to increase the cost to the Issuing Lender or any Participant of issuing, maintaining or participating in any Letter of Credit, or reduce the amount of any sum received or receivable by the Issuing Lender or any Participant hereunder or reduce the rate of return on its capital with respect to Letters of Credit (except for changes in the rate of tax on, or determined by reference to, the net income or profits of the Issuing Lender or such Participant pursuant to the laws of the jurisdiction in which it is organized or in which its principal office or applicable lending office is located or any subdivision thereof or therein), then, upon the delivery of the certificate referred to below to the Borrower by the Issuing Lender or any Participant (a copy of which certificate shall be sent by the Issuing Lender or such Participant to the Administrative Agent), the Borrower agrees, subject to Section 1.16, to pay to the Issuing Lender or such Participant such additional amount or amounts as will compensate the Issuing Lender or such Participant for such increased cost or reduction in the amount receivable or reduction on the rate of return on its capital. The Issuing Lender or any Participant, upon determining that any additional amounts will be payable pursuant to this Section 2.06, will give prompt written notice thereof to the Borrower, which notice shall include a certificate submitted to the Borrower by the Issuing Lender or such Participant (a copy of which certificate shall be sent by the Issuing Lender or such Participant to the Administrative Agent), setting forth in reasonable detail the basis therefor and the calculation of such additional amount or amounts necessary to compensate the Issuing Lender or such Participant. The certificate required to be delivered pursuant to this Section 2.06 shall, absent manifest error, be final and conclusive and binding on the Borrower. SECTION 3. Commitment Commission; Fees; Reductions of ------------------------------------------ Commitment. - ---------- 3.01 Fees. (a) The Borrower agrees to pay to the Administrative ---- Agent for distribution to each Non-Defaulting RL Lender a commitment commission (the "Commitment Commission") for the period from and including the Effective Date to but excluding the Revolving Loan Maturity Date (or such earlier date on which the Total Revolving Loan Commitment has been terminated) computed at a rate per annum equal to the Applicable Commitment Commission Percentage on the Unutilized Revolving Loan Commitment of such Non-Defaulting RL Lender as in effect from time to time. Accrued Commitment Commission shall be due and payable quarterly in arrears on each Quarterly Payment Date and on the date upon which the Total Revolving Loan Commitment is terminated. (b) The Borrower agrees to pay to the Administrative Agent for distribution to each RL Lender (based on each such RL Lender's respective RL Percentage) a fee in respect of each Letter of Credit (the "Letter of Credit Fee") for the period from and including the date of issuance of such Letter of Credit to and including the date of termination or expiration of such Letter of Credit, computed at a rate per annum equal to the Applicable Margin then in effect with respect to Revolving Loans that are maintained as Eurodollar Loans on the daily Stated Amount of each such Letter of Credit. Accrued Letter of Credit Fees shall be due and payable quarterly in arrears on each Quarterly Payment Date and on the first day on or after the termination of the Total Revolving Loan Commitment upon which no Letters of Credit remain outstanding. -31- (c) The Borrower agrees to pay to the Issuing Lender, for its own account, a facing fee in respect of each Letter of Credit issued by it (the "Facing Fee") for the period from and including the date of issuance of such Letter of Credit to and including the date of termination or expiration of such Letter of Credit, computed at a rate per annum equal to 1/4 of 1% on the daily Stated Amount of such Letter of Credit, provided that in any event the minimum ------ amount of Facing Fees payable in any twelve-month period for each Letter of Credit shall be not less than $500; it being agreed that, on the day of issuance of any Letter of Credit and on each anniversary thereof prior to the termination or expiration of such Letter of Credit, if $500 will exceed the amount of Facing Fees that will accrue with respect to such Letter of Credit for the immediately succeeding twelve-month period, the full $500 shall be payable on the date of issuance of such Letter of Credit and on each such anniversary thereof. Except as otherwise provided in the proviso to the immediately preceding sentence, accrued Facing Fees shall be due and payable quarterly in arrears on each Quarterly Payment Date and upon the first day on or after the termination of the Total Revolving Loan Commitment upon which no Letters of Credit remain outstanding. (d) The Borrower agrees to pay to the Issuing Lender, for its own account, upon each payment under, issuance of, or amendment to, any Letter of Credit issued by it, such amount as shall at the time of such event be the administrative charge and the reasonable expenses which the Issuing Lender is generally imposing in connection with such occurrence with respect to letters of credit. (e) Concurrently with all voluntary prepayments of principal of B Term Loans and all mandatory prepayments of principal of B Term Loans (other than mandatory repayments made pursuant to Sections 4.02(c) and (f)), in each case which are made on or prior to May 9, 2002, the Borrower will pay to the Administrative Agent, for the ratable account of each Lender with outstanding B Term Loans, a fee equal to 1.0% of the aggregate principal amount of such prepayment. (f) The Borrower agrees to pay to the Administrative Agent, for its own account, such fees as may be agreed to in writing from time to time by the Borrower and the Administrative Agent. 3.02 Voluntary Termination of Unutilized Revolving Loan -------------------------------------------------- Commitments. (a) Upon at least one Business Day's prior written notice to the - ----------- Administrative Agent at the Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders), the Borrower shall have the right, at any time or from time to time, without premium or penalty to terminate the Total Unutilized Revolving Loan Commitment in whole, or reduce it in part, pursuant to this Section 3.02(a), in an integral multiple of $1,000,000 in the case of partial reductions to the Total Unutilized Revolving Loan Commitment, provided that (i) any reduction to the Total Unutilized Revolving Loan - -------- Commitment shall in no case be in an amount which would cause the Blocked Revolving Loan Commitment to exceed the Total Unutilized Revolving Loan Commitment (immediately after giving effect to such reduction) and (ii) each such reduction shall apply proportionately to permanently reduce the Revolving Loan Commitment of each RL Lender. -32- (b) In the event of a refusal by a Lender to consent to certain proposed changes, waivers, discharges or terminations with respect to this Agreement which have been approved by the Required Lenders as (and to the extent) provided in Section 13.12(b), the Borrower may, subject to its compliance with the requirements of Section 13.12(b), upon five Business Days' prior written notice to the Administrative Agent at the Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders) terminate all of the Commitments of such Lender (or in the case of the Fronting Lender only, that portion of its Revolving Loan Commitment which gave rise to the need to obtain the individual consent of one or more Indemnifying Lenders whose consents were not provided), so long as all Loans, together with accrued and unpaid interest, Fees and all other amounts, owing to such Lender (or in the case of the repayment of Revolving Loans of the Fronting Lender which relate to one or more Indemnifying Lenders whose individual consent was required but not obtained, all Revolving Loans subject to the Indemnity Participations of non- consenting Indemnifying Lenders, together with accrued and unpaid interest, Fees and other amounts relating thereto) are repaid concurrently with the effectiveness of such termination pursuant to Section 4.01(b) (at which time Schedule I shall be deemed modified to reflect such changed amounts) and such Lender's RL Percentage of (or, in the case of a replacement of an Indemnifying Lender, such Indemnifying Lender's Indemnity Participation in) all outstanding Letters of Credit is cash collateralized in a manner satisfactory to the Administrative Agent and the Issuing Lender, and at such time, such Lender or Indemnifying Lender, as the case may be, shall no longer constitute a "Lender" or "Indemnifying Lender," as the case may be, for purposes of this Agreement, except with respect to indemnifications under this Agreement (including, without limitation, Sections 1.10, 1.11, 2.06, 4.04 and 13.01), which shall survive as to such repaid Lender or Indemnifying Lender, as the case may be. 3.03 Mandatory Reduction of Commitments. (a) The Total Commitment ---------------------------------- (and the Commitments of each Lender) shall terminate in its entirety on July 13, 2001 unless the Initial Borrowing Date has occurred on or prior to such date. (b) In addition to any other mandatory commitment reductions pursuant to this Section 3.03, the Total A Term Loan Commitment (and the A Term Loan Commitment of each Lender) shall terminate in its entirety on the Initial Borrowing Date (after giving effect to the incurrence of A Term Loans on such date). (c) In addition to any other mandatory commitment reductions pursuant to this Section 3.03, the Total Initial B Term Loan Commitment (and the Initial B Term Loan Commitment of each Lender) shall terminate in its entirety on the Initial Borrowing Date (after giving effect to the incurrence of the Initial B Term Loans on such date). (d) In addition to any other mandatory commitment reductions pursuant to this Section 3.03, the Total Incremental B Term Loan Commitment (and the Incremental B Term Loan Commitment of each Lender provided pursuant to an Incremental B Term Loan Commitment Agreement) shall terminate in its entirety on the Incremental B Term Loan Borrowing Date (after giving effect to the incurrence of the Incremental B Term Loans on each such date). -33- (e) In addition to any other mandatory commitment reductions pursuant to this Section 3.03, the Total Revolving Loan Commitment (and the Revolving Loan Commitment of each Lender) shall terminate in its entirety on the earlier of (i) the Revolving Loan Maturity Date and (ii) unless the Required Lenders otherwise agree, the date on which a Change of Control occurs. SECTION 4. Prepayments; Payments; Taxes. ---------------------------- 4.01 Voluntary Prepayments. (a) The Borrower shall have the right --------------------- to prepay the Loans, without premium or penalty (except as otherwise provided in this Agreement), in whole or in part at any time and from time to time on the following terms and conditions: (i) the Borrower shall give the Administrative Agent at the Notice Office written notice (or telephonic notice promptly confirmed in writing) no later than 12:00 Noon (New York time) (or, in the case of Foreign Currency Revolving Loans, no later than 10:00 A.M. (New York time)) (x) on the date of such prepayment in the case of a prepayment of Base Rate Loans and (y) at least three Business Days' prior to the date of such prepayment in the case of a prepayment of Euro Rate Loans, which notice (in each case) shall specify whether A Term Loans, B Term Loans, Revolving Loans or Swingline Loans shall be prepaid, the amount of such prepayment and the Types of Loans and the currency or currencies in which they are to be prepaid and, in the case of Euro Rate Loans, the specific Borrowing or Borrowings pursuant to which such Euro Rate Loans were made, and which notice the Administrative Agent shall, except in the case of a prepayment of Swingline Loans, promptly transmit to each of the Lenders; (ii) (x) each partial prepayment of Term Loans pursuant to this Section 4.01(a) shall be in an aggregate principal amount of at least $500,000, (y) each partial prepayment of Revolving Loans pursuant to this Section 4.01(a) shall be in an aggregate principal amount of at least $250,000 (or the Dollar Equivalent thereof in the case of Foreign Currency Revolving Loans) and (z) each partial prepayment of Swingline Loans pursuant to this Section 4.01(a) shall be in an aggregate principal amount of at least $100,000, provided that if any partial prepayment of Euro Rate Loans made pursuant to any Borrowing shall reduce the outstanding principal amount of Euro Rate Loans made pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount applicable thereto, then such Borrowing may not be continued as a Borrowing of Euro Rate Loans and (A) in the case of Dollar Revolving Loans, such Borrowing shall automatically be converted into a Borrowing of Base Rate Loans and any election of an Interest Period with respect thereto given by the Borrower shall have no force or effect, and (B) in the case of Foreign Currency Revolving Loans, such Borrowing shall be repaid and any election of an Interest Period with respect thereto given by the Borrower shall have no force or effect; (iii) each prepayment pursuant to this Section 4.01(a) in respect of any Loans made pursuant to a Borrowing shall be applied pro rata among such Loans, provided --- ---- that at the Borrower's election in connection with any prepayment of Revolving Loans pursuant to this Section 4.01(a), such prepayment shall not, so long as no Default or Event of Default then exists, be applied to any Revolving Loan of a Defaulting Lender; (iv) each voluntary prepayment of Term Loans pursuant to this Section 4.01(a) shall, except as otherwise provided in Section 4.01(c), be applied pro rata to each Tranche of outstanding Term Loans, with the A Term --- ---- Loans to be allocated the A Term Loan Percentage of the amount of such prepayment and the B Term Loans to be allocated the B Term Loan Percentage of the amount of such payment; and (v) each prepayment of any Tranche of Term Loans pursuant to this Section 4.01(a) shall be applied (I) first, to reduce in direct order of maturity the -34- Scheduled Repayments of such Tranche of Term Loans which are due and payable within six months from the date of such payment and (II) second, to the extent in excess of the amounts required to be applied pursuant to the preceding clause (I), to reduce the then remaining Scheduled Repayments of such Tranche of Term Loans being prepaid on a pro rata basis (based upon the then remaining unpaid principal amounts of such Scheduled Repayments after giving effect to all prior reductions thereto). (b) In the event of a refusal by a Lender or an Indemnifying Lender to consent to certain proposed changes, waivers, discharges or terminations with respect to this Agreement which have been approved by the Required Lenders as (and to the extent) provided in Section 13.12(b), the Borrower may, upon five Business Days' prior written notice to the Administrative Agent at the Notice Office (which notice the Administrative Agent shall promptly transmit to each of the Lenders) repay all Loans, together with accrued and unpaid interest, Fees, and other amounts owing to such Lender (or in the case of a refusal by an Indemnifying Lender to give any such consent, the Borrower may repay all Revolving Loans, together with accrued and unpaid interest, Fees and other amounts owing to the Fronting Lender, in each case which correlate to the Indemnity Participation of the respective Indemnifying Lender) in accordance with, and subject to the requirements of, said Section 13.12(b) so long as (I) all Commitments of such Lender are terminated (or, in the case of a termination of an Indemnifying Lender, so long as the related portion of the Revolving Loan Commitment of the Fronting Lender is terminated) concurrently with such repayment pursuant to Section 3.02(b) (at which time Schedule I shall be deemed modified to reflect the changed Commitments and, if relevant, Indemnity Amounts), (II) such Lender's RL Percentage of (or the respective Indemnifying Lender's Indemnity Participation in) all outstanding Letters of Credit is cash collateralized in a manner satisfactory to the Administrative Agent and the Issuing Lender and (III) the consents, if any, required under Section 13.12(b) in connection with the repayment pursuant to this Section 4.01(b) have been obtained. Each prepayment of any Tranche of Term Loans pursuant to this Section 4.01(b) shall be applied to reduce the then remaining Scheduled Repayments of such Tranche of Term Loans being prepaid on a pro rata basis (based upon the then remaining unpaid principal amounts of such - --- ---- Scheduled Repayments after giving effect to all prior reductions thereto). (c) Notwithstanding anything to the contrary contained in this Section 4.01 or elsewhere in this Agreement (including, without limitation, in Section 13.12), at any time that A Term Loans are outstanding, the Borrower shall have the option, in its sole discretion, to give the Lenders with outstanding B Term Loans (the "B Lenders") the option to waive their pro rata --- ---- share of a voluntary prepayment of B Term Loans which is to be made pursuant to Section 4.01(a) (each such prepayment, a "Waivable Voluntary Prepayment") upon the terms and provisions set forth in this Section 4.01(c); provided that if the -------- amount of the Waivable Voluntary Prepayment would exceed the aggregate principal amount of A Term Loans then outstanding (after giving effect to the application of their pro rata share of the respective voluntary prepayment), then the amount --- ---- of the Waivable Voluntary Prepayment shall be limited to such aggregate principal amount of A Term Loans then outstanding and the remainder of the pro --- rata share of the respective voluntary repayment otherwise applicable to the B - ---- Term Loans shall be immediately applied to the repayment of such outstanding B Term Loans. If the Borrower elects to exercise the option referred to in the immediately preceding sentence, the Borrower shall give to the Administrative Agent written notice of its intention to give the B Lenders the -35- right to waive a Waivable Voluntary Prepayment (including in such notice, the aggregate amount of such proposed prepayment) at least five Business Days prior to the date of the proposed prepayment, which notice the Administrative Agent shall promptly forward to all B Lenders (indicating in such notice the amount of such prepayment to be applied to each such B Lender's outstanding B Term Loans). The Borrower's offer to permit the B Lenders to waive any such Waivable Voluntary Prepayment may apply to all or part of such prepayment, provided that -------- any offer to waive part of such prepayment must be made ratably to the B Lenders on the basis of their outstanding B Term Loans. In the event that any such B Lender desires to waive its pro rata share of such B Lender's right to receive --- ---- any such Waivable Voluntary Prepayment in whole or in part, such B Lender shall so advise the Administrative Agent no later than 4:00 P.M. (New York time) on the date which is two Business Days after the date of such notice from the Administrative Agent (and the Administrative Agent shall promptly thereafter notify the Borrower thereof), which notice shall also include the amount such B Lender desires to receive in respect of such prepayment. If any B Lender does not reply to the Administrative Agent within such two Business Day period, such B Lender will be deemed not to have waived any part of such prepayment. If any B Lender does not specify an amount it wishes to receive, such B Lender will be deemed to have accepted 100% of its share of such prepayment. In the event that any such B Lender waives all or part of its share of any such Waivable Voluntary Prepayment, the Administrative Agent shall apply 100% of the amount so waived by such Lender to the A Term Loans in accordance with Section 4.01(a). Notwithstanding anything to the contrary contained above, if one or more B Lenders waives its right to receive all or any part of any Waivable Voluntary Repayment, but less than all the B Lenders waive in full their right to receive 100% of the total payment otherwise required with respect to the B Term Loans, then of the amount actually applied to the repayment of B Term Loans of B Lenders which have waived all or any of part their right to receive 100% of such repayment, such amount shall be applied to each then outstanding Borrowing of B Term Loans on a pro rata basis (so that each B Lender shall, after giving effect --- ---- to the application of the respective repayment, maintain the same percentage (as determined for such B Lender, but not the same percentage as the other B Lenders hold and not the same percentage held by such B Lender prior to repayment) of each Borrowing of B Term Loans which remains outstanding after giving effect to such application). 4.02 Mandatory Repayments. (a) (i) On any day on which the sum of -------------------- (I) the aggregate outstanding Principal Amount of all Revolving Loans (after giving effect to all other repayments thereof on such date), (II) the aggregate outstanding Principal Amount of all Swingline Loans (after giving effect to all other repayments thereof on such date) and (III) the aggregate amount of all Letter of Credit Outstandings exceeds the Total Available Revolving Loan Commitment at such time, the Borrower shall prepay on such day the principal of Swingline Loans and, after all Swingline Loans have been repaid in full or if no Swingline Loans are outstanding, Revolving Loans in an amount equal to such excess. If, after giving effect to the prepayment of all outstanding Swingline Loans and Revolving Loans, the aggregate amount of the Letter of Credit Outstandings exceeds the Total Available Revolving Loan Commitment at such time, the Borrower agrees to pay to the Administrative Agent at the Payment Office on such day an amount of cash and/or Cash Equivalents equal to the amount of such excess (up to a maximum amount equal to the Letter of Credit Outstandings at such time), such cash and/or Cash -36- Equivalents to be held as security for all obligations of the Borrower to the Issuing Lender and the Lenders hereunder in a cash collateral account to be established by the Administrative Agent. (ii) On any day on which the aggregate outstanding Principal Amount of all Foreign Currency Revolving Loans (after giving effect to all other repayments thereof on such date) exceeds the lesser of (x) $51,000,000 and (y) the Total Available Revolving Loan Commitment at such time, the Borrower shall prepay on such day the principal of Foreign Currency Revolving Loans in an amount equal to such excess. (iii) On any day on which the aggregate Stated Amount of all Letters of Credit Outstandings exceeds the lesser of (x) $50,000,000 and (y) the Total Available Revolving Loan Commitment at such time, the Borrower shall pay to the Administrative Agent at the Payment Office on such day an amount of cash and/or Cash Equivalents equal to the amount of such excess, such cash and/or Cash Equivalents to be held as security for all obligations of the Borrower to the Issuing Lender and the Lenders hereunder in a cash collateral account to be established by the Administrative Agent. (b) In addition to any other mandatory repayments pursuant to this Section 4.02, on each date set forth below, the Borrower shall be required to repay that principal amount of A Term Loans, to the extent then outstanding, as is set forth opposite each such date below (each such repayment, as the same may be reduced as provided in Sections 4.01(a), 4.01(b) and 4.02(i), a "Scheduled A Repayment"): Scheduled A Repayment Date Amount -------------------------- ------ September 30, 2001 $8,750,000 December 31, 2001 $8,750,000 March 31, 2002 $8,750,000 June 30, 2002 $8,750,000 September 30, 2002 $8,750,000 December 31, 2002 $8,750,000 March 31, 2003 $8,750,000 June 30, 2003 $8,750,000 September 30, 2003 $8,750,000 December 31, 2003 $8,750,000 March 31, 2004 $8,750,000 June 30, 2004 $8,750,000 September 30, 2004 $8,750,000 December 31, 2004 $8,750,000 March 31, 2005 $8,750,000 June 30, 2005 $8,750,000 September 30, 2005 $8,750,000 December 31, 2005 $8,750,000 March 31, 2006 $8,750,000 A Term Loan Maturity Date $8,750,000 -37- (c) In addition to any other mandatory repayments pursuant to this Section 4.02, on each date set forth below, the Borrower shall be required to repay that principal amount of B Term Loans, to the extent then outstanding, as is set forth opposite each such date below (each such repayment, (i) as the same may be reduced as provided in Sections 4.01(a), 4.01(b) and 4.02(i), and (ii) as the same may be increased as provided below in this Section 4.02(c), a "Scheduled B Repayment"): Scheduled B Repayment Date Amount -------------------------- ------ September 30, 2001 $437,500 December 31, 2001 $437,500 March 31, 2002 $437,500 June 30, 2002 $437,500 September 30, 2002 $437,500 December 31, 2002 $437,500 March 31, 2003 $437,500 June 30, 2003 $437,500 September 30, 2003 $437,500 December 31, 2003 $437,500 March 31, 2004 $437,500 June 30, 2004 $437,500 September 30, 2004 $437,500 December 31, 2004 $437,500 March 31, 2005 $437,500 June 30, 2005 $437,500 September 30, 2005 $437,500 December 31, 2005 $437,500 March 31, 2006 $437,500 June 30, 2006 $33,337,500 September 30, 2006 $33,337,500 December 31, 2006 $33,337,500 March 31, 2007 $33,337,500 B Term Loan Maturity Date $33,337,500 In the event that the Borrower incurs any Incremental B Term Loans pursuant to Section 1.01(c), then (i) each of the Scheduled B Repayments occurring after the date of such incurrence through and including March 31, 2006 shall be increased by .25% of the aggregate principal amount of the Incremental B Term Loans so incurred and (ii) each of the Scheduled B Repayments occurring after March 31, 2006 shall be increased by an amount equal to (x) the aggregate principal amount of the Incremental B Term Loans so incurred less portion thereof allocated to the Scheduled B Repayments as provided in the preceding clause (i) divided by (y) 5. (d) In addition to any other mandatory repayments pursuant to this Section 4.02, on each date on or after the Initial Borrowing Date upon which the Borrower or any of its Subsidiaries receives any cash proceeds from any incurrence by the Borrower or any of its Subsidiaries of Indebtedness for borrowed money (other than Indebtedness for borrowed money -38- permitted to be incurred pursuant to Section 9.04 as in effect on the Effective Date), an amount equal to 100% of the Net Debt Proceeds of the respective incurrence of Indebtedness shall be applied on such date in accordance with the requirements of Sections 4.02(i) and (j). (e) In addition to any other mandatory repayments pursuant to this Section 4.02, on each date on or after the Initial Borrowing Date upon which the Borrower or any of its Subsidiaries receives any cash proceeds from any Asset Sale, an amount equal to 100% of the Net Sale Proceeds therefrom shall be applied on such date in accordance with the requirements of Sections 4.02(i) and (j); provided, however, that with respect to no more than $25,000,000 in the -------- ------- aggregate of cash proceeds from Asset Sales in any fiscal year of the Borrower, the Net Sale Proceeds therefrom shall not be required to be so applied on such date so long as no Default or Event of Default then exists and such Net Sale Proceeds shall be used to purchase assets (other than working capital) used or to be used in the businesses permitted pursuant to Section 9.16 (including, without limitation (but only to the extent permitted by Section 8.14), the purchase of the assets or 100% of the equity of a Person engaged in such businesses) within 360 days following the date of such Asset Sale, and provided -------- further, that if all or any portion of such Net Sale Proceeds not required to be - ------- so applied as provided above in this Section 4.02(e) are not so reinvested within such 360-day period (or such earlier date, if any, as the Borrower or the relevant Subsidiary determines not to reinvest the Net Sale Proceeds from such Asset Sale as set forth above), such remaining portion shall be applied on the last day of such period (or such earlier date, as the case may be) as provided above in this Section 4.02(e) without regard to the preceding proviso. (f) In addition to any other mandatory repayments pursuant to this Section 4.02, on each Excess Cash Payment Date, an amount equal to 50% of the Excess Cash Flow for the related Excess Cash Payment Period shall be applied in accordance with the requirements of Sections 4.02(i) and (j). (g) In addition to any other mandatory repayments pursuant to this Section 4.02, within 10 days following each date on or after the Initial Borrowing Date upon which the Borrower or any of its Subsidiaries receives any cash proceeds from any Recovery Event (other than Recovery Events where the Net Insurance Proceeds therefrom do not exceed $250,000), an amount equal to 100% of the Net Insurance Proceeds from such Recovery Event shall be applied within such 10 day period in accordance with the requirements of Sections 4.02(i) and (j); provided, however, that (x) so long as no Default or Event of Default then - -------- ------- exists and such Net Insurance Proceeds do not exceed $10,000,000, such Net Insurance Proceeds shall not be required to be so applied within such 10 day period to the extent that the Borrower has delivered a certificate to the Administrative Agent within such 10 day period stating that such Net Insurance Proceeds shall be used to replace or restore any properties or assets in respect of which such Net Insurance Proceeds were paid within 360 days following the date of the receipt of such Net Insurance Proceeds (which certificate shall set forth the estimates of the Net Insurance Proceeds to be so expended), and (y) so long as no Default or Event of Default then exists and to the extent that (a) the amount of such Net Insurance Proceeds is greater than $10,000,000 but is less than or equal to $15,000,000, (b) the amount of such Net Insurance Proceeds, together with other cash available to the Borrower and its Subsidiaries and permitted to be spent by them on Capital Expenditures during the relevant period, equals at least 100% of the cost of replacement -39- or restoration of the properties or assets in respect of which such Net Insurance Proceeds were paid as determined by the Borrower and as supported by such information as the Administrative Agent may reasonably request and (c) the Borrower has delivered to the Administrative Agent a certificate within such 10 day period in the form described in clause (x) above, then the entire amount of the Net Insurance Proceeds from such Recovery Event and not just the portion in excess of $10,000,000 shall be deposited with the Administrative Agent pursuant to a cash collateral arrangement reasonably satisfactory to the Administrative Agent whereby such proceeds shall be disbursed to the Borrower from time to time as needed to pay or reimburse the Borrower or such Subsidiary for the actual costs incurred by it in connection with the replacement or restoration of the respective properties or assets (pursuant to such certification requirements as may be established by the Administrative Agent), although at any time while an Event or Default has occurred and is continuing, the Required Lenders may direct the Collateral Agent (in which case the Collateral Agent shall, and is hereby authorized by the Borrower to, follow said directions) to apply any or all proceeds then on deposit in such collateral account to the repayment of the Term Loans as provided above in this Section 4.02(g) without regard to this proviso; and provided further, that (i) if the amount of such Net Insurance Proceeds ---------------- exceeds $15,000,000, then the entire amount of such Net Insurance Proceeds (and not just the portion of such Net Insurance Proceeds in excess of $15,000,000) shall be applied as provided above in this Section 4.02(g) without regard to the preceding proviso, and (ii) if all or any portion of such Net Insurance Proceeds not required to be so applied pursuant to the preceding proviso (whether pursuant to clause (x) or (y) thereof) are not so used within 360 days after the date of the receipt of such Net Insurance Proceeds (or such earlier date, if any, as the Borrower or the relevant Subsidiary determines not to reinvest the Net Insurance Proceeds relating to such Recovery Event as set forth above), such remaining portion shall be applied on the last day of such period (or such earlier date, as the case may be) as provided above in this Section 4.02(g) without regard to the preceding proviso. (h) In addition to any other mandatory repayments pursuant to this Section 4.02, on each date on which the Borrower or any of its Subsidiaries receives any cash proceeds from (i) any purchase price adjustment under Section 2.2.2(ii) of the Acquisition Agreement (as in effect on the Initial Borrowing Date) and (ii) any indemnity payment under the Acquisition Agreement as a result of any reversion of any shares of capital stock of the Target to any prior shareholder of the Target, an amount equal to 100% of the cash proceeds from such purchase price adjustment or indemnity payment shall be applied on such date in accordance with the requirements of Sections 4.02(i) and (j). (i) Except as otherwise provided in Section 4.02(k), each amount required to be applied pursuant to this Section 4.02(i) shall be applied as a mandatory repayment of outstanding Term Loans on a pro rata basis, with the A --- ---- Term Loans to be allocated the A Term Loan Percentage of the amount of such repayment and the B Term Loans to be allocated the B Term Loan Percentage of the amount of such prepayment. The amount of each principal repayment of each Tranche of outstanding Term Loans made as required by this Section 4.02(i) shall be applied (I) first, to reduce in direct order of maturity the Scheduled Repayments of such Tranche of Term Loans which are due and payable within six calendar months from the date of such payment, and (II) second, to the extent in excess of the amounts required to be applied pursuant to the preceding clause (I), to reduce the then remaining Scheduled Repayments of such -40- Tranche of Term Loans being repaid on a pro rata basis (based upon the then --- ---- remaining unpaid principal amounts of such Scheduled Repayments of the respective Tranche of Term Loans after giving effect to all prior reductions thereto). (j) With respect to each repayment of Loans required by this Section 4.02, the Borrower may designate the Types of Loans of the respective Tranche which are to be repaid and, in the case of Euro Rate Loans, the specific Borrowing or Borrowings of the respective Tranche pursuant to which such Euro Rate Loans were made, provided that: (i) repayments of Euro Rate Loans pursuant -------- to this Section 4.02 may only be made on the last day of an Interest Period applicable thereto unless all Euro Rate Loans of the respective Tranche with Interest Periods ending on such date of required repayment and all Base Rate Loans of the respective Tranche have been paid in full; (ii) if any repayment of Euro Rate Loans made pursuant to a single Borrowing shall reduce the outstanding Euro Rate Loans made pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount applicable thereto, such Borrowing (x) in the case of Eurodollar Loans, shall be automatically converted into a Borrowing of Base Rate Loans and (y) in the case of Foreign Currency Revolving Loans, shall be repaid; and (iii) each repayment of any Loans made pursuant to a Borrowing shall be applied pro rata among such Loans. In the absence of a designation by the --- ---- Borrower as described in the preceding sentence, the Administrative Agent shall, subject to the above, make such designation in its sole discretion. (k) Notwithstanding anything to the contrary contained in this Section 4.02 or elsewhere in this Agreement (including, without limitation, in Section 13.12), at any time that A Term Loans are outstanding, the Borrower shall have the option, in its sole discretion, to give the B Lenders the option to waive their pro rata share of a mandatory repayment of B Term Loans which is --- ---- to be made pursuant to Sections 4.02(d), (e), (f), (g) and/or (h) (each such repayment, a "Waivable Mandatory Repayment") upon the terms and provisions set forth in this Section 4.02(k); provided that if the amount of the Waivable -------- Mandatory Repayment would exceed the aggregate principal amount of A Term Loans then outstanding (after giving effect to the application of their pro rata share --- ---- of the respective mandatory repayment), then the amount of the Waivable Mandatory Repayment shall be limited to such aggregate principal amount of A Term Loans then outstanding and the remainder of the pro rata share of the --- ---- respective mandatory repayment otherwise applicable to the B Term Loans shall be immediately applied to the repayment of such outstanding B Term Loans. If the Borrower elects to exercise the option referred to in the immediately preceding sentence, the Borrower shall give to the Administrative Agent written notice of its intention to give the B Lenders the right to waive a Waivable Mandatory Repayment (including in such notice, the aggregate amount of such proposed repayment) at least five Business Days prior to the date of the proposed repayment, which notice the Administrative Agent shall promptly forward to all B Lenders (indicating in such notice the amount of such repayment to be applied to each such B Lender's outstanding B Term Loans). The Borrower's offer to permit the B Lenders to waive any such Waivable Mandatory Repayment may apply to all or part of such repayment, provided that any offer to waive part of such repayment -------- must be made ratably to the B Lenders on the basis of their outstanding B Term Loans. In the event that any such B Lender desires to waive its pro rata share --- ---- of such B Lender's right to receive any such Waivable Mandatory Repayment in whole or in part, such B Lender shall so advise the Administrative Agent no later than 4:00 P.M. (New York time) on the date -41- which is two Business Days after the date of such notice from the Administrative Agent (and the Administrative Agent shall promtly thereafter notify the Borrower thereof), which notice shall also include the amount such B Lender desires to receive in respect of such repayment. If any B Lender does not reply to the Administrative Agent within such two Business Day period, such B Lender will be deemed not to have waived any part of such repayment. If any B Lender does not specify an amount it wishes to receive, such B Lender will be deemed to have accepted 100% of its share of such repayment. In the event that any such B Lender waives all or part of its share of any such Waivable Mandatory Repayment, the Administrative Agent shall apply 100% of the amount so waived by such B Lender to the A Term Loans in accordance with Sections 4.02(i) and (j). Notwithstanding anything to the contrary contained above, if one or more B Lenders waives its right to receive all or any part of any Waivable Mandatory Repayment, but less than all the B Lenders waive in full their right to receive 100% of the total payment otherwise required with respect to the B Term Loans, then of the amount actually applied to the repayment of B Term Loans of B Lenders which have waived all or any of part their right to receive 100% of such repayment, such amount shall be applied to each then outstanding Borrowing of B Term Loans on a pro rata basis (so that each B Lender shall, after giving effect --- ---- to the application of the respective repayment, maintain the same percentage (as determined for such B Lender, but not the same percentage as the other B Lenders hold and not the same percentage held by such B Lender prior to repayment) of each Borrowing of B Term Loans which remains outstanding after giving effect to such application). (l) In addition to any other mandatory repayments pursuant to this Section 4.02, (i) all then outstanding Loans of any Tranche shall be repaid in full on the respective Maturity Date for such Tranche of Loans and (ii) unless the Required Lenders otherwise agree, all then outstanding Loans shall be repaid in full on the date on which a Change of Control occurs. 4.03 Method and Place of Payment. Except as otherwise --------------------------- specifically provided herein, all payments under this Agreement and under any Note shall be made to the Administrative Agent for the account of the Lender or Lenders entitled thereto not later than 12:00 Noon (New York time) (or, in the case of a payment of principal or interest on Foreign Currency Revolving Loans, no later than 10:00 A.M. (New York time)) on the date when due and shall be made in immediately available funds at the Payment Office in Dollars (calculated, in the case of Letter of Credit Fees, Facing Fees and the reimbursement of Drawings (in each case) in respect of a Letter of Credit denominated in a Foreign Currency, using the Dollar Equivalent thereof); provided, however, that payments -------- ------- in respect of principal and interest on Foreign Currency Revolving Loans shall be made in the Foreign Currency in which such Foreign Currency Revolving Loans are denominated. Whenever any payment to be made hereunder or under any Note shall be stated to be due on a day which is not a Business Day, the due date thereof shall be extended to the next succeeding Business Day and, with respect to payments of principal, interest shall be payable at the applicable rate during such extension. 4.04 Net Payments. (a) All payments made by the Borrower ------------ hereunder and under any Note will be made without setoff, counterclaim or other defense. Except as provided in Section 4.04(b), all such payments made by the Borrower and all payments made by the Fronting Lender to any Indemnifying Lender hereunder will be made free and clear of, and -42- without deduction or withholding for, any present or future taxes, levies, imposts, duties, fees, assessments or other charges of whatever nature now or hereafter imposed by any jurisdiction or by any political subdivision or taxing authority thereof or therein with respect to such payments (but excluding, except as provided in the second succeeding sentence, any tax imposed on or measured by the net income or net profits of a Lender or an Indemnifying Lender pursuant to the laws of the jurisdiction in which such Lender or Indemnifying Lender, as the case may be, is organized or the jurisdiction in which the principal office or applicable lending office of such Lender or Indemnifying Lender, as the case may be, is located or any subdivision thereof or therein) and all interest, penalties or similar liabilities with respect to such non- excluded taxes, levies, imposts, duties, fees, assessments or other charges (all such non-excluded taxes, levies, imposts, duties, fees, assessments or other charges being referred to collectively as "Taxes"). If any Taxes are so levied or imposed on any Lender or Indemnifying Lender, (i) the Borrower agrees to pay such Lender and, in the case of Taxes so levied or imposed on an Indemnifying Lender, the Fronting Lender and (ii) the Fronting Lender (upon actual receipt of payments from the Borrower required pursuant to preceding clause (i)) agrees to pay such Indemnifying Lender, the full amount of such Taxes, and such additional amounts as may be necessary so that every payment of all amounts due to such Lender and Indemnifying Lender under this Agreement and under any Note, after withholding or deduction for or on account of any Taxes, will not be less than the amount provided for herein or in such Note. If any amounts are payable in respect of Taxes pursuant to the preceding sentence, (x) the Borrower agrees to reimburse each Lender and the Fronting Lender (in the case of Taxes payable by an Indemnifying Lender) and (y) the Fronting Lender (upon actual receipt of the reimbursement from the Borrower required pursuant to preceding clause (x)) agrees to reimburse each Indemnifying Lender, upon the written request of such Lender, the Fronting Lender or such Indemnifying Lender, as the case may be, for taxes imposed on or measured by the net income or net profits of such Lender or an Indemnifying Lender pursuant to the laws of the jurisdiction in which such Lender or Indemnifying Lender, as the case may be, is organized or in which the principal office or applicable lending office of such Lender or Indemnifying Lender, as the case may be, is located or under the laws of any political subdivision or taxing authority of any such jurisdiction in which such Lender or Indemnifying Lender, as the case may be, is organized or in which the principal office or applicable lending office of such Lender or Indemnifying Lender, as the case may be, is located and for any withholding of taxes as such Lender or Indemnifying Lender shall determine are payable by, or withheld from, such Lender or Indemnifying Lender, in respect of such amounts so paid to or on behalf of such Lender or Indemnifying Lender pursuant to the preceding sentence and in respect of any amounts paid to or on behalf of such Lender or Indemnifying Lender pursuant to this sentence. The Borrower will furnish to the Administrative Agent within 45 days after the date the payment of any Taxes is due pursuant to applicable law certified copies of tax receipts evidencing such payment by the Borrower. The Borrower agrees (i) to indemnify and hold harmless each Lender, and reimburse such Lender upon its written request, for the amount of any Taxes so levied or imposed and paid by such Lender and (ii) to indemnify and hold harmless the Fronting Lender, and reimburse the Fronting Lender upon its written request, for the amount of any Taxes so levied or imposed and paid by any Indemnifying Lender. (b) Each Lender and each Indemnifying Lender that is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax -43- purposes agrees to deliver to the Borrower and the Administrative Agent on or prior to the Effective Date or, in the case of a Lender or Indemnifying Lender that is (x) an assignee or transferee of an interest or Indemnity Participation under this Agreement pursuant to Section 1.13, 13.04(b) or 13.04(c) (unless the respective Lender or Indemnifying Lender was already a Lender or Indemnifying Lender hereunder immediately prior to such assignment or transfer), on the date of such assignment or transfer to such Lender or Indemnifying Lender, or (y) a new Lender or Indemnifying Lender pursuant to Section 1.14 or 1.15, on the date that such Person becomes a Lender or Indemnifying Lender hereunder, (i) two accurate and complete original signed copies of Internal Revenue Service Form W- 8ECI or Form W-8BEN (with respect to a complete exemption under an income tax treaty) (or successor forms) certifying to such Lender's or Indemnifying Lender's entitlement as of such date to a complete exemption from United States withholding tax with respect to payments to be made under this Agreement and under any Note, or (ii) if the Lender or Indemnifying Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption under an income tax treaty) (or any successor forms) pursuant to clause (i) above, (x) a certificate substantially in the form of Exhibit F (any such certificate, a "Section 4.04(b)(ii) Certificate") and (y) two accurate and complete original signed copies of Internal Revenue Service Form W-8BEN (with respect to the portfolio interest exemption) (or successor form) certifying to such Lender's or Indemnifying Lender's entitlement as of such date to a complete exemption from United States withholding tax with respect to payments of interest to be made under this Agreement and under any Note. In addition, each Lender and each Indemnifying Lender agrees that from time to time after the Effective Date, when a lapse in time or change in circumstances renders the previous certification obsolete or inaccurate in any material respect, such Lender or Indemnifying Lender will deliver to the Borrower and the Administrative Agent two new accurate and complete original signed copies of Internal Revenue Service Form W-8ECI, Form W-8BEN (with respect to the benefits of any income tax treaty), or Form W-8BEN (with respect to the portfolio interest exemption) and a Section 4.04(b)(ii) Certificate, as the case may be, and such other forms as may be required in order to confirm or establish the entitlement of such Lender or Indemnifying Lender to a continued exemption from or reduction in United States withholding tax with respect to payments under this Agreement and any Note, or such Lender or Indemnifying Lender shall immediately notify the Borrower and the Administrative Agent of its inability to deliver any such Form or Certificate, in which case such Lender or Indemnifying Lender shall not be required to deliver any such Form or Certificate pursuant to this Section 4.04(b). Notwithstanding anything to the contrary contained in Section 4.04(a), but subject to Sections 13.04(b) and (c) and the immediately succeeding sentence, (x) the Borrower shall be entitled, to the extent it is required to do so by law, to deduct or withhold income or similar taxes imposed by the United States (or any political subdivision or taxing authority thereof or therein) from interest, Fees or other amounts payable hereunder for the account of any Lender which is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes or for the account of the Fronting Lender acting on behalf of any Indemnifying Lender which is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes, to the extent that such Lender or Indemnifying Lender, as the case may be, has not provided to the Borrower U.S. Internal Revenue Service Forms that establish a complete exemption from such deduction or withholding and (y) the Borrower shall not be obli- -44- gated pursuant to Section 4.04(a) to gross-up payments to be made to a Lender or the Fronting Lender (acting on behalf of an Indemnifying Lender) in respect of income or similar taxes imposed by the United States if (I) such Lender or Indemnifying Lender has not provided to the Borrower the Internal Revenue Service Forms required to be provided to the Borrower pursuant to this Section 4.04(b) or (II) in the case of a payment, other than interest, to a Lender described in clause (ii) above or the Fronting Lender on behalf of an Indemnifying Lender described in clause (ii) above, to the extent that such Forms do not establish a complete exemption from withholding of such taxes. Notwithstanding anything to the contrary contained in the preceding sentence or elsewhere in this Section 4.04 and except as set forth in Sections 13.04(b) and (c), the Borrower agrees to pay any additional amounts and to indemnify each Lender and Fronting Lender in the manner set forth in Section 4.04(a) (without regard to the identity of the jurisdiction requiring the deduction or withholding) in respect of any amounts deducted or withheld by it as described in the immediately preceding sentence as a result of any changes that are effective after the Effective Date in any applicable law, treaty, governmental rule, regulation, guideline or order, or in the interpretation thereof, relating to the deducting or withholding of such Taxes. SECTION 5. Conditions Precedent to Credit Events on the Initial ---------------------------------------------------- Borrowing Date. The obligation of each Lender to make Loans, and the obligation - -------------- of the Issuing Lender to issue Letters of Credit, on the Initial Borrowing Date, is subject at the time of the making of such Loans or the issuance of such Letters of Credit to the satisfaction of the following conditions: 5.01 Effective Date; Notes. On or prior to the Initial Borrowing --------------------- Date, (i) the Effective Date shall have occurred and (ii) there shall have been delivered to the Administrative Agent for the account of each of the Lenders that has requested same the appropriate A Term Note, B Term Note and/or Revolving Note executed by the Borrower and to the extent requested by the Swingline Lender, the Swingline Note executed by the Borrower, in each case, in the amount, maturity and as otherwise provided herein. 5.02 Officer's Certificate. On the Initial Borrowing Date, the --------------------- Administrative Agent shall have received a certificate, dated the Initial Borrowing Date and signed on behalf of the Borrower by the Chairman of the Board, the Chief Executive Officer, the President or any Vice President of the Borrower, certifying on behalf of the Borrower that all of the conditions in Sections 5.06, 5.07, 5.08 and 6.01 have been satisfied on such date. 5.03 Opinions of Counsel. On the Initial Borrowing Date, the ------------------- Administrative Agent shall have received opinions, addressed to the Administrative Agent, the Collateral Agent and each of the Lenders and dated the Initial Borrowing Date, from (i) Foley & Lardner, special counsel to the Credit Parties, which opinion shall cover the matters set forth in Exhibit G and such other matters incident to the transactions contemplated herein as the Administrative Agent may reasonably request, and (ii) from local counsel to the Credit Parties and/or the Administrative Agent in each of the States in which a Mortgaged Property is located, which opinions shall cover such matters incident to the transactions contemplated herein as the Administrative Agent may reasonably request and shall be in form and substance reasonably satisfactory to the Administrative Agent. -45- 5.04 Corporate Documents; Proceedings; etc. (a) On the Initial -------------------------------------- Borrowing Date, the Administrative Agent shall have received a certificate from each Credit Party, dated the Initial Borrowing Date, signed by the Chairman of the Board, the Chief Executive Officer, the President or any Vice President of such Credit Party, and attested to by the Secretary or any Assistant Secretary of such Credit Party, in the form of Exhibit H with appropriate insertions, together with copies of the certificate or articles of incorporation and by-laws (or equivalent organizational documents) of such Credit Party and the resolutions of such Credit Party referred to in such certificate, and each of the foregoing shall be in form and substance reasonably acceptable to the Administrative Agent. (b) On the Initial Borrowing Date, all corporate and legal proceedings and all instruments and agreements in connection with the transactions contemplated by this Agreement and the other Documents shall be reasonably satisfactory in form and substance to the Administrative Agent, and the Administrative Agent shall have received all information and copies of all documents and papers, including records of corporate proceedings, governmental approvals, good standing certificates and bring-down telegrams or facsimiles, if any, which the Administrative Agent reasonably may have requested in connection therewith, such documents and papers where appropriate to be certified by proper corporate, limited liability company or governmental authorities. 5.05 Shareholders' Agreements; Tax Sharing Agreements; Existing ---------------------------------------------------------- Indebtedness Agreements. On or prior to the Initial Borrowing Date, there shall - ----------------------- have been delivered to the Administrative Agent true and correct copies of the following documents: (i) all agreements entered into by the Borrower governing the terms and relative rights of its capital stock and any agreements entered into by its shareholders relating to its capital stock (collectively, the "Shareholders' Agreements"); (ii) all tax sharing, tax allocation and other similar agreements entered into by the Borrower, the Target or any of their respective Subsidiaries (collectively, the "Tax Sharing Agreements"); and (iii) all agreements evidencing or relating to Indebtedness for borrowed money of the Borrower, the Target or any of their respective Subsidiaries which is to remain outstanding after giving effect to the Transaction to the extent that such Indebtedness exceeds (or upon the utilization of any unused commitments may exceed) $2,000,000 (collectively, the "Existing Indebtedness Agreements"); all of which Shareholders' Agreements, Tax Sharing Agreements and Existing Indebtedness Agreements shall be in form and substance reasonably satisfactory to the Administrative Agent and shall be in full force and effect on the Initial Borrowing Date. 5.06 Consummation of the Transaction. (a) On or prior to the Initial ------------------------------- Borrowing Date, there shall have been delivered to the Administrative Agent true and correct copies of the Acquisition Documents, which Acquisition Documents shall be in form and substance reasonably satisfactory to the Administrative Agent and the Required Lenders. All of the -46- conditions precedent to the consummation of the Acquisition as set forth in the Acquisition Agreement (other than immaterial conditions) shall have been satisfied (and not waived, unless consented to by the Administrative Agent and the Required Lenders) to the reasonable satisfaction of the Administrative Agent and the Required Lenders. Concurrently with the incurrence of the Loans hereunder on the Initial Borrowing Date, the Acquisition shall have been consummated in accordance with the terms and conditions of the Acquisition Documents and all applicable laws. (b) On the Initial Borrowing Date, the Borrower shall have received gross cash proceeds of (Euro) 175,000,000 from the issuance by it of a like principal amount of Senior Subordinated Notes. There shall have been delivered to the Administrative Agent true and correct copies of the Senior Subordinated Note Documents, and all of the Senior Subordinated Note Documents shall be in form and substance reasonably satisfactory to the Administrative Agent and the Required Lenders. All of the conditions precedent to the issuance of the Senior Subordinated Notes as set forth in the Senior Subordinated Note Documents shall have been satisfied (and not waived, unless consented to by the Administrative Agent and the Required Lenders), to the reasonable satisfaction of the Administrative Agent and the Required Lenders. The Senior Subordinated Notes shall have been issued in accordance with the terms and conditions of the Senior Subordinated Note Documents and all applicable laws. (c) (i) On the Initial Borrowing Date and concurrently with the incurrence of the Loans hereunder on such date, (x) the total commitments in respect of the Indebtedness to be Refinanced shall have been terminated, and all loans and notes with respect thereto shall have been repaid in full (together with interest thereon), all letters of credit issued thereunder shall have been terminated (except to the extent that same are back-stopped by a Letter of Credit issued hereunder) and all other amounts (including premiums) owing pursuant to the Indebtedness to be Refinanced shall have been repaid in full and all documents in respect of the Indebtedness to be Refinanced and all guarantees with respect thereto shall have been terminated (except as to indemnification and expense reimbursement provisions, which may survive to the extent provided therein) and be of no further force and effect, and (y) the Administrative Agent shall have received evidence, in form and substance reasonably satisfactory to it, that the Refinancing has occurred. (ii) On the Initial Borrowing Date and concurrently with the incurrence of the Loans hereunder on such date, the creditors in respect of the Indebtedness to be Refinanced shall have terminated and released all security interests and Liens (if any) on the assets owned by the Borrower, the Target and their respective Subsidiaries. The Administrative Agent shall have received such releases of security interests in and Liens on the assets owned by the Borrower, the Target and their respective Subsidiaries as may have been reasonably requested by the Administrative Agent, which releases shall be in form and substance reasonably satisfactory to the Administrative Agent. Without limiting the foregoing, there shall have been delivered (i) proper termination statements (Form UCC-3 or the appropriate equivalent) for filing under the UCC (or foreign equivalent) of each jurisdiction where a financing statement (Form UCC-1 or the appropriate equivalent) was filed with respect to the Borrower, the Target or any of their respective Subsidiaries in connection with the security interests created with respect to the Indebtedness to be Refinanced and the documentation related thereto, (ii) termination or -47- reassignment of any security interest in, or Lien on, any patents, trademarks, copyrights, or similar interests of the Borrower, the Target or any of their respective Subsidiaries on which filings have been made, (iii) terminations of all mortgages, leasehold mortgages, deeds of trust and leasehold deeds of trust created with respect to property of the Borrower, the Target or any of their respective Subsidiaries, in each case, to secure the obligations in respect of the Indebtedness to be Refinanced, all of which shall be in form and substance reasonably satisfactory to the Administrative Agent, and (iv) all collateral owned by the Borrower, the Target or any of their respective Subsidiaries in the possession of any of the creditors in respect of the Indebtedness to be Refinanced or any collateral agent or trustee under any related security document shall have been returned to the Borrower, the Target or such Subsidiary, as the case may be (all of which deliveries pursuant to this sentence may be delivered to the Administrative Agent in escrow pending the funding of the Loans hereunder on the Initial Borrowing Date). 5.07 Adverse Change, Approvals. (a) Since December 31, 2000, nothing ------------------------- shall have occurred (and neither the Administrative Agent nor any Lender shall have become aware of any facts or conditions not previously known) which the Administrative Agent or the Required Lenders shall determine has had, or could reasonably be expected to have, a Material Adverse Effect or a material adverse effect on the business, operations, liabilities, assets, property or condition (financial or otherwise) of the Target and its Subsidiaries taken as a whole. (b) On or prior to the Initial Borrowing Date, all necessary governmental (domestic and foreign) and third party approvals and/or consents in connection with the Transaction (and the incurrence of Indebtedness hereunder and the granting of Liens hereunder) shall have been obtained and remain in effect (including proper notification and consultation with the appropriate workers' council of the Target), and all applicable waiting periods with respect thereto shall have expired without any action being taken by any competent authority which restrains, prevents or imposes materially adverse conditions upon the consummation of the Transaction or the other transactions contemplated by the Documents or otherwise referred to herein or therein. On the Initial Borrowing Date, there shall not exist any judgment, order, injunction or other restraint issued or filed or a hearing seeking injunctive relief or other restraint pending or notified prohibiting or imposing materially adverse conditions upon the Transaction or the other transactions contemplated by the Documents or otherwise referred to herein or therein. 5.08 Litigation. On the Initial Borrowing Date, there shall be no ---------- actions, suits or proceedings pending or threatened (i) with respect to the Transaction, this Agreement or any other Document or (ii) which the Administrative Agent or the Required Lenders shall determine has had, or could reasonably be expected to have, a Material Adverse Effect or a material adverse effect on the business, operations, liabilities, assets, property or condition (financial or otherwise) of the Target and its Subsidiaries taken as a whole. 5.09 Pledge Agreement. On the Initial Borrowing Date, each Credit ---------------- Party shall have duly authorized, executed and delivered the Pledge Agreement in the form of Exhibit I, with such changes thereto, or additional pledge agreements (or amendments thereto) entered into in connection therewith, as foreign counsel for the Administrative Agent may suggest in respect of any Pledge Agreement Collateral of any Foreign Subsidiary to be pledged by any Credit Party (as -48- amended, modified or supplemented from time to time, collectively, the "Pledge Agreement") and shall have delivered to the Collateral Agent, as Pledgee thereunder, all of the Pledge Agreement Collateral, if any, referred to therein and then owned by such Credit Party, (x) endorsed in blank in the case of promissory notes constituting Pledge Agreement Collateral and (y) together with executed and undated endorsements for transfer in the case of equity interests constituting certificated Pledge Agreement Collateral, along with evidence that all other actions necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect the security interests purported to be created by the Pledge Agreement have been taken and the Pledge Agreement shall be in full force and effect. 5.10 Security Agreement. On the Initial Borrowing Date, each Credit ------------------ Party shall have duly authorized, executed and delivered the Security Agreement in the form of Exhibit J (as modified, supplemented or amended from time to time, the "Security Agreement") covering all of such Credit Party's Security Agreement Collateral, together with: (i) proper Financing Statements (Form UCC-1 or the equivalent) fully executed for filing under the UCC or other appropriate filing offices of each jurisdiction as may be necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect the security interests purported to be created by the Security Agreement; (ii) certified copies of Requests for Information or Copies (Form UCC-11), or equivalent reports as of a recent date, listing all effective financing statements that name the Borrower, the Target or any of their respective Subsidiaries as debtor and that are filed in the jurisdictions referred to in clause (i) above, together with copies of such other financing statements that name the Borrower, the Target or any of their respective Subsidiaries as debtor (none of which shall cover any of the Collateral except (x) to the extent evidencing Permitted Liens or (y) those in respect of which the Collateral Agent shall have received termination statements (Form UCC-3) or such other termination statements as shall be required by local law fully executed for filing); (iii) evidence of the completion of all other recordings and filings of, or with respect to, the Security Agreement as may be necessary or, in the reasonable opinion of the Collateral Agent, desirable, to perfect the security interests intended to be created by the Security Agreement; and (iv) evidence that all other actions necessary or, in the reasonable opinion of the Collateral Agent, desirable to perfect and protect the security interests purported to be created by the Security Agreement have been taken, and the Security Agreement shall be in full force and effect. 5.11 Subsidiaries Guaranty. On the Initial Borrowing Date, each --------------------- Subsidiary Guarantor shall have duly authorized, executed and delivered the Subsidiaries Guaranty in the form of Exhibit K (as amended, modified or supplemented from time to time, the "Subsidiaries Guaranty"), and the Subsidiaries Guaranty shall be in full force and effect. -49- 5.12 Mortgages; Title Insurance; Surveys; Landlord Waivers. On the ----------------------------------------------------- Initial Borrowing Date, the Collateral Agent shall have received: (i) fully executed counterparts of Mortgages, each in form and substance reasonably satisfactory to the Administrative Agent, which Mortgages shall cover such of the Real Property owned or leased by the Borrower or any Subsidiary Guarantor and designated as a "Mortgaged Property" on Schedule III, together with evidence that counterparts of such Mortgages have been delivered to the title insurance company insuring the Lien of such Mortgages for recording in all places to the extent necessary or, in the reasonable opinion of the Collateral Agent desirable, to effectively create a valid and enforceable first priority mortgage lien, subject only to Permitted Liens related thereto, on such Mortgaged Property in favor of the Collateral Agent (or such other trustee as may be required or desired under local law) for the benefit of the Secured Creditors; (ii) Mortgage Policies on the Mortgages for the Mortgaged Properties issued by a title insurer reasonably satisfactory to the Collateral Agent and in amounts satisfactory to the Collateral Agent and assuring the Collateral Agent that each of the Mortgages on such Mortgaged Properties is a valid and enforceable first priority mortgage lien on such Mortgaged Properties, free and clear of all defects and encumbrances except Permitted Liens related thereto, and such Mortgage Policies shall otherwise be in form and substance reasonably satisfactory to the Collateral Agent and shall include, as appropriate, an endorsement for future advances under this Agreement and the Notes and for any other matter that the Collateral Agent in its discretion may reasonably request, shall not include an exception for mechanics' liens, and shall provide for affirmative insurance and such reinsurance as the Collateral Agent in its discretion may reasonably request; (iii) recent surveys, in form and substance reasonably satisfactory to the Collateral Agent, of those owned Mortgaged Properties designated as requiring a survey on Schedule III, certified by a licensed professional surveyor reasonably satisfactory to the Collateral Agent and dated recent a date reasonably acceptable to the Collateral Agent; and (iv) fully executed landlord waivers as the Administrative Agent may have reasonably requested, each of which shall be in form and substance reasonably satisfactory to the Collateral Agent. 5.13 Financial Statements; Pro Forma Balance Sheet; Projections. On ---------------------------------------------------------- or prior to the Initial Borrowing Date, the Administrative Agent shall have received true and correct copies of the historical financial statements, the pro --- forma financial statements and the Projections referred to in Sections 7.05(a) - ----- and (d). 5.14 Solvency Certificate; Insurance Certificates. On the Initial -------------------------------------------- Borrowing Date, the Administrative Agent shall have received: -50- (i) a solvency certificate from the chief financial officer of the Borrower in the form of Exhibit L; and (ii) certificates of insurance complying with the requirements of Section 8.03 for the business and properties of the Borrower and its Subsidiaries, in form and substance reasonably satisfactory to the Administrative Agent and naming the Collateral Agent as an additional insured and/or as loss payee, and stating that such insurance shall not be canceled without at least 30 days' prior written notice by the insurer to the Collateral Agent. 5.15 Environmental and Hazardous Substance Analyses; etc. On or ---------------------------------------------------- prior to the Initial Borrowing Date, the Administrative Agent shall have received environmental and hazardous substance analyses with respect to the Real Property of the Target and its Subsidiaries in scope, and in form, reasonably acceptable to the Administrative Agent. The Administrative Agent shall be reasonably satisfied that (i) the aggregate exposure of the Borrower and its Subsidiaries (including the Target and its Subsidiaries) for all potential environmental claims, costs, remediations and similar expenses relating to the existing operations of the Target and its Subsidiaries will not exceed 10,000,000 French francs (exclusive of the amounts to which the Borrower is entitled to be indemnified for under clause (ii) below), (ii) the Seller's environmental indemnity of 100,000,000 French francs will be sufficient to reimburse the Borrower and its Subsidiaries (including the Target and its Subsidiaries) for all other potential environmental claims, costs, remediations and similar expenses relating to the existing operations of the Target and its Subsidiaries, and (iii) 430,000,000 French francs will be sufficient to reimburse the Borrower and its Subsidiaries (including the Target and its Subsidiaries) for all matters for which the Borrower and its Subsidiaries (including the Target and its Subsidiaries) are entitled to be indemnified against in respect of the Acquisition. 5.16 Fees, etc. On the Initial Borrowing Date, the Borrower shall ---------- have paid to the Administrative Agent and each Lender all costs, fees and expenses (including, without limitation, legal fees and expenses) payable to the Administrative Agent or such Lender to the extent then due. SECTION 6. Conditions Precedent to All Credit Events. The obligation ----------------------------------------- of each Lender to make Loans (including Loans made on the Initial Borrowing Date), and the obligation of the Issuing Lender to issue Letters of Credit (including Letters of Credit issued on the Initial Borrowing Date), is subject, at the time of each such Credit Event (except as hereinafter indicated), to the satisfaction of the following conditions: 6.01 No Default; Representations and Warranties. At the time of each ------------------------------------------ such Credit Event and also after giving effect thereto (i) there shall exist no Default or Event of Default and (ii) all representations and warranties contained herein and in the other Credit Documents shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on the date of such Credit Event (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date). -51- 6.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to the --------------------------------------------- making of each Loan (other than a Swingline Loan or a Revolving Loan made pursuant to a Mandatory Borrowing), the Administrative Agent shall have received a Notice of Borrowing meeting the requirements of Section 1.03(a). Prior to the making of each Swingline Loan, the Swingline Lender shall have received the notice referred to in Section 1.03(b)(i). (b) Prior to the issuance of each Letter of Credit, the Administrative Agent and the Issuing Lender shall have received a Letter of Credit Request meeting the requirements of Section 2.03(a). 6.03 Regulation U. If at any time any Margin Stock is pledged or ------------ required to be pledged pursuant to any Security Document, all actions required to be taken pursuant to Section 8.17 shall have been taken to the reasonable satisfaction of the Administrative Agent. The acceptance of the benefits of each Credit Event shall constitute a representation and warranty by the Borrower to the Administrative Agent and each of the Lenders that all the conditions specified in Section 5 (with respect to Credit Events on the Initial Borrowing Date) and in this Section 6 (with respect to Credit Events on or after the Initial Borrowing Date) and applicable to such Credit Event exist as of that time. All of the Notes, certificates, legal opinions and other documents and papers referred to in Section 5 and in this Section 6, unless otherwise specified, shall be delivered to the Administrative Agent at the Notice Office for the account of each of the Lenders and, except for the Notes, in sufficient counterparts or copies for each of the Lenders and shall be in form and substance reasonably satisfactory to the Administrative Agent and the Required Lenders. SECTION 7. Representations, Warranties and Agreements. In order to ------------------------------------------ induce the Lenders to enter into this Agreement and to make the Loans, and issue (or participate in) the Letters of Credit as provided herein, the Borrower makes the following representations, warranties and agreements, in each case after giving effect to the Transaction, all of which shall survive the execution and delivery of this Agreement and the Notes and the making of the Loans and the issuance of the Letters of Credit, with the occurrence of each Credit Event on or after the Initial Borrowing Date being deemed to constitute a representation and warranty that the matters specified in this Section 7 are true and correct in all material respects on and as of the Initial Borrowing Date and on the date of each such other Credit Event (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date). 7.01 Organizational Status. Each of the Borrower and each of its --------------------- Subsidiaries (i) is a duly organized and validly existing corporation, partnership or limited liability company, as the case may be, in good standing under the laws of the jurisdiction of its organization, (ii) has the corporate, partnership or limited liability company power and authority, as the case may be, to own its property and assets and to transact the business in which it is engaged and presently proposes to engage and (iii) is duly qualified and is authorized to do business and is in good standing in each jurisdiction where the ownership, leasing or operation of its property or the conduct of its business requires such qualifications except for failures to be so qualified which, either -52- individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. 7.02 Power and Authority. Each Credit Party and each Subsidiary ------------------- thereof has the corporate, partnership or limited liability company power and authority, as the case may be, to execute, deliver and perform the terms and provisions of each of the Documents to which it is party and has taken all necessary corporate, partnership or limited liability company action, as the case may be, to authorize the execution, delivery and performance by it of each of such Documents. Each Credit Party and each Subsidiary thereof has duly executed and delivered each of the Documents to which it is party, and each of such Documents constitutes its legal, valid and binding obligation enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors' rights and by equitable principles (regardless of whether enforcement is sought in equity or at law). 7.03 No Violation. Neither the execution, delivery or performance by ------------ any Credit Party or any Subsidiary thereof of the Documents to which it is a party, nor compliance by it with the terms and provisions thereof, (i) will contravene any provision of any law, statute, rule or regulation or any order, writ, injunction or decree of any court or governmental instrumentality, (ii) will conflict with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien (except pursuant to the Security Documents) upon any of the property or assets of the Borrower or any of its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other material agreement, contract or instrument, in each case to which the Borrower or any of its Subsidiaries is a party or by which it or any of its property or assets is bound or to which it may be subject, or (iii) will violate any provision of the certificate or articles of incorporation, certificate of formation, limited liability company agreement or by-laws (or equivalent organizational documents), as applicable, of the Borrower or any of its Subsidiaries. 7.04 Approvals. No order, consent, approval, license, authorization --------- or validation of, or filing, recording or registration with (except for (x) those that have otherwise been obtained or made on or prior to the Initial Borrowing Date and which remain in full force and effect on the Initial Borrowing Date and (y) filings which are necessary to perfect the security interests created under the Security Documents, which filings will be made within ten days following the Initial Borrowing Date), or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to be obtained or made by, or on behalf of, any Credit Party to authorize, or is required to be obtained or made by, or on behalf of, any Credit Party in connection with, (i) the execution, delivery and performance of any Document or (ii) the legality, validity, binding effect or enforceability of any such Document. 7.05 Financial Statements; Financial Condition; Undisclosed ------------------------------------------------------ Liabilities; Projections. (a)(i) The consolidated balance sheet of each of the - ------------------------ Borrower and the Target for its fiscal year ended on December 31, 2000 and the related consolidated statements of income, cash flows and shareholders' equity of each of the Borrower and the Target for its fiscal year ended on such date, copies of which have been furnished to the Lenders prior to the Initial Borrowing Date, -53- present fairly in all material respects the consolidated financial position of each of the Borrower and the Target at the date of such balance sheet and the consolidated results of their respective operations for the period covered thereby. All of the foregoing historical financial statements have been prepared in accordance with generally accepted accounting principles consistently applied except as otherwise noted therein. (ii) The pro forma consolidated balance sheet of the Borrower as of --- ----- December 31, 2000 (after giving effect to the Transaction and the financing therefor) and the related pro forma consolidated statements of income, cash --- ----- flows and shareholders equity of the Borrower for the twelve-month period ended on December 31, 2000 (after giving effect to the Transaction and the financing therefor), copies of which have been furnished to the Lenders prior to the Initial Borrowing Date, present fairly in all material respects the pro forma --- ----- consolidated financial position of the Borrower as of December 31, 2000 and the pro forma consolidated results of the operations of the Borrower for the period - --- ----- covered thereby. All of the foregoing pro forma financial statenments have been --- ----- prepared on a basis consistent with the historical financial statements of the Borrower set forth in preceding clause (i). (b) On and as of the Initial Borrowing Date and after giving effect to the Transaction and to all Indebtedness (including the Loans and the Senior Subordinated Notes) being incurred or assumed and Liens created by the Credit Parties in connection therewith, (i) the sum of the assets, at a fair valuation, of each of the Borrower on a stand-alone basis and of the Borrower and its Subsidiaries taken as a whole will exceed their respective debts, (ii) each of the Borrower on a stand-alone basis and the Borrower and its Subsidiaries taken as a whole have not incurred and do not intend to incur, and do not believe that they will incur, debts beyond their respective ability to pay such debts as such debts mature, and (iii) each of the Borrower on a stand-alone basis and the Borrower and its Subsidiaries taken as a whole will have sufficient capital with which to conduct their respective businesses. For purposes of this Section 7.05(b), "debt" means any liability on a claim, and "claim" means (a) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (b) right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability of the Borrower or any of its Subsidiaries. (c) Except as fully disclosed in the financial statements delivered pursuant to Section 7.05(a), there were as of the Initial Borrowing Date no liabilities or obligations with respect to the Borrower or any of its Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether or not due) which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. As of the Initial Borrowing Date, the Borrower does not know of any basis for the assertion against it or any of its Subsidiaries of any liability or obligation of any nature whatsoever that is not fully disclosed in the financial statements delivered pursuant to Section 7.05(a) or referred to in the immediately -54- preceding sentence which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. (d) The Projections delivered to the Administrative Agent and the Lenders prior to the Initial Borrowing Date have been prepared in good faith and are based on reasonable assumptions, and there are no statements or conclusions in the Projections which are based upon or include information known to the Borrower to be misleading in any material respect or which fail to take into account material information known to the Borrower as of the Initial Borrowing Date regarding the matters reported therein. On the Initial Borrowing Date, the Borrower believes that the Projections are reasonable and attainable, it being recognized by the Lenders, however, that projections as to future events are not to be viewed as facts and that the actual results during the period or periods covered by the Projections may differ from the projected results and such differences may be material. (e) After giving effect to the Transaction (but for this purpose assuming that the Transaction and the related financing had occurred prior to December 31, 2000), since December 31, 2000, there has been no change in the business, operations, liabilities, assets, property or condition (financial or otherwise) of the Borrower or any of its Subsidiaries that has had, or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. 7.06 Litigation. There are no actions, suits or proceedings pending ---------- or, to the knowledge of the Borrower, threatened (i) with respect to the Transaction or any Document or (ii) that could reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect. 7.07 True and Complete Disclosure. All factual information (taken as ---------------------------- a whole) furnished by or on behalf of the Borrower in writing to the Administrative Agent or any Lender (including, without limitation, all information contained in the Documents) for purposes of or in connection with this Agreement, the other Credit Documents or any transaction contemplated herein or therein is, and all other such factual information (taken as a whole) hereafter furnished by or on behalf of the Borrower in writing to the Administrative Agent or any Lender will be, true and accurate in all material respects on the date as of which such information is dated or certified and not incomplete by omitting to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time in light of the circumstances under which such information was provided. 7.08 Use of Proceeds; Margin Regulations. (a) All proceeds of the A ----------------------------------- Term Loans and the Initial B Term Loans will be used by the Borrower (i) to finance, in part, the Transaction and (ii) to pay the fees and expenses incurred in connection with the Transaction. (b) All proceeds of the Incremental B Term Loans will be used by the Borrower for its and its Subsidiaries' working capital and general corporate requirements. (c) All proceeds of the Revolving Loans and the Swingline Loans will be used for the working capital and general corporate purposes of the Borrower and its Subsidiaries; -55- provided that up to, but no more than, $64,200,000 of Revolving Loans and - -------- Swingline Loans in the aggregate may be used for the purposes described in clauses (a) of this Section 7.08. (d) Except as otherwise permitted by Sections 9.03(iii) and (v), no part of any Credit Event (or the proceeds thereof) will be used to purchase or carry any Margin Stock or to extend credit for the purpose of purchasing or carrying any Margin Stock. Neither the making of any Loan nor the use of the proceeds thereof nor the occurrence of any other Credit Event will violate or be inconsistent with the provisions of Regulation T, U or X of the Board of Governors of the Federal Reserve System. (e) The fair market value of all Margin Stock owned by the Borrower and its Subsidiaries (other than the capital stock of the Borrower held in treasury) does not exceed $2,500,000. At the time of each Credit Event, not more than 25% of the value of the assets of the Borrower and its Subsidiaries taken as a whole (including all capital stock of the Borrower held in treasury) will constitute Margin Stock. 7.09 Tax Returns and Payments. Each of the Borrower and each of its ------------------------ Subsidiaries has timely filed with the appropriate taxing authority all federal and state income tax returns and all other material returns, statements, forms and reports for taxes, domestic and foreign (collectively, the "Returns") required to be filed by, or with respect to the income, properties or operations of, the Borrower and/or any of its Subsidiaries. The Returns accurately reflect in all material respects all liability for taxes of the Borrower and its Subsidiaries for the periods covered thereby. Each of the Borrower and each of its Subsidiaries has paid all taxes and assessments payable by it which have become due, other than those that are being contested in good faith by proceedings proper and adequately disclosed and fully provided for on the financial statements of the Borrower and its Subsidiaries in accordance with generally accepted accounting principles. There is no material action, suit, proceeding, investigation, audit or claim now pending or, to the best knowledge of the Borrower, threatened by any authority regarding any taxes relating to the Borrower or any of its Subsidiaries which, if adversely determined, could reasonably be expected to result in a material liability to the Borrower and its Subsidiaries taken as a whole. Neither the Borrower nor any of its Subsidiaries has entered into an agreement or waiver or been requested to enter into an agreement or waiver extending any statute of limitations relating to the payment or collection of taxes of the Borrower or any of its Subsidiaries, or is aware of any circumstances that would cause the taxable years or other taxable periods of the Borrower or any of its Subsidiaries not to be subject to the normally applicable statute of limitations. Neither the Borrower nor any of its Subsidiaries has provided, with respect to themselves or property held by them, any consent under Section 341 of the Code. Neither the Borrower nor any of its Subsidiaries has incurred, nor will any of them incur, any material tax liability in connection with the Transaction or any other transactions contemplated hereby (it being understood that the representation contained in this sentence does not cover any future tax liabilities of the Borrower or any of its Subsidiaries arising as a result of the operation of their businesses in the ordinary course of business). 7.10 Compliance with ERISA. (i) Schedule IV sets forth, as of the --------------------- Initial Borrowing Date, the name of each Plan. Each Plan (and each related trust, insurance contract or fund) is in substantial compliance with its terms and in substantial compliance with all applicable -56- laws, including, without limitation, ERISA and the Code; for each Plan (and each related trust, if any) which is intended to be qualified under Section 401(a) of the Code, the Borrower (or its representative) has received a determination letter from the Internal Revenue Service to the effect that each such Plan meets the requirements of Sections 401(a) and 501(a) of the Code (unless the Plan is a standardized plan that meets the requirements set forth in Section 6 of Rev. Proc. 2000-20 for reliance on the opinion letter issued to the sponsor for the standardized plan); no Reportable Event has occurred; no Plan which is a multiemployer plan (as defined in Section 4001(a)(3) of ERISA) is insolvent or in reorganization; no Plan has an Unfunded Current Liability; no Plan which is subject to Section 412 of the Code or Section 302 of ERISA has an accumulated funding deficiency, within the meaning of such sections of the Code or ERISA, or has applied for or received a waiver of an accumulated funding deficiency or an extension of any amortization period, within the meaning of Section 412 of the Code or Section 303 or 304 of ERISA; all contributions required to be made with respect to a Plan have been timely made; neither the Borrower nor any Subsidiary of the Borrower nor any ERISA Affiliate has incurred any material liability (including any indirect, contingent or secondary liability) to or on account of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or expects to incur any such material liability under any of the foregoing sections with respect to any Plan; no condition exists which presents a material risk to the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate of incurring a material liability to or on account of a Plan pursuant to the foregoing provisions of ERISA and the Code; no proceedings have been instituted to terminate or appoint a trustee to administer any Plan which is subject to Title IV of ERISA; no action, suit, proceeding, hearing, audit or investigation with respect to the administration, operation or the investment of assets of any Plan (other than routine claims for benefits) is pending, expected or threatened; using actuarial assumptions and computation methods consistent with Part 1 of subtitle E of Title IV of ERISA, the aggregate liabilities of the Borrower and its Subsidiaries and its ERISA Affiliates to all Plans which are multiemployer plans (as defined in Section 4001(a)(3) of ERISA) in the event of a complete withdrawal therefrom, as of the close of the most recent fiscal year of each such Plan ended prior to the date of the most recent Credit Event, would not exceed $5,000,000; each group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) which covers or has covered employees or former employees of the Borrower, any Subsidiary of the Borrower, or any ERISA Affiliate has at all times been operated in compliance with the provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the Code, except for any failure to so comply which could not, individually or in the aggregate, result in a material liability of the Borrower or any Subsidiary of the Borrower; no lien imposed under the Code or ERISA on the assets of the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate exists or is likely to arise on account of any Plan; and the Borrower and its Subsidiaries may cease contributions to or terminate any employee benefit plan maintained by any of them without incurring any material liability. (ii) Each Foreign Pension Plan has been maintained in substantial compliance with its terms and in substantial compliance with the requirements of any and all applicable laws, statutes, rules, regulations and orders and has been maintained, where required, in good standing with applicable regulatory authorities. All contributions required to be made with respect to a Foreign Pension Plan have been timely made. Neither the Borrower nor any of its Subsidiaries -57- has incurred any material obligation in connection with the termination of or withdrawal from any Foreign Pension Plan. The present value of the accrued benefit liabilities (whether or not vested) under each Foreign Pension Plan, determined as of the end of the Borrower's most recently ended fiscal year on the basis of actuarial assumptions, each of which is reasonable, did not exceed the current value of the assets of such Foreign Pension Plan allocable to such benefit liabilities. 7.11 The Security Documents. (a) The provisions of the Security ---------------------- Agreement are effective to create in favor of the Collateral Agent for the benefit of the Secured Creditors a legal, valid and enforceable security interest in all right, title and interest of the Credit Parties in the Security Agreement Collateral described therein, and the Collateral Agent, for the benefit of the Secured Creditors, has (or within 10 days following the Initial Borrowing Date will have) a fully perfected security interest in all right, title and interest in all of the Security Agreement Collateral described therein (to the extent that such security interest can be perfected by filing a UCC financing statement or, to the extent required by the Security Agreement, by taking possession of (or taking certain other actions with respect to) the respective Security Agreement Collateral), subject to no other Liens other than Permitted Liens. In addition, the recordation of (x) the Grant of Security Interest in U.S. Patents and (y) the Grant of Security Interest in U.S. Trademarks in the respective form attached to the Security Agreement, in each case in the United States Patent and Trademark Office, together with filings on Form UCC-1 made pursuant to the Security Agreement, will create, as may be perfected by such filings and recordation, a perfected security interest in the United States trademarks and patents covered by the Security Agreement, and the recordation of the Grant of Security Interest in U.S. Copyrights in the form attached to the Security Agreement with the United States Copyright Office, together with filings on Form UCC-1 made pursuant to the Security Agreement, will create, as may be perfected by such filings and recordation, a perfected security interest in the United States copyrights covered by the Security Agreement. (b) The security interests created in favor of the Collateral Agent, as Pledgee, for the benefit of the Secured Creditors, under the Pledge Agreement constitute perfected security interests in the Pledge Agreement Collateral described in the Pledge Agreement, subject to no security interests of any other Person. No filings or recordings are required in order to perfect (or maintain the perfection or priority of) the security interests created in the Pledge Agreement Collateral under the Pledge Agreement other than with respect to that portion of the Pledge Agreement Collateral constituting a "general intangible" under the UCC. (c) Each Mortgage creates, as security for the obligations purported to be secured thereby, a valid and enforceable perfected security interest in and mortgage lien on the respective Mortgaged Property in favor of the Collateral Agent (or such other trustee as may be required or desired under local law) for the benefit of the Secured Creditors, superior and prior to the rights of all third Persons (except that the security interest and mortgage lien created on such Mortgaged Property may be subject to the Permitted Liens related thereto) and subject to no other Liens (other than Permitted Liens related thereto). 7.12 Properties. All Real Property owned or leased by the Borrower ---------- and each of its Domestic Subsidiaries as of the Initial Borrowing Date, and the nature of the interest therein, -58- is set forth in Schedule III. Each of the Borrower and each of its Subsidiaries has good and indefeasible title to all material properties owned by it, and a valid leasehold interest in all material property leased by it, including (in each case) all material property reflected in the most recent historical balance sheets referred to in Section 7.05(a) (except as sold or otherwise disposed of since the date of such balance sheet in the ordinary course of business or as permitted by the terms of this Agreement), free and clear of all Liens, other than Permitted Liens. 7.13 Capitalization. On the Initial Borrowing Date, the authorized -------------- capital stock of the Borrower shall consist of (i) 75,000,000 shares of common stock, $.01 par value per share, and (ii) 3,500,000 shares of preferred stock, $.01 par value per share, of which no shares of such preferred stock are issued and outstanding. All outstanding shares of capital stock of the Borrower have been duly and validly issued and are fully paid and non-assessable (other than any assessment on the shareholders of the Borrower that may be imposed as a matter of law). The Borrower does not have outstanding any capital stock or other securities convertible into or exchangeable for its capital stock or any rights to subscribe for or to purchase, or any options for the purchase of, or any agreement providing for the issuance (contingent or otherwise) of, or any calls, commitments or claims of any character relating to, its capital stock, except for options, warrants and rights to purchase shares of the Borrower's common stock and/or Qualified Preferred Stock which may be issued from time to time. 7.14 Subsidiaries. As of the Initial Borrowing Date, the Borrower ------------ has no Subsidiaries other than those Subsidiaries listed on Schedule V. Schedule V correctly sets forth, as of the Initial Borrowing Date, (i) the percentage ownership (direct or indirect) of the Borrower in each class of capital stock or other equity of its Subsidiaries and also identifies the direct owner thereof, and (ii) the jurisdiction of organization of each such Subsidiary. 7.15 Compliance with Statutes, etc. Each of the Borrower and each of ------------------------------ its Subsidiaries is in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the conduct of its business and the ownership of its property (including, without limitation, applicable statutes, regulations, orders and restrictions relating to environmental standards and controls), except such noncompliances as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 7.16 Investment Company Act. Neither the Borrower nor any of its ---------------------- Subsidiaries is an "investment company" or a company "controlled" by an "investment company," within the meaning of the Investment Company Act of 1940, as amended. 7.17 Public Utility Holdings Company Act. Neither the Borrower nor ----------------------------------- any of its Subsidiaries is a "holding company," or a "subsidiary company" of a "holding company," or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company" within the meaning of the Public Utility Holdings Company Act of 1935, as amended. 7.18 Environmental Matters. (a) Each of the Borrower and each of --------------------- its Subsidiaries is in compliance with all applicable Environmental Laws and the requirements of any permits issued under such Environmental Laws. There are no pending or, to the knowledge -59- of the Borrower, threatened Environmental Claims against the Borrower or any of its Subsidiaries or any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries (including any such claim arising out of the ownership, lease or operation by the Borrower or any of its Subsidiaries of any Real Property formerly owned, leased or operated by the Borrower or any of its Subsidiaries but no longer owned, leased or operated by the Borrower or any of its Subsidiaries). There are no facts, circumstances, conditions or occurrences with respect to the business or operations of the Borrower or any of its Subsidiaries, or any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries (including any Real Property formerly owned, leased or operated by the Borrower or any of its Subsidiaries but no longer owned, leased or operated by the Borrower or any of its Subsidiaries) or, to the knowledge of the Borrower, any property adjoining or adjacent to any such Real Property that could be reasonably expected (i) to form the basis of an Environmental Claim against the Borrower or any of its Subsidiaries or any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries or (ii) to cause any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries to be subject to any restrictions on the ownership, lease, occupancy or transferability of such Real Property by the Borrower or any of its Subsidiaries under any applicable Environmental Law. (b) Hazardous Materials have not at any time been generated, used, treated or stored on, or transported to or from, or Released on or from, any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries or to the knowledge of the Borrower, any property adjoining or adjacent to any Real Property, where such generation, use, treatment, storage, transportation or Release has violated or could be reasonably expected to violate any applicable Environmental Law or give rise to an Environmental Claim. (c) Notwithstanding anything to the contrary in this Section 7.18, the representations and warranties made in this Section 7.18 shall not be untrue unless the effect of any or all conditions, violations, claims, restrictions, failures and noncompliances of the types described above could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 7.19 Labor Relations. Neither the Borrower nor any of its --------------- Subsidiaries is engaged in any unfair labor practice that could reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect. There is (i) no unfair labor practice complaint pending against the Borrower or any of its Subsidiaries or, to the knowledge of the Borrower, threatened against any of them, before the National Labor Relations Board (or any foreign equivalent thereof), and no grievance or arbitration proceeding arising out of or under any collective bargaining agreement is so pending against the Borrower or any of its Subsidiaries or, to the knowledge of the Borrower, threatened against any of them, (ii) no strike, labor dispute, slowdown or stoppage pending against the Borrower or any of its Subsidiaries or, to the knowledge of the Borrower, threatened against the Borrower or any of its Subsidiaries and (iii) no union representation question exists with respect to the employees of the Borrower or any of its Subsidiaries, except (with respect to any matter specified in clause (i), (ii) or (iii) above, either individually or in the aggregate) such as could not reasonably be expected to have a Material Adverse Effect. -60- 7.20 Intellectual Property, etc. Each of the Borrower and each of --------------------------- its Subsidiaries owns or has the right to use all the patents, trademarks, permits, domain names, service marks, trade names, copyrights, licenses, franchises, inventions, trade secrets, proprietary information and know-how of any type, whether or not written (including, but not limited to, rights in computer programs and databases) and formulas, or rights with respect to the foregoing, and has obtained assignments of all leases, licenses and other rights of whatever nature, necessary for the present conduct of its business, without any known conflict with the rights of others which, or the failure to obtain which, as the case may be, could reasonably be expected, either individually or in the aggregate, to have a Material Adverse Effect. 7.21 Indebtedness. Schedule VI sets forth a true and complete list ------------ of all Indebtedness (including Contingent Obligations (other than Contingent Obligations otherwise permitted under Section 9.04(vii))) of the Borrower and its Subsidiaries as of the Initial Borrowing Date and which is to remain outstanding after giving effect to the Transaction (excluding the Loans, the Letters of Credit, the Senior Subordinated Notes and the Receivables Indebtedness pursuant to the Factoring Agreement, the "Existing Indebtedness"), in each case showing the aggregate principal amount thereof and the name of the respective borrower and any Credit Party or any of its Subsidiaries which directly or indirectly guarantees such debt. 7.22 Insurance. Schedule VII sets forth a true and complete listing --------- of all insurance maintained by the Borrower and its Subsidiaries as of the Initial Borrowing Date, with the amounts insured (and any deductibles) set forth therein. 7.23 Representations and Warranties in Other Documents. All ------------------------------------------------- representations and warranties set forth in the other Documents were true and correct in all material respects at the time as of which such representations and warranties were made (or deemed made) and shall be true and correct in all material respects as of the Initial Borrowing Date as if such representations or warranties were made on and as of such date (it being understood and agreed that any such representation or warranty which by its terms is made as of a specified date shall be true and correct in all material respects as of such earlier date). 7.24 Subordination. The subordination provisions contained in the ------------- Senior Subordinated Note Documents are enforceable against the Borrower, the Subsidiary Guarantors and the holders of the Senior Subordinated Notes, and all Obligations hereunder and under the other Credit Documents (including without limitation, the Subsidiaries Guaranty) are within the definitions of "Senior Debt" (or "Guarantor Senior Debt" in the case of the obligations of any Subsidiary Guarantor) and "Designated Senior Debt" included in such subordination provisions. SECTION 8. Affirmative Covenants. The Borrower hereby covenants and --------------------- agrees that on and after the Effective Date and until the Total Commitment and all Letters of Credit have terminated and the Loans, Notes and Unpaid Drawings (in each case together with interest thereon), Fees and all other Obligations (other than indemnities described in Section 13.13 which are not then due and payable) incurred hereunder and thereunder, are paid in full: -61- 8.01 Information Covenants. The Borrower will furnish to each Lender --------------------- and each Indemnifying Lender: (a) Quarterly Financial Statements. Within 45 days after the close ------------------------------ of each of the first three quarterly accounting periods in each fiscal year of the Borrower, (i) the consolidated and consolidating balance sheets of the Borrower and its Subsidiaries as at the end of such quarterly accounting period and the related consolidated and consolidating statements of income and stockholders' equity and statement of cash flows for such quarterly accounting period and for the elapsed portion of the fiscal year ended with the last day of such quarterly accounting period, in each case setting forth comparative figures for the corresponding quarterly accounting period in the prior fiscal year and comparable budgeted figures for such quarterly accounting period as set forth in the respective budget delivered pursuant to Section 8.01(d), all of which shall be certified by the chief financial officer or treasurer of the Borrower that they fairly present in all material respects in accordance with generally accepted accounting principles the financial condition of the Borrower and its Subsidiaries as of the dates indicated and the results of their operations for the periods indicated, subject to normal year-end audit adjustments and the absence of footnotes, and (ii) management's discussion and analysis of the important operational and financial developments during such quarterly accounting period; provided that, notwithstanding the foregoing, the -------- consolidating financial statements required to be delivered pursuant to this Section 8.01(a) shall be in such form and scope as may be mutually agreed upon from time to time by the Administrative Agent and the Borrower. (b) Annual Financial Statements. Within 90 days after the close of --------------------------- each fiscal year of the Borrower, (i) the consolidated and consolidating balance sheets of the Borrower and its Subsidiaries as at the end of such fiscal year and the related consolidated and consolidating statements of income and stockholders' equity and statement of cash flows for such fiscal year setting forth comparative figures for the preceding fiscal year and certified (x) in the case of the consolidated financial statements, by PricewaterhouseCoopers LLP or such other independent certified public accountants of recognized national standing reasonably acceptable to the Administrative Agent, together with a report of such accounting firm stating that in the course of its regular audit of the financial statements of the Borrower and its Subsidiaries, which audit was conducted in accordance with generally accepted auditing standards, such accounting firm obtained no knowledge of any Default or an Event of Default relating to financial or accounting matters which has occurred and is continuing or, if in the opinion of such accounting firm such a Default or an Event of Default has occurred and is continuing, a statement as to the nature thereof, and (y) in the case of the consolidating financial statements, by the chief financial officer or treasurer of the Borrower that they fairly present in all material respects in accordance with generally accepted accounting principles the financial condition of the respective Subsidiaries or group of Subsidiaries covered by thereby as of the dates indicated and the results of their operations and changes in their cash flows for the periods indicated, and (ii) management's discussion and analysis of the important operational and financial developments during such fiscal year; provided that, notwithstanding the foregoing, the -------- consolidating financial statements required to be delivered pursuant to this Section 8.01(b) shall be in such form and scope as may be mutually agreed upon from time to time by the Administrative Agent and the Borrower. -62- (c) Management Letters. Promptly after the Borrower's or any of its ------------------ Subsidiaries' receipt thereof, a copy of any "management letter" received from its certified public accountants and management's response thereto. (d) Budgets. No later than 30 days following the first day of each ------- fiscal year of the Borrower, a budget in form reasonably satisfactory to the Administrative Agent (including budgeted statements of income, sources and uses of cash and balance sheets) for the Borrower and its Subsidiaries on a consolidated basis prepared by the Borrower (i) for each of the four fiscal quarters of such fiscal year prepared in detail and (ii) for each of the immediately succeeding three fiscal years prepared in summary form, in each case setting forth, with appropriate discussion, the principal assumptions upon which such budgets are based. (e) Officer's Certificates. At the time of the delivery of the ---------------------- financial statements provided for in Sections 8.01(a) and (b), a compliance certificate from the chief financial officer or treasurer of the Borrower in the form of Exhibit M certifying on behalf of the Borrower that, to such officer's best knowledge after due inquiry, no Default or Event of Default has occurred and is continuing or, if any Default or Event of Default has occurred and is continuing, specifying the nature and extent thereof, which certificate shall (i) set forth in reasonable detail the calculations required to establish whether the Borrower and its Subsidiaries were in compliance with the provisions of Sections 4.02(e), 4.02(g), 8.17, 9.01(x), 9.01(xxi), 9.02(v), 9.02(xiv), 9.02(xvi), 9.03(iii), 9.03(v), 9.03(vi), 9.04, 9.05, 9.07 through 9.12, inclusive, and 9.18 in each case at the end of such fiscal quarter or year, as the case may be, (ii) set forth the Bank Debt Ratings (if any) assigned by both S&P and Moody's as of the date of such certificate, (iii) if delivered with the financial statements required by Section 8.01(b), set forth in reasonable detail the amount of (and the calculations required to establish the amount of) Excess Cash Flow for the respective Excess Cash Payment Period, and (iv) certify that there have been no changes to Annexes A through G of the Security Agreement and Annexes A through G of the Pledge Agreement, in each case since the Initial Borrowing Date or, if later, since the date of the most recent certificate delivered pursuant to this Section 8.01(e), or if there have been any such changes, a list in reasonable detail of such changes (but, in each case with respect to this clause (iv), only to the extent that such changes are required to be reported to the Collateral Agent pursuant to the terms of such Security Documents) and whether the Borrower and the other Credit Parties have otherwise taken all actions required to be taken by them pursuant to such Security Documents in connection with any such changes. (f) Notice of Default, Litigation and Material Adverse Effect. --------------------------------------------------------- Promptly, and in any event within three Business Days after any officer of the Borrower or any of its Subsidiaries obtains knowledge thereof, notice of (i) the occurrence of any event which constitutes a Default or an Event of Default, (ii) any litigation or governmental investigation or proceeding pending against the Borrower or any of its Subsidiaries (x) which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect or (y) with respect to any Document, or (iii) any other event, change or circumstance that has had, or could reasonably be expected to have, a Material Adverse Effect. (g) Other Reports and Filings. Promptly after the filing or delivery ------------------------- thereof, copies of all financial information, proxy materials and reports which the Borrower or any of its -63- Subsidiaries shall publicly file with the Securities and Exchange Commission or any successor thereto (the "SEC") or deliver to holders (or any trustee, agent or representative therefor) of its Senior Subordinated Notes or other Indebtedness with a principal amount of $5,000,000 or more in either case pursuant to the terms of the documentation governing such Indebtedness. (h) Environmental Matters. Promptly after any officer of the Borrower --------------------- or any of its Subsidiaries obtains knowledge thereof, notice of one or more of the following environmental matters to the extent that such environmental matters, either individually or when aggregated with all other such environmental matters, could reasonably be expected to have a Material Adverse Effect: (i) any pending or threatened Environmental Claim against the Borrower or any of its Subsidiaries or any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries; (ii) any condition or occurrence on or arising from any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries that (a) results in noncompliance by the Borrower or any of its Subsidiaries with any applicable Environmental Law or (b) could reasonably be expected to form the basis of an Environmental Claim against the Borrower or any of its Subsidiaries or any such Real Property; (iii) any condition or occurrence on any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries that could reasonably be expected to cause such Real Property to be subject to any restrictions on the ownership, lease, occupancy, use or transferability by the Borrower or any of its Subsidiaries of such Real Property under any Environmental Law; and (iv) the taking of any removal or remedial action in response to the actual or alleged presence of any Hazardous Material on any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries as required by any Environmental Law or any governmental or other administrative agency; provided that in any event the Borrower shall -------- deliver to each Lender all notices received by the Borrower or any of its Subsidiaries from any government or governmental agency under, or pursuant to, CERCLA which identify the Borrower or any of its Subsidiaries as potentially responsible parties for remediation costs or which otherwise notify the Borrower or any of its Subsidiaries of potential liability under CERCLA. All such notices shall describe in reasonable detail the nature of the claim, investigation, condition, occurrence or removal or remedial action and the Borrower's or such Subsidiary's response thereto. (i) Bank Debt Ratings. Promptly, and in any event within five ----------------- Business Days after any officer of the Borrower obtains knowledge thereof, notice of any change to the Bank Debt Ratings by either Moody's or S&P. -64- (j) Other Information. From time to time, such other information or ----------------- documents (financial or otherwise) with respect to the Borrower or any of its Subsidiaries as the Administrative Agent or any Lender may reasonably request. 8.02 Books, Records and Inspection; Annual Meetings. (a) The ---------------------------------------------- Borrower will, and will cause each of its Subsidiaries to, keep proper books of record and accounts in which full, true and correct entries in conformity with generally accepted accounting principles and all requirements of law shall be made of all dealings and transactions in relation to its business and activities. The Borrower will, and will cause each of its Subsidiaries to, permit officers and designated representatives of the Administrative Agent or any Lender to visit and inspect, under guidance of officers of the Borrower or such Subsidiary, any of the properties of the Borrower or such Subsidiary, and to examine the books of account of the Borrower or such Subsidiary and discuss the affairs, finances and accounts of the Borrower or such Subsidiary with, and be advised as to the same by, its and their officers and independent accountants, all upon reasonable prior notice and at such reasonable times and intervals and to such reasonable extent as the Administrative Agent or such Lender may reasonably request. (b) At a date to be mutually agreed upon between the Administrative Agent and the Borrower, the Borrower will, at the request of the Administrative Agent, hold a meeting with all of the Lenders at which meeting will be reviewed the financial results of the Borrower and its Subsidiaries for the previous fiscal year and the budgets presented for the current fiscal year of the Borrower. 8.03 Maintenance of Property; Insurance. (a) The Borrower will, and ---------------------------------- will cause each of its Subsidiaries to, (i) keep all property necessary to the business of the Borrower and its Subsidiaries in good working order and condition, ordinary wear and tear and damage by casualty excepted, (ii) maintain with financially sound and reputable insurance companies insurance on all such property and against such risks as is consistent and in accordance with industry practice for companies similarly situated owning similar properties and engaged in similar businesses as the Borrower or any of its Subsidiaries operates, and (iii) furnish to the Administrative Agent, together with each set of financial statements delivered pursuant to Section 8.01(b), full information as to the insurance carried. (b) The Borrower will, and will cause each of the Subsidiary Guarantors to, at all times keep its property insured in favor of the Collateral Agent, and all policies or certificates (or certified copies thereof) with respect to such insurance (and any other insurance maintained by the Borrower and/or such Subsidiary Guarantors) (i) shall be endorsed to the Collateral Agent's satisfaction for the benefit of the Collateral Agent (including, without limitation, by naming the Collateral Agent as loss payee and/or additional insured), (ii) shall state that such insurance policies shall not be canceled without at least 30 days' prior written notice thereof by the respective insurer to the Collateral Agent, shall provide that the respective insurers irrevocably waive any and all rights of subrogation with respect to the Collateral Agent and the other Secured Creditors, and (iii) shall be delivered to the Collateral Agent. (c) If the Borrower or any of its Subsidiaries shall fail to maintain insurance in accordance with this Section 8.03, or if the Borrower or any of its Subsidiaries shall fail to so -65- endorse and deliver all policies or certificates with respect thereto, the Administrative Agent shall have the right (but shall be under no obligation) to procure such insurance and the Borrower agrees to reimburse the Administrative Agent for all reasonable costs and expenses of procuring such insurance. 8.04 Existence; Franchises. The Borrower will, and will cause each --------------------- of its Subsidiaries to, do or cause to be done, all things necessary to preserve and keep in full force and effect its existence and its material rights, franchises, licenses, permits, copyrights, trademarks and patents; provided, -------- however, that nothing in this Section 8.04 shall prevent (i) sales of assets and - ------- other transactions by the Borrower or any of its Subsidiaries in accordance with Section 9.02, (ii) the abandonment by the Borrower or any of its Subsidiaries of any copyrights, trademarks or patents which the Borrower reasonably determines are no longer material to the operations of the Borrower and its Subsidiaries taken as a whole or (iii) the withdrawal by the Borrower or any of its Subsidiaries of its qualification as a foreign corporation, partnership or limited liability company, as the case may be, in any jurisdiction where such withdrawal could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 8.05 Compliance with Statutes, etc. The Borrower will, and will ------------------------------ cause each of its Subsidiaries to, comply with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the conduct of its business and the ownership of its property (including applicable statutes, regulations, orders and restrictions relating to environmental standards and controls), except such noncompliances as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 8.06 Compliance with Environmental Laws. (a) The Borrower will ---------------------------------- comply, and will cause each of its Subsidiaries to comply, with all Environmental Laws and permits applicable to, or required by, the ownership, lease or use of its Real Property now or hereafter owned, leased or operated by the Borrower or any of its Subsidiaries, except such noncompliances as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and will promptly pay or cause to be paid all costs and expenses incurred in connection with such compliance, and will keep or cause to be kept all such Real Property free and clear of any Liens imposed pursuant to such Environmental Laws. Neither the Borrower nor any of its Subsidiaries will generate, use, treat, store, Release or dispose of, or permit the generation, use, treatment, storage, Release or disposal of Hazardous Materials on any Real Property now or hereafter owned, leased or operated by the Borrower or any of its Subsidiaries, or transport or permit the transportation of Hazardous Materials to or from any such Real Property, except for Hazardous Materials generated, used, treated, stored, Released or disposed of at any such Real Properties in compliance in all material respects with all applicable Environmental Laws and as required in connection with the normal operation, use and maintenance of the business or operations of the Borrower or any of its Subsidiaries and which could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. (b) (i) After the receipt by the Administrative Agent or any Lender of any notice of the type described in Section 8.01(h), (ii) at any time that the Borrower or any of its -66- Subsidiaries are not in compliance with Section 8.06(a) or (iii) in the event that the Administrative Agent or the Lenders have exercised any of the remedies pursuant to the last paragraph of Section 10, the Borrower will (in each case) provide, at the sole expense of the Borrower and at the request of the Administrative Agent, an environmental site assessment report concerning any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries, prepared by an environmental consulting firm reasonably approved by the Administrative Agent, indicating the presence or absence of Hazardous Materials and the potential cost of any removal or remedial action in connection with such Hazardous Materials on such Real Property. If the Borrower fails to provide the same within 30 days after such request was made, the Administrative Agent may order the same, the cost of which shall be borne by the Borrower, and the Borrower shall grant and hereby grants to the Administrative Agent and the Lenders and their respective agents access to such Real Property and specifically grants the Administrative Agent and the Lenders an irrevocable non- exclusive license, subject to the rights of tenants, to undertake such an assessment at any reasonable time upon reasonable notice to the Borrower, all at the sole expense of the Borrower. 8.07 ERISA. As soon as possible and, in any event, within ten (10) ----- days after the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate knows or has reason to know of the occurrence of any of the following, the Borrower will deliver to each of the Lenders a certificate of the chief financial officer or treasurer of the Borrower setting forth the full details as to such occurrence and the action, if any, that the Borrower, such Subsidiary or such ERISA Affiliate is required or proposes to take, together with any notices required or proposed to be given or filed by the Borrower, such Subsidiary, the Plan administrator or such ERISA Affiliate to or with the PBGC or any other governmental agency, or a Plan participant and any notices received by the Borrower, such Subsidiary or such ERISA Affiliate from the PBGC or any other government agency, or a Plan participant with respect thereto: that a Reportable Event has occurred (except to the extent that the Borrower has previously delivered to the Lenders a certificate and notices (if any) concerning such event pursuant to the next clause hereof); that a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is subject to the advance reporting requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof), and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected to occur with respect to such Plan within the following 30 days; that an accumulated funding deficiency, within the meaning of Section 412 of the Code or Section 302 of ERISA, has been incurred or an application may be or has been made for a waiver or modification of the minimum funding standard (including any required installment payments) or an extension of any amortization period under Section 412 of the Code or Section 303 or 304 of ERISA with respect to a Plan; that any contribution required to be made with respect to a Plan or Foreign Pension Plan has not been timely made; that a Plan has been or may be terminated, reorganized, partitioned or declared insolvent under Title IV of ERISA; that a Plan has an Unfunded Current Liability; that proceedings may be or have been instituted to terminate or appoint a trustee to administer a Plan which is subject to Title IV of ERISA; that a proceeding has been instituted pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan; that the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate will or may incur any material liability (including any indirect, contingent, or secondary liability) to or on account of the termination of or withdrawal -67- from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409, 502(i) or 502(l) of ERISA or with respect to a group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or that the Borrower or any Subsidiary of the Borrower may incur any material liability for retiree benefits pursuant to any employee welfare benefit plan (as defined in Section 3(1) of ERISA) that provides benefits to retired employees or other former employees (other than as required by the severance pay Plans of the Borrower or any of its Subsidiaries or Section 601 of ERISA) or any Plan or any Foreign Pension Plan. The Borrower will deliver to each of the Lenders copies of any records, documents or other information that must be furnished to the PBGC with respect to any Plan pursuant to Section 4010 of ERISA. At the request of any Lender, the Borrower will also deliver to such Lender a complete copy of the annual report (on Internal Revenue Service Form 5500-series) of each Plan (including, to the extent required, the related financial and actuarial statements and opinions and other supporting statements, certifications, schedules and information) required to be filed with the Internal Revenue Service. In addition to any certificates or notices delivered to the Lenders pursuant to the first sentence hereof, copies of any records, documents or other information required to be furnished to the PBGC, and any material notices received by the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate with respect to any Plan or Foreign Pension Plan or received from any governmental agency or plan administrator or sponsor or trustee with respect to any multiemployer plan (as defined in Section 4001(a)(3) of ERISA), shall be delivered to the Lenders no later than ten (10) days after the date such records, documents and/or information has been furnished to the PBGC or any other governmental agency or such notice has been received by the Borrower, the respective Subsidiary or the ERISA Affiliate, as applicable. The Borrower and each of its applicable Subsidiaries shall ensure that all Foreign Pension Plans administered by it or into which it makes payments obtains or retains (as applicable) registered status under and as required by applicable law and is administered in a timely manner in all respects in compliance with all applicable laws except where the failure to do any of the foregoing could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 8.08 End of Fiscal Years; Fiscal Quarters. The Borrower will cause ------------------------------------ (i) each of its fiscal years to end on December 31 of each year and (ii) each of its fiscal quarters to end on March 31, June 30, September 30 and December 31 of each year. 8.09 Performance of Obligations. The Borrower will, and will cause -------------------------- each of its Subsidiaries to, perform all of its obligations under the terms of each mortgage, indenture, security agreement, loan agreement or credit agreement and each other material agreement, contract or instrument by which it is bound, except such non-performances as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 8.10 Payment of Taxes. The Borrower will pay and discharge, and will ---------------- cause each of its Subsidiaries to pay and discharge, all taxes, assessments and governmental charges or levies imposed upon it or upon its income or profits or upon any properties belonging to it, in each case on a timely basis, and all lawful claims which, if unpaid, might become a Lien or charge upon any properties of the Borrower or any of its Subsidiaries not otherwise permitted under Section 9.01(i); provided that neither the Borrower nor any of its -------- Subsidiaries shall be -68- required to pay any such tax, assessment, charge, levy or claim which is being contested in good faith and by proper proceedings if it has maintained adequate reserves with respect thereto in accordance with generally accepted accounting principles. 8.11 Use of Proceeds. The Borrower will use the proceeds of the --------------- Loans only as provided in Section 7.08. 8.12 Additional Security; Further Assurances; etc. (a) The Borrower --------------------------------------------- will, and will cause each of the other Credit Parties to, grant to the Collateral Agent for the benefit of the Secured Creditors security interests and Mortgages in such assets and properties of the Borrower and the other Credit Parties as are not covered by the original Security Documents and as may be reasonably requested from time to time by the Administrative Agent or the Required Lenders (collectively, the "Additional Security Documents"); provided, -------- however, neither the Borrower nor any other Credit Party will be required to - ------- grant a Mortgage on any Real Property pursuant to this Section 8.12(a) unless the fair market value (as determined in good faith by the Borrower) of such Real Property equals or exceeds $2,500,000. All such security interests and Mortgages shall be granted pursuant to documentation reasonably satisfactory in form and substance to the Administrative Agent and shall constitute valid and enforceable perfected security interests and Mortgages superior to and prior to the rights of all third Persons and subject to no other Liens except for Permitted Liens. The Additional Security Documents or instruments related thereto shall have been duly recorded or filed in such manner and in such places as are required by law to establish, perfect, preserve and protect the Liens in favor of the Collateral Agent required to be granted pursuant to the Additional Security Documents and all taxes, fees and other charges payable in connection therewith shall have been paid in full. (b) The Borrower will, and will cause each of its Subsidiaries to, at the expense of the Borrower, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, powers of attorney, certificates, real property surveys, reports, landlord waivers and other assurances or instruments and take such further steps relating to the Collateral covered by any of the Security Documents as the Collateral Agent may reasonably require and as are generally consistent with the terms of this Agreement and such Security Documents. Furthermore, the Borrower will, and will cause the other Credit Parties to, deliver to the Collateral Agent such opinions of counsel, title insurance and other related documents as may be reasonably requested by the Administrative Agent to assure itself that this Section 8.12 has been complied with. (c) If the Administrative Agent or the Required Lenders reasonably determine that they are required by law or regulation to have appraisals prepared in respect of the Real Property of the Borrower and its Subsidiaries constituting Collateral, the Borrower will, at its own expense, provide to the Administrative Agent appraisals which satisfy the applicable requirements of the Real Estate Appraisal Reform Amendments of the Financial Institution Reform, Recovery and Enforcement Act of 1989, as amended, and which shall otherwise be in form and substance reasonably satisfactory to the Administrative Agent. -69- (d) The Borrower agrees that each action required by clauses (a) through (c) of this Section 8.12 shall be completed as soon as possible, but in no event later than 60 days after such action is requested to be taken by the Administrative Agent or the Required Lenders; provided that, in no event will -------- the Borrower or any of its Subsidiaries be required to take any action, other than using its commercially reasonable best efforts, to obtain consents from third parties with respect to its compliance with this Section 8.12. 8.13 Foreign Subsidiaries Security. If, following a change in the ----------------------------- relevant sections of the Code or the regulations, rules, rulings, notices or other official pronouncements issued or promulgated thereunder, the Borrower does not within 30 days after a request from the Administrative Agent or the Required Lenders deliver evidence, in form and substance reasonably satisfactory to the Administrative Agent (which evidence may be in the form of an opinion of counsel), with respect to any Foreign Subsidiary of the Borrower which has not already had all of its stock pledged pursuant to the Pledge Agreement that (i) a pledge of 66-2/3% or more of the total combined voting power of all classes of capital stock of such Foreign Subsidiary entitled to vote, (ii) the entering into by such Foreign Subsidiary of a security agreement in substantially the form of the Security Agreement and (iii) the entering into by such Foreign Subsidiary of a guaranty in substantially the form of the Subsidiaries Guaranty, in any such case could reasonably be expected to cause (I) any undistributed earnings of such Foreign Subsidiary as determined for Federal income tax purposes to be treated as a deemed dividend to such Foreign Subsidiary's United States parent for Federal income tax purposes or (II) other Federal income tax consequences to the Credit Parties having an adverse financial consequence to any Credit Party in any material respect, then in the case of a failure to deliver the evidence described in clause (i) above, that portion of such Foreign Subsidiary's outstanding capital stock not theretofore pledged pursuant to the Pledge Agreement shall be promptly pledged to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Pledge Agreement (or another pledge agreement in substantially similar form, if needed), and in the case of a failure to deliver the evidence described in clause (ii) above, such Foreign Subsidiary shall promptly execute and deliver the Security Agreement and Pledge Agreement (or another security agreement or pledge agreement in substantially similar form, if needed), granting the Collateral Agent for the benefit of the Secured Creditors a security interest in all of such Foreign Subsidiary's assets and securing the obligations of the Borrower under the Credit Documents and under any Interest Rate Protection Agreement or Other Hedging Agreement entered into with a Secured Creditor and, in the event the Subsidiaries Guaranty shall have been executed by such Foreign Subsidiary, the obligations of such Foreign Subsidiary thereunder, and in the case of a failure to deliver the evidence described in clause (iii) above, such Foreign Subsidiary shall promptly execute and deliver the Subsidiaries Guaranty (or another guaranty in substantially similar form, if needed), guaranteeing the obligations of the Borrower under the Credit Documents and under any Interest Rate Protection Agreement or Other Hedging Agreement entered into with a Secured Creditor, in each case to the extent that the entering into of the Security Agreement, Pledge Agreement or Subsidiaries Guaranty is permitted by the laws of the respective foreign jurisdiction and with all documents delivered pursuant to this Section 8.13 to be in form and substance reasonably satisfactory to the Administrative Agent. 8.14 Permitted Acquisitions. (a) Subject to the provisions of this ---------------------- Section 8.14 and the requirements contained in the definition of Permitted Acquisition, the Borrower and its -70- Wholly-Owned Subsidiaries may from time to time effect Permitted Acquisitions, so long as (in each case except to the extent the Required Lenders otherwise specifically agree in writing in the case of a specific Permitted Acquisition): (i) no Default or Event of Default shall have occurred and be continuing at the time of the consummation of the proposed Permitted Acquisition or immediately after giving effect thereto; (ii) the Borrower shall have given to the Administrative Agent and the Lenders at least 10 Business Days' prior written notice of any Permitted Acquisition (or such shorter period of time as may be reasonably acceptable to the Administrative Agent), which notice shall describe in reasonable detail the principal terms and conditions of such Permitted Acquisition; (iii) calculations are made by the Borrower showing compliance with the financial covenants contained in Sections 9.08 through 9.12, inclusive, for the respective Calculation Period on a Pro Forma Basis as if the respective Permitted Acquisition (as well as all other Permitted Acquisitions theretofore consummated after the first day of such Calculation Period) had occurred on the first day of such Calculation Period, and such recalculations shall show that such financial covenants would have been complied with if the Permitted Acquisition had occurred on the first day of such Calculation Period (although such recalculations shall show, for purposes of this clause (iii), that the Consolidated Senior Leverage Ratio for such Calculation Period shall be no greater than the lesser of (x) 2.50:1.00 and (y) that ratio required to be complied with at such time pursuant to Section 9.10 for such Calculation Period); (iv) based on good faith projections prepared by the Borrower for the period from the date of the consummation of the respective Permitted Acquisition to the date which is one year thereafter, the level of financial performance measured by the financial covenants set forth in Sections 9.08 through 9.12, inclusive, shall be better than or equal to such level as would be required to provide that no Default or Event of Default would exist under the financial covenants contained in such Sections 9.08 through 9.12, inclusive, as compliance with such financial covenants would be required through the date which is one year from the date of the consummation of the respective Permitted Acquisition (although such projections shall show, for purposes of this clause (iv), that the Consolidated Senior Leverage Ratio for such one year period shall be no greater than the lesser of (x) 2.50:1.00 and (y) that ratio required to be complied with at such time pursuant to Section 9.10 during such one year period); (v) all representations and warranties contained herein and in the other Credit Documents shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on and as of the date of such Permitted Acquisition (both before and after giving effect thereto), unless stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date; (vi) the aggregate consideration (including, without limitation, (I) the aggregate principal amount of any Indebtedness assumed, refinanced, incurred or issued in connection therewith, (II) the fair market value (as determined in good faith by the Board of Directors of the Borrower) of any common stock or Qualified Preferred Stock of the Borrower issued as part of the purchase price therefor, and (III) the aggregate amount paid and reasonably expected to be paid (based on good faith projections prepared by the Borrower) pursuant to any earn-out, non-compete, consulting or deferred compensation or purchase price arrangements) payable for the proposed Permitted Acquisition, when added to the aggregate consideration paid or payable for all other Permitted Acquisitions theretofore consummated during such fiscal year, does not exceed the Permitted Acquisition Basket Amount for such fiscal year; (vii) immediately after giving effect to each Permitted Acquisition (and all payments to be made in connection therewith including, for this purpose, all- -71- post closing purchase price adjustments required (in the good faith determination of the Borrower) in connection with such Permitted Acquisition (and all other Permitted Acquisitions for which purchase adjustment may be required to be made) within the 360-day period following such Permitted Acquisition)), the Total Unutilized Revolving Loan Commitment (less the amount of the Blocked Revolving Loan Commitment then in effect) shall equal or exceed $10,000,000; and (viii) the Borrower shall have delivered to the Administrative Agent and each Lender a certificate executed by its chief financial officer or treasurer, certifying to the best of such officer's knowledge, compliance with the requirements of preceding clauses (i) through (vii), inclusive, and containing the calculations (in reasonable detail) (A) required by preceding clauses (iii), (iv), (vi) and (vii) and (B) necessary to establish the Acquired EBITDA of the Acquired Entity or Business acquired pursuant to each Permitted Acquisition for the most recently ended 12-month period for which financial statements are available for such Acquired Entity or Business. (b) At the time of each Permitted Acquisition involving the creation or acquisition of a Subsidiary, or the acquisition of capital stock or other equity interest of any Person, the capital stock or other equity interests thereof created or acquired in connection with such Permitted Acquisition shall be pledged for the benefit of the Secured Creditors pursuant to (and to the extent required by) the Pledge Agreement. (c) The Borrower will cause each Subsidiary which is formed to effect, or is acquired pursuant to, a Permitted Acquisition to comply with, and to execute and deliver, all of the documentation as and to the extent required by, Sections 8.12 and 9.17, to the reasonable satisfaction of the Administrative Agent. (d) The consummation of each Permitted Acquisition shall be deemed to be a representation and warranty by the Borrower that the certifications pursuant to this Section 8.14 are true and correct and that all conditions thereto have been satisfied and that same is permitted in accordance with the terms of this Agreement, which representation and warranty shall be deemed to be a representation and warranty for all purposes hereunder, including, without limitation, Sections 7 and 10. 8.15 Ownership of Subsidiaries; etc. Except as otherwise permitted ------------------------------- by Section 9.05(iii) or (xiii) or pursuant to a Permitted Acquisition consummated in accordance with the terms hereof, the Borrower will directly or indirectly own 100% of the capital stock or other equity interests of each of its Subsidiaries (other than, in the case of Foreign Subsidiaries, director's qualifying shares and/or other nominal amounts of shares required to be held by Persons other than the Borrower and its Subsidiaries under applicable law). 8.16 Interest Rate Protection. No later than 90 days following the ------------------------ Initial Borrowing Date, the Borrower will enter into (and thereafter maintain) Interest Rate Protection Agreements mutually agreeable to the Borrower and the Administrative Agent, with a term of at least two years, establishing a fixed or maximum interest rate acceptable to the Administrative Agent for an aggregate amount equal to at least 50% of the aggregate principal amount of all Term Loans then outstanding. -72- 8.17 Margin Regulations. The Borrower will take all actions so that ------------------ at all times the fair market value of all Margin Stock owned by the Borrower and its Subsidiaries (other than capital stock of the Borrower held in treasury) shall not exceed $2,500,000. So long as the covenant contained in the immediately preceding sentence is complied with, all Margin Stock at any time owned by the Borrower and its Subsidiaries will not constitute Collateral and no security interest shall be granted therein pursuant to any Credit Document. Without excusing any violation of the first sentence of this Section 8.17, if at any time the fair market value of all Margin Stock owned by the Borrower and its Subsidiaries (other than capital stock of the Borrower held in treasury) exceeds $2,500,000, then (x) all Margin Stock owned by the Credit Parties (other than capital stock of the Borrower held in treasury) shall be pledged, and delivered for pledge, pursuant to the Pledge Agreement and (y) the Borrower will execute and deliver to the Lenders appropriate completed forms (including, without limitation, Forms G-3 and U-1, as appropriate) establishing compliance with Regulations T, U and X. If at any time any Margin Stock is required to be pledged as a result of the provisions of the immediately preceding sentence, repayments of outstanding Obligations shall be required, and subsequent Credit Events shall be permitted, only in compliance with the applicable provisions of Regulations T, U and X. SECTION 9. Negative Covenants. The Borrower hereby covenants and ------------------ agrees that on and after the Effective Date and until the Total Commitment and all Letters of Credit have terminated and the Loans, Notes and Unpaid Drawings (in each case, together with interest thereon), Fees and all other Obligations (other than any indemnities described in Section 13.13 which are not then due and payable) incurred hereunder and thereunder, are paid in full: 9.01 Liens. The Borrower will not, and will not permit any of its ----- Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with respect to any property or assets (real or personal, tangible or intangible) of the Borrower or any of its Subsidiaries, whether now owned or hereafter acquired, or sell any such property or assets subject to an understanding or agreement, contingent or otherwise, to repurchase such property or assets (including sales of accounts receivable with recourse to the Borrower or any of its Subsidiaries), or assign any right to receive income or authorize the filing of any financing statement under the UCC or any other similar notice of Lien under any similar recording or notice statute; provided that the provisions of -------- this Section 9.01 shall not prevent the creation, incurrence, assumption or existence of the following (Liens described below are herein referred to as "Permitted Liens"): (i) inchoate Liens for taxes, assessments or governmental charges or levies not yet due or Liens for taxes, assessments or governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves have been established in accordance with generally accepted accounting principles; (ii) Liens in respect of property or assets of the Borrower or any of its Subsidiaries imposed by law, which were incurred in the ordinary course of business and do not secure Indebtedness for borrowed money, such as carriers', warehousemen's, materialmen's and mechanics' liens and other similar Liens arising in the ordinary course of business, and (x) which do not in the aggregate materially detract from the value of the Borrower's or such Subsidiary's property or assets or materially impair the use thereof in the operation of the business of the Borrower or such Subsidiary or (y) which are being -73- contested in good faith by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the property or assets subject to any such Lien; (iii) Liens in existence on the Initial Borrowing Date which are listed, and the property subject thereto described, in Schedule VIII, but only to the respective date, if any, set forth in such Schedule VIII for the removal, replacement and termination of any such Liens, plus renewals, replacements and extensions of such Liens to the extent set forth on such Schedule VIII, provided that (x) the aggregate principal amount of the -------- Indebtedness, if any, secured by such Liens does not increase from that amount outstanding at the time of any such renewal, replacement or extension and (y) any such renewal, replacement or extension does not encumber any additional assets or properties of the Borrower or any of its Subsidiaries; (iv) Liens created pursuant to the Security Documents; (v) licenses, sublicenses, leases or subleases granted to other Persons not materially interfering with the conduct of the business of the Borrower or any of its Subsidiaries; (vi) Liens upon assets of the Borrower or any of its Subsidiaries subject to Capitalized Lease Obligations to the extent such Capitalized Lease Obligations are permitted by Section 9.04(iv), provided that (x) such -------- Liens only serve to secure the payment of Indebtedness arising under such Capitalized Lease Obligation and (y) the Lien encumbering the asset giving rise to the Capitalized Lease Obligation does not encumber any other asset of the Borrower or any Subsidiary of the Borrower (other than proceeds of the asset giving rise to such Capitalized Lease Obligation); (vii) Liens placed upon equipment or machinery acquired after the Initial Borrowing Date and used in the ordinary course of business of the Borrower or any of its Subsidiaries and placed at the time of the acquisition thereof by the Borrower or such Subsidiary or within 90 days thereafter to secure Indebtedness incurred to pay all or a portion of the purchase price thereof or to secure Indebtedness incurred solely for the purpose of financing the acquisition of any such equipment or machinery or extensions, renewals or replacements of any of the foregoing for the same or a lesser amount, provided that (x) the Indebtedness secured by such -------- Liens is permitted by Section 9.04(iv) and (y) in all events, the Lien encumbering the equipment or machinery so acquired does not encumber any other asset of the Borrower or such Subsidiary (other than proceeds of the equipment or machinery subject to such purchase money Lien); (viii) easements, rights-of-way, restrictions, encroachments, municipal and zoning ordinances and other similar charges or encumbrances, and minor title deficiencies, in each case not securing Indebtedness and not materially interfering with the conduct of the business of the Borrower or any of its Subsidiaries; (ix) Liens arising from precautionary UCC financing statement filings regarding operating leases entered into in the ordinary course of business; -74- (x) Liens arising out of the existence of judgments or awards in respect of which the Borrower or any of its Subsidiaries shall in good faith be prosecuting an appeal or proceedings for review and in respect of which there shall have been secured a subsisting stay of execution pending such appeal or proceedings, provided that the aggregate amount of all cash -------- (including, for this purpose, the amount of all letters of credit) and the fair market value of all other property pledged or deposited to obtain a subsisting stay of execution pending such appeal does not exceed $7,500,000 at any time outstanding; (xi) statutory and common law landlords' liens under leases to which the Borrower or any of its Subsidiaries is a party; (xii) Liens (other than Liens imposed under ERISA) (x) incurred in the ordinary course of business in connection with workers compensation claims, unemployment insurance and social security benefits and (y) Liens securing the performance of bids, tenders, leases and contracts in the ordinary course of business, statutory obligations, surety bonds, performance bonds and other obligations of a like nature (other than appeal bonds) incurred in the ordinary course of business and consistent with past practice (exclusive of obligations in respect of the payment for borrowed money); (xiii) Permitted Encumbrances; (xiv) Liens on property or assets acquired pursuant to a Permitted Acquisition, or on property or assets of a Subsidiary of the Borrower in existence at the time such Subsidiary is acquired pursuant to a Permitted Acquisition, provided that (x) any Indebtedness that is secured by such -------- Liens is permitted to exist under Section 9.04(viii), and (y) such Liens are not incurred in connection with, or in contemplation or anticipation of, such Permitted Acquisition and do not attach to any other asset of the Borrower or any of its Subsidiaries; (xv) Liens on assets of Foreign Subsidiaries that are not Credit Parties and securing Indebtedness permitted to be incurred by such Foreign Subsidiaries pursuant to Section 9.04; (xvi) Liens in favor of customs or revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; (xvii) Liens granted by Subsidiaries of the Borrower that are not Credit Parties in favor of the Borrower or any Subsidiary Guarantor; (xviii) Liens in favor of the Factor solely on those accounts receivable (and rights ancillary thereto) of the Borrower and its Subsidiaries which are purchased by the Factor pursuant to the Factoring Agreement from time to time; (xix) customary Liens in favor of banking institutions encumbering deposits (including the right of set-off) held by such banking institutions incurred in the ordinary course of business; -75- (xx) rights of customers with respect to inventory which arise from deposits and progress payments made in the ordinary course of business; and (xxi) other Liens incidental to the conduct of the business of the Borrower or any of its Subsidiaries that (i) were not incurred in connection with Indebtedness, (ii) do not encumber any Collateral (other than on a junior and subordinated basis) and do not materially detract from the value of the assets subject to such Liens or materially impair the use thereof in the operation of such business and (iii) do not at any time for all such Liens encumber cash and other property having an aggregate value in excess of, or secure outstanding obligations in the aggregate in excess of, $2,500,000 at any time outstanding. In connection with the granting of Liens of the type described in clauses (vi), (vii) and (xiv) of this Section 9.01 by the Borrower or any of its Subsidiaries, the Administrative Agent and the Collateral Agent shall be authorized to take any actions deemed appropriate by it in connection therewith (including, without limitation, by executing appropriate lien releases or lien subordination agreements in favor of the holder or holders of such Liens, in either case solely with respect to the item or items of equipment or other assets subject to such Liens). 9.02 Consolidation, Merger, Purchase or Sale of Assets, etc. The ------------------------------------------------------- Borrower will not, and will not permit any of its Subsidiaries to, wind up, liquidate or dissolve its affairs or enter into any transaction of merger or consolidation, or convey, sell, lease or otherwise dispose of all or any part of its property or assets, or enter into any sale-leaseback transactions, or purchase or otherwise acquire (in one or a series of related transactions) any part of the property or assets (other than purchases or other acquisitions of inventory, materials and equipment in the ordinary course of business) of any Person (or agree to do any of the foregoing at any future time), except that: (i) Capital Expenditures by the Borrower or any of its Subsidiaries shall be permitted to the extent not in violation of Section 9.07; (ii) each of the Borrower and its Subsidiaries may make sales and/or rentals of inventory in the ordinary course of business; (iii) each of the Borrower and its Subsidiaries may sell or otherwise transfer obsolete, uneconomic or worn-out equipment, materials or other assets in the ordinary course of business; (iv) Investments may be made to the extent permitted by Section 9.05; (v) the Borrower and its Subsidiaries may sell assets (other than the capital stock or other equity interests of any Wholly-Owned Subsidiary unless all of the capital stock or other equity interests of such Wholly- Owned Subsidiary are sold in accordance with this clause (v)), so long as (v) no Default or Event of Default then exists or would result therefrom, (w) each such sale is in an arm's-length transaction and the Borrower or the respective Subsidiary receives at least fair market value (as determined in good faith by the Borrower or such Subsidiary, as the case may be), (x) the total consideration -76- received by the Borrower or such Subsidiary is at least 80% cash and is paid at the time of the closing of such sale, (y) the Net Sale Proceeds therefrom are applied and/or reinvested as (and to the extent) required by Section 4.02(e) and (z) the aggregate amount of the proceeds received from all assets sold pursuant to this clause (v) shall not exceed $25,000,000 in any fiscal year of the Borrower; (vi) each of the Borrower and its Subsidiaries may lease (as lessee) or license (as licensee) real or personal property (so long as any such lease or license does not create a Capitalized Lease Obligation except to the extent permitted by Section 9.04(iv)); (vii) each of the Borrower and its Subsidiaries may sell or discount, in each case without recourse and in the ordinary course of business, accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof and not as part of any financing transaction; (viii) each of the Borrower and its Subsidiaries may grant licenses, sublicenses, leases or subleases to other Persons not materially interfering with the conduct of the business of the Borrower or any of its Subsidiaries, in each case so long as no such grant otherwise affects the Collateral Agent's security interest in the asset or property subject thereto; (ix) the Borrower may transfer assets to any Wholly-Owned Domestic Subsidiary of the Borrower which is a Subsidiary Guarantor and any Subsidiary of the Borrower may transfer assets to the Borrower or to any Wholly-Owned Domestic Subsidiary of the Borrower which is a Subsidiary Guarantor, in each case so long as the security interests granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Security Documents in the assets so transferred shall remain in full force and effect and perfected (to at least the same extent as in effect immediately prior to such transfer); (x) any Subsidiary of the Borrower may merge with and into, or be dissolved or liquidated into, the Borrower or any Wholly-Owned Domestic Subsidiary of the Borrower which is a Subsidiary Guarantor so long as (i) in the case of any such merger, dissolution or liquidation involving the Borrower, the Borrower is the surviving corporation of any such merger, dissolution or liquidation, (ii) in all other cases, the Wholly-Owned Domestic Subsidiary which is a Subsidiary Guarantor is the surviving corporation of any such merger, dissolution or liquidation, and (iii) in all cases, the security interests granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Security Documents in the assets of such Subsidiary shall remain in full force and effect and perfected (to at least the same extent as in effect immediately prior to such merger, dissolution or liquidation); (xi) any Foreign Subsidiary of the Borrower may merge with and into, or be dissolved or liquidated into, or transfer any of its assets to, any Wholly-Owned Foreign Subsidiary of the Borrower so long as (i) in the case of any such merger, dissolution or liquidation, a Wholly-Owned Foreign Subsidiary of the Borrower is the survivor of such -77- merger, dissolution or liquidation, and (ii) any security interests granted to the Collateral Agent for the benefit of the Secured Creditors pursuant to the Security Documents in the equity interests of such Wholly-Owned Foreign Subsidiary shall remain in full force and effect and perfected (to at least the same extent as in effect immediately prior to such merger, dissolution or liquidation); (xii) Permitted Acquisitions may be made to the extent permitted by Section 8.14; (xiii) subject to Section 9.04(xii), Foreign Subsidiaries of the Borrower may repurchase equipment as may be required in accordance with the terms of the Buy-Back Arrangements relating to such equipment; (xiv) subject to Section 9.04(xiv) and so long as no Default or Event of Default then exists or would result therefrom, each of the Borrower and its Subsidiaries may from time to time (i) sell to the Factor for cash accounts receivable (and rights ancillary thereto) pursuant to, and in accordance with the terms of, the Factoring Agreement and (ii) repurchase accounts receivable theretofore sold to the Factor pursuant to, and to the extent required by, the Factoring Agreement; (xv) the Borrower may merge with and into a Wholly-Owned Domestic Subsidiary of the Borrower formed solely for the purpose of reincorporating the Borrower in the State of Delaware so long as (i) the surviving corporation expressly assumes all obligations of the Borrower under the Credit Documents pursuant to an agreement in form and substance reasonably satisfactory to the Administrative Agent, (ii) the name of the surviving corporation is "The Manitowoc Company, Inc." or such other name as shall have been previously notified to the Administrative Agent, (iii) all actions have been taken that are necessary or, in the reasonable opinion of the Administrative Agent desirable, to maintain the perfection and priority of the Liens created by the respective Security Documents in the assets of the Borrower and (iv) at least 20 days' prior written notice thereof is given by the Borrower to the Administrative Agent; (xvi) the Borrower may, in the ordinary course of business and on a basis consistent with past practice, enter into one or more sale-leaseback transactions with one or more financial institutions as lessor pursuant to which the Borrower sells equipment to such lessor for cash and such lessor subsequently leases back such equipment to the Borrower or to certain Subsidiaries of the Borrower, in each case so long as the aggregate amount of the obligations of the Borrower and its Subsidiaries in respect of all such sale-leaseback transactions does not exceed $20,000,000 at any time outstanding; (xvii) Dividends may be paid as, and to the extent, permitted by Section 9.03; and (xviii) the Acquisition shall be permitted in accordance with the terms of the Acquisition Documents. -78- To the extent the Required Lenders waive the provisions of this Section 9.02 with respect to the sale of any Collateral, or any Collateral is sold as permitted by this Section 9.02 (other than to the Borrower or a Subsidiary thereof), such Collateral shall be sold free and clear of the Liens created by the Security Documents, and the Administrative Agent and the Collateral Agent shall be authorized to take any actions deemed appropriate in order to effect the foregoing. 9.03 Dividends. The Borrower will not, and will not permit any of --------- its Subsidiaries to, authorize, declare or pay any Dividends with respect to the Borrower or any of its Subsidiaries, except that: (i) any Subsidiary of the Borrower may pay cash Dividends to the Borrower or to any Wholly-Owned Domestic Subsidiary of the Borrower and any Foreign Subsidiary of the Borrower also may pay cash Dividends to any Wholly-Owned Foreign Subsidiary of the Borrower; (ii) any non-Wholly-Owned Subsidiary of the Borrower may pay cash Dividends to its shareholders generally so long as the Borrower or its respective Subsidiary which owns the equity interest in the Subsidiary paying such Dividends receives at least its proportionate share thereof (based upon its relative holding of the equity interest in the Subsidiary paying such Dividends and taking into account the relative preferences, if any, of the various classes of equity interests of such Subsidiary); (iii) so long as no Default or Event of Default then exists or would result therefrom, the Borrower may repurchase outstanding shares of its common stock (or options to purchase such common stock) held by former officers, directors or employees of the Borrower or any of its Subsidiaries following the death, disability, retirement or termination of employment of such officers, directors or employees, provided that the aggregate amount -------- of all Dividends paid by the Borrower pursuant to this clause (iii) shall not exceed $500,000 in any fiscal year of the Borrower; (iv) the Borrower may pay regularly scheduled Dividends on its Qualified Preferred Stock pursuant to the terms thereof solely through the issuance of additional shares of such Qualified Preferred Stock rather than in cash; (v) so long as no Default or Event of Default then exists or would result therefrom, the Borrower may pay regularly scheduled cash Dividends on its common stock in an aggregate amount not to exceed the lesser of (x) $8,500,000 in any fiscal year of the Borrower and (y) that amount permitted under the Senior Subordinated Note Indenture; and (vi) the Borrower may effect open market repurchases of its common stock in an aggregate amount not to exceed the lesser of (x) $20,000,000 and (y) that amount permitted under the Senior Subordinated Note Indenture, so long as (I) no Default or Event of Default then exists or would result therefrom, (II) calculations are made by the Borrower showing compliance with a Consolidated Total Leverage Ratio not to exceed 2.00:1.00 at the time of the respective repurchase (and after giving effect thereto) and (III) -79- the Borrower shall have delivered to the Administrative Agent and each Lender a certificate executed by its chief financial officer or treasurer, certifying to the best of such officer's knowledge, compliance with the requirements of preceding clauses (I) and (II) and containing the calculations (in reasonable detail) required by preceding clause (II). 9.04 Indebtedness. The Borrower will not, and will not permit any ------------ of its Subsidiaries to, contract, create, incur, assume or suffer to exist any Indebtedness, except: (i) Indebtedness incurred pursuant to this Agreement and the other Credit Documents; (ii) Existing Indebtedness outstanding on the Initial Borrowing Date and listed on Schedule VI (as reduced by any repayments of principal thereof), without giving effect to any subsequent extension, renewal or refinancing thereof except to the extent set forth on Schedule VI, provided -------- that the aggregate principal amount of the Indebtedness to be extended, renewed or refinanced does not increase from that amount outstanding at the time of any such extension, renewal or refinancing; (iii) Indebtedness of the Borrower or any of its Subsidiaries under Interest Rate Protection Agreements entered into with respect to other Indebtedness permitted under this Section 9.04 so long as the entering into of such Interest Rate Protection Agreements are bona fide hedging activities and are not for speculative purposes; (iv) Indebtedness of the Borrower and its Subsidiaries evidenced by Capitalized Lease Obligations (to the extent permitted pursuant to Section 9.07) and purchase money Indebtedness described in Section 9.01(vii), provided that in no event shall the sum of the aggregate principal amount -------- of all Capitalized Lease Obligations and purchase money Indebtedness permitted by this clause (iv) exceed $10,000,000 at any time outstanding; (v) unsecured Indebtedness of the Borrower and the Subsidiary Guarantors incurred under the Senior Subordinated Notes and the other Senior Subordinated Notes Documents in an aggregate principal amount not to exceed (Euro)175,000,000 (less the amount of any repayments of principal thereof after the Initial Borrowing Date); (vi) intercompany Indebtedness among the Borrower and its Subsidiaries to the extent permitted by Sections 9.05(ix) and (xii); (vii) Indebtedness consisting of guaranties (x) by the Borrower and the Subsidiary Guarantors of each other's Indebtedness and lease and other contractual obligations permitted under this Agreement and (y) by Wholly- Owned Foreign Subsidiaries of the Borrower of each other's Indebtedness and lease and other contractual obligations permitted under this Agreement; (viii) Indebtedness of a Subsidiary of the Borrower acquired pursuant to a Permitted Acquisition (or Indebtedness assumed at the time of a Permitted Acquisition of an asset securing such Indebtedness), provided -------- that (x) such Indebtedness was not incurred in connection with, or in anticipation or contemplation of, such Permitted -80- Acquisition, (y) such Indebtedness does not constitute debt for borrowed money, it being understood and agreed that Capitalized Lease Obligations and purchase money Indebtedness shall not constitute debt for borrowed money for purposes of this clause (y) and (z) the aggregate principal amount of all Indebtedness permitted by this clause (viii) shall not exceed $10,000,000 at any one time outstanding; (ix) Indebtedness in respect of bid, payments, performance, advance payment or surety bonds entered into in the ordinary course of business and consistent with past practices; (x) to the extent that same constitutes Indebtedness, obligations in respect of earn-out arrangements permitted pursuant to a Permitted Acquisition; (xi) Indebtedness of the Borrower or any of its Subsidiaries under Other Hedging Agreements entered into in the ordinary course of business and providing protection to the Borrower and its Subsidiaries against fluctuations in currency values or commodity prices in connection with the Borrower's or any of its Subsidiaries' operations so long as the entering into of such Other Hedging Agreements are bona fide hedging activities and ---- ---- are not for speculative purposes; (xii) Indebtedness of Foreign Subsidiaries of the Borrower under lines of credit to any such Foreign Subsidiary from Persons other than the Borrower or any of its Subsidiaries, the proceeds of which Indebtedness are used for such Foreign Subsidiary's working capital and other general corporate purposes; provided that the aggregate principal amount of all -------- such Indebtedness outstanding at any time for all such Foreign Subsidiaries shall not exceed $5,000,000; (xiii) unsecured Indebtedness of Foreign Subsidiaries of the Borrower consisting of obligations to repurchase (or a guaranty of an obligation to repurchase) equipment in accordance with the terms of the Buy-Back Arrangements for such equipment, provided that the aggregate -------- amount of all such Indebtedness shall not exceed $15,000,000 at any time outstanding; (xiv) Indebtedness which may be deemed to exist pursuant to the Factoring Agreement, so long as the aggregate outstanding amount of all Receivables Indebtedness attributable thereto does not exceed (x) at any time on or after the Initial Borrowing Date through and including December 30, 2001, $45,000,000, and (y) at any time thereafter, $25,000,000; (xv) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business so long as such Indebtedness is extinguished within four Business Days of the incurrence thereof; -81- (xvi) Indebtedness of the Borrower or any of its Subsidiaries which may be deemed to exist in connection with agreements providing for indemnification, purchase price adjustments and similar obligations in connection with the acquisition or disposition of assets in accordance with the requirements of this Agreement so long as any such obligations are those of the Person making the respective acquisition or sale, and are not guaranteed by any other Person except as permitted by Section 9.04(vii); and (xvii) so long as no Default or Event of Default then exists or would result therefrom, additional Indebtedness incurred by the Borrower and its Subsidiaries in an aggregate principal amount not to exceed $10,000,000 at any one time outstanding, which Indebtedness shall be unsecured unless otherwise permitted under Section 9.01(xv). 9.05 Advances, Investments and Loans. The Borrower will not, and ------------------------------- will not permit any of its Subsidiaries to, directly or indirectly, lend money or credit or make advances to any Person, or purchase or acquire any stock, obligations or securities of, or any other interest in, or make any capital contribution to, any other Person, or purchase or own a futures contract or otherwise become liable for the purchase or sale of currency or other commodities at a future date in the nature of a futures contract, or hold any cash or Cash Equivalents (each of the foregoing an "Investment" and, collectively, "Investments"), except that the following shall be permitted: (i) the Borrower and its Subsidiaries may acquire and hold accounts receivables owing to any of them, if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms of the Borrower or such Subsidiary; (ii) the Borrower and its Subsidiaries may acquire and hold cash and Cash Equivalents and Foreign Subsidiaries of the Borrower may also acquire and hold cash and Foreign Cash Equivalents; provided, however at -------- ------- any time that Intercompany Loans are outstanding and owing by one or more Foreign Subsidiaries of the Borrower to the Borrower and/or one or more Subsidiary Guarantors, the aggregate amount of all cash, Cash Equivalents and Foreign Cash Equivalents permitted to be held by all Foreign Subsidiaries shall not exceed $15,000,000; (iii) the Borrower and its Subsidiaries may hold the Investments held by them on the Initial Borrowing Date and described on Schedule IX, provided that any additional Investments made with respect thereto shall be permitted only if independently justified under the other provisions of this Section 9.05; (iv) the Borrower and its Subsidiaries may acquire and own investments (including debt obligations) received in connection with the bankruptcy or reorganization of suppliers and customers and in good faith settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business; (v) the Borrower and its Subsidiaries may make loans and advances to their officers and employees for moving, relocation and travel expenses and other similar -82- expenditures, in each case in the ordinary course of business in an aggregate amount not to exceed $1,000,000 at any time outstanding (determined without regard to any write-downs or write-offs of such loans and advances); (vi) the Borrower may acquire and hold obligations of one or more officers, directors or other employees of the Borrower or any of its Subsidiaries in connection with such officers', directors' or employees' acquisition of shares of capital stock of the Borrower so long as no cash is paid by the Borrower or any of its Subsidiaries to such officers, directors or employees in connection with the acquisition of any such obligations; (vii) the Borrower and its Subsidiaries may enter into Interest Rate Protection Agreements to the extent permitted by Section 9.04(iii); (viii) the Borrower and its Subsidiaries may acquire and hold promissory notes and other non-cash consideration issued by the purchaser of assets in connection with a sale of such assets to the extent permitted by Sections 9.02(iii) and (v); (ix) the Borrower and its Wholly-Owned Subsidiaries may make intercompany loans and advances between and among one another (collectively, "Intercompany Loans"), provided that (i) at no time shall -------- the aggregate outstanding principal amount of all Intercompany Loans made pursuant to this clause (ix) by Credit Parties to Wholly-Owned Subsidiaries that are not Credit Parties (excluding for this purpose, however, the aggregate outstanding principal amount of all Intercompany Loans made pursuant to this clause (ix) by Credit Parties to Wholly-Owned Subsidiaries that are not Credit Parties the proceeds of which are used to make payments owing in connection with the Transaction or to finance a Permitted Acquisition), when added to the aggregate amount of contributions, capitalizations and forgiveness theretofore made by Credit Parties pursuant to Section 9.05(x) to (or in respect of) Wholly-Owned Foreign Subsidiaries that are not Credit Parties (excluding for this purpose, however, the aggregate amount of contributions, capitalizations and forgiveness made pursuant to Section 9.05(x) by Credit Parties to (or in respect of) Wholly- Owned Foreign Subsidiaries that are not Credit Parties the proceeds of which are (or, in the case of debt forgiveness, the proceeds of the incurrence of debt so forgiven were initially) used to finance a Permitted Acquisition and, in any event, net of cash equity returns), exceed $40,000,000 (determined without regard to any write-downs or write-offs of such Intercompany Loans), (ii) no Intercompany Loans may be made by a Credit Party to a Wholly-Owned Subsidiary that is not a Credit Party at a time that an Event of Default exists and is continuing, (iii) any such Intercompany Loan made by a Credit Party shall be evidenced by an Intercompany Note which shall be pledged to the Collateral Agent to the extent required pursuant to the Pledge Agreement, and (iv) each Intercompany Loan made to any Credit Party by a Wholly-Owned Subsidiary that is not a Credit Party shall include (or, if not evidenced by an Intercompany Note, the books and records of the respective parties shall note that such Intercompany Loan shall be subject to) the subordination provisions attached as Annex A to the form of Intercompany Note; -83- (x) the Borrower and its Wholly-Owned Subsidiaries may make cash capital contributions to their respective Wholly-Owned Subsidiaries, and may capitalize or forgive any Indebtedness owed to them by a Wholly-Owned Foreign Subsidiary and outstanding under clause (ix) of this Section 9.05, provided that (i) the aggregate amount of such contributions, -------- capitalizations and forgiveness made by Credit Parties to Wholly-Owned Subsidiaries that are not Credit Parties (excluding for this purpose, however, the aggregate amount of contributions, capitalizations and forgiveness made pursuant to this clause (x) by Credit Parties to (or in respect of) Wholly-Owned Foreign Subsidiaries that are not Credit Parties the proceeds of which are (or, in the case of debt forgiveness, the proceeds of the incurrence of debt so forgiven were initially) used to finance a Permitted Acquisition and, in any event, net of cash equity returns), when added to the aggregate outstanding principal amount of Intercompany Loans made by Credit Parties to Wholly-Owned Subsidiaries that are not Credit Parties pursuant to Section 9.05(ix) (determined without regard to any write-downs or write-offs thereof) (excluding for this purpose, however, the aggregate outstanding principal amount of all Intercompany Loans made pursuant to Section 9.05(ix) by Credit Parties to Wholly-Owned Subsidiaries that are not Credit Parties the proceeds of which are used to make payments owing in connection with the Transaction or to finance a Permitted Acquisition), shall not exceed an amount equal to $40,000,000 at any time, (ii) Credit Parties may only make capital contributions to, and capitalize or forgive any Indebtedness owed to them by, a Wholly-Owned Foreign Subsidiary pursuant to this clause (x) to the extent (A) required to comply with any thin capitalization rules applicable to such Wholly-Owned Foreign Subsidiary or (B) that the making of Intercompany Loans to such Wholly-Owned Foreign Subsidiary would have adverse tax consequences to the Credit Party making the same, and (iii) no such contributions, capitalizations or forgivenesses may be made by a Credit Party to a Wholly-Owned Subsidiary that is not a Credit Party at any time that an Event of Default exists and is continuing; (xi) Permitted Acquisitions shall be permitted in accordance with Section 8.14; (xii) the Borrower and its Subsidiaries may enter into Other Hedging Agreements to the extent permitted by Section 9.04(xi); and (xiii) so long as no Default or Event of Default then exists or would result therefrom, the Borrower and its Subsidiaries may make Investments not otherwise permitted by clauses (i) through (xii) of this Section 9.05 in an aggregate amount not to exceed $20,000,000 (taking the fair market value (as determined in good faith by the Borrower) of property other than cash) at any time outstanding (determined without regard to any write-downs or write-offs thereof). 9.06 Transactions with Affiliates. The Borrower will not, and will ---------------------------- not permit any of its Subsidiaries to, enter into any transaction or series of related transactions with any Affiliate of the Borrower or any of its Subsidiaries, other than in the ordinary course of business and on terms and conditions substantially as favorable to the Borrower or such Subsidiary as would reasonably be obtained by the Borrower or such Subsidiary at that time in a comparable arm's- -84- length transaction with a Person other than an Affiliate, except that the following in any event shall be permitted: (i) Dividends may be paid to the extent provided in Section 9.03; (ii) loans may be made and other transactions may be entered into by the Borrower and its Subsidiaries to the extent permitted by Sections 9.02, 9.04 and 9.05 ; (iii) customary fees may be paid to non-officer directors of the Borrower and its Subsidiaries; (iv) the Borrower and its Subsidiaries may enter into, and may make payments under, employment agreements, employee benefits plans, stock option plans, indemnification provisions, severance arrangements, and other similar compensatory arrangements with officers, employees and directors of the Borrower and its Subsidiaries in the ordinary course of business; (v) Subsidiaries of the Borrower may pay management fees, licensing fees and similar fees to the Borrower or to any Subsidiary Guarantor; and (vi) the Borrower and its Wholly-Owned Subsidiaries may otherwise engage in transactions exclusively between or among themselves so long as such transactions are otherwise permitted under this Agreement. 9.07 Capital Expenditures. (a) The Borrower will not, and will not -------------------- permit any of its Subsidiaries to, make any Capital Expenditures, except that (i) during the period from January 1, 2001 through and including December 31, 2001, the Borrower and its Subsidiaries (including, for periods prior to the Initial Borrowing Date, the Target and its Subsidiaries) may make Capital Expenditures so long as the aggregate amount of all such Capital Expenditures does not exceed $40,000,000, and (ii) during any fiscal year of the Borrower set forth below (taken as one accounting period), the Borrower and its Subsidiaries may make Capital Expenditures so long as the aggregate amount of all such Capital Expenditures does not exceed in any fiscal year of the Borrower set forth below the amount set forth opposite such fiscal year below:
Fiscal Year Ending On Amount ---------------------- ----------- December 31, 2002 $40,000,000 December 31, 2003 $37,500,000 December 31, 2004 $37,500,000 December 31, 2005 $37,500,000 December 31, 2006 $37,500,000 December 31, 2007 $37,500,000
(b) In addition to the foregoing, in the event that the amount of Capital Expenditures permitted to be made by the Borrower and its Subsidiaries pursuant to clause (a) above in any fiscal year of the Borrower (or during the period set forth in clause (a)(i) above) (before giving effect to any increase in such permitted Capital Expenditure amount pursuant to -85- this clause (b)) is greater than the amount of Capital Expenditures actually made by the Borrower and its Subsidiaries during such fiscal year (or such period, as the case may be), the lesser of (x) such excess and (y) 50% of the applicable permitted scheduled Capital Expenditure amount as set forth in such clause (a) above may be carried forward and utilized to make Capital Expenditures in the immediately succeeding fiscal year, provided that no amounts -------- once carried forward pursuant to this Section 9.07(b) may be carried forward to any fiscal year of the Borrower thereafter. (c) In addition to the foregoing, the Borrower and its Subsidiaries may make Capital Expenditures with the amount of Net Sale Proceeds received by the Borrower or any of its Subsidiaries from any Asset Sale so long as such Net Sale Proceeds are reinvested within 360 days following the date of such Asset Sale, but only to the extent that such Net Sale Proceeds are not otherwise required to be applied pursuant to Section 4.02(e). (d) In addition to the foregoing, the Borrower or any of its Subsidiaries may make Capital Expenditures with the amount of Net Insurance Proceeds received by the Borrower or any of its Subsidiaries from any Recovery Event so long as such Net Insurance Proceeds are used to replace or restore any properties or assets in respect of which such Net Insurance Proceeds were paid within 360 days following the date of receipt of such Net Insurance Proceeds from such Recovery Event, but only to the extent that such Net Insurance Proceeds are not otherwise required to be applied pursuant to Section 4.02(g). (e) In addition to the foregoing, the Borrower and its Wholly-Owned Subsidiaries may consummate Permitted Acquisitions in accordance with the requirements of Section 8.14. 9.08 Minimum Consolidated Interest Coverage Ratio. The Borrower will -------------------------------------------- not permit the Consolidated Interest Coverage Ratio for any Test Period ending on the last day of a fiscal quarter of the Borrower set forth below to be less than the ratio set forth opposite such fiscal quarter below:
Fiscal Quarter Ending Ratio --------------------- --------- June 30, 2001 2.50:1.00 September 30, 2001 2.50:1.00 December 31, 2001 and thereafter 3.00:1.00
9.09 Minimum Consolidated EBITDA. The Borrower will not permit --------------------------- Consolidated EBITDA for any Test Period ending on the last day of a fiscal quarter of the Borrower set forth below to be less than the respective amount set forth opposite such fiscal quarter below:
Fiscal Quarter Ending Amount --------------------- ------------ June 30, 2001 $150,000,000 September 30, 2001 $150,000,000 December 31, 2001 $154,000,000
-86-
Fiscal Quarter Ending Amount --------------------- ------------ March 31, 2002 $162,200,000 June 30, 2002 $169,700,000 September 30, 2002 $172,400,000 December 31, 2002 $175,400,000 March 31, 2003 $175,400,000 June 30, 2003 $175,400,000 September 30, 2003 $175,400,000 December 31, 2003 $182,700,000 March 31, 2004 $182,700,000 June 30, 2004 $182,700,000 September 30, 2004 $182,700,000 December 31, 2004 $190,500,000 March 31, 2005 $190,500,000 June 30, 2005 $190,500,000 September 30, 2005 $190,500,000 December 31, 2005 $198,500,000 March 31, 2006 $198,500,000 June 30, 2006 $198,500,000 September 30, 2006 $198,500,000 December 31, 2006 $206,900,000 March 31, 2007 $206,900,000
From and after the consummation of any Permitted Acquisition, each of the amounts set forth above in this Section 9.09 from and after such time shall be increased by an amount (if positive) equal to 75% of the Acquired EBITDA of the respective Acquired Entity or Business acquired in each such Permitted Acquisition for the most recently ended 12-month period for which financial statements are available for such Acquired Entity or Business prior to the date of such acquisition (as certified in the respective officer's certificate delivered pursuant to clause (viii) of Section 8.14(a)). 9.10 Maximum Consolidated Senior Leverage Ratio. The Borrower will ------------------------------------------ not permit the Consolidated Senior Leverage Ratio at any time during a period set forth below to be greater than the ratio set forth opposite such period below: Period Ratio ------ --------- Initial Borrowing Date through and including March 30, 2002 2.75:1.00 March 31, 2002 through and including December 30, 2002 2.50:1.00 December 31, 2002 through and including December 30, 2003 2.25:1.00 -87- Thereafter 2.00:1.00 Notwithstanding the foregoing, from and after such time as the Borrower consummates more than $100,000,000 of Permitted Acquisitions in any fiscal year, the Borrower will not permit the Consolidated Senior Leverage Ratio at any time on or prior to December 30, 2002 to be greater than 2.25:1.00 (it being understood that nothing in this sentence shall affect the ratios (or the Borrower's obligation to comply with such ratios) from and after December 31, 2002 as set forth above). 9.11 Maximum Consolidated Total Leverage Ratio. The Borrower will ----------------------------------------- not permit the Consolidated Total Leverage Ratio at any time during a period set forth below to be greater than the ratio set forth opposite such period below: Period Ratio ------ --------- Initial Borrowing Date through and including September 29, 2002 3.50:1.00 September 30, 2002 through and including December 30, 2003 3.25:1.00 December 31, 2003 through and including December 30, 2004 3.00:1.00 Thereafter 2.85:1.00 9.12 Minimum Consolidated Fixed Charge Coverage Ratio. The Borrower ------------------------------------------------ will not permit the Consolidated Fixed Charge Coverage Ratio for any Test Period ending on the last day of a fiscal quarter of the Borrower set forth below to be less than the ratio set forth opposite such fiscal quarter below: Fiscal Quarter Ending Ratio --------------------- ---------- June 30, 2001 2.30:1.00 September 30, 2001 2.30:1.00 December 31, 2001 2.30:1.00 March 31, 2002 and thereafter 2.50:1.00 9.13 Limitations on Prepayments of Certain Indebtedness; --------------------------------------------------- Modifications of Certain Indebtedness; Modifications of Certificate of - ---------------------------------------------------------------------- Incorporation, By-Laws and Certain Other Agreements, etc. (a) The Borrower will - --------------------------------------------------------- not, and will not permit any of its Subsidiaries to: (i) make (or give any notice in respect of) any voluntary or optional payment or prepayment on or redemption or acquisition for value of, or any prepayment or redemption as a result of any asset sale, change of control or similar event of (including in -88- each case, without limitation, by way of depositing with the trustee with respect thereto or any other Person money or securities before due for the purpose of paying when due), any Senior Subordinated Notes; (ii) amend or modify, or permit the amendment or modification of, any provision of any Senior Subordinated Note Document; or (iii) amend, modify or change the Factoring Agreement, any Tax Sharing Agreement or its certificate or articles of incorporation (including, without limitation, by the filing or modification of any certificate or articles of designation), certificate of formation, limited liability company agreement or by-laws (or the equivalent organizational documents), as applicable, or any agreement entered into by it with respect to its capital stock or other equity interests (including any Shareholders' Agreement), or enter into any new Factoring Agreement, Tax Sharing Agreement or agreement with respect to its capital stock or other equity interests, unless such new agreement or amendment, modification, change or other action contemplated by this clause (iii) could not reasonably be expected to be adverse to the interests of the Lenders in any material respect and, in the case of the Factoring Agreement, such changes otherwise satisfy the requirements of the definition thereof. (b) Neither the Borrower nor any of its Subsidiaries shall designate any Indebtedness, other than the Obligations, as "Designated Senior Debt" for purposes of the Senior Subordinated Notes and the other Senior Subordinated Note Documents. 9.14 Limitation on Certain Restrictions on Subsidiaries. The Borrower -------------------------------------------------- will not, and will not permit any of its Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any such Subsidiary to (a) pay dividends or make any other distributions on its capital stock or any other interest or participation in its profits owned by the Borrower or any of its Subsidiaries, or pay any Indebtedness owed to the Borrower or any of its Subsidiaries, (b) make loans or advances to the Borrower or any of its Subsidiaries or (c) transfer any of its properties or assets to the Borrower or any of its Subsidiaries, except for such encumbrances or restrictions existing under or by reason of (i) applicable law, (ii) this Agreement and the other Credit Documents, (iii) the Senior Subordinated Note Documents, (iv) customary provisions restricting subletting or assignment of any lease governing and leasehold interest of the Borrower or any of its Subsidiaries, (v) customary provisions restricting assignment of any licensing agreement (in which the Borrower or any of its Subsidiaries is the licensee) or other contract entered into by the Borrower or any of its Subsidiaries in the ordinary course of business, (vi) restrictions on the transfer of any asset pending the close of the sale of such asset, and (vii) restrictions on the transfer of any asset subject to a Lien permitted by Section 9.01(iii), (vi), (vii), (xiv), (xv) or (xviii). 9.15 Limitation on Issuance of Capital Stock. (a) The Borrower will --------------------------------------- not, and will not permit any of its Subsidiaries to, issue (i) any preferred stock or other preferred equity interests other than Qualified Preferred Stock of the Borrower or (ii) any redeemable common stock or other redeemable common equity interests other than common stock or other redeemable -89- common equity interests that is redeemable at the sole option of the Borrower or such Subsidiary, as the case may be. (b) The Borrower will not permit any of its Subsidiaries to issue any capital stock or other equity interests (including by way of sales of treasury stock) or any options or warrants to purchase, or securities convertible into, capital stock or other equity interests, except (i) for transfers and replacements of then outstanding shares of capital stock or other equity interests, (ii) for stock splits, stock dividends and issuances which do not decrease the percentage ownership of the Borrower or any of its Subsidiaries in any class of the capital stock or other equity interests of such Subsidiary, (iii) in the case of Foreign Subsidiaries, to qualify directors to the extent required by applicable law and for other nominal share issuances to Persons other than the Borrower and its Subsidiaries to the extent required under applicable law, or (iv) for issuances by newly created or acquired Subsidiaries in accordance with the terms of this Agreement. 9.16 Business. The Borrower will not, and will not permit any of its -------- Subsidiaries to, engage in any business other than the businesses engaged in by the Borrower and its Subsidiaries as of the Initial Borrowing Date and reasonable extensions thereof. 9.17 Limitation on Creation of Subsidiaries. The Borrower will not, -------------------------------------- and will not permit any of its Subsidiaries to, establish, create or acquire after the Initial Borrowing Date any Subsidiary, provided that the Borrower and -------- its Wholly-Owned Subsidiaries shall be permitted to (A) establish, create and, to the extent permitted by this Agreement, acquire Wholly-Owned Subsidiaries so long as (i) the equity interests of each such new Wholly-Owned Subsidiary is pledged pursuant to, and to the extent required by, the Pledge Agreement, (ii) each such new Wholly-Owned Domestic Subsidiary (and, to the extent required by Section 8.13, each such new Wholly-Owned Foreign Subsidiary) executes a counterpart of the Subsidiaries Guaranty, the Pledge Agreement and the Security Agreement, and (iii) each such new Wholly-Owned Domestic Subsidiary (and, to the extent required by Section 8.13, each such new Wholly-Owned Foreign Subsidiary), to the extent requested by the Administrative Agent or the Required Lenders, takes all actions required pursuant to Section 8.12, and (B) establish, create and acquire non-Wholly-Owned Subsidiaries in each case to the extent permitted by Section 9.05(xiii) and the definition of Permitted Acquisition so long as the equity interest of each such non-Wholly-Owned Subsidiary is pledged pursuant to, and to the extent required by, the Pledge Agreement. In addition, each such new Wholly-Owned Subsidiary which is required to become a Credit Party shall execute and deliver, or cause to be executed and delivered, all other relevant documentation of the type described in Section 5 as such new Wholly-Owned Subsidiary would have had to deliver if such new Wholly-Owned Subsidiary were a Credit Party on the Initial Borrowing Date. 9.18 Rental Fleet. Notwithstanding anything to the contrary ------------ contained in this Agreement, the Borrower will not permit the aggregate net book value of all cranes of the Borrower and its Subsidiaries that are part of their rental fleet to exceed $25,000,000 at any time. SECTION 10. Events of Default. Upon the occurrence of any of the ----------------- following specified events (each, an "Event of Default"): -90- 10.01 Payments. The Borrower shall (i) default in the payment when -------- due of any principal of any Loan or any Note or (ii) default, and such default shall continue unremedied for three or more Business Days, in the payment when due of any interest on any Loan or Note, any Unpaid Drawing or any Fees or any other amounts owing hereunder or under any other Credit Document; or 10.02 Representations, etc. Any representation, warranty or --------------------- statement made or deemed made by any Credit Party herein or in any other Credit Document or in any certificate delivered to the Administrative Agent or any Lender pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which made or deemed made; or 10.03 Covenants. The Borrower or any of its Subsidiaries shall (i) --------- default in the due performance or observance by it of any term, covenant or agreement contained in Section 8.01(f)(i), 8.08, 8.11, 8.14, 8.15, 8.17 or Section 9 or (ii) default in the due performance or observance by it of any other term, covenant or agreement contained in this Agreement or in any other Credit Document (other than those set forth in Sections 10.01 and 10.02 and clause (i) of this Section 10.03) and such default shall continue unremedied for a period of 30 days (or such longer period of time as may be provided for in the Mortgages) after written notice thereof to the defaulting party by the Administrative Agent or the Required Lenders; or 10.04 Default Under Other Agreements. (i) The Borrower or any of ------------------------------ its Subsidiaries shall (x) default in any payment of any Indebtedness (other than the Obligations) beyond the period of grace, if any, provided in the instrument or agreement under which such Indebtedness was created or (y) default in the observance or performance of any agreement or condition relating to any Indebtedness (other than the Obligations) or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such Indebtedness to become due prior to its stated maturity, or (ii) any Indebtedness (other than the Obligations) of the Borrower or any of its Subsidiaries shall be declared to be (or shall become) due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof, provided that it shall not be a Default or an Event of Default under this - -------- Section 10.04 unless the aggregate principal amount of all Indebtedness as described in preceding clauses (i) and (ii) is at least $7,000,000; or 10.05 Bankruptcy, etc. The Borrower or any of its Subsidiaries shall ---------------- commence a voluntary case concerning itself under Title 11 of the United States Code entitled "Bankruptcy," as now or hereafter in effect, or any successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced against the Borrower or any of its Subsidiaries, and the petition is not controverted within 10 days, or is not dismissed within 60 days, after commencement of the case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge of, all or substantially all of the property of the Borrower or any of its Subsidiaries, or the Borrower or any of its Subsidiaries commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Borrower or any of its Subsidiaries, -91- or there is commenced against the Borrower or any of its Subsidiaries any such proceeding which remains undismissed for a period of 60 days, or the Borrower or any of its Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or the Borrower or any of its Subsidiaries suffers any appointment of any custodian or the like for it or any substantial part of its property to continue undischarged or unstayed for a period of 60 days; or the Borrower or any of its Subsidiaries makes a general assignment for the benefit of creditors; or any corporate, limited liability company or similar action is taken by the Borrower or any of its Subsidiaries for the purpose of effecting any of the foregoing; or 10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding ----- standard required for any plan year or part thereof under Section 412 of the Code or Section 302 of ERISA or a waiver of such standard or extension of any amortization period is sought or granted under Section 412 of the Code or Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA shall be subject to the advance reporting requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur with respect to such Plan within the following 30 days, any Plan which is subject to Title IV of ERISA shall have had or is likely to have a trustee appointed to administer such Plan, any Plan which is subject to Title IV of ERISA is, shall have been or is likely to be terminated or to be the subject of termination proceedings under ERISA, any Plan shall have an Unfunded Current Liability, a contribution required to be made with respect to a Plan or a Foreign Pension Plan has not been timely made, the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate has incurred or is likely to incur any liability to or on account of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or on account of a group health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code, or the Borrower or any Subsidiary of the Borrower has incurred or is likely to incur liabilities pursuant to one or more employee welfare benefit plans (as defined in Section 3(1) of ERISA) that provide benefits to retired employees or other former employees (other than as required by Section 601 of ERISA) or Plans or Foreign Pension Plans, a "default" within the meaning of Section 4219(c)(5) of ERISA shall occur with respect to any Plan, any applicable law, rule or regulation is adopted, changed or interpreted, or the interpretation or administration thereof is changed, in each case after the date hereof, by any governmental authority or agency or by any court (a "Change of Law"), or, as a result of a Change in Law, an event occurs following a Change in Law, with respect to or otherwise affecting any Plan; (b) there shall result from any such event or events the imposition of a lien, the granting of a security interest, or a liability or a material risk of incurring a liability; and (c) such lien, security interest or liability, either individually and/or in the aggregate, has had, or could reasonably be expected to have, a Material Adverse Effect; or 10.07 Security Documents. Any of the Security Documents shall cease ------------------ to be in full force and effect, or shall cease to give the Collateral Agent for the benefit of the Secured Creditors the Liens, rights, powers and privileges purported to be created thereby, or any Credit Party shall default in the due performance or observance of any term, covenant or agreement on -92- its part to be performed or observed pursuant to any such Security Document and such default shall continue beyond the period of grace, if any, specifically applicable thereto pursuant to the terms of such Security Document; or 10.08 Subsidiaries Guaranties. Except as otherwise provided in ----------------------- Section 9.02(v) or (x), the Subsidiaries Guaranty or any provision thereof shall cease to be in full force or effect as to any Subsidiary Guarantor, or any Subsidiary Guarantor or any Person acting for or on behalf of such Subsidiary Guarantor shall deny or disaffirm such Subsidiary Guarantor's obligations under the Subsidiaries Guaranty or any Subsidiary Guarantor shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to the Subsidiaries Guaranty; or 10.09 Judgments. One or more judgments or decrees shall be entered --------- against the Borrower or any Subsidiary of the Borrower involving in the aggregate for the Borrower and its Subsidiaries a liability (not paid or fully covered by a reputable and solvent insurance company) and such judgments and decrees either shall be final and non-appealable or shall not be vacated, discharged or stayed or bonded pending appeal for any period of 30 consecutive days, and the aggregate amount of all such judgments equals or exceeds $5,000,000; or 10.10 Change of Control. A Change of Control shall occur; ----------------- then, and in any such event, and at any time thereafter, if any Event of Default shall then be continuing, the Administrative Agent, upon the written request of the Required Lenders, shall by written notice to the Borrower, take any or all of the following actions, without prejudice to the rights of the Administrative Agent, any Lender or the holder of any Note to enforce its claims against any Credit Party (provided that, if an Event of Default specified in Section 10.05 -------- shall occur with respect to the Borrower, the result which would occur upon the giving of written notice by the Administrative Agent as specified in clauses (i) and (ii) below shall occur automatically without the giving of any such notice): (i) declare the Total Commitment terminated, whereupon all Commitments of each Lender shall forthwith terminate immediately and any Commitment Commission shall forthwith become due and payable without any other notice of any kind; (ii) declare the principal of and any accrued interest in respect of all Loans and the Notes and all Obligations owing hereunder and thereunder to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Credit Party; (iii) terminate any Letter of Credit which may be terminated in accordance with its terms; (iv) direct the Borrower to pay (and the Borrower agrees that upon receipt of such notice, or upon the occurrence of an Event of Default specified in Section 10.05 with respect to the Borrower, it will pay) to the Collateral Agent at the Payment Office such additional amount of cash or Cash Equivalents, to be held as security by the Collateral Agent, as is equal to the aggregate Stated Amount of all Letters of Credit issued for the account of the Borrower and then outstanding; (v) enforce, as Collateral Agent, all of the Liens and security interests created pursuant to the Security Documents; and (vi) apply any cash collateral held by the Administrative Agent pursuant to Section 4.02 to the repayment of the Obligations. -93- SECTION 11. Definitions and Accounting Terms. -------------------------------- 11.01 Defined Terms. As used in this Agreement, the following terms ------------- shall have the following meanings (such meanings to be equally applicable to both the singular and plural forms of the terms defined): "A Term Loan" shall have the meaning provided in Section 1.01(a). "A Term Loan Commitment" shall mean, for each Lender, the amount set forth opposite such Lender's name in Schedule I directly below the column entitled "A Term Loan Commitment", as the same may be terminated pursuant to Sections 3.03 and/or 10. "A Term Loan Maturity Date" shall mean May 9, 2006. "A Term Loan Percentage" shall mean, at any time, a fraction (expressed as a percentage), the numerator of which is equal to the aggregate principal amount of all A Term Loans outstanding at such time, and the denominator of which is equal to the aggregate principal amount of all Term Loans outstanding at such time. "A Term Note" shall have the meaning provided in Section 1.05(a). "Acquired EBITDA" shall mean, for any Acquired Entity or Business for any period, the Consolidated EBITDA as determined for such Acquired Entity or Business for such period on the basis substantially the same (with necessary reference changes) as provided in the definition of Consolidated EBITDA contained herein. "Acquired Entity or Business" shall mean either (x) the assets constituting a business, division or product line of any Person not already a Subsidiary of the Borrower or (y) 100% of the capital stock of any such Person, which Person shall, as a result of such stock acquisition, become a Wholly-Owned Subsidiary of the Borrower (or shall be merged with and into the Borrower or a Subsidiary Guarantor, with the Borrower or such Subsidiary Guarantor being the surviving Person). "Acquisition" shall mean the acquisition by Acquisition Co. of all of the outstanding stock of the Target pursuant to the Acquisition Documents. "Acquisition Agreement" shall mean the Share Purchase Agreement, dated as of May 9, 2001, between the Seller and Acquisition Co. "Acquisition Co." shall mean Manitowoc France SAS, a newly formed Wholly-Owned Foreign Subsidiary of the Borrower incorporated under the laws of France. "Acquisition Documents" shall mean the Acquisition Agreement, the Put Agreement and all other agreements and documents relating to the Acquisition. "Additional Security Documents" shall have the meaning provided in Section 8.12. -94- "Adjusted Consolidated Net Income" shall mean, for any period, Consolidated Net Income for such period plus, without duplication, the sum of the amount of all net non-cash charges (including, without limitation, depreciation, amortization, deferred tax expense and non-cash interest expense) and net non-cash losses which were included in arriving at Consolidated Net Income for such period, less the amount of all net non-cash gains and non-cash credits which were included in arriving at Consolidated Net Income for such period. "Adjusted Consolidated Working Capital" shall mean, at any time, Consolidated Current Assets (but excluding therefrom all cash and Cash Equivalents) less Consolidated Current Liabilities at such time. "Administrative Agent" shall mean BTCo, in its capacity as Administrative Agent for the Lenders hereunder, and shall include any successor to the Administrative Agent appointed pursuant to Section 12.09. "Affiliate" shall mean, with respect to any Person, any other Person directly or indirectly controlling (including, but not limited to, all directors and officers of such Person), controlled by, or under direct or indirect common control with, such Person. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power (i) to vote 10% or more of the securities having ordinary voting power for the election of directors (or equivalent governing body) of such Person or (ii) to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise; provided, -------- however, that neither the Administrative Agent nor any Lender (nor any Affiliate - ------- thereof) shall be considered an Affiliate of the Borrower or any Subsidiary thereof. "Agreement" shall mean this Credit Agreement, as modified, supplemented, amended, restated (including any amendment and restatement hereof), extended or renewed from time to time. "Applicable Commitment Commission Percentage" and "Applicable Margin" shall mean: from and after any Start Date to and including the corresponding End Date, (i) with respect to Commitment Commission, the respective per annum percentage set forth below under the column "Applicable Commitment Commission Percentage" and (ii) with respect to A Term Loans, B Term Loans, Revolving Loans and Swingline Loans, the respective percentage per annum set forth below under the respective Type of Loans and (in the case of preceding clauses (i) and (ii)) opposite the respective Level (i.e., Level 1, Level 2, Level 3 or Level 4, as ---- the case may be) indicated to have been achieved on the applicable Test Date for such Start Date (as shown in the respective officer's certificate delivered pursuant to Section 8.01(e) or the first proviso below) plus or minus (in the ---- ----- case of preceding clause (ii)), as applicable, any Applicable Pricing Adjustment as in effect from time to time: -95-
A Term Loans and Revolving Loans A Term Loans and B Term Loans Applicable Consolidated maintained as Revolving Loans B Term Loans maintained as Commitment Total Base Rate Loans maintained as maintained as Eurodollar Commission Level Leverage Ratio and Swingline Loans Euro Rate Loans Base Rate Loans Loans Percentage - ----- -------------- -------------------- ---------------- --------------- ------------- ---------- 1 Less than 2.00:1.00 1.000% 2.000% 1.750% 2.750% 0.250% 2 Greater than or equal to 2.00:1.00 but less than or equal to 2.50:1.00 1.250% 2.250% 1.875% 2.875% 0.250% 3 Greater than 2.50:1.00 but less than or equal to 3.00:1.00 1.500% 2.500% 1.875% 2.875% 0.375% 4 Greater than 3.00:1.00 1.625% 2.625% 1.875% 2.875% 0.500%
;provided, however, that if the Borrower fails to deliver the financial -------- ------- statements required to be delivered pursuant to Section 8.01(a) or (b) (accompanied by the officer's certificate required to be delivered pursuant to Section 8.01(e) showing the applicable Consolidated Total Leverage Ratio on the relevant Test Date) on or prior to the respective date required by such Sections, then Level 4 pricing (as adjusted by any Applicable Pricing Adjustment) shall apply until such time, if any, as the financial statements required as set forth above and the accompanying officer's certificate have been delivered showing the pricing for the respective Margin Reduction Period is at a level which is less than Level 4 (as adjusted by any Applicable Pricing Adjustment) (it being understood that, in the case of any late delivery of the financial statements and officer's certificate as so required, any reduction in the Applicable Commitment Commission Percentage or in the Applicable Margin shall apply only from and after the date of the delivery of the complying financial statements and officer's certificate); provided further, that Level 4 ---------------- pricing (as adjusted by any Applicable Pricing Adjustment) shall apply at all times when an Event of Default is in existence. Notwithstanding anything to the contrary contained in the immediately preceding sentence, Level 4 pricing (as adjusted by any Applicable Pricing Adjustment) shall apply for the period from the Initial Borrowing Date to the date of the delivery of the Borrower's financial statements (and related officer's certificate) in respect of its fiscal year ending December 31, 2001. "Approved Currency" shall mean (i) for Term Loans, Dollars, (ii) for Revolving Loans, Dollars, Pounds Sterling and Euros, and (iii) for Letters of Credit, Dollars and one or more Foreign Currencies. "Applicable Pricing Adjustment" shall mean, on any date: -96- (A) in the case of A Term Loans, Revolving Loans and Swingline Loans, a decrease of 0.250% so long as no Event of Default then exists and is continuing and the Bank Debt Ratings assigned by both Moody's and S&P are Ba1 (or above) and BB+ (or above), respectively; and (B) in the case of B Term Loans, (x) an increase of 0.125% in the event that either (i) the Bank Debt Rating assigned by Moody's is Ba3 (or below) or (ii) the Bank Debt Rating assigned by S&P is BB- (or below) and succeeding sub-clause (y) is not applicable and (y) an increase of 0.250% in the event that the Bank Debt Ratings assigned by both Moody's and S&P are Ba3 (or below) and BB- (or below), respectively. Notwithstanding the foregoing, (i) for the period from the Initial Borrowing Date to the date of the delivery of the Borrower's financial statements (and related officer's certificate) in respect of its fiscal year ending December 31, 2001, the Applicable Pricing Adjustment in clause (A) above shall be 0, and (ii) at any time that a Bank Debt Rating has not been assigned by both S&P and Moody's, (x) the Applicable Pricing Adjustment set forth in clause (A) above shall be 0 and (y) the Applicable Pricing Adjustment set forth in clause (B) above shall be 0.250% "Asset Sale" shall mean any sale, transfer or other disposition by the Borrower or any of its Subsidiaries to any Person (including by way of redemption by such Person) other than to the Borrower or a Wholly-Owned Subsidiary of the Borrower of any asset (including, without limitation, any capital stock or other securities of, or equity interests in, another Person) other than sales of assets pursuant to Sections 9.02(ii), (iii), (vii), (viii), (xiv), (xvi) and (xvii). "Assignment and Assumption Agreement" shall mean an Assignment and Assumption Agreement substantially in the form of Exhibit N (appropriately completed). "Associated Costs" shall mean the cost imputed to each Lender of compliance with (a) the cash ratios and special deposit requirements of the Bank of England and/or the banking supervision or other costs imposed by the Financial Services Authority, as determined in accordance with Schedule X, and (b) any reserve asset requirements of the European Central Bank, as determined in accordance with Schedule X. "Available Revolving Loan Commitment" of any RL Lender at any time shall mean its RL Percentage of the Total Available Revolving Loan Commitment at such time. "B Lenders" shall have the meaning provided in Section 4.01(c). "B Term Loan" shall mean, collectively, each Initial B Term Loan and each Incremental B Term Loan. "B Term Loan Maturity Date" shall mean May 9, 2007. "B Term Loan Percentage" shall mean, at any time, a fraction (expressed as a percentage), the numerator of which is equal to the aggregate principal amount of all B Term -97- Loans outstanding at such time, and the denominator of which is equal to the aggregate principal amount of all Term Loans outstanding at such time. "B Term Note" shall have the meaning provided in Section 1.05(a). "Bank Debt Ratings" shall mean, as of each date of determination, the rating (actual or implied) assigned to the Loans by S&P and Moody's. "Bankruptcy Code" shall have the meaning provided in Section 10.05. "Base Rate" shall mean, at any time, the higher of (i) the Prime Lending Rate at such time and (ii) 1/2 of 1% in excess of the overnight Federal Funds Rate at such time. "Base Rate Loan" shall mean (i) each Swingline Loan and (ii) each other Loan (other than a Foreign Currency Revolving Loan) designated or deemed designated as such by the Borrower at the time of the incurrence thereof or conversion thereto. "Blocked Revolving Loan Commitment" shall mean, at any time, the aggregate outstanding amount of all Receivables Indebtedness at such time for which the Factor has recourse to the Borrower or any of its Subsidiaries at such time. "Borrower" shall have the meaning provided in the first paragraph of this Agreement. "Borrowing" shall mean the borrowing of one Type of Loan of a single Tranche from all the Lenders having Commitments of the respective Tranche (or from the Swingline Lender in the case of Swingline Loans) on a given date (or resulting from a conversion or conversions on such date) having in the case of Euro Rate Loans the same Interest Period, provided that (i) Base Rate Loans -------- incurred pursuant to Section 1.10(b) shall be considered part of the related Borrowing of Eurodollar Loans, and (ii) any Incremental B Term Loans incurred pursuant to Section 1.01(c) shall be considered part of the related Borrowing of the then outstanding Initial B Term Loans to which such Incremental B Term Loans are added pursuant to Section 1.14(c). "BTCo" shall mean Bankers Trust Company, in its individual capacity, and any successor corporation thereto by merger, consolidation or otherwise. "Business Day" shall mean (i) for all purposes other than as covered by clause (ii) below, any day except Saturday, Sunday and any day which shall be in New York, New York, a legal holiday or a day on which banking institutions are authorized or required by law or other government action to close and (ii) with respect to all notices and determinations in connection with, and payments of principal and interest on, Euro Rate Loans, any day which is a Business Day described in clause (i) above and which is also (A) a day for trading by and between banks in U.S. dollar deposits in the relevant interbank market and (B) in relation to any payment in (x) Euros, a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET) System is open, and (y) Pounds Sterling, a day on which banks are ordinarily open for the transaction of business in the United Kingdom. -98- "Buy-Back Arrangements" shall mean those arrangements more particularly described on Schedule XI entered into by Foreign Subsidiaries of the Borrower in the ordinary course of business and on a basis consistent with the past practices of the Target and its Subsidiaries. "Calculation Period" shall mean, in the case of any Permitted Acquisition, the Test Period most recently ended prior to the date of any such Permitted Acquisition for which financial statements are available. "Canadian Dollars" shall mean freely transferable lawful money of Canada. "Capital Expenditures" shall mean, with respect to any Person, all expenditures by such Person which should be capitalized in accordance with generally accepted accounting principles and, without duplication, the amount of Capitalized Lease Obligations incurred by such Person; provided, however, that -------- ------- the term Capital Expenditures shall not include the transfer of any then existing cranes of the Borrower or its Subsidiaries held in inventory to their rental fleet and thereby result in an increase to property, plant and equipment even though generally accepted accounting principles may treat such transfers as Capital Expenditures. "Capitalized Lease Obligations" shall mean, with respect to any Person, all rental obligations of such Person which, under generally accepted accounting principles, are required to be capitalized on the books of such Person, in each case taken at the amount thereof accounted for as indebtedness in accordance with such principles. "Cash Equivalents" shall mean, as to any Person, (i) securities issued or directly and fully guaranteed or insured by the United States or any agency or instrumentality thereof (provided that the full faith and credit of the -------- United States is pledged in support thereof) having maturities of not more than six months from the date of acquisition, (ii) marketable direct obligations issued by any state of the United States or any political subdivision of any such state or any public instrumentality thereof maturing within six months from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either S&P or Moody's, (iii) Dollar denominated time deposits, certificates of deposit and bankers acceptances of any Lender or any commercial bank having, or which is the principal banking subsidiary of a bank holding company having, a long-term unsecured debt rating of at least "A" or the equivalent thereof from S&P or "A2" or the equivalent thereof from Moody's with maturities of not more than six months from the date of acquisition by such Person, (iv) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clause (i) above entered into with any bank meeting the qualifications specified in clause (iii) above, (v) commercial paper issued by any Person incorporated in the United States rated at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody's and in each case maturing not more than six months after the date of acquisition by such Person, and (vi) investments in money market funds substantially all of whose assets are comprised of securities of the types described in clauses (i) through (v) above. -99- "CERCLA" shall mean the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as the same has been amended and may hereafter be amended from time to time, 42 U.S.C. (S) 9601 et seq. -- ---- "Change of Control" shall mean (a) any "person" or "group" (within the meaning of Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, as in effect on the Effective Date) shall (A) have acquired, directly or indirectly, beneficial ownership of 30% or more on a fully diluted basis of the voting and/or economic interest in the Borrower's capital stock or (B) obtained the power (whether or not exercised) to elect a majority of the Borrower's directors or (b) the Board of Directors of the Borrower shall cease to consist of a majority of Continuing Directors or (c) a "change of control" shall occur as provided in the Senior Subordinated Note Indenture. "Change of Law" shall have the meaning provided in Section 10.06. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to the Code are to the Code, as in effect at the date of this Agreement and any subsequent provisions of the Code, amendatory thereof, supplemental thereto or substituted therefor. "Collateral" shall mean all property (whether real or personal) with respect to which any security interests have been granted (or purported to be granted) pursuant to any Security Document, including, without limitation, all Pledge Agreement Collateral, all Security Agreement Collateral, all Mortgaged Properties and all cash and Cash Equivalents delivered as collateral pursuant to Section 4.02 or 10. "Collateral Agent" shall mean the Administrative Agent acting as collateral agent for the Secured Creditors pursuant to the Security Documents. "Commitment" shall mean any of the commitments of any Lender, i.e., ---- whether the A Term Loan Commitment, the Initial B Term Loan Commitment, the Incremental B Term Loan Commitment or the Revolving Loan Commitment. "Commitment Commission" shall have the meaning provided in Section 3.01(a). "Consolidated Current Assets" shall mean, at any time, the consolidated current assets of the Borrower and its Subsidiaries at such time. "Consolidated Current Liabilities" shall mean, at any time, the consolidated current liabilities of the Borrower and its Subsidiaries at such time, but excluding the current portion of any Indebtedness under this Agreement and the current portion of any other long-term Indebtedness which would otherwise be included therein. "Consolidated EBIT" shall mean, for any period, Consolidated Net Income for such period before deducting therefrom Consolidated Interest Expense for such period (to the extent deducted in arriving at Consolidated Net Income for such period) and provision for taxes based on income (including foreign withholding taxes imposed on interest or dividend payments -100- and state single business, unitary or similar taxes imposed on net income) that were included in arriving at Consolidated Net Income for such period and without giving effect (x) to any extraordinary gains or extraordinary losses and (y) to any gains or losses from sales of assets other than from sales of inventory in the ordinary course of business. "Consolidated EBITDA" shall mean, for any period, Consolidated EBIT for such period, adjusted by adding thereto (i) the amount of all amortization and depreciation that were deducted in arriving at Consolidated Net Income for such period and (ii) the amount of all fees and expenses incurred in connection with the Transaction for such period to the extent that same were deducted in arriving at Consolidated Net Income for such period; it being understood that in determining the Consolidated Senior Leverage Ratio and the Consolidated Total Leverage Ratio only and in determining compliance with Section 9.09, Consolidated EBITDA for any period shall be calculated on a Pro Forma Basis to --- ----- give effect to any Acquired Entity or Business acquired during such period pursuant to a Permitted Acquisition and not subsequently sold or otherwise disposed of by the Borrower or any of its Subsidiaries during such period. "Consolidated Fixed Charge Coverage Ratio" shall mean, for any period, the ratio of (x) the remainder of (A) Consolidated EBITDA for such period minus (B) the aggregate amount of all Capital Expenditures made by the Borrower and its Subsidiaries for such period (other than Capital Expenditures (x) made pursuant to Section 9.07(c), (d) or (e) or (y) to the extent financed with equity proceeds, capital stock, Assets Sale proceeds, insurance proceeds or Indebtedness (other than with Revolving Loans or Swingline Loans)) to (y) Consolidated Fixed Charges for such period. "Consolidated Fixed Charges" shall mean, for any period, the sum, without duplication, of (i) Consolidated Interest Expense for such period and (ii) the aggregate amount of all Dividends (including stock repurchases) paid by the Borrower pursuant to Sections 9.03(v) and (vi) for such period. "Consolidated Indebtedness" shall mean, at any time, the sum of (without duplication) (I) the aggregated stated balance sheet amount of all Indebtedness (including, in any event, all Loans, Capitalized Lease Obligations and Senior Subordinated Notes) of the Borrower and its Subsidiaries as would be required to be reflected on the liability side of a balance sheet of such Person at such time in accordance with generally accepted accounting principles as determined on a consolidated basis, (II) all Indebtedness of the Borrower and its Subsidiaries of the type described in clauses (ii) and (vii) of the definition of Indebtedness contained herein, (III) the aggregate amount of all Receivables Indebtedness of the Borrower and its Subsidiaries outstanding at such time, and (IV) all Contingent Obligations of the Borrower and its Subsidiaries in respect of Indebtedness of any third Person of the type referred to in preceding clauses (I), (II) and (III) of this definition. "Consolidated Interest Coverage Ratio" shall mean, for any period, the ratio of (x) Consolidated EBITDA for such period to (y) Consolidated Interest Expense for such period. "Consolidated Interest Expense" shall mean, for any period, the total consolidated interest expense of the Borrower and its Subsidiaries for such period (calculated without regard -101- to any limitations on the payment thereof) plus, without duplication, that portion of Capitalized Lease Obligations of the Borrower and its Subsidiaries representing the interest factor for such period; provided that (i) the -------- amortization of deferred financing, legal and accounting costs and expenses with respect to the Transaction shall be excluded from Consolidated Interest Expense to the extent same would otherwise have been included therein and (ii) "Consolidated Interest Expense" shall be deemed to include interest expense which the Borrower would have incurred during such period if the aggregate amount of Receivables Indebtedness from time to time outstanding during such period had instead been outstanding during such period as Revolving Loans maintained as Eurodollar Loans bearing interest at a rate equal to the sum of (I) the average of the Eurodollar Rates applicable to Revolving Loans maintained as Eurodollar Loans as determined on the last day of such period (or, if no Revolving Loans are outstanding on the last day of such period, the average of the Eurodollar Rates applicable to A Term Loans (or, if no A Term Loans are outstanding on the last day of such period, B Term Loans) maintained as Eurodollar Loans as determined on the last day of such period) plus (II) the ---- Applicable Margin for Revolving Loans maintained as Eurodollar Loans as in effect on the last day of such period. "Consolidated Net Income" shall mean, for any period, the net income (or loss) of the Borrower and its Subsidiaries for such period, determined on a consolidated basis (after any deduction for minority interests), provided that -------- (i) in determining Consolidated Net Income, the net income of any other Person which is not a Subsidiary of the Borrower or is accounted for by the Borrower by the equity method of accounting shall be included only to the extent of the payment of cash dividends or cash distributions by such other Person to the Borrower or a Subsidiary thereof during such period, (ii) the net income of any Subsidiary of the Borrower shall be excluded to the extent that the declaration or payment of cash dividends or similar cash distributions by that Subsidiary of that net income is not at the date of determination permitted by operation of its charter or any agreement, instrument or law applicable to such Subsidiary and (iii) the net income (or loss) of any other Person acquired by the Borrower or a Subsidiary of the Borrower in a pooling of interests transaction for any period prior to the date of such acquisition shall be excluded. "Consolidated Senior Indebtedness" shall mean, at any time, the amount of all Consolidated Indebtedness at such time, less the aggregate principal amount of the Senior Subordinated Notes outstanding at such time. "Consolidated Senior Leverage Ratio" shall mean, at any time, the ratio of (x) Consolidated Senior Indebtedness at such time to (y) Consolidated EBITDA for the Test Period then most recently ended. "Consolidated Total Leverage Ratio" shall mean, at any time, the ratio of (x) Consolidated Indebtedness at such time to (y) Consolidated EBITDA for the Test Period then most recently ended. "Contingent Obligation" shall mean, as to any Person, any obligation of such Person as a result of such Person being a general partner of any other Person, unless the underlying obligation is expressly made non-recourse as to such general partner, and any obligation of such Person guaranteeing or intended to guarantee any Indebtedness, leases, dividends or other -102- obligations ("primary obligations") of any other Person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, any obligation of such Person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (x) for the purchase or payment of any such primary obligation or (y) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term Contingent -------- ------- Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the lesser of (x) the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such Person in good faith and (y) the stated amount of such Contingent Obligation. "Continuing Directors" shall mean the directors of the Borrower on the Initial Borrowing Date and each other director if such director's election to, or nomination for the election to, the Board of Directors of the Borrower is recommended or approved by a majority of then continuing Directors. "Credit Documents" shall mean this Agreement and, after the execution and delivery thereof pursuant to the terms of this Agreement, each Note, the Subsidiaries Guaranty, each Security Document, each Incremental B Term Loan Commitment Agreement and each Incremental Revolving Loan Commitment Agreement. "Credit Event" shall mean the making of any Loan or the issuance of any Letter of Credit. "Credit Party" shall mean the Borrower and each Subsidiary Guarantor. "Default" shall mean any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default. "Defaulting Lender" shall mean any Lender with respect to which a Lender Default is in effect. "Dividend" shall mean, with respect to any Person, that such Person has declared or paid a dividend, distribution or returned any equity capital to its stockholders, partners or members or authorized or made any other distribution, payment or delivery of property (other than common equity of such Person) or cash to its stockholders, partners or members as such, or redeemed, retired, purchased or otherwise acquired, directly or indirectly, for a consideration any shares of any class of its capital stock or any partnership or membership interests outstanding on or after the Effective Date (or any options or warrants issued by such Person with respect to its -103- capital stock or other equity interests), or set aside any funds for any of the foregoing purposes, or shall have permitted any of its Subsidiaries to purchase or otherwise acquire for a consideration any shares of any class of the capital stock or any partnership or membership interests of such Person outstanding on or after the Effective Date (or any options or warrants issued by such Person with respect to its capital stock or other equity interests). Without limiting the foregoing, "Dividends" with respect to any Person shall also include all payments made or required to be made by such Person with respect to any stock appreciation rights, equity incentive or achievement plans or any similar plans or setting aside of any funds for the foregoing purposes. "Documents" shall mean the Credit Documents, the Acquisition Documents and the Senior Subordinated Note Documents. "Dollar Equivalent" shall mean, at any time for the determination thereof, (i) except as provided in clause (ii) below, the amount of Dollars which could be purchased with the amount of the relevant Foreign Currency involved in such computation at the spot exchange rate therefor as quoted by the Administrative Agent as of 11:00 A.M. (London time) on the date two Business Days prior to the date of any determination thereof for purchase on such date and (ii) for purposes of Section 13.07(e), the amount of Dollars which could be purchased with the amount of the relevant Foreign Currency involved in such computation at the spot exchange rate therefor as quoted or utilized by the Administrative Agent on the date of any determination thereof for purchase on such day. "Dollar Revolving Loan" shall mean each Revolving Loan denominated in Dollars. "Dollars" and the sign "$" shall each mean freely transferable lawful money of the United States. "Domestic Subsidiary" shall mean, as to any Person, each Subsidiary of such Person that is incorporated under the laws of the United States, any State thereof or the District of Columbia. "Drawing" shall have the meaning provided in Section 2.05(b). "Effective Date" shall have the meaning provided in Section 13.10. "Eligible Transferee" shall mean and include a commercial bank, an insurance company, a finance company, a financial institution, any fund that invests in loans or any other "accredited investor" (as defined in Regulation D of the Securities Act), but in any event excluding the Borrower and its Subsidiaries. "EMU Legislation" shall mean the legislative measures of the European Council for the introduction of, changeover to or operation of a single or unified European Currency. "End Date" shall mean, for any Margin Reduction Period, the last day of such Margin Reduction Period. -104- "Environmental Claims" shall mean any and all administrative, regulatory or judicial actions, suits, demands, demand letters, directives, claims, liens, notices of noncompliance or violation, investigations or proceedings relating in any way to any Environmental Law or any permit issued, or any approval given, under any such Environmental Law (hereafter, "Claims"), including, without limitation, (a) any and all Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law, and (b) any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief in connection with alleged injury or threat of injury to health, safety or the environment due to the presence of Hazardous Materials. "Environmental Law" shall mean any Federal, state, foreign or local statute, law, rule, regulation, ordinance, code, guideline, written policy and rule of common law now or hereafter in effect and in each case as amended, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, relating to the environment, employee health and safety or Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C. (S) 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. (S) 2601 et seq.; the -- ---- -- ---- Clean Air Act, 42 U.S.C. (S) 7401 et seq.; the Safe Drinking Water Act, 42 -- ---- U.S.C. (S) 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. (S) 2701 et -- ---- -- seq.; the Emergency Planning and the Community Right-to-Know Act of 1986, 42 - ---- U.S.C. (S) 11001 et seq.; the Hazardous Material Transportation Act, 49 U.S.C. -- ---- (S) 1801 et seq.; the Occupational Safety and Health Act, 29 U.S.C. (S) 651 et -- ---- -- seq.; and any state and local or foreign counterparts or equivalents, in each - ---- case as amended from time to time. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to ERISA are to ERISA, as in effect at the date of this Agreement and any subsequent provisions of ERISA, amendatory thereof, supplemental thereto or substituted therefor. "ERISA Affiliate" shall mean each person (as defined in Section 3(9) of ERISA) which together with the Borrower or a Subsidiary of the Borrower would be deemed to be a "single employer" (i) within the meaning of Section 414(b), (c), (m) or (o) of the Code or (ii) as a result of the Borrower or a Subsidiary of the Borrower being or having been a general partner of such person. "EURIBOR" shall mean, with respect to each Interest Period applicable to any Foreign Currency Revolving Loan denominated in Euros, (i) the rate per annum for deposits in Euros as determined by the Administrative Agent for a period corresponding to the duration of the relevant Interest Period which appears on Reuters Page EURIBOR-01 at approximately 11:00 A.M. (Brussels time) on the date which is two Business Days prior to the commencement of such Interest Period or (ii) if such rate is not shown on Reuters Page EURIBOR-01, the average offered quotation to four prime banks in the Euro-zone interbank market by the Administrative Agent for Euro deposits of amounts comparable to the principal amount of the Foreign Currency Revolving Loan for which an interest rate is then being determined with maturities comparable to the Interest Period to be applicable to such Foreign Currency Revolving Loan (rounded upward to the next whole multiple of 1/16 of 1%), determined as of 11:00 A.M. (Brussels time) on the -105- date which is two Business Days prior to the commencement of such Interest Period. The reference to Reuters Page EURIBOR-01 in this definition shall be construed to be a reference to the relevant page or any other page that may replace such page on the Reuters service. Notwithstanding anything to the contrary contained above, in the event the Administrative Agent has made any determination pursuant to Section 1.10(a)(i) in respect of Foreign Currency Revolving Loans denominated in Euros, or in the circumstances described in clause (i) to the proviso to Section 1.10(b) in respect of Foreign Currency Revolving Loans denominated in Euros, EURIBOR determined pursuant to this definition shall instead be the rate determined by the Administrative Agent as the all-in-cost of funds for the Administrative Agent to fund a Foreign Currency Revolving Loan denominated in Euros with maturities comparable to the Interest Period applicable thereto. "Euro" and the sign "Euro" shall each mean the single currency of the participating member states as described in any EMU Legislation. "Euro Equivalent" shall mean, at any time for the determination thereof, the amount of Euros which could be purchased with the amount of Dollars involved in such computation at the spot exchange rate therefor as quoted by the Administrative Agent as of 11:00 A.M. (London time) on the date two Business Days prior to the date of any determination thereof for purchase on such date (or, in the case of any determination pursuant to Section 13.17 or Section 25 of the Subsidiaries Guaranty, on the date of determination). "Euro Rate" shall mean (i) with respect to Term Loans and Dollar Revolving Loans, the Eurodollar Rate, (ii) with respect to Foreign Currency Revolving Loans denominated in Euros, EURIBOR, and (iii) with respect to Foreign Currency Revolving Loans denominated in Pounds Sterling, Sterling LIBOR. "Euro Rate Loan" shall mean each Eurodollar Loan and each Foreign Currency Revolving Loan. "Eurodollar Loan" shall mean each Loan (other than any Swingline Loan and any Foreign Currency Revolving Loan) designated as such by the Borrower at the time of the incurrence thereof or conversion thereto. "Eurodollar Rate" shall mean (a) the offered quotation to first-class banks in the New York interbank Eurodollar market by BTCo for Dollar deposits of amounts in immediately available funds comparable to the outstanding principal amount of the Eurodollar Loan of BTCo with maturities comparable to the Interest Period applicable to such Eurodollar Loan commencing two Business Days thereafter as of 11:00 A.M. (New York time) on the applicable Interest Determination Date, divided (and rounded upward to the nearest 1/16 of 1%) by (b) a percentage equal to 100% minus then stated maximum rate of all reserve requirements (including, without limitation, any marginal, emergency, supplemental, special or other reserves required by applicable law) applicable to any member bank of the Federal Reserve System in respect of Eurocurrency funding or liabilities as defined in Regulation D (or any successor category of liabilities under Regulation D). -106- "Euro-zone" shall mean the region composed of the participating member states as described in the EMU Legislation. "Event of Default" shall have the meaning provided in Section 10. "Excess Cash Flow" shall mean, for any period, the remainder of (a) the sum of, without duplication, (i) Adjusted Consolidated Net Income for such period and (ii) the decrease, if any, in Adjusted Consolidated Working Capital from the first day to the last day of such period, minus (b) the sum of, without duplication, (i) the aggregate amount of all Capital Expenditures made by the Borrower and its Subsidiaries during such period (other than Capital Expenditures to the extent financed with equity proceeds, capital stock, Asset Sale proceeds, insurance proceeds or Indebtedness (other than with Revolving Loans or Swingline Loans)), (ii) the aggregate amount of all Permitted Acquisitions made by the Borrower and its Subsidiaries during such period (other than Permitted Acquisitions to the extent financed with equity proceeds, capital stock, Asset Sale proceeds, insurance proceeds or Indebtedness), (iii) the aggregate amount of permanent principal payments of Indebtedness for borrowed money of the Borrower and its Subsidiaries during such period (other than (A) repayments to the extent made with Asset Sale proceeds, equity proceeds, insurance proceeds or Indebtedness and (B) repayments of Loans, provided that -------- repayments of Loans shall only be deducted in determining Excess Cash Flow if such repayments were (x) required as a result of a Scheduled Repayment under Section 4.02(b) or 4.02(c) or (y) made as a voluntary prepayment with internally generated funds (but in the case of a voluntary prepayment of Revolving Loans or Swingline Loans, only to the extent accompanied by a voluntary reduction to the Total Revolving Loan Commitment in an amount equal to such prepayment)), (iii) the aggregate amount of all cash Dividends actually paid pursuant to Section 9.03(v) for such period and (v) the increase, if any, in Adjusted Consolidated Working Capital from the first day to the last day of such period. "Excess Cash Payment Date" shall mean the date occurring 90 days after the last day of each fiscal year of the Borrower (beginning with its fiscal year ending on December 31, 2002). "Excess Cash Payment Period" shall mean, with respect to the repayment required on each Excess Cash Payment Date, the immediately preceding fiscal year of the Borrower. "Exchange Senior Subordinated Notes" shall mean Senior Subordinated Notes which are substantially identical securities to the Senior Subordinated Notes issued on or prior to the Initial Borrowing Date, which Exchange Senior Subordinated Notes shall be issued pursuant to a registered exchange offer or private exchange offer for the Senior Subordinated Notes and pursuant to the Senior Subordinated Notes Indenture. In no event will the issuance of any Exchange Senior Subordinated Notes increase the aggregate principal amount of Senior Subordinated Notes then outstanding or otherwise result in an increase in an interest rate applicable to the Senior Subordinated Notes. "Existing Indebtedness" shall have the meaning provided in Section 7.21. -107- "Existing Indebtedness Agreements" shall have the meaning provided in Section 5.05. "Facing Fee" shall have the meaning provided in Section 3.01(c). "Factor" shall mean General Electric Capital Corporation or any successor thereto or replacement thereof under the Factoring Agreement. "Factoring Agreement" shall mean one or more receivables purchase agreements (or similar agreements) entered into by the Borrower or a Subsidiary thereof with the Factor so long as each such agreement is substantially in the form of the Receivables Purchase Agreement as in effect on the Initial Borrowing Date with the Factor, as the same may be amended, modified, supplemented and/or replaced from time to time in accordance with the terms hereof and thereof and so long as any such replacement agreement is on terms no less favorable to the Borrower or any of its Subsidiaries in any material respect than those terms set forth in the existing Factoring Agreement with General Electric Capital Corporation as of the Initial Borrowing Date. "Federal Funds Rate" shall mean, for any period, a fluctuating interest rate equal for each day during such period to the weighted average of the rates on overnight Federal Funds transactions with members of the Federal Reserve System arranged by Federal Funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal Funds brokers of recognized standing selected by the Administrative Agent. "Fees" shall mean all amounts payable pursuant to or referred to in Section 3.01. "Foreign Cash Equivalents" shall mean certificates of deposit or bankers acceptances of any bank organized under the laws of Canada or any country that is a member of the European Economic Community, whose short-term commercial paper rating from S&P is at least A-1 or the equivalent thereof or from Moody's is at least P-1 or the equivalent thereof, in each case with maturities of not more than six months from the date of acquisition. "Foreign Currency" shall mean (i) in the case of any Revolving Loan, Euros and Pounds Sterling, and (ii) in the case of any non-Dollar denominated Letter of Credit, Euros, Pounds Sterling, Canadian Dollars and such other currencies as may be requested by the Borrower and acceptable to the Administrative Agent and the Issuing Lender. "Foreign Currency Revolving Loan" shall mean each Revolving Loan denominated in a Foreign Currency. "Foreign Pension Plan" shall mean any plan, fund (including, without limitation, any superannuation fund) or other similar program established or maintained outside the United States by the Borrower or any one or more of its Subsidiaries primarily for the benefit of employees of the Borrower or such Subsidiaries residing outside the United States, which plan, -108- fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination or severance of employment, and which plan is not subject to ERISA or the Code. "Foreign Subsidiary" shall mean, as to any Person, each Subsidiary of such Person which is not a Domestic Subsidiary. "Fronting Lender" shall mean BTCo in its individual capacity. "Hazardous Materials" shall mean (a) any petroleum or petroleum products, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, dielectric fluid containing levels of polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or substances defined as or included in the definition of "hazardous substances," "hazardous waste," "hazardous materials," "extremely hazardous substances," "restricted hazardous waste," "toxic substances," "toxic pollutants," "contaminants," or "pollutants," or words of similar import, under any applicable Environmental Law; and (c) any other chemical, material or substance, the exposure to, or Release of which is prohibited, limited or regulated by any governmental authority. "Incremental B Term Loan" shall have the meaning provided in Section 1.01(c). "Incremental B Term Loan Borrowing Date" shall mean that date on which the Borrower incurs Incremental B Term Loans pursuant to Section 1.01(c), which date shall be the date of the effectiveness of the Incremental B Term Loan Commitment Agreement pursuant to which such Incremental B Term Loans are to be made; provided that that such date shall occur on or before the Incremental -------- Commitment Expiry Date. "Incremental B Term Loan Commitment" shall mean, for each Incremental B Term Loan Lender, the commitment of such Incremental B Term Loan Lender to make Incremental B Term Loans pursuant to Section 1.01(c) on the Incremental B Term Loan Borrowing Date, as such commitment is set forth in the Incremental B Term Loan Commitment Agreement delivered pursuant to Section 1.14(b) and as same may be terminated pursuant to Sections 3.03 and/or 10. "Incremental B Term Loan Commitment Agreement" shall mean an Incremental B Term Loan Commitment Agreement substantially in the form of Exhibit C (appropriately completed). "Incremental B Term Loan Lender" shall have the meaning provided in Section 1.14(b). "Incremental Commitment Expiry Date" shall mean May 30, 2005. "Incremental Revolving Loan Commitment" shall mean, for each Incremental RL Lender, any commitment by such Incremental RL Lender to make Revolving Loans pursuant to Section 1.01(d) as agreed to by such Incremental RL Lender in the respective Incremental Revolving Loan Commitment Agreement delivered pursuant to Section 1.15; it being -109- understood, however, that on each date upon which an Incremental Revolving Loan ------- Commitment of any Incremental RL Lender becomes effective, such Incremental Revolving Loan Commitment of such Incremental RL Lender shall be added to (and thereafter become a part of) the Revolving Loan Commitment of such Incremental RL Lender for all purposes of this Agreement as contemplated by Section 1.15. "Incremental Revolving Loan Commitment Agreement" shall mean an Incremental Revolving Loan Commitment Agreement substantially in the form of Exhibit D (appropriately completed). "Incremental RL Lender" shall have the meaning provided in Section 1.15(b). "Indebtedness" shall mean, as to any Person, without duplication, (i) all indebtedness (including principal, interest, fees and charges) of such Person for borrowed money or for the deferred purchase price of property or services, (ii) the maximum amount available to be drawn under all letters of credit, bankers' acceptances and similar obligations issued for the account of such Person and all unpaid drawings in respect of such letters of credit, bankers' acceptances and similar obligations, (iii) all indebtedness of the types described in clause (i), (ii), (iv), (v), (vi) or (vii) of this definition secured by any Lien on any property owned by such Person, whether or not such indebtedness has been assumed by such Person (provided that, if the Person has -------- not assumed or otherwise become liable in respect of such indebtedness, such indebtedness shall be deemed to be in an amount equal to the fair market value of the property to which such Lien relates as determined in good faith by such Person), (iv) the aggregate amount of all Capitalized Lease Obligations of such Person, (v) all obligations of such Person to pay a specified purchase price for goods or services, whether or not delivered or accepted, i.e., take-or-pay and ---- similar obligations, (vi) all Contingent Obligations of such Person, (vii) all obligations under any Interest Rate Protection Agreement, any Other Hedging Agreement or under any similar type of agreement, and (viii) all Receivables Indebtedness. Notwithstanding the foregoing, Indebtedness shall not include trade payables and accrued expenses incurred by any Person in accordance with customary practices and in the ordinary course of business of such Person. "Indebtedness to be Refinanced" shall mean all Indebtedness set forth on Schedule XII which is to be repaid in full and/or terminated on the Initial Borrowing Date as part of the Refinancing. "Indemnifying Lender" shall mean each financial institution that has an "Indemnity Amount" (in excess of $0) appearing opposite its name on Schedule I, and each financial institution which, with the approval of the Fronting Lender and the Administrative Agent, acquires an Indemnity Amount (in excess of $0) pursuant to an Assignment and Assumption Agreement. "Indemnity Amount" shall mean, for each Indemnifying Lender which is a signatory hereto or which becomes an Indemnifying Lender pursuant to an Assignment and Assumption Agreement, the amount that is so designated and set forth opposite such Indemnify- -110- ing Lender's name on Schedule I (as the same may be modified pursuant to Sections 1.13, 1.17, 13.04(c) and 13.12(b), as the case may be). "Indemnity Participation" shall have the meaning provided in Section 1.17. "Initial B Term Loan" shall have the meaning provided in Section 1.01(b). "Initial B Term Loan Commitment" shall mean, for each Lender, the amount set forth opposite such Lender's name on Schedule I directly below the column entitled "Initial B Term Loan Commitment," as the case may be terminated pursuant to Sections 3.03 and or 10. "Initial Borrowing Date" shall mean the date occurring on or after the Effective Date on which the initial Borrowing of Loans occurs. "Intercompany Loan" shall have the meaning provided in Section 9.05(ix). "Intercompany Note" shall mean a promissory note, in the form of Exhibit O, evidencing Intercompany Loans. "Interest Determination Date" shall mean, with respect to any Euro Rate Loan, the second Business Day prior to the commencement of any Interest Period relating to such Euro Rate Loan. "Interest Period" shall have the meaning provided in Section 1.09. "Interest Rate Protection Agreement" shall mean any interest rate swap agreement, interest rate cap agreement, interest collar agreement, interest rate hedging agreement or other similar agreement or arrangement. "Investments" shall have the meaning provided in Section 9.05. "Issuing Country" shall have the meaning provided in Section 13.18(a). "Issuing Lender" shall mean BTCo (which, for purposes of this definition, also shall include any banking affiliate of BTCo, including Deutsche Bank AG, New York Branch, which has agreed to issue Letters of Credit under this Agreement). "Judgment Currency" shall have the meaning provided in Section 13.17(a). "Judgment Currency Conversion Date" shall have the meaning provided in Section 13.17(a). "L/C Supportable Obligations" shall mean (i) obligations of the Borrower or any of its Subsidiaries with respect to workers compensation, surety bonds and other similar statutory obligations and (ii) such other obligations of the Borrower or any of its Subsidiaries as are reasonably acceptable to the Issuing Lender and otherwise permitted to exist pursuant to the terms of this Agreement (other than obligations in respect of the Senior Subordinated Notes). -111- "Leaseholds" of any Person shall mean all the right, title and interest of such Person as lessee or licensee in, to and under leases or licenses of land, improvements and/or fixtures. "Lender" shall mean each financial institution listed on Schedule I, as well as any Person that becomes a "Lender" hereunder pursuant to Section 1.13, 1.14, 1.15 or 13.04(b), it being understood that for purposes of Sections 1.10, 1.11 and 2.06, the term "Lender" as used herein shall in any event include BTCo in its capacity as a Fronting Lender. "Lender Default" shall mean (i) the refusal (which has not been retracted) or the failure of a Lender to make available its portion of any Borrowing (including any Mandatory Borrowing) or to fund its portion of any unreimbursed payment under Section 2.04(c) or (ii) a Lender having notified in writing the Borrower and/or the Administrative Agent that such Lender does not intend to comply with its obligations under Section 1.01(a), 1.01(b), 1.01(c), 1.01(d), 1.01(f) or 2. "Letter of Credit" shall have the meaning provided in Section 2.01(a). "Letter of Credit Fee" shall have the meaning provided in Section 3.01(b). "Letter of Credit Outstandings" shall mean, at any time, the sum of (i) the Stated Amount of all outstanding Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings in respect of all Letters of Credit. "Letter of Credit Request" shall have the meaning provided in Section 2.03(a). "Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, priority or other security agreement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the UCC or any other similar recording or notice statute, and any lease having substantially the same effect as any of the foregoing). "Loan" shall mean each Term Loan, each Revolving Loan and each Swingline Loan. "Majority Lenders" of any Tranche shall mean those Non-Defaulting Lenders which would constitute the Required Lenders under, and as defined in, this Agreement if all outstanding Obligations under the other Tranches under this Agreement were repaid in full and all Commitments with respect thereto were terminated. "Mandatory Borrowing" shall have the meaning provided in Section 1.01(f). "Margin Reduction Period" shall mean each period which shall commence on the date upon which the respective officer's certificate is delivered pursuant to Section 8.01(e) (together with the related financial statements pursuant to Section 8.01(a) or (b), as the case may be) and which shall end on the date of actual delivery of the next officer's certificates pursuant to -112- Section 8.01(e) (and related financial statements) or the latest date on which such next officer's certificate (and related financial statements) is required to be so delivered; it being understood that the first Margin Reduction Period shall commence with the delivery of the Borrower's financial statements (and related officer's certificate) in respect of its fiscal year ending on December 31, 2001. "Margin Stock" shall have the meaning provided in Regulation U. "Material Adverse Effect" shall mean (i) a material adverse effect on the business, operations, property, assets, liabilities or condition (financial or otherwise) of the Borrower and its Subsidiaries taken as a whole or (ii) a material adverse effect (x) on the Transaction, (y) on the rights or remedies of the Lenders or the Administrative Agent hereunder or under any other Credit Document or (z) on the ability of any Credit Party to perform its obligations to the Lenders or the Administrative Agent hereunder or under any other Credit Document. "Maturity Date" shall mean, with respect to any Tranche of Loans, the A Term Loan Maturity Date, the B Term Loan Maturity Date, the Revolving Loan Maturity Date or the Swingline Expiry Date, as the case may be. "Maximum Swingline Amount" shall mean $20,000,000. "Minimum Borrowing Amount" shall mean (i) for Term Loans, $5,000,000, (ii) for Revolving Loans maintained as Base Rate Loans, $1,000,000, (iii) for Revolving Loans maintained as Euro Rate Loans, $1,000,000 (or the Euro Equivalent or Sterling Equivalent thereof, as the case may be), and (iv) for Swingline Loans, $100,000. "Moody's" shall mean Moody's Investors Service, Inc. and its successors. "Mortgage" shall mean a mortgage, leasehold mortgage, deed of trust, leasehold deed of trust, deed to secure debt, leasehold deed to secure debt or similar security instrument. "Mortgage Policy" shall mean a mortgage title insurance policy or a binding commitment with respect thereto. "Mortgaged Property" shall mean any Real Property owned or leased by a Credit Party which is encumbered (or required to be encumbered) by a Mortgage. "NAIC" shall mean the National Association of Insurance Commissioners. "Net Debt Proceeds" shall mean, with respect to any incurrence of Indebtedness for borrowed money, the cash proceeds (net of underwriting discounts and commissions and other reasonable costs and expenses associated therewith) received by the respective Person from the respective incurrence of such Indebtedness for borrowed money. "Net Insurance Proceeds" shall mean, with respect to any Recovery Event, the cash proceeds (net of reasonable costs, expenses and taxes incurred in connection with such Recovery Event) received by the respective Person in connection with such Recovery Event. -113- "Net Sale Proceeds" shall mean, for any Asset Sale, the gross cash proceeds (including any cash received by way of deferred payment pursuant to a promissory note, receivable or otherwise, but only as and when received) received from such sale of assets, net of the reasonable costs and expenses of such sale (including fees and commissions, payments of unassumed liabilities relating to the assets sold and required payments of any Indebtedness (other than Indebtedness secured pursuant to the Security Documents) which is secured by the respective assets which were sold), and the incremental taxes paid or payable as a result of such Asset Sale. "Non-Defaulting Lender" and "Non-Defaulting RL Lender" shall mean and include each Lender or RL Lender, as the case may be, other than a Defaulting Lender. "Note" shall mean each A Term Note, each B Term Note, each Revolving Note and the Swingline Note. "Notice of Borrowing" shall have the meaning provided in Section 1.03(a). "Notice of Conversion/Continuation" shall have the meaning provided in Section 1.06. "Notice Office" shall mean the office of the Administrative Agent located at One Bankers Trust Plaza, 130 Liberty Street, New York, New York 10006, Attention: Robert Carlovits or such other office or person as the Administrative Agent may hereafter designate in writing as such to the other parties hereto; provided that in the case of all Borrowings of Foreign Currency -------- Revolving Loans denominated in Pounds Sterling or Euros, and all notices relating thereto, the "Notice Office" shall mean the office specified above, with a copy of the respective notice to be delivered at the same time as otherwise required pursuant to the terms of this Agreement to the office of the Administrative Agent located at Deutsche Bank AG, London, Winchester House, 1 Great Winchester Street, London EC2N 2DB Attention: Loans Agency Department--Liz Keegan, or such other office or person in London as the Administrative Agent may hereafter designate in writing as such to the other parties hereto. "Obligations" shall mean all amounts owing to the Administrative Agent, the Collateral Agent, the Issuing Lender, the Swingline Lender or any Lender pursuant to the terms of this Agreement or any other Credit Document. "Obligation Currency" shall have the meaning provided in Section 13.17(a). "Other Hedging Agreements" shall mean any foreign exchange contracts, currency swap agreements or other similar arrangements, or arrangements designed to protect against fluctuations in the currency values. "Participant" shall have the meaning provided in Section 2.04(a). "Payment Office" shall mean (i) in the case of principal, interest, Unpaid Drawings, Fees and all other amounts owing with respect to all Loans (other than Foreign Currency Revolving Loans), all Letters of Credit and, except as provided in clauses (ii) and (iii) -114- below, all other amounts owing under this Agreement and the other Credit Documents, the office of the Administrative Agent located at One Bankers Trust Plaza, 130 Liberty Street, New York, New York 10006, or such other office located in New York City as the Administrative Agent may hereafter designate in writing as such to the other parties hereto, (ii) in the case of all principal, interest and other amounts owing with respect to all Foreign Currency Revolving Loans denominated in Pounds Sterling, the office of the Administrative Agent located at Deutsche Bank AG, London, 1 Appold Street, Broadgate, London EC2A HE Attention: Loans Agency Department--Liz Keegan, or such other office or person in London as the Administrative Agent may hereafter designate in writing as such to the other parties hereto, and (iii) in the case of all principal, interest and other amounts owing with respect to all Foreign Currency Revolving Loans denominated in Euros, the office of the Administrative Agent located at Deutsche Bank AG (DEUTDEFF), Alfred-Herrhausen Allee 16-24, Eschborn 65760, Germany, or such other office in Frankfurt as the Administrative Agent may hereafter designate in writing as such to the other parties hereto. "PBGC" shall mean the Pension Benefit Guaranty Corporation established pursuant to Section 4002 of ERISA, or any successor thereto. "Permitted Acquisition" shall mean the acquisition by the Borrower or a Wholly-Owned Subsidiary thereof of an Acquired Entity or Business (including by way of merger of such Acquired Entity or Business with and into the Borrower (so long as the Borrower is the surviving corporation) or a Wholly-Owned Subsidiary thereof (so long as the Wholly-Owned Subsidiary is the surviving corporation), provided that (in each case) (A) the consideration paid or to be -------- paid by the Borrower or such Wholly-Owned Subsidiary consists solely of cash (including proceeds of Revolving Loans or Swingline Loans), the issuance or incurrence of Indebtedness otherwise permitted by Section 9.04, the issuance of common stock of the Borrower or Qualified Preferred Stock of the Borrower in each case to the extent no Default or Event of Default exists pursuant to Section 10.10 or would result therefrom and the assumption/acquisition of any Indebtedness (calculated at face value) which is permitted to remain outstanding in accordance with the requirements of Section 9.04, (B) in the case of the acquisition of 100% of the capital stock of any Person (including way of merger), such Person shall own no capital stock of any other Person (excluding de minimis amounts) unless either (x) such Person owns 100% of the capital stock of such other Person or (y) (1) such Person and its Wholly-Owned Subsidiaries own at least 80% of the consolidated assets of such other Person and its Subsidiaries and (2) any non-Wholly-Owned Subsidiary of such Person was non- Wholly-Owned prior to the date of such Permitted Acquisition of such Person, (C) the Acquired Entity or Business acquired pursuant to the respective Permitted Acquisition is in a business permitted by Section 9.16 and (D) all applicable requirements of Sections 8.14, 9.02 and 9.17 applicable to Permitted Acquisitions are satisfied. Notwithstanding anything to the contrary contained in the immediately preceding sentence, an acquisition which does not otherwise meet the requirements set forth above in the definition of "Permitted Acquisition" shall constitute a Permitted Acquisition if, and to the extent, the Required Lenders agree in writing, prior to the consummation thereof, that such acquisition shall constitute a Permitted Acquisition for purposes of this Agreement. "Permitted Acquisition Basket Amount" shall mean, (i) for any fiscal year of the Borrower ending on or prior to December 31, 2002, $100,000,000, provided, however, that such - -------- ------- -115- amount shall be increased to $200,000,000 for each such fiscal year of the Borrower at such time, if any, as the Borrower elects to consummate more than $100,000,000 of Permitted Acquisitions in any such fiscal year of the Borrower in accordance with the requirements of Section 8.14 but only after taking into account the resetting of the Consolidated Senior Leverage Ratio compliance level in Section 9.10 pursuant to the last sentence thereof, and (ii) for any fiscal year of the Borrower ending after December 31, 2002, $200,000,000. "Permitted Encumbrance" shall mean, with respect to any Mortgaged Property, such exceptions to title as are set forth in the Mortgage Policy delivered with respect thereto, all of which exceptions must be acceptable to the Administrative Agent in its reasonable discretion. "Permitted Liens" shall have the meaning provided in Section 9.01. "Person" shall mean any individual, partnership, joint venture, firm, corporation, association, limited liability company, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof. "Plan" shall mean any pension plan as defined in Section 3(2) of ERISA, which is maintained or contributed to by (or to which there is an obligation to contribute of) the Borrower or a Subsidiary of the Borrower or an ERISA Affiliate on or after the Initial Borrowing Date, and each such plan for the five year period immediately following the latest date (whether before or after the Initial Borrowing Date) on which the Borrower, a Subsidiary of the Borrower or an ERISA Affiliate maintained, contributed to or had an obligation to contribute to such plan. "Pledge Agreement" shall have the meaning provided in Section 5.09. "Pledge Agreement Collateral" shall mean all "Collateral" as defined in the Pledge Agreement. "Pledgee" shall have the meaning as defined in the Pledge Agreement. "Pounds Sterling" shall mean freely transferable lawful money of the United Kingdom. "Prime Lending Rate" shall mean the rate which the Administrative Agent announces from time to time as its prime lending rate, the Prime Lending Rate to change when and as such prime lending rate changes. The Prime Lending Rate is a reference rate and does not necessarily represent the lowest or best rate actually charged to any customer by the Administrative Agent, which may make commercial loans or other loans at rates of interest at, above or below the Prime Lending Rate. "Principal Amount" shall mean (i) the stated amount of each Swingline Loan, (ii) the stated amount of each Dollar Revolving Loan, and (iii) the Dollar Equivalent of the stated amount of each Foreign Currency Revolving Loan, as the context may require. "Pro Forma Basis" shall mean, in connection with any calculation of --- ----- compliance with any financial covenant or financial term, the calculation thereof after giving effect on a pro --- -116- forma basis to (x) the incurrence of any Indebtedness (other than revolving - ----- Indebtedness, except to the extent same is incurred to refinance other outstanding Indebtedness or to finance a Permitted Acquisition) after the first day of the relevant Calculation Period as if such Indebtedness had been incurred (and the proceeds thereof applied) on the first day of the relevant Calculation Period, (y) the permanent repayment of any Indebtedness (other than revolving Indebtedness) after the first day of the relevant Calculation Period as if such Indebtedness had been retired or redeemed on the first day of the relevant Calculation Period or (z) the Permitted Acquisition, if any, then being consummated as well as any other Permitted Acquisition consummated after the first day of the relevant Calculation Period and on or prior to the date of the respective Permitted Acquisition then being effected, as the case may be, with the following rules to apply in connection therewith: (i) all Indebtedness (x) (other than revolving Indebtedness, except to the extent same is incurred to refinance other outstanding Indebtedness or to finance a Permitted Acquisition) incurred or issued after the first day of the relevant Calculation Period (whether incurred to finance a Permitted Acquisition, to refinance Indebtedness or otherwise) shall be deemed to have been incurred or issued (and the proceeds thereof applied) on the first day of the respective Calculation Period and remain outstanding through the date of determination and (y) (other than revolving Indebtedness) permanently retired or redeemed after the first day of the relevant Calculation Period shall be deemed to have been retired or redeemed on the first day of the respective Calculation Period and remain retired through the date of determination; (ii) all Indebtedness assumed to be outstanding pursuant to preceding clause (i) shall be deemed to have borne interest at (x) the rate applicable thereto, in the case of fixed rate indebtedness or (y) the rates which would have been applicable thereto during the respective period when same was deemed outstanding, in the case of floating rate Indebtedness (although interest expense with respect to any Indebtedness for periods while same was actually outstanding during the respective period shall be calculated using the actual rates applicable thereto while same was actually outstanding); and (iii) in making any determination of Consolidated EBITDA, pro forma --- ----- effect shall be given to any Permitted Acquisition consummated during the periods described above, with such Consolidated EBITDA to be determined as if such Permitted Acquisition was consummated on the first day of the relevant Calculation Period, taking into account factually supportable and identifiable cost savings and expenses which would otherwise be permitted to be accounted for as an adjustment pursuant to Article 11 of Regulation S-X under the Securities Act, as if such cost savings or expenses were realized on the first day of the respective Calculation Period. "Projections" shall mean the projections contained in the Confidential Information Memorandum, dated April, 2001, which were prepared by or on behalf of the Borrower in connection with the Transaction and delivered to the Administrative Agent and the Lenders prior to the Initial Borrowing Date. -117- "Put Agreement" shall mean the Put Agreement, dated as of March 4, 2001, by and between the Borrower and the Seller. "Qualified Preferred Stock" shall mean any preferred stock of the Borrower so long as the terms of any such preferred stock (v) do not contain any mandatory put, redemption, repayment, sinking fund or other similar provision, (w) do not require the cash payment of dividends or distributions, (x) do not contain any covenants, (y) do not grant the holders thereof any voting rights except for (I) voting rights required to be granted to such holders under applicable law and (II) limited customary voting rights on fundamental matters such as mergers, consolidations, sales of all or substantially all of the assets of the Borrower, or liquidations involving the Borrower, and (z) are otherwise reasonably satisfactory to the Administrative Agent. "Quarterly Payment Date" shall mean the last Business Day of each September, December, March and June occurring after the Initial Borrowing Date, commencing on June 30, 2001. "RCRA" shall mean the Resource Conservation and Recovery Act, as the same has been and may hereafter be amended from time to time, 42 U.S.C. (S) 6901 et seq. - -- ---- "Real Property" of any Person shall mean all the right, title and interest of such Person in and to land, improvements and fixtures, including Leaseholds. "Receivables Indebtedness" shall mean the aggregate amount of uncollected accounts receivables of the Borrower and its Subsidiaries at such time which have been (or which are then being) sold to the Factor pursuant to the Factoring Agreement (regardless of whether any liability of the Borrower or any Subsidiary thereof in respect of such accounts receivable would be required to be reflected on a balance sheet of such Person in accordance with generally accepted accounting principles). "Recovery Event" shall mean the receipt by the Borrower or any of its Subsidiaries of any cash insurance proceeds (other than proceeds from business interruption insurance) or condemnation awards payable (i) by reason of theft, loss, physical destruction, damage, taking or any other similar event with respect to any property or assets of the Borrower or any of its Subsidiaries and (ii) under any policy of insurance required to be maintained under Section 8.03. "Refinancing" shall mean the repayment in full of all of the Indebtedness to be Refinanced and the termination of all commitments in respect thereof. "Register" shall have the meaning provided in Section 13.15. "Regulation D" shall mean Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof establishing reserve requirements. -118- "Regulation T" shall mean Regulation T of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof. "Regulation U" shall mean Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof. "Regulation X" shall mean Regulation X of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof. "Release" shall mean the active or passive disposing, discharging, injecting, spilling, pumping, leaking, leaching, dumping, emitting, escaping, emptying, pouring, seeping, migrating or the like, into or upon any land or water or air, or otherwise entering into the environment. "Relevant Currency Equivalent" shall mean the Dollar Equivalent, the Euro Equivalent or the Sterling Equivalent, as the case may be. "Replaced Indemnifying Lender" shall have the meaning provided in Section 1.13. "Replaced Lender" shall have the meaning provided in Section 1.13. "Replacement Indemnifying Lender" shall have the meaning provided in Section 1.13. "Replacement Lender" shall have the meaning provided in Section 1.13. "Reportable Event" shall mean an event described in Section 4043(c) of ERISA with respect to a Plan that is subject to Title IV of ERISA other than those events as to which the 30-day notice period is waived under subsection .22, .23, .25, .27 or .28 of PBGC Regulation Section 4043. "Required Lenders" shall mean Non-Defaulting Lenders the sum of whose outstanding Term Loans and Revolving Loan Commitments (or after the termination thereof, outstanding Revolving Loans and RL Percentages of (x) outstanding Swingline Loans and (y) Letter of Credit Outstandings) represent at least 50.1% of the sum of (i) all outstanding Term Loans of Non-Defaulting Lenders and (ii) the Total Revolving Loan Commitment less the Revolving Loan Commitments of all Defaulting Lenders (or after the termination thereof, the sum of then total outstanding Revolving Loans of Non-Defaulting Lenders and the aggregate RL Percentages of all Non-Defaulting Lenders of the total (x) outstanding Swingline Loans and (y) Letter of Credit Outstandings at such time). After the termination of the Total Revolving Loan Commitment, the calculation of the outstanding principal amount of all Foreign Currency Revolving Loans for purposes of this definition shall be determined by taking the Dollar Equivalent thereof at the time of any such calculation. "Returns" shall have the meaning provided in Section 7.09. -119- "Revolving Loan" shall have the meaning provided in Section 1.01(d) (and shall include any Revolving Loans made pursuant to an Incremental Revolving Loan Commitment). "Revolving Loan Commitment" shall mean, for each Lender, the amount set forth opposite such Lender's name in Schedule I directly below the column entitled "Revolving Loan Commitment," as same may be (x) reduced from time to time pursuant to Sections 3.02, 3.03 and/or 10, (y) increased from time to time pursuant to Section 1.15 or (z) adjusted from time to time as a result of assignments to or from such Lender pursuant to Section 1.13 or 13.04(b). "Revolving Loan Maturity Date" shall mean May 9, 2006. "Revolving Note" shall have the meaning provided in Section 1.05(a). "RL Lender" shall mean each Lender with a Revolving Loan Commitment or with outstanding Revolving Loans. "RL Percentage" of any RL Lender at any time shall mean a fraction (expressed as a percentage) the numerator of which is the Revolving Loan Commitment of such RL Lender at such time and the denominator of which is the Total Revolving Loan Commitment at such time, provided that if the RL Percentage -------- of any RL Lender is to be determined after the Total Revolving Loan Commitment has been terminated, then the RL Percentages of such RL Lender shall be determined immediately prior (and without giving effect) to such termination. "S&P" shall mean Standard & Poor's Ratings Services, a division of the McGraw Hill Companies, Inc., and any successor owner of such division. "Scheduled A Repayment" shall have the meaning provided in Section 4.02(b). "Scheduled B Repayment" shall have the meaning provided in Section 4.02(c). "Scheduled Repayment" shall mean a Scheduled A Repayment or a Scheduled B Repayment. "SEC" shall have the meaning provided in Section 8.01(g). "Section 4.04(b)(ii) Certificate" shall have the meaning provided in Section 4.04(b)(ii). "Secured Creditors" shall have the meaning assigned that term in the respective Security Documents. "Securities Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. "Security Agreement" shall have the meaning provided in Section 5.10. "Security Agreement Collateral" shall mean all "Collateral" as defined in the Security Agreement. -120- "Security Document" shall mean and include each of the Security Agreement, the Pledge Agreement, each Mortgage and, after the execution and delivery thereof, each Additional Security Document. "Seller" shall mean Legris Industries S.A., a company organized under the laws of France. "Senior Subordinated Notes" shall mean the Borrower's 10-3/8% Senior Subordinated Notes due 2011, issued pursuant to the Senior Subordinated Note Indenture, as in effect on the Initial Borrowing Date and as the same may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. As used herein, the term "Senior Subordinated Notes" shall include any Exchange Senior Subordinated Notes issued pursuant to the Senior Subordinated Note Indenture in exchange for theretofore outstanding Senior Subordinated Notes, as contemplated by the Offering Memorandum, dated May 4, 2001, and the definition of Exchange Senior Subordinated Notes. "Senior Subordinated Note Documents" shall mean the Senior Subordinated Notes, the Senior Subordinated Note Indenture and all other documents executed and delivered with respect to the Senior Subordinated Notes or Senior Subordinated Note Indenture, as in effect on the Initial Borrowing Date and as the same may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. "Senior Subordinated Note Indenture" shall mean the Indenture, dated as of May 9, 2001, among the Borrower, the Subsidiary Guarantors and the Senior Subordinated Note Indenture Trustee, as in effect on the Initial Borrowing Date and as the same may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. "Senior Subordinated Note Indenture Trustee" shall mean The Bank of New York and any successor thereto. "Shareholders' Agreements" shall have the meaning provided in Section 5.05. "Start Date" shall mean, with respect to any Margin Reduction Period, the first day of such Margin Reduction Period. "Stated Amount" of each Letter of Credit shall mean, at any time, the maximum amount available to be drawn thereunder (in each case determined without regard to whether any conditions to drawing could then be met); provided that -------- the "Stated Amount" of each Letter of Credit denominated in a Foreign Currency shall be, on any date of calculation, the Dollar Equivalent of the maximum amount available to be drawn in the respective currency thereunder (determined without regard to whether any conditions to drawing could then be met). "Sterling Equivalent" shall mean, at any time for the determination thereof, the amount of Pounds Sterling which could be purchased with the amount of Dollars involved in such computation at the spot exchange rate therefor as quoted by the Administrative Agent as of 11:00 A.M. (London time) on the date two Business Days prior to the date of any determination -121- thereof for purchase on such date (or, in the case of any determination pursuant to Section 13.17 or Section 25 of the Subsidiaries Guaranty, on the date of determination). "Sterling LIBOR" shall mean, with respect to each Interest Period for any Foreign Currency Revolving Loan denominated in Pounds Sterling, (i) the rate per annum that appears on page 3750 of the Dow Jones Telerate Screen for Pounds - --- ----- Sterling deposits with maturities comparable to the Interest Period applicable to the Foreign Currency Revolving Loans subject to the respective Interest Period as of 11:00 A.M. (London time) on the date which occurs two Business Days prior to the date of the proposed commencement of such Interest Period or (ii) if such a rate does not appear on page 3750 of the Dow Jones Telerate Screen, the offered quotation to first-class banks in the London interbank market by the Administrative Agent for Pounds Sterling deposits of amounts in immediately available funds comparable to the principal amount of the Foreign Currency Revolving Loan to be made by the Administrative Agent as part of such Borrowing with maturities comparable to the Interest Period applicable to such Foreign Currency Revolving Loan as of 11:00 A.M. (London time) on the date which occurs two Business Days prior to the date of the proposed commencement of such Interest Period. The reference to page 3750 of the Dow Jones Telerate Screen in this definition shall be construed to be a reference to the relevant page or any other page that may replace such page on the Dow Jones Telerate Screen. Notwithstanding anything to the contrary contained above, in the event the Administrative Agent has made any determination pursuant to Section 1.10(a)(i) in respect of Foreign Currency Revolving Loans denominated in Pounds Sterling, or in the circumstances described in clause (i) to the proviso to Section 1.10(b) in respect of Foreign Currency Revolving Loans denominated in Pounds Sterling, Sterling LIBOR determined pursuant to this definition shall instead be the rate determined by the Administrative Agent as the all-in-cost of funds for the Administrative Agent to fund such Foreign Currency Revolving Loan with maturities comparable to the Interest Period applicable thereto. "Subsidiaries Guaranty" shall have the meaning provided in Section 5.11. "Subsidiary" shall mean, as to any Person, (i) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time stock of any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person and/or one or more Subsidiaries of such Person and (ii) any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Subsidiaries of such Person has more than a 50% equity interest at the time. "Subsidiary Guarantor" shall mean each Wholly-Owned Domestic Subsidiary of the Borrower and, to the extent required by Section 8.13, each Wholly-Owned Foreign Subsidiary of the Borrower. "Supermajority Lenders" shall mean (i) in the case of references to holders of A Term Loans, those Non-Defaulting Lenders which would constitute the Required Lenders under, and as defined in, this Agreement if (x) all outstanding Obligations (other than those with respect to A Term Loans) under this Agreement were repaid in full and all Commitments with -122- respect to such other Obligations were terminated and (y) the text "at least 50.1%" contained therein were changed to "at least 75%" and (ii) in the case of references to holders of B Term Loans, those Non-Defaulting Lenders which would constitute the Required Lenders under, and as defined in, this Agreement if (x) all outstanding Obligations (other than those relating to B Term Loans) under this Agreement were repaid in full and all Commitments with respect to such other Obligations were terminated and (y) the text "at least 50.1%" contained therein were changed to "at least 75%." "Swingline Expiry Date" shall mean that date which is five Business Days prior to the Revolving Loan Maturity Date. "Swingline Lender" shall mean BTCo. "Swingline Loan" shall have the meaning provided in Section 1.01(e). "Swingline Note" shall have the meaning provided in Section 1.05(a). "Syndication Date" shall mean that date upon which the Administrative Agent determines that the primary syndication (and resultant addition of Persons as Lenders pursuant to Section 13.04(b)) has been completed (it being understood that the Administrative Agent shall promptly notify the Borrower of the occurrence of the Syndication Date). "Target" shall mean Potain S.A. "Tax Sharing Agreements" shall have the meaning provided in Section 5.05. "Taxes" shall have the meaning provided in Section 4.04(a). "Term Loans" shall mean the A Term Loans and the B Term Loans. "Test Date" shall mean, with respect to any Start Date, the last day of the most recent fiscal quarter of the Borrower ended immediately prior to such Start Date. "Test Period" shall mean each period of four consecutive fiscal quarters of the Borrower then last ended (in each case taken as one accounting period). Notwithstanding anything to the contrary contained above or in Section 13.07 or otherwise required by United States generally accepted accounting principles, with respect to any portion of a Test Period occurring prior to the Initial Borrowing Date, the calculations required to determine compliance with Sections 8.14, 9.08, 9.09, 9.10, 9.11 and 9.12 and to determine the Applicable Margin and the Applicable Commitment Commission Percentage shall be made on a pro forma basis as if the Transaction and the related financing had occurred on - --- ----- July 1, 2000; it being understood that, in such connection, the parties hereto hereby agree that (A) Consolidated EBITDA, Capital Expenditures, Consolidated Fixed Charges and Consolidated Interest Expense for (i) the fiscal quarter ended June 30, 2000 shall be $60,684,000, $7,129,000, $13,693,000 and $11,880,000, respectively, (ii) the fiscal quarter ended September 30, 2000 shall be $36,990,000, $3,795,000, $13,728,000 and $11,888,000, respectively, (iii) December 31, 2000 shall be $38,120,000, $5,942,000, $13,769,000 and $11,888,000, respectively, and (iv) March 31, 2001 shall be -123- $33,987,000, $6,789,000, $13,671,000 and $11,888,000, respectively, (B) Consolidated EBITDA, Consolidated Fixed Charges and Consolidated Interest Expense for the period from April 1, 2001 through and including May 8, 2001 shall be calculated on a basis consistent with that used in arriving at the amounts related to clause (A) above, and (C) Capital Expenditures for the period from April 1, 2001 through and including May 8, 2001 shall be the aggregate amount of actual Capital Expenditures of the Borrower, the Target and their respective Subsidiaries during such period. "Total A Term Loan Commitment" shall mean, at any time, the sum of the A Term Loan Commitments of each of the Lenders at such time. "Total Available Revolving Loan Commitment" shall mean, at any time, an amount equal to the remainder of (x) the Total Revolving Loan Commitment at such time less (y) the Blocked Revolving Loan Commitment as in effect at such ---- time. "Total Commitment" shall mean, at any time, the sum of the Commitments of each of the Lenders at such time. "Total Incremental B Term Loan Commitment" shall mean, at any time, the sum of the Incremental B Term Loan Commitments of each of the Lenders at such time. "Total Initial B Term Loan Commitment" shall mean, at any time, the sum of the Initial B Term Loan Commitments of each of the Lenders at such time. "Total Revolving Loan Commitment" shall mean, at any time, the sum of the Revolving Loan Commitments of each of the Lenders at such time. "Total Unutilized Revolving Loan Commitment" shall mean, at any time, an amount equal to the remainder of (x) the Total Revolving Loan Commitment then in effect less (y) the sum of the aggregate Principal Amount of all Revolving Loans and Swingline Loans then outstanding plus the aggregate amount of all Letter of Credit Outstandings. "Tranche" shall mean the respective facility and commitments utilized in making Loans hereunder, with there being four separate Tranches, (i) A Term Loans, (ii) Initial B Term Loans and Incremental B Term Loans taken together as a single Tranche (except for purposes of Sections 1.03 and 1.04), (iii) Revolving Loans and (iv) Swingline Loans. "Transaction" shall mean, collectively, (i) the Acquisition, (ii) the Refinancing, (iii) the entering into of the Credit Documents and the incurrence of Loans on the Initial Borrowing Date, (iv) the issuance of the Senior Subordinated Notes and (v) the payment of all fees and expenses in connection with the foregoing. "Triggering Event" shall mean (i) the occurrence and continuation of any Event of Default under Section 10.01 or 10.05 or (ii) the acceleration of the maturity of the Obligations as a result of any Event of Default. -124- "Type" shall mean the type of Loan determined with regard to the interest option applicable thereto, i.e., whether a Base Rate Loan, a Eurodollar ---- Loan, a Foreign Currency Revolving Loan denominated in Euros or a Foreign Currency Revolving Loan denominated in Pounds Sterling. "UCC" shall mean the Uniform Commercial Code as from time to time in effect in the relevant jurisdiction. "Unfunded Current Liability" of any Plan shall mean the amount, if any, by which the value of the accumulated plan benefits under the Plan determined on a plan termination basis in accordance with actuarial assumptions at such time consistent with those prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds the fair market value of all plan assets allocable to such liabilities under Title IV of ERISA (excluding any accrued but unpaid contribution). "United States" and "U.S." shall each mean the United States of America. "Unpaid Drawing" shall have the meaning provided for in Section 2.05(a). "Unutilized Revolving Loan Commitment" shall mean, with respect to any Lender at any time, such Lender's Revolving Loan Commitment at such time less the sum of (i) the aggregate outstanding Principal Amount of all Revolving Loans made by such Lender at such time and (ii) such Lender's RL Percentage of the Letter of Credit Outstandings at such time. "Waivable Mandatory Repayment" shall have the meaning provided in Section 4.02(k). "Waivable Voluntary Prepayment" shall have the meaning provided in Section 4.01(c). "Wholly-Owned Domestic Subsidiary" shall mean each Domestic Subsidiary of the Borrower that is also a Wholly-Owned Subsidiary of the Borrower. "Wholly-Owned Foreign Subsidiary" shall mean each Foreign Subsidiary of the Borrower that is also a Wholly-Owned Subsidiary of the Borrower. "Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any corporation 100% of whose capital stock is at the time owned by such Person and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such time (other than, in the case of a Foreign Subsidiary with respect to preceding clauses (i) and (ii), director's qualifying shares and/or other nominal amount of shares required to be held by Persons other than the Borrower and its Subsidiaries under applicable law). -125- SECTION 12. Administrative Agent. -------------------- 12.01 Appointment. The Lenders hereby irrevocably designate and ----------- appoint BTCo as Administrative Agent (for purposes of this Section 12 and Section 13.01, the term "Administrative Agent" also shall include BTCo in its capacity as Collateral Agent pursuant to the Security Documents) to act as specified herein and in the other Credit Documents. Each Lender hereby irrevocably authorizes, and each holder of any Note by the acceptance of such Note shall be deemed irrevocably to authorize, the Administrative Agent to take such action on its behalf under the provisions of this Agreement, the other Credit Documents and any other instruments and agreements referred to herein or therein and to exercise such powers and to perform such duties hereunder and thereunder as are specifically delegated to or required of the Administrative Agent by the terms hereof and thereof and such other powers as are reasonably incidental thereto. The Administrative Agent may perform any of their respective duties hereunder by or through its officers, directors, agents, employees or affiliates. 12.02 Nature of Duties. The Administrative Agent shall not have any ---------------- duties or responsibilities except those expressly set forth in this Agreement and in the other Credit Documents. Neither the Administrative Agent nor any of its officers, directors, agents, employees or affiliates shall be liable for any action taken or omitted by them hereunder or under any other Credit Document or in connection herewith or therewith, unless caused by its or their gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision). The duties of the Administrative Agent shall be mechanical and administrative in nature; the Administrative Agent shall not have by reason of this Agreement or any other Credit Document a fiduciary relationship in respect of any Lender or the holder of any Note; and nothing in this Agreement or in any other Credit Document, expressed or implied, is intended to or shall be so construed as to impose upon the Administrative Agent any obligations in respect of this Agreement or any other Credit Document except as expressly set forth herein or therein. 12.03 Lack of Reliance on the Administrative Agent. Independently -------------------------------------------- and without reliance upon the Administrative Agent, each Lender and the holder of each Note, to the extent it deems appropriate, has made and shall continue to make (i) its own independent investigation of the financial condition and affairs of the Borrower and its Subsidiaries in connection with the making and the continuance of the Loans and the taking or not taking of any action in connection herewith and (ii) its own appraisal of the creditworthiness of the Borrower and its Subsidiaries and, except as expressly provided in this Agreement, the Administrative Agent shall not have any duty or responsibility, either initially or on a continuing basis, to provide any Lender or the holder of any Note with any credit or other information with respect thereto, whether coming into its possession before the making of the Loans or at any time or times thereafter. The Administrative Agent shall not be responsible to any Lender or the holder of any Note for any recitals, statements, information, representations or warranties herein or in any document, certificate or other writing delivered in connection herewith or for the execution, effectiveness, genuineness, validity, enforceability, perfection, collectibility, priority or sufficiency of this Agreement or any other Credit Document or the financial condition of the Borrower or any of its Subsidiaries or be required to make any inquiry concerning either the performance or observance of any of the terms, provisions or conditions of this Agreement or any other Credit Document, or -126- the financial condition of the Borrower or any of its Subsidiaries or the existence or possible existence of any Default or Event of Default. 12.04 Certain Rights of the Administrative Agent. If the ------------------------------------------ Administrative Agent requests instructions from the Required Lenders with respect to any act or action (including failure to act) in connection with this Agreement or any other Credit Document, the Administrative Agent shall be entitled to refrain from such act or taking such action unless and until the Administrative Agent shall have received instructions from the Required Lenders; and the Administrative Agent shall not incur liability to any Lender by reason of so refraining. Without limiting the foregoing, neither any Lender nor the holder of any Note shall have any right of action whatsoever against the Administrative Agent as a result of the Administrative Agent acting or refraining from acting hereunder or under any other Credit Document in accordance with the instructions of the Required Lenders. 12.05 Reliance. The Administrative Agent shall be entitled to rely, -------- and shall be fully protected in relying, upon any note, writing, resolution, notice, statement, certificate, telex, teletype or telecopier message, cablegram, radiogram, order or other document or telephone message signed, sent or made by any Person that the Administrative Agent believed to be the proper Person, and, with respect to all legal matters pertaining to this Agreement and any other Credit Document and its duties hereunder and thereunder, upon advice of counsel selected by the Administrative Agent. 12.06 Indemnification. To the extent the Administrative Agent (or --------------- any affiliate thereof) is not reimbursed and indemnified by the Borrower, the Lenders will reimburse and indemnify the Administrative Agent (and any affiliate thereof) in proportion to their respective "percentage" as used in determining the Required Lenders (determined as if there were no Defaulting Lenders) for and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, costs, expenses or disbursements of whatsoever kind or nature which may be imposed on, asserted against or incurred by the Administrative Agent (or any affiliate thereof) in performing its duties hereunder or under any other Credit Document or in any way relating to or arising out of this Agreement or any other Credit Document; provided that no -------- Lender shall be liable for any portion of such liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs, expenses or disbursements resulting from the Administrative Agent's (or such affiliate's) gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision). 12.07 The Administrative Agent in its Individual Capacity. With --------------------------------------------------- respect to its obligation to make Loans, or issue or participate in Letters of Credit, under this Agreement, the Administrative Agent shall have the rights and powers specified herein for a "Lender" and may exercise the same rights and powers as though it were not performing the duties specified herein; and the term "Lender," "Required Lenders," "Majority Lenders," "Supermajority Lenders," "holders of Notes" or any similar terms shall, unless the context clearly otherwise indicates, include the Administrative Agent in its respective individual capacities. The Administrative Agent and its affiliates may accept deposits from, lend money to, and generally engage in any kind of banking, investment banking, trust or other business with, or provide debt financing, equity capital or other services (including financial advisory services) to any Credit Party or any -127- Affiliate of any Credit Party (or any Person engaged in a similar business with any Credit Party or any Affiliate thereof) as if they were not performing the duties specified herein, and may accept fees and other consideration from any Credit Party or any Affiliate of any Credit Party for services in connection with this Agreement and otherwise without having to account for the same to the Lenders. 12.08 Holders. The Administrative Agent may deem and treat the payee ------- of any Note as the owner thereof for all purposes hereof unless and until a written notice of the assignment, transfer or endorsement thereof, as the case may be, shall have been filed with the Administrative Agent. Any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is the holder of any Note shall be conclusive and binding on any subsequent holder, transferee, assignee or endorsee, as the case may be, of such Note or of any Note or Notes issued in exchange therefor. 12.09 Resignation by the Administrative Agent. (a) The --------------------------------------- Administrative Agent may resign from the performance of all its respective functions and duties hereunder and/or under the other Credit Documents at any time by giving 30 Business Days' prior written notice to the Lenders and, unless a Default or an Event of Default under Section 10.05 then exists, the Borrower. Such resignation shall take effect upon the appointment of a successor Administrative Agent pursuant to clauses (b) and (c) below or as otherwise provided below. (b) Upon any such notice of resignation by the Administrative Agent, the Required Lenders shall appoint a successor Administrative Agent hereunder or thereunder who shall be a commercial bank or trust company reasonably acceptable to the Borrower, which acceptance shall not be unreasonably withheld or delayed (provided that the Borrower's approval shall not be required if an Event of Default then exists). (c) If a successor Administrative Agent shall not have been so appointed within such 30 Business Day period, the Administrative Agent, with the consent of the Borrower (which consent shall not be unreasonably withheld or delayed, provided that the Borrower's consent shall not be required if an Event of Default then exists), shall then appoint a successor Administrative Agent who shall serve as Administrative Agent hereunder or thereunder until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided above. (d) If no successor Administrative Agent has been appointed pursuant to clause (b) or (c) above by the 35th Business Day after the date such notice of resignation was given by the Administrative Agent, the Administrative Agent's resignation shall become effective and the Required Lenders shall thereafter perform all the duties of the Administrative Agent hereunder and/or under any other Credit Document until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided above. (e) Upon a resignation of the Administrative Agent pursuant to this Section 12.09, such Administrative Agent shall remain indemnified to the extent provided in this Agreement and the other Credit Documents and the provisions of this Section 12 shall continue -128- in effect for the benefit of the Administrative Agent for all of its actions and inactions while serving as the Administrative Agent. SECTION 13. Miscellaneous. ------------- 13.01 Payment of Expenses, etc. The Borrower hereby agrees to: (i) ------------------------- whether or not the transactions herein contemplated are consummated, pay all reasonable out-of-pocket costs and expenses of the Administrative Agent (including, without limitation, the reasonable fees and disbursements of White & Case LLP and the Administrative Agent's other counsel and consultants) in connection with the preparation, execution and delivery of this Agreement and the other Credit Documents and the documents and instruments referred to herein and therein and any amendment, waiver or consent relating hereto or thereto, of the Administrative Agent in connection with its syndication efforts with respect to this Agreement and of each Agent and, after the occurrence and during the continuance of an Event of Default, each of the Lenders in connection with the enforcement of this Agreement and the other Credit Documents and the documents and instruments referred to herein and therein or in connection with any refinancing or restructuring of the credit arrangements provided under this Agreement in the nature of a "work-out" or pursuant to any insolvency or bankruptcy proceedings (including, in each case without limitation, the reasonable fees and disbursements of counsel and consultants for the Administrative Agent and, after the occurrence of an Event of Default, counsel for each of the Lenders); (ii) pay and hold the Administrative Agent and each of the Lenders harmless from and against any and all present and future stamp, excise and other similar documentary taxes with respect to the foregoing matters and save the Administrative Agent and each of the Lenders harmless from and against any and all liabilities with respect to or resulting from any delay or omission (other than to the extent attributable to the Administrative Agent or such Lender) to pay such taxes; and (iii) indemnify the Administrative Agent and each Lender, and each of their respective officers, directors, employees, representatives, agents, affiliates, trustees and investment advisors from and hold each of them harmless against any and all liabilities, obligations (including removal or remedial actions), losses, damages, penalties, claims, actions, judgments, suits, costs, expenses and disbursements (including reasonable attorneys' and consultants' fees and disbursements) incurred by, imposed on or assessed against any of them as a result of, or arising out of, or in any way related to, or by reason of, (a) any investigation, litigation or other proceeding (whether or not the Administrative Agent or any Lender is a party thereto and whether or not such investigation, litigation or other proceeding is brought by or on behalf of any Credit Party) related to the entering into and/or performance of this Agreement or any other Credit Document or the use of any Letter of Credit or the proceeds of any Loans hereunder or the consummation of the Transaction or any other transactions contemplated herein or in any other Credit Document or the exercise of any of their rights or remedies provided herein or in the other Credit Documents, provided that the indemnity -------- described above in this clause (iii)(a) shall not apply to any liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs, expenses and disbursements incurred by, imposed on or assessed as a result of, or arising out of, or in any way related to, or by reason of any litigation, proceeding or other action solely between or among the Lenders (excluding, however, any liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs, expenses and disbursements incurred by, imposed on or assessed against the Administrative Agent, the Collateral Agent or any of their respective officers, directors, employees, representatives, agents, -129- affiliates, trustees and advisors as a result of, or arising out of, or in any way related to, or by reason of any such litigation, proceeding or action to which the Administrative Agent or the Collateral Agent is a party in its capacity as such) to the extent (and only to the extent) that such litigation, proceeding or other action does not relate to, or arise from, any action or omission by the Borrower or any of its Subsidiaries, or (b) the actual or alleged presence of Hazardous Materials in the air, surface water or groundwater or on the surface or subsurface of any Real Property at any time owned, leased or operated by the Borrower or any of its Subsidiaries, the generation, storage, transportation, handling or disposal of Hazardous Materials by the Borrower or any of its Subsidiaries at any location, whether or not owned, leased or operated by the Borrower or any of its Subsidiaries, the non-compliance by the Borrower or any of its Subsidiaries with any Environmental Law (including applicable permits thereunder) applicable to any Real Property, or any Environmental Claim asserted against the Borrower, any of its Subsidiaries or any Real Property at any time owned, leased or operated by the Borrower or any of its Subsidiaries, including, in each case, without limitation, the reasonable fees and disbursements of counsel and other consultants incurred in connection with any such investigation, litigation or other proceeding (but excluding any losses, liabilities, claims, damages or expenses to the extent incurred by reason of the gross negligence or willful misconduct of the Person to be indemnified (as determined by a court of competent jurisdiction in a final and non-appealable decision)). To the extent that the undertaking to indemnify, pay or hold harmless the Administrative Agent or any Lender set forth in the preceding sentence may be unenforceable because it is violative of any law or public policy, the Borrower shall make the maximum contribution to the payment and satisfaction of each of the indemnified liabilities which is permissible under applicable law. 13.02 Right of Setoff. (a) In addition to any rights now or --------------- hereafter granted under applicable law or otherwise, and not by way of limitation of any such rights, upon the occurrence and during the continuance of an Event of Default, the Administrative Agent and each Lender is hereby authorized at any time or from time to time, without presentment, demand, protest or other notice of any kind to any Credit Party or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special) and any other Indebtedness at any time held or owing by the Administrative Agent or such Lender (including, without limitation, by branches and agencies of such Lender wherever located) to or for the credit or the account of any Credit Party against and on account of the Obligations and liabilities of the Credit Parties to the Administrative Agent or such Lender under this Agreement or under any of the other Credit Documents, including, without limitation, all interests in Obligations purchased by such Lender pursuant to Section 13.06(b), and all other claims of any nature or description arising out of or connected with this Agreement or any other Credit Document, irrespective of whether or not such Lender shall have made any demand hereunder and although said Obligations, liabilities or claims, or any of them, shall be contingent or unmatured. Each Lender agrees to promptly notify the relevant Credit Party and the Administrative Agent after any such set off and application made by such Lender; provided that the failure to give such notice shall not affect or impair the validity of any such set off and application or result in any liability for such Lender. (b) NOTWITHSTANDING CLAUSE (a) OF THIS SECTION 13.02, AT ANY TIME THAT THE OBLIGATIONS SHALL BE SECURED BY REAL PROPERTY LOCATED -130- IN CALIFORNIA, NO LENDER SHALL EXERCISE A RIGHT OF SETOFF, LIEN OR COUNTERCLAIM OR TAKE ANY COURT OR ADMINISTRATIVE ACTION OR INSTITUTE ANY PROCEEDING TO ENFORCE ANY PROVISION OF THIS AGREEMENT OR ANY NOTE UNLESS IT IS TAKEN WITH THE CONSENT OF THE REQUIRED LENDERS, OR APPROVED IN WRITING BY THE ADMINISTRATIVE AGENT, IF SUCH SETOFF OR ACTION OR PROCEEDING WOULD OR MIGHT (PURSUANT TO CALIFORNIA CODE OF CIVIL PROCEDURE SECTIONS 580a, 580b, 580d AND 726 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE OR SECTION 2924 OF THE CALIFORNIA CIVIL CODE, IF APPLICABLE, OR OTHERWISE) AFFECT OR IMPAIR THE VALIDITY, PRIORITY OR ENFORCEABILITY OF THE LIENS GRANTED TO THE COLLATERAL AGENT PURSUANT TO THE SECURITY DOCUMENTS OR THE ENFORCEABILITY OF THE NOTES AND OTHER OBLIGATIONS HEREUNDER, AND ANY ATTEMPTED EXERCISE BY ANY LENDER OF ANY SUCH RIGHT WITHOUT OBTAINING SUCH CONSENT SHALL BE NULL AND VOID. THIS CLAUSE (b) SHALL BE SOLELY FOR THE BENEFIT OF EACH OF THE LENDERS AND THE ADMINISTRATIVE AGENT HEREUNDER. 13.03 Notices. Except as otherwise expressly provided herein, all ------- notices and other communications provided for hereunder shall be in writing (including telegraphic, telex, telecopier or cable communication) and mailed, telegraphed, telexed, telecopied, cabled or delivered: if to any Credit Party, at the address specified opposite its signature below or in the other relevant Credit Documents; if to any Lender, at its address specified on Schedule II; and if to the Administrative Agent, at the Notice Office; or, as to any Credit Party or the Administrative Agent, at such other address as shall be designated by such party in a written notice to the other parties hereto and, as to each Lender, at such other address as shall be designated by such Lender in a written notice to the Borrower and the Administrative Agent. All such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be effective when deposited in the mails, delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier, except that notices and communications to the Administrative Agent and the Borrower shall not be effective until received by the Administrative Agent or the Borrower, as the case may be. 13.04 Benefit of Agreement; Assignments; Participations. (a) This ------------------------------------------------- Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto; provided, -------- however, the Borrower may not assign or transfer any of its rights, obligations - ------- or interest hereunder without the prior written consent of the Lenders and, provided further, that (x) although any Lender (including the Fronting Lender) - ---------------- may transfer, assign or grant participations in its rights hereunder, such Lender shall remain a "Lender" for all purposes hereunder (and may not transfer or assign all or any portion of its Commitments hereunder except as provided in Sections 1.13 and 13.04(b)) and the transferee, assignee or participant, as the case may be, shall not constitute a "Lender" hereunder, (y) no Indemnity Participation may be assigned except as otherwise expressly provided in Sections 1.17 and 13.04(c) and (z) except as otherwise expressly provided in Section 1.17 in the case of Indemnity Participations, no Lender shall transfer or grant any participation under which the participant shall have rights to approve any amendment to or waiver of this Agreement or any other Credit Document except to the extent such amendment or waiver would (i) extend the final scheduled -131- maturity of any Loan, Note or Letter of Credit (unless such Letter of Credit is not extended beyond the Revolving Loan Maturity Date) in which such participant is participating, or reduce the rate or extend the time of payment of interest or Fees thereon (except in connection with a waiver of applicability of any post-default increase in interest rates) or reduce the principal amount thereof (it being understood that any amendment or modification to the financial definitions in this Agreement or to Section 13.07(a) shall not constitute a reduction in the rate of interest or Fees payable hereunder), or increase the amount of the participant's participation over the amount thereof then in effect (it being understood that a waiver of any Default or Event of Default or of a mandatory reduction in the Total Commitment shall not constitute a change in the terms of such participation, and that an increase in any Commitment (or the available portion thereof) or Loan shall be permitted without the consent of any participant if the participant's participation is not increased as a result thereof), (ii) consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement or (iii) release all or substantially all of the Collateral under all of the Security Documents (except as expressly provided in the Credit Documents) supporting the Loans or Letters of Credit hereunder in which such participant is participating. In the case of any such participation (other than an Indemnity Participation which shall be governed by the provisions of Sections 1.17 and 13.04(c)), the participant shall not have any rights under this Agreement or any of the other Credit Documents (the participant's rights against such Lender in respect of such participation to be those set forth in the agreement executed by such Lender in favor of the participant relating thereto) and all amounts payable by the Borrower hereunder shall be determined as if such Lender had not sold such participation. (b) Notwithstanding the foregoing, any Lender (or any Lender together with one or more other Lenders) may (x) assign all or a portion of its Commitments and related outstanding Obligations (or, if the Commitments with respect to the relevant Tranche have terminated, outstanding Obligations) hereunder to (i)(A) its parent company and/or any affiliate of such Lender which is at least 50% owned by such Lender or its parent company or (B) to one or more other Lenders or any affiliate of any such other Lender which is at least 50% owned by such other Lender or its parent company (provided that any fund that -------- invests in loans and is managed or advised by the same investment advisor of another fund which is a Lender (or by an Affiliate of such investment advisor) shall be treated as an affiliate of such other Lender for the purposes of this sub-clause (x)(i)(B)), or (ii) in the case of any Lender that is a fund that invests in loans, any other fund that invests in loans and is managed or advised by the same investment advisor of such Lender or by an Affiliate of such investment advisor or (y) assign all, or if less than all, a portion equal to at least $1,000,000 (or such lesser amount as may be agreed to by the Administrative Agent and the Borrower in any given case) in the aggregate for the assigning Lender or assigning Lenders, of such Commitments and related outstanding Obligations (or, if the Commitments with respect to the relevant Tranche have terminated, outstanding Obligations) hereunder to one or more Eligible Transferees, each of which assignees shall become a party to this Agreement as a Lender by execution of an Assignment and Assumption Agreement, provided that, notwithstanding the foregoing, in connection with any assignment - -------- to an Eligible Transferee pursuant to sub-clause (y) above by any Lender which acquired Commitments and/or related Obligations in an amount less than $1,000,000 in reliance on the proviso to sub-clause (x)(i)(B) or (x)(ii) above, such Lender shall (together with its affiliates and/or any other Lender -132- that is a fund that invests in loans and is managed or advised by the same investment advisor as such Lender (or by an Affiliate of such investment advisor)) assign a portion equal to at least $1,000,000 in the aggregate for such assigning Lender or assigning Lenders, of such Commitments and related outstanding Obligations (or, if the Commitments with respect to the relevant Tranche have terminated, outstanding Obligations) hereunder to such Eligible Transferee if (but only if) the aggregate amount of Commitments and Term Loans held by such Lender (and its affiliates and any other Lender that is a fund that invests in loans and is managed or advised by the same investment advisor as such Lender (or by an Affiliate of such investment advisor)) equals or exceeds $1,000,000 at such time; provided further, that, (i) at such time Schedule I -------- ------- shall be deemed modified to reflect the Commitments and/or outstanding Loans, as the case may be, of such new Lender and of the existing Lenders, (ii) upon the surrender of the relevant Notes by the assigning Lender (or, upon such assigning Lender's indemnifying the Borrower for any lost Note pursuant to a customary indemnification agreement) new Notes will be issued, at the Borrower's expense, to such new Lender and to the assigning Lender upon the request of such new Lender or assigning Lender, such new Notes to be in conformity with the requirements of Section 1.05 (with appropriate modifications) to the extent needed to reflect the revised Commitments and/or outstanding Loans, as the case may be, (iii) the consent of the Administrative Agent and, so long as no Default or Event of Default then exists, the consent of the Borrower shall (in either case) be required in connection with any such assignment pursuant to clause (y) above (other than any such assignment by the Administrative Agent or any of its Affiliates prior to the Syndication Date) (each of which consents shall not be unreasonably withheld or delayed), (iv) the Administrative Agent shall receive at the time of each such assignment, from the assigning or assignee Lender, the payment of a non-refundable assignment fee of $3,500 and (v) no such transfer or assignment will be effective until recorded by the Administrative Agent on the Register pursuant to Section 13.15. To the extent of any assignment pursuant to this Section 13.04(b), the assigning Lender shall be relieved of its obligations hereunder with respect to its assigned Commitments and outstanding Loans. At the time of each assignment pursuant to this Section 13.04(b) to a Person which is not already a Lender hereunder and which is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for Federal income tax purposes, the respective assignee Lender shall, to the extent legally entitled to do so, provide to the Borrower the appropriate Internal Revenue Service Forms (and, if applicable, a Section 4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent that an assignment of all or any portion of a Lender's Commitments and related outstanding Obligations pursuant to Section 1.13 or this Section 13.04(b) would, at the time of such assignment, result in increased costs under Section 1.10, 2.06 or 4.04 from those being charged by the respective assigning Lender prior to such assignment, then the Borrower shall not be obligated to pay such increased costs (although the Borrower, in accordance with and pursuant to the other provisions of this Agreement, shall be obligated to pay any other increased costs of the type described above resulting from changes after the date of the respective assignment). (c) Notwithstanding the foregoing, any Indemnifying Lender (or any Indemnifying Lender together with one or more other Indemnifying Lenders) may (x) assign all or a portion of its Indemnity Participation (and related Indemnity Amount) to (i)(A) its parent company and/or any affiliate of such Indemnifying Lender which is at least 50% owned by such Indemnifying Lender or its parent company or (B) to one or more other Indemnifying Lenders or -133- any affiliate of any such other Indemnifying Lender which is at least 50% owned by such other Indemnifying Lender or its parent company (provided that any fund -------- that invests in loans and is managed or advised by the same investment advisor of another fund which is an Indemnifying Lender (or by an Affiliate of such investment advisor) shall be treated as an affiliate of such other Indemnifying Lender for the purposes of this sub-clause (x)(i)(B)), or (ii) in the case of any Indemnifying Lender that is a fund that invests in loans, any other fund that invests in loans and is managed or advised by the same investment advisor of such Indemnifying Lender or by an Affiliate of such investment advisor or (y) assign all, or if less than all, a portion equal to at least $1,000,000 in the aggregate for the assigning Indemnifying Lender or assigning Indemnifying Lenders, of such Indemnity Participation (and related Indemnity Amount) to one or more Eligible Transferees, each of which assignees shall become a party to this Agreement as an Indemnifying Lender by execution of an Assignment and Assumption Agreement; provided that, notwithstanding the foregoing, in -------- connection with any assignment to an Eligible Transferee pursuant to sub-clause (y) above by any Indemnifying Lender which acquired an Indemnity Participation (and/or related Indemnity Amount) in an amount less than $1,000,000 in reliance on the proviso to sub-clause (x)(i)(B) or (x)(ii) above, such Indemnifying Lender shall (together with its affiliates and/or any other Indemnifying Lender that is a fund that invests in loans and is managed or advised by the same investment advisor as such Indemnifying Lender (or by an Affiliate of such investment advisor)) assign a portion equal to at least $1,000,000 in the aggregate for such assigning Indemnifying Lender or assigning Indemnifying Lenders, of such Indemnity Participations (and related Indemnity Amounts) to such Eligible Transferee if (but only if) the aggregate amount of Indemnity Participations (and/or (without duplication) related Indemnity Amounts) held by such Indemnifying Lender (and its affiliates and any other Indemnifying Lender that is a fund that invests in loans and is managed or advised by the same investment advisor as such Indemnifying Lender (or by an Affiliate of such investment advisor)) equals or exceeds $1,000,000 at such time; provided -------- further, that, (i) at such time Schedule I shall be deemed modified to reflect - ------- the Indemnity Participation (and related Indemnity Amount) of such new Indemnifying Lender and of the existing Indemnifying Lenders, (ii) the consent of the Administrative Agent and the Fronting Lender and, so long as no Default or Event of Default then exists, the consent of the Borrower shall (in either case) be required in connection with any such assignment pursuant to clause (y) above (each of which consents shall not be unreasonably withheld or delayed), (iv) the Administrative Agent shall receive at the time of each such assignment, from the assigning or assignee Indemnifying Lender, the payment of a non- refundable assignment fee of $3,500 and (v) no such transfer or assignment will be effective until recorded by the Administrative Agent on the Register pursuant to Section 13.15. To the extent of any assignment pursuant to this Section 13.04(c), the assigning Indemnifying Lender shall be relieved of its obligations hereunder with respect to its assigned Indemnity Participation (and Indemnity Amount). At the time of each assignment pursuant to this Section 13.04(c) to a Person which is not already a Lender or an Indemnifying Lender hereunder and which is not a United States person (as such term is defined in Section 7701(a)(30) of the Code) for Federal income tax purposes, the respective assignee Indemnifying Lender shall, to the extent legally entitled to do so, provide to the Borrower and the Fronting Lender the appropriate Internal Revenue Service Forms (and, if applicable, a Section 4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent that an assignment of all or any portion of an Indemnifying Lender's Indemnity Participation (and related Indemnity Amount) pursuant to Section 1.13 or this Section -134- 13.04(c) would, at the time of such assignment, result in increased costs under Section 4.04 from those being charged by the respective assigning Indemnifying Lender prior to such assignment, then neither the Borrower nor the Fronting Lender shall be obligated to pay such increased costs (although the Borrower, in accordance with and pursuant to the other provisions of this Agreement, shall be obligated to pay to the Fronting Lender (acting for any Indemnifying Lender) any other increased costs of the type described above resulting from changes after the date of the respective assignment). (d) Nothing in this Agreement shall prevent or prohibit any Lender from pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of borrowings made by such Lender from such Federal Reserve Bank and any Lender which is a fund may, without the consent of the Administrative Agent or the Borrower, pledge all or any portion of its Loans and Notes to its trustee or to a collateral agent providing credit or credit support to such Lender in support of its obligations to its trustee or such collateral agent, as the case may be. No pledge pursuant to this clause (d) shall release the transferor Lender from any of its obligations hereunder. 13.05 No Waiver; Remedies Cumulative. No failure or delay on the ------------------------------ part of the Administrative Agent, the Collateral Agent, the Issuing Lender or any Lender in exercising any right, power or privilege hereunder or under any other Credit Document and no course of dealing between the Borrower or any other Credit Party and the Administrative Agent, the Collateral Agent, the Issuing Lender or any Lender shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights, powers and remedies herein or in any other Credit Document expressly provided are cumulative and not exclusive of any rights, powers or remedies which the Administrative Agent, the Collateral Agent, the Issuing Lender or any Lender would otherwise have. No notice to or demand on any Credit Party in any case shall entitle any Credit Party to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Administrative Agent, the Collateral Agent, the Issuing Lender or any Lender to any other or further action in any circumstances without notice or demand. 13.06 Payments Pro Rata. (a) Except as otherwise provided in this ----------------- Agreement, the Administrative Agent agrees that promptly after its receipt of each payment from or on behalf of the Borrower in respect of any Obligations hereunder, the Administrative Agent shall distribute such payment to the Lenders (other than any Lender that has consented in writing to waive its pro rata share --- ---- of any such payment) pro rata based upon their respective shares, if any, of the --- ---- Obligations with respect to which such payment was received. (b) Each of the Lenders agrees that, if it should receive any amount hereunder (whether by voluntary payment, by realization upon security, by the exercise of the right of setoff or banker's lien, by counterclaim or cross action, by the enforcement of any right under the Credit Documents, or otherwise), which is applicable to the payment of the principal of, or interest on, the Loans, Unpaid Drawings, Commitment Commission or Letter of Credit Fees, of a sum which with respect to the related sum or sums received by other Lenders is in a greater proportion than the total of such Obligation then owed and due to such Lender bears to the total -135- of such Obligation then owed and due to such Lender bears to the total of such Obligation then owed and due to all of the Lenders immediately prior to such receipt, then such Lender receiving such excess payment shall purchase for cash without recourse or warranty from the other Lenders an interest in the Obligations of the respective Credit Party to such Lenders in such amount as shall result in a proportional participation by all the Lenders in such amount; provided that if all or any portion of such excess amount is thereafter - -------- recovered from such Lenders, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest. (c) Notwithstanding anything to the contrary contained herein, the provisions of the preceding Sections 13.06(a) and (b) shall be subject to the express provisions of this Agreement which require, or permit, differing payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders. 13.07 Calculations; Computations. (a) The financial statements to -------------------------- be furnished to the Lenders pursuant hereto shall be made and prepared in accordance with generally accepted accounting principles in the United States consistently applied throughout the periods involved (except as set forth in the notes thereto or as otherwise disclosed in writing by the Borrower to the Lenders); provided that, (i) except as otherwise specifically provided herein, -------- all computations of Excess Cash Flow, the Applicable Margin and the Applicable Commitment Commission Percentage, and all computations and all definitions (including accounting terms) used in determining compliance with Sections 9.07 through 9.12, inclusive, shall utilize generally accepted accounting principles and policies in conformity with those used to prepare the historical financial statements of the Borrower referred to in Section 7.05(a), (ii) to the extent expressly provided herein, certain calculations shall be made on a Pro Forma --- ----- Basis and (iii) for all purposes of this Agreement, all Receivables Indebtedness shall be treated as Indebtedness of the Borrower and its Subsidiaries hereunder, regardless of any differing treatment pursuant to generally accepted accounting principles. (b) All computations of interest, Commitment Commission and other Fees hereunder shall be made on the basis of a year of 360 days (or 365 days in the case of interest on Base Rate Loans maintained at the Prime Lending Rate and Foreign Currency Revolving Loans denominated in Pounds Sterling) for the actual number of days (including the first day but excluding the last day; except that in the case of Letter of Credit Fees and Facing Fees, the last day shall be included) occurring in the period for which such interest, Commitment Commission or Fees are payable. (c) Notwithstanding anything to the contrary contained in clause (a) of this Section 13.07, (i) for purposes of determining compliance with any incurrence tests set forth in Sections 8 and/or 9 (excluding Sections 9.08, 9.09, 9.10, 9.11 and 9.12), any amounts so incurred or expended (to the extent incurred or expended in a currency other than Dollars) shall be converted into Dollars on the basis of the Dollar Equivalent of the respective such amounts as in effect on the date of such incurrence or expenditure under any provision of any such Section that has an aggregate Dollar limitation provided for therein (and to the extent the respective incurrence test limits the aggregate amount outstanding (or expended) at any time and is expressed in Dollars, all outstanding amounts originally incurred or expended in a currency other than Dollars shall be converted into Dollars on the basis of the Dollar Equivalent of the -136- respective such amounts as in effect on the date any new incurrence or expenditures made under any provision of any such Section that regulates the Dollar amount outstanding (or expended) at any time). (d) Except as provided in Section 13.07(e), for purposes of this Agreement, the Dollar Equivalent of each Foreign Currency Revolving Loan and each Letter of Credit denominated in a Foreign Currency shall be calculated on the date when any such Foreign Currency Revolving Loan is made or Letter of Credit is issued, on the second Business Day of each month and at such other times as may be designated by the Administrative Agent. Such Dollar Equivalent shall remain in effect until the same is recalculated by the Administrative Agent as provided above and notice of such recalculation is received by the Borrower, it being understood that until such notice is received, the Dollar Equivalent shall be that Dollar Equivalent as last reported to the Borrower by the Administrative Agent. The Administrative Agent shall promptly notify the Borrower of each such determination of the Dollar Equivalent. (e) For the purposes of determining the Borrower's obligation to reimburse in Dollars a Drawing under a Letter of Credit denominated in a Foreign Currency (and each Participant's obligation to fund its Participation with respect to any such Letter of Credit), such determination shall be made by the Administrative Agent by converting the amount of the Unpaid Drawing into Dollars based on the Dollar Equivalent thereof on the day on which the Drawing is honored by the Issuing Lender. For the purposes of determining the Borrower's obligation to pay Letter of Credit Fees and Facing Fees with respect to Letters of Credit denominated in a Foreign Currency, such determination shall be made by using the Dollar Equivalent in effect from time to time during the term of any such Letter of Credit as determined by the provisions of Section 13.07(d). 13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF ----------------------------------------------------------- JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS - ---------- AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE PROVIDED IN THE MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE CITY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT, THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER THE BORROWER, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENTS BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL JURISDICTION OVER THE BORROWER. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE -137- AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY OTHER JURISDICTION. (b) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. (c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. 13.09 Counterparts. This Agreement may be executed in any number of ------------ counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set of counterparts executed by all the parties hereto shall be lodged with the Borrower and the Administrative Agent. 13.10 Effectiveness. This Agreement shall become effective on the ------------- date (the "Effective Date") on which the Borrower, the Administrative Agent and each of the Lenders shall have signed a counterpart hereof (whether the same or different counterparts) and shall have delivered the same to the Administrative Agent at the Notice Office or, in the case of the Lenders, shall have given to the Administrative Agent telephonic (confirmed in writing), written or telex notice (actually received) at such office that the same has been signed and mailed to it. The Administrative Agent will give the Borrower and each Lender prompt written notice of the occurrence of the Effective Date. -138- 13.11 Headings Descriptive. The headings of the several sections and -------------------- subsections of this Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Agreement. 13.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any ------------------------- other Credit Document nor any terms hereof or thereof may be changed, waived, discharged or terminated unless such change, waiver, discharge or termination is in writing signed by the respective Credit Parties party thereto and the Required Lenders (although additional parties may be added to, and Subsidiaries of the Borrower may be released from, the Subsidiaries Guaranty and the Security Documents in accordance with the provisions thereof without the consent of the other Credit Parties party thereto or the Required Lenders), provided that no -------- such change, waiver, discharge or termination shall, without the consent of each Lender (other than a Defaulting Lender) (with Obligations being directly affected in the case of following clause (i)), (i) extend the final scheduled maturity of any Loan or Note or extend the stated expiration date of any Letter of Credit beyond the Revolving Loan Maturity Date, or reduce the rate or extend the time of payment of interest or Fees thereon (except in connection with the waiver of applicability of any post-default increase in interest rates), or reduce the principal amount thereof (it being understood that any amendment or modification to the financial definitions in this Agreement or to Section 13.07(a) shall not constitute a reduction in the rate of interest or Fees for the purposes of this clause (i)), (ii) release all or substantially all of the Collateral under all the Security Documents (except as expressly permitted by the Credit Documents), (iii) release all or substantially all of the Subsidiary Guarantors from their respective obligations under the Subsidiaries Guaranty (except as expressly permitted by the Credit Documents), (iv) amend, modify or waive any provision of this Section 13.12 (except for technical amendments with respect to additional extensions of credit pursuant to this Agreement which afford the protections to such additional extensions of credit of the type provided to the Term Loans and the Revolving Loan Commitments on the Effective Date), (v) reduce the percentage specified in the definition of Required Lenders (it being understood that, with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of the Required Lenders on substantially the same basis as the extensions of Term Loans and Revolving Loan Commitments are included on the Effective Date) or (vi) consent to the assignment or transfer by the Borrower of any of its rights and obligations under this Agreement; provided further, that ---------------- no such change, waiver, discharge or termination shall (1) increase the Commitments of any Lender over the amount thereof then in effect without the consent of such Lender (it being understood that waivers or modifications of conditions precedent, covenants, Defaults or Events of Default or of a mandatory reduction in the Total Commitment shall not constitute an increase of the Commitment of any Lender, and that an increase in the available portion of any Commitment of any Lender shall not constitute an increase of the Commitment of such Lender), (2) without the consent of the Issuing Lender, amend, modify or waive any provision of Section 2 or alter its rights or obligations with respect to Letters of Credit, (3) without the consent of the Swingline Lender, alter the Swingline Lender's rights or obligations with respect to Swingline Loans, (4) without the consent of the Administrative Agent, amend, modify or waive any provision of Section 12 or any other provision as same relates to the rights or obligations of the Administrative Agent, (5) without the consent of Collateral Agent, amend, modify or waive any provision relating to the rights or obligations of the Collateral Agent, (6) -139- except in cases where additional extensions of term loans and/or revolving loans are being afforded substantially the same treatment afforded to the Term Loans and Revolving Loans pursuant to this Agreement as originally in effect, (x) without the consent of the Majority Lenders of each Tranche which is being allocated a lesser prepayment, repayment or commitment reduction as a result of the actions described below, alter the required application of any prepayments or repayments (or commitment reduction), as between the various Tranches, pursuant to Section 4.01(a) or 4.02 (excluding Section 4.02(b) or (c)) (although the Required Lenders may waive, in whole or in part, any such prepayment, repayment or commitment reduction, so long as the application, as amongst the various Tranches, of any such prepayment, repayment or commitment reduction which is still required to be made is not altered) or (y) without the consent of each Lender of each Tranche which is adversely affected by such amendment, amend the definition of Majority Lenders (it being understood that with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of the Majority Lenders on substantially the same basis as the extensions of Term Loans and Revolving Loan Commitments are included on the Effective Date), (7) reduce the amount of, or extend the date of, any Scheduled A Repayment without the consent of Supermajority Lenders holding A Term Loans, or reduce the amount, or extend the date of, any Scheduled B Repayment without the consent of the Supermajority Lenders holding B Term Loans, or reduce the second percentage specified in clause (i) of the definition of Supermajority Lenders without the consent of each Lender holding A Term Loans, or reduce the second percentage specified in clause (ii) of the definition of Supermajority Lenders without the consent of each Lender holding B Term Loans (it being understood that (x) with the consent of the Required Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of the Supermajority Lenders on substantially the same basis as the extensions of Term Loans and Revolving Loan Commitments are included on the Effective Date and (y) nothing in this clause (7) is intended to limit the rights of the Lenders set forth in clause (i) of the preceding proviso with respect to any extension of the final Scheduled A Repayment due on the A Term Loan Maturity Date or of the final Scheduled B Repayment due on the B Term Loan Maturity Date), or (8) without the consent of the Indemnifying Lenders holding a majority of the then outstanding Indemnity Participations, amend, modify, terminate or waive any provision of Section 1.17 or 13.04(c) or of the component definitions used therein. For purposes of this Section 13.12(a), it is understood and agreed that the Fronting Lender may, in accordance with the provisions of Section 1.17(f), provide votes or consents with respect to certain portions of its Revolving Loan Commitment only, or may provide inconsistent votes with respect to portions of its Revolving Loan Commitment, in each case to the extent that the respective portions of its Revolving Loan Commitment are required to be voted at the direction of the respective Indemnifying Lenders pursuant to Section 1.17(f). (b) If, in connection with any proposed change, waiver, discharge or termination of any of the provisions of this Agreement as contemplated by clauses (i) through (vi), inclusive, of the first proviso to Section 13.12(a), the consent of the Required Lenders is obtained but the consent of one or more of such other Lenders or Indemnifying Lenders whose consent is required is not obtained, then the Borrower shall have the right, so long as all non-consenting Lenders and Indemnifying Lenders whose individual consent is required are treated as described in either clauses (A) or (B) below, to either (A) replace each such non-consenting Lender and -140- each such non-consenting Indemnifying Lender with one or more Replacement Lenders and/or Replacement Indemnifying Lenders, as the case may be, pursuant to Section 1.13 so long as at the time of such replacement, each such Replacement Lender and/or Replacement Indemnifying Lenders, as the case may be, consents to the proposed change, waiver, discharge or termination or (B)(I) terminate such non-consenting Lender's Commitments and/or repay each Tranche of outstanding Loans of such Lender in accordance with Sections 3.02(b) and/or 4.01(b) and (II) if the consent of any non-consenting Indemnifying Lender is required in connection with the respective action, terminate that portion of the Revolving Loan Commitment of the Fronting Lender in which the respective non-consenting Indemnifying Lender has an Indemnity Participation and terminate the related Indemnity Participation, provided that, unless the Commitments that are -------- terminated, and Loans repaid, pursuant to preceding clause (B) are immediately replaced in full at such time through the addition of new Lenders or the increase of the Commitments and/or outstanding Loans of existing Lenders (who in each case must specifically consent thereto), then in the case of any action pursuant to preceding clause (B) the Required Lenders (determined after giving effect to the proposed action) shall specifically consent thereto, provided -------- further, that in any event the Borrower shall not have the right to replace a - ------- Lender or Indemnifying Lender, terminate its Commitments (or Indemnity Participations) or repay its Loans solely as a result of the exercise of such Lender's or Indemnifying Lender's rights (and the withholding of any required consent by such Lender or Indemnifying Lender) pursuant to the second proviso to Section 13.12(a). 13.13 Survival. All indemnities set forth herein including, without -------- limitation, in Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01 shall survive the execution, delivery and termination of this Agreement and the Notes and the making and repayment of the Obligations. 13.14 Domicile of Loans. Each Lender may transfer and carry its ----------------- Loans at, to or for the account of any office, Subsidiary or Affiliate of such Lender. Notwithstanding anything to the contrary contained herein, to the extent that a transfer of Loans pursuant to this Section 13.14 would, at the time of such transfer, result in increased costs under Section 1.10, 1.11, 2.06 or 4.04 from those being charged by the respective Lender prior to such transfer, then the Borrower shall not be obligated to pay such increased costs (although the Borrower shall be obligated to pay any other increased costs of the type described above resulting from changes after the date of the respective transfer). 13.15 Register. The Borrower hereby designates the Administrative -------- Agent to serve as the Borrower's agent, solely for purposes of this Section 13.15, to maintain a register (the "Register") on which it will record the Commitments from time to time of each of the Lenders, the Loans made by each of the Lenders, each repayment in respect of the principal amount of the Loans of each Lender and the Indemnity Participation (and Indemnity Amount) of each Indemnifying Lender. Failure to make any such recordation, or any error in such recordation, shall not affect the Borrower's obligations in respect of such Loans or any Indemnifying Lender's obligation with respect to its Indemnity Participation. With respect to (x) any Lender, the transfer of the Commitments of such Lender and the rights to the principal of, and interest on, any Loan made pursuant to such Commitments and (y) any Indemnifying Lender, the transfer of the Indemnity Participation of such Indemnifying Lender and the rights to interest and fees payable pursuant to such Indemnity Participation, shall not be effective until such transfer is -141- recorded on the Register maintained by the Administrative Agent with respect to ownership of such Commitments, Loans and/or Indemnity Participations, as the case may be, and prior to such recordation all amounts owing to the transferor with respect to such Commitments, Loans and/or Indemnity Participations, as the case may be, shall remain owing to the transferor. The registration of assignment or transfer of all or part of any Commitments, Loans and Indemnity Participations shall be recorded by the Administrative Agent on the Register only upon the acceptance by the Administrative Agent of a properly executed and delivered Assignment and Assumption Agreement pursuant to Sections 13.04(b) and/or (c). Coincident with the delivery of such an Assignment and Assumption Agreement to the Administrative Agent for acceptance and registration of assignment or transfer of all or part of a Loan, or as soon thereafter as practicable, the assigning or transferor Lender shall surrender the Note (if any) evidencing such Loan, and thereupon one or more new Notes in the same aggregate principal amount shall be issued to the assigning or transferor Lender and/or the new Lender at the request of any such Lender. The Borrower agrees to indemnify the Administrative Agent from and against any and all losses, claims, damages and liabilities of whatsoever nature which may be imposed on, asserted against or incurred by the Administrative Agent in performing its duties under this Section 13.15. 13.16 Confidentiality. (a) Subject to the provisions of clause (b) --------------- of this Section 13.16, each Lender agrees that it will use its reasonable efforts not to disclose without the prior consent of the Borrower (other than to its employees, auditors, advisors or counsel or to another Lender if such Lender or such Lender's holding or parent company in its sole discretion determines that any such party should have access to such information, provided such Persons shall be subject to the provisions of this Section 13.16 to the same extent as such Lender) any information with respect to the Borrower or any of its Subsidiaries which is now or in the future furnished pursuant to this Agreement or any other Credit Document, provided that any Lender may disclose -------- any such information (i) as has become generally available to the public other than by virtue of a breach of this Section 13.16(a) by the respective Lender, (ii) as may be required or appropriate in any report, statement or testimony submitted to any municipal, state or Federal regulatory body having or claiming to have jurisdiction over such Lender or to the Federal Reserve Board or the Federal Deposit Insurance Corporation or similar organizations (whether in the United States or elsewhere) or their successors, (iii) as may be required or appropriate in respect to any summons or subpoena or in connection with any litigation involving the Borrower, any of its Subsidiaries or affiliates, this Agreement, any other Credit Document, the Transaction or any other transaction contemplated or permitted hereunder, (iv) in order to comply with any law, order, regulation or ruling applicable to such Lender, (v) to the extent necessary in connection with the exercise of any remedy under the Credit Documents, (vi) to the Administrative Agent or the Collateral Agent, (vii) to any direct or indirect contractual counterparty in any swap, hedge or similar agreement (or to any such contractual counterparty's professional advisor), so long as such contractual counterparty (or such professional advisor) agrees to be bound by the provisions of this Section 13.16 and (viii) to any prospective or actual transferee or participant in connection with any contemplated transfer or participation of any of the Notes or Commitments or any interest therein by such Lender, provided that such prospective transferee agrees to be bound by the -------- confidentiality provisions contained in this Section 13.16. (b) The Borrower hereby acknowledges and agrees that each Lender may share with any of its affiliates, and such affiliates may share with such Lender any information -142- related to the Borrower or any of its Subsidiaries (including, without limitation, any non-public customer information regarding the creditworthiness of the Borrower and its Subsidiaries), provided such Persons shall be subject to the provisions of this Section 13.16 to the same extent as such Lender. 13.17 Judgment Currency. (a) The Borrower's obligation hereunder ----------------- and under the other Credit Documents to make payments in Dollars or (x) in the case of a Letter of Credit issued in a Foreign Currency, the Dollar Equivalent thereof or (y) in the case of a Foreign Currency Revolving Loan, the applicable Foreign Currency (in any such case, the "Obligation Currency") shall not be discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any currency other than the Obligation Currency, except to the extent that such tender or recovery results in the effective receipt by the Administrative Agent, the Collateral Agent, the Issuing Lender or the respective Lender of the full amount of the Obligation Currency expressed to be payable to the Administrative Agent, the Collateral Agent, the Issuing Lender or such Lender under this Agreement or the other Credit Documents. If for the purpose of obtaining or enforcing judgment against the Borrower in any court or in any jurisdiction, it becomes necessary to convert into or from any currency other than the Obligation Currency (such other currency being hereinafter referred to as the "Judgment Currency") an amount due in the Obligation Currency, the conversion shall be made at the Relevant Currency Equivalent thereof or, in the case of conversions into other currencies, at the rate of exchange quoted by the Administrative Agent, determined, in each case, as of the date immediately preceding the day on which the judgment is given (such Business Day being hereinafter referred to as the "Judgment Currency Conversion Date"). (b) If there is a change in the rate of exchange prevailing between the Judgment Currency Conversion Date and the date of actual payment of the amount due, the Borrower covenants and agrees to pay, or cause to be paid, such additional amounts, if any (but in any event not a lesser amount) as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Obligation Currency which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial award at the rate of exchange prevailing on the Judgment Currency Conversion Date. (c) For purposes of determining the Relevant Currency Equivalent or any other rate of exchange for this Section 13.17, such amounts shall include any premium and costs payable in connection with the purchase of the Obligation Currency. 13.18 Euro. (a) If at any time that a Foreign Currency Revolving ---- Loan denominated in Pounds Sterling is outstanding, Pounds Sterling is replaced as the lawful currency of the United Kingdom (the "Issuing Country") by the Euro so that all payments are to be made in the Issuing Country in Euros and not in Pounds Sterling, then such Foreign Currency Revolving Loan shall be automatically converted into a Foreign Currency Revolving Loan denominated in Euros in a principal amount equal to the amount of Euros into which the principal amount of such Foreign Currency Revolving Loan would be converted pursuant to the EMU Legislation and thereafter no further Foreign Currency Revolving Loans will be available in Pounds Sterling, with the basis of accrual of interest, notice requirements and payment offices -143- with respect to such converted Foreign Currency Revolving Loans to be that consistent for Foreign Currency Revolving Loans denominated in Euros. (b) In each case, to the maximum extent permitted under applicable law, the Borrower shall from time to time, at the request of any Lender, pay to such Lender the amount of any losses, damages, liabilities, claims, reduction in yield, additional expense, increased cost, reduction in any amount payable, reduction in the effective return of its capital, the decrease or delay in the payment of interest or any other return forgone by such Lender or its affiliates with respect to a Foreign Currency Revolving Loan affected by this Section 13.18 as a result of the tax or currency exchange resulting from the introduction, changeover to or operation of the Euro in any applicable nation or eurocurrency market. 13.19 Post-Closing Actions. Notwithstanding anything to the contrary -------------------- contained in this Agreement or in the other Credit Documents, the parties hereto acknowledge and agree that the Borrower and its Subsidiaries shall be required to take the actions specified in Schedule XIII as promptly as practicable, and in any event within 90 days after the Initial Borrowing Date. The provisions of said Schedule XIII shall be deemed incorporated by reference herein as fully as if set forth herein in its entirety. All conditions precedent and representations contained in this Agreement and the other Credit Documents shall be deemed modified to the extent necessary to effect the foregoing (and to permit the taking of the actions described above within the time periods required above, rather than as elsewhere provided in the Credit Documents, and to allow for certain items otherwise required to be delivered pursuant to the Credit Documents not to be so delivered to the extent permitted by the terms of said Schedule XIII), provided that (x) to the extent any representation and -------- warranty would not be true because the actions described on Schedule XIII marked with an asterisk (collectively, the "Actions Within Borrower's Control") were not taken on the Initial Borrowing Date, the respective representation and warranty shall be required to be true and correct in all material respects at the time the respective action is taken (or was required to be taken) in accordance with the foregoing provisions of this Section 13.19 and (y) all representations and warranties relating to the Security Documents shall be required to be true with respect to any of the foregoing actions required to be taken by this Section 13.19 immediately after said actions have been taken. The acceptance of the benefits of each Credit Event shall constitute a representation, warranty and covenant by each Credit Agreement Party to each of the Lenders that the Actions Within Borrower Control required to be taken pursuant to this Section 13.19 will be, or have been, taken within the relevant time periods referred to in this Section 13.19 and that, at such time, all representations and warranties contained in this Agreement and the other Credit Documents with respect to each Action Within Borrower's Control shall then be true and correct without any modification pursuant to this Section 13.19. The parties hereto acknowledge and agree that (i) the failure to take the Action Within Borrower's Control specified as item IV. on Schedule XIII, within the relevant time period required above, shall give rise to an immediate Event of Default and (ii) the failure to take any of the other actions required above (to the extent so required), within the relevant time periods required above, shall be a covenant default for all purposes of this Agreement. * * * -144- IN WITNESS WHEREOF, the parties hereto have caused their duly authorized officers to execute and deliver this Agreement as of the date first above written. Address: - ------- The Manitowoc Company, Inc. THE MANITOWOC COMPANY, INC. 500 South 16/th/ Street Manitowoc, Wisconsin 54221 Attention: Maurice D. Jones By: /s/ Glen E. Tellock Tel. No.: (920) 684-4410 _________________________ Fax No.: (920) 683-8123 Name: Glen E. Tellock Title: Senior Vice President and Chief Financial Officer BANKERS TRUST COMPANY, Individually and as Administrative Agent By: /s/ Gina S. Thompson _________________________ Name: Gina S. Thompson Title: Director BANK ONE, NA, Individually and as Syndication Agent By: /s/ Richard G. Hillsman _________________________ Name: Richard G. Hillsman Title: Director ARAB BANKING CORPORATION (B.S.C.) By: /s/ Grant E. McDonald _________________________ Name: Grant E. McDonald Title: Vice President LASALLE BANK NATIONAL ASSOCIATION By: /s/ Lou D. Banach _________________________ Name: Lou D. Banach Title: Vice President and Senior Lender ASSOCIATED BANK, N.A. By: /s/ Clark A. Rasmussen _________________________ Name: Clark A. Rasmussen Title: Senior Vice President THE BANK OF NEW YORK By: /s/ Eugene F. Kenny _________________________ Name: Eugene F. Kenny Title: Senior Vice President FIRST UNION NATIONAL BANK By: /s/ John R. Langhine _________________________ Name: John R. Langhine Title: S.V.P. & Director NATEXIS BANQUES POPULAIRES By: /s/ Christine Dirkinger _________________________ Name: Christine Dirkinger Title: Assistant Vice President FIRSTAR BANK, N.A. By: /s/ Thomas V. Richtman _________________________ Name: Thomas V. Richtman Title: Vice President M&I MARSHALL & ILSLEY BANK By: /s/ Ronald J. Casey _________________________ Name: Ronald J. Casey Title: Vice President FLEET NATIONAL BANK, Individually and as Documentation Agent By: /s/ James V. Maiorino _________________________ Name: James V. Maiorino Title: Vice President BNP PARIBAS By:_________________________ Name: Title: THE NORTHERN TRUST COMPANY By: /s/ David J. Mitchell _________________________ Name: David J. Mitchell Title: Vice President EX-4.2 4 dex42.txt INDENTURE DATED MAY 9, 2001 EXHIBIT 4.2 ================================================================================ THE MANITOWOC COMPANY, INC., as Issuer, the Guarantors named herein, as Guarantors and THE BANK OF NEW YORK, as Trustee ________________________________ Indenture Dated as of May 9, 2001 ________________________________ 10 3/8% Senior Subordinated Notes due 2011 ================================================================================ TABLE OF CONTENTS
Page ---- ARTICLE ONE DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01. Definitions........................................................................ 1 SECTION 1.02. Incorporation by Reference of Trust Indenture Act.................................. 35 SECTION 1.03. Rules of Construction.............................................................. 36 ARTICLE TWO THE NOTES SECTION 2.01. The Notes.......................................................................... 37 SECTION 2.02. Restrictive Legends................................................................ 38 SECTION 2.03. Execution and Authentication....................................................... 41 SECTION 2.04. Registrar and Paying Agent......................................................... 42 SECTION 2.05. Holders to Be Treated as Owners; Payments of Interest.............................. 42 SECTION 2.06. Paying Agent to Hold Money in Trust................................................ 43 SECTION 2.07. Transfer and Exchange.............................................................. 43 SECTION 2.08. Replacement Notes.................................................................. 55 SECTION 2.09. Outstanding Notes.................................................................. 56 SECTION 2.10. Temporary Notes.................................................................... 56 SECTION 2.11. Cancellation....................................................................... 57 SECTION 2.12. ISIN Numbers and Common Codes...................................................... 57 SECTION 2.13. Defaulted Interest................................................................. 57 SECTION 2.14. Issuance of Additional Notes....................................................... 57 ARTICLE THREE REDEMPTION SECTION 3.01. Optional Redemption................................................................ 58 SECTION 3.02. Notices to Trustee................................................................. 59 SECTION 3.03. Selection of Notes to Be Redeemed.................................................. 59 SECTION 3.04. Notice of Redemption............................................................... 59 SECTION 3.05. Effect of Notice of Redemption..................................................... 61 SECTION 3.06. Deposit of Redemption Price........................................................ 61 SECTION 3.07. Payment of Notes Called for Redemption............................................. 61 SECTION 3.08. Notes Redeemed in Part............................................................. 61
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Page ---- ARTICLE FOUR COVENANTS SECTION 4.01. Payment of Notes................................................................... 62 SECTION 4.02. Maintenance of Office or Agency.................................................... 62 SECTION 4.03. Limitation on Incurrence of Additional Indebtedness................................ 62 SECTION 4.04. Prohibition on Incurrence of Senior Subordinated Debt.............................. 63 SECTION 4.05. Limitation on Restricted Payments.................................................. 63 SECTION 4.06. Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.............................................. 65 SECTION 4.07. Limitation on Preferred Stock of Restricted Subsidiaries........................... 67 SECTION 4.08. Limitation on Transactions with Affiliates......................................... 67 SECTION 4.09. Limitation on Liens................................................................ 69 SECTION 4.10. Limitation on Asset Sales.......................................................... 69 SECTION 4.11. Repurchase of Notes upon a Change of Control....................................... 73 SECTION 4.12. Additional Subsidiary Guarantees................................................... 75 SECTION 4.13. Existence.......................................................................... 75 SECTION 4.14. Payment of Taxes and Other Claims.................................................. 75 SECTION 4.15. Reports to Holders................................................................. 76 SECTION 4.16. Conduct of Business................................................................ 76 SECTION 4.17. Waiver of Stay, Extension or Usury Laws............................................ 77 SECTION 4.18. Compliance Certificates............................................................ 77 SECTION 4.19. Maintenance of Properties.......................................................... 77 SECTION 4.20. Insurance.......................................................................... 78 ARTICLE FIVE SUCCESSOR CORPORATION SECTION 5.01. Merger, Consolidation and Sale of Assets........................................... 78 SECTION 5.02. Successor Substituted.............................................................. 80 ARTICLE SIX DEFAULT AND REMEDIES SECTION 6.01. Events of Default.................................................................. 81 SECTION 6.02. Notice of Defaults................................................................. 84 SECTION 6.03. Other Remedies..................................................................... 84 SECTION 6.04. Waiver of Past Defaults............................................................ 84 SECTION 6.05. Control by Majority................................................................ 84 SECTION 6.06. Limitation on Suits................................................................ 85
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Page ---- SECTION 6.07. Rights of Holders to Receive Payment............................................... 85 SECTION 6.08. Collection Suit by Trustee......................................................... 86 SECTION 6.09. Trustee May File Proofs of Claim................................................... 86 SECTION 6.10. Priorities......................................................................... 86 SECTION 6.11. Undertaking for Costs.............................................................. 87 SECTION 6.12. Restoration of Rights and Remedies................................................. 87 SECTION 6.13. Rights and Remedies Cumulative..................................................... 87 SECTION 6.14. Delay or Omission Not Waiver....................................................... 87 ARTICLE SEVEN TRUSTEE SECTION 7.01. General............................................................................ 88 SECTION 7.02. Certain Rights, Duties and Responsibilities of Trustee............................. 88 SECTION 7.03. Individual Rights of Trustee....................................................... 90 SECTION 7.04. Trustee's Disclaimer............................................................... 90 SECTION 7.05. Notice of Default.................................................................. 90 SECTION 7.06. Reports by Trustee to Holders...................................................... 90 SECTION 7.07. Compensation and Indemnity......................................................... 90 SECTION 7.08. Replacement of Trustee............................................................. 91 SECTION 7.09. Successor Trustee by Merger, Etc................................................... 92 SECTION 7.10. Eligibility........................................................................ 92 SECTION 7.11. Money Held in Trust................................................................ 92 SECTION 7.12. Withholding Taxes.................................................................. 93 SECTION 7.13. Trustee's Application for Instructions from the Company............................ 93 SECTION 7.14. Appointment of Co-Trustee.......................................................... 93 ARTICLE EIGHT DISCHARGE OF INDENTURE SECTION 8.01. Termination of Company's Obligations............................................... 95 SECTION 8.02. Defeasance and Discharge of Indenture.............................................. 95 SECTION 8.03. Defeasance of Certain Obligations.................................................. 98 SECTION 8.04. Application of Trust Money......................................................... 99 SECTION 8.05. Repayment to Company............................................................... 99 SECTION 8.06. Reinstatement...................................................................... 100
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Page ---- ARTICLE NINE AMENDMENTS, SUPPLEMENTS AND WAIVERS SECTION 9.01. Without Consent of Holders......................................................... 100 SECTION 9.02. With Consent of Holders............................................................ 101 SECTION 9.03. Revocation and Effect of Consent................................................... 102 SECTION 9.04. Notation on or Exchange of Notes................................................... 103 SECTION 9.05. Trustee to Sign Amendments, Etc.................................................... 103 SECTION 9.06. Conformity with Trust Indenture Act................................................ 103 ARTICLE TEN SUBORDINATION SECTION 10.01. Notes Subordinated to Senior Debt.................................................. 103 SECTION 10.02. Suspension of Payment When Senior Debt Is in Default............................... 104 SECTION 10.03. Obligations Subordinated to Prior Payment of All Senior Debt on Dissolution, Liquidation or Reorganization of Company........................... 105 SECTION 10.04. Payments May Be Paid Prior to Dissolution.......................................... 107 SECTION 10.05. Holders to Be Subrogated to Rights of Holders of Senior Debt....................... 107 SECTION 10.06. Obligations of the Company Unconditional........................................... 107 SECTION 10.07. Reliance on Judicial Order or Certificate of Liquidating Agent..................... 108 SECTION 10.08. Subordination Rights Not Impaired by Acts or Omissions of the Company or Holders of Senior Debt............................................................................ 108 SECTION 10.09. Holders Authorize Trustee to Effectuate Subordination of Obligations............... 109 SECTION 10.10. This Article Ten Not to Prevent Events of Default.................................. 109 SECTION 10.11. Amendments or Modifications to Article Ten......................................... 110 SECTION 10.12. Acceleration of Notes.............................................................. 110 SECTION 10.13. Notice to Trustee, Rights of Trustee and Paying Agent.............................. 110 ARTICLE ELEVEN GUARANTEE OF NOTES SECTION 11.01. Guarantee.......................................................................... 111 SECTION 11.02. Execution and Delivery of Guarantee................................................ 112 SECTION 11.03. Waiver of Subrogation.............................................................. 112 SECTION 11.04. Immediate Payment.................................................................. 113 SECTION 11.05. No Set-Off......................................................................... 113 SECTION 11.06. Obligations Absolute............................................................... 113 SECTION 11.07. Obligations Continuing............................................................. 113
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Page ---- SECTION 11.08. Obligations Not Reduced............................................................ 114 SECTION 11.09. Obligations Reinstated............................................................. 114 SECTION 11.10. Obligations Not Affected........................................................... 114 SECTION 11.11. Waiver............................................................................. 115 SECTION 11.12. No Obligation to Take Action Against Company....................................... 115 SECTION 11.13. Default and Enforcement............................................................ 116 SECTION 11.14. Costs and Expenses................................................................. 116 SECTION 11.15. No Merger or Waiver; Cumulative Remedies........................................... 116 SECTION 11.16. Survival of Obligations............................................................ 116 SECTION 11.17. Guarantee in Addition to Other Obligations......................................... 117 SECTION 11.18. Successors and Assigns............................................................. 117 SECTION 11.19. Governing Law; Agent for Service; Submission to Jurisdiction; Waiver of Immunities; Judgment Currency......................................... 117 SECTION 11.20. Limitation of Guarantor's Liability................................................ 117 SECTION 11.21. Release of Guarantee............................................................... 117 ARTICLE TWELVE SUBORDINATION OF GUARANTEE OBLIGATIONS SECTION 12.01. Guarantee Obligations Subordinated to Guarantor Senior Debt........................ 118 SECTION 12.02. Suspension of Guarantee Obligations When Guarantor Senior Debt Is in Default....... 118 SECTION 12.03. Guarantee Obligations Subordinated to Prior Payment of All Guarantor Senior Debt on Dissolution, Liquidation or Reorganization of Such Guarantor.................... 119 SECTION 12.04. Payments May Be Paid Prior to Dissolution.......................................... 120 SECTION 12.05. Holders to Be Subrogated to Rights of Holders of Guarantor Senior Debt............. 121 SECTION 12.06. Guarantee Obligations of the Guarantors Unconditional.............................. 121 SECTION 12.07. Reliance on Judicial Order or Certificate of Liquidating Agent..................... 121 SECTION 12.08. Subordination Rights Not Impaired by Acts or Omissions of the Guarantors or Holders of Guarantor Senior Debt................................................ 122 SECTION 12.09. Holders Authorize Trustee to Effectuate Subordination of Guarantee Obligations..... 122 SECTION 12.10. This Article Twelve Not to Prevent Events of Default............................... 123 SECTION 12.11. Amendments or Modifications to Article Twelve...................................... 123 SECTION 12.12. Acceleration of Notes.............................................................. 123 SECTION 12.13. Notice to Trustee, Rights of Trustee and Paying Agent.............................. 123
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Page ---- ARTICLE THIRTEEN MISCELLANEOUS SECTION 13.01. Trust Indenture Act of 1939........................................................ 124 SECTION 13.02. Notices............................................................................ 124 SECTION 13.03. Certificate and Opinion as to Conditions Precedent................................. 126 SECTION 13.04. Statements Required in Certificate................................................. 126 SECTION 13.05. Rules by Trustee, Paying Agent or Registrar........................................ 127 SECTION 13.06. Payment Date Other Than a Business Day............................................. 127 SECTION 13.07. Governing Law...................................................................... 127 SECTION 13.08. No Adverse Interpretation of Other Agreements...................................... 127 SECTION 13.09. No Recourse Against Others......................................................... 127 SECTION 13.10. Successors......................................................................... 128 SECTION 13.11. Duplicate Originals................................................................ 128 SECTION 13.12. Separability....................................................................... 128 SECTION 13.13. Table of Contents, Headings, Etc................................................... 128 SECTION 13.14. Judgment Currency.................................................................. 128 SECTION 13.15. Waiver of Jury Trial............................................................... 128 SECTION 13.16. Unclaimed Money; Prescription...................................................... 128 ARTICLE FOURTEEN PAYING AGENT, TRANSFER AGENT AND REGISTRAR SECTION 14.01. Duties of the Paying Agent, Transfer Agent and Registrar........................... 129 SECTION 14.02. Agent of the Company............................................................... 129 SECTION 14.03. Certain Rights of Paying Agent, Transfer Agent and Registrar....................... 129 SECTION 14.04. May Hold Notes..................................................................... 130 SECTION 14.05. Appointment of Agents.............................................................. 130 SECTION 14.06. Money Held......................................................................... 130 SECTION 14.07. Paying Agent, Transfer Agent and Registrar Not Responsible for Notes............... 130 SECTION 14.08. Compensation and Indemnification................................................... 130 EXHIBIT A - Form of Note EXHIBIT B - Form of Certificate of Transfer EXHIBIT C - Form of Certificate of Exchange EXHIBIT D - Form of Certificate from Acquiring Institutional Accredited Investor EXHIBIT E - Form of Guarantee
-vi- CROSS-REFERENCE TABLE
TIA Sections Indenture Sections - ------------ ------------------ Section 310 (a)(1)......................................................... 7.10 (a)(2)......................................................... 7.10 (b)............................................................ 7.03; 7.08 Section 311 ............................................................... 7.03 Section 313 (a)............................................................ 7.06 (c)............................................................ 7.05; 7.06 Section 314 (a)............................................................ 13.02 (a)(4)......................................................... 4.18 (b)............................................................ N/A (c)(1)......................................................... N/A (c)(2)......................................................... N/A (d)............................................................ N/A (e)............................................................ 13.04 Section 315 (a)............................................................ 7.02 (b)............................................................ 7.02; 7.05 (c)............................................................ 7.02 (d)............................................................ 7.02 Section 316 (a)............................................................ 6.05; 6.06 (a)(1)(A)...................................................... 6.05 (a)(1)(B)...................................................... 6.04 (b)............................................................ 6.07 Section 317 (a)(1)......................................................... 6.08 (a)(2)......................................................... 6.09 (b)............................................................ 2.08 Section 318 (a)............................................................ N/A (c)............................................................ N/A
Note: The Cross-Reference Table shall not for any purpose be deemed to be a part of this Indenture. INDENTURE, dated as of May 9, 2001, by and among THE MANITOWOC COMPANY, INC., a Wisconsin corporation (the "Company"), the Guarantors (as ------- defined below) listed on the signature pages hereto and THE BANK OF NEW YORK, a New York banking corporation, as trustee (the "Trustee"), registrar, paying ------- agent and transfer agent. RECITALS OF THE COMPANY The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance of [_]175,000,000 aggregate principal amount of the Company's 10 3/8% Senior Subordinated Notes due 2011 in the form of Initial Notes (as defined below), 10 3/8% Senior Subordinated Notes due 2011 in the form of Exchange Notes (as defined below), 10 3/8% Senior Subordinated Notes due 2011 in the form of Private Exchange Notes (as defined below) and, if and when issued, such Additional Notes (as defined below) that the Company may from time to time choose to issue pursuant to this Indenture, in each case issuable as provided in this Indenture. The Notes (as defined below) will be Guaranteed (as defined below) on a senior subordinated basis by the Guarantors. All things necessary to make this Indenture a valid and legally binding agreement of the Company and the Guarantors, in accordance with its terms, have been done, and the Company has done all things necessary to make the Notes, when executed by the Company, and authenticated and delivered by the Trustee hereunder and duly issued by the Company, valid and legally binding obligations of the Company. The Guarantors have done all things necessary to make the Guarantees, when executed by the Guarantors, the valid and legally binding obligations of the Guarantors. AND THIS INDENTURE FURTHER WITNESSETH For and in consideration of the premises and the purchase of the Notes by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders, as follows: ARTICLE ONE DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01. Definitions. ----------- "Acceleration Notice" has the meaning given such term in Section ------------------- 6.01(b). "Acquired Indebtedness" means Indebtedness of a Person or any of its --------------------- Subsidiaries existing at the time such Person becomes a Restricted Subsidiary of the Company or at the time it merges or consolidates with or into the Company or any of its Restricted Subsidiaries or that is assumed in connection with the acquisition of assets from such Person and in each case not incurred by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Restricted Subsidiary of the Company or such acquisition, merger or consolidation. "Additional Interest" shall have the meaning given such term in the ------------------- Registration Rights Agreement. "Additional Notes" means, subject to the Company's compliance with ---------------- Section 4.03, 10 3/8% Senior Subordinated Notes due 2011 in aggregate principal amount not to exceed [_]100.0 million, substantially in the form of Exhibit A --------- and, if required, containing the Private Placement Legend, issued from time to time after the Issue Date under the terms of this Indenture (other than issuances pursuant to Section 2.07, 2.08, 2.10, 3.08 or 9.04 of this Indenture and other than Exchange Notes issued pursuant to an exchange offer for other Notes outstanding under this Indenture). "Affiliate" means, with respect to any specified Person, any other --------- Person who directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, such specified Person. The term "control" means the possession, directly or indirectly, of the power to ------- direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative of the ----------- ---------- foregoing. "Affiliate Transaction" has the meaning given such term in Section --------------------- 4.08. "Agent" means any Registrar, Paying Agent, Transfer Agent, ----- authenticating agent or co-Registrar. "amend" means to amend, supplement, restate, amend and restate or ----- otherwise modify; and "amendment" shall have a correlative meaning. --------- "Applicable Procedures" means with respect to any transfer, exchange --------------------- or other transaction involving a Global Note or beneficial interest therein, the "Operating Procedures of the Euroclear System" and "Terms and Conditions Governing Use of Euroclear," "General Terms and Conditions of Clearstream" and "Customer Handbook" of Clearstream, to the extent applicable to such transaction and as in effect at the time of such transaction. "Asset Acquisition" means (1) an Investment by the Company or any ----------------- Restricted Subsidiary of the Company in any other Person pursuant to which such Person shall become a Restricted Subsidiary of the Company or any Restricted Subsidiary of the Company, or shall be merged with or into the Company or any Restricted Subsidiary of the Company, or (2) the acquisition by the Company or any Restricted Subsidiary of the Company of the assets of any Person (other than a Restricted Subsidiary of the Company) that constitute all or substantially all of the assets of such Person or comprise any division or line of business of such Person or any other properties or assets of such Person other than in the ordinary course of business. -2- "Asset Sale" means any direct or indirect sale, issuance, conveyance, ---------- transfer, lease, assignment or other transfer for value by the Company or any of its Restricted Subsidiaries (including any Sale and Leaseback Transaction) to any Person other than the Company or a Wholly Owned Restricted Subsidiary of the Company of: (1) any Capital Stock of any Restricted Subsidiary of the Company; or (2) any other property or assets of the Company or any Restricted Subsidiary of the Company other than in the ordinary course of business; provided, however, that Asset Sales or other dispositions shall not include: (a) a transaction or series of related transactions for which the Company or its Restricted Subsidiaries receive aggregate consideration of less than $2.0 million; (b) the sale, lease, conveyance, disposition or other transfer of all or substantially all of the assets of the Company as permitted under Section 5.01; (c) the sale or discount, in each case without recourse, of accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof; (d) sales of accounts receivable and related assets (including contract rights) of the type specified in the definition of "Qualified Securitization Transaction" to a Securitization Entity for the fair market value thereof; (e) sales of accounts receivable and related assets (including contract rights) to the Factor pursuant to the Factoring Agreement; (f) disposals or replacements of obsolete equipment in the ordinary course of business; (g) sales pursuant to the GE Agreement; (h) any Restricted Payment permitted by Section 4.05 or that constitutes a Permitted Investment; and (i) any transfer of up to 6.4% of the Capital Stock of Potain S.A. ("Potain") to comply with the judgment or order of any court or to settle any judicial proceeding in whole or in part. "Bankruptcy Law" means Title 11 of the United States Code, as amended, -------------- or any similar federal or state law for the relief of debtors. -3- "Board of Directors" means, as to any Person, the board of directors ------------------ of such Person or any duly authorized committee thereof. "Board Resolution" means, with respect to any Person, a copy of a ---------------- resolution certified by the Secretary or an Assistant Secretary of such Person to have been duly adopted by the Board of Directors of such Person and to be in full force and effect on the date of such certification, and delivered to the Trustee. "Book-Entry Interest" means a beneficial interest held by or through a ------------------- Participant in a Global Note. "Borrowing Base Amount" means, as of any date, an amount equal to the --------------------- sum of: (1) 80% of the aggregate book value of all accounts receivable of the Company and its Restricted Subsidiaries; and (2) 50% of the aggregate book value of all inventory owned by the Company and its Restricted Subsidiaries; all calculated on a consolidated basis and in accordance with GAAP. "Business Day" means any day excluding Saturday, Sunday and any day ------------ which is a legal holiday under the laws of New York or Luxembourg or is a day on which banking institutions in New York or Luxembourg are authorized or required by law or other governmental action to close. "Capital Stock" means: ------------- (1) with respect to any Person that is a corporation, any and all shares, interests, participations or other equivalents (however designated and whether or not voting) of corporate stock, including each class of Common Stock and Preferred Stock of such Person; and (2) with respect to any Person that is not a corporation, any and all partnership, membership or other equity interests of such Person. "Capitalized Lease Obligations" means, as to any Person, the ----------------------------- obligations of such Person under a lease that are required to be classified and accounted for as capital lease obligations under GAAP and, for purposes of this definition, the amount of such obligations at any date shall be the capitalized amount of such obligations at such date, determined in accordance with GAAP. -4- "Cash Equivalents" means: ---------------- (1) marketable direct obligations issued by, or unconditionally guaranteed by, the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition thereof; (2) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within one year from the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable from either S&P or Moody's; (3) commercial paper maturing no more than one year from the date of creation thereof and, at the time of acquisition, having a rating of at least A-1 from S&P or at least P-1 from Moody's; (4) certificates of deposit or bankers' acceptances maturing within one year from the date of acquisition thereof issued by any bank organized under the laws of the United States of America or any state thereof or the District of Columbia or any U.S. branch of a foreign bank having at the date of acquisition thereof combined capital and surplus of not less than $250.0 million; (5) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clause (1) above entered into with any bank meeting the qualifications specified in clause (4) above; (6) investments in money market funds that invest substantially all their assets in securities of the types described in clauses (1) through (5) above; and (7) Foreign Cash Equivalents (although Foreign Cash Equivalents shall not be considered Cash Equivalents for purposes of Articles Ten and Twelve). "Change of Control" means the occurrence of one or more of the ----------------- following events: (1) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company to any Person or group of related Persons for purposes of Section 13(d) of the Exchange Act (a "Group"), together with ----- any Affiliates thereof (whether or not otherwise in compliance with the provisions of this Indenture); -5- (2) the approval by the holders of Capital Stock of the Company of any plan or proposal for the liquidation or dissolution of the Company (whether or not otherwise in compliance with the provisions of this Indenture); (3) any Person or Group (other than entities formed for the purpose of holding, directly or indirectly, Capital Stock of the Company) shall become the owner, directly or indirectly, beneficially or of record, of shares representing more than 50% of the aggregate ordinary voting power represented by the issued and outstanding Capital Stock of the Company; or (4) the replacement of a majority of the Board of Directors of the Company over a two-year period from the directors who constituted the Board of Directors of the Company at the beginning of such period, and such replacement shall not have been approved by a vote of at least a majority of the Board of Directors of the Company then still in office who either were members of such Board of Directors at the beginning of such period or whose election as a member of such Board of Directors was previously so approved. "Change of Control Offer" has the meaning given to such term in ----------------------- Section 4.11. "Change of Control Payment Date" has the meaning given to such term in ------------------------------ Section 4.11. "Clearstream" means Clearstream Banking, societe anonyme, formerly ----------- Cedelbank. "Commission" means the United States Securities and Exchange ---------- Commission. "Common Depositary" means initially The Bank of New York Depository ----------------- (Nominees) Limited or such other common depositary for the Depositary as may be appointed by the Depositary from time to time. "Common Stock" of any Person means any and all shares, interests or ------------ other participations in, and other equivalents (however designated and whether voting or non-voting) of, such Person's common stock, whether outstanding on the Issue Date or issued after the Issue Date, and includes, without limitation, all series and classes of such common stock. "Company" means The Manitowoc Company, Inc. until a successor replaces ------- it pursuant to Article Five of this Indenture and thereafter means the Surviving Entity. "Company Order" means a written request or order signed in the name of ------------- the Company by an authorized signatory (by virtue of a power of attorney or other similar instrument) and delivered to the Trustee. -6- "Consolidated EBITDA" means, with respect to any Person, for any ------------------- period, the sum (without duplication) of: (1) Consolidated Net Income; and (2) to the extent Consolidated Net Income has been reduced thereby: (a) all income taxes of such Person and its Restricted Subsidiaries paid or accrued in accordance with GAAP for such period (other than income taxes attributable to extraordinary, unusual or nonrecurring gains or losses (other than in connection with an Inversion Transaction) or taxes attributable to sales or dispositions outside the ordinary course of business); (b) Consolidated Interest Expense; and (c) Consolidated Non-cash Charges less any non-cash items increasing Consolidated Net Income for such period, all as determined on a consolidated basis for such Person and its Restricted Subsidiaries in accordance with GAAP. "Consolidated Fixed Charge Coverage Ratio" means, with respect to any ---------------------------------------- Person, the ratio of Consolidated EBITDA of such Person during the four full fiscal quarters (the "Four Quarter Period") ending prior to the date of the ------------------- transaction giving rise to the need to calculate the Consolidated Fixed Charge Coverage Ratio for which financial statements are available (the "Transaction ----------- Date") to Consolidated Fixed Charges of such Person for the Four Quarter Period. - ---- In addition to and without limitation of the foregoing, for purposes of this definition, "Consolidated EBITDA" and "Consolidated Fixed Charges" shall be calculated after giving effect on a pro forma basis for the period of such calculation to: (1) the incurrence or repayment of any Indebtedness of such Person or any of its Restricted Subsidiaries (and the application of the proceeds thereof) giving rise to the need to make such calculation and any incurrence or repayment of other Indebtedness (and the application of the proceeds thereof), other than the incurrence or repayment of Indebtedness in the ordinary course of business for working capital purposes pursuant to working capital facilities, occurring during the Four Quarter Period or at any time subsequent to the last day of the Four Quarter Period and on or prior to the Transaction Date, as if such incurrence or repayment, as the case may be (and the application of the proceeds thereof), occurred on the first day of the Four Quarter Period; and (2) any asset sales or Asset Acquisitions (including, without limitation, any Asset Acquisition giving rise to the need to make such calculation as a result of such Person or one of its Restricted Subsidiaries (including any Person who becomes a Re- -7- stricted Subsidiary as a result of the Asset Acquisition) incurring, assuming or otherwise being liable for Acquired Indebtedness and also including any Consolidated EBITDA (including any pro forma expense and cost reductions calculated on a basis consistent with Regulation S-X promulgated under the Exchange Act) attributable to the assets that are the subject of the Asset Acquisition or asset sale during the Four Quarter Period) occurring during the Four Quarter Period or at any time subsequent to the last day of the Four Quarter Period and on or prior to the Transaction Date, as if such asset sale or Asset Acquisition (including the incurrence or assumption of any such Acquired Indebtedness) occurred on the first day of the Four Quarter Period. If such Person or any of its Restricted Subsidiaries directly or indirectly guarantees Indebtedness of a third Person, the preceding sentence shall give effect to the incurrence of such guaranteed Indebtedness as if such Person or any Restricted Subsidiary of such Person had directly incurred or otherwise assumed such other Indebtedness that was so guaranteed. Furthermore, in calculating "Consolidated Fixed Charges" for purposes of determining the denominator (but not the numerator) of this "Consolidated Fixed Charge Coverage Ratio": (1) interest on outstanding Indebtedness determined on a fluctuating basis as of the Transaction Date and which will continue to be so determined thereafter shall be deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness in effect on the Transaction Date; and (2) notwithstanding clause (1) of this paragraph, interest on Indebtedness determined on a fluctuating basis, to the extent such interest is covered by agreements relating to Interest Swap Obligations, shall be deemed to accrue at the rate per annum resulting after giving effect to the operation of such agreements. "Consolidated Fixed Charges" means, with respect to any Person for any -------------------------- period, the sum, without duplication, of: (1) Consolidated Interest Expense; plus (2) the product of (x) the amount of all dividend payments on any series of Preferred Stock of such Person and, to the extent permitted under this Indenture, its Restricted Subsidiaries (other than dividends paid in Qualified Capital Stock) paid, accrued or scheduled to be paid or accrued during such period, times (y) a fraction, the numerator of which is one and the denominator of which is one minus the then current effective consolidated federal, state and local income tax rate of such Person, expressed as a decimal. -8- "Consolidated Interest Expense" means, with respect to any Person for ----------------------------- any period, the sum of, without duplication: (1) the aggregate of the interest expense of such Person and its Restricted Subsidiaries for such period determined on a consolidated basis in accordance with GAAP, including without limitation: (a) any amortization of debt discount and amortization or write-off of deferred financing costs; (b) the net costs under Interest Swap Obligations; (c) all capitalized interest; and (d) the interest portion of any deferred payment obligation; and (2) the interest component of Capitalized Lease Obligations paid, accrued and/or scheduled to be paid or accrued by such Person and its Restricted Subsidiaries during such period as determined on a consolidated basis in accordance with GAAP. "Consolidated Net Income" means, with respect to any Person, for any ----------------------- period, the aggregate net income (or loss) of such Person and its Restricted Subsidiaries for such period on a consolidated basis, determined in accordance with GAAP; provided that there shall be excluded therefrom: (1) after-tax gains from Asset Sales (without regard to the $2.0 million limitation set forth in the definition thereof) or abandonments or reserves relating thereto; (2) after-tax items classified as extraordinary or nonrecurring gains or losses; (3) the net income of any Person acquired in a "pooling of interests" transaction accrued prior to the date it becomes a Restricted Subsidiary of the referent Person or is merged or consolidated with the referent Person or any Restricted Subsidiary of the referent Person; (4) the net income (but not loss) of any Restricted Subsidiary of the referent Person to the extent that the declaration of dividends or similar distributions by that Restricted Subsidiary of that income is restricted by contract, operation of law or otherwise; (5) the net income of any Person, other than a Restricted Subsidiary of the Company, except to the extent of cash dividends or distributions paid to the Company or to a Restricted Subsidiary of the Company by such Person; (6) income or loss attributable to discontinued operations (including, without limitation, operations disposed of during such period whether or not such operations were classified as discontinued); -9- (7) in the case of a successor to the referent Person by consolidation or merger or as a transferee of the referent Person's assets, any earnings of the successor corporation prior to such consolidation, merger or transfer of assets; (8) non-cash charges relating to compensation expense in connection with benefits provided under employee stock option plans, restricted stock option plans and other employee stock purchase or stock incentive plans; and (9) income or loss attributable solely to fluctuations in currency values and related tax effects. "Consolidated Net Worth" of any Person means the consolidated ---------------------- stockholders' equity of such Person, determined on a consolidated basis in accordance with GAAP, less (without duplication) amounts attributable to Disqualified Capital Stock of such Person. "Consolidated Non-cash Charges" means, with respect to any Person, for ----------------------------- any period, the aggregate depreciation, amortization and other non-cash expenses of such Person and its Restricted Subsidiaries reducing Consolidated Net Income of such Person and its Restricted Subsidiaries for such period, determined on a consolidated basis in accordance with GAAP (excluding any such charges that require an accrual of or a reserve for cash charges for any future period). "Corporate Trust Office" means the office of the Trustee at which the ---------------------- corporate trust business of the Trustee shall, at any particular time, be principally administered, which office is, at the date of this Indenture, located at 101 Barclay Street, 21st Floor West, New York, NY 10286, Attention: Corporate Trust Trustee Administration. "Covenant Defeasance" has the meaning given such term in Section 8.03. ------------------- "Credit Agreement" means the Credit Agreement dated as of May 9, 2001, ---------------- among the Company, the lenders party thereto in their capacities as lenders thereunder and Bankers Trust Company, as agent, together with the related documents thereto (including, without limitation, any guarantee agreements and security documents), in each case as such agreements may be amended (including any amendment and restatement thereof), supplemented or otherwise modified from time to time, including any agreement extending the maturity of, refinancing, replacing or otherwise restructuring (including increasing the amount of available borrowings thereunder or adding Restricted Subsidiaries of the Company as additional borrowers or guarantors thereunder) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group of lenders. "Currency Agreement" means any foreign exchange contract, currency ------------------ swap agreement or other similar agreement or arrangement designed to protect the Company or any Restricted Subsidiary of the Company against fluctuations in currency values. -10- "Custodian" means any receiver, trustee, assignee, liquidator or --------- similar official under any Bankruptcy Law. "Default" means an event or condition the occurrence of which is, or ------- with the lapse of time or the giving of notice or both would be, an Event of Default. "Definitive Registered Note" means any Note that is not a Global Note -------------------------- and that is registered in the Register, the form of which is attached hereto as Exhibit A. - --------- "Depositary" means Euroclear or Clearstream or a successor clearing ---------- agency to either or both of them. "Designated Senior Debt" means (1) Indebtedness under or in respect of ---------------------- the Credit Agreement and (2) any other Indebtedness constituting Senior Debt that, at the time of determination, has an aggregate principal amount of at least $25.0 million and is specifically designated in the instrument evidencing such Senior Debt as "Designated Senior Debt" by the Company. "Disqualified Capital Stock" means that portion of any Capital Stock -------------------------- which, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable at the option of the holder thereof), or upon the happening of any event (other than an event which would constitute a Change of Control), matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the sole option of the holder thereof (except, in each case, upon the occurrence of a Change of Control), on or prior to the final maturity date of the Notes. "Domestic Restricted Subsidiary" means any Restricted Subsidiary of ------------------------------ the Company incorporated or otherwise organized or existing under the laws of the United States, any state thereof or the District of Columbia. "Eligible Jurisdiction" means any country in the European Union (as it --------------------- exists on the Issue Date) or Switzerland. "Euroclear" means Euroclear S.A./N.V. as operator of the Euroclear --------- system. "European Union" means the European Union, including the countries of -------------- Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom, but not including any country which becomes a member of the European Union after the Issue Date. "Events of Default" has the meaning provided in Section 6.01. ----------------- "Exchange Act" means the Securities Exchange Act of 1934, as amended, ------------ or any successor statute or statutes thereto. -11- "Exchange Notes" means the 10 3/8% Senior Subordinated Notes due 2011 -------------- to be issued pursuant to this Indenture in connection with (i) a Registration pursuant to the Registration Rights Agreement or (ii) with respect to Initial Notes issued under this Indenture from time to time after the Issue Date pursuant to Section 2.14, 10 3/8% Senior Subordinated Notes due 2011 issued pursuant to a registration rights agreement substantially identical to the Registration Rights Agreement, in each case substantially in the form of Exhibit ------- A. - - "Exchange Offer" has the meaning set forth in the Registration Rights -------------- Agreement. "Exchange Registration Statement" has the meaning set forth in the ------------------------------- Registration Rights Agreement. "Factor" means, collectively, one or more purchasers of receivables ------ under the Factoring Agreement. "Factoring Agreement" means one or more receivables purchase ------------------- agreements (or similar agreements) entered into by the Company or any of its Restricted Subsidiaries with the Factor, as the same may be amended, modified, supplemented and/or replaced from time to time so long as any such replacement agreement is on terms no less favorable to the Company or any of its Restricted Subsidiaries in any material respect than those terms set forth in the Factoring Agreement as in effect on the Issue Date. "fair market value" means, with respect to any asset or property, the ----------------- price which could be negotiated in an arm's-length, free market transaction, for cash, between a willing seller and a willing and able buyer, neither of whom is under undue pressure or compulsion to complete the transaction. Fair market value shall be determined by the Board of Directors of the Company acting reasonably and in good faith and shall be evidenced by a Board Resolution of the Board of Directors of the Company delivered to the Trustee. "Foreign Cash Equivalents" means certificates of deposit or bankers' ------------------------ acceptances of any bank organized under the laws of Canada or any country that is a member of the European Union, whose short-term commercial paper rating from S&P is at least A-1 or the equivalent thereof or from Moody's is at least P-1 or the equivalent thereof, in each case with maturities of not more than one year from the date of acquisition. "Foreign Restricted Subsidiary" means any Restricted Subsidiary of the ----------------------------- Company that is not a Domestic Restricted Subsidiary. "Four Quarter Period" has the meaning given such term in the ------------------- definition of "Consolidated Fixed Charge Coverage Ratio." "GAAP" means generally accepted accounting principles set forth in the ---- opinions and pronouncements of the Accounting Principles Board of the American Institute of -12- Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, which are in effect as of the Issue Date. "GE Agreement" means the agreement, dated March 10, 1998, between the ------------ Company and General Electric Capital Corporation, as Lessor, as the same may be amended, modified, supplemented and/or replaced from time to time, providing for the sale of equipment by the Company to the Lessor and subsequent leaseback by the Lessor to the Company and/or to certain of the Company's Subsidiaries in an aggregate outstanding principal amount not to exceed $20.0 million at any time. "Global Notes" means the U.S. Global Note(s), the International Global ------------ Note(s) and the Unrestricted Global Notes. "Government Obligations" means securities issued or directly and fully ---------------------- guaranteed or insured by the governments of any Eligible Jurisdiction rated AAA or above and having maturities of not more than one year from the date of acquisition. "guarantee" means a direct or indirect guarantee by any Person of any --------- Indebtedness of any other Person and includes any obligation, direct or indirect, contingent or otherwise, of such Person: (1) to purchase or pay (or advance or supply funds for the purchase or payment of) Indebtedness of such other Person (whether arising by virtue of partnership arrangements, or by agreements to keep-well, to purchase assets, goods, securities or services (unless such purchase arrangements are on arm's-length terms and are entered into in the ordinary course of business), to take-or-pay, or to maintain financial statement conditions or otherwise); or (2) entered into for purposes of assuring in any other manner the obligee of such Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part). When used as verbs, "guarantee" and "guaranteed" have correlative --------- ---------- meanings. "Guarantee" means any guarantee of the Obligations of the Company --------- under this Indenture and the Notes by a Guarantor. When used as a verb, "Guarantee" shall have a corresponding meaning. - ---------- "Guarantor" means: (1) Manitowoc Crane Companies, Inc.; Manitowoc --------- Foodservice Companies, Inc.; North Central Crane & Excavator Sales Corp.; Manitowoc Marine Group, LLC; Environmental Rehab, Inc.; Manitowoc Crane & Shovel Sales Corp.; Manitowoc Western Company, Inc.; Femco Machine Company, Inc.; Manitowoc Cranes, Inc.; West-Manitowoc, Inc.; Manitowoc Re-Manufacturing, Inc.; Manitowoc CP, Inc.; Manitowoc Boom Trucks, Inc.; Manitowoc MEC, Inc.; Manitowoc Ice, Inc.; Manitowoc Equipment Works, Inc.; SerVend International, Inc.; Manitowoc Beverage Systems, Inc.; KMT Refrigeration, Inc.; Diversified Refrigeration, Inc.; Manitowoc FP, Inc.; SerVend Sales Corp.; Mul- -13- tiplex Company, Inc.; KMT Sales Corp.; Harford Duracool, LLC; Marinette Marine Corporation; and Potain Corporation; and (2) each of the Company's Domestic Restricted Subsidiaries that in the future executes a supplemental indenture in which such Domestic Restricted Subsidiary agrees to be bound by the terms of this Indenture as a Guarantor; provided that any Person constituting a Guarantor as described above shall cease to constitute a Guarantor when its respective Guarantee is released in accordance with the terms of this Indenture. "Guarantor Senior Debt" means, with respect to any Guarantor, the --------------------- principal of, premium, if any, and interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law) on any Indebtedness of a Guarantor, whether outstanding on the Issue Date or thereafter created, incurred or assumed, unless, in the case of any particular Indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness shall not be senior in right of payment to the Guarantee of such Guarantor. Without limiting the generality of the foregoing, "Guarantor Senior Debt" shall also include the principal of, premium, if any, interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law) on, and all other amounts owing in respect of: (x) all monetary obligations (including guarantees) of every nature of such Guarantor under the Credit Agreement, including, without limitation, obligations (including guarantees) to pay principal, premium and interest, reimbursement obligations under letters of credit, fees, expenses and indemnities; (y) all Interest Swap Obligations (and guarantees thereof); and (z) all obligations under Currency Agreements (and guarantees thereof), in each case whether outstanding on the Issue Date or thereafter incurred. Notwithstanding the foregoing, "Guarantor Senior Debt" shall not include: (1) any Indebtedness of such Guarantor to the Company or to a Subsidiary of the Company; (2) Indebtedness to, or guaranteed on behalf of, any director, officer or employee of the Company or any Subsidiary of the Company (including, without limitation, amounts owed for compensation); (3) Indebtedness owed to trade creditors and other amounts incurred (but not under the Credit Agreement) in connection with obtaining goods, materials or services; -14- (4) Indebtedness represented by Disqualified Capital Stock; (5) any liability for federal, state, local or other taxes owed or owing by such Guarantor; (6) that portion of any Indebtedness incurred in violation of Section 4.03 (but, as to any such obligation, no such violation shall be deemed to exist for purposes of this clause (6) if the holder(s) of such obligation or their representative and the Trustee shall have received an Officers' Certificate to the effect that the incurrence of such Indebtedness does not (or, in the case of revolving credit indebtedness, that the incurrence of the entire committed amount thereof at the date on which the initial borrowing thereunder is made would not) violate such provisions of this Indenture); (7) Indebtedness that, when incurred and without respect to any election under Section 1111(b) of Title 11, United States Bankruptcy Code, is without recourse to such Guarantor; and (8) any Indebtedness that is, by its express terms, subordinated in right of payment to any other Indebtedness of such Guarantor. "Holder" means any Person shown on the Register as the registered ------ holder, from time to time, of the Notes. "incur" has the meaning given such term in Section 4.03. ----- "Indebtedness" means, with respect to any Person, without duplication: ------------ (1) all Obligations of such Person for borrowed money; (2) all Obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (3) all Capitalized Lease Obligations of such Person; (4) all Obligations of such Person issued or assumed as the deferred purchase price of property, all conditional sale obligations and all Obligations under any title retention agreement (but excluding trade accounts payable and other accrued liabilities arising in the ordinary course of business); (5) all Obligations for the reimbursement of any obligor on any letter of credit, banker's acceptance or similar credit transaction; (6) guarantees and other contingent obligations in respect of Indebtedness referred to in clauses (1) through (5) above and clause (8) below; -15- (7) all Obligations of any other Person of the type referred to in clauses (1) through (6) above that are secured by any Lien on any property or asset of such Person, the amount of such Obligation being deemed to be the lesser of the fair market value of such property or asset or the amount of the Obligation so secured; (8) all Obligations under Currency Agreements and interest swap agreements of such Person; and (9) all Disqualified Capital Stock issued by such Person, with the amount of Indebtedness represented by such Disqualified Capital Stock being equal to the greater of its voluntary or involuntary liquidation preference and its maximum fixed repurchase price, but excluding accrued dividends, if any. For purposes hereof, the "maximum fixed repurchase price" of any ------------------------------ Disqualified Capital Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified Capital Stock as if such Disqualified Capital Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to this Indenture, and if such price is based upon, or measured by, the fair market value of such Disqualified Capital Stock, such fair market value shall be determined reasonably and in good faith by the Board of Directors of the issuer of such Disqualified Capital Stock. "Indenture" means this Indenture as originally executed or as it may --------- be amended or supplemented from time to time by one or more indentures supplemental to this Indenture entered into pursuant to the applicable provisions of this Indenture. "Indenture Obligations" has the meaning given such term in Section --------------------- 11.01. "Independent Financial Advisor" means a firm: (1) that does not, and ----------------------------- whose directors, officers and employees or Affiliates do not, have a direct or indirect financial interest in the Company; and (2) that, in the judgment of the Board of Directors of the Company, is otherwise independent and qualified to perform the task for which it is to be engaged. "Indirect Participant" is defined to mean a Person who holds a Book- -------------------- Entry Interest through a Participant. "Initial Notes" means (i) . 175,000,000 aggregate principal amount of ------------- 10 3/8% Senior Subordinated Notes due 2011 issued on the Issue Date, substantially in the form of Exhibit A and containing the Private Placement --------- Legend, and (ii) Additional Notes, in each case for so long as such Notes constitute Restricted Notes. "interest" means, with respect to the Notes, interest on and -------- Additional Interest, if any, with respect to, the Notes. -16- "Interest Payment Date" means each semi-annual interest payment date --------------------- on May 15 and November 15 of each year, commencing November 15, 2001. "Interest Swap Obligations" means the obligations of any Person ------------------------- pursuant to any arrangement with any other Person, whereby, directly or indirectly, such Person is entitled to receive from time to time periodic payments calculated by applying either a floating or a fixed rate of interest on a stated notional amount in exchange for periodic payments made by such other Person calculated by applying a fixed or a floating rate of interest on the same notional amount and shall include, without limitation, interest rate swaps, caps, floors, collars and similar agreements. "International Global Note(s)" means one or more Global Notes bearing --------------------------- the Private Placement Legend in registered form without interest coupons that will be issued on the Issue Date in a principal amount equal to the outstanding principal amount of the Initial Notes sold in reliance on Regulation S and deposited with the Common Depositary. "Inversion Transaction" means a transaction or series of related --------------------- transactions undertaken to facilitate the global movement of cash assets among affiliated group members in a tax efficient manner pursuant to which (i) a U.S. parent company ("Former Parent") becomes a wholly owned subsidiary of a newly ------------- organized offshore/foreign entity or entities (in either case, or together, "New --- Parent"); (ii) all of the issued and outstanding capital stock of Former Parent - ------ is converted into an equivalent number of shares of capital stock of New Parent; and (iii) the foreign subsidiaries of Former Parent would then be owned by New Parent, either directly or through a foreign subsidiary of New Parent, and would be sister companies of Former Parent, and the domestic subsidiaries would be held through Former Parent as a U.S. subsidiary of New Parent. "Investment" means, with respect to any Person, any direct or indirect ---------- loan or other extension of credit (including, without limitation, a guarantee) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition by such Person of any Capital Stock, bonds, notes, debentures or other securities or evidences of Indebtedness issued by, any Person. "Investment" shall exclude extensions of trade credit by the Company and its Restricted Subsidiaries on commercially reasonable terms in accordance with normal trade practices of the Company or such Restricted Subsidiaries, as the case may be, and the acquisition of up to 6.4% of the Capital Stock of Potain. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Common Stock of any direct or indirect Wholly Owned Restricted Subsidiary of the Company (other than, in the case of Potain, up to 6.4% of the Capital Stock of Potain) such that, after giving effect to any such sale or disposition, the Company no longer owns, directly or indirectly, 100% of the outstanding Common Stock of such Restricted Subsidiary, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Common Stock of such Restricted Subsidiary not sold or disposed of. -17- "Issue Date" means May 9, 2001. ---------- "Judgment Currency" has the meaning given such term in Section 13.14. ----------------- "Legal Defeasance" has the meaning given such term in Section 8.02. ---------------- "Lien" means any lien, mortgage, deed of trust, pledge, security ---- interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof and any agreement to give any security interest). "Moody's" means Moody's Investors Service, Inc. and its successors. ------- "Net Cash Proceeds" means, with respect to any Asset Sale, the ----------------- proceeds in the form of cash or Cash Equivalents including payments in respect of deferred payment obligations when received in the form of cash or Cash Equivalents (other than the portion of any such deferred payment constituting interest) received by the Company or any of its Restricted Subsidiaries from such Asset Sale net of: (1) reasonable out-of-pocket expenses and fees relating to such Asset Sale (including, without limitation, legal, accounting and investment banking fees and sales commissions); (2) taxes paid or payable after taking into account any reduction in consolidated tax liability due to available tax credits or deductions and any tax sharing arrangements; (3) repayment of Indebtedness that is secured by the property or assets that are the subject of such Asset Sale; and (4) appropriate amounts to be provided by the Company or any Restricted Subsidiary, as the case may be, as a reserve, in accordance with GAAP, against any liabilities associated with such Asset Sale and retained by the Company or any Restricted Subsidiary, as the case may be, after such Asset Sale, including, without limitation, pension and other post- employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale. "Net Proceeds Offer" has the meaning provided in Section 4.10(b). ------------------ "Net Proceeds Offer Amount" has the meaning provided in Section ------------------------- 4.10(b). "Net Proceeds Offer Payment Date" has the meaning provided in Section ------------------------------- 4.10(b). -18- "Net Proceeds Offer Trigger Date" has the meaning provided in Section ------------------------------- 4.10(b). "Non-payment Default" has the meaning provided in Section 10.02(b). ------------------- "Notes" means, collectively, the Initial Notes, the Private Exchange ----- Notes, if any, and the Unrestricted Notes. For purposes of this Indenture, all Notes shall vote together as one series of Notes under this Indenture. "Obligations" means all obligations for principal, premium, interest, ----------- penalties, fees, indemnification, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness. "Officer" means any of the following of the Company: the Chairman of ------- the Board of Directors, the Chief Executive Officer, the Chief Financial Officer, the President, any Vice President, the Treasurer or the Secretary. "Officers' Certificate" means a certificate signed by two Officers. --------------------- "Opinion of Counsel" means a written opinion from legal counsel ------------------ reasonably acceptable to the Trustee. The counsel may be an employee of or counsel to the Company. "Participant" means, with respect to any Depositary, Persons who have ----------- accounts with such Depositary. "Paying Agent" has the meaning provided in Section 2.04, except that, ------------ for the purposes of Article Eight, the Paying Agent shall not be the Company, any Guarantor or any Subsidiary of the Company, a Guarantor or an Affiliate of any of them. The term "Paying Agent" includes any additional Paying Agent. "Payment Blockage Notice" has the meaning provided in Section ----------------------- 10.02(b). "Payment Blockage Period" has the meaning provided in Section ----------------------- 10.02(b). "Payment Default" has the meaning provided in Section 10.02. --------------- "Permitted Indebtedness" means, without duplication, each of the ---------------------- following: (1) Indebtedness under the Notes issued on the Issue Date in an aggregate principal amount not to exceed . 175.0 million and the related Guarantees; (2) Indebtedness incurred pursuant to the Credit Agreement in an aggregate principal amount at any time outstanding not to exceed the greater of: -19- (a) $475.0 million (i) less the amount of all mandatory principal payments actually made by the Company or any Restricted Subsidiary with the Net Cash Proceeds from Asset Sales in respect of the term loans thereunder (excluding any such payments to the extent refinanced at the time of payment under a replaced Credit Agreement); and (ii) reduced by any mandatory permanent repayments of revolving loans made by the Company thereunder (which are accompanied by a corresponding permanent commitment reduction) with the Net Cash Proceeds from Asset Sales (excluding any such payments and commitment reductions to the extent refinanced at the time of payment under a replaced Credit Agreement); and (b) the Borrowing Base Amount plus $30.0 million; (3) other Indebtedness of the Company and its Restricted Subsidiaries outstanding on the Issue Date reduced by the amount of any scheduled amortization payments or mandatory prepayments when actually paid or permanent reductions therein; (4) Interest Swap Obligations of the Company or any of its Restricted Subsidiaries covering Indebtedness of the Company or such Restricted Subsidiary; provided, however, that such Interest Swap Obligations are entered into to protect the Company and its Restricted Subsidiaries from fluctuations in interest rates on Indebtedness incurred without violation of this Indenture to the extent the notional principal amount of such Interest Swap Obligation does not exceed, at the time of the incurrence thereof, the principal amount of the Indebtedness to which such Interest Swap Obligation relates; (5) Indebtedness under Currency Agreements; provided that in the case of Currency Agreements which relate to Indebtedness, such Currency Agreements do not increase the Indebtedness of the Company and its Restricted Subsidiaries outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder; (6) Indebtedness of a Restricted Subsidiary of the Company to the Company, to a Guarantor or to another Wholly Owned Restricted Subsidiary of the Company for so long as such Indebtedness is held by the Company, such Guarantor, such Wholly Owned Restricted Subsidiary or the holders of a Lien permitted under this Indenture, in each case subject to no Lien held by a Person other than the Company, a Guarantor, such Wholly Owned Restricted Subsidiary or holders of a Lien permitted under this Indenture; provided that if as of any date any Person other than the Company, a Guarantor, a Wholly Owned Restricted Subsidiary of the Company or the holder of a Lien permitted under this Indenture owns or holds any such Indebtedness or holds a Lien in respect of such Indebtedness, such date shall be deemed the incurrence of Indebtedness not constituting Permitted Indebtedness by the issuer of such Indebtedness pursuant to this clause (6); -20- (7) Indebtedness of the Company to a Wholly Owned Restricted Subsidiary of the Company for so long as such Indebtedness is held by a Wholly Owned Restricted Subsidiary of the Company or the holders of a Lien permitted under this Indenture, in each case subject to no Lien other than a Lien permitted under this Indenture; provided that (a) any Indebtedness of the Company to any Wholly Owned Restricted Subsidiary of the Company that is not Guarantor is unsecured and subordinated, pursuant to a written agreement, to the Company's obligations under this Indenture and the Notes and (b) if as of any date any Person other than a Wholly Owned Restricted Subsidiary of the Company or the holder of a Lien permitted under this Indenture owns or holds any such Indebtedness or any Person holds a Lien in respect of such Indebtedness, such date shall be deemed the incurrence of Indebtedness not constituting Permitted Indebtedness by the Company pursuant to this clause (7); (8) Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within four business days of incurrence; (9) Indebtedness of the Company or any of its Restricted Subsidiaries represented by letters of credit for the account of the Company or such Restricted Subsidiary, as the case may be, in order to provide security for workers' compensation claims, payment obligations in connection with self- insurance or similar requirements in the ordinary course of business; (10) Indebtedness represented by guarantees by the Company or its Restricted Subsidiaries of Indebtedness otherwise permitted to be incurred under this Indenture; provided that, in the case of a guarantee by a Restricted Subsidiary, such Restricted Subsidiary complies with Section 4.12 (to the extent applicable); (11) Indebtedness of the Company or any of its Restricted Subsidiaries in respect of bid, payment and performance bonds, bankers' acceptances, workers' compensation claims, surety or appeal bonds, payment obligations in connection with self-insurance or similar obligations, and bank overdrafts (and letters of credit in respect thereof) in the ordinary course of business; (12) Indebtedness of the Company or any Restricted Subsidiary consisting of guarantees, indemnities or obligations in respect of purchase price adjustments in connection with the acquisition or disposition of assets; (13) Indebtedness represented by Capitalized Lease Obligations and Purchase Money Indebtedness of the Company and its Restricted Subsidiaries incurred in -21- the ordinary course of business not to exceed $15.0 million at any one time outstanding; (14) Indebtedness of Foreign Restricted Subsidiaries of the Company in an aggregate principal amount not to exceed $20.0 million under lines of credit to any such Foreign Restricted Subsidiary from Persons other than the Company or any of its Subsidiaries, the proceeds of which Indebtedness are used for such Foreign Restricted Subsidiary's working capital and other general corporate purposes; (15) Indebtedness that may be deemed to exist pursuant to the Factoring Agreement and Indebtedness by a Securitization Entity in a Qualified Securitization Transaction that is not recourse (except for Standard Securitization Undertakings) to the Company or any of its Restricted Subsidiaries; provided that any amounts incurred under this clause (15) in excess of $50.0 million will reduce the amounts available for borrowing under clause (2) above in an equal amount; (16) Indebtedness of the Company evidenced by commercial paper issued by the Company; provided that the aggregate outstanding principal amount of Indebtedness incurred pursuant to clause (2) of this definition and this clause (16) does not exceed the maximum amount of Indebtedness permitted under clause (2) of this definition; (17) Refinancing Indebtedness; (18) Indebtedness of the Company or any of its Restricted Subsidiaries consisting of obligations to repurchase equipment incurred in the ordinary course of business, to the extent such obligations do not exceed the fair market value of such equipment; and (19) additional Indebtedness of the Company and its Restricted Subsidiaries in an aggregate principal amount not to exceed $30.0 million at any one time outstanding (which amount may, but need not, be incurred in whole or in part under the Credit Agreement). For purposes of determining any particular amount of Indebtedness under Section 4.03, guarantees, Liens or letter of credit obligations supporting Indebtedness otherwise included in the determination of such particular amount shall not be included. For purposes of determining compliance with Section 4.03, in the event that an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses (1) through (19) above or is permitted to be incurred pursuant to the Consolidated Fixed Charge Coverage Ratio provisions of such section, the Company shall, in its sole discretion, classify (or later reclassify) such item of Indebtedness in any manner that complies with such section. Accrual of interest, accretion or amortization of original issue discount, the payment of inter- -22- est on any Indebtedness in the form of additional Indebtedness with the same terms, the payment of dividends on Disqualified Capital Stock in the form of additional shares of the same class of Disqualified Capital Stock and change in the amount outstanding due solely to the result of fluctuations in the exchange rates of currencies will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Capital Stock for purposes of Section 4.03. "Permitted Investments" means: --------------------- (1) Investments by the Company or any Restricted Subsidiary of the Company in any Person that is or will become immediately after such Investment a Wholly Owned Restricted Subsidiary of the Company or that will merge or consolidate into the Company or a Wholly Owned Domestic Restricted Subsidiary of the Company and other Investments to the extent constituting intercompany Indebtedness permitted under clause (6) or (7) of the definition of "Permitted Indebtedness"; (2) Investments in the Company by any Restricted Subsidiary of the Company; provided that any Indebtedness evidencing such Investment, to the extent held by a Restricted Subsidiary that is not a Guarantor, is unsecured and subordinated, pursuant to a written agreement, to the Company's obligations under the Notes and this Indenture; (3) Investments in cash and Cash Equivalents; (4) loans and advances to employees and officers of the Company and its Restricted Subsidiaries in the ordinary course of business for bona fide business purposes not in excess of $2.0 million at any one time outstanding; (5) Currency Agreements and Interest Swap Obligations entered into in the ordinary course of the Company's or its Restricted Subsidiaries' businesses and otherwise in compliance with this Indenture; (6) additional Investments not to exceed $15.0 million at any one time outstanding; (7) Investments in securities of trade creditors or customers received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such trade creditors or customers or in good faith settlement of delinquent obligations of such trade creditors or customers; (8) Investments made by the Company or its Restricted Subsidiaries as a result of consideration received in connection with an Asset Sale made in compliance with Section 4.10; -23- (9) Investments represented by guarantees that are otherwise permitted under this Indenture; (10) Investments the payment for which is Qualified Capital Stock of the Company; (11) any Investment by the Company or a Wholly Owned Subsidiary of the Company in a Securitization Entity or any Investment by a Securitization Entity in any other Person in connection with a Qualified Securitization Transaction; provided that any Investment in a Securitization Entity is in the form of a Purchase Money Note or an equity interest; (12) Investments by the Company consisting of obligations of one or more officers, directors or other employees of the Company or any of its Subsidiaries in connection with such officers', directors' or employees' acquisition of shares of capital stock of the Company so long as no cash is paid by the Company or any of its Restricted Subsidiaries to such officers, directors or employees in connection with the acquisition of any such obligations; and (13) Investments in joint ventures not to exceed $15.0 million at any one time outstanding. "Permitted Liens" means the following types of Liens: --------------- (1) Liens for taxes, assessments or governmental charges or claims either (a) not delinquent or (b) contested in good faith by appropriate proceedings and as to which the Company or its Restricted Subsidiaries shall have set aside on their books such reserves as may be required pursuant to GAAP; (2) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, suppliers, materialmen and repairmen and other Liens imposed by law incurred in the ordinary course of business for sums not yet delinquent or being contested in good faith, if such reserve or other appropriate provision, if any, as shall be required by GAAP has been made in respect thereof; (3) Liens incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security, including any Lien securing letters of credit issued in the ordinary course of business consistent with past practice in connection therewith, or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money); -24- (4) judgment Liens not giving rise to an Event of Default so long as such Lien is adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired; (5) easements, rights-of-way, zoning restrictions and other similar charges or encumbrances in respect of real property not interfering in any material respect with the ordinary conduct of the business of the Company or any of its Restricted Subsidiaries; (6) Liens upon specific items of inventory or other goods and proceeds of any Person securing such Person's obligations in respect of bankers' acceptances issued or created for the account of such Person to facilitate the purchase, shipment or storage of such inventory or other goods; (7) Liens securing reimbursement obligations with respect to commercial letters of credit which encumber documents and other property relating to such letters of credit and products and proceeds thereof; (8) Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual or warranty requirements of the Company or any of its Restricted Subsidiaries, including rights of offset and set-off; (9) Liens securing Interest Swap Obligations which Interest Swap Obligations relate to Indebtedness that is otherwise permitted under this Indenture; (10) Liens securing Capitalized Lease Obligations and Purchase Money Indebtedness permitted pursuant to clause (13) of the definition of "Permitted Indebtedness"; provided, however, that in the case of Purchase Money Indebtedness (a) the Indebtedness shall not exceed the cost of such property or assets and shall not be secured by any property or assets of the Company or any Restricted Subsidiary of the Company other than the property and assets so acquired or constructed and (b) the Lien securing such Indebtedness shall be created within 90 days of such acquisition or construction or, in the case of a refinancing of any Purchase Money Indebtedness, within 90 days of such refinancing; (11) Liens securing Indebtedness under Currency Agreements; (12) Liens securing Acquired Indebtedness incurred in accordance with Section 4.03; provided that: (a) such Liens secured such Acquired Indebtedness at the time of and prior to the incurrence of such Acquired Indebtedness by the Company or a Restricted Subsidiary of the Company and were not granted in connection with, -25- or in anticipation of, the incurrence of such Acquired Indebtedness by the Company or a Restricted Subsidiary of the Company; and (b) such Liens do not extend to or cover any property or assets of the Company or of any of its Restricted Subsidiaries other than the property or assets that secured the Acquired Indebtedness prior to the time such Indebtedness became Acquired Indebtedness of the Company or a Restricted Subsidiary of the Company and are no more favorable to the lienholders than those securing the Acquired Indebtedness prior to the incurrence of such Acquired Indebtedness by the Company or a Restricted Subsidiary of the Company; (13) Liens on assets of a Restricted Subsidiary of the Company that is not a Guarantor to secure Indebtedness of such Restricted Subsidiary that is otherwise permitted under this Indenture; (14) Liens on assets transferred to a Securitization Entity or on assets of a Securitization Entity, in either case incurred in connection with a Qualified Securitization Transaction, and Liens in favor of the Factor solely on those accounts receivable (and the rights ancillary thereto) of the Company and its Restricted Subsidiaries that are purchased by the Factor pursuant to the Factoring Agreement from time to time; (15) leases, subleases, licenses and sublicenses granted to others that do not materially interfere with the ordinary course of business of the Company and its Restricted Subsidiaries; (16) banker's Liens, rights of set-off and similar Liens with respect to cash and Cash Equivalents on deposit in one or more bank accounts in the ordinary course of business; (17) Liens arising from filing Uniform Commercial Code financing statements regarding leases; (18) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; (19) rights of customers with respect to inventory which arise from deposits and progress payments made in the ordinary course of business; (20) additional Liens not to exceed $5.0 million at any one time; and (21) the escrow of up to 6.4% of the Capital Stock of Potain to comply with the judgment or order of any court or to settle any judicial proceeding in whole or in part. -26- "Person" means an individual, partnership, corporation, limited ------ liability company, unincorporated organization, trust or joint venture, or a governmental agency or political subdivision thereof. "Preferred Stock" of any Person means any Capital Stock of such Person --------------- that has preferential rights to any other Capital Stock of such Person with respect to dividends or redemptions or upon liquidation. "principal" means, with respect to the Notes, the principal of, and --------- premium, if any, on the Notes. "Private Exchange Notes" has the meaning given such term in the ---------------------- Registration Rights Agreement. "Private Placement Legend" means the legend initially set forth on the ------------------------ Restricted Notes in the form set forth in Section 2.02(a). "Public Equity Offering" has the meaning set forth in Section 3.01(b). ---------------------- "Purchase Money Indebtedness" means Indebtedness of the Company and --------------------------- its Restricted Subsidiaries incurred in the normal course of business for the purpose of financing all or any part of the purchase price, or the cost of installation, construction or improvement, of property or equipment. "Purchase Money Note" means a promissory note of a Securitization ------------------- Entity evidencing a line of credit, which may be irrevocable, from the Company or any Subsidiary of the Company in connection with a Qualified Securitization Transaction to a Securitization Entity, which note shall be repaid from cash available to the Securitization Entity other than amounts required to be established as reserves pursuant to agreements, amounts paid to investors in respect of interest and principal and amounts paid in connection with the purchase of newly generated receivables or newly acquired equipment. "QIB" means a "qualified institutional buyer" as defined in Rule 144A. --- "Qualified Capital Stock" means any Capital Stock that is not ----------------------- Disqualified Capital Stock. "Qualified Securitization Transaction" means any transaction or series ------------------------------------ of transactions that may be entered into by the Company, any of its Restricted Subsidiaries or a Securitization Entity pursuant to which the Company or such Restricted Subsidiary or such Securitization Entity may, pursuant to customary terms, sell, convey or otherwise transfer to, or grant a security interest in for the benefit of, (1) a Securitization Entity or the Company or any of its Restricted Subsidiaries that subsequently transfers to a Securitization Entity (in the case of a transfer by the Company or such Restricted Subsidiary) and (2) any other Person (in -27- the case of transfer by a Securitization Entity), any accounts receivable (whether now existing or arising or acquired in the future) of the Company or any of its Restricted Subsidiaries that arose in the ordinary course of business of the Company and its Restricted Subsidiaries, and any assets related thereto, including, without limitation, all collateral securing such accounts receivable, all contracts and contract rights and all guarantees or other obligations in respect of such accounts receivable, proceeds of such accounts receivable and other assets (including contract rights) that are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable. "redeem" means to redeem, repurchase, purchase, defease, retire, ------ discharge or otherwise acquire or retire for value; and "redemption" shall have ---------- a correlative meaning. "Redemption Date," when used with respect to any Note to be redeemed, --------------- means the date fixed for such redemption by or pursuant to this Indenture. "Redemption Price," when used with respect to any Note to be redeemed, ---------------- means the price at which such Note is to be redeemed pursuant to this Indenture. "Reference Date" has the meaning provided in Section 4.05. -------------- "Refinance" means, in respect of any security or Indebtedness, to --------- refinance, extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue a security or Indebtedness in exchange or replacement for, such security or Indebtedness in whole or in part. "Refinanced" and "Refinancing" ---------- ----------- shall have correlative meanings. "Refinancing Indebtedness" means any Refinancing by the Company or any ------------------------ Restricted Subsidiary of the Company of Indebtedness incurred in accordance Section 4.03 (other than pursuant to clause (2), (4), (5), (6), (7), (8), (9), (10), (11), (12), (13), (14), (15) or (19) of the definition of "Permitted Indebtedness"), in each case, that does not: (1) result in an increase in the aggregate principal amount of Indebtedness of such Person as of the date of such proposed Refinancing (plus the amount of any premium required to be paid under the terms of the instrument governing such Indebtedness and plus the amount of reasonable expenses incurred by the Company in connection with such Refinancing); or (2) create Indebtedness with: (a) a Weighted Average Life to Maturity that is less than the Weighted Average Life to Maturity of the Indebtedness being Refinanced; or (b) a final maturity earlier than the final maturity of the Indebtedness being Refinanced; provided that (x) if such Indebtedness being Refinanced is Indebtedness solely of the Company, then such Refinancing Indebtedness shall be Indebtedness solely of the Company and (y) if such Indebtedness being Refinanced is subordinate or junior to the Notes, then such Refinancing Indebtedness shall be subordinate to the -28- Notes at least to the same extent and in the same manner as the Indebtedness being Refinanced. "Register" has the meaning provided in Section 2.04. -------- "Registrar" has the meaning provided in Section 2.04. --------- "Registration" means, collectively, each offer of Notes registered ------------ pursuant to a registration statement. "Registration Rights Agreement" means (i) with respect to the Initial ----------------------------- Notes issued on the Issue Date, the Registration Rights Agreement, dated as of the date hereof, between the Company, the Guarantors and Deutsche Bank AG London, and (ii) with respect to each issuance of Additional Notes in a transaction exempt from the registration requirements of the Securities Act, the registration rights agreement among the Company and the Persons purchasing the Additional Notes. "Registration Statement" means the Exchange Registration Statement or ---------------------- a Shelf Registration as defined and described in the Registration Rights Agreement. "Regular Record Date" for the interest payable on any Interest Payment ------------------- Date means the May 1 or November 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. "Regulation S" means Regulation S under the Securities Act. ------------ "Replacement Assets" has the meaning provided in Section ------------------ 4.10(a)(3)(ii). "Representative" means the indenture trustee or other trustee, agent -------------- or representative in respect of any Designated Senior Debt; provided that if, and for so long as, any Designated Senior Debt lacks such a representative, then the Representative for such Designated Senior Debt shall at all times constitute the holders of a majority in outstanding principal amount of such Designated Senior Debt in respect of any Designated Senior Debt. "Responsible Officer," when used with respect to the Trustee or any ------------------- Paying Agent means any vice president, any assistant vice president, any assistant treasurer, any trust officer or assistant trust officer or any other officer of the Trustee or such Paying Agent, as the case may be, customarily performing functions similar to those performed by any of the above designated officers in each case assigned to or employed by the corporate trust department of the Trustee or such Paying Agent, as the case may be, and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject and who shall have direct responsibility for the administration of this Indenture. -29- "Restricted Definitive Registered Note" means a Definitive Registered ------------------------------------- Note bearing the Private Placement Legend issued in registered form without coupons in a principal amount of . 1,000 or integral multiples thereof. "Restricted Global Notes" means the U.S. Global Note(s) and the ----------------------- International Global Note(s). "Restricted Notes" means the Restricted Definitive Registered Notes ---------------- and the Restricted Global Note(s). "Restricted Payment" has the meaning provided in Section 4.05. ------------------ "Restricted Subsidiary" of any Person means any Subsidiary of such --------------------- Person which at the time of determination is not an Unrestricted Subsidiary. "Rule 144A" means Rule 144A under the Securities Act. --------- "S&P" means Standard & Poor's Ratings Services, a division of the --- McGraw-Hill Companies, Inc., and its successors. "Sale and Leaseback Transaction" means any direct or indirect ------------------------------ arrangement with any Person or to which any such Person is a party, providing for the leasing to the Company or a Restricted Subsidiary of any property, whether owned by the Company or any Restricted Subsidiary at the Issue Date or later acquired, which has been or is to be sold or transferred by the Company or such Restricted Subsidiary to such Person or to any other Person from whom funds have been or are to be advanced by such Person on the security of such Property. "Securities Act" means the United States Securities Act of 1933, as -------------- amended. "Securitization Entity" means a Wholly Owned Subsidiary of the Company --------------------- (or another Person in which the Company or any Subsidiary of the Company makes an Investment and to which the Company or any Subsidiary of the Company transfers accounts receivable and related assets) that engages in no activities other than in connection with the financing of accounts receivable and that is designated by the Board of Directors of the Company (as provided below) as a Securitization Entity; and (1) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which: (a) is guaranteed by the Company or any Restricted Subsidiary of the Company (other than the Securitization Entity) (excluding guarantees of obligations (other than the principal of, and interest on, Indebtedness)) pursuant to Standard Securitization Undertakings, -30- (b) is recourse to or obligates the Company or any Restricted Subsidiary of the Company (other than the Securitization Entity) in any way other than pursuant to Standard Securitization Undertakings or (c) subjects any asset of the Company or any Restricted Subsidiary of the Company (other than the Securitization Entity), directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings and other than any interest in the accounts receivable and related assets being financed (whether in the form of an equity interest in such assets or subordinated indebtedness payable primarily from such financed assets), retained or acquired by the Company or any Restricted Subsidiary of the Company; (2) with which neither the Company nor any Restricted Subsidiary of the Company has any material contract, agreement, arrangement or understanding other than on terms no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of the Company, other than fees payable in the ordinary course of business in connection with servicing receivables of such entity; and (3) to which neither the Company nor any Restricted Subsidiary of the Company has any obligation to maintain or preserve such entity's financial condition or cause such entity to achieve certain levels of operating results. Any such designation by the Board of Directors of the Company shall be evidenced to the Trustee by filing with the Trustee a certified copy of the Board Resolution giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing conditions. "Senior Debt" means the principal of, premium, if any, and interest ----------- (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law) on any Indebtedness of the Company, whether outstanding on the Issue Date or thereafter created, incurred or assumed, unless, in the case of any particular Indebtedness, the instrument creating or evidencing the same or pursuant to which the same is outstanding expressly provides that such Indebtedness shall not be senior in right of payment to the Notes. Without limiting the generality of the foregoing, "Senior Debt" shall also include the principal of, premium, if any, interest (including any interest accruing subsequent to the filing of a petition of bankruptcy at the rate provided for in the documentation with respect thereto, whether or not such interest is an allowed claim under applicable law) on, and all other amounts owing in respect of: -31- (1) all monetary obligations (including guarantees thereof) of every nature of the Company under the Credit Agreement, including, without limitation, obligations (including guarantees) to pay principal, premium (if any) and interest, reimbursement obligations under letters of credit, fees, expenses and indemnities; (2) all Interest Swap Obligations (including guarantees thereof); and (3) all obligations under Currency Agreements (including guarantees thereof), in each case whether outstanding on the Issue Date or thereafter incurred. Notwithstanding the foregoing, "Senior Debt" shall not include: (1) any Indebtedness of the Company to a Subsidiary of the Company; (2) any Indebtedness to, or guaranteed on behalf of, any director, officer or employee of (x) the Company or (y) any Subsidiary of the Company (including, without limitation, amounts owed for compensation); (3) Indebtedness to trade creditors and other amounts incurred (but not under the Credit Agreement) in connection with obtaining goods, materials or services; (4) Indebtedness represented by Disqualified Capital Stock; (5) any liability for federal, state, local or other taxes owed or owing by the Company; (6) that portion of any Indebtedness incurred in violation of Section 4.03 (but, as to any such obligation, no such violation shall be deemed to exist for purposes of this clause (6) if the holder(s) of such obligation or their representative and the Trustee shall have received an Officers' Certificate to the effect that the incurrence of such Indebtedness does not (or, in the case of revolving credit indebtedness, that the incurrence of the entire committed amount thereof at the date on which the initial borrowing thereunder is made would not) violate such provisions of this Indenture); (7) Indebtedness that, when incurred and without respect to any election under Section 1111(b) of Title 11, United States Bankruptcy Code, is without recourse to the Company; and (8) any Indebtedness that is, by its express terms, subordinated in right of payment to any other Indebtedness of the Company. -32- "Shelf Registration" means the Shelf Registration as defined in the ------------------ Registration Rights Agreement. "Significant Subsidiary," with respect to any Person, means any ---------------------- Restricted Subsidiary of such Person that satisfies the criteria for a "significant subsidiary" set forth in Rule 1-02(w) of Regulation S-X under the Securities Act. "Standard Securitization Undertakings" means representations, ------------------------------------ warranties, covenants and indemnities entered into by the Company or any Subsidiary of the Company that are reasonably customary in an accounts receivable securitization transaction. "Stated Maturity" means, with respect to any installment of interest --------------- or principal on any Indebtedness, the date on which such payment of interest or principal is scheduled to be paid in the documentation governing such Indebtedness (after giving effect to any amendments, modifications or waivers thereto), and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof. "Subsidiary," with respect to any Person, means: ---------- (1) any corporation of which the outstanding Capital Stock having at least a majority of the votes entitled to be cast in the election of directors under ordinary circumstances shall at the time be owned, directly or indirectly, by such Person; or (2) any other Person of which at least a majority of the voting interest under ordinary circumstances is at the time, directly or indirectly, owned by such Person. "Supplemental Indenture" means a supplemental indenture to be ---------------------- substantially in the form of this Indenture (except that all references to Inversion Transactions shall have been deleted) executed and delivered to the Trustee, pursuant to which each New Parent (i) will become a Guarantor of the Notes by executing a Guarantee in the form attached as Exhibit E hereto, and --------- (ii) becomes subject to the covenants contained in this Indenture as described in such supplemental indenture. "Surviving Entity" has the meaning given such term in Section ---------------- 5.01(a)(1)(B). "TIA" or "Trust Indenture Act" means the Trust Indenture Act of 1939, --- ------------------- as amended (15 U.S. Code Sections 77aaa-77bbb), as in effect on the date this Indenture was executed, except as provided in Section 9.06. "Transaction Date" has the meaning given such term in the definition ---------------- of "Consolidated Fixed Charge Coverage Ratio." -33- "Transfer Agent" means The Bank of New York in its capacity as -------------- transfer agent. "Trustee" means the party named as such in the first paragraph of this ------- Indenture until a successor replaces it in accordance with the provisions of Article Seven of this Indenture and thereafter means such successor. "Unrestricted Definitive Registered Note" means a Definitive --------------------------------------- Registered Note not bearing the Private Placement Legend issued in registered form without coupons in a principal amount of . 1,000 or integral multiples thereof, including, without limitation, the Exchange Notes. "Unrestricted Global Note" means one or more Global Note(s) not ------------------------ bearing the Private Placement Legend issued in registered form without interest coupons in a principal amount of . 1,000 or integral multiples thereof, and deposited with the Common Depositary, including, without limitation, the Exchange Notes. "Unrestricted Notes" means the Unrestricted Global Notes and the ------------------ Unrestricted Definitive Registered Notes. "Unrestricted Subsidiary" of any Person means: ----------------------- (1) any Subsidiary of such Person that at the time of determination shall be or continue to be designated an Unrestricted Subsidiary by the Board of Directors of such Person in the manner provided below; and (2) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary (including any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary unless such Subsidiary owns any Capital Stock of, or owns or holds any Lien on any property of, the Company or any other Subsidiary of the Company that is not a Subsidiary of the Subsidiary to be so designated; provided that: (1) the Company certifies to the Trustee that such designation complies with Section 4.05; and (2) each Subsidiary to be so designated and each of its Subsidiaries has not at the time of designation, and does not thereafter, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable with respect to any Indebtedness pursuant to which the lender has recourse to any of the assets of the Company or any of its Restricted Subsidiaries. -34- The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary only if: (1) immediately after giving effect to such designation, the Company is able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.03; and (2) immediately before and immediately after giving effect to such designation, no Default or Event of Default shall have occurred and be continuing. Any such designation by the Board of Directors shall be evidenced to the Trustee by promptly filing with the Trustee a copy of the Board Resolution giving effect to such designation and an Officers' Certificate certifying that such designation complied with the foregoing provisions. "U.S. Global Note(s)" means one or more Global Note(s) bearing the ------------------- Private Placement Legend in registered form without interest coupons that will be issued in a principal amount equal to the outstanding principal amount of the Initial Notes sold in reliance on Rule 144A and deposited with the Common Depositary. "Weighted Average Life to Maturity" means, when applied to any --------------------------------- Indebtedness at any date, the number of years obtained by dividing (a) the then outstanding aggregate principal amount of such Indebtedness into (b) the sum of the total of the products obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payment of principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) which will elapse between such date and the making of such payment. "Wholly Owned Restricted Subsidiary" of any Person means any Wholly ---------------------------------- Owned Subsidiary of such Person which at the time of determination is a Restricted Subsidiary of such Person. "Wholly Owned Subsidiary" of any Person means any Subsidiary of such ----------------------- Person of which all the outstanding voting securities (other than (i) in the case of a Restricted Subsidiary that is incorporated in a jurisdiction other than a state in the United States or the District of Columbia, directors' qualifying shares or an immaterial amount of shares required to be owned by other Persons pursuant to applicable law and (ii) in the case of Potain, also up to 6.4% of the Capital Stock of Potain) are owned by such Person or any Wholly Owned Subsidiary of such Person. SECTION 1.02. Incorporation by Reference of Trust Indenture Act. ------------------------------------------------- Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: -35- "indenture notes" means the Notes; "indenture note holder" means a Holder or a Noteholder; "indenture to be qualified" means this Indenture; "indenture trustee" or "institutional trustee" means the Trustee; and "obligor" on the indenture securities means the Company or any other obligor on the Notes. All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by a rule of the Commission and not otherwise defined herein have the meanings assigned to them therein. SECTION 1.03. Rules of Construction. Unless the context otherwise --------------------- requires: (i) a term has the meaning assigned to it; (ii) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (iii) "or" is not exclusive; (iv) words in the singular include the plural, and words in the plural include the singular; (v) provisions apply to successive related events and transactions; (vi) "herein," "hereof" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision; (vii) all ratios and computations based on GAAP contained in this Indenture shall be computed in accordance with the definition of "GAAP" set forth in Section 1.01; (viii) all references to Sections or Articles refer to Sections or Articles of this Indenture unless otherwise indicated; (ix) all references to "." or "Euros" refer to the lawful currency of a Euro currency country, unless the content expressly contemplates otherwise; and (x) all references to "$," "Dollars," "U.S. Dollars" or money refer to the lawful currency of the United States, unless the content expressly contemplates otherwise. -36- ARTICLE TWO THE NOTES SECTION 2.01. The Notes. --------- (a) Form and Dating. The Notes and the Trustee's certificate of --------------- authentication thereon shall be substantially in the form annexed hereto as Exhibit A with such appropriate insertions, omissions, substitutions and other - --------- variations as are required or permitted by this Indenture. The Notes may have notations, legends or endorsements required by law, stock exchange agreements to which the Company is subject or usage. The Company shall approve the form of the Notes and any notation, legend or endorsement on the Notes. Each Note shall be dated the date of its authentication. The terms and provisions contained in the forms of the Notes annexed hereto as Exhibit A shall constitute, and are hereby expressly made, a part of --------- this Indenture. The Global Notes and the Definitive Registered Notes shall be issued only in registered form. The Notes shall be issued without coupons. The Notes shall be issued only in denominations of . 1,000 principal amount or any integral multiple thereof. To the extent applicable, the Company, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. (b) Global Notes. Initial Notes offered and sold in reliance on Rule ------------ 144A shall be issued in the form of one or more U.S. Global Notes, deposited with the Common Depositary, as custodian for the Depositaries, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of the U.S. Global Note may from time to time be increased or decreased by adjustments made on Schedule A to each Global Note, as hereinafter provided. Initial Notes offered and sold in offshore transactions in reliance on Regulation S shall be issued initially in the form of one or more International Global Notes deposited with the Common Depositary, as custodian for the Depositaries, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of the International Global Note may from time to time be increased or decreased by adjustments made on Schedule A to each Global Note, as hereinafter provided. Unrestricted Global Notes shall be issued in accordance with Section 2.07(b)(iii), 2.07(d)(iii) and 2.07(f), and shall be deposited with the Common Depositary, as custodian for the Depositaries or their respective nominees, duly executed by the Company and authenticated by the Trustee as hereinafter provided. Each Global Note shall represent such of the outstanding Notes as shall be specified therein and each shall provide that it shall represent the aggregate principal amount -37- outstanding of Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges, transfers of interests therein, redemptions and repurchases in accordance with the terms of this Indenture. Any endorsement of Schedule A to a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of Notes represented thereby shall be made by the Trustee, the Paying Agent or the Registrar in accordance with Sections 2.07 (Transfer and Exchange), 3.04 (Notice of Redemption), 4.10 (Limitation on Asset Sales) and 4.11 (Repurchase of Notes upon a Change of Control) hereof. Except as set forth in Section 2.07(a) hereof, the Global Notes may be transferred, in whole and not in part, only to a successor of the Common Depositary. (c) Definitive Registered Notes. Definitive Registered Notes issued --------------------------- upon transfer of a Book-Entry Interest or a Definitive Registered Note, or in exchange for a Book-Entry Interest or a Definitive Registered Note, shall be issued in accordance with this Indenture, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The Definitive Registered Notes shall be typed, printed, lithographed or engraved or produced by any combination of these methods or may be produced in any other manner permitted by the rules of any securities exchange on which the Notes may be listed, all as determined by the Officers executing such Notes, as evidenced by their execution of such Notes. (d) Book-Entry Provisions. Participants and Indirect Participants --------------------- shall have no rights either under this Indenture or under any Global Note with respect to such Global Note held on their behalf by the Common Depositary. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any Agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositaries and their respective Participants, the operation of customary practices of such Depositaries governing the exercise of the rights of an owner of a beneficial interest in any Global Note. The Applicable Procedures shall be applicable to Book-Entry Interests that are held by the Participants through Euroclear or Clearstream. SECTION 2.02. Restrictive Legends. ------------------- (a) Private Placement Legend. Except as permitted by subparagraph (b) ------------------------ below, each Global Note and each Definitive Registered Note (and all Notes issued in exchange therefor or substitution thereof) issued under this Indenture shall bear a legend in substantially the following form: THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE -38- UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT), (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (C) IT IS AN ACCREDITED INVESTOR (AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN "ACCREDITED INVESTOR"), (2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO THE MANITOWOC COMPANY, INC. OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTION ON TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE MANITOWOC COMPANY, INC. SO REQUESTS), OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE MANITOWOC COMPANY, INC. SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE MANITOWOC COMPANY, INC. MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT -39- SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT. (b) Notwithstanding the foregoing, any Global Note or Definitive Registered Note issued pursuant to subparagraph (b)(iii), (c)(ii), (c)(iii), (d)(ii), (d)(iii) or (f) of Section 2.07 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend. Each Global Note, if the Company so elects, may also bear the following legend on the face thereof: THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A COMMON DEPOSITARY OR A NOMINEE OF A COMMON DEPOSITARY. THIS NOTE IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE COMMON DEPOSITARY OR ITS NOMINEE EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A TRANSFER OF THIS NOTE AS A WHOLE TO A COMMON DEPOSITARY OR A NOMINEE OF THE COMMON DEPOSITARY OR TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. THIS NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTIONS 2.01, 2.07, 2.08, 3.04, AND 4.11 OF THE INDENTURE, (II) EXCEPT AS OTHERWISE PROVIDED IN THE INDENTURE, THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.07 OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR COMMON DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. -40- SECTION 2.03. Execution and Authentication. The Notes shall be ---------------------------- executed by an Officer or an authorized signatory as identified in an Officers' Certificate (pursuant to a power of attorney or other similar instrument). The signature of any such Officer (or authorized signatory) on the Notes shall be by manual or facsimile signature in the name and on behalf of the Company. If an Officer whose signature is on a Note no longer holds that office at the time the Trustee or authenticating agent authenticates the Note, the Note shall be valid nevertheless. A Note shall not be valid until the Trustee or authenticating agent manually signs the certificate of authentication on the Note. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture. The Trustee or an authenticating agent shall, upon receipt of a Company Order, authenticate (i) Initial Notes for original issue in aggregate principal amount not to exceed . 275,000,000, of which . 175,000,000 are being issued on the Issue Date, (ii) Private Exchange Notes from time to time only in exchange for a like principal amount of Initial Notes, (iii) Unrestricted Notes from time to time only (x) in exchange for a like principal amount of Initial Notes or (y) in an aggregate principal amount of not more than the excess of . 275,000,000 over the sum of the aggregate principal amount of (A) Initial Notes then outstanding, (B) Private Exchange Notes then outstanding and (C) Unrestricted Notes issued in accordance with (iii)(x) above, and (iv) Additional Notes issued pursuant to Section 2.14 hereof. Each such Company Order shall specify the amount of Notes to be authenticated and the date on which the Notes are to be authenticated, whether the Notes are to be Initial Notes, Private Exchange Notes or Unrestricted Notes and whether the Notes are to be issued as Definitive Registered Notes or Global Notes or such other information as the Trustee may reasonably request. In addition, with respect to authentication pursuant to clauses (ii) or (iii) of the first sentence of this paragraph, the first such written order from the Issuer shall be accompanied by an Opinion of Counsel of the Issuer in a form reasonably satisfactory to the Trustee stating that the issuance of the Private Exchange Notes or the Unrestricted Notes, as the case may be, does not give rise to an Event of Default, complies with this Indenture and has been duly authorized by the Issuer. The Trustee may appoint an authenticating agent to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such authenticating agent. An authenticating agent has the same rights as an Agent to deal with the Company or an Affiliate of the Company. The Notes shall be issuable only in registered form without coupons and only in minimum denominations of . 1,000 in principal amount and any integral multiples of . 1,000 in excess thereof. -41- SECTION 2.04. Registrar and Paying Agent. The Company shall -------------------------- maintain an office or agency in London, England, the Borough of Manhattan, The City of New York and, so long as the Notes are listed on the Luxembourg Stock Exchange and the rules of such stock exchange require, in Luxembourg, where (a) Notes may be presented or surrendered for registration of transfer or for exchange ("Registrar"), (b) Notes may be presented or surrendered for payment --------- (the "Paying Agent") and (c) notices and demands in respect of the Notes and ------------ this Indenture may be served. The Registrar shall keep a register or registers of the Notes and of their transfer and exchange. The Company, upon notice to the Trustee, may appoint one or more co-Registrars and one or more additional Paying Agents. The term "Paying Agent" includes any additional Paying Agent. Except as provided herein, the Company or any Subsidiary may act as Paying Agent, Registrar or co-Registrar. The Company shall enter into an appropriate agency agreement with any Agent not a party to this Indenture and the agreement shall implement the provisions of this Indenture that relate to such Agent and shall incorporate the provisions of the TIA. Without limiting the foregoing, each such agreement appointing a Paying Agent must contain provisions substantially to the effect of Section 2.07 hereof. The Company shall notify the Trustee in writing of the name and address of any such Agent. If the Company fails to maintain a Registrar or Paying Agent or fails to give the foregoing notice, the Trustee shall act as such and shall be entitled to appropriate compensation in accordance with Section 7.07. The Registrar shall keep a register (the "Register") of the Definitive -------- Registered Notes and of their transfer and exchange. Any notice to be given under this Indenture or under the Notes by the Trustee or the Company to Noteholders shall be mailed by first class mail to each Holder of Definitive Registered Notes at its address as it appears at the time of such mailing in the Register, and to the Holders of the Global Notes. The Company hereby appoints the corporate trust office of the Trustee in New York located at the address set forth in Section 13.02 as Registrar, Paying Agent and Transfer Agent in New York with respect to Definitive Registered Notes. So long as the Notes are listed on the Luxembourg Stock Exchange and the rules of such stock exchange so require, the Company shall maintain a Paying Agent and Transfer Agent in Luxembourg. The Company, any Subsidiary of the Company, or any Affiliate of any of them may act as Registrar or co-Registrar, and/or agent for service of notice and demands. If, at any time, the Trustee is not the Registrar, the Registrar shall make available to the Trustee on or before each Interest Payment Date and at such other times as the Trustee may reasonably request, the names and addresses of the Holders as they appear in the Register. SECTION 2.05. Holders to Be Treated as Owners; Payments of Interest. ---------------------------------------------------- The Company, the Paying Agents, the Registrar, the Trustee and any agent of the Company, the Paying Agents, the Registrar or the Trustee may deem and treat the person in whose name a -42- Note is registered as the absolute owner of such Note for the purpose of receiving payment of or on account of the principal of and, subject to the provisions of this Indenture, interest, Additional Interest, if any on such Note and for all other purposes; and neither the Company, any Paying Agent, the Registrar, the Trustee nor any agent of the Company, the Paying Agent, the Registrar or the Trustee shall be affected by any notice to the contrary. All such payments so made to any such Person, or upon his order, shall be valid, and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for moneys payable upon any Note. SECTION 2.06. Paying Agent to Hold Money in Trust. Not later than ----------------------------------- 12:00 noon (New York Time) one Business Day prior to each due date of the principal and interest on any Notes, the Company shall deposit with the Paying Agent money in immediately available funds sufficient to pay such principal and interest so becoming due on the due date for payment under the Notes. The Company shall require each Paying Agent other than the Trustee to agree in writing that such Paying Agent shall hold in trust for the benefit of the Holders or the Trustee all money held by the Paying Agent for the payment of principal of and interest on the Notes (whether such money has been paid to it by the Company or any other obligor on the Notes), and such Paying Agent shall promptly notify the Trustee of any default by the Company (or any other obligor on the Notes) in making any such payment. Money held in trust by any Paying Agent need not be segregated except as required by law and in no event shall any Paying Agent be liable for any interest on any money received by it hereunder. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and account for any funds disbursed, and the Trustee may at any time during the continuance of any payment default, upon written request to a Paying Agent, require such Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed. Upon doing so, the Paying Agent shall have no further liability for the money so paid over to the Trustee. SECTION 2.07. Transfer and Exchange. --------------------- (a) Transfer and Exchange of Global Notes. Transfers of a Global Note ------------------------------------- shall be limited to transfers of such Global Note in whole, but not in part, to a successor Common Depositary, any or both of the Depositaries, their respective successors or their respective nominees. All Global Notes will be exchanged by the Company for Definitive Registered Notes if (i) either Euroclear or Clearstream notifies the Company that it is unwilling or unable to continue to act as a Depositary and a successor Depositary is not appointed by the Company within 120 days; (ii) Euroclear or Clearstream so requests following an Event of Default hereunder; (iii) the Company in its sole discretion determines that the Global Notes should be exchanged (in whole but not in part) for Definitive Registered Notes; or (iv) the owner of a Book-Entry Interest requests such exchange in writing delivered either through Euroclear or Clearstream following an Event of Default hereunder. Upon the occurrence of any of the pre -43- ceding events, Definitive Registered Notes shall be issued in such names and in any approved denominations as Euroclear and/or Clearstream shall instruct the Registrar. Global Notes may also be exchanged or replaced, in whole or in part, as provided in Sections 2.08 and 2.10. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to Sections 2.08 and 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for another Note other than as provided in this Section 2.07(a). (b) Transfer and Exchange of Book-Entry Interests Between Global ------------------------------------------------------------ Notes. Transfers of Book-Entry Interests between Global Notes shall require compliance with subparagraph (i) below, as well as one or more of the other following subparagraphs, as applicable: (i) General Provisions Applicable to Transfers and Exchanges of ----------------------------------------------------------- Book-Entry Interests Between Global Notes. In connection with all ----------------------------------------- transfers and exchanges of Book-Entry Interests (other than transfers of Book-Entry Interests in connection with which the transferor takes delivery thereof in the form of a Book-Entry Interest in the same Global Note or transfers or exchanges resulting in the delivery of one or more Definitive Registered Notes), the transferor of such Book-Entry Interest must deliver to the Registrar (1) a written and/or electronic order from a Participant or an Indirect Participant given to either Depositary in accordance with the Applicable Procedures directing such Depositary to debit or cause to be debited a Book-Entry Interest in a Global Note in an amount equal to the Book-Entry Interest to be transferred or exchanged, (2) a written and/or electronic order from a Participant or an Indirect Participant given to either Depositary in accordance with the Applicable Procedures directing such Depositary to credit or cause to be credited a Book-Entry Interest in another Global Note in an amount equal to the Book-Entry Interest to be transferred or exchanged and (3) written and/or electronic instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase. The requirements of this Section 2.07(b)(i) shall be deemed to have been satisfied in connection with the Exchange Offer upon receipt by the Registrar of instructions contained in a Letter of Transmittal delivered by any Holder tendering Book-Entry Interests in a Restricted Global Note in the Exchange Offer. (ii) Transfer of Book-Entry Interests to Another Restricted Global ------------------------------------------------------------- Note. A Book-Entry Interest in any Restricted Global Note may be ---- transferred to a Person who takes delivery thereof in the form of a Book- Entry Interest in a different Restricted Global Note if the transfer complies with the requirements of Section 2.07(b)(i) above and the Registrar receives the following: -44- (A) if the transferee will take delivery in the form of a Book- Entry Interest in the U.S. Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the --------- certifications in item (1) or (3) thereof; and (B) if the transferee will take delivery in the form of a Book- Entry Interest in an International Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including --------- the certifications in item (2) thereof. Upon satisfaction of the conditions set forth in this Section 2.07(b)(ii), the Registrar shall (i) instruct the Common Depositary to deliver the relevant Global Note(s) to the Trustee, (ii) instruct the Trustee to endorse (and the Trustee shall endorse) Schedule A to the relevant Global Note(s) to reflect the relevant increase or decrease in the principal amount of such Global Note resulting from the applicable transfer, and (iii) thereafter, instruct the Trustee to return (and the Trustee shall return) the Global Note(s) to the Common Depositary, together with all information regarding the Participant accounts to be credited and debited in connection with such transfer. (iii) Transfer and Exchange of Book-Entry Interests in a Restricted ------------------------------------------------------------- Global Note for Book-Entry Interests in an Unrestricted Global Note. A ------------------------------------------------------------------- Book-Entry Interest in any Restricted Global Note may be exchanged by any holder thereof for a Book-Entry Interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a Book- Entry Interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.07(b)(i) above and: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the Book-Entry Interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer that acquired the Book-Entry Interests tendered in the Exchange Offer directly from the Company or an Affiliate of the Company, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; or (B) such transfer is effected pursuant to the Shelf Registration in accordance with the Registration Rights Agreement or pursuant to another effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act and the transferor delivers a certificate in the form of Exhibit B hereto including the certifications contained in item (4) --------- thereof; or -45- (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement. Upon satisfaction of the conditions set forth in this Section 2.07(b)(iii), the Registrar shall (i) instruct the Common Depositary to deliver the relevant Global Note(s) to the Trustee, (ii) instruct the Trustee to endorse (and the Trustee shall endorse) Schedule A to the relevant Global Note(s) to reflect the relevant increase or decrease in principal amount of such Global Note resulting from the applicable transfer, and (iii) thereafter, instruct the Trustee to return (and the Trustee shall return) the Global Note(s) to the Common Depositary, together with all information regarding the Participant accounts to be credited and debited in connection with such transfer. If any such transfer or exchange is effected pursuant to this Section 2.07(b)(iii) at a time when an Unrestricted Global Note has not yet been issued, the Registrar shall so inform the Trustee and the Company and, thereafter, the Company shall issue and, upon receipt of a Company Order from the Company in accordance with Section 2.03 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of Book-Entry Interests to be transferred or exchanged. Book-Entry Interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a Book-Entry Interest in a Restricted Global Note. (c) Transfer or Exchange of Book-Entry Interests for Definitive ----------------------------------------------------------- Registered Notes. In connection with a transfer or exchange of a Book-Entry - ---------------- Interest for a Definitive Registered Note, the Registrar must receive (1) a written and/or electronic order from a Participant or an Indirect Participant given to either Depositary in accordance with the Applicable Procedures directing such Depositary to debit or cause to be debited a Book-Entry Interest in an amount equal to the Book-Entry Interest to be transferred or exchanged, (2) a written order directing the Registrar to issue or cause to be issued a Definitive Registered Note in an amount equal to the Book-Entry Interest to be transferred or exchanged and (3) instructions containing information regarding the Person in whose name such Definitive Registered Note shall be registered to effect the transfer or exchange referred to above. (i) Book-Entry Interests in Restricted Global Notes to Restricted ------------------------------------------------------------- Definitive Registered Notes. A holder of a Book-Entry Interest in a --------------------------- Restricted Global Note may exchange such Book-Entry Interest for a Restricted Definitive Registered Note or transfer such Book-Entry Interest to a Person who takes delivery thereof in the form of a Restricted Definitive Registered Note, if the exchange or transfer complies with the first paragraph of this Section 2.07(c) and: -46- (A) if the holder of such Book-Entry Interest in a Restricted Global Note proposes to exchange such Book-Entry Interest for a Restricted Definitive Registered Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item --------- (1)(a) thereof; (B) if such Book-Entry Interest is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications --------- in item (1) thereof; (C) if such Book-Entry Interest is being transferred in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set forth in Exhibit B --------- hereto, including the certifications in item (2) thereof; (D) if such Book-Entry Interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications --------- in item (3)(a) thereof; (E) if such Book-Entry Interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) --------- thereof; or (F) if such Book-Entry Interest is being transferred in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (E) above, a certificate to the effect set forth in Exhibit B hereto, including the --------- certifications, certificates and Opinion of Counsel required by item (3)(c) thereof, if applicable. Upon satisfaction of the conditions set forth in this Section 2.07(c)(i), the Registrar shall (i) instruct the Common Depositary to deliver the relevant Global Note(s) to the Trustee, (ii) instruct the Trustee to endorse (and the Trustee shall endorse) Schedule A to the relevant Global Note(s) to reflect the relevant decrease in the principal amount of such Global Note resulting from the applicable transfer or exchange, (iii) thereafter, instruct the Trustee to return (and the Trustee shall return) the Global Notes to the Common Depositary, together with all information regarding the Participant accounts to be debited in connection with such exchange or transfer and (iv) deliver to the Registrar instructions received by it from the relevant Depositary that contain information regarding the Person in whose name Definitive Registered Notes shall be registered to effect such transfer or exchange. The Company shall issue and the Trustee shall authenticate one or more Definitive Registered Notes in an aggregate principal amount equal to the aggregate prin -47- cipal amount of Book-Entry Interests so transferred or exchanged and in the names set forth in the instructions received by the Registrar. (ii) Book-Entry Interests in Restricted Global Notes to Unrestricted --------------------------------------------------------------- Definitive Registered Notes. A holder of a Book-Entry Interest in a --------------------------- Restricted Global Note may exchange such Book-Entry Interest for an Unrestricted Definitive Registered Note or may transfer such Book-Entry Interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Registered Note if the exchange or transfer complies with the first paragraph of this Section 2.07(c) and: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of such Book-Entry Interest, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker- Dealer that acquired the Book-Entry Interests tendered in the Exchange Offer directly from the Company or an Affiliate of the Company, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) such transfer is effected pursuant to the Shelf Registration in accordance with the Registration Rights Agreement or pursuant to another effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act and the transferor delivers a certificate in the form of Exhibit B hereto including the certifications contained in item (4) --------- thereof; or (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement. Upon satisfaction of the conditions set forth in this Section 2.07(c)(ii), the Registrar shall (i) instruct the Common Depositary to deliver the relevant Global Note(s) to the Trustee, (ii) instruct the Trustee to endorse (and the Trustee shall endorse) Schedule A to the relevant Global Note(s) to reflect the relevant decrease in the principal amount of such Global Note resulting from the applicable exchange or transfer, (iii) thereafter, instruct the Trustee to return (and the Trustee shall return) the Global Notes to the Common Depositary, together with all information regarding the Participant accounts to be debited in connection with such exchange or transfer and (iv) deliver to the Registrar instructions received by it from the relevant Depositary that contain information regarding the Person in whose name Definitive Registered Notes shall be registered to effect such transfer or exchange. -48- The Company shall issue and the Trustee shall authenticate one or more Definitive Registered Notes in an aggregate principal amount equal to the aggregate principal amount of Book-Entry Interests so transferred or exchanged and in the names set forth in the instructions received by the Registrar. (iii) Book-Entry Interests in Unrestricted Global Notes to ---------------------------------------------------- Unrestricted Definitive Registered Notes. A holder of a Book-Entry ---------------------------------------- Interest in an Unrestricted Global Note may exchange such Book-Entry Interest for an Unrestricted Definitive Registered Note or transfer such Book-Entry Interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Registered Note upon the satisfaction of the conditions set forth in the first paragraph of this Section 2.07(c). Upon satisfaction of the conditions set forth in this Section 2.07(c)(iii), the Registrar shall (i) instruct the Common Depositary to deliver the relevant Global Note(s) to the Trustee, (ii) instruct the Trustee to endorse (and the Trustee shall endorse) Schedule A to the relevant Global Note(s) to reflect the relevant decrease in the principal amount of such Global Note resulting from the applicable transfer or exchange, (iii) thereafter, instruct the Trustee to return (and the Trustee shall return) the Global Note(s) to the Common Depositary, together with all information regarding the Participant accounts to be debited in connection with such exchange or transfer and (iv) deliver to the Registrar instructions received by it from the relevant Depositary that contain information regarding the Person in whose name Definitive Registered Notes shall be registered to effect such transfer or exchange. The Company shall issue and the Trustee shall authenticate, one or more Definitive Registered Notes in an aggregate principal amount equal to the aggregate principal amount of Book-Entry Interests so transferred or exchanged and in the names set forth in the instructions received by the Registrar. (d) Transfer and Exchange of Definitive Registered Notes for Book- ------------------------------------------------------------- Entry Interests. In connection with any transfer or exchange of Definitive - --------------- Registered Notes for Book-Entry Interests, the Holder of such Notes shall surrender to the Registrar such Definitive Registered Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the Holder of such Definitive Registered Notes must deliver written and/or electronic orders directing the Depositary to credit the account of the transferee Participant in an amount equal to the Book-Entry Interest to be created and identifying the Participant account to be credited. (i) Restricted Definitive Registered Notes to Book-Entry Interests -------------------------------------------------------------- in Restricted Global Notes. A Holder of Restricted Definitive Registered -------------------------- Notes may exchange such Notes for a Book-Entry Interest in a Restricted Global Note or transfer such Restricted Definitive Registered Notes to a Person who takes delivery thereof in -49- the form of a Book-Entry Interest in a Restricted Global Note, if the exchange or transfer complies with the first paragraph of this Section 2.07(d) and: (A) if the Holder of such Restricted Definitive Registered Note proposes to exchange such Note for a Book-Entry Interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; --------- (B) if such Restricted Definitive Registered Note is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, --------- including the certifications in item (1) thereof; (C) if such Restricted Definitive Registered Note is being transferred in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) --------- thereof; (D) if such Restricted Definitive Registered Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in Exhibit B --------- hereto, including the certifications in item (3)(a) thereof; (E) if such Restricted Definitive Registered Note is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the --------- certifications in item (3)(b) thereof; (F) if such Restricted Definitive Registered Note is being transferred in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (E) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates --------- and Opinion of Counsel required by item (3)(c) thereof, if applicable. Upon satisfaction of all the requirements set forth in this Section 2.07(d)(i), the Registrar shall (i) deliver the Definitive Registered Notes surrendered for exchange or transfer to the Trustee for cancellation pursuant to Section 2.11 hereof, (ii) record such transfer or exchange on the Register, (iii) instruct the Common Depositary to deliver to it (x) in the case of clause (C) above, the International Global Note and (y) in all other cases, the U.S. Global Note, (iv) endorse Schedule A to such Global Note to reflect the increase in principal amount resulting from such transfer or exchange, and (v) thereafter, return the Global Note(s) to the Common Depositary, together with all informa -50- tion regarding the Participant accounts to be credited in connection with such exchange or transfer. (ii) Restricted Definitive Registered Notes to Book-Entry Interests -------------------------------------------------------------- in Unrestricted Global Notes. A Holder of a Restricted Definitive ---------------------------- Registered Note may exchange such Note for a Book-Entry Interest in an Unrestricted Global Note or transfer such Restricted Definitive Registered Note to a Person who takes delivery thereof in the form of a Book-Entry Interest in an Unrestricted Global Note if the exchange or transfer complies with the first paragraph of this Section 2.07(d) and: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer that acquired the Book-Entry Interests tendered in the Exchange Offer directly from the Company or an Affiliate of the Company, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) such transfer is effected pursuant to the Shelf Registration in accordance with the Registration Rights Agreement or pursuant to another effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act and the transferor delivers a certificate in the form of Exhibit B hereto including the --------- certifications contained in item (4) thereof; or (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement. Upon satisfaction of all the requirements set forth in this Section 2.07(d)(ii), the Registrar shall (i) deliver the Definitive Registered Notes surrendered for exchange or transfer to the Trustee for cancellation pursuant to Section 2.11 hereof, (ii) record such transfer or exchange on the Register, (iii) instruct the Common Depositary to deliver the relevant Global Note(s), (iv) endorse Schedule A to such Global Note to reflect the increase in principal amount resulting from such transfer or exchange, and (v) thereafter, return the Global Notes to the Common Depositary, together with all information regarding the Participant accounts to be credited in connection with such exchange or transfer. If any such transfer is effected pursuant to this Section 2.07(d)(ii) at a time when an Unrestricted Global Note has not yet been issued, the Registrar shall so inform the Trustee and the Company and, thereafter, the Company shall issue and, upon -51- receipt of a Company Order from the Company in accordance with Section 2.03 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of Book-Entry Interests to be transferred or exchanged. (iii) Unrestricted Definitive Registered Notes to Book-Entry ------------------------------------------------------ Interests in Unrestricted Global Notes. A Holder of an Unrestricted -------------------------------------- Definitive Registered Note may exchange such Note for a Book-Entry Interest in an Unrestricted Global Note or transfer such Definitive Registered Note to a Person who takes delivery thereof in the form of a Book-Entry Interest in an Unrestricted Global Note if the exchange or transfer complies with the first paragraph of this Section 2.07(d). Upon satisfaction of all the requirements set forth in this Section 2.07(d)(iii), the Registrar shall (i) deliver the Definitive Registered Note surrendered for exchange or transfer to the Trustee for cancellation pursuant to Section 2.11 hereof, (ii) record such transfer or exchange on the Register, (iii) instruct the Common Depositary to deliver the relevant Global Note(s), (iv) endorse Schedule A to such Global Note to reflect the increase in principal amount resulting from such transfer or exchange, and (v) thereafter, return the Global Notes to the Common Depositary, together with all information regarding the Participant accounts to be credited in connection with such exchange or transfer. If any such transfer is effected pursuant to this Section 2.07(d)(iii) at a time when an Unrestricted Global Note has not yet been issued, the Registrar shall so inform the Trustee and the Company and, thereafter, the Company shall issue and, upon receipt of a Company Order from the Company in accordance with Section 2.03 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of Book-Entry Interests to be transferred or exchanged. (e) Transfer and Exchange of Definitive Registered Notes for -------------------------------------------------------- Definitive Registered Notes. In connection with any transfer or exchange of - --------------------------- Definitive Registered Notes for Definitive Registered Notes, the Holder of such Notes shall surrender to the Registrar the Definitive Registered Notes for transfer or exchange duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.07(e). Upon request by a Holder of Definitive Registered Notes and such Holder's compliance with the provisions of this Section 2.07(e), the Registrar shall register the transfer or exchange of Definitive Registered Notes. (i) Restricted Definitive Registered Notes to Restricted Definitive --------------------------------------------------------------- Registered Notes. Any Restricted Definitive Registered Note may be ---------------- transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted -52- Definitive Registered Note if the exchange or transfer complies with the first paragraph of this Section 2.07(e) and the Registrar receives the following: (A) if the transfer will be made pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) --------- thereof; (B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; --------- and (C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit ------- B hereto, including the certifications, certificates and Opinion of - Counsel required by item (3) thereof, if applicable. (ii) Restricted Definitive Registered Notes to Unrestricted ------------------------------------------------------ Definitive Registered Notes. Any Restricted Definitive Registered Note may --------------------------- be exchanged by the Holder thereof for an Unrestricted Definitive Registered Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Registered Note if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer that acquired the Book-Entry Interests tendered in the Exchange Offer directly from the Company or an Affiliate of the Company, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) any such transfer is effected pursuant to the Shelf Registration in accordance with the Registration Rights Agreement or pursuant to another effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act and the transferor delivers a certificate in the form of Exhibit B hereto including the --------- certifications contained in item (4) thereof; or (C) any such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement. -53- (iii) Unrestricted Definitive Registered Notes to Unrestricted -------------------------------------------------------- Definitive Registered Notes. A Holder of Unrestricted Definitive --------------------------- Registered Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Registered Note. Upon compliance with the first paragraph of this Section 2.07(e) and receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Registered Notes pursuant to the instructions from the Holder thereof. (f) Exchange Offer. Upon the occurrence of the Exchange Offer in -------------- accordance with the Registration Rights Agreement, the Company shall issue and, upon receipt of a Company Order in accordance with Section 2.03, the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an aggregate principal amount equal to the corresponding principal amount of the Book-Entry Interests in the Restricted Global Notes tendered for acceptance by Persons that certify in the applicable Letters of Transmittal that (x) they are not Broker- Dealers that acquired the Book-Entry Interests tendered in the Exchange Offer directly from the Company or an Affiliate of the Company, (y) they are not participating in a distribution of the Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of the Company and (ii) Unrestricted Definitive Registered Notes in an aggregate principal amount equal to the corresponding principal amount of the Restricted Definitive Registered Notes tendered for exchange by Persons who certify to the effect set forth in (i) of this subsection (f) and accepted for exchange in the Exchange Offer. In addition, the Trustee shall (i) endorse Schedule A to the Unrestricted Global Notes issued pursuant to the preceding paragraph to reflect the principal amount of Restricted Global Notes tendered in the Exchange Offer, (ii) deliver such Unrestricted Global Notes to the Common Depositary, (iii) instruct the Common Depositary to deliver the relevant Restricted Global Note(s) to the Trustee, (iv) endorse Schedule A to such Restricted Global Note(s) to reflect the decrease in principal amount resulting from the Exchange Offer, and (v) thereafter, return the Restricted Global Notes to the Common Depositary, together with all information regarding the Participant accounts to be debited and credited in connection with the Exchange Offer. (g) General Provisions Relating to All Transfers and Exchanges. ---------------------------------------------------------- (i) To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Notes or Definitive Registered Notes, as the case may be, in each case, in accordance with Section 2.03 hereof. (ii) No service charge shall be made to a Holder for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any stamp or transfer tax, duty or governmental charge payable in connection therewith (other than any such stamp or transfer taxes, duties or similar governmental -54- charge payable upon exchange or transfer pursuant to Sections 2.10, 3.08, 4.10, 4.11 and 9.04 hereof). (iii) All Global Notes and Definitive Registered Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Registered Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Registered Notes surrendered upon such registration of transfer or exchange. (iv) The Company shall not be required (A) to register the transfer of or to exchange Notes during a period beginning at the opening of business 15 days before any redemption date under Section 3.08 and ending at the close of business on the redemption date, (B) to register the transfer of or to exchange any Note during a period beginning at the opening of business 15 days before any mailing of a notice of redemption of Notes for partial redemption under Section 3.08 and ending on the day of such selection, (C) to register the transfer of or to exchange a Note during a period beginning at the opening of business on a record date for the payment of interest and the applicable succeeding Interest Payment Date, or (D) to register the transfer of or to exchange a Note that has been tendered in an Asset Sale Offer or a Change of Control Offer. (v) Prior to due presentment for the registration of a transfer of any Note, the Trustee, the Paying Agents, the Registrar, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, the Paying Agents, the Registrar, any Agent or the Company shall be affected by notice to the contrary. SECTION 2.08. Replacement Notes. If a mutilated Note is ----------------- surrendered to the Trustee or if the Holder claims that the Note has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Note of like tenor and amount and bearing a number not contemporaneously outstanding; provided that the requirements of this Section 2.08 are met. If required by the Trustee or the Company, an indemnity bond must be furnished that is sufficient in the judgment of both the Trustee and the Company to protect the Company, the Guarantors, the Trustee or any Agent from any loss that any of them may suffer if a Note is replaced. The Company may charge such Holder for its expenses and the expenses of the Trustee in replacing a Note. In case any such mutilated, lost, destroyed or wrongfully taken Note has become or is about to become due and payable, the Company in its discretion may pay such Note instead of issuing a new Note in replacement thereof. Every replacement Note is an additional obligation of the Company and shall be entitled to the benefits of this Indenture. -55- SECTION 2.09. Outstanding Notes. Notes outstanding at any time are ----------------- all Notes that have been authenticated by the Trustee except for those cancelled by it, those delivered to it for cancellation and those described in this Section 2.09 as not outstanding. If a Note is replaced pursuant to Section 2.08, it ceases to be outstanding unless and until the Trustee and the Company receive proof satisfactory to them that the replaced Note is held by a bona fide purchaser. If the Paying Agent (other than the Company or an Affiliate of the Company) holds on any redemption date, the maturity date or any date of repurchase money sufficient to pay Notes payable on that date, then on and after that date such Notes cease to be outstanding and interest on them shall cease to accrue. A Note does not cease to be outstanding because the Company or one of its Affiliates holds such Note; provided, however, that, in determining whether the Holders of the requisite principal amount of the outstanding Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Notes owned by the Company or any other obligor upon the Notes or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes which a Responsible Officer of the Trustee has actual knowledge or has received written notice to be so owned shall be so disregarded. The Company shall notify the Trustee when it, any obligor or any of their respective Affiliates acquires any Notes. Notes so owned which have been pledged in good faith may be regarded as outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Notes and that the pledgee is not the Company or any other obligor upon the Notes or any Affiliate of the Company or of such other obligor. SECTION 2.10. Temporary Notes. Until definitive permanent Notes --------------- are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of definitive permanent Notes but may have insertions, substitutions, omissions and other variations determined to be appropriate by the officers executing the temporary Notes, as evidenced by their execution of such temporary Notes. If temporary Notes are issued, the Company shall cause definitive permanent notes to be prepared without unreasonable delay. After the preparation of definitive permanent Notes, the temporary Notes shall be exchangeable for definitive permanent Notes upon surrender of the temporary Notes at the office or agency of the Company designated for such purpose pursuant to Section 4.02, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Notes, the Company shall execute and the Trustee shall authenticate and make available for delivery in exchange therefor a like principal amount of definitive permanent Notes of authorized denominations. Until so exchanged, the temporary Notes shall be entitled to the same benefits under this Indenture as definitive permanent Notes. -56- SECTION 2.11. Cancellation. The Company at any time may deliver to ------------ the Trustee for cancellation any Notes previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and may deliver to the Trustee for cancellation any Notes previously authenticated hereunder which the Company has not issued and sold. The Registrar and the Paying Agent shall forward to the Trustee any Notes surrendered to them for transfer, exchange or payment. The Trustee shall cancel all Notes surrendered for transfer, exchange, payment or cancellation in accordance with its normal procedure. At such time as all Book-Entry Interests therein have been exchanged for Definitive Registered Notes, a Global Note shall be returned to or retained and canceled by the Trustee in accordance with this Section 2.11. SECTION 2.12. ISIN Numbers and Common Codes. The Company in ----------------------------- issuing the Notes may use "ISIN" numbers or Common Codes (if then generally in use), and the Trustee shall use the same in notices of redemption or exchange as a convenience to Holders; provided that any such notice shall state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of redemption or exchange and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect or omission of such numbers. The Company shall promptly notify the Trustee in writing of any change in the "ISIN" numbers or Common Codes. SECTION 2.13. Defaulted Interest. If the Company defaults on a ------------------ payment of interest on the Notes, it shall pay, or shall deposit with the Paying Agent money in immediately available funds sufficient to pay the defaulted interest, plus (to the extent lawful) any interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date. A special record date, as used in this Section 2.13 with respect to the payment of any defaulted interest, shall mean the 15th day next preceding the date fixed by the Company for the payment of defaulted interest, whether or not such day is a Business Day. At least 15 days before the subsequent special record date, the Company shall mail to each Holder and to a Responsible Officer of the Trustee a notice that states the subsequent special record date, the payment date and the amount of defaulted interest to be paid. SECTION 2.14. Issuance of Additional Notes. The Company shall be ---------------------------- entitled to issue Additional Notes under this Indenture which shall have identical terms as the Notes issued on the Issue Date, other than with respect to the date of issuance, issue price, and amount of interest payable on the first payment date applicable thereto (and, if such Additional Notes shall be issued in the form of Exchange Notes, other than with respect to transfer restrictions); provided that such issuance is not prohibited by Section 4.03. The Initial Notes issued on the Issue Date, any Additional Notes and all Exchange Notes issued in exchange therefor shall be treated as a single class for all purposes under this Indenture. -57- With respect to any Additional Notes, the Company shall set forth in a resolution of its Board of Directors and in a Company Order, a copy of each of which shall be delivered to the Trustee, the following information: (1) the aggregate principal amount of such Additional Notes to be authenticated and delivered pursuant to this Indenture; (2) the issue price, the issue date and the ISIN number or Common Code of such Additional Notes and the amount of interest payable on the first payment date applicable thereto; provided, however, that no Additional Notes may be issued at a price that would cause such Additional Notes to have "original issue discount" within the meaning of Section 1273 of the Internal Revenue Code of 1986, as amended; and (3) whether such Additional Notes shall be Notes bearing the Private Placement Legend and issued in the form of Initial Notes or shall be Unrestricted Notes issued in the form of Exchange Notes. ARTICLE THREE REDEMPTION SECTION 3.01. Optional Redemption. (a) Except as described below, ------------------- the Notes are not redeemable before May 15, 2006. Thereafter, the Company may redeem the Notes at its option, in whole or in part, upon not less than 30 nor more than 60 days' notice to the Holders, at the following redemption prices (expressed as percentages of the principal amount thereof) if redeemed during the 12-month period commencing on May 15 of the year set forth below: Year Percentage ---- ---------- 2006....................................... 105.188% 2007....................................... 103.458% 2008....................................... 101.729% 2009 and thereafter........................ 100.000% In addition, the Company must pay accrued and unpaid interest on the Notes redeemed. (b) At any time, or from time to time, on or prior to May 15, 2004, the Company may, at its option, use the Net Cash Proceeds of one or more Public Equity Offerings (as defined below) to redeem up to 35% of the principal amount of the Notes (including any Additional Notes) outstanding under this Indenture at a redemption price of 110.375% of -58- the principal amount thereof plus accrued and unpaid interest thereon, if any, to the date of redemption; provided that: (1) at least 65% of the principal amount of Notes (including any Additional Notes) outstanding under this Indenture remains outstanding immediately after any such redemption; and (2) the Company makes such redemption not more than 90 days after the consummation of any such Public Equity Offering. "Public Equity Offering" means an underwritten public offering of ---------------------- Qualified Capital Stock of the Company pursuant to a registration statement filed with the Commission in accordance with the Securities Act. SECTION 3.02. Notices to Trustee. If the Company elects to redeem ------------------ Notes pursuant to Section 3.01(a) or Section 3.01(b), it shall notify the Trustee in writing of the Redemption Date and the principal amount of Notes to be redeemed. The Company shall give each notice provided for in this Section 3.02 in an Officers' Certificate at least 60 days before the Redemption Date (unless a shorter period shall be satisfactory to the Trustee). SECTION 3.03. Selection of Notes to Be Redeemed. In the case of --------------------------------- any partial redemption pursuant to Section 3.01(a) or Section 3.01(b), selection of the Notes for redemption will be made by the Trustee in compliance with the requirements of the Luxembourg Stock Exchange, if the Notes are so listed, and any other principal securities exchange, if any, on which the Notes are listed or, if the Notes are not listed on a principal securities exchange or the Luxembourg Stock Exchange, pro rata, by lot or by such other method as the Trustee shall deem fair and appropriate; provided that no Note of . 1,000 in principal amount or less shall be redeemed in part; and provided, further, that any redemption following a Public Equity Offering will be made on a pro rata or on as nearly a pro rata basis as applicable (subject to the procedures of Euroclear and Clearstream). The Trustee shall make the selection from the Notes outstanding and not previously called for redemption. Provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. The Trustee shall notify the Company and the Registrar promptly in writing of the Notes or portions of Notes to be called for redemption. SECTION 3.04. Notice of Redemption. With respect to any redemption -------------------- of Notes pursuant to Section 3.01(a) or Section 3.01(b), at least 30 days but not more than 60 days before a Redemption Date, the Company shall mail a notice of redemption by first class mail to each Holder whose Notes are to be redeemed at its registered address. For Notes which are represented by Global Notes, notices may be given by delivery of the relevant notices to each of the Depositaries for communication to its Participants. So long as any Notes are listed on the Luxembourg Stock Exchange, any such notice to the Holders of the relevant -59- Notes shall also be published in a daily newspaper of general circulation in Luxembourg (which is expected to be the Luxemburger Wort). The notice shall identify the Notes to be redeemed and shall state: (i) the Redemption Date; (ii) the Redemption Price; (iii) the name and address of each Paying Agent; (iv) that Notes called for redemption must be surrendered to the applicable Paying Agent in order to collect the Redemption Price; (v) that, unless the Company defaults in making the redemption payment, interest on Notes called for redemption ceases to accrue on and after the Redemption Date and the only remaining right of the Holders is to receive payment of the Redemption Price plus accrued interest and Additional Interest, if any, to the Redemption Date upon surrender of the Notes to the Paying Agent; (vi) that, in the case of a redemption pursuant to Section 3.01(a) or Section 3.01(b) of Definitive Registered Notes, if any such Note is being redeemed in part, the portion of the principal amount (equal to . 1,000 in principal amount or any integral multiple thereof) of such Note to be redeemed and that, on and after the Redemption Date, upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion thereof with a minimum denomination of . 1,000 will be issued, and that, in the case of such a partial redemption of Global Notes, the Trustee shall endorse Schedule A to each Global Note surrendered for redemption to reflect the decrease in principal amount resulting from such redemption; (vii) that, if any such Notice contains an ISIN number or Common Code as provided in Section 2.12, no representation is being made as to the correctness of the ISIN number or Common Code either as printed on the Notes or as contained in the notice of redemption and that reliance may be placed only on the other identification numbers printed on the Notes; and (viii) if the redemption is conditioned upon any subsequent event, a description of such condition or event. At the Company's request (which request may be revoked by the Company at any time prior to the time at which the Trustee shall have given such notice to the Holders), made in writing to the Trustee at least 60 days (or such shorter period as shall be satisfactory to the Trustee) before a Redemption Date, the Trustee shall give the notice of redemption in the name and at the expense of the Company. If, however, the Company gives such notice to -60- the Holders, the Company shall concurrently deliver to the Trustee an Officers' Certificate stating that such notice has been given. SECTION 3.05. Effect of Notice of Redemption. Once notice of ------------------------------ redemption is mailed, Notes called for redemption become due and payable on the Redemption Date and at the Redemption Price, unless the redemption is conditioned upon the occurrence of a subsequent event. Upon surrender of any Notes to the Paying Agent, unless such redemption is conditioned upon the occurrence of a subsequent event, such Notes shall be paid at the Redemption Price, plus accrued interest and Additional Interest, if any, to the Redemption Date. Notice of redemption shall be deemed to be given when mailed, whether or not the Holder receives the notice. In any event, failure to give such notice, or any defect therein, shall not affect the validity of the proceedings for the redemption of Notes held by Holders to whom such notice was properly given. SECTION 3.06. Deposit of Redemption Price. On or before 12:00 noon --------------------------- (New York City time) one Business Day prior to any Redemption Date, the Company shall deposit with the Paying Agent (or, if the Company is acting as its own Paying Agent, shall segregate and hold in trust as provided in Section 2.06) money sufficient to pay the Redemption Price of and accrued interest on all Notes to be redeemed on that date other than Notes or portions thereof called for redemption on that date that have been delivered by the Company to the Trustee for cancellation. SECTION 3.07. Payment of Notes Called for Redemption. If notice of -------------------------------------- redemption has been given in the manner provided above, and unless such redemption is conditioned upon a subsequent event, the Notes or portion of Notes specified in such notice to be redeemed shall become due and payable on the Redemption Date at the Redemption Price stated therein, together with accrued interest and Additional Interest, if any, to such Redemption Date, and so long as the Company has deposited with the Paying Agent funds in satisfaction of the Redemption Price pursuant to the terms of this Indenture on and after such date (unless the Company shall default in the payment of such Notes at the Redemption Price and accrued interest and Additional Interest, if any, to the Redemption Date, in which case the principal, until paid, shall bear interest from the Redemption Date at the rate prescribed in the Notes), such Notes shall cease to accrue interest. Upon surrender of any Note for redemption in accordance with a notice of redemption, such Note shall be paid and redeemed by the Company at the Redemption Price, together with accrued interest, if any, to the Redemption Date; provided that installments of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders registered as such at the close of business on the relevant Regular Record Date. SECTION 3.08. Notes Redeemed in Part. Upon surrender of any Note ---------------------- that is redeemed in part, the Company shall execute and the Trustee shall authenticate and deliver to the Holder a new Note equal in principal amount to the unredeemed portion of such surren- -61- dered Note, which shall not, in any event be less than * 1,000 principal amount. In the case of a partial redemption of Global Notes, the Trustee shall endorse Schedule A to each Global Note surrendered for redemption to reflect the decrease in principal amount resulting from such redemption. ARTICLE FOUR COVENANTS SECTION 4.01. Payment of Notes. The Company shall pay the principal ---------------- of, Additional Interest, if any, and interest on the Notes on or before 12:00 noon (New York City time) one Business Day prior to the dates due for such payments and in the manner provided in the Notes and this Indenture. An installment of principal, Additional Interest, if any, or interest shall be considered paid on the date due if the Trustee or Paying Agent (other than the Company, a Subsidiary of the Company, or any Affiliate of any of them) holds on that date money designated for and sufficient to pay the installment unless the provisions of Article Ten hereof prohibit such payment. As provided in Section 6.09, upon a bankruptcy or reorganization procedure relative to the Company, the Trustee shall serve as the Paying Agent, if any, for the Notes. The Company shall pay interest on overdue principal, Additional Interest, if any, and interest on overdue installments of interest, to the extent lawful, at the rate per annum then borne upon the Notes. SECTION 4.02. Maintenance of Office or Agency. The Company shall ------------------------------- maintain the offices and agencies specified in Section 2.04. SECTION 4.03. Limitation on Incurrence of Additional Indebtedness. --------------------------------------------------- The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume, guarantee, acquire, become liable, contingently or otherwise, with respect to, or otherwise become responsible for payment of (collectively, "incur") any Indebtedness (other than ----- Permitted Indebtedness); provided, however, that if no Default or Event of Default shall have occurred and be continuing at the time of or as a consequence of the incurrence of any such Indebtedness, the Company and the Guarantors may incur Indebtedness (including, without limitation, Acquired Indebtedness) and any Restricted Subsidiary of the Company that is not or will not, upon such incurrence, become a Guarantor may incur Acquired Indebtedness, in each case if on the date of the incurrence of such Indebtedness, after giving effect to the incurrence thereof, the Consolidated Fixed Charge Coverage Ratio of the Company is greater than 2.0 to 1.0 if such Indebtedness is incurred on or before May 15, 2003 and 2.25 to 1.0 if such Indebtedness is incurred thereafter. -62- SECTION 4.04. Prohibition on Incurrence of Senior Subordinated Debt. ----------------------------------------------------- The Company shall not, and shall not permit any Restricted Subsidiary that is a Guarantor to, incur or suffer to exist Indebtedness that is senior in right of payment to the Notes or such Guarantor's Guarantee, as the case may be, and subordinate in right of payment to any other Indebtedness of the Company or such Guarantor, as the case may be. SECTION 4.05. Limitation on Restricted Payments. (a) The Company --------------------------------- shall not, and shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly: (1) declare or pay any dividend or make any distribution (other than dividends or distributions payable in Qualified Capital Stock of the Company) on or in respect of shares of the Company's Capital Stock to holders of such Capital Stock; (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of the Company or any warrants, rights or options to purchase or acquire shares of any class of such Capital Stock; (3) make any principal payment on, purchase, defease, redeem, prepay, decrease or otherwise acquire or retire for value, prior to any scheduled final maturity, scheduled repayment or scheduled sinking fund payment, any Indebtedness of the Company that is subordinate or junior in right of payment to the Notes or any Indebtedness of a Guarantor that is subordinate or junior in right of payment to such Guarantor's Guarantee; or (4) make any Investment (other than Permitted Investments) (each of the foregoing actions set forth in clauses (1), (2), (3) and (4) being referred to as a "Restricted Payment"), if at the time of such Restricted ------------------ Payment or immediately after giving effect thereto, (i) a Default or an Event of Default shall have occurred and be continuing; or (ii) the Company is not able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.03; or (iii) the aggregate amount of Restricted Payments (including such proposed Restricted Payment) made subsequent to the Issue Date (the amount expended for such purposes, if other than in cash, being the fair market value of such property as determined in good faith by the Board of Directors of the Company) shall exceed the sum of: (w) 50% of the cumulative Consolidated Net Income (or if cumulative Consolidated Net Income shall be a loss, minus 100% of such loss) of the -63- Company earned subsequent to the Issue Date and on or prior to the date the Restricted Payment occurs (the "Reference Date") (treating -------------- such period as a single accounting period); plus (x) 100% of the aggregate net cash proceeds received by the Company from any Person (other than a Subsidiary of the Company) from the issuance and sale subsequent to the Issue Date and on or prior to the Reference Date of Qualified Capital Stock of the Company; plus (y) without duplication of any amounts included in clause (iii)(x) above, 100% of the aggregate net cash proceeds of any equity contribution received by the Company from a holder of the Company's Capital Stock (excluding, in the case of clauses (iii)(x) and (y), any net cash proceeds from a Public Equity Offering to the extent used to redeem the Notes in compliance with the provisions set forth under Section 3.01); plus (z) without duplication, the sum of: (1) the aggregate amount returned in cash on or with respect to Investments (other than Permitted Investments) made subsequent to the Issue Date whether through interest payments, principal payments, dividends or other distributions or payments; (2) the net cash proceeds received by the Company or any of its Restricted Subsidiaries from the disposition of all or any portion of such Investments (other than to a Subsidiary of the Company); and (3) upon redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary, the fair market value of such Subsidiary; provided, however, that the sum of clauses (z) (1) through (3) above shall not exceed the aggregate amount of all such Investments made subsequent to the Issue Date. (b)Notwithstanding the foregoing, the provisions set forth in the immediately preceding paragraph do not prohibit: (1) the payment of any dividend within 60 days after the date of declaration of such dividend if the dividend would have been permitted on the date of declaration; (2) if no Default or Event of Default shall have occurred and be continuing, the acquisition of any shares of Capital Stock of the Company, either (i) solely in exchange for shares of Qualified Capital Stock of the Company or (ii) through the appli- -64- cation of net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of shares of Qualified Capital Stock of the Company; (3) if no Default or Event of Default shall have occurred and be continuing, the acquisition of any Indebtedness of the Company or a Guarantor that is subordinate or junior in right of payment to the Notes or such Guarantor's Guarantee, as the case may be, either (i) solely in exchange for shares of Qualified Capital Stock of the Company, or (ii) through the application of net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of the Company) of (a) shares of Qualified Capital Stock of the Company or (b) Refinancing Indebtedness; (4) if no Default or Event of Default shall have occurred and be continuing, repurchases by the Company of Common Stock of the Company (or options or warrants to purchase such Common Stock) from directors, officers and employees of the Company or any of its Subsidiaries or their authorized representatives upon the death, disability, retirement or termination of employment of such directors, officers or employees, in an aggregate amount not to exceed $500,000 in any calendar year; (5) if no Default or Event of Default shall have occurred and be continuing, Restricted Payments in an amount not to exceed $5.0 million; and (6) if no Default or Event of Default shall have occurred and be continuing, any transfer or other disposition of Capital Stock of the Company or any Subsidiary of the Company, pursuant to an Inversion Transaction; provided that (i) the Supplemental Indenture is executed and in effect concurrently with the consummation of such Inversion Transaction; (ii) immediately following such Inversion Transaction, the Company shall apply to S&P and Moody's to have its debt rating and outlook updated and such updated debt rating and outlook shall be no less favorable to the Company than immediately prior to such Inversion Transaction; (iii) immediately following such Inversion Transaction, the Company's Consolidated Fixed Charge Coverage Ratio is at least equal to the Consolidated Fixed Charge Coverage Ratio immediately prior to such Inversion Transaction; and (iv) immediately following such Inversion Transaction, the Company is able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in compliance Section 4.03. In determining the aggregate amount of Restricted Payments made subsequent to the Issue Date in accordance with Section 4.05(a)(4)(iii), amounts expended pursuant to Section 4.05(b) (1), (2)(ii), 3(ii)(a), (4) and (5) shall be included in such calculation. SECTION 4.06. Limitation on Dividend and Other Payment Restrictions ----------------------------------------------------- Affecting Restricted Subsidiaries. The Company shall not, and shall not cause - --------------------------------- or permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or permit to exist -65- or become effective any encumbrance or restriction on the ability of any Restricted Subsidiary of the Company to: (1) pay dividends or make any other distributions on or in respect of its Capital Stock; (2) make loans or advances or to pay any Indebtedness or other obligation owed to the Company or any other Restricted Subsidiary of the Company; or (3) transfer any of its property or assets to the Company or any other Restricted Subsidiary of the Company, in each case except for such encumbrances or restrictions existing under or by reason of: (a) applicable law; (b) the Notes or this Indenture; (c) customary non-assignment provisions of any contract or any lease governing a leasehold interest of any Restricted Subsidiary of the Company; (d) any instrument governing Acquired Indebtedness, which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person or the properties or assets of the Person so acquired; (e) agreements existing on the Issue Date to the extent and in the manner such agreements are in effect on the Issue Date; (f) the Credit Agreement or an agreement governing other Senior Debt or Guarantor Senior Debt permitted to be incurred under this Indenture; provided that, with respect to any agreement governing such other Senior Debt or Guarantor Senior Debt, the provisions relating to such encumbrance or restriction are no less favorable to the Company in any material respect as determined by the Board of Directors of the Company in its reasonable and good faith judgment than the provisions contained in the Credit Agreement as in effect on the Issue Date; (g) restrictions on the transfer of assets subject to any Lien permitted under this Indenture imposed by the holder of such Lien; (h) restrictions imposed by any agreement to sell assets or Capital Stock permitted under this Indenture to any Person pending the closing of such sale; (i) restrictions imposed by agreements governing Indebtedness of a Foreign Restricted Subsidiary incurred pursuant to clauses (14) and (19) of the definition of "Permitted Indebtedness"; -66- (j) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business; (k) any Purchase Money Note or other Indebtedness or other contractual requirements of a Securitization Entity in connection with a Qualified Securitization Transaction; provided that such restrictions apply only to such Securitization Entity; (l) customary provisions in joint venture agreements and other similar agreements (in each case relating solely to the respective joint venture or similar entity or the equity interests therein) entered into in the ordinary course of business; and (m) an agreement governing Indebtedness incurred to Refinance the Indebtedness issued, assumed or incurred pursuant to an agreement referred to in clauses (b) and (d) through (l) above; provided, however, that the provisions relating to such encumbrance or restriction contained in any such agreements are no less favorable to the Company in any material respect as determined by the Board of Directors of the Company in their reasonable and good faith judgment than the provisions relating to such encumbrance or restriction contained in agreements referred to in such clauses (b) and (d) through (l) above. SECTION 4.07. Limitation on Preferred Stock of Restricted ------------------------------------------- Subsidiaries. The Company shall not permit any of its Restricted Subsidiaries - ------------ that are not Guarantors to issue any Preferred Stock (other than to the Company or to a Wholly Owned Restricted Subsidiary of the Company) or permit any Person (other than the Company or a Wholly Owned Restricted Subsidiary of the Company) to own any Preferred Stock of any Restricted Subsidiary of the Company that is not a Guarantor. SECTION 4.08. Limitation on Transactions with Affiliates. (a) The ------------------------------------------ Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into or permit to exist any transaction or series of related transactions (including, without limitation, the purchase, sale, lease or exchange of any property or the rendering of any service) with, or for the benefit of, any of its Affiliates (each, an "Affiliate Transaction"), other --------------------- than (x) Affiliate Transactions permitted under Section 4.08(b) and (y) Affiliate Transactions on terms that are no less favorable than those that might reasonably have been obtained in a comparable transaction at such time on an arm's-length basis from a Person that is not an Affiliate of the Company or such Restricted Subsidiary. All Affiliate Transactions (and each series of related Affiliate Transactions which are similar or part of a common plan) involving aggregate payments or other property with a fair market value in excess of $5.0 million shall be approved by the Board of Directors of the Company or such Restricted Subsidiary, as the case may be, such approval to be evidenced by a Board Resolution stating that such Board of Directors has determined that such transaction complies with the foregoing provisions. If the Company or any Restricted Sub- -67- sidiary of the Company enters into an Affiliate Transaction (or a series of related Affiliate Transactions related to a common plan) that involves an aggregate fair market value of more than $10.0 million, the Company or such Restricted Subsidiary, as the case may be, shall, prior to the consummation thereof, obtain a favorable opinion as to the fairness of such transaction or series of related transactions to the Company or the relevant Restricted Subsidiary, as the case may be, from a financial point of view, from an Independent Financial Advisor and file the same with the Trustee. (b) The restrictions set forth in Section 4.08(a) shall not apply to: (1) reasonable fees and compensation paid to and indemnity provided on behalf of, officers, directors, employees or consultants of the Company or any Restricted Subsidiary of the Company as determined in good faith by the Company's Board of Directors or senior management; (2) transactions exclusively between or among the Company and any of its Restricted Subsidiaries or exclusively between or among such Restricted Subsidiaries; provided such transactions are not otherwise prohibited by this Indenture; (3) any agreement as in effect as of the Issue Date or any amendment thereto or any transaction contemplated thereby (including pursuant to any amendment thereto) in any replacement agreement thereto so long as any such amendment or replacement agreement is not more disadvantageous to the Holders in any material respect than the original agreement as in effect on the Issue Date; (4) Restricted Payments or Permitted Investments permitted by this Indenture; (5) transactions between the Company or any of its Subsidiaries and any Securitization Entity in connection with a Qualified Securitization Transaction, in each case provided that such transactions are not otherwise prohibited by this Indenture; and (6) transactions undertaken pursuant to an Inversion Transaction; provided that (i) the Supplemental Indenture is executed and in effect concurrently with the consummation of such Inversion Transaction; (ii) immediately following such Inversion Transaction, the Company shall apply to S&P and Moody's to have its debt rating and outlook updated and such updated debt rating and outlook shall be no less favorable to the Company than immediately prior to such Inversion Transaction; (iii) immediately following such Inversion Transaction, the Company's Consolidated Fixed Charge Coverage Ratio is at least equal to the Consolidated Fixed Charge Coverage Ratio immediately prior to such Inversion Transaction; and (iv) immediately following such Inversion Transaction, the Company is able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.03. -68- SECTION 4.09. Limitation on Liens. The Company shall not, and ------------------- shall not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or permit or suffer to exist any Liens of any kind against or upon any property or assets of the Company or any of its Restricted Subsidiaries whether owned on the Issue Date or acquired after the Issue Date, or any proceeds therefrom, or assign or otherwise convey any right to receive income or profits therefrom unless: (1) in the case of Liens securing Indebtedness that is expressly subordinate or junior in right of payment to the Notes or the Guarantees, the Notes or the Guarantees are secured by a Lien on such property, assets or proceeds that is senior in priority to such Liens; and (2) in all other cases, the Notes or the Guarantees, as the case may be, are equally and ratably secured, except for: (a) Liens existing as of the Issue Date to the extent and in the manner such Liens are in effect on the Issue Date; (b) Liens securing Senior Debt and Liens securing Guarantor Senior Debt; (c) Liens securing the Notes and the Guarantees; (d) Liens of the Company or a Wholly Owned Restricted Subsidiary of the Company on assets of any Restricted Subsidiary of the Company and Liens on assets of the Company in favor of a Wholly Owned Restricted Subsidiary that is a Guarantor; (e) Liens securing Refinancing Indebtedness which is incurred to Refinance any Indebtedness that has been secured by a Lien permitted under this Indenture and that has been incurred without violation of this Indenture; provided, however, that such Liens: (i) are no less favorable to the Holders and are not more favorable to the lienholders, in each case in any material respect, with respect to such Liens than the Liens in respect of the Indebtedness being Refinanced; and (ii) do not extend to or cover any categories of property or assets of the Company or any of its Restricted Subsidiaries not securing the Indebtedness so Refinanced; and (f) Permitted Liens. SECTION 4.10. Limitation on Asset Sales. (a) The Company shall not, ------------------------- and shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless: (1) the Company or the applicable Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets sold or otherwise disposed of (as determined in good faith by the Company's Board of Directors); -69- (2) at least 75% of the consideration received by the Company or the Restricted Subsidiary, as the case may be, from such Asset Sale shall be in the form of cash or Cash Equivalents and shall be received at the time of such disposition; provided that, for purposes of this clause (2), the following will be considered "cash" or "Cash Equivalents": (i) any Senior Debt or Guarantor Senior Debt that is assumed by the transferee of any such assets, to the extent the Company or such Restricted Subsidiary is released from any further liability with respect thereto; and (ii) any securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash or Cash Equivalents (to the extent of the cash or Cash Equivalents received) within 30 days after receipt; and (3) upon the consummation of an Asset Sale, the Company shall apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within 365 days of receipt thereof either: (i) to prepay any Senior Debt, Guarantor Senior Debt or Indebtedness of a Restricted Subsidiary that is not a Guarantor and, in the case of any Senior Debt, Guarantor Senior Debt or such other Indebtedness under any revolving credit facility, effect a permanent reduction in the availability under such revolving credit facility; (ii) to make an investment in properties and assets that replace the properties and assets that were the subject of such Asset Sale or in properties and assets (including Capital Stock) that will be used in the business of the Company and its Restricted Subsidiaries as existing on the Issue Date or in businesses reasonably related thereto ("Replacement ----------- Assets"); or ------ (iii) a combination of prepayment and investment permitted by the foregoing clauses (3)(i) and (3)(ii). (b) On the 366th day after an Asset Sale or such earlier date, if any, as the Board of Directors of the Company or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clauses (3)(i), (3)(ii) and (3)(iii) of Section 4.10(a) (each, a "Net --- Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds that - --------------------------- have not been applied on or before such Net Proceeds Offer Trigger Date as permitted in clauses (3)(i), (3)(ii) and (3)(iii) of Section 4.10(a) (each, a "Net Proceeds Offer Amount") shall be applied by the Company or such Restricted - -------------------------- Subsidiary to make an offer to purchase (the "Net Proceeds Offer") on a date ------------------ (the "Net Proceeds Offer Payment -------------------------- -70- Date") not less than 30 nor more than 45 days following the applicable Net - ---- Proceeds Offer Trigger Date, from all Holders on a pro rata basis, the maximum amount of Notes that may be purchased with the Net Proceeds Offer Amount at a price equal to 100% of the principal amount of the Notes to be purchased, plus accrued and unpaid interest thereon, if any, to the date of purchase; provided, however, that if at any time any non-cash consideration received by the Company or any Restricted Subsidiary of the Company, as the case may be, in connection with any Asset Sale is converted into or sold or otherwise disposed of for cash (other than interest received with respect to any such non-cash consideration), then such conversion or disposition shall be deemed to constitute an Asset Sale hereunder and the Net Cash Proceeds thereof shall be applied in accordance with this Section 4.10. The Company may defer the Net Proceeds Offer until there is an aggregate unutilized Net Proceeds Offer Amount equal to or in excess of $10.0 million resulting from one or more Asset Sales (at which time, the entire unutilized Net Proceeds Offer Amount, and not just the amount in excess of $10.0 million, shall be applied as required pursuant to this Section 4.10(b)). In the event of the transfer of substantially all (but not all) of the property and assets of the Company and its Restricted Subsidiaries as an entirety to a Person in a transaction permitted under Section 5.01, which transaction does not constitute a Change of Control, the successor corporation shall be deemed to have sold the properties and assets of the Company and its Restricted Subsidiaries not so transferred for purposes of this Section 4.10 and shall comply with the provisions of this Section 4.10 with respect to such deemed sale as if it were an Asset Sale. In addition, the fair market value of such properties and assets of the Company or its Restricted Subsidiaries deemed to be sold shall be deemed to be Net Cash Proceeds for purposes of this Section 4.10. (c) Notwithstanding Sections 4.10(a) and (b), the Company and its Restricted Subsidiaries will be permitted to consummate an Asset Sale without complying with such Sections to the extent that: (1) at least 75% of the consideration for such Asset Sale constitutes Replacement Assets; and (2) such Asset Sale is for fair market value; provided that any consideration not constituting Replacement Assets received by the Company or any of its Restricted Subsidiaries in connection with any Asset Sale permitted to be consummated under this Section 4.10(c) shall constitute Net Cash Proceeds subject to the provisions of Sections 4.10(a) and (b). The provisions of this Section 4.10 shall not apply to transactions undertaken pursuant to an Inversion Transaction; provided that (i) the Supplemental Indenture is executed and in effect concurrently with the consummation of such Inversion Transaction; (ii) immedi- -71- ately following such Inversion Transaction, the Company shall apply to S&P and Moody's to have its debt rating and outlook updated and such updated debt rating and outlook shall be no less favorable to the Company than immediately prior to such Inversion Transaction; (iii) immediately following such Inversion Transaction, the Company's Consolidated Fixed Charge Coverage Ratio is at least equal to the Consolidated Fixed Charge Coverage Ratio immediately prior to such Inversion Transaction; and (iv) immediately following such Inversion Transaction, the Company is able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.03. Each Net Proceeds Offer will be mailed to the record Holders as shown on the register of Holders within 25 days following the Net Proceeds Offer Trigger Date, with a copy to the Trustee, and shall comply with the procedures set forth in this Indenture. The notice to the Holders shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Net Proceeds Offer. Such notice shall state: (1) that the Net Proceeds Offer is being made pursuant to this Section 4.10 and that all Notes tendered will be accepted for payment; (2) the purchase price (including the amount of accrued interest) and the purchase date (which shall be the Net Proceeds Offer Payment Date); (3) that any Note not tendered will continue to accrue interest if interest is then accruing; (4) that, unless the Company defaults in making payment therefor, any Note accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Net Proceeds Offer Payment Date; (5) that Holders electing to have a Note purchased pursuant to a Net Proceeds Offer will be required to surrender the Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third business day prior to the Net Proceeds Offer Payment Date; (6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than 5:00 p.m., New York City time, on the second Business Day preceding the Net Proceeds Offer Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Notes the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased; and (7) the circumstances and relevant facts regarding such Net Proceeds Offer. -72- Upon receiving notice of the Net Proceeds Offer, Holders may elect to tender their Notes in whole or in part in integral multiples of . 1000 in exchange for cash. To the extent Holders properly tender Notes in an amount exceeding the Net Proceeds Offer Amount, Notes of tendering Holders will be purchased on a pro rata basis (based on amounts tendered). A Net Proceeds Offer shall remain open for a period of 20 business days or such longer period as may be required by law. The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to a Net Proceeds Offer. To the extent that the provisions of any securities laws or regulations conflict with this Section 4.10 hereof, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.10 by virtue thereof. SECTION 4.11. Repurchase of Notes upon a Change of Control. (a) -------------------------------------------- Upon the occurrence of a Change of Control, each Holder will have the right to require that the Company purchase all or a portion of such Holder's Notes pursuant to the offer described below (the "Change of Control Offer"), at a ----------------------- purchase price equal to 101% of the principal amount thereof plus accrued and unpaid interest thereon to the date of purchase. Within 30 days following the date upon which the Change of Control occurred, the Company must send, by first class mail, a notice to each Holder, with a copy to the Trustee, which notice shall govern the terms of the Change of Control Offer. Such notice shall state, among other things, the purchase date, which, unless otherwise required by law, must be no earlier than 30 days nor later than 60 days from the date such notice is mailed (the "Change of Control ----------------- Payment Date"). The notice to the Holders shall contain all instructions and - ------------ materials necessary to enable such Holders to tender Notes pursuant to the Change of Control Offer. Such notice shall state: (1) that the Change of Control Offer is being made pursuant to this Section 4.11 and that all Notes tendered will be accepted for payment; (2) the purchase price (including the amount of accrued interest) and the purchase date (which shall be no earlier than the Change of Control Payment Date); (3) that any Note not tendered will continue to accrue interest if interest is then accruing; (4) that, unless the Company defaults in making payment therefor, any Note accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Payment Date; -73- (5) that Holders electing to have a Note purchased pursuant to a Change of Control Offer will be required to surrender the Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third business day prior to the Change of Control Payment Date; (6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than 5:00 p.m., New York City time, on the second Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Notes the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased; and (7) the circumstances and relevant facts regarding such Change of Control. (b) Prior to the mailing of the notice referred to above, but in any event within 30 days following any Change of Control, the Company covenants to: (1) repay in full and terminate all commitments under Indebtedness under the Credit Agreement and all other Senior Debt the terms of which require repayment upon a Change of Control or offer to repay in full and terminate all commitments under all Indebtedness under the Credit Agreement and all other such Senior Debt and to repay the Indebtedness owed to (and terminate the commitments of) each lender that has accepted such offer; or (2) obtain the requisite consents under the Credit Agreement and all other such Senior Debt to permit the repurchase of the Notes as provided below. The Company shall first comply with the covenant in the immediately preceding sentence before it shall be required to either repurchase Notes pursuant to the provisions described below or send the notice pursuant to the provisions described above. The Company's failure to comply with the covenant described in the immediately preceding sentence shall constitute an Event of Default described in Section 6.01(a)(3) (after the giving of the notice and lapse of time as described therein) and not in Section 6.01(a)(2). (c) The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with this Section 4.11, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 4.11 by virtue thereof. -74- Notwithstanding anything to the contrary in this section, the Company shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this section and purchases all notes validly tendered and not withdrawn under such Change of Control Offer. SECTION 4.12. Additional Subsidiary Guarantees. If any existing or -------------------------------- future Domestic Restricted Subsidiary shall, after the Issue Date, guarantee any Indebtedness of the Company or a Guarantor, then the Company shall cause such Domestic Restricted Subsidiary to: (1) execute and deliver to the Trustee a supplemental indenture pursuant to which such Domestic Restricted Subsidiary shall unconditionally guarantee all of the Company's obligations under the Notes and this Indenture on the terms set forth herein; and (2) deliver to the Trustee an opinion of counsel that such supplemental indenture has been duly authorized, executed and delivered by such Domestic Restricted Subsidiary and constitutes a legal, valid, binding and enforceable obligation of such Domestic Restricted Subsidiary. Thereafter, such Domestic Restricted Subsidiary shall be a Guarantor for all purposes of this Indenture until such Domestic Restricted Subsidiary is released from its Guarantee as provided in this Indenture. SECTION 4.13. Existence. Subject to Article Five of this --------- Indenture, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect its existence and the existence of each Restricted Subsidiary in accordance with the respective organizational documents of the Company and each Restricted Subsidiary and the rights (whether pursuant to charter, partnership certificate, agreement, statute or otherwise), material licenses and franchises of the Company and each Restricted Subsidiary; provided that the Company shall not be required to preserve any such right, license or franchise, or the existence of any Restricted Subsidiary, if the maintenance or preservation thereof is no longer desirable in the conduct of the business of the Company and its Restricted Subsidiaries taken as a whole. SECTION 4.14. Payment of Taxes and Other Claims. The Company shall --------------------------------- pay or discharge and shall cause each of its Restricted Subsidiaries to pay or discharge, or cause to be paid or discharged, before the same shall become delinquent (i) all material taxes, assessments and governmental charges levied or imposed upon (a) the Company or any such Restricted Subsidiary, (b) the income or profits of any such Restricted Subsidiary which is a corporation or (c) the property of the Company or any such Restricted Subsidiaries and (ii) all material lawful claims for labor, materials and supplies that, if unpaid, might by law become a -75- Lien upon the property of the Company or any such Restricted Subsidiary; provided that neither the Company nor any such Restricted Subsidiary shall be required to pay or discharge, or cause to be paid or discharged, any such tax, assessment, charge or claim the amount, applicability or validity of which is being contested in good faith by appropriate proceedings and for which adequate reserves have been established in accordance with GAAP. SECTION 4.15. Reports to Holders. Whether or not required by the ------------------ rules and regulations of the Commission, so long as any Notes are outstanding, the Company shall furnish the Holders of Notes: (1) all quarterly and annual financial information that would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K if the Company were required to file such Forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" that describes the financial condition and results of operations of the Company and its consolidated Subsidiaries (showing in reasonable detail, either on the face of the financial statements or in the footnotes thereto and in Management's Discussion and Analysis of Financial Condition and Results of Operations, the financial condition and results of operations of the Company and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of the Company, if any) and, with respect to the annual information only, a report thereon by the Company's certified independent accounts; and (2) all current reports that would be required to be filed with the Commission on Form 8-K if the Company were required to file such reports, in each case within the time periods specified in the Commission's rules and regulations. In addition, following the consummation of the Exchange Offer, whether or not required by the rules and regulations of the Commission, the Company shall file a copy of all such information and reports with the Commission for public availability within the time periods specified in the Commission's rules and regulations (unless the Commission will not accept such a filing) and make such information available to securities analysts and prospective investors upon request. In addition, the Company has agreed that, for so long as any Notes remain outstanding, it shall furnish to the Holders and to securities analysts and prospective investors, upon their request, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. If and so long as the Notes are listed on the Luxembourg Stock Exchange, the Company shall cause copies of such reports to be available at the specified office of the Paying Agent and transfer agent in Luxembourg. SECTION 4.16. Conduct of Business. The Company shall not, and ------------------- shall not permit any Restricted Subsidiary to, engage in any businesses that are not the same, similar or -76- reasonably related to the businesses in which the Company and its Restricted Subsidiaries are engaged on the Issue Date. SECTION 4.17. Waiver of Stay, Extension or Usury Laws. Each of the --------------------------------------- Company and any Guarantor covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law that would prohibit or forgive the Company or such Guarantor from paying all or any portion of the principal of, premium, if any, or interest on the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or that may affect the covenants or the performance of this Indenture; and (to the extent that it may lawfully do so) each of the Company and any Guarantor hereby expressly waives all benefit or advantage of any such law and covenants that it shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted. SECTION 4.18. Compliance Certificates. (a) The Company shall ----------------------- deliver to the Trustee within 90 days after the end of each fiscal year, commencing with the fiscal year ending December 31, 2001, an Officers' Certificate (which shall be signed by the Chief Financial Officer of the Company) stating (i) that, a review has been conducted of the activities of the Company and its Restricted Subsidiaries under the supervision of the signing Officer with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and (ii) that, to the best knowledge of the Officer signing such certificate, the Company has kept, observed, performed and fulfilled each and every covenant and condition contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions, conditions and covenants hereof (or, if a Default or Event of Default shall have occurred, specifying each such Default or Event of Default and describing its status and what action the Company is taking or proposes to take with respect thereto). (b) The Company shall, so long as any of the Notes are outstanding, deliver to the Trustee, promptly after any Officer of the Company becomes aware of any Default or Event of Default, an Officers' Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto. SECTION 4.19. Maintenance of Properties. The Company shall cause ------------------------- all material properties owned by it or any Restricted Subsidiary or used or held for use in the conduct of its business or the business of any Restricted Subsidiary to be maintained and kept in good condition, repair and working order (ordinary wear and tear and damage by casualty excepted) and supplied with all necessary equipment and shall cause to be made all necessary repairs, renewals, replacements, betterments and improvements thereof, all as in the judgment of the Company may be necessary so that the business carried on in connection therewith may be properly and advantageously conducted at all times; provided, however, that nothing in this Section 4.19 shall prevent the Company from discontinuing the maintenance of any such -77- properties if such discontinuance is, in the judgment of the Company, desirable in the conduct of the business of the Company and the Restricted Subsidiaries as a whole and not disadvantageous in any material respect to the Holders. SECTION 4.20. Insurance. The Company shall maintain, and shall --------- cause its Restricted Subsidiaries to maintain, insurance with carriers believed by the Company to be responsible, against such risks and in such amounts, and with such deductibles, retentions, self-insured amounts and coinsurance provisions, as the Company believes are customarily carried by similar businesses, of similar size, including as appropriate general liability, property and casualty loss and interruption of business insurance. ARTICLE FIVE SUCCESSOR CORPORATION SECTION 5.01. Merger, Consolidation and Sale of Assets. (a) The ---------------------------------------- Company shall not, in a single transaction or series of related transactions, consolidate or merge with or into any Person, or sell, assign, transfer, lease, convey or otherwise dispose of (or cause or permit any Restricted Subsidiary of the Company to sell, assign, transfer, lease, convey or otherwise dispose of) all or substantially all of the Company's assets (determined on a consolidated basis for the Company and the Company's Restricted Subsidiaries) whether as an entirety or substantially as an entirety to any Person unless: (1) either: (A) the Company shall be the surviving or continuing corporation; or (B) the Person (if other than the Company) formed by such consolidation or into which the Company is merged or the Person which acquires by sale, assignment, transfer, lease, conveyance or other disposition the properties and assets of the Company and of the Company's Restricted Subsidiaries substantially as an entirety (the "Surviving Entity"): ---------------- (x) shall be a corporation organized and validly existing under the laws of any country that is a member of the European Union as currently constituted or the United States or any State thereof or the District of Columbia; and (y) shall expressly assume, by supplemental indenture (in form and substance satisfactory to the Trustee), executed and delivered to the Trustee, the due and punctual payment of the principal of, and -78- premium, if any, and interest on all of the Notes and the performance of every covenant of the Notes, this Indenture and the Registration Rights Agreement on the part of the Company to be performed or observed; (2) immediately after giving effect to such transaction and the assumption contemplated by Section 5.01(a)(1)(B)(y) above (including giving effect to any Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction), the Company or such Surviving Entity, as the case may be, (a) shall have a Consolidated Net Worth equal to or greater than the Consolidated Net Worth of the Company immediately prior to such transaction and (b) shall be able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.03; (3) immediately before and immediately after giving effect to such transaction and the assumption contemplated by Section 5.01(a)(1)(B)(y) above (including, without limitation, giving effect to any Indebtedness and Acquired Indebtedness incurred or anticipated to be incurred and any Lien granted in connection with or in respect of the transaction), no Default or Event of Default shall have occurred or be continuing; and (4) the Company or the Surviving Entity shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, sale, assignment, transfer, lease, conveyance or other disposition and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with the applicable provisions of this Indenture and that all conditions precedent in this Indenture relating to such transaction have been satisfied. For purposes of the foregoing, the transfer (by lease, assignment, sale or otherwise, in a single transaction or series of transactions) of all or substantially all of the properties or assets of one or more Restricted Subsidiaries of the Company the Capital Stock of which constitutes all or substantially all of the properties and assets of the Company, shall be deemed to be the transfer of all or substantially all of the properties and assets of the Company. (b) Upon any consolidation, combination or merger or any transfer of all or substantially all of the assets of the Company in accordance with Section 5.01(a) in which the Company is not the continuing corporation, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, lease or transfer is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture and the Notes with the same effect as if such surviving entity had been named as such. -79- (c) Each Guarantor (other than any Guarantor whose Guarantee is to be released in accordance with the terms of its Guarantee and this Indenture in connection with any transaction complying with Section 4.10) shall not, and the Company shall not cause or permit any Guarantor to, consolidate with or merge with or into any Person other than the Company or any other Guarantor unless: (1) the entity formed by or surviving any such consolidation or merger (if other than the Guarantor) or to which such sale, lease, conveyance or other disposition shall have been made is a corporation organized and existing under the laws of the United States or any State thereof or the District of Columbia; (2) such entity assumes by supplemental indenture all of the obligations of the Guarantor on its Guarantee; (3) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing; and (4) immediately after giving effect to such transaction and the use of any net proceeds therefrom on a pro forma basis, the Company could satisfy Section 5.01(a)(2). Any merger or consolidation of a Guarantor with and into the Company (with the Company being the surviving entity) or another Guarantor that is a Wholly Owned Restricted Subsidiary of the Company need only comply with Section 5.01(a)(4). The provisions of this Section 5.01 shall not apply to transactions undertaken pursuant to an Inversion Transaction; provided that (i) the Supplemental Indenture is executed and in effect concurrently with the consummation of such Inversion Transaction; (ii) immediately following such Inversion Transaction, the Company shall apply to S&P and Moody's to have its debt rating and outlook updated and such updated debt rating and outlook shall be no less favorable to the Company than immediately prior to such Inversion Transaction; (iii) immediately following such Inversion Transaction, the Company's Consolidated Fixed Charge Coverage Ratio is at least equal to the Consolidated Fixed Charge Coverage Ratio immediately prior to such Inversion Transaction; and (iv) immediately following such Inversion Transaction, the Company is able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.03. SECTION 5.02. Successor Substituted. In the event of a sale, --------------------- assignment, transfer, conveyance or other disposition (other than a lease) described in and complying with the conditions listed in Section 5.01 in which the Company is not the Surviving Entity and the Surviving Entity assumes all the obligations of the Company under the Notes, this Indenture and the Registration Rights Agreement, the Surviving Entity will succeed to, and be substituted for, and may exercise every right and power of, the Company under such agreements and -80- the Company shall be discharged from its obligations under the Notes, this Indenture and the Registration Rights Agreement. ARTICLE SIX DEFAULT AND REMEDIES SECTION 6.01. Events of Default. (a) The following events are ----------------- defined as "Events of Default": ----------------- (1) the failure to pay interest on any Notes when the same becomes due and payable and the default continues for a period of 30 days (whether or not such payment shall be prohibited by Article Ten hereof); (2) the failure to pay the principal on any Notes, when such principal becomes due and payable, at maturity, upon redemption or otherwise (including the failure to make a payment to purchase Notes tendered pursuant to a Change of Control Offer or a Net Proceeds Offer) on the date specified for such payment in the applicable offer to purchase (whether or not such payment shall be prohibited by Article Ten hereof); (3) a default in the observance or performance of any other covenant or agreement contained in this Indenture which default continues for a period of 45 days after the Company receives written notice specifying the default (and demanding that such default be remedied) from the Trustee or the Holders of at least 25% of the outstanding principal amount of the Notes (except in the case of a default with respect to Section 5.01, which will constitute an Event of Default with such notice requirement but without such passage of time requirement); (4) the failure to pay at final stated maturity (giving effect to any applicable grace periods and any extensions thereof) the principal amount of any Indebtedness of the Company or any Restricted Subsidiary of the Company, or the acceleration of the final stated maturity of any such Indebtedness (which acceleration is not rescinded, annulled or otherwise cured within 20 days of receipt by the Company or such Restricted Subsidiary of notice of any such acceleration) if the aggregate principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness in default for failure to pay principal at final stated maturity or which has been accelerated (in each case with respect to which the 20-day period described above has passed), aggregates $10.0 million or more at any time; (5) one or more judgments in an aggregate amount in excess of $10.0 million shall have been rendered against the Company or any of its Significant Subsidiar- -81- ies and such judgments remain undischarged, unpaid or unstayed for a period of 60 days after such judgment or judgments become final and non- appealable; (6) the Company or any of its Significant Subsidiaries, pursuant to or within the meaning of any Bankruptcy Law, (i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary case, (iii) consents to the appointment of a Custodian of it or for all or substantially all of its assets, or (iv) makes a general assignment for the benefit of its creditors; (7) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (i) is for relief against the Company or any of its Significant Subsidiaries as debtor in an involuntary case, (ii) appoints a Custodian of the Company or any of its Significant Subsidiaries or a Custodian for all or substantially all of the assets of the Company or any Restricted Subsidiary, or (iii) orders the liquidation of the Company or any of its Significant Subsidiaries, and in each case, the order or decree remains unstayed and in effect for 60 days; or (8) any Guarantee of a Significant Subsidiary ceases to be in full force and effect or any Guarantee of a Significant Subsidiary is declared to be null and void and unenforceable or any Guarantee of a Significant Subsidiary is found to be invalid or any Guarantor that is a Significant Subsidiary denies its liability under its Guarantee (other than, in each case, by reason of release of a Guarantor in accordance with the terms of this Indenture). (b) If an Event of Default (other than an Event of Default specified in Section 6.01(a)(6) or 6.01 (a)(7) above with respect to the Company) shall occur and be continuing, the Trustee or the Holders of at least 25% in principal amount of outstanding Notes may declare the principal of and accrued interest on all the Notes to be due and payable by notice in writing to the Company, the Representative under the Credit Agreement and the Trustee specifying the applicable Event of Default and that it is a "notice of acceleration" (the Acceleration Notice"), and the same: - -------------------- -82- (1) shall become immediately due and payable; or (2) if there are any amounts outstanding under the Credit Agreement, shall become immediately due and payable upon the first to occur of an acceleration under the Credit Agreement and five Business Days after receipt by the Company and the Representative under the Credit Agreement of such Acceleration Notice but only if such Event of Default is then continuing. If an Event of Default specified in Section 6.01(a)(6) or 6.01(a)(7) above with respect to the Company occurs and is continuing, then all unpaid principal of, and premium, if any, and accrued and unpaid interest on all of the outstanding Notes shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. (c) At any time after a declaration of acceleration with respect to the Notes as described in Section 6.01(b), the Holders of a majority in principal amount of the Notes may rescind and cancel such declaration and its consequences: (1) if the rescission would not conflict with any judgment or decree; (2) if all existing Events of Default have been cured or waived except nonpayment of principal or interest that has become due solely because of the acceleration; (3) to the extent the payment of such interest is lawful, interest on overdue installments of interest and overdue principal, which has become due otherwise than by such declaration of acceleration, has been paid; (4) if the Company has paid the Trustee its reasonable compensation and reimbursed the Trustee for its expenses, disbursements and advances; and (5) in the event of the cure or waiver of an Event of Default of the type described in Section 6.01(a)(6) or 6.01(a)(7), the Trustee shall have received an Officers' Certificate and an Opinion of Counsel that such Event of Default has been cured or waived. No such rescission shall affect any subsequent Default or impair any right consequent thereto. The Holders of a majority in principal amount of the Notes may waive any existing Default or Event of Default under this Indenture, and its consequences, except a default in the payment of the principal of or interest on any Notes. Holders of the Notes may not enforce this Indenture or the Notes except as provided in this Indenture and under the TIA. The Trustee is under no obligation to exercise -83- any of its rights or powers under this Indenture at the request, order or direction of any of the Holders, unless such Holders have offered to the Trustee reasonable indemnity. Subject to all provisions of this Indenture and applicable law, the Holders of a majority in aggregate principal amount of the then outstanding Notes have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee. SECTION 6.02. Notice of Defaults. The Trustee shall, within 90 ------------------ days after the occurrence of any Default with respect to the Notes, give the Holders notice of all uncured Defaults thereunder known to it; provided, however, that, except in the case of an Event of Default in payment with respect to the Notes or a Default in complying with Section 5.01, the Trustee shall be protected in withholding such notice if and so long as a committee of its trust officers in good faith determines that the withholding of such notice is in the interest of the Holders. SECTION 6.03. Other Remedies. If an Event of Default occurs and is -------------- continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of principal of, premium, if any, or interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. Holders of the Notes may not enforce this Indenture or the Notes except as provided in Section 6.02, Section 6.05, Section 6.06 and Section 6.07. SECTION 6.04. Waiver of Past Defaults. Subject to Sections 6.02, ----------------------- 6.07 and 9.02, the Holders of at least a majority in principal amount of the outstanding Notes, by notice to the Trustee, may waive an existing Default or Event of Default and its consequences, except a Default in the payment of principal of, premium, if any, or interest on any Note as specified in clause (a) or (b) of Section 6.01 which cannot be waived without the consent of the Holder of such Note or in respect of a covenant or provision of this Indenture which cannot be modified or amended without the consent of the Holder of each outstanding Note affected. Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto. SECTION 6.05. Control by Majority. Subject to Section 7.02(e), the ------------------- Holders of a majority in aggregate principal amount of the Notes may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or that the Trustee determines is unduly prejudicial to the rights of other Holders or would involve the Trustee in personal liability; -84- provided, however, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction. SECTION 6.06. Limitation on Suits. A Holder may not pursue any ------------------- proceeding, judicial or otherwise, with respect to this Indenture and the Notes or for the appointment of a receiver or trustee, or for any other remedy hereunder unless: (i) the Holder gives the Trustee written notice of a continuing Event of Default; (ii) the Holders of at least 25% in aggregate principal amount of outstanding Notes make a written request to the Trustee to pursue the remedy; (iii) such Holder or Holders offer the Trustee indemnity satisfactory to the Trustee against any costs, liability or expense; (iv) the Trustee does not comply with the request within 15 days after receipt of the request and the offer of indemnity; and (v) during such 15-day period, the Holders of a majority in aggregate principal amount of the outstanding Notes do not give the Trustee a direction that is inconsistent with the request. However, such limitations do not apply to a suit instituted by a Holder of any Note for enforcement of payment of the principal of or interest on such Note on or after the due date therefor (after giving effect to any grace period specified in Section 6.01(a) and only with respect to the amount of such missed payment). For purposes of Section 6.05 of this Indenture and this Section 6.06, the Trustee shall comply with TIA Section 316(a) in making any determination of whether the Holders of the required aggregate principal amount of outstanding Notes have concurred in any request or direction of the Trustee to pursue any remedy available to the Trustee or the Holders with respect to this Indenture and the Notes or otherwise under the law. A Holder may not use this Indenture to prejudice the rights of another Holder or to obtain a preference or priority over such other Holder. SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding ------------------------------------ any other provision of this Indenture, the right of any Holder of a Note to receive payment of the principal amount of, Additional Interest, if any, or interest on, such Note or to bring suit for the enforcement of any such payment, on or after the due date expressed in the Notes, shall not be impaired or affected without the consent of such Holder. -85- SECTION 6.08. Collection Suit by Trustee. If an Event of Default -------------------------- in payment of principal, premium or interest specified in clause (1) or (2) of Section 6.01(a) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company or any other obligor of the Notes for the whole amount of principal, premium, if any, and accrued interest remaining unpaid, together with interest on overdue principal and premium and, to the extent that payment of such interest is lawful, interest on overdue installments of interest, in each case at the rate specified in the Notes, and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may -------------------------------- file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07) and the Holders allowed in any judicial proceedings relative to the Company (or any other obligor of the Notes), its creditors or its property and shall be entitled and empowered to collect and receive any monies, securities or other property payable or deliverable upon conversion or exchange of the Notes or upon any such claims and to distribute the same, and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation expenses, disbursements and advances of the Trustee, its agent and counsel, and any other amounts due the Trustee under Section 7.07. Nothing herein contained shall be deemed to empower the Trustee to authorize or consent to, or accept or adopt on behalf of any Holder, any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. SECTION 6.10. Priorities. If the Trustee collects any money ---------- pursuant to this Article Six it shall pay out the money in the following order: First: to the Trustee for all amounts due under Section 7.07 and any receiver, manager, administrative receiver, liquidator or agent appointed subject to this Indenture; Second: to Holders for amounts then due and unpaid for principal of, premium, if any, and interest on the Notes in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Notes for principal, premium, if any, and interest, respectively; and -86- Third: to the Company and any other obligors of the Notes, as their interests may appear, or as a court of competent jurisdiction may direct. The Trustee, upon prior written notice to the Company, may fix a record date and payment date for any payment to Holders pursuant to this Section 6.10. SECTION 6.11. Undertaking for Costs. In any suit for the --------------------- enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court may require any party litigant in such suit to file an undertaking to pay the costs of the suit, and the court may assess reasonable costs, including reasonable attorneys' fees and expenses, against any party litigant in the suit having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07, or a suit by Holders of more than 10% in principal amount of the outstanding Notes. SECTION 6.12. Restoration of Rights and Remedies. If the Trustee ---------------------------------- or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then, and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Company, Trustee and the Holders shall continue as though no such proceeding had been instituted. SECTION 6.13. Rights and Remedies Cumulative. Except as otherwise ------------------------------ provided with respect to the replacement or payment of mutilated, destroyed, lost or wrongfully taken Notes in Section 2.08, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. SECTION 6.14. Delay or Omission Not Waiver. No delay or omission ---------------------------- of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article Six or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. -87- ARTICLE SEVEN TRUSTEE SECTION 7.01. General. The duties and responsibilities of the ------- Trustee shall be as provided by the TIA and as set forth herein. The Trustee undertakes to perform such duties as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or indemnity satisfactory to it against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Article Seven. SECTION 7.02. Certain Rights, Duties and Responsibilities of Trustee. ------------------------------------------------------ Subject to TIA Sections 315(a) through (d): (a) if any Event of Default has occurred and is continuing of which a Responsible Officer of the Trustee has actual knowledge, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise as a prudent Person would exercise or use under the circumstances in the conduct of such Person's own affairs; (b) the Trustee may conclusively rely and shall be protected in acting or refraining from acting, upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document (whether in its original or facsimile form) believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document; (c) before the Trustee acts or refrains from acting, it may require an Officers' Certificate and/or an Opinion of Counsel, which shall conform to the certificate or opinion described in Section 13.03 or Section 13.04, as the case may be. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such certificate or opinion; (d) the Trustee may consult with and act through attorneys and agents of its selection and the advice of such attorneys and agents shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; -88- (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders, unless such Holders shall have offered to the Trustee reasonable security or indemnity satisfactory to it against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction; (f) the Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers or for any action it takes or omits to take in accordance with the direction of the Holders of the requisite percentage in principal amount of the outstanding Notes required by this Indenture relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture; (g) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed), in the absence of bad faith on its part, may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon an Officers' Certificate or an Opinion of Counsel furnished to it and conforming with the requirements of this Indenture; but in the case of any such Officers' Certificate or Opinion of Counsel which by provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein); (h) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company personally or by agent or attorney at the sole cost of the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or investigation; (i) the Trustee shall not be deemed to have knowledge of any Default or Event of Default except any Default or Event of Default of which a Responsible Officer of the Trustee shall have received written notification, or obtained actual knowledge; (j) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the -89- Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; and (k) the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and other Person employed to act hereunder. SECTION 7.03. Individual Rights of Trustee. The Trustee, in its ---------------------------- individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not the Trustee. Any Agent may do the same with like rights. However, the Trustee is subject to TIA Sections 310(b) and 311. SECTION 7.04. Trustee's Disclaimer. The Trustee (a) makes no -------------------- representation as to the validity, accuracy or adequacy of this Indenture, any offering materials or the Notes, (b) shall not be accountable for the Company's use or application of the proceeds from the Notes and (c) shall not be responsible for any statement in the Notes other than its certificate of authentication. SECTION 7.05. Notice of Default. If any Default or any Event of ----------------- Default occurs and is continuing and if such Default or Event of Default is actually known to a Responsible Officer of the Trustee, the Trustee shall mail to each Holder in the manner and to the extent provided in TIA Section 313(c) notice of the Default or Event of Default within 90 days after it occurs, unless such Default or Event of Default has been cured; provided, however, that, except in the case of a default in the payment of the principal of, premium, if any, or interest on any Note, the Trustee shall be protected in withholding such notice if and so long as the Board of Directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the interest of the Holders. The Company shall give the Trustee notice of any uncured Default or Event of Default within 30 days after any Responsible Officer of the Company becomes aware of or receives actual notice of such Event of Default. SECTION 7.06. Reports by Trustee to Holders. Within 60 days after ----------------------------- each May 15 following initial issuance, beginning with May 15, 2001 the Trustee shall mail to each Holder as provided in TIA Section 313(c) a brief report dated as of such May 15 if required by TIA Section 313(a). SECTION 7.07. Compensation and Indemnity. The Company shall pay to -------------------------- the Trustee such compensation as shall be agreed upon in writing for its services hereunder. The compensation of the Trustee shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses and advances incurred or made by the Trustee in each of its capacities -90- hereunder. Such expenses shall include the reasonable compensation and expenses of the Trustee's agents and counsel. The Company shall indemnify the Trustee, in each of its capacities, and any successor of the Trustee, in each of its capacities, for, and hold it harmless against, any and all claims, damages, losses, costs, liability or expense (including, without limitation, the reasonable fees and expenses of its counsel and advisors) and taxes (other than taxes based on the income of the Trustee) incurred by it without negligence or willful misconduct on its part arising out of or in connection with the acceptance or administration of this Indenture and its duties under this Indenture and the Notes and the exercise of its rights and powers under this Indenture, including the costs and expenses of defending itself against any claim or liability (whether asserted by the Company, any Holder or any other Person) and of complying with any process served upon it or any of its officers in connection with the exercise or performance of any of its powers or duties under this Indenture and the Notes and the exercise of the rights of the Trustee thereunder. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. To secure the Company's payment obligations in this Section 7.07, the Trustee shall have a lien prior to the Notes on all money or property held or collected by the Trustee, in its capacity as Trustee, except money or property held in trust to pay principal of, Additional Interest, if any, and interest on particular Notes. If the Trustee incurs expenses or renders services after the occurrence of an Event of Default specified in Sections 6.01(a)(6) and/or 6.01(a)(7), the expenses (including the reasonable charges and expenses of its counsel) and the compensation for the services will be intended to constitute expenses of administration under Title 11 of the United States Bankruptcy Code or any applicable foreign, federal or state law for the relief of debtors. The provisions of this Section 7.07 shall survive the termination of this Indenture, payment of the Notes and/or the removal or resignation of the Trustee. SECTION 7.08. Replacement of Trustee. A resignation or removal of ---------------------- the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section 7.08. The Trustee may resign at any time by so notifying the Company in writing at least 30 days prior to the date of the proposed resignation. The Holders of a majority in principal amount of the outstanding Notes may remove the Trustee by so notifying the Trustee in writing and may appoint a successor Trustee with the prior written consent of the Company. The Company may remove the Trustee by a Board Resolution if: (a) the Trustee is no longer eligible under Section 7.10; (b) the Trustee is adjudged a bankrupt or an insolvent; (c) a receiver or other public officer takes charge of the Trustee or its property; or (d) the Trustee becomes incapable of acting. 91 If the Trustee resigns or is removed, or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company. If the successor Trustee does not deliver its written acceptance required by the next succeeding paragraph of this Section 7.08 within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of a majority in principal amount of the outstanding Notes may petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Immediately after the delivery of such written acceptance, subject to the lien provided in Section 7.07, (i) the retiring Trustee shall transfer all property held by it as Trustee to the successor Trustee, (ii) the resignation or removal of the retiring Trustee shall become effective and (iii) the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. A successor Trustee shall mail notice of its succession to each Holder. If the Trustee is no longer eligible under Section 7.10, any Holder who satisfies the requirements of TIA Section 310(b) may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. The Company shall give notice of any resignation and any removal of the Trustee and each appointment of a successor Trustee to all Holders. Each notice shall include the name of the successor Trustee and the address of its Corporate Trust Office. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company's obligation under Section 7.07 shall continue for the benefit of the retiring Trustee. SECTION 7.09. Successor Trustee by Merger, Etc. If the Trustee -------------------------------- consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation or national banking association, the resulting, surviving or transferee corporation or national banking association without any further act shall be the successor Trustee with the same effect as if the successor Trustee had been named as the Trustee herein. SECTION 7.10. Eligibility. This Indenture shall always have a ----------- Trustee who satisfies the requirements of TIA Section 310(a)(1). The Trustee shall have a combined capital and surplus of at least $50.0 million as set forth in its most recent published annual report of condition. SECTION 7.11. Money Held in Trust. The Trustee shall not be liable ------------------- for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to 92 the extent required by law and except for money held in trust under Article Eight of this Indenture. SECTION 7.12. Withholding Taxes. The Paying Agent, as agent for ----------------- the Company, shall exclude and withhold from each payment of principal and interest and other amounts due hereunder or under the Notes any and all withholding taxes applicable thereto as required by law, as directed in writing by the Company. The Paying Agent agrees to act as such withholding agent and, in connection therewith, whenever any present or future taxes or similar charges are required to be withheld with respect to any amounts payable in respect of the Notes, to withhold such amounts, as directed in writing by the Company, and timely pay the same to the appropriate authority, as directed in writing by the Company, in the name of and on behalf of the Holders of the Notes, and to file any necessary withholding tax returns or statements when due. The Company or the Trustee shall, as promptly as possible after the payment of the taxes described above, deliver to each Holder of a Note documentation in form satisfactory to the Company showing the payment thereof, together with such additional documentary evidence as such Holders may reasonably request from time to time. SECTION 7.13. Trustee's Application for Instructions from the Company. ------------------------------------------------------- Any application by the Trustee for written instructions from the Company may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such actions shall be taken or such omission shall be effective. The Trustee shall not be liable for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than three Business Days after the date any Officer of the Company actually receives such application, unless any such Officer shall have consented in writing to any earlier date) unless prior to taking any such action (or the effective date in the case of an omission), the Trustee shall have received written instructions in response to such application specifying the action to be taken or omitted. SECTION 7.14. Appointment of Co-Trustee. (a) Notwithstanding any ------------------------- other provisions of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the Notes may at the time be located, the Trustee shall have the power and may execute and deliver all instruments necessary to appoint one or more Persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part of the Notes, and to vest in such Person or Persons, in such capacity and for the benefit of the Holders, such title to the Notes, or any part hereof, and subject to the other provisions of this Section 7.14, such powers, duties, obligations, rights and trusts as the Trustee may consider necessary or desirable. No notice to Holders of the appointment of any co-trustee or separate trustee shall be required. (b) Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions: 93 (i) all rights, powers, duties and obligations conferred or imposed upon the Trustee shall be conferred or imposed upon and exercised or performed by the Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Trustee joining in such act) except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Trustee shall be incompetent or unqualified or it shall be unreasonably burdensome for the Trustee to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Notes or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Trustee; (ii) no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and (iii) the Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee. (c) Any notice, request or other writing given to the Trustee shall be deemed to have been given to each of the then separate trustees and co- trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Indenture and the conditions of this Article Seven. Each separate trustee and co-trustee, upon its acceptance of the appointment, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Trustee or separately, as may be provided therein, subject to all the provisions of this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection or rights (including the rights to compensation, reimbursement and indemnification hereunder) to, the Trustee. Every such instrument shall be filed with the Trustee. (d) Any separate trustee or co-trustee may at any time constitute the Trustee its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Indenture on its behalf and in its name. If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Trustee, to the extent permitted by law, until the appointment of a new trustee or successor to such separate or co-trustee. 94 ARTICLE EIGHT DISCHARGE OF INDENTURE SECTION 8.01. Termination of Company's Obligations. Except as ------------------------------------ otherwise provided in this Section 8.01, the Company may terminate its and the Guarantors' obligations under this Indenture and the Notes if: (1) either: (a) all the Notes theretofore authenticated and delivered (except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust) have been delivered to the Trustee for cancellation; or (b) all Notes not theretofore delivered to the Trustee for cancellation have become due and payable, and the Company has irrevocably deposited or caused to be deposited with the Trustee funds in an amount sufficient to pay and discharge the entire Indebtedness on the Notes not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest on the Notes to the date of deposit together with irrevocable instructions from the Company directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be; (2) the Company has paid all other sums payable under this Indenture by the Company; and (3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel stating that all conditions precedent under this Indenture relating to the satisfaction and discharge of this Indenture have been complied with. With respect to the foregoing clause (1), the Company's and the Guarantors' obligations under Sections 7.07 and 14.08 shall survive such satisfaction and discharge. With respect to the foregoing clause (2), the Company's and the Guarantors' obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.10, 2.13, 4.02, 4.13, 7.07, 7.08, 8.04, 8.05, 8.06 and 14.08 shall survive until the Notes are no longer outstanding. Thereafter, only the Company's and the Guarantors' obligations in Sections 7.07, 8.05, 8.06 and 14.08 shall survive. After any such irrevocable deposit, the Trustee upon written request of the Company shall acknowledge in writing the discharge of the Company's and the Guarantors' obligations under the Notes and this Indenture, except for those surviving obligations specified above. SECTION 8.02. Defeasance and Discharge of Indenture. The Company ------------------------------------- will be deemed to have paid and will, together with the Guarantors, be discharged from any and all 95 obligations in respect of this Indenture and the Notes on the date of the deposit referred to in clause (A) of this Section 8.02, and the provisions of this Indenture will no longer be in effect with respect to the Notes ("Legal ----- Defeasance"), and the Trustee, at the expense of the Company, shall execute - ---------- proper instruments acknowledging the same, except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of outstanding Notes to receive solely from the trust fund described in clause (A) below payments in respect of the principal of, premium, if any, and interest on such Notes when such payments are due, (b) the Company's obligations with respect to such Notes under Article Two and Section 4.02 hereof, (c) the rights, powers, trusts, duties, indemnities and immunities of the Trustee hereunder, including, without limitation, Section 7.07 hereof and the Company's obligations in connection therewith and (d) this Article Eight. Subject to compliance with this Article Eight, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof. The following conditions shall apply to Legal Defeasance: (A) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders cash in Euros, non-callable Government Obligations of any member nation of the European Union whose official currency is the Euro, rated AAA or better by S&P and Aaa by Moody's, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest on the Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be; (B) the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that: (i) the Company has received from, or there has been published by the United States Internal Revenue Service, a ruling, or (ii) since the date of this Indenture, there has been a change in the applicable U.S. federal income tax law, in either case to the effect that, and based thereon this Opinion of Counsel shall confirm that, the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the Legal Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; (C) no Default shall have occurred and be continuing on the date of such deposit (other than a Default resulting from the borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowing); 96 (D) the Legal Defeasance shall not result in a breach or violation of, or constitute a default under this Indenture (other than a Default resulting from the borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowing) or any other material agreement or instrument (including, without limitation, the Credit Agreement) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound; (E) the Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by it with the intent of preferring the Holders over any other of its creditors or with the intent of defeating, hindering, delaying or defrauding any other of its creditors or others; (F) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that the conditions provided for in, in the case of the Officers' Certificate, clauses (A) through (E) and, in the case of the Opinion of Counsel, clauses (A) (with respect to the validity and perfection of the security interest), (B) and (D) of this Section 8.02 have been complied with; and (G) the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that: (i) the trust funds will not be subject to any rights of holders of Senior Debt, including, without limitation, those arising under the Indenture; and (ii) assuming no intervening bankruptcy of the Company between the date of deposit and the 124th day following the date of deposit and that no Holder is an insider of the Company, after the 124th day following the date of deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally The Company's and the Guarantors' obligations in Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.10, 2.13, 4.02, 4.13, 7.07, 7.08, 8.05, 8.06 and 14.08 shall survive until the Notes are no longer outstanding. Thereafter, only the Company's and the Guarantors' obligations in Sections 7.07, 8.05, 8.06 and 14.08 shall survive. After any such irrevocable deposit, the Trustee upon request shall acknowledge in writing the discharge of the Company's obligations under the Notes and this Indenture except for those surviving obligations in the immediately preceding paragraph. Notwithstanding the foregoing, the Opinion of Counsel required by Section 8.02(B) with respect to a Legal Defeasance need not be delivered if all Notes not theretofore delivered to the Trustee for cancellation (1) have become due and payable or (2) will become due and payable on the maturity date or a redemption date within one year under arrangements -97- satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company. SECTION 8.03. Defeasance of Certain Obligations. The Company may --------------------------------- omit to comply with any term, provision or condition set forth in Section 5.01(a)(3) and Sections 4.03 through 4.16 and Sections 4.18 through 4.20 and breach of clauses (a)(4), (a)(5) and (a)(8) under Section 6.01 shall be deemed not to be Events of Default ("Covenant Defeasance"), in each case with respect ------------------- to the outstanding Notes if: (A) the Company irrevocably deposits with the Trustee, in trust, for the benefit of the Holders cash in Euros, non-callable Government Obligations of any member nation of the European Union whose official currency is the Euro, rated AAA or better by S&P and Aaa by Moody's, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest on the Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be; (B) the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to such Trustee confirming that the Holders will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such Covenant Defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the Covenant Defeasance had not occurred; (C) no Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowing); (D) the Covenant Defeasance shall not result in a breach or violation of, or constitute a default under this Indenture (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit and the grant of any Lien securing such borrowing) or any other material agreement or instrument (including, without limitation, the Credit Agreement) to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound; (E) the Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by it with the intent of preferring the Holders over any other of its creditors or with the intent of defeating, hindering, delaying or defrauding any other of its creditors or others; (F) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that the conditions provided for in, in the case 98 of the Officers' Certificate, clauses (A) through (E) and, in the case of the Opinion of Counsel, clauses (A) (with respect to the validity and perfection of the security interest), (B) and (D) of this Section 8.03 have been complied with; and (G) the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that: (i) the trust funds will not be subject to any rights of holders of Senior Debt, including, without limitation, those arising under this Indenture; and (ii) assuming no intervening bankruptcy of the Company between the date of deposit and the 124th day following the date of deposit and that no Holder is an insider of the Company, after the 124th day following the date of deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally. If the funds deposited with the Trustee to effect Covenant Defeasance are insufficient to pay the principal of and interest on the Notes when due, then the Company's obligations and the obligations of the Guarantors under this Indenture will be revived and no such defeasance will be deemed to have occurred. SECTION 8.04. Application of Trust Money. Subject to Section 8.06, -------------------------- the Trustee or Paying Agent shall hold in trust money or Government Obligations deposited with it pursuant to Section 8.01, 8.02 or 8.03, as the case may be, and shall apply the deposited money and the money from Government Obligations in accordance with the Notes and this Indenture to the payment of principal of, premium, if any, and interest on the Notes. SECTION 8.05. Repayment to Company. Subject to Sections 7.07, -------------------- 8.01, 8.02 and 8.03, the Trustee and the Paying Agent shall promptly pay to the Company upon request set forth in an Officers' Certificate any excess money held by them at any time and thereupon shall be relieved from all liability with respect to such money. The Trustee and the Paying Agent shall pay to the Company upon written request any money held by them for the payment of principal, premium, if any, or interest that remains unclaimed for two years; provided that the Trustee or such Paying Agent before being required to make any payment shall cause to be published at the expense of the Company once in a newspaper of general circulation in the City of New York and the Trustee or such Paying Agent will cause a copy of such notice to be published in a daily newspaper with general circulation in Luxembourg (expected to be the Luxemburger Wort) or mail to each Holder entitled to such money at such Holder's address (as set forth in the Register) notice that such money remains unclaimed and that after a date specified therein (which shall be at least 30 days from the date of such publication or mailing) any unclaimed balance of such money then remaining will be repaid to the Company. After payment to the Company, Holders entitled to such money must look to the Company for 99 payment as general creditors unless an applicable law designates another Person, and all liability of the Trustee and such Paying Agent with respect to such money shall cease. SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is ------------- unable to apply any money or Government Obligations in accordance with Section 8.01, 8.02 or 8.03, as the case may be, by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company's obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.01, 8.02 or 8.03, as the case may be, until such time as the Trustee or Paying Agent is permitted to apply all such money or Government Obligations in accordance with Section 8.01, 8.02 or 8.03, as the case may be; provided that if the Company has made any payment of principal of, premium, if any, or interest on any Notes because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Obligations held by the Trustee or Paying Agent. ARTICLE NINE AMENDMENTS, SUPPLEMENTS AND WAIVERS SECTION 9.01. Without Consent of Holders. The Company, when -------------------------- authorized by a resolution of its Board of Directors (as evidenced by a Board Resolution), and the Trustee may amend or supplement this Indenture, the Notes and any Guarantee without notice to or the consent of any Holder: (1) to cure any ambiguity, defect or inconsistency; (2) to provide for uncertificated Notes in addition to or in place of certificated Notes; (3) to provide for the assumption of the Company's or any Guarantor's obligations to Holders in the case of a merger, consolidation, amalgamation or other combination of the Company or any Guarantor or sale of all or substantially all of the Company's or such Guarantor's assets; (4) to make any change that would provide any additional rights or benefits to the Holders of Notes or that does not materially adversely affect the rights or interests under this Indenture of any such Holder; (5) to alter the form of Notes to provide for any changes in applicable tax laws to the extent that such changes do not materially adversely affect the rights or interests of any Holder; 100 (6) to comply with requirements of the Commission in order to effect or maintain the qualification of this Indenture under the Trust Indenture Act; or (7) to comply with the requirement that the Supplemental Indenture be executed and delivered by the New Parent and the Former Parent pursuant to an Inversion Transaction. This Section 9.01 is subject to Section 9.05. SECTION 9.02. With Consent of Holders. Subject to Sections 6.04 ----------------------- and 6.07 and without prior notice to the Holders, the Company, when authorized by its Board of Directors (as evidenced by a Board Resolution), and the Trustee may amend this Indenture, the Notes or the Guarantees with the written consent of the Holders of a majority in aggregate principal amount of the Notes then outstanding, and the Holders of a majority in aggregate principal amount of the Notes then outstanding by written notice to the Trustee may waive compliance by the Company with any provision of this Indenture, the Notes or the Guarantees. Notwithstanding the foregoing provisions of this Section 9.02, without the consent of each Holder affected, an amendment or waiver, including a waiver pursuant to Section 6.04, may not: (i) reduce the amount of Notes whose Holders must consent to an amendment; (ii) reduce the rate of or change or have the effect of changing the time for payment of interest, including defaulted interest, on any Notes; (iii) reduce the principal of or change or have the effect of changing the fixed maturity of any Notes, or change the date on which any Notes may be subject to redemption or reduce the redemption price therefor; (iv) make any Notes payable in money other than that stated in the Notes; (v) make any change in provisions of this Indenture protecting the right of each Holder to receive payment of principal of and interest on such Note on or after the due date thereof or to bring suit to enforce such payment, or permitting Holders of a majority in principal amount of Notes to waive Defaults or Events of Default; (vi) after the Company's obligation to purchase Notes arises thereunder, amend, change or modify in any material respect the obligation of the Company to make and consummate a Change of Control Offer in the event of a Change of Control or make and consummate a Net Proceeds Offer with respect -101- to any Asset Sale that has been consummated or, after such Change of Control has occurred or such Asset Sale has been consummated, modify any of the provisions or definitions with respect thereto; (vii) modify or change any provision of this Indenture or the related definitions affecting the subordination or ranking of the Notes or the Guarantees in a manner which adversely affects the Holders; or (viii) release any Guarantor that is a Significant Subsidiary from any of its obligations under its Guarantee or this Indenture otherwise than in accordance with the terms of this Indenture. It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof. After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Company shall mail to the Holders affected thereby a notice briefly describing the amendment, supplement or waiver. The Company shall mail supplemental indentures to Holders upon request. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture or waiver. This Section 9.02 is subject to Section 9.05. SECTION 9.03. Revocation and Effect of Consent. Until an amendment -------------------------------- or waiver becomes effective, a consent to it by a Holder is a continuing consent by the Holder and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the Note of the consenting Holder, even if notation of the consent is not made on any Note. However, any such Holder or subsequent Holder may revoke the consent as to its Note or portion of its Note. Such revocation shall be effective only if the Trustee receives the notice of revocation before the date the amendment, supplement or waiver becomes effective. An amendment, supplement or waiver shall become effective on receipt by the Trustee of written consents from the Holders of the requisite percentage in principal amount of the outstanding Notes and any other conditions thereto specified in the notice relating thereto. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver. If a record date is fixed, then, notwithstanding the last two sentences of the immediately preceding paragraph, those persons who were Holders at such record date (or their duly designated proxies) and only those persons shall be entitled to consent to such amendment, supplement or waiver or to revoke any consent previously given, whether or not such persons -102- continue to be Holders after such record date. No such consent shall be valid or effective for more than 90 days after such record date. After an amendment, supplement or waiver becomes effective, it shall bind every Holder unless it is of the type described in any of clauses (i) through (viii) of Section 9.02. In case of an amendment or waiver of the type described in clauses (i) through (viii) of Section 9.02, the amendment or waiver shall bind each Holder who has consented to it and every subsequent Holder of a Note that evidences the same indebtedness as the Note of the consenting Holder. SECTION 9.04. Notation on or Exchange of Notes. If an amendment, -------------------------------- supplement or waiver changes the terms of a Note, the Trustee may require the Holder to deliver it to the Trustee. The Trustee shall, if directed in writing by the Company, place an appropriate notation on the Note about the changed terms and return it to the Holder and the Trustee shall, if directed in writing by the Company, place an appropriate notation on any Note thereafter authenticated. Alternatively, if the Company so determines, the Company in exchange for the Note shall issue and the Trustee upon the Company's written direction in the form of a Company Order shall authenticate a new Note that reflects the changed terms. SECTION 9.05. Trustee to Sign Amendments, Etc. The Trustee shall ------------------------------- be entitled to receive, and shall be fully protected in relying upon an Officers' Certificate and an Opinion of Counsel stating that the execution of any amendment, supplement or waiver authorized pursuant to this Article Nine is authorized and permitted by this Indenture (and otherwise in form and substance satisfactory to the Trustee) and, in the case of an Inversion Transaction, that the Supplemental Indenture is a legal and binding obligation of the New Parent and enforceable against the New Parent in accordance with its terms. Subject to the preceding sentence, the Trustee shall sign such amendment, supplement or waiver if the same does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Trustee may, but shall not be obligated to, execute any such amendment, supplement or waiver that affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. SECTION 9.06. Conformity with Trust Indenture Act. Every ----------------------------------- supplemental indenture executed pursuant to this Article Nine shall conform to the requirement of the TIA as then in effect. ARTICLE TEN SUBORDINATION SECTION 10.01. Notes Subordinated to Senior Debt. Anything herein --------------------------------- to the contrary notwithstanding, the Company, for itself and its successors, and each Holder agrees that the payment of all Obligations owing on, or relating to, the Notes to the Holders is subor -103- dinated, to the extent and in the manner provided in this Article Ten, to the prior payment in full in cash or Cash Equivalents of all Obligations on Senior Debt (including all Obligations with respect to the Credit Agreement), whether outstanding on the Issue Date or thereafter incurred. Notwithstanding the provisions of this Article Ten, payments and distributions made relating to the Notes pursuant to a trust fund established under Section 8.04 pursuant to the terms of Article Eight (so long as all of the applicable conditions contained in Article Eight were satisfied at the time of such payment) shall not be subordinated to Senior Debt under this Article Ten. This Article Ten shall constitute a continuing offer to all Persons who become holders of, or continue to hold, Senior Debt, and such provisions are made for the benefit of the holders of Senior Debt and such holders are made obligees hereunder and any one or more of them may enforce such provisions. SECTION 10.02. Suspension of Payment When Senior Debt Is in Default. ---------------------------------------------------- (a) If any default occurs and is continuing in the payment when due, whether at maturity, upon any redemption, by declaration or otherwise, of any principal of, premium, if any, or interest on, unpaid drawings for letters of credit issued in respect of, or regularly accruing fees with respect to, any Designated Senior Debt or any other Senior Debt of at least $25.0 million aggregate principal amount (including, without limitation, guarantees of the foregoing items which constitute such Senior Debt) (a "Payment Default"), then no payment or --------------- distribution of any kind or character shall be made by or on behalf of the Company or any other Person on its or their behalf with respect to any Obligations owing on, or relating to, the Notes or to acquire any of the Notes for cash or property or otherwise until such Payment Default (and all other Payment Defaults) shall have been cured or waived in accordance with the terms of the documentation governing the respective Designated Senior Debt or such other Senior Debt or ceased to exist or all Designated Senior Debt or all other such Senior Debt with respect to which any Payment Default has occurred and is continuing shall have been discharged or paid in full in cash or Cash Equivalents. (b) If any event of default (other than a Payment Default) occurs and is continuing with respect to any Designated Senior Debt (as such event of default is defined in the instrument creating or evidencing such Designated Senior Debt) permitting the holders of such Designated Senior Debt then outstanding to accelerate the maturity thereof (a "Non-payment Default"), and if ------------------- the Representative for the respective issue of Designated Senior Debt gives notice of the event of default to the Trustee stating that such notice is a payment blockage notice (a "Payment Blockage Notice"), then during the period ----------------------- (the "Payment Blockage Period") beginning upon the delivery of such Payment ----------------------- Blockage Notice and ending on the earliest of (x) the date on which such Non- payment Default is cured or waived (so long as no other Non-payment Default exists), (y) 180 days after the date on which the applicable Payment Blockage Notice is received, and (z) the date on which the Trustee receives notice thereof from the Representative for the respective issue of Designated Senior Debt terminating the Payment Blockage Period, neither the Company nor any other Person on its behalf shall -104- (i) make any payment of any kind or character with respect to any Obligations owing on, or with respect to, the Notes or (ii) acquire any of the Notes for cash or property or otherwise. Notwithstanding anything herein to the contrary, (x) in no event will a Payment Blockage Period extend beyond 180 days from the date the applicable Payment Blockage Notice is received by the Trustee and (y) only one such Payment Blockage Period may be commenced within any 360 consecutive days. For all purposes of this Section 10.02(b), no event of default which existed or was continuing on the date of the commencement of any Payment Blockage Period with respect to the Designated Senior Debt shall be, or be made, the basis for the commencement of a second Payment Blockage Period by the Representative of such Designated Senior Debt whether or not within a period of 360 consecutive days, unless such event of default shall have been cured or waived for a period of not less than 90 consecutive days (it being acknowledged that any subsequent action, or any breach of any financial covenants for a period ending after the date of commencement of such Payment Blockage Period that, in either case, would give rise to an event of default pursuant to any provisions under which an event of default previously existed or was continuing shall constitute a new event of default for this purpose). (c) In the event that, notwithstanding the foregoing, any payment shall be received by the Trustee or any Holder when such payment is prohibited by the foregoing provisions of this Section 10.02, such payment shall be held in trust for the benefit of, and shall be paid over or delivered to, the holders of Senior Debt (pro rata to such holders on the basis of the respective amount of Senior Debt held by such holders) or their respective Representatives, as their respective interests may appear. The Trustee shall be entitled to rely on information regarding amounts then due and owing on the Senior Debt, if any, received from the holders of Senior Debt (or their Representatives) or, if such information is not received from such holders or their Representatives, from the Company and only amounts included in the information provided to the Trustee shall be paid to the holders of Senior Debt. Nothing contained in this Article Ten shall limit the right of the Trustee or the Holders to take any action to accelerate the maturity of the Notes and all other Obligations owing under the Notes pursuant to Article Six or to pursue any rights or remedies hereunder (subject to the rights, if any, under this Article Ten, of the holders of Senior Debt in respect of cash, property or securities of the Company received upon the exercise of any such remedy); provided that all Senior Debt thereafter due or declared to be due shall first be paid in full in cash or Cash Equivalents before the Holders are entitled to receive any payment of any kind or character with respect to Obligations owing on, or with respect to, the Notes. SECTION 10.03. Obligations Subordinated to Prior Payment of All ------------------------------------------------ Senior Debt on Dissolution, Liquidation or Reorganization of Company. (a) - -------------------------------------------------------------------- Upon any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to creditors upon any total or partial liquidation, dissolution, winding-up, reorganization, assignment for the benefit of creditors or marshaling of assets of the Company or in a bankruptcy, reorganization, insolvency, receivership or other similar proceeding relating to the -105- Company or its assets, whether voluntary or involuntary, all Obligations in respect of Senior Debt due or to become due shall first be paid in full in cash or Cash Equivalents (including interest after the commencement of any bankruptcy or other like proceeding at the rate specified in the applicable Senior Debt whether or not such interest is an allowed claim in any such proceeding), before any payment or distribution of any kind or character is made on account of any Obligations on, or with respect to, the Notes or for the acquisition of any of the Notes for cash or property or otherwise. Upon any such dissolution, winding- up, liquidation, reorganization, receivership or similar proceeding, any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, to which the Holders or the Trustee would be entitled, except for the provisions hereof, shall be paid by the Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person making such payment or distribution, or by the Holders or by the Trustee if received by it, directly to the holders of Senior Debt (pro rata to such holders on the basis of the respective amounts of Senior Debt held by such holders) or their respective Representatives, or to the trustee or trustees under any indenture pursuant to which any of such Senior Debt may have been issued, as their respective interests may appear, for application to the payment of Senior Debt remaining unpaid until all such Senior Debt has been paid in full in cash or Cash Equivalents after giving effect to any concurrent payment, distribution or provision therefor to or for the holders of Senior Debt. (b) To the extent any payment of Senior Debt (whether by or on behalf of the Company, as proceeds of security or enforcement of any right of setoff or otherwise) is declared to be fraudulent or preferential, set aside or required to be paid to any receiver, trustee in bankruptcy, liquidating trustee, agent or other similar Person under any bankruptcy, insolvency, receivership, fraudulent conveyance or similar law, then, if such payment is recovered by, or paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent or other similar Person, the Senior Debt or part thereof originally intended to be satisfied shall be deemed to be reinstated and outstanding as if such payment had not occurred. It is further agreed that any diminution (whether pursuant to court decree or otherwise, including without limitation for any of the reasons described in the preceding paragraph) of the Company's obligation to make any distribution or payment pursuant to any Senior Debt, except to the extent such diminution occurs by reason of the repayment (which has not been disgorged or returned) of such Senior Debt in cash or Cash Equivalents, shall have no force or effect for purposes of the subordination provisions contained in this Article Ten, with any turnover of payments as otherwise calculated pursuant to this Article Ten to be made as if no such diminution had occurred. (c) In the event that, notwithstanding the foregoing, any payment or distribution of assets of the Company of any kind or character, whether in cash, property or securities, shall be received by the Trustee or any Holder when such payment or distribution is prohibited by this Section 10.03, such payment or distribution shall be held in trust for the benefit of, and shall be paid over or delivered to, the holders of Senior Debt (pro rata to such holders -106- on the basis of the respective amount of Senior Debt held by such holders) or their respective Representatives, or to the trustee or trustees under any indenture pursuant to which any of such Senior Debt may have been issued, as their respective interests may appear, for application to the payment of Senior Debt remaining unpaid until all such Senior Debt has been paid in full in cash or Cash Equivalents, after giving effect to any concurrent payment, distribution or provision therefor to or for the holders of such Senior Debt. SECTION 10.04. Payments May Be Paid Prior to Dissolution. Nothing ----------------------------------------- contained in this Article Ten or elsewhere in this Indenture shall prevent (i) the Company, except under the conditions described in Sections 10.02 and 10.03, from making payments at any time for the purpose of making payments of principal of and interest on the Obligations owing under the Notes, or from depositing with the Trustee, any monies for such payments, or (ii) in the absence of actual knowledge by the Trustee that a given payment would be prohibited by Section 10.02, 10.03, 12.02 or 12.03, the application by the Trustee of any monies deposited with it for the purpose of making such payments of principal of, and interest on, the Obligations owing under the Notes to the Holders entitled thereto unless at least one Business Day prior to the date upon which such payment would otherwise become due and payable the Trustee shall have actually received the written notice provided for in Section 10.13, in the first sentence of Section 10.02(b) or in the last sentence of this Section 10.04 (provided that, notwithstanding the foregoing, the Holders receiving any payments made in contravention of Sections 10.02 and/or 10.03 (and such payments) shall otherwise be subject to the provisions of Sections 10.02 and 10.03). The Company shall give prompt written notice to the Trustee of any dissolution, winding-up, liquidation or reorganization of the Company, although any delay or failure to give any such notice shall have no effect on the subordination provisions contained herein. SECTION 10.05. Holders to Be Subrogated to Rights of Holders of ------------------------------------------------ Senior Debt. Subject to the payment in full in cash or Cash Equivalents of - ----------- all Senior Debt, the Holders shall be subrogated to the rights of the holders of Senior Debt to receive payments or distributions of cash, property or securities of the Company applicable to the Senior Debt until the Obligations owing under the Notes shall be paid in full; and, for the purposes of such subrogation, no such payments or distributions to the holders of the Senior Debt by or on behalf of the Company, or by or on behalf of the Holders by virtue of this Article Ten, which otherwise would have been made to the Holders shall, as between the Company and the Holders, be deemed to be a payment by the Company to or on account of the Senior Debt, it being understood that the provisions of this Article Ten are and are intended solely for the purpose of defining the relative rights of the Holders, on the one hand, and the holders of Senior Debt, on the other hand. SECTION 10.06. Obligations of the Company Unconditional. Nothing ---------------------------------------- contained in this Article Ten or elsewhere in this Indenture is intended to or shall impair, as among the Company, its creditors other than the holders of Senior Debt, and the Holders, the obligation of the Company, which is absolute and unconditional, to pay to the Holders the -107- principal of and any interest on the Obligations owing under the Notes as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the Holders and creditors of the Company other than the holders of the Senior Debt, nor shall anything herein or therein prevent any Holder or the Trustee on its behalf from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article Ten, of the holders of Senior Debt in respect of cash, property or securities of the Company received upon the exercise of any such remedy. SECTION 10.07. Reliance on Judicial Order or Certificate of -------------------------------------------- Liquidating Agent. Whenever a distribution is to be made or a notice given to - ----------------- holders of Designated Senior Debt, the distribution may be made and the notice given to their Representative. Upon any payment or distribution of assets of the Company referred to in this Article Ten, the Trustee and the Holders shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which any insolvency, bankruptcy, receivership, dissolution, winding-up, liquidation, reorganization or similar case or proceeding is pending, or upon a certificate of the receiver, trustee in bankruptcy, liquidating trustee, assignee for the benefit of creditors, agent or other person making such payment or distribution, delivered to the Trustee or the Holders, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Debt and other Indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article Ten. Nothing in this Article Ten shall apply to the claims of, or payments to, the Trustee in its capacity as such under or pursuant to Section 7.07 or the Paying Agent, Transfer Agent or Registrar in their capacity as such under or pursuant to Section 14.08. The Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself or itself to be a holder of any Senior Debt (or a trustee on behalf of, or other representative of, such holder) to establish that such notice has been given by a holder of such Senior Debt or a trustee or representative on behalf of any such holder. In the event that the Trustee determines in good faith that any evidence is required with respect to the right of any Person as a holder of Senior Debt to participate in any payment or distribution pursuant to this Article Ten, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of Senior Debt held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article Ten, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. SECTION 10.08. Subordination Rights Not Impaired by Acts or Omissions ------------------------------------------------------ of the Company or Holders of Senior Debt . No right of any present or future - ---------------------------------------- holders of any Senior Debt to enforce subordination as provided herein shall at any time in any way be preju -108- diced or impaired by any act or failure to act on the part of the Company or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by the Company with the terms of this Indenture, regardless of any knowledge thereof which any such holder may have or otherwise be charged with. Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Debt may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders, without incurring responsibility to the Trustee or the Holders and without impairing or releasing the subordination provided in this Article Ten or the obligations hereunder of the Holders to the holders of the Senior Debt, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Senior Debt, or otherwise amend or supplement in any manner Senior Debt, or any instrument evidencing the same or any agreement under which Senior Debt is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Debt; (iii) release any Person liable in any manner for the payment or collection of Senior Debt; and (iv) exercise or refrain from exercising any rights against the Company and any other Person. SECTION 10.09. Holders Authorize Trustee to Effectuate Subordination ----------------------------------------------------- of Obligations. Each Holder authorizes and expressly directs the Trustee on - -------------- its behalf to take such action as may be necessary or appropriate to effectuate, as between the holders of Senior Debt and the Holders, the subordination provided in this Article Ten, and appoints the Trustee its attorney-in-fact for such purposes, including, in the event of any dissolution, winding-up, liquidation or reorganization of the Company (whether in bankruptcy, insolvency, receivership, reorganization or similar proceedings or upon an assignment for the benefit of credits or otherwise) tending towards liquidation of the business and assets of the Company, the filing of a claim for the unpaid balance of its Obligations owing under the Notes and accrued interest in the form required in those proceedings. If the Trustee does not file a proper claim or proof of debt in the form required in such proceeding prior to 30 days before the expiration of the time to file such claim or claims, then the holders of the Senior Debt or their Representative shall have the right to file and are or is hereby authorized to file an appropriate claim for and on behalf of the Holders. Nothing herein contained shall be deemed to authorize the Trustee or the holders of Senior Debt or their Representative to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Obligations owing under the Notes or the rights of any Holder thereof, or to authorize the Trustee or the holders of Senior Debt or their Representative to vote in respect of the claim of any Holder in any such proceeding. SECTION 10.10. This Article Ten Not to Prevent Events of Default. ------------------------------------------------- The failure to make a payment on account of principal of or interest on the Obligations owing under -109- the Notes by reason of any provision of this Article Ten will not be construed as preventing the occurrence of an Event of Default. SECTION 10.11. Amendments or Modifications to Article Ten. No ------------------------------------------ amendment of, or supplement or waiver to, this Indenture shall adversely effect the rights of any holder of Senior Debt or Guarantor Senior Debt under Article Ten or Article Twelve without the consent of such holder of Senior Debt or Guarantor Senior Debt, as the case may be. Notwithstanding anything to the contrary contained in this Indenture (but without limiting the provisions of the immediately preceding sentence), no amendment or modification to any provision of this Article Ten or the related definitions used herein (other than to cure any ambiguity, defect, mistake or inconsistency herein, so long as such amendment or modification does not adversely affect the rights of the holders of any Senior Debt then outstanding) shall be permitted without the consent of the Holders of at least a majority in principal amount of the Notes then outstanding voting as a single class (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes) or, if required by Section 9.02, by each Holder affected. SECTION 10.12. Acceleration of Notes. If payment of the Notes is --------------------- accelerated because of an Event of Default, the Company shall promptly notify holders of Senior Debt of the acceleration. SECTION 10.13. Notice to Trustee, Rights of Trustee and Paying Agent. ----------------------------------------------------- The Company shall give prompt written notice to the Trustee of any fact known to the Company which would prohibit the making of any payment to or by the Trustee or any Holder in respect of the Notes or under any Guarantee pursuant to the provisions of this Article Ten or Article Twelve, as the case may be, although any delay or failure to give any such notice shall have no effect on the subordination provisions contained herein. Notwithstanding the provisions of this Article Ten or any other provision of this Indenture, neither the Trustee nor any Paying Agent shall be charged with knowledge of the existence of any facts that would prohibit the making of any payment or distribution by the Trustee or such Paying Agent, and (in the absence of actual knowledge that the respective payment will violate the applicable provisions of this Article Ten or Article Twelve) the Trustee and such Paying Agent may continue to make payments on the Notes, unless the Trustee or such Paying Agent shall have received, at least one Business Day prior to the date of such payment, written notice of facts that would cause the payment of any Obligations with respect to the Notes to violate this Article Ten (although the receipt of such payment shall otherwise be subject to the applicable provisions of this Article Ten) or Article Twelve (although the receipt of such payment shall otherwise be subject to the applicable provisions of Article Twelve). Only the Company, a Guarantor, a holder of Senior Debt or a Representative thereof may give the notice. Nothing in this Article Ten shall impair the claims of, or payments to, the Trustee in its capacity as such under or pursuant to Section 7.07 or any Agent in its capacity as such under or pursuant to Section 14.08. Nothing in this Section 10.13 is intended to or shall relieve any Holder of Notes from -110- the obligations imposed under Sections 10.02 and 10.03 with respect to other distributions received in violation of the provisions hereof. The Trustee in its individual or any other capacity may hold Senior Debt with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. ARTICLE ELEVEN GUARANTEE OF NOTES SECTION 11.01. Guarantee. Each Guarantor hereby unconditionally --------- guarantees, as a primary obligor and not merely a surety, subject to Article Twelve, to each Holder of a Note authenticated and delivered by a Trustee and to the Trustee and their successors, that: (a) the principal of, premium, if any, and interest on the Notes (and any Additional Interest payable thereon) will be duly and punctually paid in full when due, whether at maturity, by acceleration or otherwise, and interest on the overdue principal and (to the extent permitted by law) interest, Additional Interest, if any, on the Notes and all other obligations of the Company to the Holders or the Trustee hereunder (including amounts due the Trustee under Section 7.07) and all other obligations under this Indenture (the "Indenture Obligations") will be promptly paid in full or --------------------- performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other Obligations hereunder, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at the maturity date of the Notes, by acceleration or otherwise. An Event of Default under this Indenture or the Notes shall constitute an event of default under any of the Guarantees, and shall entitle the Holders of Notes to accelerate the obligations of each Guarantor hereunder in the same manner and to the same extent as the obligations of the Company hereunder. Each Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrespective of the absence of any action to enforce the Notes or this Indenture, any release of any other Guarantor, the recovery of any judgment against the Company, any action to enforce the same, whether or not its Guarantee is affixed to any particular Note, or any other circumstance (other than payment in full) which might otherwise constitute a legal or equitable discharge or defense of each Guarantor. Each Guarantor hereby waives the benefit of diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenants that its Guarantee will not be discharged except by complete performance of the obligations contained in the Notes, this Indenture and its Guarantee or as otherwise provided herein for the release of such Guarantee. The Guarantees are guarantees of payment and not of collection. If any Holder or the Trustee -111- is required by any court or otherwise to return to the Company or to the Guarantors, or any custodian, trustee, liquidator or other similar official acting in relation to the Company or the Guarantors, any amount paid by the Company or the Guarantors to the Trustee or such Holder, each Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor further agrees that, as between it, on the one hand, and the Holders of Notes and the Trustee, on the other hand, (a) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article Six for the purposes of each Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (b) in the event of any acceleration of such obligations as provided in Article Six, such obligations (whether or not due and payable) shall forthwith become due and payable by each Guarantor for the purpose of its Guarantee. The obligations of each Guarantor to the Holders and to the Trustee pursuant to the Guarantee of such Guarantor and this Indenture are expressly subordinate and subject in right of payment to the prior payment in full of all Guarantor Senior Debt of such Guarantor, to the extent and in the manner provided in Article Twelve. SECTION 11.02. Execution and Delivery of Guarantee. Guarantees, ----------------------------------- substantially in the form included in Exhibit E of this Indenture, shall be --------- executed by either manual or facsimile signature of an Officer of each Guarantor. The validity and enforceability of each Guarantee shall not be affected by the fact that it is not affixed to any particular Note. Guarantees set forth in Section 11.01 shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Guarantee. If an Officer of a Guarantor whose signature is on this Indenture or a Guarantee no longer holds that office at the time a Trustee authenticates the Note on which such Guarantee is endorsed or at any time thereafter, such Guarantor's Guarantee of such Note shall be valid nevertheless. The delivery of any Note by a Trustee, after the authentication thereof hereunder, shall constitute due delivery of each Guarantee set forth in this Indenture on behalf of its respective Guarantor. SECTION 11.03. Waiver of Subrogation. Until the Notes are paid in --------------------- full, each Guarantor hereby irrevocably waives and agrees not to exercise any claim or other rights which it may now or hereafter acquire against the Company or any other Restricted Subsidiary that arise from the existence, payment, performance or enforcement of the Company's obligations under the Notes or this Indenture and such Guarantor's obligations under its Guarantee and this Indenture, in any such instance including, without limitation, any right of subrogation, reimbursement, exoneration, contribution, indemnification, and any right to participate in any claim or remedy of the Holders, any Agent and the Trustee against the Company or any other Restricted Subsidiary, whether or not such claim, remedy or right arises in equity, or under -112- contract, statute or common law, including, without limitation, the right to take or receive from the Company or any other Restricted Subsidiary, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim or other rights. If any amount shall be paid to any Guarantor in violation of the preceding sentence and any amounts owing to the Trustee, any Agent or the Holders of Notes under the Notes, this Indenture, or any other document or instrument delivered under or in connection with such agreements or instruments, shall not have been paid in full, such amount shall have been deemed to have been paid to such Guarantor for the benefit of, and held in trust for the benefit of, the Holders, such Agent, and the Trustee and shall, subject to the provisions of Articles Ten and Twelve and the last paragraph of Section 11.01, forthwith be paid to the Trustee for the benefit of such Holders, such Agent and the Trustee to be credited and applied to the obligations in favor of the Holders, such Agent and the Trustee, whether matured or unmatured, in accordance with the terms of this Indenture. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the waiver set forth in this Section 11.03 is knowingly made in contemplation of such benefits. SECTION 11.04. Immediate Payment. Each Guarantor shall make ----------------- immediate payment to the Trustee on behalf of the Holders and the Trustee of all obligations with respect to its Guarantee owing or payable to the respective Holders upon receipt of a demand for payment therefor by the Trustee to such Guarantor in writing. SECTION 11.05. No Set-Off. Each payment to be made by a Guarantor ---------- hereunder in respect of any obligations with respect to its Guarantee shall be payable in the currency or currencies in which such obligations are denominated, and shall be made without set-off, counterclaim, reduction or diminution of any kind or nature. SECTION 11.06. Obligations Absolute. The obligations of each -------------------- Guarantor hereunder are and shall be absolute and unconditional and any monies or amounts expressed to be owing or payable by such Guarantor hereunder which may not be recoverable from such Guarantor on the basis of a Guarantee shall be recoverable from such Guarantor as a primary obligor and principal debtor in respect thereof. SECTION 11.07. Obligations Continuing. The obligations of each ---------------------- Guarantor hereunder shall be continuing and shall remain in full force and effect until all of the obligations with respect thereto have been paid and satisfied in full. Each Guarantor agrees with the Trustee that it will from time to time deliver to the Trustee suitable acknowledgments of this continued liability hereunder and under any other instrument or instruments in such form as counsel to the Trustee may advise and as will prevent any action brought against it in respect of any default hereunder being barred by any statute of limitations now or hereafter in force in the jurisdiction of incorporation or organization of such Guarantor or elsewhere and, in the event of the failure of such Guarantor so to do, it hereby irrevocably appoints the Trustee and each of them the attorneys and agents of such Guarantor to make, execute and deliver such -113- written acknowledgment or acknowledgments or other instruments as may from time to time become necessary or advisable, in the judgment of the Trustee on the advice of counsel, to fully maintain and keep in force the liability of such Guarantor hereunder. SECTION 11.08. Obligations Not Reduced. The obligations of each ----------------------- Guarantor hereunder shall not be satisfied, reduced or discharged by any intermediate payment or satisfaction of the whole or any part of the principal, interest, fees and other monies or amounts which may at any time be or become owing or payable under or by virtue of or otherwise in connection with the Notes or this Indenture. SECTION 11.09. Obligations Reinstated. The obligations of each ---------------------- Guarantor hereunder shall continue to be effective or shall be reinstated, as the case may be, if at any time any payment which would otherwise have reduced the obligations of each Guarantor hereunder (whether such payment shall have been made by or on behalf of the Company or by or on behalf of such Guarantor) is rescinded or reclaimed from any of the Holders and the Trustee upon the insolvency, bankruptcy, liquidation or reorganization of the Company or such Guarantor or otherwise, all as though such payment had not been made. If demand for, or acceleration of the time for, payment by the Company is stayed upon the insolvency, bankruptcy, liquidation or reorganization of the Company, all such indebtedness otherwise subject to demand for payment or acceleration shall nonetheless be payable by each Guarantor as provided herein. SECTION 11.10. Obligations Not Affected. The obligations of each ------------------------ Guarantor hereunder shall not be affected, impaired or diminished in any way by any act, omission, matter or thing whatsoever, occurring before, upon or after any demand for payment hereunder (and whether or not known or consented to by such Guarantor or any of the Holders and the Trustee) which, but for this provision, might constitute a whole or partial defense to a claim against each Guarantor hereunder or might operate to release or otherwise exonerate such Guarantor from any of its obligations hereunder or otherwise affect such obligations, whether occasioned by default of any of the Holders and the Trustee or otherwise, including, without limitation: (i) any limitation of status or power, disability, incapacity or other circumstance relating to the Company or any other person, including any insolvency, bankruptcy, liquidation, reorganization, readjustment, composition, dissolution, winding-up or other proceeding involving or affecting the Company or any other person; (ii) any failure of the Company, whether or not without fault on its part, to perform or comply with any of the provisions of this Indenture or the Notes, or to give notice thereof to any Guarantor; -114- (iii) the taking or enforcing or exercising or the refusal or neglect to take or enforce or exercise any right or remedy from or against the Company or any other Person or their respective assets or the release or discharge of any such right or remedy; (iv) the granting of time, renewals, extensions, compromises, concessions, waivers, releases, discharges and other indulgences to the Company or any other person; (v) any change in the time, manner or place of payment of, or in any other term of, any of the Notes, or any other amendment, variation, supplement, replacement or waiver of, or any consent to departure from, any of the Notes or this Indenture, including, without limitation, any increase or decrease in the principal amount of or premium, if any, or interest on any of the Notes; (vi) any change in the ownership, control, name, objects, businesses, assets, capital structure or constitution of the Company or any Guarantor; (vii) any merger or amalgamation of the Company or any Guarantor with any Person or Persons; (viii) the occurrence of any change in the laws, rules, regulations or ordinances of any jurisdiction by any present or future action of any governmental authority or court amending, varying, reducing or otherwise affecting, or purporting to amend, vary, reduce or otherwise affect, any of the obligations of any Guarantor under its Guarantee; and (ix) any other circumstance (other than by complete, irrevocable payment) that might otherwise constitute a legal or equitable discharge or defense of the Company under this Indenture or the Notes or of any Guarantor in respect of its guarantee hereunder. SECTION 11.11. Waiver. Without in any way limiting the provisions ------ of Section 11.01 of this Indenture, each Guarantor hereby waives notice of acceptance hereof, notice of any liability of such Guarantor hereunder, notice or proof of reliance by the Holders and the Trustee upon the obligations of such Guarantor hereunder, and diligence, presentment, demand for payment on the Company, protest, notice of dishonor or non-payment of any of the obligations under its Guarantee, or other notice or formalities to the Company or such Guarantor of any kind whatsoever. SECTION 11.12. No Obligation to Take Action Against Company. -------------------------------------------- Neither the Trustee nor any of the Holders shall have any obligation to enforce or exhaust any rights or remedies or to take any other steps under any security for the obligations under the Guarantees or against the Company or any other person or any property of the Company or any other person before the Trustee is entitled to demand payment and performance by any Guarantor of its -115- liabilities and obligations under its Guarantee, and each Guarantor hereby waives all benefit of discussion. SECTION 11.13. Default and Enforcement. (a) If any Guarantor ----------------------- fails to pay in accordance with Section 11.01 hereof, the Trustee may proceed in its name as trustee hereunder in the enforcement of such Guarantee and such Guarantor's obligations thereunder and hereunder by any remedy provided by law, whether by legal proceedings or otherwise, and to recover from any Guarantor the obligations of such Guarantor with respect to its Guarantee. (b) No Holder shall have the right to institute any suit, action or proceeding against any Guarantor for any default hereunder except in the manner and subject to the conditions set forth in Article Six of this Indenture, it being understood and intended that no one or more Holders shall have any right in any manner whatsoever to enforce any right hereunder by his or their action except as aforesaid and that all powers and trusts hereunder shall be exercised and all proceedings at law or in equity shall be instituted, had and maintained by the Trustee, only as aforesaid and in any event for the benefit of all Holders as provided in this Indenture. SECTION 11.14. Costs and Expenses. Each Guarantor shall pay on ------------------ demand by the Trustee any and all costs, fees and expenses (including, without limitation, the fees and the expenses of its counsel) incurred by the Trustee or any of the Holders in enforcing any of their rights under its Guarantee. SECTION 11.15. No Merger or Waiver; Cumulative Remedies. No ---------------------------------------- Guarantee shall operate by way of merger of any of the obligations of any Guarantor under any other agreement, including, without limitation, this Indenture. No failure to exercise and no delay in exercising, on the part of the Trustee or the Holders, any right, remedy, power or privilege hereunder or under this Indenture or the Notes, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder or under this Indenture or the Notes preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein and under this Indenture, the Notes and any other document or instrument between any Guarantor and/or the Company and the Trustee, are cumulative and not exclusive of any rights, remedies, powers and privilege provided by law. SECTION 11.16. Survival of Obligations. Without prejudice to the ----------------------- survival of any of the other obligations of any Guarantor hereunder, the obligations of each Guarantor under Section 11.01 shall survive the payment in full of any obligations with respect to its Guarantee and shall be enforceable against each Guarantor without regard to and without giving effect to any defense, right of offset or counterclaim available to or which may be asserted by the Company or any Guarantor. -116- SECTION 11.17. Guarantee in Addition to Other Obligations. The ------------------------------------------ obligations of each Guarantor under its Guarantee and this Indenture are in addition to and not in substitution for any other obligations to the Trustee or to any of the Holders in relation to this Indenture or the Notes and any guarantees or security at any time held by or for the benefit of any of them. SECTION 11.18. Successors and Assigns. Each Guarantee shall be ---------------------- binding upon and inure to the benefit of each Guarantor and the Trustee and the other Holders and their respective successors and permitted assigns, except that no Guarantor may assign any of its obligations hereunder except in accordance with the provisions of Section 9.01 or Section 9.02 of this Indenture, as applicable, or Section 5.01(c). SECTION 11.19. Governing Law; Agent for Service; Submission to ----------------------------------------------- Jurisdiction; Waiver of Immunities; Judgment Currency. Each Guarantor hereby - ----------------------------------------------------- acknowledges and agrees to comply with and be bound by Section 13.07, Section 13.15 and Section 13.16 of this Indenture on the same terms as the Company and as if the term "Guarantor" had therein been substituted for the term "Company." SECTION 11.20. Limitation of Guarantor's Liability. Any term or ------------------------------------ provision of this Indenture to the contrary notwithstanding, the maximum aggregate amount of the obligations guaranteed hereunder by any Guarantor shall not exceed the maximum amount that can be hereby guaranteed without rendering this Indenture, as it relates to such Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally. To effectuate the foregoing intention, the obligations of each Guarantor shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor (including, but not limited to, all Guarantor Senior Debt of such Guarantor) and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Guarantee or pursuant to its contribution obligations hereunder, result in the obligations of such Guarantor under its Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal, state or foreign law. Each Guarantor that makes a payment or distribution under a Guarantee shall be entitled to a contribution from each other Guarantor in an amount based on the consolidated net worth of each Guarantor. SECTION 11.21. Release of Guarantee. In the event of a sale or -------------------- other disposition of all of the assets of any Guarantor, by way of merger, consolidation or otherwise, or a sale or other disposition of all of the Capital Stock of any Guarantor then held by the Company and the Restricted Subsidiaries, then that Guarantor will be released and relieved of any obligations under its Guarantee; provided that the Net Cash Proceeds of such sale or other disposition are applied in accordance with Section 4.10, to the extent required thereby. In addition, any Guarantor that is designated as an Unrestricted Subsidiary or that otherwise ceases to be a Guarantor, in each case in accordance with the provisions of this Indenture, will be re- -117- leased from its Guarantee upon effectiveness of such designation or when it first ceases to be a Restricted Subsidiary, as the case may be. ARTICLE TWELVE SUBORDINATION OF GUARANTEE OBLIGATIONS SECTION 12.01. Guarantee Obligations Subordinated to Guarantor Senior ------------------------------------------------------ Debt. Anything herein to the contrary notwithstanding, each of the Guarantors, - ---- for itself and its successors, and each Holder agrees that the payment of all Guarantee Obligations of such Guarantor are subordinated, to the extent and in the manner provided in this Article Twelve, to the prior payment in full in cash or Cash Equivalents of all Obligations on Guarantor Senior Debt of such Guarantor (including all Obligations of such Guarantor with respect to the Credit Agreement), whether outstanding on the Issue Date or thereafter incurred. This Article Twelve shall constitute a continuing offer to all Persons who become holders of, or continue to hold, Guarantor Senior Debt, and such provisions are made for the benefit of the holders of Guarantor Senior Debt and such holders are made obligees hereunder and any one or more of them may enforce such provisions. SECTION 12.02. Suspension of Guarantee Obligations When Guarantor -------------------------------------------------- Senior Debt Is in Default. (a) If any default occurs and is continuing in - ------------------------- the payment when due, whether at maturity, upon any redemption, by declaration or otherwise, of any principal of, premium, if any, interest on, unpaid drawings for letters of credit issued in respect of, or regularly accruing fees with respect to, any Guarantor Senior Debt (including, without limitation, guarantees of the foregoing items which constitute Guarantor Senior Debt), then no payment or distribution of any kind or character shall be made by or on behalf of such Guarantor or any other Person on its or their behalf with respect to any Guarantee Obligations or to acquire any of the Notes for cash or property or otherwise until such Payment Default (and all other Payment Defaults) shall have been cured or waived in accordance with the terms of the documentation governing the respective Guarantor Senior Debt or ceased to exist or all Guarantor Senior Debt with respect to which any Payment Default has occurred and is continuing shall have been discharged or paid in full in cash or Cash Equivalents. (b) During any Payment Blockage Period (as determined in accordance with Section 10.02(b)), neither any Guarantor nor any other Person on any Guarantor's behalf shall (i) make any payment of any kind or character with respect to any Guarantee Obligations or (ii) acquire any of the Notes for cash or property or otherwise. (c) In the event that, notwithstanding the foregoing, any payment shall be received by the Trustee or any Holder when such payment is prohibited by the foregoing provisions of this Section 12.02, such payment shall be held in trust for the benefit of, and shall -118- be paid over or delivered to, the holders of Guarantor Senior Debt (pro rata to such holders on the basis of the respective amount of Guarantor Senior Debt held by such holders) or their respective Representatives, as their respective interests may appear. The Trustee shall be entitled to rely on information regarding amounts then due and owing on the Guarantor Senior Debt, if any, received from the holders of Guarantor Senior Debt (or their Representatives) or, if such information is not received from such holders or their Representatives, from a Guarantor and only amounts included in the information provided to the Trustee shall be paid to the holders of Guarantor Senior Debt. SECTION 12.03. Guarantee Obligations Subordinated to Prior Payment of ------------------------------------------------------ All Guarantor Senior Debt on Dissolution, Liquidation or Reorganization of Such - ------------------------------------------------------------------------------- Guarantor. (a) Upon any payment or distribution of assets of any Guarantor - --------- of any kind or character, whether in cash, property or securities, to creditors upon any total or partial liquidation, dissolution, winding-up, reorganization, assignment for the benefit of creditors or marshaling of assets of such Guarantor or in a bankruptcy, reorganization, insolvency, receivership or other similar proceeding relating to such Guarantor or its assets, whether voluntary or involuntary, all Obligations in respect of Guarantor Senior Debt due or to become due shall first be paid in full in cash or Cash Equivalents (including interest after the commencement of any bankruptcy or other like proceeding at the rate specified in the applicable Guarantor Senior Debt whether or not such interest is an allowed claim in any such proceeding), before any payment or distribution of any kind or character is made on account of any Guarantee Obligations or for the acquisition of any of the Notes for cash or property or otherwise. Upon any such dissolution, winding-up, liquidation, reorganization, receivership or similar proceeding, any payment or distribution of assets of such Guarantor of any kind or character, whether in cash, property or securities, to which the Holders or the Trustee would be entitled, except for the provisions hereof, shall be paid by such Guarantor or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person making such payment or distribution, or by the Holders or by the Trustee if received by them, directly to the holders of Guarantor Senior Debt (pro rata to such holders on the basis of the respective amounts of Guarantor Senior Debt held by such holders) or their respective Representatives, or to the trustee or trustees under any indenture pursuant to which any of such Guarantor Senior Debt may have been issued, as their respective interests may appear, for application to the payment of Guarantor Senior Debt remaining unpaid until all such Guarantor Senior Debt has been paid in full in cash or Cash Equivalents after giving effect to any concurrent payment, distribution or provision therefor to or for the holders of Guarantor Senior Debt. (b) To the extent any payment of Guarantor Senior Debt (whether by or on behalf of a Guarantor, as proceeds of security or enforcement of any right of setoff or otherwise) is declared to be fraudulent or preferential, set aside or required to be paid to any receiver, trustee in bankruptcy, liquidating trustee, agent or other similar Person under any bankruptcy, insolvency, receivership, fraudulent conveyance or similar law, then, if such payment is recovered by, or paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent or other similar Person, the Guarantor Senior Debt or part thereof originally intended to be -119- satisfied shall be deemed to be reinstated and outstanding as if such payment had not occurred. It is further agreed that any diminution (whether pursuant to court decree or otherwise, including without limitation for any of the reasons described in the preceding paragraph) of a Guarantor's obligation to make any distribution or payment pursuant to any Guarantor Senior Debt, except to the extent such diminution occurs by reason of the repayment (which has not been disgorged or returned) of such Guarantor Senior Debt in cash or Cash Equivalents, shall have no force or effect for purposes of the subordination provisions contained in this Article Twelve, with any turnover of payments as otherwise calculated pursuant to this Article Twelve to be made as if no such diminution had occurred. (c) In the event that, notwithstanding the foregoing, any payment or distribution of assets of any Guarantor of any kind or character, whether in cash, property or securities, shall be received by the Trustee or any Holder when such payment or distribution is prohibited by this Section 12.03, such payment or distribution shall be held in trust for the benefit of, and shall be paid over or delivered to, the holders of Guarantor Senior Debt (pro rata to such holders on the basis of the respective amount of Guarantor Senior Debt held by such holders) or their respective Representatives, or to the trustee or trustees under any indenture pursuant to which any of such Guarantor Senior Debt may have been issued, as their respective interests may appear, for application to the payment of Guarantor Senior Debt remaining unpaid until all such Guarantor Senior Debt has been paid in full in cash or Cash Equivalents, after giving effect to any concurrent payment, distribution or provision therefor to or for the holders of such Guarantor Senior Debt. SECTION 12.04. Payments May Be Paid Prior to Dissolution. Nothing ----------------------------------------- contained in this Article Twelve or elsewhere in this Indenture shall prevent (i) any Guarantor, except under the conditions described in Sections 12.02 and 12.03, from making payments at any time for the purpose of making payments on Guarantee Obligations, or from depositing with the Trustee any monies for such payments, or (ii) in the absence of actual knowledge by the Trustee that a given payment would be prohibited by Section 12.02 or 12.03, the application by the Trustee of any monies deposited with it by a Guarantor for the purpose of making such payments on Guarantee Obligations to the Holders entitled thereto unless at least one Business Day prior to the date upon which such payment would otherwise become due and payable the Trustee shall have actually received the written notice provided for in Section 12.13, in the first sentence of Section 10.02(b) or in the last sentence of this Section 12.04 (provided that, notwithstanding the foregoing, the Holders receiving any payments made in contravention of Sections 12.02 and/or 12.03 (and the respective such payments) shall otherwise be subject to the provisions of Section 12.02 and Section 12.03). Each Guarantor shall give prompt written notice to the Trustee of any dissolution, winding-up, liquidation or reorganization of such Guarantor, although any delay or failure to give any such notice shall have no effect on the subordination provisions contained herein. -120- SECTION 12.05. Holders to Be Subrogated to Rights of Holders of ------------------------------------------------ Guarantor Senior Debt. Subject to the payment in full in cash or Cash - --------------------- Equivalents of all Guarantor Senior Debt, the Holders shall be subrogated to the rights of the holders of Guarantor Senior Debt of such Guarantor to receive payments or distributions of cash, property or securities of such Guarantor applicable to such Guarantor Senior Debt until all amounts owing on or in respect of the Guarantee Obligations shall be paid in full; and, for the purposes of such subrogation, no such payments or distributions to the holders of such Guarantor Senior Debt by or on behalf of such Guarantor, or by or on behalf of the Holders by virtue of this Article Twelve, which otherwise would have been made to the Holders shall, as between such Guarantor and the Holders, be deemed to be a payment by such Guarantor to or on account of such Guarantor Senior Debt, it being understood that the provisions of this Article Twelve are and are intended solely for the purpose of defining the relative rights of the Holders, on the one hand, and the holders of Guarantor Senior Debt, on the other hand. SECTION 12.06. Guarantee Obligations of the Guarantors Unconditional. ----------------------------------------------------- Nothing contained in this Article Twelve or elsewhere in this Indenture or in the Guarantees is intended to or shall impair, as among the Guarantors, their creditors other than the holders of Guarantor Senior Debt, and the Holders, the obligation of the Guarantors, which is absolute and unconditional, to pay to the Holders all amounts due and payable under the Guarantees as and when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the Holders and creditors of the Guarantors other than the holders of the Guarantor Senior Debt, nor shall anything herein or therein prevent any Holder or the Trustee on its behalf from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article Twelve, of the holders of Guarantor Senior Debt in respect of cash, property or securities of the Guarantors received upon the exercise of any such remedy. SECTION 12.07. Reliance on Judicial Order or Certificate of -------------------------------------------- Liquidating Agent. Whenever a distribution is to be made or a notice given to - ----------------- holders of the Guarantor Senior Debt, the distribution may be made and the notice given to their Representative. Upon any payment or distribution of assets of a Guarantor referred to in this Article Twelve, the Trustee and the Holders shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which any insolvency, bankruptcy, receivership, dissolution, winding-up, liquidation, reorganization or similar case or proceeding is pending, or upon a certificate of the trustee in bankruptcy, liquidating trustee, receiver, assignee for the benefit of creditors, agent or other person making such payment or distribution, delivered to the Trustee or the Holders, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Guarantor Senior Debt and other Indebtedness of such Guarantor, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article Twelve. Nothing in this Article Twelve shall apply to the claims of, or payments to, the Trustee in its capacity as such under or pursuant to Section 7.07 or the Paying Agent, Transfer -121- Agent or Registrar in their capacity as such under or pursuant to Section 14.08. The Trustee shall be entitled to rely on the delivery to it of a written notice by a Person representing himself or itself to be a holder of the Guarantor Senior Debt (or a trustee on behalf of, or other representative of, such holder) to establish that such notice has been given by a holder of such Guarantor Senior Debt or a trustee or representative on behalf of any such holder. In the event that the Trustee determines in good faith that any evidence is required with respect to the right of any Person as a holder of the Guarantor Senior Debt to participate in any payment or distribution pursuant to this Article Twelve, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the Trustee as to the amount of the Guarantor Senior Debt held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under this Article Twelve, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending judicial determination as to the right of such Person to receive such payment. SECTION 12.08. Subordination Rights Not Impaired by Acts or Omissions ------------------------------------------------------ of the Guarantors or Holders of Guarantor Senior Debt. No right of any present - ----------------------------------------------------- or future holders of any Guarantor Senior Debt to enforce subordination as provided herein shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of any Guarantor or by any act or failure to act, in good faith, by any such holder, or by any noncompliance by any Guarantor with the terms of this Indenture, regardless of any knowledge thereof which any such holder may have or otherwise be charged with. Without in any way limiting the generality of the foregoing paragraph, the holders of Guarantor Senior Debt may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders, without incurring responsibility to the Trustee or the Holders and without impairing or releasing the subordination provided in this Article Twelve or the obligations hereunder of the Holders to the holders of Guarantor Senior Debt, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, Guarantor Senior Debt, or otherwise amend or supplement in any manner Guarantor Senior Debt, or any instrument evidencing the same or any agreement under which Guarantor Senior Debt is outstanding; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Guarantor Senior Debt; (iii) release any Person liable in any manner for the payment or collection of Guarantor Senior Debt; and (iv) exercise or refrain from exercising any rights against the Guarantors and any other Person. SECTION 12.09. Holders Authorize Trustee to Effectuate Subordination ----------------------------------------------------- of Guarantee Obligations. Each Holder, by its acceptance of the Guarantee - ------------------------ Obligations, authorizes and expressly directs the Trustee on its behalf to take such action as may be necessary or appropriate to effectuate, as between the holders of Guarantor Senior Debt and the Holders, the subordination provided in this Article Twelve, and appoints the Trustee its attorney-in-fact -122- for such purposes, including, in the event of any dissolution, winding-up, liquidation or reorganization of any Guarantor (whether in bankruptcy, insolvency, receivership, reorganization or similar proceedings or upon an assignment for the benefit of credits or otherwise) tending towards liquidation of the business and assets of any Guarantor, the filing of a claim for the unpaid balance under its Guarantee Obligations and accrued interest in the form required in those proceedings. If the Trustee does not file a proper claim or proof of debt in the form required in such proceeding prior to 30 days before the expiration of the time to file such claim or claims, then the holders of the Guarantor Senior Debt or their Representative shall have the right to file and are or is hereby authorized to file an appropriate claim for and on behalf of the Holders. Nothing herein contained shall be deemed to authorize the Trustee or the holders of Guarantor Senior Debt or their Representative to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Guarantee Obligations or the rights of any Holder, or to authorize the Trustee or the holders of Guarantor Senior Debt or their Representative to vote in respect of the claim of any Holder in any such proceeding. SECTION 12.10. This Article Twelve Not to Prevent Events of Default. ---------------------------------------------------- The failure to make a payment on account of principal of or interest on the Guarantee Obligations by reason of any provision of this Article Twelve will not be construed as preventing the occurrence of a Default or an Event of Default. SECTION 12.11. Amendments or Modifications to Article Twelve. --------------------------------------------- Notwithstanding anything to the contrary contained in this Indenture (but without limiting the provisions of the first sentence of Section 10.11), no amendment or modification to any provision of this Article Twelve or the related definitions used herein (other than to cure any ambiguity, defect, mistake or inconsistency herein, so long as such amendment or modification does not adversely affect the rights of the holders of any Guarantor Senior Debt then outstanding) shall be permitted without the consent of the Holders of at least a majority in principal amount of the Notes then outstanding voting as a single class (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes) or, if required by Section 9.02, by each Holder affected. SECTION 12.12. Acceleration of Notes. If payment of the Notes is --------------------- accelerated because of an Event of Default, the Company shall promptly notify holders of Guarantor Senior Debt of the acceleration. SECTION 12.13. Notice to Trustee, Rights of Trustee and Paying Agent. ----------------------------------------------------- Each Guarantor shall give prompt written notice to the Trustee of any fact known to such Guarantor which would prohibit the making of any payment to or by the Trustee or any Holder under any Guarantee pursuant to the provisions of this Article Twelve, although any delay or failure to give any such notice shall have no effect on the subordination provisions -123- contained herein. Notwithstanding the provisions of this Article Twelve or any other provision of this Indenture, neither the Trustee nor any Paying Agent shall be charged with knowledge of the existence of any facts that would prohibit the making of any payment or distribution by the Trustee or such Paying Agent, and (in the absence of actual knowledge that the respective payment will violate the applicable provisions of this Article Twelve or Article Ten, as applicable) the Trustee and such Paying Agent may continue to make payments on the Notes, unless the Trustee or such Paying Agent shall have received, at least one Business Day prior to the date of such payment, written notice of facts that would cause the payment of any Obligations with respect to the Notes to violate Article Ten or this Article Twelve (although the receipt of such payment shall otherwise be subject to the applicable provisions of this Article Twelve or Article Ten, as applicable). Only the Company, a Guarantor, a holder of Senior Debt or a holder of Guarantor Senior Debt or a Representative thereof may give the notice. Nothing in this Article Twelve shall impair the claims of, or payments to, the Trustee in its capacity as such under or pursuant to Section 7.07 or any Agent in its capacity as such, under or pursuant to Section 14.08. Nothing in this Section 12.13 is intended to or shall relieve any Holder of Notes from the obligations imposed under Sections 12.02 and 12.03 with respect to other distributions received in violation of the provisions hereof. The Trustee in its individual or any other capacity may hold the Guarantor Senior Debt with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. ARTICLE THIRTEEN MISCELLANEOUS SECTION 13.01. Trust Indenture Act of 1939. Prior to the --------------------------- effectiveness of the Registration Statement, this Indenture shall incorporate and be governed by the provisions of the TIA that are required to be part of and to govern indentures qualified under the TIA. After the effectiveness of the Registration Statement, this Indenture shall be subject to the provisions of the TIA that are required to be a part of this Indenture and shall, to the extent applicable, be governed by such provisions. SECTION 13.02. Notices. Any notice or communication shall be ------- sufficiently given if in writing and delivered in person or mailed by first class mail addressed as follows: -124- if to the Company or the Guarantors: The Manitowoc Company, Inc. 500 South 16th Street Manitowoc, Wisconsin 54220 Telecopier No.: (920) 683-8123 Attention: Maurice D. Jones if to the Trustee, Paying Agent or Registrar: The Bank of New York Corporate Trust Department 101 Barclay Street, 21W New York, New York 10286 Telecopier No.: (212) 815-4803 Attention: Corporate Trust Trustee Administration The Company or the Trustee by notice to the other (and to each Representative for Designated Senior Debt known to it to be then outstanding) may designate additional or different addresses for subsequent notices or communications. Any notice or communication mailed to a Holder shall be mailed to it at such Holder's address as it appears on the Register by first class mail and shall be sufficiently given to it if so mailed within the time prescribed. Copies of any such communication or notice to a Holder shall also be mailed to the Trustee and each Agent at the same time. All notices shall be deemed to have been given upon (1) the mailing by first class mail, postage prepaid, of such notices to Holders of the Notes at their registered addresses as recorded in the Register; and (2) so long as the Notes are listed on the Luxembourg Stock Exchange and it is required by the rules of the Luxembourg Stock Exchange, the Company shall make publication of such notice to the Holders of the Notes in a leading newspaper having general circulation in Luxembourg (which is expected to be the Luxemburger Wort) or, if such publication is not practicable, in one other leading daily newspaper with general circulation in Europe, such newspaper being published on each business day in morning editions, whether or not it shall be published in Saturday, Sunday or holiday editions. For so long as the Notes are listed on the Luxembourg Stock Exchange, a copy of all notices shall be provided by the Company to the Luxembourg Stock Exchange. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. Except for a notice to the Trustee, which is deemed given only when received, and except as otherwise provided in this Indenture, if a notice or communication is mailed in the manner provided in this Section 13.02, it is duly given, whether or not the addressee receives it. -125- Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. SECTION 13.03. Certificate and Opinion as to Conditions Precedent. -------------------------------------------------- Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee: (i) an Officers' Certificate, upon which the Trustee may conclusively rely, stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and (ii) an Opinion of Counsel, upon which the Trustee may conclusively rely, in form and substance satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with; provided, however, that, with respect to matters of fact, an Opinion of Counsel may rely on an Officers' Certificate or certificates of public officials. SECTION 13.04. Statements Required in Certificate. Each Officers' ---------------------------------- Certificate with respect to compliance with a condition or covenant provided for in this Indenture shall include: (i) a statement that each person signing such certificate has read such covenant or condition and the definitions herein relating thereto; (ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements contained in such certificate are based; (iii) a statement that, in the opinion of each such person, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (iv) a statement as to whether or not, in the opinion of each such person, such condition or covenant has been complied with. -126- SECTION 13.05. Rules by Trustee, Paying Agent or Registrar. The ------------------------------------------- Trustee may make reasonable rules for action by or at a meeting of Holders. The Paying Agent or Registrar may make reasonable rules for its functions. SECTION 13.06. Payment Date Other Than a Business Day. If an -------------------------------------- Interest Payment Date, Redemption Date, Stated Maturity or date of maturity or repurchase of any Note or any other payment date shall not be a Business Day, then payment of principal of, premium, if any, or interest on such Note, as the case may be, need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity or date of maturity or repurchase of such Note; provided that no interest shall accrue for the period from and after such Interest Payment Date, Redemption Date, Stated Maturity or date of maturity or repurchase, as the case may be. SECTION 13.07. Governing Law. The laws of the State of New York ------------- shall govern this Indenture, the Notes and the Guarantees. The Trustee, the Company and the Guarantors agree to submit to the jurisdiction of any federal or state court situated in the State of New York, the City of New York, the Borough of Manhattan in any action or proceeding arising out of or relating to this Indenture, the Notes and the Guarantees. Each of the Company and each Guarantor hereby irrevocably submits to the non-exclusive jurisdiction of each such court for the purpose of any such action or proceeding. Each of the Company and each Guarantor irrevocably waives, to the fullest extent it may effectively do so, any objection to the laying of venue of any such action or proceeding in any such court and the defense of inconvenient forum to the maintenance of any such action or proceeding in any such court. SECTION 13.08. No Adverse Interpretation of Other Agreements. This --------------------------------------------- Indenture may not be used to interpret another indenture, loan or debt agreement of the Company. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. SECTION 13.09. No Recourse Against Others. No recourse for the -------------------------- payment of the principal of, premium, if any, or interest on any of the Notes, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company or the Guarantors contained in this Indenture or in any of the Notes, or because of the creation of any Indebtedness represented thereby, shall be had against any incorporator or against any past, present or future partner, shareholder, other equityholder, officer, director, employee, management board member, supervisory board member or controlling person, as such, of the Company or the Guarantors or of any successor Person, either directly or through the Company, the Guarantors or any successor Person, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that all such liability is hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issue of the Notes. -127- SECTION 13.10. Successors. All agreements of the Company and the ---------- Guarantors in this Indenture and the Notes shall bind their respective successors. All agreements of the Trustee of this Indenture shall bind its successor. SECTION 13.11. Duplicate Originals. The parties may sign any ------------------- number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. SECTION 13.12. Separability. In case any provision in this ------------ Indenture, in the Guarantees or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 13.13. Table of Contents, Headings, Etc. The Table of -------------------------------- Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof and shall in no way modify or restrict any of the terms and provisions hereof. SECTION 13.14. Judgment Currency. The Company and the Guarantors ----------------- agree, jointly and severally, to indemnify the Holders and each person, if any, who controls any Holder within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any loss incurred, as incurred, as a result of any judgment or award in connection with this Indenture being expressed in a currency (the "Judgment Currency") other than Euros and as a ----------------- result of any variation as between (i) the spot rate of exchange in London at which the Judgment Currency could have been converted into Euros as of the date such judgment or award is paid and (ii) the spot rate of exchange at which the indemnified party converts such Judgment Currency. The foregoing indemnity shall constitute a separate and independent obligation of the Company and the Guarantors and shall continue in full force and effect notwithstanding any such judgment or order as aforesaid. The term "spot rate of exchange" shall include any premiums and costs of exchange payable in connection with the purchase of, or conversion into, the relevant currency. SECTION 13.15. Waiver of Jury Trial. Each of the Company, the -------------------- Guarantors, Trustee, Paying Agent, and Registrar hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Indenture, the Notes, the Guarantees or the transactions contemplated hereby. SECTION 13.16. Unclaimed Money; Prescription. If money deposited ----------------------------- with the Trustee or any Paying Agent for the payment of principal, premium (if any), interest or Additional Interest (if any) remains unclaimed for two years, the Trustee and such Paying Agent shall, upon written request of the Company, pay such money back to the Company. Following such repayment to the Company, Holders of the Notes entitled to such payment must look to the Company for such payment unless applicable abandoned property law desig- -128- nates another Person and all liability of the Trustee and Paying Agent shall cease. Other than as set forth in this paragraph, this Indenture does not provide for any prescription period for the payment of principal, premium (if any), interest and Additional Interest (if any) on the Notes. ARTICLE FOURTEEN PAYING AGENT, TRANSFER AGENT AND REGISTRAR SECTION 14.01. Duties of the Paying Agent, Transfer Agent and ---------------------------------------------- Registrar. Each of the Paying Agent, Transfer Agent and the Registrar shall be - --------- obliged to perform such duties, and only such duties, as are herein specifically set forth, and no implied duties or obligations shall be read into this Indenture against it. No provision of this Indenture shall require the Paying Agent, the Transfer Agent or the Registrar to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties, or in the exercise of its rights and powers, hereunder. SECTION 14.02. Agent of the Company. In acting hereunder and in -------------------- connection with the Securities, the Paying Agent, the Transfer Agent and the Registrar shall act solely as agents of the Company and will not thereby assume any obligations towards, or relationship of agency or trust for, any of the Holders. SECTION 14.03. Certain Rights of Paying Agent, Transfer Agent and -------------------------------------------------- Registrar. (a) Each of the Paying Agent, the Transfer Agent and the Registrar - --------- may consult with legal or other professional advisers satisfactory to it, and the opinion of such advisers shall be full and complete protection in respect of any action taken, omitted or suffer hereunder in good faith and in accordance with the opinion of such advisers. (b) Each of the Paying Agent, the Transfer Agent and the Registrar shall be protected and shall incur no liability for or in respect of any action taken, omitted or suffered in reliance upon any instruction, request or order from the Company or the Trustee, or any Note, form or transfer, resolution, direction, consent, certificate, affidavit, statement, telex, facsimile transmission or other paper or document believed by it in good faith to be genuine and to have been delivered, signed or sent by the proper party or parties. (c) Except as may be required by law, each of the Paying Agent, the Transfer Agent and the Registrar shall (whether or not the relevant Note is overdue and regardless of any notice of ownership, trust or any interest, or writing on, or the loss or theft of, the certificate issued in respect of such Note) be entitled to treat the registered owner of any Note as the absolute owner for all purposes. -129- (d) Each of the Paying Agent, the Transfer Agent and the Registrar shall not be liable for any action taken, suffered or omitted by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture. (e) None of the Paying Agent, the Transfer Agent or the Registrar shall have any duty or responsibility in case of any default by the Company or any Guarantor in the performance of its obligations hereunder or under the Notes or any Guarantee (including, without limitation, the generality of the foregoing, any duty or responsibility to accelerate all or any of the Notes or to initiate or to attempt to initiate any proceedings at law or otherwise or to make any demand for the payment thereof upon the Company or any Guarantor). SECTION 14.04. May Hold Notes. Each of the Paying Agent, the -------------- Transfer Agent and the Registrar and each's respective officers, directors and employees, may become the owner of, or acquire any interest in, any Notes with the same rights that it or they would have if it were not appointed hereunder, and may engage or be interested in any financial or other transaction with the Company and may act on, or as depositary, trustee or agent for, any committee or body of Holders of Securities or other obligations of the Company as freely as if it were not appointed hereunder. SECTION 14.05. Appointment of Agents. Each of the Paying Agent, the --------------------- Transfer Agent and the Registrar may perform the services required to be rendered by it hereunder either directly or through attorneys-in-fact or agents not regularly in its employ and the Paying Agent, the Transfer Agent or the Registrar, as the case may be, shall not be responsible or liable for any willful misconduct or negligence on the part of any such attorney or agent appointed by it with due care hereunder. SECTION 14.06. Money Held. The Paying Agent shall be entitled to ---------- deal with moneys paid to it hereunder in the same manner as other moneys paid to it as a banker by its customers except that the Paying Agent shall not be liable to any Person for interest on, or have any responsibility to invest, any sums held by it under this Indenture. SECTION 14.07. Paying Agent, Transfer Agent and Registrar Not ---------------------------------------------- Responsible for Notes. The recitals contained herein and in the Notes shall be - --------------------- taken as the statements of the Company and the Paying Agent, the Transfer Agent and the Registrar assume no responsibility for the correctness of the same. None of the Paying Agent, the Transfer Agent or the Registrar makes any representation as to the validity or sufficiency of this Indenture, the Notes, any Guarantee or any offering material. The Paying Agent, the Transfer Agent and the Registrar shall not be accountable for the use or application by the Company of the proceeds of any Notes. SECTION 14.08. Compensation and Indemnification. (a) The Company -------------------------------- shall pay to each of the Paying Agent, the Transfer Agent and the Registrar from time to time such compensation as may be agreed upon in writing by the Company and each such agent for all -130- services rendered by it hereunder and shall reimburse each such agent upon its request for all reasonable expenses, disbursements and advances incurred or made by it in accordance with or in connection with this Indenture (including the reasonable compensation and expenses of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or willful misconduct. (b) The Company shall indemnify each of the Paying Agent, the Transfer Agent and the Registrar, and hold each harmless, against any loss, liability or expense (including the reasonable costs and expenses of its counsel and defending against any claim of liability) arising out of or in connection with its acting as Paying Agent, the Transfer Agent and the Registrar, as the case may be, hereunder, provided, however, that none of the Paying Agent, the Transfer Agent or the Registrar shall be indemnified for or held harmless against any such loss, liability or expense resulting from its negligence, willful misconduct or bad faith. The provision of this subsection (b) of Section 14.08 shall remain in full force and effect notwithstanding the resignation or removal of any of the Paying Agent, the Transfer Agent and the Registrar, the payment of the Notes or the termination of this Indenture. [Signature Pages Follow] -131- SIGNATURES IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as of the date first written above. THE MANITOWOC COMPANY, INC., as the Company By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: General Counsel and Secretary MANITOWOC CRANE COMPANIES, INC. By: /s/ James Walden ------------------------------------- Name: James Walden Title: President MANITOWOC MARINE GROUP, LLC By: The Manitowoc Company, Inc., as sole member and manager By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: General Counsel and Secretary MANITOWOC FOODSERVICE COMPANIES, INC. By: /s/ James Walden ------------------------------------- Name: James Walden Title: President S-1 MANITOWOC WESTERN COMPANY, INC. By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: Secretary MANITOWOC BOOM TRUCKS, INC. By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: Secretary MANITOWOC RE-MANUFACTURING, INC. By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: Secretary MANITOWOC CRANES, INC. By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: Secretary WEST-MANITOWOC, INC. By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: Secretary FEMCO MACHINE COMPANY, INC. By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: Secretary S-2 MANITOWOC CP, INC. By: /s/ James Walden ------------------------------------- Name: James Walden Title: President KMT REFRIGERATION, INC. By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: Secretary HARFORD DURACOOL, LLC By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: Secretary DIVERSIFIED REFRIGERATION, INC. By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: Secretary SERVEND INTERNATIONAL, INC. By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: Secretary SERVEND SALES CORP. By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: Secretary S-3 MANITOWOC BEVERAGE SYSTEMS, INC. By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: Secretary MANITOWOC ICE, INC. By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: Secretary MANITOWOC EQUIPMENT WORKS, INC. By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: Secretary MANITOWOC FP, INC. By: /s/ James Walden ------------------------------------- Name: James Walden Title: President KMT SALES CORP. By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: Secretary MULTIPLEX COMPANY, INC. By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: Secretary S-4 NORTH CENTRAL CRANE & EXCAVATOR SALES CORP. By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: Secretary ENVIRONMENTAL REHAB, INC. By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: Secretary MANITOWOC CRANE & SHOVEL SALES CORP. By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: Secretary MANITOWOC MEC, INC. By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: Secretary MARINETTE MARINE CORPORATION By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: Secretary POTAIN CORPORATION S-5 By: /s/ Maurice D. Jones ------------------------------------- Name: Maurice D. Jones Title: Secretary S-6 THE BANK OF NEW YORK, as Trustee, Registrar, Transfer Agent and Paying Agent By: /s/ Luis Perez -------------------------------------- Name: Luis Perez Title: Assistant Vice President S-7 EXHIBIT A --------- [FACE OF NOTE] [Insert Private Placement Legend and Global Notes if Applicable] THE MANITOWOC COMPANY, INC. 10 3/8% Senior Subordinated Note Due 2011 . 175,000,000 ISIN No. [ ] Common Code [ ] No. [ ] THE MANITOWOC COMPANY, INC., a Wisconsin corporation (the "Company", which ------- term includes any successor under the Indenture hereinafter referred to), for value received, promise to pay to _______________, or its registered assigns, the principal sum of . 175,000,000 on May 15, 2011. Interest Payment Dates: May 15 and November 15 commencing November 15, 2001. Regular Record Dates: May 1 and November 1 . Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. A-1 IN WITNESS WHEREOF, the Company has caused this Note to be signed manually by its duly authorized signatories. THE MANITOWOC COMPANY, INC. By: _____________________________________ Name: Title: (Trustee's Certificate of Authentication) This is one of the 10 3/8% Senior Subordinated Notes due 2011 described in the within-mentioned Indenture. Date: [ ], 2001 THE BANK OF NEW YORK, as Trustee By:______________________________________ Name: Title: A-2 [REVERSE SIDE OF NOTE] THE MANITOWOC COMPANY, INC. 10 3/8% Senior Subordinated Note due 2011 1. Principal and Interest. ---------------------- The Company shall pay the principal of this Note on May 15, 2011. The Company promises to pay interest on the principal amount of this Note on each Interest Payment Date, as set forth below, at the rate per annum shown above. Interest will be paid semi-annually in arrears on each Interest Payment Date, commencing November 15, 2001. Interest on this Note will accrue from the latest date to which interest has been paid on the Notes or, if no interest has been paid, the Issue Date; provided, however, that, if the Exchange Offer is consummated and Unrestricted Notes are issued in exchange for this Note in connection therewith, any accrued and unpaid interest on this Note shall be deemed to have accrued with respect to, and shall be paid with respect to, such Unrestricted Notes. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The Company shall pay interest on overdue principal and premium, if any, and interest on overdue installments of interest, to the extent lawful, at a rate per annum that is the then applicable interest rate borne by the Notes. 2. Method of Payment. ----------------- The Company shall pay interest on the principal amount of the Notes on each May 15 and November 15 to the persons who are Holders of the relevant Notes on the May 1 or November 1, as the case may be, immediately preceding such Interest Payment Date (as reflected in the Register at the close of business on the Regular Record Date), in each case, even if the Note is canceled on registration of transfer or registration of exchange after such record date. The Company shall make payments of principal on the Notes to Holders that surrender Notes to the Paying Agent. If a Holder has given wire transfer instructions to the Paying Agent at least 15 days prior to any payment, the Company shall make all principal, premium and interest and Additional Interest, if any, payments on the Notes owned by such Holder in accordance with those instructions. All other payments on the Notes shall be made by check mailed to the Holders at their address set forth in the register of Holders, or in the case of the final payment of principal and interest, if any, on any Note, upon presentation and surrender of such Note at the office of the Paying Agent. All payments on the Notes will be made in Euros. A-3 3. Paying Agent and Registrar. -------------------------- Initially, the Company has appointed the corporate trust office of the Trustee in The City of New York located at the address set forth in Section 13.02 of the Indenture as Paying Agent in The City of New York. So long as the Notes are listed on the Luxembourg Stock Exchange and the rules of such stock exchange so require, the Company shall maintain a Paying Agent and Transfer Agent in Luxembourg. 4. Indenture; Limitations. ---------------------- The Company issued the Notes under an Indenture dated as of May 9, 2001 (the "Indenture"), among the Company, the Guarantors named therein and The --------- Bank of New York, as trustee (the "Trustee"). Capitalized terms herein are used ------- as defined in the Indenture unless otherwise indicated. This Note is one of a duly authorized issue of Notes of the Company designated as its 10 3/8% Senior Subordinated Notes due 2011 (the "Initial Notes"). The Initial Notes are ------------- initially being issued in the aggregate principal amount of . 175,000,000. The Company shall be entitled to issue Additional Notes pursuant to Section 2.14 of the Indenture (the "Additional Notes"). The Notes include the Unrestricted ---------------- Notes (as defined below) issued in exchange for the Initial Notes pursuant to the Registration Rights Agreement. The Initial Notes, the Additional Notes and the Unrestricted Notes are treated as a single class of securities under the Indenture. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act. The Notes are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of all such terms. To the extent permitted by applicable law, in the event of any inconsistency between the terms of this Note and the terms of the Indenture, the terms of the Indenture shall control. This is one of the Notes referred to in the Indenture. The Notes are unsecured and unsubordinated obligations of the Company. 5. Redemption. ---------- Optional Redemption. Except as described below, the Notes are not redeemable before May 15, 2006. Thereafter, the Company may redeem the Notes at its option, in whole or in part, upon not less than 30 nor more than 60 days' notice to the Holders, at the following redemption prices (expressed as percentages of the principal amount thereof) if redeemed during the twelve-month period commencing on May 15 of the years set forth below:
Year Percentage ---- ---------- 2006................................................................ 105.188% 2007................................................................ 103.458% 2008................................................................ 101.729% 2009 and thereafter................................................. 100.000%
A-4 In addition, the Company must pay accrued and unpaid interest on the Notes redeemed. Optional Redemption upon Public Equity Offerings. At any time, or from time to time, on or prior to May 15, 2004, the Company may, at its option, use the net cash proceeds of one or more Public Equity Offerings (as defined below) to redeem up to 35% of the principal amount of the Notes (including any Additional Notes) outstanding under the Indenture at a redemption price of 110.375% of the principal amount thereof plus accrued and unpaid interest thereon, if any, to the date of redemption; provided that: (1) at least 65% of the principal amount of Notes (including any Additional Notes) outstanding under the Indenture remains outstanding immediately after any such redemption; and (2) the Company makes such redemption not more than 90 days after the consummation of any such Public Equity Offering. "Public Equity Offering" means an underwritten public offering of ---------------------- Qualified Capital Stock of the Company pursuant to a registration statement filed with the Commission in accordance with the Securities Act. In the event that the Company chooses to redeem less than all of the Notes, selection of the Notes for redemption will be made by the Trustee either: (1) in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed; or, (2) on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate. No Notes of a principal amount of . 1,000 or less shall be redeemed in part. If a partial redemption is made with the proceeds of a Public Equity Offering, the Trustee will select the Notes only on a pro rata basis or on as nearly a pro rata basis as is practicable (subject to Euroclear and Clearstream Luxembourg procedures, if any). Notice of any optional redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at its last address as it appears in the Register. So long as the Notes are listed on the Luxembourg Stock Exchange and the rules of such exchange so require, notice of redemption shall be published in a daily newspaper of general circulation in Luxembourg (which is expected to be the Luxemberger Wort). On and after the Redemption Date, interest ceases to accrue on Notes or portions of Notes called for redemption so long as the Company has deposited with the Paying Agent funds in satisfaction of the Redemption Price pursuant to the terms of the Indenture, unless the Company defaults in the payment of the Redemption Price. The Trustee may select A-5 for redemption portions of the principal amount of the Notes that have denominations equal to . 1,000 integral multiples thereof in accordance with Section 3.03 of the Indenture. 6. Redemption for Changes in Withholding Taxes. ------------------------------------------- The Company may redeem the Notes, in whole, but not in part, at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, in the event of certain changes in the applicable tax laws or treaties. 7. Repurchase upon Change in Control. --------------------------------- Upon the occurrence of a Change of Control, each Holder shall have the right, subject to the terms and conditions set forth in the Indenture, to require the Company to repurchase its Notes in cash pursuant to the offer described in the Indenture at a purchase price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, and Additional Interest, if any, to the date of purchase (the "Change of Control Payment"). ------------------------- A notice of such Change of Control will be mailed within 30 days after any Change of Control occurs to each Holder at its last address as it appears in the Register and to the Trustee. The notice to the Holders shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Change of Control Offer. Such notice shall state: (1) that the Change of Control Offer is being made pursuant to Section 4.11 of the Indenture and that all Notes tendered will be accepted for payment; (2) the purchase price (including the amount of accrued interest) and the purchase date (which shall be no earlier than the Change of Control Payment Date); (3) that any Note not tendered will continue to accrue interest if interest is then accruing; (4) that, unless the Company defaults in making payment therefor, any Note accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest after the Change of Control Payment Date; (5) that Holders electing to have a Note purchased pursuant to a Change of Control Offer will be required to surrender the Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third business day prior to the Change of Control Payment Date; (6) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than 5:00 p.m., New York City time, on the second Business A-6 Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Notes the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased; and (7) the circumstances and relevant facts regarding such Change of Control. 8. Subordination. ------------- The Notes are subordinated to Senior Debt of the Company, as defined in the Indenture. To the extent provided in the Indenture, Senior Debt of the Company must be paid before the Notes may be paid. The Company agrees, and each Holder by accepting a Note agrees, to the subordination provisions contained in the Indenture and authorizes the Trustee to give it effect and appoints the Trustee as attorney-in-fact for such purpose. 9. Denominations; Transfer; Exchange. --------------------------------- The Notes are in registered form without coupons in denominations of . 1,000 principal amount and multiples of . 1,000 in excess thereof. A Holder may register the transfer or exchange of Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. 10. Persons Deemed Owners. --------------------- A Holder shall be treated as the owner of a Note for all purposes. 11. Unclaimed Money. --------------- If money deposited with the Trustee or any Paying Agent for the payment of principal, premium (if any), interest or Additional Interest (if any) remains unclaimed for two years, the Trustee and each such Paying Agent shall pay such money back to the Company upon written request of the Company. Following such repayment to the Company, Holders of the Notes entitled to such payment must look to the Company for such payment unless applicable abandoned property law designates another Person and all liability of the Trustee and such Paying Agent shall cease. Other than as set forth in this paragraph, the Indenture does not provide for any prescription period for the payment of principal, premium (if any), interest and Additional Interest (if any) on the Notes. 12. Discharge Prior to Redemption or Maturity. ----------------------------------------- If the Company deposits with the Trustee money or Government Obligations sufficient to pay the then outstanding principal of and accrued interest on the Notes to re- A-7 demption or maturity, the Company and the Guarantors will be discharged from the Indenture, the Notes and the Guarantees except in certain circumstances set forth in the Indenture. 13. Legal Defeasance and Covenant Defeasance. ---------------------------------------- The Company and each Guarantor may be discharged from their obligations under the Indenture, the Notes and the Guarantees except for certain provisions thereof, and the Company may be discharged from its obligations to comply with certain covenants contained therein, in each case upon satisfaction of certain conditions specified in the Indenture. 14. Amendment; Supplement; Waiver. ----------------------------- Subject to certain exceptions, the Indenture, the Notes and the Guarantees may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding, and any existing default or compliance with any provision may be waived with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding. Without notice to or the consent of any Holder, the parties thereto may amend or supplement the Indenture, the Notes and the Guarantees to, among other things, cure any ambiguity, defect or inconsistency. Certain modifications will require the consent of each Holder affected thereby. 15. Restrictive Covenants. --------------------- The Indenture imposes certain limitations on the ability of the Company and its Restricted Subsidiaries, among other things, to incur additional Indebtedness, make Restricted Payments, use the proceeds from Asset Sales, engage in transactions with Affiliates and, in the case of the Company and the Guarantors, to merge, consolidate or transfer substantially all of its assets. 16. Successor Persons. ----------------- When a successor person or other entity assumes all the obligations of its predecessor under the Notes and the Indenture, the predecessor person will be released from those obligations. 17. Defaults and Remedies. --------------------- If an Event of Default (other than an Event of Default specified in clause (a)(6) or (a)(7) of Section 6.01 of the Indenture that occurs with respect to the Company) occurs and is continuing, the Trustee by notice to the Company, or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding under the Indenture by notice to the Company and the Trustee, may declare the principal of, premium, if any, and accrued interest, if any, on all Notes to be due and payable. If an Event of Default specified in clause (a)(6) or (a)(7) of Section 6.01 occurs and is continuing with respect to the Company, such amount A-8 with respect to all the Notes shall, ipso facto, become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holders. Holders may not enforce the Indenture, the Notes or the Guarantees except as provided in the Indenture. The Trustee may require indemnity satisfactory to it before it enforces the Indenture, the Notes or the Guarantees. Subject to certain limitations, Holders of at least a majority in principal amount of the Notes then outstanding may direct the Trustee in its exercise of any trust or power. 18. Trustee Dealings with Company. ----------------------------- Subject to the Trust Indenture Act, the Trustee under the Indenture, in its individual or any other capacity, may make loans to, accept deposits from and perform services for the Company or its Affiliates and may otherwise deal with the Company or its Affiliates as if it were not the Trustee. 19. No Recourse Against Others. -------------------------- No recourse for the payment of the principal of, premium, if any, or interest on any of the Notes or the Guarantees, or for any claim based thereon or otherwise in respect thereof, and no recourse under or upon any obligation, covenant or agreement of the Company contained in the Indenture, in any of the Notes or the Guarantees, or because of the creation of any Indebtedness represented thereby, shall be had against any incorporator or against any past, present or future partner, shareholder, other equityholder, officer, director, employee, management board member, supervisory board member or controlling person, as such, of the Company, the Guarantors or of any successor Person, either directly or through the Company or any successor Person, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise. 20. Authentication. -------------- This Note shall not be valid until the Trustee or authenticating agent signs the certificate of authentication on the other side of this Note. 21. Abbreviations. ------------- Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian) and U/G/M/A (= Uniform Gifts to Minors Act). The Company shall furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to The Manitowoc Company, Inc., 500 South 16th Street, Manitowoc, Wisconsin 54220. A-9 22. Registration Rights. ------------------- With respect to Restricted Notes, pursuant to the Registration Rights Agreement, the Company shall be obligated upon the occurrence of certain events to consummate an exchange offer pursuant to which the Holder of this Note shall have the right to exchange this Note for a 10 3/8% Senior Subordinated Note due 2011 of the Company (an "Unrestricted Note") which has been registered under the ----------------- Securities Act, in like principal amount and having terms identical in all material respects to the Initial Notes. The Holders shall be entitled to receive certain Additional Interest in the event such exchange offer is not consummated and upon certain other conditions, all pursuant to and in accordance with the terms of the Registration Rights Agreement. 23. Choice of Law. ------------- The laws of the State of New York shall govern the Indenture and this Note. A-10 ASSIGNMENT FORM I or we assign and transfer this Note to ________________________________________________________________________________ ________________________________________________________________________________ (Print or type name, address and zip code of assignee or transferee) ________________________________________________________________________________ (Insert Company Registration, Social Security or other identifying number of assignee or transferee) and irrevocably appoint_________________________________________________________ agent to transfer this Security on the books of the Company. The agent may substitute another to act for him. Dated:___________________ Signed:______________________________________________ (Sign exactly as name appears on the other side of this Note) Signature Guarantee:____________________________________________________________ Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor program reasonably acceptable to the Trustee) A-11 OPTION OF HOLDER TO ELECT PURCHASE If you wish to have this Note purchased by the Company pursuant to Section 4.10 or Section 4.11 of the Indenture, check the box: [_] If you wish to have a portion of this Note purchased by the Company pursuant to Section 4.10 or Section 4.11 of the Indenture, state the amount (in principal amount): . _________. Date: _________________ Your Signature: ________________________________________________________________________________ (Sign exactly as your name appears on the other side of this Note) Signature Guarantee:____________________________ A-12 SCHEDULE A SCHEDULE OF PRINCIPAL AMOUNT OF INDEBTEDNESS EVIDENCED BY THIS NOTE The initial principal amount of indebtedness evidenced by this Note shall be . _____. The following decreases/increases in the principal amount of indebtedness evidenced by this Note have been made:
Total Principal Amount of Decrease in Increase in Indebtedness Principal Amount Principal Amount Evidenced Notation Made Date of of Indebtedness of Indebtedness Following Such by or on Behalf of Decrease/Increase Evidenced Evidenced Decrease/Increase Trustee - ------------------ ----------------- ------------------ ------------------- -------------------
A-13 EXHIBIT B FORM OF CERTIFICATE OF TRANSFER The Manitowoc Company, Inc. 500 South 16th Street Manitowoc, WI 54220 Attention: Maurice D. Jones The Bank of New York 101 Barclay Street 21st Floor West New York, NY 10286 Attn: Corporate Trust Administration Re: 10 3/8% Senior Subordinated Notes due 2011 The Manitowoc Company, Inc. ------------------------------------------ Reference is hereby made to the Indenture, dated as of May 9, 2001 (the "Indenture"), by and among The Manitowoc Company, Inc., as Company (the --------- "Company"), the Guarantors named therein and The Bank of New York, as trustee. ------- Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. ___________________ (the "Transferor") owns and proposes to transfer ---------- the Note[s] or interest in such Note[s] specified in Annex A hereto, in a ------- principal amount of . ___________ (the "Transfer"), to ____________________ (the -------- "Transferee"), as further specified in Annex A hereto. In connection with the ---------- ------- Transfer, the Transferor hereby certifies that: [CHECK ALL THAT APPLY] 1. [_] Check if Transferee will take delivery of a beneficial interest in the U.S. Global Note or a Definitive Registered Note pursuant to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the Transferor hereby further certifies -------------- that the Book-Entry Interest or Definitive Registered Note is being transferred to a Person that the Transferor reasonably believed and believes is purchasing the Book-Entry Interest or Definitive Registered Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred Book-Entry Interest or Definitive Registered Note will be subject to the restrictions on B-1 transfer enumerated in the Private Placement Legend printed on the U.S. Global Note and/or the Definitive Registered Note and in the Indenture and the Securities Act. 2. [_] Check if Transferee will take delivery of a Book-Entry Interest in the International Global Note or a Definitive Registered Note pursuant to Regulation S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act and (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred Book-Entry Interest or Definitive Registered Note will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the International Global Note and/or the Definitive Registered Note and in the Indenture and the Securities Act. 3. [_] Check and complete if Transferee will take delivery of a Book-Entry Interest in the U.S. Global Note or a Definitive Registered Note pursuant to any provision of the Securities Act other than Rule 144A or Regulation S. The Transfer is being effected in compliance with the transfer restrictions applicable to Book-Entry Interests in Restricted Global Notes and Restricted Definitive Registered Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one): (a) [_] such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act; or (b) [_] such Transfer is being effected to the Company or a subsidiary thereof; or (c) [_] such Transfer is being effected to an institutional "Accredited Investor," as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act, and pursuant to an exemption from the registration requirements of the Securities Act B-2 other than Rule 144A, Rule 144 or Rule 904, and the Transferor hereby further certifies that it has not engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to Book-Entry Interests in a Restricted Global Note or Restricted Definitive Registered Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the Indenture and (2) if --------- such Transfer is in respect of a principal amount of Notes at the time of transfer of less than [_]250,000, an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred Book-Entry Interest or Definitive Registered Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Note and/or the Restricted Definitive Registered Notes and in the Indenture and the Securities Act. 4. [_] Check if Transferee will take delivery of a Book-Entry Interest in an Unrestricted Global Note or an Unrestricted Definitive Registered Note. The Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred Book- Entry Interest or Definitive Registered Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend. B-3 This certificate and the statements contained herein are made for your benefit and the benefit of the Company. ___________________________________ [Insert Name of Transferor] By: _______________________________ Name: Title: Dated: ____________________ B-4 ANNEX A TO CERTIFICATE OF TRANSFER 1. The Transferor owns and proposes to transfer the following: [CHECK ONE OF (a)(i), (a)(ii) or (b)] (a) [_] a Book-Entry Interest in the: (i) [_] U.S. Global Note (ISIN __________; Common Code __________), held through Participant Account __________, or (iii) [_] International Global Note (ISIN __________; Common Code __________), held through Participant Account __________, or (b) [_] a Restricted Definitive Registered Note; or 2. After the Transfer the Transferee will hold: [CHECK ONE] (a) [_] a Book-Entry Interest in the : (i) [_] U.S. Global Note (ISIN __________; Common Code __________), held through Participant Account __________, or (ii) [_] International Global Note (ISIN __________; Common Code __________), held through Participant Account __________, or (iii) [_] Unrestricted Global Note (ISIN __________; Common Code ___________), held through Participant Account __________, or (b) [_] a Restricted Definitive Registered Note; or (c) [_] an Unrestricted Definitive Registered Note. B-5 EXHIBIT C --------- FORM OF CERTIFICATE OF EXCHANGE The Manitowoc Company, Inc. 500 South 16th Street Manitowoc, WI 54220 Attention: Maurice D. Jones The Bank of New York 101 Barclay Street 21st Floor West New York, NY 10286 Attn: Corporate Trust Administration Re: 10 3/8% Senior Subordinated Notes due 2011 The Manitowoc Company, Inc. ------------------------------------------ (Regulation S ISIN XS0128971032; Common Code: 012897103) (144A ISIN XS0128971115; Common Code: 012897111) Reference is hereby made to the Indenture, dated as of May 9, 2001 (the "Indenture"), by and among The Manitowoc Company, Inc., as Company (the --------- "Company"), the Guarantors named therein and The Bank of New York, as trustee. ------- Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. __________________________ (the "Owner") owns and proposes to exchange ----- the Note[s] or interest in such Note[s] specified on Annex A hereto, in a ------- principal amount of . ____________ (the "Exchange"). In connection with the -------- Exchange, the Owner hereby certifies that: 1. Exchange of Restricted Definitive Registered Notes or Book-Entry Interests in Restricted Global Notes for Restricted Definitive Registered Notes or Book-Entry Interests in Restricted Global Notes (a) [_] Check if Exchange is from Book-Entry Interest in a Restricted Global Note to Restricted Definitive Registered Note. In connection with the Exchange of the Owner's Book-Entry Interest in a Restricted Global Note for a Restricted Definitive Registered Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Registered Note is being acquired for the Owner's own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Registered Note issued will continue to be subject to the C-1 restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Registered Note and in the Indenture and the Securities Act. (b) [_] Check if Exchange is from Restricted Definitive Registered Note to Book-Entry Interest in a Restricted Global Note. In connection with the Exchange of the Owner's Restricted Definitive Registered Note for Book-Entry Interest in a Restricted Global Note with an equal principal amount, the Owner hereby certifies that the Book-Entry Interests are being acquired for the Owner's own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Book-Entry Interests will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Note and in the Indenture and the Securities Act. This certificate and the statements contained herein are made for your benefit and the benefit of the Company. [Insert Name of Owner] By:_______________________________________________ Name: Title: Dated: ______________________ C-2 ANNEX A TO CERTIFICATE OF EXCHANGE 1. The Owner currently owns and proposes to Exchange the following: [CHECK ONE OF (a)(i), (a)(ii) or (b)] (a) a Book-Entry Interest in the: (i) [_] U.S. Global Note (ISIN __________; Common Code __________), held through Participant Account __________, or (ii) [_] International Global Note (ISIN __________; Common Code __________), held through Participant Account __________, or (b) [_] a Restricted Definitive Registered Note. 2. After the Exchange the Owner will hold: [CHECK ONE] (a) a Book-Entry Interest in the: (i) [_] U.S. Global Note (ISIN __________; Common Code __________), through Participant Account __________, or (ii) [_] International Global Note (ISIN __________; Common Code __________), through Participant Account __________, or (b) [_] a Restricted Definitive Registered Note. 2. The Owner requests that Definitive Registered Notes be registered in the following name: ___________________ ___________________ and sent to the Owner at the following address: ___________________ ___________________ C-3 EXHIBIT D --------- FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR The Manitowoc Company, Inc. 500 South 16th Street Manitowoc, WI 54220 Attention: Maurice D. Jones The Bank of New York 101 Barclay Street 21st Floor West New York, NY 10286 Attn: Corporate Trust Administration Re: 10 3/8% Senior Subordinated Notes due 2011 The Manitowoc Company, Inc. ------------------------------------------ Reference is hereby made to the Indenture, dated as of May 9, 2001 (the "Indenture"), by and among The Manitowoc Company, Inc., as Company (the --------- "Company"), the Guarantors named therein and The Bank of New York, as trustee. ------- Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. In connection with our proposed purchase of . ____________ aggregate principal amount of: (a) [_] a Book-Entry Interest in a Global Note, or (b) [_] a Definitive Registered Note, we confirm that: 1. We understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with, such restrictions and conditions and the United States Securities Act of 1933, as amended (the "Securities Act"). -------------- 2. We understand that the offer and sale of the Notes have not been registered under the Securities Act and that the Notes and any interest therein may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the D-1 Notes or any interest therein, we will do so only (a) to The Manitowoc Company, Inc. or any of its subsidiaries, (b) pursuant to a registration statement that has been declared effective under the U.S. Securities Act, (c) for so long as the Notes are eligible for resale pursuant to Rule 144A under the U.S. Securities Act, to a person who the holder reasonably believes is a QIB purchasing for its own account or for the account of a QIB in compliance with Rule 144A and to whom notice is given that the transfer is being made in reliance on Rule 144A, (d) pursuant to offshore transactions in compliance with Rule 903 and 904 under the U.S. Securities Act, (e) in a transaction meeting the requirements of Rule 144 under the U.S. Securities Act, (f) to an institutional accredited investor that, prior to such transfer, furnishes to the trustee or the registrar a signed letter containing certain representations and agreements relating to the transfer (the form of which letter has been obtained from the trustee) and, if such transfer is in respect of an aggregate principal amount of Notes less than . 250,000, an opinion of counsel acceptable to the Company that such transfer is in accordance with the U.S. Securities Act, or (g) in accordance with another exemption from the registration requirements of the U.S. Securities Act (and based upon an opinion of counsel acceptable to The Manitowoc Company, Inc.), subject in each of the foregoing cases to any requirements of law that the disposition of its property or the property of such investor account or accounts be at all times within its or their control and in compliance with any applicable state securities laws. We further agree to provide to any person purchasing the Definitive Registered Note or Book-Entry Interest in a Global Note from us in a transaction meeting the requirements of clauses (a) through (g) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein. 3. We understand that, on any proposed resale of the Notes or Book - -Entry Interest therein, we will be required to furnish to you and the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect. 4. We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment. 5. We are acquiring the Notes or Book-Entry Interest therein purchased by us for our own account or for one or more accounts (each of which is an institutional "accredited investor") as to each of which we exercise sole investment discretion without a view to distribution thereof and without any present intention of selling such Notes or Book-Entry Interests in a transaction that would violate the Securities Act. D-2 You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. [Insert Name of Accredited Investor] By:_______________________________________________ Name: Title: Dated: _______________ D-3 EXHIBIT E --------- FORM OF GUARANTEE For value received, the undersigned hereby unconditionally guarantees to the Holder of this Note the cash payments in Euros of principal of, premium, if any, Additional Interest, if any, and interest on this Note in the amounts and at the time when due and interest on the overdue principal and premium and, to the extent lawful, Additional Interest, if any, and interest, if any, on this Note, if lawful, and the payment or performance of all other obligations of the Company under the Indenture or the Notes, to the Holder of this Note and the Trustee, all in accordance with and subject to the terms and limitations of this Note and Articles Eleven and Twelve of the Indenture and this Guarantee. This Guarantee will become effective in accordance with Articles Eleven and Twelve of the Indenture and its terms shall be evidenced therein. The validity and enforceability of each Guarantee shall not be affected by the fact that it may not be affixed to any particular Note. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Indenture dated as of May 9, 2001, between The Manitowoc Company, Inc. and The Bank of New York, as Trustee, as amended or supplemented (the "Indenture"). --------- The obligations of the undersigned to the Holders of Notes and to the Trustee pursuant to this Guarantee and the Indenture are expressly set forth in Articles Eleven and Twelve of the Indenture and reference is hereby made to the Indenture for the precise terms of this Guarantee and all of the other provisions of the Indenture to which this Guarantee relates. THIS GUARANTEE WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. EACH GUARANTOR HEREUNDER AGREES TO SUBMIT TO THE JURISDICTION OF ANY FEDERAL OR STATE COURT SITUATED IN THE STATE OF NEW YORK, THE CITY OF NEW YORK, THE BOROUGH OF MANHATTAN FOR THE PURPOSES SET FORTH IN THE INDENTURE, THE NOTES OR THIS GUARANTEE. Date: May 9, 2001 [ ], as Guarantor By:_______________________________________________ Name: Title: F-1 EX-23 5 dex23.txt CONSENT OF ERNST & YOUNG Exhibit 23 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference into the previously filed Registration Statements of The Manitowoc Company, Inc., on Form S-8 (Numbers 333-40622, 333-37266, 333-11731 and 333-11729) of our report dated April 19, 2001 with respect to the consolidated financial statements of Potain Group S.A., included in this Current Report on Form 8-K. Ernst and Young Audit Represented by Daniel Mary-Dauphin May 11, 2001 Lyon, France EX-99 6 dex99.txt PRESS RELEASE OF THE MANITOWOC COMPANY, INC. Exhibit 99 THE MANITOWOC COMPANY COMPLETES ACQUISITION OF POTAIN Historic Joining of Two Industry Giants Provides One of the Broadest Ranges of Lifting Solutions in the Industry MANITOWOC, WISCONSIN NEWS FOR IMMEDIATE RELEASE MANITOWOC, WI - May 9, 2001 - The Manitowoc Company, Inc. (NYSE: MTW), the leading worldwide manufacturer of high-capacity, lattice-boom crawler cranes, announced today that it has completed the acquisition of Potain SA, the tower crane subsidiary of the French industrial concern Legris Industries SA. Located in Ecully, France, Potain is the world's leading manufacturer of tower cranes. The final purchase price of the acquisition was $307.1 million, plus Potain's net income from January 1, 2001 through the closing date. Potain will become part of Manitowoc's Crane segment, creating one of the world's largest producers of lifting solutions for the construction and equipment rental industries, with products that include lattice-boom crawler cranes, tower cranes, boom trucks, and other lifting products. "We are extremely pleased to welcome the over 2,200 employees of Potain to the Manitowoc family," said Terry D. Growcock, Manitowoc's president and chief executive officer. "This strategic addition to our Crane segment presents Manitowoc with a host of opportunities for growth, including further penetration into key European and Asian markets and the expansion of our product line to encompass a greater variety of lifting solutions. In addition, we will now be able to extend our crane manufacturing capabilities to a third continent and take full advantage of synergies in distribution, material procurement, manufacturing, and product marketing." "Our two organizations share a common heritage of quality and technological innovation, and a long-term commitment to our customers that spans more than half a century," said Jean Yves Bouffault, Potain's president and chief executive officer. "We are pleased that this historic combination will offer our customers the choice of the world's finest tower and lattice-boom crawler crane products from the two finest manufacturers in the industry." "For the remainder of the year, we expect Potain to generate over $200 million in revenue and be neutral to Manitowoc's earnings, but to be approximately $0.10 to $0.15 accretive to earnings in 2002," explained Glen E. Tellock, Manitowoc's senior vice president and chief financial officer. "More importantly, these earnings assumptions are not contingent on synergies. Potain's operating margins should approach 15% by year-end. In addition, we expect Potain will be EVA positive within 24 months. Our interest expense in 2001 is expected to increase approximately $21 million. Goodwill associated with the transaction is expected to be amortized over 40 years, or approximately $5.0 million per year. We expect that capital expenditures at Potain will be in the $5 to $10 million range for 2001. With Potain as a part of Manitowoc's crane operations, we are on the verge of achieving our Vision 2002 goal of $1.3 billion in consolidated revenue." The transaction was financed through Manitowoc's new $475 million credit facility and the issuance of Manitowoc's 10-3/8% Senior Subordinated Notes due 2011 in the aggregate principal amount of Euro 175 million. About Potain Founded in 1928, Potain is considered a technology leader in the tower crane market with a long history of product innovations and patents. The company manufactures a variety of tower cranes, including top slewing, luffing jib, topless, and self-erecting units, plus special models for dams and other large building projects. The company has sold more than 88,000 cranes worldwide. Potain operates eight manufacturing facilities for tower cranes and related products in France, Germany, Italy, Portugal, and China, and is active in more than 50 countries through distribution subsidiaries or agents. Potain tower crane products are on the job in some of the world's highest profile construction projects, including the Three Gorges Dam in China, the world's largest dam project; the Normandy Bridge in France, the world's largest shroud bridge; the Hong Kong Airport; and Boston's "Big Dig" tunnel/highway interchange, the largest construction project in North America. About The Manitowoc Company The Manitowoc Company, Inc. is a leading manufacturer of ice-cube machines, ice/beverage dispensers, and commercial refrigeration equipment for the foodservice industry. It is also a leading producer of lattice-boom cranes, tower cranes, boom trucks, and related products for the construction industry, and is the leading provider of ship repair, conversion, and new-construction services for the Great Lakes maritime industry. Forward-Looking Statements Any statements contained herein that contain other than historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in this press release, words such as Manitowoc "expects," or "estimates," or words of similar meaning are generally intended to identify forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this press release. Factors that could cause such a variance include, but are not limited to, unanticipated difficulties in integrating Potain's operations, changes in demand for the products manufactured by Manitowoc and Potain, competitive conditions in the markets served by Manitowoc and Potain, the potential negative impact on Manitowoc of the substantial leverage it will incur as a result of the Potain acquisition, changes in currency exchange rates, unanticipated changes in laws and regulations (including international trade regulations), changes in general economic conditions, and the cyclicality of the construction industry. Additional factors that could affect the forward-looking statements are included in Manitowoc's filings with the Securities and Exchange Commission, including but not limited to its Annual Report on Form 10-K for the fiscal year ended December 31, 2000. Shareholders, potential investors, and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this press release are made only as of the date of this release, and Manitowoc undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. For further information: Glen E. Tellock Senior Vice President & Chief Financial Officer Telephone: (920) 683-8122 2 -----END PRIVACY-ENHANCED MESSAGE-----