-----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, J/FB7WAc8fjUcSkBr1S8PjPSFFL3sz03OecQehHtyGSr56t5TMGrjiw6sMJsoHg7 4AhQgt5ADxt5hcmmy27fng== /in/edgar/work/20000714/0000912057-00-031865/0000912057-00-031865.txt : 20000920 0000912057-00-031865.hdr.sgml : 20000920 ACCESSION NUMBER: 0000912057-00-031865 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 26 FILED AS OF DATE: 20000714 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DAYTON SUPERIOR CORP CENTRAL INDEX KEY: 0000854709 STANDARD INDUSTRIAL CLASSIFICATION: [3317 ] IRS NUMBER: 310676346 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-41392 FILM NUMBER: 672626 BUSINESS ADDRESS: STREET 1: 7777 WASHINGTON VILLAGE DRIVE STREET 2: SUITE 130 CITY: DAYTON STATE: OH ZIP: 45459 BUSINESS PHONE: 9374287172 MAIL ADDRESS: STREET 1: 7777 WASHINGTON VILLAGE DRIVE STREET 2: SUITE 130 CITY: DAYTON STATE: OH ZIP: 45459 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DUR O WAL INC CENTRAL INDEX KEY: 0001119221 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 363104265 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-41392-01 FILM NUMBER: 672627 BUSINESS ADDRESS: STREET 1: 4260 WESTBROOK DR. STREET 2: SUITE 120 CITY: AURORA STATE: IL ZIP: 60504 BUSINESS PHONE: 8778518400 MAIL ADDRESS: STREET 1: 4260 WESTBROOK DR. STREET 2: SUITE 120 CITY: AURORA STATE: IL ZIP: 60504 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYMONS CORP CENTRAL INDEX KEY: 0001119222 STANDARD INDUSTRIAL CLASSIFICATION: [ ] IRS NUMBER: 061053316 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-41392-02 FILM NUMBER: 672628 BUSINESS ADDRESS: STREET 1: 200 EAST TOMBY AVE CITY: DES PLAINES STATE: IL ZIP: 60017 MAIL ADDRESS: STREET 1: 200 EAST TOMBY AVE CITY: DES PLAINES STATE: IL ZIP: 60017 S-4 1 s-4.txt S-4 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 13, 2000 REGISTRATION NO. 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------ SYMONS CORPORATION DAYTON SUPERIOR CORPORATION DUR-O-WAL, INC. (EXACT NAME OF CO-REGISTRANT AS SPECIFIED IN ITS CHARTER) ILLINOIS OHIO ILLINOIS (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) 3312 3312 3312 (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER) 06-1053316 31-0676346 36-3104265 (I.R.S. EMPLOYER IDENTIFICATION NUMBER) 200 EAST TOUHY AVENUE 7777 WASHINGTON VILLAGE DRIVE, 4260 WESBROOK DRIVE, SUITE 120 DES PLAINES, IL 60018 SUITE 130 AURORA, IL 60504 (847) 298-3200 DAYTON, OH 45459 (630) 851-8400 (937) 428-6360 (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF CO-REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------ ALAN F. MCILROY CHIEF FINANCIAL OFFICER 7777 WASHINGTON VILLAGE DRIVE, SUITE 130 DAYTON, OHIO 45459 (937) 428-6360 (Name, address, including zip code, and telephone number, including area code, of agent for service) ------------------------------ COPIES TO: KIRK A. DAVENPORT II, ESQ. LATHAM & WATKINS 885 THIRD AVENUE NEW YORK, NEW YORK 10022 (212) 906-1284 ------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective. If any of the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. / / If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / / If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering./ / ------------------------------ CALCULATION OF REGISTRATION FEE
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION SECURITIES TO BE REGISTERED REGISTERED PER EXCHANGE NOTES OFFERING PRICE(1)(2) FEE(1)(2) 13% Senior Subordinated Notes due 2009(3)... $170,000,000 95.58% $162,500,000 $42,900 Guarantees of the 13% Senior Subordinated Notes due 2009(4)......................... N/A N/A N/A N/A
(1) The registration fee has been calculated pursuant to Rule 457(a), Rule 457(f)(2) and Rule 457(n) under the Securities Act of 1933 and reflects the book value of the notes as of June 30, 2000. The Proposed Maximum Aggregate Offering Price is estimated solely for the purpose of calculating the registration fee. (2) The Proposed Maximum Aggregate Offering Price is based on the book value of the notes, as of March 31, 2000, in the absence of a market for them as required by Rule 457(f)(2) under the Securities Act of 1933. (3) The 13% Senior Subordinated Notes due 2009 will be the obligations of Dayton Superior Corporation. (4) Each of Symons Corporation and Dur-O-Wal, Inc. will guarantee on an unconditional basis the obligations of Dayton Superior Corporation under the 13% Senior Subordinated Notes due 2009. Pursuant to Rule 457(n), no additional registration fee is being paid in respect of the guarantees. The guarantees are not traded separately. ------------------------------ THE CO-REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE CO-REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SUBJECT TO COMPLETION JULY 13, 2000 THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES, AND WE ARE NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. PROSPECTUS DAYTON SUPERIOR CORPORATION OFFER TO EXCHANGE $170,000,000 PRINCIPAL AMOUNT OF ITS 13% SENIOR SUBORDINATED NOTES DUE 2009, WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT, FOR ANY AND ALL OF ITS OUTSTANDING 13% SENIOR SUBORDINATED NOTES DUE 2009 We are offering to exchange all of our outstanding 13% senior subordinated notes, which we refer to as the old notes, for our registered 13% senior subordinated notes, which we refer to as the exchange notes. We refer to the old notes and the exchange notes collectively as the notes. The terms of the exchange notes are identical to the terms of the old notes except that the exchange notes have been registered under the Securities Act of 1933 and, therefore, are freely transferable. *PLEASE CONSIDER THE FOLLOWING: - Our offer to exchange old notes for exchange notes will be open until 5:00 p.m., New York City time, on , 2000, unless we extend the offer. - You should also carefully review the procedures for tendering the old notes beginning on page 19 of this prospectus. - If you fail to tender your old notes, you will continue to hold unregistered securities and your ability to transfer them could be adversely affected. - No public market currently exists for the notes. We do not intend to list the exchange notes on any securities exchange and, therefore, no active public market is anticipated. INFORMATION ABOUT THE NOTES: - The notes will mature on June 15, 2009. - We will pay interest on the notes semi-annually on June 15 and December 15 of each year beginning December 15, 2000 at the rate of 13% per annum. - We may redeem the notes on or after June 15, 2007 at the rates set forth on page 76 of this prospectus. - We also have the option until June 15, 2003, to redeem up to 25% of the original aggregate principal amount of the notes with the net proceeds of certain types of qualified equity offerings. - The notes are unsecured obligations and are subordinated to all existing and future senior indebtedness and other liabilities of our subsidiaries. - If we undergo a change of control or sell some of our assets, we may be required to offer to purchase notes from you. YOU SHOULD CAREFULLY REVIEW THE RISK FACTORS BEGINNING ON PAGE 10 OF THIS PROSPECTUS. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE EXCHANGE NOTES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. , 2000. TABLE OF CONTENTS
PAGE -------- Where You Can Find More Information......................... ii Cautionary Statement Regarding Forward-Looking Statements... ii Prospectus Summary.......................................... 1 Risk Factors................................................ 10 The Exchange Offer.......................................... 19 Use of Proceeds............................................. 26 Capitalization.............................................. 27 Unaudited Pro Forma Consolidated Financial Information...... 28 Selected Historical Consolidated Financial Data............. 38 Management's Discussion and Analysis of Financial Condition and Results of Operations................................. 39 Business.................................................... 50 Management.................................................. 65 Principal Shareholders...................................... 71 Certain Relationships and Related Transactions.............. 73 Description of Other Indebtedness........................... 74 Description of the Notes.................................... 76 Book-Entry, Delivery and Form............................... 116 Important Federal Income Tax Considerations................. 118 Plan of Distribution........................................ 123 Legal Matters............................................... 123 Experts..................................................... 123 Index to Financial Statements............................... F-1
i WHERE YOU CAN FIND MORE INFORMATION Upon effectiveness of the Registration Statement of which this prospectus is a part, we will file annual and quarterly and other information with the Securities and Exchange Commission (the "Commission"). You may read and copy any reports, statements and other information we file at the Commission's public reference rooms in Washington, D.C., New York, New York, and Chicago, Illinois. Please call 1-800-SEC-0330 for further information on the public reference rooms. Our filings will also be available to the public from commercial document retrieval services and at the web site maintained by the Commission at http://www.sec.gov. We have filed a Registration Statement on Form S-4 to register with the Commission the exchange notes to be issued in exchange for the old notes. This prospectus is part of that Registration Statement. As allowed by the Commission's rules, this prospectus does not contain all of the information you can find in the Registration Statement or the exhibits to the Registration Statement. WE HAVE NOT AUTHORIZED ANYONE TO GIVE YOU ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS ABOUT THE TRANSACTIONS WE DISCUSS IN THIS PROSPECTUS OTHER THAN THOSE CONTAINED HEREIN. IF YOU ARE GIVEN ANY INFORMATION OR REPRESENTATIONS ABOUT THESE MATTERS THAT IS NOT DISCUSSED, YOU MUST NOT RELY ON THAT INFORMATION. THIS PROSPECTUS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SECURITIES ANYWHERE OR TO ANYONE WHERE OR TO WHOM WE ARE NOT PERMITTED TO OFFER OR SELL SECURITIES UNDER APPLICABLE LAW. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS CURRENT ONLY AS OF THE DATE ON THE COVER PAGE OF THIS PROSPECTUS AND MAY CHANGE AFTER THAT DATE. THE DELIVERY OF THIS PROSPECTUS OFFERED HEREBY DOES NOT, UNDER ANY CIRCUMSTANCES, MEAN THAT THERE HAS NOT BEEN A CHANGE IN OUR AFFAIRS SINCE THE DATE HEREOF. IT ALSO DOES NOT MEAN THAT THE INFORMATION IN THIS PROSPECTUS IS CORRECT AFTER THIS DATE. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This prospectus contains certain forward-looking statements about our financial condition, results of operations and business. You can find many of these statements by looking for words such as "believes," "expects," "anticipates," "estimates," or similar expressions used in this prospectus or incorporated herein. This prospectus includes forward-looking statements including, in particular, the statements about our plans, strategies and prospects under the headings "Prospectus Summary," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business." Although we believe that our plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, we can give no assurance that such plans, intentions or expectations will be achieved. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this prospectus are set forth below under the caption "Risk Factors" and elsewhere in this prospectus. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by those cautionary statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this prospectus. We do not undertake any responsibility to release publicly any revisions to these forward-looking statements to take into account events or circumstances that occur after the date of this prospectus. Additionally, we don't undertake any responsibility to update you on the occurrence of any unanticipated events which may cause actual results to differ from those expressed or implied by the forward-looking statements contained or incorporated by reference to this prospectus. ii PROSPECTUS SUMMARY In this prospectus, the words the "Company," "we," or "us" refer to the combined business of Dayton Superior Corporation, the issuer of the notes, its predecessors and all of its subsidiaries. The following summary contains basic information about Dayton Superior Corporation and this exchange offer. It does not contain all the information that is important to you. For a more complete understanding of this exchange offer, we encourage you to read this entire document and the documents we have referred you to. OUR COMPANY We believe that Dayton Superior Corporation is the largest North American manufacturer and distributor of metal accessories and forms used in concrete construction and of metal accessories used in masonry construction. In many of our product lines, we believe we are the market leader and lowest cost manufacturer competing primarily with smaller, regional suppliers with more limited product offerings. Our products are used primarily in two segments of the construction industry: infrastructure construction, such as highways, bridges, utilities, water and waste treatment facilities and airport runways, and non-residential building, such as schools, stadiums, prisons, retail sites, commercial offices and manufacturing facilities. For the twelve-month period ended March 31, 2000, our pro forma net sales would have been $338.4 million and our pro forma EBITDA would have been $55.4 million. We derive our revenue from a profitable mix of sales of consumable products and the sale and rental of engineered equipment. We believe that the breadth of our product offerings and national distribution network allow us to maintain a large customer base that prefers a "one-stop" supplier. We manufacture the substantial majority of our 18,000 products, which we sell under a number of well-established brand names. Our national distribution system, which we believe is the largest in our industry, allows us to efficiently cross-sell and distribute newly developed and acquired product lines on a nationwide basis. Through our network of 62 service/distribution centers, we serve over 6,000 customers, comprised of independent distributors and a broad array of precast concrete manufacturers, general contractors, subcontractors and metal fabricators. This nationwide customer base provides us with a geographically diversified sales mix and reduces our dependence on the economic cycles of any one region. We currently have four principal business units, which are organized around the following product lines: - CONCRETE ACCESSORIES (DAYTON/RICHMOND). Our concrete accessories products are used in connecting forms for poured-in-place concrete walls, anchoring or bracing for walls and floors, supporting bridge framework and positioning steel reinforcing bars. - CONCRETE FORMING SYSTEMS (SYMONS). Our concrete forming systems products are reusable, engineered forms and related accessories used in the construction of concrete walls, columns and bridge supports to hold concrete in place while it hardens. - PAVING PRODUCTS (AMERICAN HIGHWAY TECHNOLOGY). Our welded dowel assemblies and dowel baskets paving products are used in the construction and rehabilitation of concrete roads, highways and airport runways to extend the life of the pavement. These consumable products are used to transfer dynamic loads between adjacent slabs of concrete roadway. - MASONRY PRODUCTS (DUR-O-WAL). Our masonry products are placed between layers of brick and concrete blocks and covered with mortar to provide additional strength to walls. Masonry products also include engineered products used to repair or restore brick and stone buildings. Each of our four principal business units also sells specialty construction chemicals that are used in conjunction with its other products. 1 COMPETITIVE STRENGTHS We believe that our key competitive strengths are: - LEADING MARKET POSITIONS. We believe that we are the market leader in many of our product lines, competing primarily with smaller, regional suppliers with limited product offerings. - LOW-COST MANUFACTURER. We manufacture the substantial majority of the products that we sell, and believe that we are the lowest cost manufacturer in many of our product lines. - EXTENSIVE DISTRIBUTION SYSTEM AND CUSTOMER NETWORK. Our national distribution system, which we believe is the largest in our industry, allows us to efficiently cross-sell and distribute newly developed and acquired product lines on a nationwide basis. - ABILITY TO INTEGRATE ACQUISITIONS. As part of our focused acquisition strategy, we have successfully completed 13 acquisitions since January 1994. - EXPERIENCED MANAGEMENT TEAM. Our management team is one of the most experienced in the concrete and masonry accessories businesses. BUSINESS STRATEGY Key elements of our strategy are to: - DESIGN, MANUFACTURE AND MARKET NEW PRODUCTS. We believe that we are the leader in introducing product innovations to our markets. - IMPLEMENT MANUFACTURING IMPROVEMENT PROGRAMS. We continue to implement strategic initiatives designed to reduce manufacturing costs. - LEVERAGE OUR EXTENSIVE DISTRIBUTION SYSTEM AND CUSTOMER NETWORK. We leverage our national distribution network and diverse customer base to efficiently introduce on a nationwide basis internally developed product lines or product lines of acquired companies that previously had a limited geographic presence. - CONTINUE TO INCREASE RENTAL REVENUE. We plan to continue our focus on increasing rental revenue of concrete forming systems and other engineered equipment. - PURSUE SELECTED ACQUISITIONS. We will continue to selectively pursue acquisition opportunities. EXECUTIVE OFFICES Our executive offices are located at 7777 Washington Village Drive, Suite 130, Dayton, Ohio 45459. Our telephone number is (937) 428-6360. THE RECAPITALIZATION On June 16, 2000, we consummated a recapitalization transaction pursuant to an agreement and plan of merger with an affiliate of Odyssey Investment Partners, LLC. In the recapitalization, our shareholders received an aggregate of $168.6 million, of which $162.4 million was paid in cash and approximately $6.2 million was retained by certain shareholders as an equity interest in the company surviving the merger. The financing for the recapitalization is described in detail in this prospectus under the caption "Use of Proceeds." 2 RECENT DEVELOPMENTS ACQUISITION We have signed a definitive agreement to acquire Conspec Marketing and Manufacturing Co., Inc., Conspec Performance Products, Inc. and Bristol Investments, Inc. (collectively, "Conspec"), for a purchase price of approximately $21.8 million subject to adjustment ($23.5 million with fees and expenses). The Conspec acquisition is expected to close during our third fiscal quarter. Conspec's net sales for the twelve months ended March 31, 2000 were approximately $22.6 million and we believe that Conspec's EBITDA for the same period was approximately $3.7 million. Conspec manufactures and sells specialty construction chemicals and concrete products and is located in the western United States. As a result of this acquisition, we expect to increase our presence in the specialty construction chemicals business and increase our sales in certain construction chemicals used in highway related construction. We expect to fund this acquisition from borrowings under our new credit facility. Although we expect to close the Conspec acquisition within the next 30 days, we cannot assure you that we will consummate this acquisition on the terms or timetable currently contemplated or at all. This exchange offer is not conditioned upon the consummation of the Conspec acquisition. 3 SUMMARY OF THE TERMS OF THE EXCHANGE OFFER The Exchange Offer........................ $1,000 principal amount of exchange notes in exchange for each $1,000 principal amount of old notes. As of the date hereof $170.0 million in aggregate principal amount of old notes are outstanding. Based on interpretations by the staff of the Commission, as set forth in no-action letters issued to certain third parties unrelated to us, we believe that exchange notes issued pursuant to the exchange offer in exchange for old notes may be offered for resale, resold or otherwise transferred by you without compliance with the registration and prospectus delivery requirements of the Securities Act, unless you: - are an "affiliate" of ours within the meaning of Rule 405 under the Securities Act; - are a broker-dealer who purchased old notes directly from us for resale under Rule 144A or Regulation S or any other available exemption under the Securities Act; - acquired the exchange notes other than in the ordinary course of your business; or - have an arrangement with any person to engage in the distribution of exchange notes. However, the Commission has not considered the exchange offer in the context of a no-action letter and we cannot be sure that the staff of the Commission would make a similar determination with respect to the exchange offer as in such other circumstances. Furthermore, in order to participate in the exchange offer, you must make the representations set forth in the letter of transmittal that we are sending you with this prospectus. Registration Rights Agreement............. We sold the old notes on June 16, 2000, in a private placement of units consisting of the old notes and warrants to purchase shares of our common stock in reliance on Section 4(2) of the Securities Act. The old notes were immediately resold by the initial purchasers in reliance on Rule 144A and Regulation S under the Securities Act. At the same time, we entered into a registration rights agreement with the initial purchasers requiring us to make the exchange offer. The registration rights agreement also requires us to use commercially reasonable efforts to: - cause the registration statement filed with respect to the exchange offer to be declared effective by November 13, 2000; and - consummate the exchange offer by December 18, 2000. See "The Exchange Offer--Purpose and Effect." If we do not do so, the interest rate on the old notes will increase, initially by 0.50%. Expiration Date........................... The exchange offer will expire at 5:00 p.m., , 2000, New York City time, or a later date and time if we extend it (the "Expiration Date").
4 Withdrawal................................ The tender of the old notes pursuant to the exchange offer may be withdrawn at any time prior to the Expiration Date. Any old notes not accepted for exchange for any reason will be returned without expense as soon as practicable after the expiration or termination of the exchange offer. Interest on the Exchange Notes and the Old Notes................................... Interest on the exchange notes will accrue from the date of the original issuance of the old notes or from the date of the last payment of interest on the old notes, whichever is later. No additional interest will be paid on the old notes tendered and accepted for exchange. Conditions to the Exchange Offer.......... The exchange offer is subject to customary conditions, some of which may be waived by us. See "The Exchange Offer--Conditions to Exchange Offer." Procedures for Tendering Old Notes........ If you wish to accept the exchange offer, you must complete, sign and date the letter of transmittal, or a copy of the letter of transmittal, in accordance with the instructions contained in this prospectus and in the letter of transmittal, and mail or otherwise deliver the letter of transmittal, or the copy, together with the old notes and any other required documentation, to the exchange agent at the address set forth in this prospectus. If you are a person holding the old notes through the Depository Trust Company and wish to accept the exchange offer, you must do so through the Depository Trust Company's Automated Tender Offer Program, by which you will agree to be bound by the letter of transmittal. By executing or agreeing to be bound by the letter of transmittal, you will be making a number of important representations to us, as described under "The Exchange Offer--Purpose and Effect." Under the circumstances specified in the registration rights agreement, we will be required to file a "shelf" registration statement for the old notes for a continuous offering under Rule 415 under the Securities Act. We will accept for exchange any and all old notes that are properly tendered in the exchange offer prior to the Expiration Date. The exchange notes issued in the exchange offer will be delivered promptly following the Expiration Date. See "The Exchange Offer--Terms of the Exchange Offer." Exchange Agent............................ United States Trust Company of New York is serving as exchange agent in connection with the exchange offer. Federal Income Tax Considerations......... We believe the exchange of old notes for exchange notes in the exchange offer will not constitute a sale or an exchange for federal income tax purposes. See "Important Federal Income Tax Considerations." Effect of Not Tendering................... Old notes that are not tendered or that are tendered but not accepted will, following the completion of the exchange offer, continue to be subject to their existing transfer restrictions. We will have no further obligation to provide for registration under the Securities Act of such old notes.
5 SUMMARY OF THE TERMS OF THE EXCHANGE NOTES Securities Offered........................ $170,000,000 in aggregate principal amount of 13% Senior Subordinated Notes due 2009 of Dayton Superior Corporation. Maturity Date............................. June 15, 2009. Interest Payment Dates.................... Payable semi-annually in cash in arrears on each June 15 and December 15, beginning December 15, 2000. Optional Redemption....................... On and after June 15, 2007, we may redeem any or all of the exchange notes at the redemption prices listed in this prospectus plus accrued interest to the date of the redemption. Optional Redemption after Equity Offerings............................... Prior to June 15, 2003, we may redeem up to 25% of the aggregate principal amount of the exchange notes with the proceeds of certain equity offerings, so long as: - we pay 113.0% of the face amount of the exchange notes, plus accrued interest; - we redeem the exchange notes within 90 days of completing the equity offering; and - at least 75% of the aggregate principal amount of the exchange notes originally issued remains outstanding afterwards. Ranking................................... The exchange notes will be our general unsecured obligations and will rank junior to all of our existing and future senior debt. The exchange notes will be guaranteed on a subordinated basis by all of our domestic subsidiaries. These guarantees will rank junior to the existing and future senior debt of each of our domestic subsidiaries. As of March 31, 2000, on a pro forma basis after giving effect to the recapitalization and the related financing transaction, we would have had approximately $65.3 million of senior debt, excluding approximately $73.4 million that we expect to have available to borrow under our new credit facility. See "Description of the Notes--Brief Description of the Notes and the Guarantees." Change of Control......................... If there is a change of control, we must offer to repurchase the exchange notes at 101% of the principal amount thereof plus accrued interest. We might not be able to pay you the
6 required price for exchange notes that you present to us at the time of a change of control, because we might not have enough funds at that time or the terms of our senior debt may prevent us from paying. Certain Covenants......................... We will issue the exchange notes under an indenture with a trustee. The indenture will, among other things, restrict our ability and the ability of our subsidiaries to: - incur additional indebtedness; - pay dividends or distributions on our capital stock or repurchase our capital stock; - issue preferred stock of subsidiaries; - make certain investments; - create liens on our assets to secure debt; - enter into transactions with affiliates; - enter into certain agreements restricting our subsidiaries' ability to pay dividends; - merge or consolidate with another company; and - transfer and sell assets. The covenants contain a number of important limitations and exceptions.
RISK FACTORS You should carefully consider the factors discussed in detail under the caption "Risk Factors" before investing in the exchange notes. 7 SUMMARY HISTORICAL CONSOLIDATED AND PRO FORMA FINANCIAL INFORMATION The following tables set forth our summary historical consolidated financial information for each of the years in the five-year period ended December 31, 1999, each of the three-month periods ended April 2, 1999 and March 31, 2000 and as of March 31, 2000 and our summary pro forma information for the year ended December 31, 1999 and as of and for the twelve-month period ended March 31, 2000. The pro forma financial information set forth below gives effect to (i) the recapitalization and the related financing transactions and (ii) our October 1999 acquisition of Southern Construction Products, Inc. and our February 2000 acquisition of Polytite Manufacturing Co. as if each had occurred at the beginning of the period or as of the balance sheet date, as applicable. The historical information for each of the years in the five-year period ended December 31, 1999 has been derived from our audited consolidated historical financial statements and the notes thereto, the historical information for each of the three-month periods ended April 2, 1999 and March 31, 2000 and as of March 31, 2000 has been derived from our unaudited consolidated historical financial statements and the notes thereto, and the pro forma information has been derived from our unaudited pro forma consolidated financial statements and the notes thereto included elsewhere in this prospectus. The pro forma financial information is not necessarily indicative of future results of operations or the results that might have occurred if the foregoing transactions had been consummated on such date. There can be no assurance that assumptions used in the preparation of the pro forma financial data will prove to be correct. The following tables should be read in conjunction with "Unaudited Pro Forma Consolidated Financial Information," "Management's Discussion and Analysis of Financial Condition and Results of Operations," the Consolidated Financial Statements and the notes thereto and the Unaudited Consolidated Financial Statements and the notes thereto included elsewhere in this prospectus.
YEAR ENDED DECEMBER 31, ------------------------------------------------------------------ PRO FORMA 1995 1996 1997(1) 1998(1) 1999 1999 -------- -------- -------- -------- -------- ----------- (UNAUDITED) (DOLLARS IN THOUSANDS) STATEMENT OF OPERATIONS DATA: Net sales.................................................. $92,802 $124,486 $167,412 $282,849 $322,170 $333,056 Gross profit............................................... 28,812 38,465 56,368 105,755 122,706 125,482 Income from operations..................................... 8,623 13,079 17,722 29,821 38,537 39,944 Interest expense........................................... 4,231 4,829 5,556 11,703 11,661 30,618 Net income available to common shareholders................ 71 2,302 6,953 10,076 14,335 5,002(2) OTHER FINANCIAL DATA: Depreciation and amortization.............................. $ 4,268 $ 6,053 $ 7,016 $ 12,289 $ 14,086 $ 14,385 Property, plant and equipment additions, net............... 2,730 3,198 4,410 6,118 7,469 Rental equipment additions, net............................ 99 534 1,247 6,783 4,052 EBITDA (3)................................................. 12,891 19,132 24,738 42,110 52,623 54,329(4) EBITDA margin.............................................. 13.9% 15.4% 14.8% 14.9% 16.3% 16.3% Cash interest expense...................................... $ 28,262 Ratio of EBITDA to cash interest expense................... 1.9x Ratio of earnings to fixed charges (5).............................................. 1.9x 2.5x 2.9x 2.4x 2.9x 1.3x
8
THREE MONTHS ENDED PRO FORMA -------------------- ---------------- TWELVE MONTHS APRIL 2, MARCH 31, ENDED MARCH 31, 1999 2000 2000 -------- --------- ---------------- (UNAUDITED) (DOLLARS IN THOUSANDS) STATEMENT OF OPERATIONS DATA: Net sales................................................... $ 68,196 $76,505 $338,372 Gross profit................................................ 24,298 27,961 128,549 Income from operations...................................... 2,329 3,600 41,062 Interest expense............................................ 2,975 2,728 30,672 Net income (loss) available to common shareholders.......... (355) 157 5,556(2) OTHER FINANCIAL DATA: Depreciation and amortization............................... 3,662 3,697 14,333 Property, plant and equipment additions, net................ 1,375 2,207 Rental equipment additions, net............................. 3,041 1,519 EBITDA (3).................................................. 5,991 7,297 55,395(4) EBITDA margin............................................... 8.8% 9.5% 16.4% Cash interest expense....................................... $ 28,300 Ratio of EBITDA to cash interest expense.................... 2.0x Ratio of earnings to fixed charges (5)...................... -- 1.1x 1.4x BALANCE SHEET DATA: (AS OF MARCH 31, 2000) Working capital............................................. $60,420 $ 61,111 Total assets................................................ 290,000 302,276 Long-term debt (including current portion).................. 118,613 227,759 Convertible trust preferred securities...................... 19,558 -- Shareholders' equity........................................ 88,944 11,632
- ------------------------------ (1) In September 1997, we acquired Symons, which contributed $27.0 million of revenues in 1997 and $129.2 million of revenues in 1998. (2) This amount includes (i) a non-recurring pension plan termination gain of $0.8 million ($0.4 million on an after tax basis) for both the year ended December 31, 1999 and the twelve months ended March 31, 2000; and (ii) administative expenses of $0.5 million ($0.2 million on an after tax basis) for the year ended December 31, 1999 and $0.4 million ($0.2 million on an after tax basis) for the twelve months ended March 31, 2000 that will not exist when our equity is no longer publicly traded. (3) EBITDA is income from operations plus depreciation and amortization. EBITDA is presented because we believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. However, other companies in our industry may present EBITDA differently than we do. EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net income as indicators of our operating performance or any other measures of performance derived in accordance with GAAP. See the Statements of Cash Flows included in our financial statements. (4) This amount includes (i) a non-recurring pension plan termination gain of $0.8 million ($0.4 million on an after tax basis) for both the year ended December 31, 1999 and the twelve months ended March 31, 2000; and (ii) administrative expenses of $0.5 million ($0.2 million on an after tax basis) for the year ended December 31, 1999 and $0.4 million ($0.2 million on an after tax basis) for the twelve months ended March 31, 2000 that will not exist when our equity is no longer publicly traded. On a pro forma adjusted basis (excluding these items), EBITDA would have been $54.0 million for the year ended December 31, 1999 and $55.0 million for the twelve months ended March 31, 2000. (5) The ratio of earnings to fixed charges is computed by dividing (i) income before income taxes, interest expense, dividends on convertible trust preferred securities and the portion of rent determined to be interest by (ii) total fixed charges, which includes interest expense, dividends on convertible trust preferred securities and the portion of rent expense determined to be interest. The portion of rent expense determined to be interest is 33% of gross rent expense. For the three months ended April 2, 1999, earnings were insufficient to cover fixed charges by $0.6 million. 9 RISK FACTORS YOU SHOULD READ AND CONSIDER CAREFULLY EACH OF THE FOLLOWING FACTORS, AS WELL AS THE OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, BEFORE MAKING A DECISION TO TENDER YOUR OLD NOTES IN THE EXCHANGE OFFER. RISKS RELATING TO OUR BUSINESS CYCLICALITY OF CONSTRUCTION INDUSTRY--THE CONSTRUCTION INDUSTRY IS CYCLICAL, AND A SIGNIFICANT DOWNTURN IN THE CONSTRUCTION INDUSTRY COULD DECREASE OUR REVENUES AND PROFITS AND ADVERSELY AFFECT OUR FINANCIAL CONDITION. Because our products primarily are used in infrastructure construction and non-residential building, our sales and earnings are strongly influenced by construction activity, which historically has been cyclical. Construction activity can decline because of many factors we cannot control, such as: - weakness in the general economy; - a decrease in government spending at the federal and state levels; - interest rate increases; and - changes in banking and tax laws. We cannot predict with accuracy the timing, extent and duration of future economic or building construction and industry cycles. Any severe or extended downturn in the general economy or the building and construction industries could have a material adverse effect on our business, financial condition and results of operations. See "Business--Industry." SUBSTANTIAL LEVERAGE--OUR SUBSTANTIAL INDEBTEDNESS COULD ADVERSELY AFFECT OUR FINANCIAL HEALTH AND PREVENT US FROM FULFILLING OUR OBLIGATIONS UNDER THE NOTES. We now have, and after this offering will continue to have, a significant amount of indebtedness and debt service requirements. The following chart shows certain important credit statistics and is presented assuming we had completed the recapitalization and all of the related financing transactions as of March 31, 2000: Total indebtedness.......................................... $227.8 million Shareholders' equity........................................ $ 11.6 million
Our substantial indebtedness could have important consequences to you. For example, it could: - make it more difficult for us to satisfy our obligations under the notes; - increase our vulnerability to general adverse economic and industry conditions; - require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, research and development efforts and other general corporate purposes; - limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; - place us at a disadvantage to our competitors that have less debt; and - limit, along with the financial and other restrictive covenants in our indebtedness, among other things, our ability to borrow additional funds. In addition, failing to comply with those covenants could result in an event of default which, if not cured or waived, could have a material adverse effect on our business, financial condition and results of operations. See "Description of the Notes" and "Description of Other Indebtedness." 10 ADDITIONAL BORROWINGS AVAILABLE--DESPITE CURRENT INDEBTEDNESS LEVELS, WE AND OUR SUBSIDIARIES MAY STILL BE ABLE TO INCUR SUBSTANTIALLY MORE DEBT. THIS COULD FURTHER EXACERBATE THE RISKS ASSOCIATED WITH OUR SUBSTANTIAL LEVERAGE. We and our subsidiaries may be able to incur substantial additional indebtedness in the future. The terms of the indenture do not fully prohibit us or our subsidiaries from doing so. Our new credit facility will permit additional borrowings of up to $73.4 million after completion of this offering and all of those borrowings would be senior to the notes and the subsidiary guarantees. In addition, we may borrow an additional $73.5 million under our new credit facility if we receive commitments for this amount. We expect to finance the Conspec acquisition with borrowings under our new credit facility. If new debt is added to our and our subsidiaries' current debt levels, the related risks that we and they now face could increase. See "Capitalization," "Description of the Notes" and "Description of Other Indebtedness." RESTRICTIVE COVENANTS--OUR NEW CREDIT FACILITY AND THE INDENTURE GOVERNING THE NOTES WILL CONTAIN VARIOUS COVENANTS WHICH LIMIT THE DISCRETION OF OUR MANAGEMENT IN THE OPERATION OF OUR BUSINESS. Our new credit facility and the indenture governing the notes will contain various provisions that limit our management's discretion by restricting our ability to: - incur additional debt; - pay dividends or distributions on our capital stock or repurchase our capital stock; - issue preferred stock of subsidiaries; - make certain investments; - create liens to secure debt; - enter into transactions with affiliates; - merge or consolidate with another company; and - transfer and sell assets. In addition, our new credit facility will require us to meet specified financial ratios and tests. These restrictions could limit our ability to plan for or react to market conditions or meet extraordinary capital needs or otherwise restrict corporate activities. Since the consummation of the offering, we have been in compliance with the covenants and restrictions in the indenture and our new credit facility. However, if we fail to comply with the covenants and restrictions of the new credit facility or the indenture governing the notes or any other subsequent financing agreements, a default could occur. Such a default could allow the lenders, if the agreements so provide, to accelerate the related debt as well as any other debt to which a cross-acceleration or cross-default provision applies. In addition, the lenders could terminate any commitments they had made to supply us with further funds. See "Description of Other Indebtedness--The New Credit Facility" and "Description of the Notes." EFCO LITIGATION OUTCOME--SYMONS MAY LOSE ITS APPEAL IN THE EFCO LITIGATION, WHICH COULD ADVERSELY AFFECT OUR EARNINGS AND FINANCIAL CONDITION AND REDUCE OUR LIQUIDITY AND THE FUNDS AVAILABLE TO IMPLEMENT OUR BUSINESS STRATEGY. Our Symons business unit was sued by a competitor, EFCO Corp., in 1996. In April 1999, the trial court judge entered a judgment in the amount of $14.1 million against Symons. Symons is appealing that judgment and, while we believe that Symons has grounds for a successful appeal, Symons nevertheless might lose the appeal and be required to pay the full amount of the judgment plus interest or a potentially higher amount. We have not recorded any liability for the resolution of this amount, so payment of the judgment plus interest would adversely affect our earnings. In addition, a significant payment would adversely affect our financial condition and results of operations and could reduce our liquidity and the funds available to us to implement our business strategy. See "Business--Legal Proceedings." 11 IDENTIFICATION OF SUITABLE ACQUISITION CANDIDATES--IMPLEMENTATION OF OUR BUSINESS STRATEGY DEPENDS UPON OUR ABILITY TO IDENTIFY AND COMPLETE ACQUISITIONS OF SUITABLE CANDIDATES. Implementation of our business strategy depends on our ability to identify and acquire complementary businesses. However, we may not be able to identify suitable new acquisition candidates, obtain financing necessary to complete acquisitions, acquire businesses on satisfactory terms or enter into definitive acquisition agreements. Failure by us to identify future acquisition candidates and to complete and manage acquisitions could have a material adverse effect on our business, financial condition and results of operations. See "Business--Business Strategy." RISKS ASSOCIATED WITH ACQUISITIONS--WE MAY COMPLETE ACQUISITIONS THAT DISRUPT OUR BUSINESS. Our strategy of growing, in part, by making acquisitions can be risky. If we do make acquisitions, we could do any of the following, which could adversely affect our financial results, our ability to pay interest on the notes and our other borrowings: - incur substantial additional debt, which may reduce funds available for operations and future opportunities and increase our vulnerability to adverse general economic and industry conditions and competition; - assume contingent liabilities; or - take substantial charges to amortize goodwill and other intangible assets. In addition, acquisitions can involve other risks, such as: - difficulty in integrating the acquired operations, products and personnel into our existing business; - costs which are greater than anticipated or cost savings which are less than anticipated; - diversion of management time and attention; - adverse effects on existing business relationships with our suppliers and customers and the suppliers and customers of the acquired business; - risk of entering new markets in which we have limited or no experience; and - loss of key employees from either the acquired business or our pre-existing business. Any of these occurrences, as well as unforeseen expenses, difficulties, complications and delays frequently encountered in connection with the rapid expansion of operations, could have a material adverse effect on our business, financial condition and results of operations. We cannot predict the timing, size and success of our acquisition efforts and any associated capital commitments. We currently intend to finance future acquisitions through bank borrowings, shares of our common stock, internally generated funds or a combination of stock and cash. In addition, agreements governing our acquisitions may provide for the sellers to receive contingent consideration, which could be substantial. STEEL PRICE INCREASES--WE MAY NOT BE ABLE TO PASS ON THE COST OF STEEL PRICE INCREASES TO OUR CUSTOMERS. Steel, in its various forms, is our principal raw material, constituting approximately 30% to 35% of our cost of sales. Historically, steel prices have fluctuated. We cannot assure you we will be able to pass on to our customers the cost of increases in the price of steel. In addition, any decrease in our volume of steel purchases could affect our ability to secure volume purchase discounts that we have obtained in the past. Any of these events could have a material adverse effect on our business, financial condition and results of operations. See "Business--Raw Materials." 12 WEATHER-RELATED RISKS--WEATHER COULD ADVERSELY AFFECT THE DEMAND FOR OUR PRODUCTS AND DECREASE OUR REVENUES. Weather could adversely affect our business, financial condition and our results of operation. Adverse weather, such as unusually prolonged periods of cold or rain, blizzards, hurricanes and other severe weather patterns, could delay or halt construction activity over wide regions of the country. For example, an unusually severe winter can lead to reduced construction activity and magnify the seasonal decline in our revenues and earnings during the winter months. Although weather conditions have not historically had a material effect on our results of operations, sustained extreme adverse weather conditions could have a material adverse effect on our business, financial condition and results of operations. See "--Fluctuating operating results" and "Business--Seasonality." CONSOLIDATION OF OUR DISTRIBUTORS--INCREASING CONSOLIDATION OF OUR DISTRIBUTORS MAY NEGATIVELY AFFECT OUR EARNINGS. We believe that there is an increasing trend among our distributors to consolidate into larger entities. As our distributors increase in size and market power, they may be able to exert pressure on us to reduce prices or create price competition by dealing more readily with our competitors. If the consolidation of our distributors does result in increased price competition, our sales and profit margins may be adversely affected. See "Business--Distribution." PRODUCT MIX PROFIT MARGINS--A CHANGE IN THE MIX OF PRODUCTS WE SELL COULD NEGATIVELY AFFECT OUR EARNINGS. Some of our products historically have had narrow profit margins. If the mix of products we sell shifts to include a larger percentage of products with narrow profit margins, our earnings may be negatively affected. FLUCTUATING OPERATING RESULTS--OUR OPERATING RESULTS CAN FLUCTUATE FROM QUARTER TO QUARTER. Our operating results tend to fluctuate from quarter to quarter because, due to weather, the construction industry is seasonal in most of North America, which is where almost all of our sales are made. Demand for our products generally is higher in the spring and summer than in the winter and late fall. As a result, our first quarter net sales typically are the lowest of the year and we experience a net loss. Our net sales and net income in the fourth quarter also generally are less than in the second and third quarters. See "--Weather-related risks" and "Business--Seasonality." COMPETITION--THE MARKETS IN WHICH WE SELL OUR PRODUCTS ARE HIGHLY COMPETITIVE. The markets in which we sell our products are highly competitive. Although we believe we are the industry leader in each of our main product markets, we compete against some national and many regional rivals. The uniformity of products among competitors results in substantial pressure on pricing and profit margins. As a result of such pricing pressures, we may in the future experience reductions in the profit margins on our sales, or we may be unable to pass any cost increases on to our customers. We believe that our purchasing power, our nationwide distribution network and marketing capabilities and our manufacturing efficiency allow us to competitively price our products. We cannot assure you that we will be able to maintain or increase our current market share of our products or compete successfully in the future. See "Business--Competition." CHEMICAL PRODUCTS COMPETITION--WE ARE SIGNIFICANTLY SMALLER THAN SOME OF OUR CONSTRUCTION CHEMICAL COMPETITORS. In the sale of some construction chemicals, we must compete with a number of national and international companies that are many times larger than we are in terms of total assets and annual revenues. Because our resources are more limited, we may not be able to compete effectively and profitably on a sustained basis in the markets in which those competitors are actively present. 13 CONTROL BY ODYSSEY--WE ARE CONTROLLED BY ODYSSEY, WHOSE INTERESTS MAY NOT BE ALIGNED WITH YOURS. Odyssey and its co-investors indirectly own approximately 94% of our outstanding common shares and, therefore, have the power, subject to certain exceptions, to control our affairs and policies. They also control the election of directors, the appointment of management, the entering into of mergers, sales of substantially all of our assets and other extraordinary transactions. The directors so elected have authority, subject to the terms of our debt, to issue additional stock, implement stock repurchase programs, declare dividends and make other decisions about our capital stock. See "The Recapitalization" and "Certain Relationships and Related Transactions." The interests of Odyssey and its affiliates could conflict with your interests. For example, if we encounter financial difficulties or are unable to pay our debts as they mature, the interests of the Odyssey investors, as equity holders of Dayton Superior, might conflict with your interests as a note holder. Affiliates of Odyssey may also have an interest in pursuing acquisitions, divestitures, financings or other transactions that, in their judgment, could enhance their equity investments, even though such transactions might involve risks to you as a holder of notes. RISKS ASSOCIATED WITH OUR WORKFORCE--WE DEPEND ON OUR HIGHLY TRAINED EMPLOYEES, AND ANY WORK STOPPAGE OR DIFFICULTY HIRING SIMILAR EMPLOYEES WOULD ADVERSELY AFFECT OUR BUSINESS. We depend on an educated and trained workforce. We could be adversely affected by a shortage of skilled employees. As of December 31, 1999, approximately 44% of our employees were unionized. We are subject to several collective bargaining agreements with these employees. Although we believe that our relations with our employees are good, we cannot assure you that we will be able to negotiate a satisfactory renewal of these collective bargaining agreements or that our employee relations will remain stable. Because we maintain a relatively small inventory of finished goods and operate on relatively short lead times for our products, any shortage of labor could have a material adverse effect on our business, financial condition and results of operations. See "Business--Employees." POTENTIAL EXPOSURE TO ENVIRONMENTAL LIABILITIES--WE MAY BE LIABLE FOR COSTS UNDER CERTAIN ENVIRONMENTAL LAWS, EVEN IF WE DID NOT CAUSE ANY ENVIRONMENTAL PROBLEMS. CHANGES IN ENVIRONMENTAL LAWS OR UNEXPECTED INVESTIGATIONS COULD ADVERSELY AFFECT OUR BUSINESS. Our business and our facilities are subject to a number of federal, state and local environmental laws and regulations, which govern, among other things, the discharge of hazardous materials into the air and water as well as the handling, storage and disposal of such materials. Pursuant to certain environmental laws, a current or previous owner or operator of land may be liable for the costs of investigation and remediation of hazardous materials at such property. These laws typically impose liability whether or not the owner or operator knew of, or was responsible for, the presence of any hazardous materials. Persons who arrange (as defined under these statutes) for the disposal or treatment of hazardous materials also may be liable for the costs of investigation and remediation of such substances at the disposal or treatment site, regardless of whether the affected site is owned or operated by them. See "Business--Environmental Matters." We believe we are in compliance with applicable environmental laws. However, because we own and operate a number of facilities where industrial activities have been historically conducted and because we arrange for the disposal of hazardous materials at many disposal sites, we may incur costs for investigation and remediation, as well as capital costs associated with compliance with these laws. Such environmental costs have not been material in the past and are not expected to be material in the future. Nevertheless, more stringent environmental laws as well as more vigorous enforcement policies or discovery of previously unknown conditions requiring remediation could have a material adverse effect on our business, financial condition and results of operations. 14 DEPENDENCE ON KEY PERSONNEL--IF WE LOSE OUR SENIOR MANAGEMENT, OUR BUSINESS MAY BE ADVERSELY AFFECTED. The success of our business is largely dependent on our senior managers, as well as on our ability to attract and retain other qualified personnel. We cannot assure you that we will be able to attract and retain the personnel necessary for the development of our business. The loss of the services of key personnel or the failure to attract additional personnel as required could have a material adverse effect on our business, financial condition and results of operations. We do not currently maintain "key person" life insurance on any of our key employees. RISKS RELATING TO THE SECURITIES OFFERED ABILITY TO SERVICE DEBT--TO SERVICE OUR INDEBTEDNESS, WE WILL REQUIRE A SIGNIFICANT AMOUNT OF CASH. OUR ABILITY TO GENERATE CASH DEPENDS ON MANY FACTORS BEYOND OUR CONTROL. Our ability to make payments on and to refinance our indebtedness, including the notes, and to fund planned capital expenditures will depend on our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Based on our current level of operations and anticipated operating improvements, we believe our cash flow from operations and available borrowings under our new credit facility, will be adequate to meet our future liquidity needs for the foreseeable future. We cannot assure you, however, that our business will generate sufficient cash flow from operations, that operating improvements will be realized on schedule or that future borrowings will be available to us under our new credit facility in an amount sufficient to enable us to pay amounts due under our indebtedness, including the notes, or to fund our other liquidity needs. We may need to refinance all or a portion of our indebtedness, including the notes, on or before maturity. We cannot assure you that we will be able to refinance any of our indebtedness, including our new credit facility and the notes, on commercially reasonable terms or at all. SUBORDINATION--YOUR RIGHT TO RECEIVE PAYMENTS ON THE NOTES IS JUNIOR TO CERTAIN OF OUR EXISTING INDEBTEDNESS AND POSSIBLY ALL OF OUR FUTURE BORROWINGS. FURTHERMORE, THE GUARANTEES OF THE NOTES ARE JUNIOR TO ALL OUR GUARANTORS' EXISTING INDEBTEDNESS AND POSSIBLY TO ALL THEIR FUTURE BORROWINGS. The notes and the subsidiary guarantees rank behind all of our and the subsidiary guarantors' existing indebtedness (other than trade payables) and all of our and their future borrowings (other than trade payables), except any future indebtedness that expressly provides that it ranks equal with, or subordinated in right of payment to, the notes and the guarantees. As a result, upon any distribution to our creditors or the creditors of the guarantors in a bankruptcy, liquidation or reorganization or similar proceeding relating to us or the guarantors or our or their property, the holders of senior debt of our company and the guarantors will be entitled to be paid in full in cash before any payment may be made with respect to these notes or the subsidiary guarantees. In addition, all payments on the notes and the guarantees will be blocked in the event of a payment default on senior debt and may be blocked for up to 179 of 360 consecutive days in the event of certain non-payment defaults on senior debt. In the event of a bankruptcy, liquidation or reorganization or similar proceeding relating to our company or the guarantors, holders of the notes will participate with trade creditors and all other holders of subordinated indebtedness of our company and the guarantors in the assets remaining after we and the subsidiary guarantors have paid all of the senior debt. However, because the indenture requires that amounts otherwise payable to holders of the notes in a bankruptcy or similar proceeding be paid to holders of senior debt instead, holders of the notes may receive less, ratably, than holders of trade payables in any such proceeding. In any of these cases, we and the subsidiary guarantors may not have sufficient funds to pay all of our creditors, and holders of notes may receive less, ratably, than the holders of senior debt. 15 Assuming we had completed the recapitalization and all of the related financing transactions on March 31, 2000, the notes and the subsidiary guarantees would have been subordinated to $65.3 million of senior debt, and approximately $73.4 million would have been available for borrowing as additional senior debt under our new credit facility. We will be permitted to incur substantial additional indebtedness, including senior debt, in the future under the terms of the indenture. FINANCING CHANGE OF CONTROL OFFER--WE MAY NOT HAVE THE ABILITY TO RAISE THE FUNDS NECESSARY TO FINANCE THE CHANGE OF CONTROL OFFER REQUIRED BY THE INDENTURE. Upon the occurrence of certain specific kinds of change of control events, we will be required to offer to repurchase all outstanding notes. However, it is possible that we will not have sufficient funds at the time of the change of control to make the required repurchase of notes or that restrictions in our new credit facility will not allow such repurchases. In addition, certain important corporate events, such as leveraged recapitalizations that would increase the level of our indebtedness, would not constitute a "Change of Control" under the indenture. See "Description of the Notes--Change of Control." FRAUDULENT CONVEYANCE MATTERS--FEDERAL AND STATE STATUTES ALLOW COURTS, UNDER SPECIFIC CIRCUMSTANCES, TO VOID THE NOTES AND THE GUARANTEES AND REQUIRE NOTEHOLDERS TO RETURN PAYMENTS RECEIVED FROM US OR THE GUARANTORS. Under the federal bankruptcy laws and comparable provisions of state fraudulent transfer laws, the notes and guarantees could be voided, or claims in respect of the notes and guarantees could be subordinated to all of our other debts and all other debts of our guarantors if, among other things, we or our guarantors, at the time we or they incurred the indebtedness evidenced by the notes or the guarantees: - received less than reasonably equivalent value or fair consideration for the incurrence of such guarantee; and - was insolvent or rendered insolvent by reason of such indebtedness; or - was engaged in a business or transaction for which our or such guarantors' remaining assets constituted unreasonably small capital; or - intended to incur, or believed that we or they would incur, debts beyond our or such guarantors' ability to pay such debts as they mature. In addition, any payment by us or by that guarantor pursuant to the notes or guarantees could be voided and required to be returned to us or the guarantor, or to a fund for the benefit of our creditors or the creditors of the guarantor. The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, we or a guarantor would be considered insolvent if: - the sum of our or its debts, including contingent liabilities, were greater than the fair saleable value of all of our or its assets, or - if the present fair saleable value of our and its assets were less than the amount that would be required to pay our or its probable liability on existing debts, including contingent liabilities, as they become absolute and mature, or - we or it could not pay our or its debts as they become due. On the basis of historical financial information, recent operating history and other factors, we and each guarantor believe that we and they, after giving effect to the indebtedness incurred in the offering and the establishment of our new credit facility, will not be insolvent, will not have unreasonably small capital for the business in which we or they are engaged and will not have incurred debts beyond our or their ability to pay such debts as they mature. There can be no assurance, however, as to what 16 standard a court would apply in making such determinations or that a court would agree with our or our guarantors' conclusions in this regard. ORIGINAL ISSUE DISCOUNT--YOU WILL BE REQUIRED TO INCLUDE ORIGINAL ISSUE DISCOUNT IN YOUR GROSS INCOME FOR FEDERAL INCOME TAX PURPOSES. The notes were considered to be issued with original issue discount for federal income tax purposes. Consequently, a holder of a note must include amortization of original issue discount in income prior to the actual receipt of cash in respect of such income. See "Certain United States Federal Tax Consequences." If a bankruptcy case is commenced by or against our company under the United States Bankruptcy Code after the issuance of the notes, the claim of a holder of any of the notes with respect to the principal amount may be limited to an amount equal to the sum of: - the initial offering price allocable to the notes, and - that portion of the original issue discount that is not deemed to constitute "unmatured interest" for purposes of the Bankruptcy Code. Any original issue discount that was not amortized as of any such bankruptcy filing would constitute "unmatured interest." FORWARD-LOOKING STATEMENTS--OUR FORWARD-LOOKING STATEMENTS MAY NOT PROVE TO BE ACCURATE. This prospectus includes "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act, including statements about our plans, strategies, and prospects under the headings "Prospectus Summary," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and "Business." Although we believe that our plans, intentions and expectations reflected in or suggested by these forward-looking statements are reasonable, we can give no assurance that our plans, intentions or expectations will be achieved. Important factors that could cause actual results to differ materially from the forward-looking statements we make in this prospectus are set forth above in this "Risk Factors" section and elsewhere in this prospectus. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by these cautionary statements. FAILURE TO EXCHANGE OLD NOTES--IF YOU DO NOT PROPERLY TENDER YOUR OLD NOTES, YOU WILL CONTINUE TO HOLD UNREGISTERED OLD NOTES AND YOUR ABILITY TO TRANSFER OLD NOTES WILL BE ADVERSELY AFFECTED. We will only issue exchange notes in exchange for old notes that are timely received by the exchange agent together with all required documents, including a properly completed and signed letter of transmittal. Therefore, you should allow sufficient time to ensure timely delivery of the old notes and you should carefully follow the instructions on how to tender your old notes. Neither we nor the exchange agent are required to tell you of any defects or irregularities with respect to your tender of the old notes. If you do not tender your old notes or if we do not accept your old notes because you did not tender your old notes properly, then, after we consummate the exchange offer, you may continue to hold old notes that are subject to the existing transfer restrictions. In addition, if you tender your old notes for the purpose of participating in a distribution of the exchange notes, you will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the exchange notes. If you are a broker-dealer that receives exchange notes for your own account in exchange for old notes that you acquired as a result of market-making activities or any other trading activities, you will be required to acknowledge that you will deliver a prospectus in connection with any resale of such exchange notes. After the exchange offer is consummated, if you continue to hold any old notes, you may have difficulty selling them because there will be less old notes outstanding. In addition, if a large amount of old notes are not tendered or are tendered improperly, the limited amount of exchange notes that would be issued and outstanding after we consummate the exchange offer could lower the market price of such exchange notes. 17 NO PRIOR MARKET FOR THE EXCHANGE NOTES--YOU CANNOT BE SURE THAT AN ACTIVE TRADING MARKET WILL DEVELOP FOR THE EXCHANGE NOTES. The exchange notes are a new issue of securities with no established trading market and will not be listed on any securities exchange. The liquidity of the trading market in the exchange notes, and the market price quoted for the exchange notes, may be adversely affected by changes in the overall market for high-yield securities and by changes in our financial performance or prospects or in the prospects for companies in our industry generally. As a result, you cannot be sure that an active trading market will develop for the exchange notes. VOLATILE TRADING PRICE--THE MARKET PRICE FOR THE SECURITIES MAY BE VOLATILE. Historically, the market for non-investment grade debt has been subject to disruptions that have caused substantial volatility in the prices of securities similar to the notes offered hereby. The market for the notes, if any, may be subject to similar disruptions. Any such disruptions may adversely affect the value of your notes. 18 THE EXCHANGE OFFER PURPOSE AND EFFECT Together with the sale by us of the old notes on June 16, 2000, we entered into a registration rights agreement, dated June 16, 2000, with the initial purchasers, which requires that we file a registration statement under the Securities Act with respect to the exchange notes and, upon the effectiveness of that registration statement, offer to the holders of the old notes the opportunity to exchange their old notes for a like principal amount of exchange notes. The exchange notes will be issued without a restrictive legend and generally may be reoffered and resold without registration under the Securities Act. The registration rights agreement further provides that we must use commercially reasonable efforts to cause the registration statement with respect to the exchange offer to be declared effective by November 13, 2000 and use commercially reasonable efforts to consummate the exchange offer by December 18, 2000. Except as described below, upon the completion of the exchange offer, our obligations with respect to the registration of the old notes and the exchange notes will terminate. A copy of the registration rights agreement has been filed as an exhibit to the registration statement of which this prospectus is a part, and this summary of the material provisions of the registration rights agreement does not purport to be complete and is qualified in its entirety by reference to the complete registration rights agreement. As a result of the timely filing and the effectiveness of the registration statement, we will not have to pay certain additional interest on the old notes provided in the registration rights agreement. Following the completion of the exchange offer, holders of old notes not tendered will not have any further registration rights other than as set forth in the paragraphs below, and those old notes will continue to be subject to certain restrictions on transfer. Accordingly, the liquidity of the market for the old notes could be adversely affected upon consummation of the exchange offer. In order to participate in the exchange offer, a holder must represent to us, among other things, that: - the exchange notes acquired pursuant to the exchange offer are being obtained in the ordinary course of business of the holder; - the holder is not engaging in and does not intend to engage in a distribution of the exchange notes; - the holder does not have an arrangement or understanding with any person to participate in the distribution of the exchange notes; and - the holder is not an "affiliate," as defined under Rule 405 under the Securities Act, of ours. Under certain circumstances specified in the registration rights agreement, we may be required to file a "shelf" registration statement for a continuous offering in connection with the old notes pursuant to Rule 415 under the Securities Act. See "--Procedures for Tendering." Based on an interpretation by the Commission's staff set forth in no-action letters issued to third parties unrelated to us, we believe that, with the exceptions set forth below, exchange notes issued in the exchange offer may be offered for resale, resold and otherwise transferred by the holder of exchange notes without compliance with the registration and prospectus delivery requirements of the Securities Act, unless the holder: - is an "affiliate" of ours within the meaning of Rule 405 under the Securities Act; - is a broker-dealer who purchased old notes directly from us for resale under Rule 144A or Regulation S or any other available exemption under the Securities Act; - acquired the exchange notes other than in the ordinary course of the holder's business; or - the holder has an arrangement with any person to engage in the distribution of exchange notes. 19 Any holder who tenders in the exchange offer for the purpose of participating in a distribution of the exchange notes cannot rely on this interpretation by the Commission's staff and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction. Each broker-dealer that receives exchange notes for its own account in exchange for old notes, where such old notes were acquired by such broker-dealer as a result of market making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. See "Plan of Distribution." Broker-dealers who acquired old notes directly from us and not as a result of market making activities or other trading activities may not rely on the staff's interpretations discussed above or participate in the exchange offer and must comply with the prospectus delivery requirements of the Securities Act in order to sell the old notes. TERMS OF THE EXCHANGE OFFER Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, we will accept any and all old notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on , 2000, or such date and time to which we extend the offer. We will issue $1,000 in principal amount of exchange notes in exchange for each $1,000 principal amount of outstanding old notes accepted in the exchange offer. Holders may tender some or all of their old notes pursuant to the exchange offer. However, old notes may be tendered only in integral multiples of $1,000 in principal amount. The exchange notes will evidence the same debt as the old notes and will be issued under the terms of, and entitled to the benefits of, the indenture relating to the old notes. As of the date of this prospectus, old notes representing $170.0 million in aggregate principal amount were outstanding and there was one registered holder, a nominee of the Depository Trust Company. This prospectus, together with the letter of transmittal, is being sent to the registered holder and to others believed to have beneficial interests in the old notes. We intend to conduct the exchange offer in accordance with the applicable requirements of the Exchange Act and the rules and regulations of the Commission promulgated under the Exchange Act. We will be deemed to have accepted validly tendered old notes when, as, and if we have given oral or written notice thereof to United States Trust Company of New York, the exchange agent. The exchange agent will act as agent for the tendering holders for the purpose of receiving the exchange notes from us. If any tendered old notes are not accepted for exchange because of an invalid tender, the occurrence of certain other events set forth under the heading "--Conditions to the Exchange Offer" or otherwise, certificates for any such unaccepted old notes will be returned, without expense, to the tendering holder of those old notes as promptly as practicable after the expiration date unless the exchange offer is extended. Holders who tender old notes in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of old notes in the exchange offer. We will pay all charges and expenses, other than certain applicable taxes, applicable to the exchange offer. See "--Fees and Expenses." EXPIRATION DATE; EXTENSIONS; AMENDMENTS The expiration date shall be 5:00 p.m., New York City time, on , 2000, unless we, in our sole discretion, extend the exchange offer, in which case the expiration date shall be the latest date and time to which the exchange offer is extended. In order to extend the exchange offer, we will notify the exchange agent and each registered holder of any extension by oral or written notice prior to 20 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. We reserve the right, in our sole discretion: (A) to delay accepting any old notes, to extend the exchange offer or, if any of the conditions set forth under "--Conditions to Exchange Offer" shall not have been satisfied, to terminate the exchange offer, by giving oral or written notice of that delay, extension or termination to the exchange agent, or (B) to amend the terms of the exchange offer in any manner. In the event that we make a fundamental change to the terms of the exchange offer, we will file a post-effective amendment to the registration statement. PROCEDURES FOR TENDERING Only a holder of old notes may tender the old notes in the exchange offer. Except as set forth under "--Book Entry Transfer," to tender in the exchange offer a holder must complete, sign, and date the letter of transmittal, or a copy of the letter of transmittal, have the signatures on the letter of transmittal guaranteed if required by the letter of transmittal, and mail or otherwise deliver the letter of transmittal or copy to the exchange agent prior to the expiration date. In addition: - certificates for the old notes must be received by the exchange agent along with the letter of transmittal prior to the expiration date; - a timely confirmation of a book-entry transfer (a "Book-Entry Confirmation") of the old notes, if that procedure is available, into the exchange agent's account at the Depository Trust Company (the "Book-Entry Transfer Facility") following the procedure for book-entry transfer described below, must be received by the exchange agent prior to the expiration date; or - you must comply with the guaranteed delivery procedures described below. To be tendered effectively, the letter of transmittal and other required documents must be received by the exchange agent at the address set forth under "--Exchange Agent" prior to the expiration date. Your tender, if not withdrawn before the expiration date will constitute an agreement between you and us in accordance with the terms and subject to the conditions set forth herein and in the letter of transmittal. THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT YOUR ELECTION AND RISK. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT YOU USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO US. YOU MAY REQUEST YOUR BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THESE TRANSACTIONS FOR YOU. Any beneficial owner whose old notes are registered in the name of a broker, dealer, commercial bank, trust company, or other nominee and who wishes to tender should contact the registered holder promptly and instruct the registered holder to tender on the beneficial owner's behalf. If the beneficial owner wishes to tender on the owner's own behalf, the owner must, prior to completing and executing the letter of transmittal and delivering the owner's old notes, either make appropriate arrangements to register ownership of the old notes in the beneficial owner's name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time. Signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed by an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Exchange Act (an "Eligible Institution") unless old notes tendered pursuant thereto are tendered: (A) by a registered holder who has not completed the box entitled "Special Registration Instruction" or "Special Delivery Instructions" on the letter of transmittal or (B) for the account of an Eligible Institution. 21 If signatures on a letter of transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, the guarantee must be by any eligible guarantor institution that is a member of or participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program or an Eligible Institution. If the letter of transmittal is signed by a person other than the registered holder of any old notes listed in the letter of transmittal, the old notes must be endorsed or accompanied by a properly completed bond power, signed by the registered holder as that registered holder's name appears on the old notes. If the letter of transmittal or any old notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations, or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and evidence satisfactory to us of their authority to so act must be submitted with the letter of transmittal unless waived by us. All questions as to the validity, form, eligibility, including time of receipt, acceptance, and withdrawal of tendered old notes will be determined by us in our sole discretion, which determination will be final and binding. We reserve the absolute right to reject any and all old notes not properly tendered or any old notes our acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to particular old notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of old notes must be cured within such time as we shall determine. Although we intend to notify holders of defects or irregularities with respect to tenders of old notes, neither we, the exchange agent, nor any other person shall incur any liability for failure to give that notification. Tenders of old notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any old notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the exchange agent to the tendering holders, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration date, unless the exchange offer is extended. In addition, we reserve the right in its sole discretion to purchase or make offers for any old notes that remain outstanding after the expiration date or, as set forth under "--Conditions to the exchange offer," to terminate the exchange offer and, to the extent permitted by applicable law, purchase old notes in the open market, in privately negotiated transactions, or otherwise. The terms of any such purchases or offers could differ from the terms of the exchange offer. By tendering, you will be representing to us that, among other things: - the exchange notes acquired in the exchange offer are being obtained in the ordinary course of business of the person receiving such exchange notes, whether or not such person is the registered holder; - you are not engaging in and do not intend to engage in a distribution of the exchange notes; - you do not have an arrangement or understanding with any person to participate in the distribution of such exchange notes; and - you are not an "affiliate," as defined under Rule 405 of the Securities Act, of ours. In all cases, issuance of exchange notes for old notes that are accepted for exchange in the exchange offer will be made only after timely receipt by the exchange agent of certificates for such old notes or a timely Book-Entry Confirmation of such old notes into the exchange agent's account at the Book-Entry Transfer Facility, a properly completed and duly executed letter of transmittal or, with respect to the Depository Trust Company and its participants, electronic instructions in which the tendering holder acknowledges its receipt of and agreement to be bound by the letter of transmittal, and all other required documents. If any tendered old notes are not accepted for any reason set forth in the terms and conditions of the exchange offer or if old notes are submitted for a greater principal 22 amount than the holder desires to exchange, such unaccepted or non-exchanged old notes will be returned without expense to the tendering holder or, in the case of old notes tendered by book-entry transfer into the exchange agent's account at the Book-Entry Transfer Facility according to the book-entry transfer procedures described below, those nonexchanged old notes will be credited to an account maintained with that Book-Entry Transfer Facility, in each case, as promptly as practicable after the expiration or termination of the exchange offer. Each broker-dealer that receives exchange notes for its own account in exchange for old notes, where those old notes were acquired by such broker-dealer as a result of market making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of those exchange notes. See "Plan of Distribution." BOOK-ENTRY TRANSFER The exchange agent will make a request to establish an account with respect to the old notes at the Book-Entry Transfer Facility for purposes of the exchange offer within two business days after the date of this prospectus, and any financial institution that is a participant in the Book-Entry Transfer Facility's systems may make book-entry delivery of old notes being tendered by causing the Book-Entry Transfer Facility to transfer such old notes into the exchange agent's account at the Book-Entry Transfer Facility in accordance with that Book-Entry Transfer Facility's procedures for transfer. However, although delivery of old notes may be effected through book-entry transfer at the Book-Entry Transfer Facility, the letter of transmittal or copy of the letter of transmittal, with any required signature guarantees and any other required documents, must, in any case other than as set forth in the following paragraph, be transmitted to and received by the exchange agent at the address set forth under "--Exchange Agent" on or prior to the expiration date or the guaranteed delivery procedures described below must be complied with. The Depository Trust Company's Automated Tender Offer Program ("ATOP") is the only method of processing exchange offers through the Depository Trust Company. To accept the exchange offer through ATOP, participants in the Depository Trust Company must send electronic instructions to the Depository Trust Company through the Depository Trust Company's communication system instead of sending a signed, hard copy letter of transmittal. The Depository Trust Company is obligated to communicate those electronic instructions to the exchange agent. To tender old notes through ATOP, the electronic instructions sent to the Depository Trust Company and transmitted by the Depository Trust Company to the exchange agent must contain the character by which the participant acknowledges its receipt of and agrees to be bound by the letter of transmittal. GUARANTEED DELIVERY PROCEDURES If a registered holder of the old notes desires to tender old notes and the old notes are not immediately available, or time will not permit that holder's old notes or other required documents to reach the exchange agent before the expiration date, or the procedure for book-entry transfer cannot be completed on a timely basis, a tender may be effected if: - the tender is made through an Eligible Institution; - prior to the expiration date, the exchange agent receives from that Eligible Institution a properly completed and duly executed letter of transmittal or a facsimile of duly executed letter of transmittal and notice of guaranteed delivery, substantially in the form provided by us, by telegram, telex, fax transmission, mail or hand delivery, setting forth the name and address of the holder of old notes and the amount of old notes tendered and stating that the tender is being made by guaranteed delivery and guaranteeing that within three New York Stock Exchange, Inc. ("NYSE") trading days after the date of execution of the notice of guaranteed delivery, the certificates for all physically tendered old notes, in proper form for transfer, or a 23 Book-Entry Confirmation, as the case may be, will be deposited by the Eligible Institution with the exchange agent; and - the certificates for all physically tendered old notes, in proper form for transfer, or a Book-Entry Confirmation, as the case may be, are received by the exchange agent within three NYSE trading days after the date of execution of the notice of guaranteed delivery. WITHDRAWAL RIGHTS Tenders of old notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the expiration date. For a withdrawal of a tender of old notes to be effective, a written or, for the Depository Trust Company participants, electronic ATOP transmission notice of withdrawal, must be received by the exchange agent at its address set forth under "--Exchange Agent" prior to 5:00 p.m., New York City time, on the expiration date. Any such notice of withdrawal must: - specify the name of the person having deposited the old notes to be withdrawn (the "Depositor"); - identify the old notes to be withdrawn, including the certificate number or numbers and principal amount of such old notes; - be signed by the holder in the same manner as the original signature on the letter of transmittal by which such old notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer sufficient to have the trustee register the transfer of such old notes into the name of the person withdrawing the tender; and - specify the name in which any such old notes are to be registered, if different from that of the Depositor. All questions as to the validity, form, eligibility and time of receipt of such notices will be determined by us, whose determination shall be final and binding on all parties. Any old notes so withdrawn will be deemed not to have been validly tendered for exchange for purposes of the exchange offer. Any old notes which have been tendered for exchange but which are not exchanged for any reason will be returned to the holder of those old notes without cost to that holder as soon as practicable after withdrawal, rejection of tender, or termination of the exchange offer. Properly withdrawn old notes may be retendered by following one of the procedures under "--Procedures for Tendering" at any time on or prior to the expiration date. CONDITIONS TO THE EXCHANGE OFFER Notwithstanding any other provision of the exchange offer, we will not be required to accept for exchange, or to issue exchange notes in exchange for, any old notes and may terminate or amend the exchange offer if at any time before the acceptance of those old notes for exchange or the exchange of the exchange notes for those old notes, we determine that the exchange offer violates applicable law, any applicable interpretation of the staff of the Commission or any order of any governmental agency or court of competent jurisdiction. The foregoing conditions are for our sole benefit and may be asserted by us regardless of the circumstances giving rise to any such condition or may be waived by us in whole or in part at any time and from time to time in its sole discretion. The failure by us at any time to exercise any of the foregoing rights shall not be deemed a waiver of any of those rights and each of those rights shall be deemed an ongoing right which may be asserted at any time and from time to time. In addition, we will not accept for exchange any old notes tendered, and no exchange notes will be issued in exchange for those old notes, if at such time any stop order shall be threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification 24 of the indenture under the Trust Indenture Act of 1939. In any of those events we are required to use every reasonable effort to obtain the withdrawal of any stop order at the earliest possible time. EXCHANGE AGENT All executed letters of transmittal should be directed to the exchange agent. United States Trust Company of New York has been appointed as exchange agent for the exchange offer. Questions, requests for assistance and requests for additional copies of this prospectus or of the letter of transmittal should be directed to the exchange agent addressed as follows: BY REGISTERED OR CERTIFIED MAIL: BY HAND DELIVERY TO 4:30 P.M.: BY OVERNIGHT COURIER AND BY HAND DELIVERY AFTER 4:30 P.M. ON EXPIRATION DATE United States Trust Company of United States Trust Company of United States Trust Company of New York New York New York P.O. Box 112 30 Broad Street, B-Level 30 Broad Street, 14th Floor Bowling Green Station New York, NY 10004-2304 New York, NY 10004-2304 New York, NY 10274-0112
BY FACSIMILE: (ELIGIBLE INSTITUTIONS ONLY) (212) 422-0183 OR (646) 458-8104 FOR INFORMATION OR CONFIRMATION BY TELEPHONE: (800) 548-6565 Originals of all documents sent by facsimile should be sent promptly by registered or certified mail, by hand or by overnight delivery service. FEES AND EXPENSES We will not make any payments to brokers, dealers or others soliciting acceptances of the exchange offer. The principal solicitation is being made by mail; however, additional solicitations may be made in person or by telephone by our officers and employeess. The estimated cash expenses to be incurred in connection with the exchange offer will be paid by us and will include fees and expenses of the exchange agent, accounting, legal, printing, and related fees and expenses. TRANSFER TAXES Holders who tender their old notes for exchange will not be obligated to pay any transfer taxes in connection with that tender or exchange, except that holders who instruct us to register exchange notes in the name of, or request that old notes not tendered or not accepted in the exchange offer be returned to, a person other than the registered tendering holder will be responsible for the payment of any applicable transfer tax on those old notes. 25 USE OF PROCEEDS This exchange offer is intended to satisfy our obligations under the registration rights agreement dated as of June 16, 2000 by and among Dayton Superior and Deutsche Bank Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial purchasers. We will not receive any cash proceeds from the issuance of the exchange notes. We will only receive old notes with a total principal amount equal to the total principal amount of the exchange notes issued in the exchange offer. We used the net proceeds from the sale of the old notes (which were issued as part of a unit consisting of old notes and warrants to purchase our common stock), together with borrowings under the new credit facility and the equity investment, (i) to finance, in part, the recapitalization, (ii) to repay previously existing indebtedness and our outstanding convertible trust preferred securities, and (iii) to pay related fees and expenses. The following table contains the estimated sources and uses of funds for those transactions assuming they were consummated on March 31, 2000:
AMOUNT --------------------- (DOLLARS IN MILLIONS) SOURCES: New credit facility (1)..................................... $ 60.1 Units....................................................... 165.6 Odyssey investment.......................................... 93.8 Rollover investment (2)..................................... 6.2 Cash on hand................................................ 2.2 ------ Total sources........................................... $327.9 ====== USES: Payment of consideration in recapitalization................ $162.4 Rollover investment (2)..................................... 6.2 Repayment of previously existing long-term indebtedness (3)....................................................... 113.4 Repayment of Company-obligated mandatorily redeemable convertible trust preferred securities (3)................ 23.4 Fees and expenses (4)....................................... 22.5 ------ Total uses.............................................. $327.9 ======
- ------------------------ (1) Consists of $53.5 million in term loan borrowings and $6.6 million in revolving credit borrowings. The new credit facility provides for aggregate borrowings of up to $133.5 million, consisting of $53.5 million in term loan facilities, a $50.0 million revolving credit facility and a $30.0 million acquisition facility available for permitted acquisitions. See "Description of Other Indebtedness--The New Credit Facility." (2) Represents approximately $6.2 million in the form of common shares and options retained by certain of our existing shareholders. This investment was valued based on the consideration per share received in the merger. (3) Represents refinancing of long-term debt consisting of $113.4 million of borrowings under the previous credit agreement, based upon amounts outstanding as of March 31, 2000. Since March 31, 2000, working capital borrowings have increased and will continue to increase over the first six months of the year due to normal seasonality. As a result, drawings under the revolving credit facility to repay previously existing indebtedness were higher as of June 16 than the $6.6 million that was outstanding at March 31, 2000. Also assumes (i) conversion of all outstanding shares of our 10% convertible trust preferred securities into the right to receive cash immediately upon the consummation of the recapitalization and (ii) that the Nash Note and the Parsons Note were not repaid at the time of the recapitalization. See "Description of Other Indebtedness." (4) Includes a $4.0 million fee paid to Odyssey in connection with the recapitalization. See "Certain Relationships and Related Transactions." Also includes $0.5 million of prepayment penalties in connection with the refinancing of our existing credit agreement. 26 CAPITALIZATION The following table sets forth our consolidated capitalization as of March 31, 2000, on a historical basis and on a pro forma basis after giving effect to the recapitalization and the related financing transactions as if they had occurred on March 31, 2000. This table should be read in conjunction with the information contained in "Use of Proceeds," "Unaudited Pro Forma Consolidated Financial Information" and the notes thereto and "Management's Discussion and Analysis of Financial Condition and Results of Operations" as well as the Consolidated Financial Statements and the notes thereto and the Unaudited Consolidated Financial Statements and the notes thereto included elsewhere in this prospectus.
MARCH 31, 2000 ---------------------- ACTUAL PRO FORMA --------- ---------- (DOLLARS IN THOUSANDS) Long-term debt, including current portion: Existing credit agreement............................... $113,440 $ -- New credit facility (1)................................. -- 60,107 Notes, net of discount (2).............................. -- 162,479 Other debt (3).......................................... 5,173 5,173 -------- -------- Total long-term debt.................................. 118,613 227,759 -------- -------- Company-obligated mandatorily redeemable convertible trust preferred securities of Dayton Superior Capital Trust which holds solely debentures (4)......................... 19,558 -- -------- -------- Shareholders' equity........................................ 88,944 11,632 -------- -------- Total capitalization........................................ $227,115 $239,391 ======== ========
- ------------------------ (1) The new credit facility consists of: (i) a revolving credit facility which provides for borrowings of up to $50.0 million, $6.6 million of which would have been outstanding at March 31, 2000 on a pro forma basis and the remainder of which was available for borrowing after the closing; (ii) a $30.0 million acquisition facility available for permitted acquisitions; (iii) the delayed-draw tranche A facility, which provides for term debt of $23.5 million; and (iv) the tranche B facility which provides for term debt of $30.0 million. Working capital borrowings have increased and will continue to increase over the first six months of the year due to normal seasonality. As a result, drawings under the revolving credit facility to repay previously existing indebtedness were higher as of the closing date than the $6.6 million that was outstanding at March 31, 2000. See "Use of Proceeds" and "Description of Other Indebtedness--The New Credit Facility." (2) Total proceeds to us from the issuance of the units was $165.6 million. Of this amount, $162.5 million was allocated to the old notes and $3.1 million was allocated to the warrants. (3) Consists of the Nash Note and the Parsons Note. (4) The pro forma presentation assumes that all holders of these convertible trust preferred securities elected to convert them into the right to receive cash immediately upon the consummation of the recapitalization. To the extent that these holders do not exercise this conversion right, these securities will remain outstanding and borrowings under the new credit facility will be correspondingly reduced. Our obligations under these securities are contractually subordinated to our obligations under the old notes. See "Description of Other Indebtedness--The Trust Preferred Securities." 27 UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL INFORMATION The following pro forma consolidated financial information has been derived by the application of pro forma adjustments to our historical consolidated financial statements for the year ended December 31, 1999, the three months ended March 31, 2000, and the twelve months ended March 31, 2000. The pro forma consolidated statements of operations give effect to (i) the recapitalization and the related financing transactions and (ii) our October 1999 acquisition of Southern Construction Products, Inc. and our February 2000 acquisition of Polytite Manufacturing Co., as if they had been consummated on January 1, 1999. The pro forma consolidated balance sheet gives effect to the recapitalization and the related financing transactions as if they had occurred on March 31, 2000. The adjustments necessary to fairly present this pro forma consolidated financial information have been made based on available information and in the opinion of management are reasonable and are described in the accompanying notes. The pro forma consolidated financial information should not be considered indicative of actual results that would have been achieved had these transactions been consummated on the respective dates indicated and do not purport to indicate balance sheet data or results of operations as of any future date or for any future period. We cannot assure you that the assumptions used in the preparation of the pro forma consolidated financial information will prove to be correct. You should read the pro forma consolidated financial statements together with the "Use of Proceeds," "The Recapitalization" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Consolidated Financial Statements and the notes thereto and the Unaudited Consolidated Financial Statements and the notes thereto, included elsewhere in this prospectus. The pro forma adjustments were applied to the historical consolidated financial statements to reflect and account for the recapitalization and the related financing transactions as a recapitalization. As a result, these adjustments have no impact on the historical basis of our assets and liabilities. The unaudited consolidated pro forma statement of operations does not include pro forma adjustments for certain non-recurring costs and charges, consisting primarily of the write-off of unamortized financing costs and prepayment premiums on both existing debt and the convertible trust preferred securities. While the exact timing, nature and amount of these costs are subject to change, we anticipate that a one-time charge of approximately $7.2 million ($4.3 million after tax) will be recorded in the quarter in which the recapitalization and the related financing transactions were consummated. See "Management's Discussion and Analysis of Financial Condition and Results of Operations--Overview." 28 DAYTON SUPERIOR CORPORATION UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1999 (DOLLARS IN THOUSANDS)
COMPANY ACQUISITIONS RECAPITALIZATION COMPANY HISTORICAL ADJUSTMENTS (1) ADJUSTMENTS (2) PRO FORMA ---------- --------------- ---------------- --------- Net sales................................... $322,170 $10,886(a) $ -- $333,056 Cost of sales............................... 199,464 8,110(b) -- 207,574 -------- ------- -------- -------- Gross profit................................ 122,706 2,776 -- 125,482 Selling, general and administrative......... 81,800 1,235(c) -- 83,035 Amortization of intangibles................. 2,369 134(d) -- 2,503 -------- ------- -------- -------- Income from operations...................... 38,537 1,407 -- 39,944 Interest expense............................ 11,661 719(e) 18,238 (a) 30,618 Other expense (income), net................. 230 -- -- 230 -------- ------- -------- -------- Income before income taxes.................. 26,646 688 (18,238) 9,096 Income tax provision........................ 11,991 310(f) (8,207)(b) 4,094 -------- ------- -------- -------- Net income.................................. 14,655 378 (10,031) 5,002 Dividends on Company obligated mandatorily redeemable convertible trust preferred securities, net of income tax benefit..... 320 -- (320)(c) -- -------- ------- -------- -------- Net income available to common shareholders.............................. $ 14,335 $ 378 $ (9,711) $ 5,002(3) ======== ======= ======== ======== EBITDA (4).................................. $ 52,623 $ 1,706 $ -- $ 54,329(5) ======== ======= ======== ========
29 DAYTON SUPERIOR CORPORATION UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS THREE MONTHS ENDED MARCH 31, 2000 (DOLLARS IN THOUSANDS)
COMPANY ACQUISITIONS RECAPITALIZATION COMPANY HISTORICAL ADJUSTMENTS (1) ADJUSTMENTS (2) PRO FORMA ---------- --------------- ---------------- --------- Net sales................................... $76,505 $ 131(a) $ -- $76,636 Cost of sales............................... 48,544 87(b) -- 48,631 ------- ------- ------- ------- Gross profit................................ 27,961 44 -- 28,005 Selling, general and administrative......... 23,737 24(c) -- 23,761 Amortization of intangibles................. 624 3(d) -- 627 ------- ------- ------- ------- Income from operations...................... 3,600 17 -- 3,617 Interest expense............................ 2,728 14(e) 4,905 (a) 7,647 Other expense (income), net................. 19 -- -- 19 ------- ------- ------- ------- Income (loss) before income taxes........... 853 3 (4,905) (4,049) Income tax provision (benefit).............. 380 1(f) (2,183)(b) (1,802) ------- ------- ------- ------- Net income (loss)........................... 473 2 (2,722) (2,247) Dividends on Company-obligated mandatorily redeemable convertible trust preferred securities, net of income tax benefit..... 316 -- (316)(c) -- ------- ------- ------- ------- Net income (loss) available to common shareholders.............................. $ 157 $ 2 $(2,406) $(2,247)(3) ------- ------- ------- ------- EBITDA (4).................................. $ 7,297 $ 23 $ -- $ 7,320 (5) ======= ======= ======= =======
30 DAYTON SUPERIOR CORPORATION UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS TWELVE MONTHS ENDED MARCH 31, 2000 (DOLLARS IN THOUSANDS)
COMPANY ACQUISITIONS RECAPITALIZATION COMPANY HISTORICAL ADJUSTMENTS (1) ADJUSTMENTS (2) PRO FORMA ---------- --------------- ---------------- --------- Net sales................................... $330,479 $7,893(a) $ -- $338,372 Cost of sales............................... 204,110 5,713(b) -- 209,823 -------- ------ ------- -------- Gross profit................................ 126,369 2,180 -- 128,549 Selling, general and administrative......... 84,215 831(c) -- 85,046 Amortization of intangibles................. 2,346 95(d) -- 2,441 -------- ------ ------- -------- Income from operations...................... 39,808 1,254 -- 41,062 Interest expense............................ 11,414 505(e) 18,753 (a) 30,672 Other expense (income), net................. 249 -- -- 249 -------- ------ ------- -------- Income before income taxes.................. 28,145 749 (18,753) 10,141 Income tax provision........................ 12,662 337(f) (8,414)(b) 4,585 -------- ------ ------- -------- Net income.................................. 15,483 412 (10,339) 5,556 Dividends on Company-obligated mandatorily redeemable convertible trust preferred securities, net of income tax benefit..... 636 -- (636)(c) -- -------- ------ ------- -------- Net income available to common shareholders.............................. $ 14,847 $ 412 $(9,703) $ 5,556(3) ======== ====== ======= ======== EBITDA (4).................................. $ 53,929 $1,466 $ -- $ 55,395(5) ======== ====== ======= ========
31 DAYTON SUPERIOR CORPORATION NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (1) The amounts in this column represent the adjustments necessary to determine our pro forma results of operations after giving effect to our acquisitions of Southern Construction Products and Polytite Manufacturing, as if they had occurred on January 1, 1999, for the periods indicated in the table below. We acquired Southern Construction Products on October 3, 1999 for $8.3 million. We acquired Polytite Manufacturing on February 8, 2000 for $1.5 million (subject to working capital adjustment).
THREE MONTHS TWELVE MONTHS YEAR ENDED ENDED ENDED DECEMBER 31, 1999 MARCH 31, 2000 MARCH 31, 2000 ----------------- ---------------- ---------------- Southern Construction Products... January 1, 1999 N/A April 3, 1999 through October through 3, 1999 October 3, 1999 Polytite Manufacturing........... Year ended January 1, 2000 April 3, 1999 December 31, 1999 through February through 8, 2000 February 8, 2000
(a) This adjustment represents the actual net sales of Southern Construction Products and of Polytite Manufacturing. (b) This adjustment represents the cost of sales of Southern Construction Products and of Polytite Manufacturing. For Southern Construction Products, adjustments have been made to reflect lower compensation for: (i) plant manager's compensation at the rates that we are paying and (ii) the elimination of nonrecurring bonuses associated with the acquisition. (c) This adjustment represents the selling, general and administrative expenses of Southern Construction Products and of Polytite Manufacturing. For Southern Construction Products, adjustments have been made to reflect lower compensation for: (i) employees we did not hire, (ii) the general manager's compensation at the rates we are paying, and (iii) the elimination of nonrecurring bonuses associated with the acquisition. For Polytite Manufacturing, adjustments have been made to reflect lower compensation for the general manager that we are paying and lower facility costs for the facility we did not acquire. (d) The adjustment to amortization of intangibles relates to the increases in goodwill associated with the purchase accounting treatment of the two acquisitions. In the case of Southern Construction Products, goodwill increased by $5.4 million and in the case of Polytite Manufacturing, goodwill increased by $1.2 million. These increases in goodwill are being amortized over a 40-year period. 32 DAYTON SUPERIOR CORPORATION NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED) (e) The adjustment to interest expense reflects the following:
THREE MONTHS TWELVE MONTHS YEAR ENDED ENDED ENDED DECEMBER 31, 1999 MARCH 31, 2000 MARCH 31, 2000 ----------------- -------------- -------------- (DOLLARS IN THOUSANDS) Interest expense on the Southern Construction Products purchase price of $8.3 million at 9.34%............................... $583 $-- $389 Interest expense on the Polytite Manufacturing purchase price of $1.5 million at 9.34%............... 136 14 116 ---- --- ---- Total adjustment..................... $719 $14 $505 ==== === ====
(f) The income tax effect of the above adjustments at our effective tax rate. (2) The amounts in this column represent the adjustments necessary to determine the pro forma impact of the recapitalization and the related financing transactions as follows: (a) The adjustment to interest expense reflects the following:
THREE MONTHS TWELVE MONTHS YEAR ENDED ENDED ENDED DECEMBER 31, 1999 MARCH 31, 2000 MARCH 31, 2000 ----------------- -------------- -------------- (DOLLARS IN THOUSANDS) Interest expense on previously existing indebtedness to be repaid in connection with the transactions.................. $(10,268) $(2,406) $(10,099) Amortization of debt issuance costs on previously existing indebtedness to be repaid................................. (846) (191) (837) -------- ------- -------- Total................................ (11,114) (2,597) (10,936) -------- ------- -------- Interest expense on new term loan facility (at a weighted average rate of 9.62%) net of the amount attributable to the Southern Construction Products and Polytite Manufacturing acquisitions (Note 1(e))............................ 4,428 1,273 4,642 Interest expense on seasonal borrowings under new revolving credit facility (at a rate of 9.34%)....................... 468 105 575 Interest expense on the notes (at a rate of 13.00%)............................. 22,100 5,525 22,100 Amortization of debt issuance costs...... 1,900 475 1,900 Amortization of discount on notes........ 456 124 472 -------- ------- -------- Interest expense on new indebtedness..... 29,352 7,502 29,689 -------- ------- -------- Total adjustment..................... $ 18,238 $ 4,905 $ 18,753 ======== ======= ========
33 DAYTON SUPERIOR CORPORATION NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS (CONTINUED) These adjustments are based upon the sources and uses of funds described above under "Use of Proceeds" and assume that all holders of our outstanding convertible trust preferred securities elected to convert their shares into the right to receive cash immediately upon the consummation of the recapitalization. If these holders did not elect to exercise this conversion right, these securities remained outstanding and borrowings under the new credit facility were correspondingly reduced. A 0.125% increase or decrease in the assumed weighted average interest rate applicable to our indebtedness under the new credit facility would change the pro forma interest expense by $0.1 million. Each $1.0 million increase or decrease in the revolving credit facility under the new credit facility would change the annual pro forma interest expense by $0.1 million. (b) The tax effect of annual pro forma adjustments to income before income taxes is based on our effective tax rate. The income tax adjustment excludes the tax effect on non-recurring costs and charges described previously. (c) This adjustment represents the elimination of dividends on our outstanding convertible trust preferred securities assuming all holders of these securities elected to convert their shares into the right to receive cash immediately upon the consummation of the recapitalization. (3) This amount includes (i) a non-recurring pension plan termination gain of $0.8 million ($0.4 million on an after tax basis) for both the year ended December 31, 1999 and the twelve months ended March 31, 2000 and was not applicable to the three months ended March 31, 2000; and (ii) administrative expenses of $0.5 million ($0.2 million on an after tax basis) for the year ended December 31, 1999, $0.1 million ($0.1 million on an after tax basis) for the three months ended March 31, 2000 and $0.4 million ($0.2 million on an after tax basis) for the twelve months ended March 31, 2000 that no longer exist since our equity is no longer publicly traded. (4) EBITDA is income from operations plus depreciation and amortization. EBITDA is presented because we believe it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry. However, other companies in our industry may present EBITDA differently than we do. EBITDA is not a measurement of financial performance under GAAP and should not be considered as an alternative to cash flow from operating activities or as a measure of liquidity or an alternative to net income as indicators of our operating performance or any other measures of performance derived in accordance with GAAP. See the Statements of Cash Flows included in our financial statements. (5) This amount includes (i) a non-recurring pension plan termination gain of $0.8 million ($0.4 million on an after tax basis) for both the year ended December 31, 1999 and the twelve months ended March 31, 2000 and was not applicable to the three months ended March 31, 2000; and (ii) administrative expenses of $0.5 million ($0.2 million on an after tax basis) for the year ended December 31, 1999, $0.1 million ($0.1 million on an after tax basis) for the three months ended March 31, 2000 and $0.4 million ($0.2 million on an after tax basis) for the twelve months ended March 31, 2000 that no longer exist since our equity is no longer publicly traded. On a pro forma adjusted basis (excluding these items), EBITDA would have been $54.0 million for the year ended December 31, 1999, $7.4 million for the three months ended March 31, 2000 and $55.0 million for the twelve months ended March 31, 2000. 34 DAYTON SUPERIOR CORPORATION UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET (1) MARCH 31, 2000 (DOLLARS IN THOUSANDS)
COMPANY RECAPITALIZATION COMPANY HISTORICAL ADJUSTMENTS (2) PRO FORMA ---------- ---------------- --------- ASSETS Current assets: Cash................................................. $ 2,188 $ (2,188)(a) $ -- Accounts receivable.................................. 53,090 -- 53,090 Inventories.......................................... 43,680 -- 43,680 Other current assets................................. 9,058 2,879 (b) 11,937 -------- --------- --------- Total current assets............................. 108,016 691 108,707 Rental equipment, net of accumulated depreciation........ 60,309 -- 60,309 Property, plant and equipment, net of accumulated depreciation........................................... 44,459 -- 44,459 Intangibles and other assets, net of accumulated amortization........................................... 77,216 11,585 (c) 88,801 -------- --------- --------- TOTAL ASSETS............................................. $290,000 $ 12,276 $ 302,276 ======== ========= ========= LIABILITIES & SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt.................... $ 5,032 $ -- $ 5,032 Accounts payable..................................... 25,484 -- 25,484 Accrued liabilities.................................. 17,080 -- 17,080 -------- --------- --------- Total current liabilities........................ 47,596 -- 47,596 -------- --------- --------- Long-term debt: Existing credit agreement............................ 113,440 (113,440)(d) -- New credit facility.................................. -- 60,107 (d) 60,107 Notes offered hereby, net of discount................ -- 162,479 (d) 162,479 Other long-term debt................................. 141 -- 141 -------- --------- --------- Total long-term debt............................. 113,581 109,146 222,727 -------- --------- --------- Other long-term liabilities.............................. 20,321 -- 20,321 -------- --------- --------- Total liabilities................................ 181,498 109,146 290,644 -------- --------- --------- Company-obligated mandatorily redeemable convertible trust preferred securities of Dayton Superior Capital Trust which holds solely debentures.................... 19,558 (19,558)(e) -- -------- --------- --------- Shareholders' equity Capital stock........................................ 47,037 96,931 (f) 143,968 Retained earnings (deficit).......................... 42,153 (174,243)(g) (132,090) Cumulative other comprehensive income................ (246) -- (246) -------- --------- --------- Total shareholders' equity....................... 88,944 (77,312) 11,632 -------- --------- --------- TOTAL LIABILITIES & SHAREHOLDERS' EQUITY................. $290,000 $ 12,276 $ 302,276 ======== ========= =========
35 DAYTON SUPERIOR CORPORATION NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET (1) Set forth below are the estimated sources and uses of funds to consummate the recapitalization and the related transactions. See "Use of Proceeds." The sources and uses below assume these transactions were consummated on March 31, 2000.
AMOUNT --------------------- (DOLLARS IN MILLIONS) SOURCES: New credit facility........................................ $ 60.1 Units offered hereby....................................... 165.6 Odyssey investment......................................... 93.8 Rollover investment........................................ 6.2 Cash on hand............................................... 2.2 ------ Total.................................................... $327.9 ====== USES: Payment of consideration in recapitalization............... $162.4 Rollover investment........................................ 6.2 Repayment of previously existing indebtedness.............. 113.4 Repayment of Company-obligated mandatorily redeemable convertible trust preferred securities................... 23.4 Fees and expenses.......................................... 22.5 ------ Total.................................................... $327.9 ======
(2) The amounts in this column represent the adjustments necessary to determine our pro forma consolidated balance sheet after giving effect to the recapitalization and the related financings. These adjustments are described below: (a) This adjustment reflects the use of cash of $2.2 million to repay existing revolver borrowings. (b) This adjustment represents the recognition of the estimated tax benefits attributable to the write-off of unamortized debt financing costs and prepayment premiums relating to our previously existing indebtedness and the convertible trust preferred securities (see (c) below). (c) This adjustment represents the recognition of $14.5 million of debt financing costs associated with the new credit facility and the notes less the write-off of $2.9 million of unamortized debt financing costs relating to our previously existing indebtedness that will be recognized as an extraordinary charge upon the repayment of the indebtedness. (d) This adjustment represents initial borrowings under the new credit facility of $60.1 million and the issuance of $170.0 million of notes along with the repayment of $113.4 million of previously existing indebtedness. Working capital borrowings have increased and will continue to increase over the first six months of the year due to normal seasonality. As a result, drawings under the revolving credit facility to repay previously existing indebtedness were higher as of the closing date than the $6.6 million that was outstanding at March 31, 2000. (e) This adjustment assumes that all holders of the convertible trust preferred securities elected to convert them into the right to receive cash immediately upon the consummation of the recapitalization. To the extent that these holders did not exercise this conversion right, these securities remained outstanding and borrowings under the new credit facility were correspondingly reduced. Our obligations under these securities are contractually subordinated 36 DAYTON SUPERIOR CORPORATION NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET to our obligations under the old notes. See "Description of Other Indebtedness--The Trust Preferred Securities." (f) This adjustment represents the investment by Odyssey of $93.8 million and the issuance of warrants valued at $3.1 million. (g) This adjustment includes the following: - The repurchase of all of our common equity other than that held by certain continuing shareholders, including fees and expenses. - A $4.3 million after-tax charge expected to result from the write-off of unamortized deferred financing costs relating to our previously existing indebtedness which has been repaid, the write-off of unamortized issuance costs on our convertible trust preferred securities, and the prepayment premiums on our previously existing indebtedness and our convertible trust preferred securities. 37 SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA The following table sets forth selected historical consolidated financial information as of and for each of the years in the five-year period ended December 31, 1999 and as of and for the three months ended April 2, 1999 and March 31, 2000. The selected historical financial information for each of the years in the five-year period ended December 31, 1999 have been derived from our consolidated financial statements, which have been audited by Arthur Andersen LLP, independent public accountants, and our selected historical financial information as of and for the three months ended April 2, 1999 and March 31, 2000 have been derived from our unaudited consolidated financial statements and which, in the case of the three years ended December 31, 1999 and the three months ended April 2, 1999 and March 31, 2000, are included elsewhere in this prospectus. You should read the following table together with the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section below and our Consolidated Financial Statements and the accompanying notes and our Unaudited Consolidated Financial Statements and the accompanying notes included elsewhere in this prospectus.
THREE MONTHS YEARS ENDED DECEMBER 31, ENDED ------------------------------------------------------ -------------------- APRIL 2, MARCH 31, 1995 1996 1997(1) 1998(1) 1999 1999 2000 -------- ---------- -------- -------- -------- -------- --------- (UNAUDITED) (DOLLARS IN THOUSANDS) STATEMENT OF OPERATIONS DATA: Net sales.................................... $ 92,802 $ 124,486 $167,412 $282,849 $322,170 $ 68,196 $ 76,505 Cost of Sales................................ 63,990 86,021 111,044 177,094 199,464 43,898 48,544 -------- ---------- -------- -------- -------- -------- -------- Gross profit................................. 28,812 38,465 56,368 105,755 122,706 24,298 27,961 Selling, general, and administrative expenses................................... 18,698 23,637 36,761 73,721 81,800 21,322 23,737 Amortization of goodwill and intangibles..... 1,491 1,749 1,885 2,213 2,369 647 624 -------- ---------- -------- -------- -------- -------- -------- Income from operations....................... 8,623 13,079 17,722 29,821 38,537 2,329 3,600 Interest expense, net........................ 4,231 4,829 5,556 11,703 11,661 2,975 2,728 Other expense (income), net.................. (3) 96 (64) (202) 230 -- 19 Provision (benefit) for income taxes......... 690(2) 3,538 5,277 8,244 11,991 (291) 380 -------- ---------- -------- -------- -------- -------- -------- Income (loss) before extraordinary items..... 3,705 4,616 6,953 10,076 14,655 (355) 473 Extraordinary item, net of tax............... -- (2,314)(3) -- -- -- -- -- -------- ---------- -------- -------- -------- -------- -------- Net income (loss)............................ $ 3,705 $ 2,302 $ 6,953 $ 10,076 $ 14,655 $ (355) $ 473 ======== ========== ======== ======== ======== ======== ======== OTHER FINANCIAL DATA: Depreciation and amortization................ $ 4,268 $ 6,053 $ 7,016 $ 12,289 $ 14,086 $ 3,662 $ 3,697 Property, plant and equipment additions, net........................................ 2,730 3,198 4,410 6,118 7,469 1,375 2,207 Rental equipment additions, net.............. 99 534 1,247 6,783 4,052 3,041 1,519 Net cash provided by (used in): Operating activities....................... 8,325 7,766 10,471 19,725 23,568 (6,075) (10,631) Investing activities....................... (26,420) (8,646) (39,139) (14,685) (25,575) (9,944) (4,873) Financing activities....................... 18,256 446 28,511 (4,405) 5,988 15,441 13,131 BALANCE SHEET DATA: Working capital.............................. $ 10,283 $ 10,874 $ 44,832 $ 39,727 $ 50,469 $ 48,012 $ 60,420 Total assets................................. 103,860 107,835 226,930 253,620 278,679 267,295 290,000 Long-term debt (including current portion)................................... 53,012 34,769 120,236 118,205 105,173 133,767 118,613 Convertible trust preferred securities....... -- -- -- -- 19,556 -- 19,558 Shareholders' equity......................... 27,485 52,872 60,529 74,588 88,772 74,130 88,944 ======== ========== ======== ======== ======== ======== ========
- ------------------------------ (1) In September 1997 we acquired Symons, which contributed $27.0 million of revenues in 1997 and $129.2 million of revenues in 1998. (2) In 1995, the provision for income taxes was reduced to reflect the utilization of net operating losses. (3) During June 1996, we prepaid our $40,000 unsecured senior promissory notes. In conjunction therewith, we paid a prepayment premium of $2,400 and expensed unamortized financing costs of $795 and debt discount of $538. We recorded an extraordinary loss of $2,314, net of an income tax effect of $1,419. We funded this repayment with $23,041 in proceeds from a public stock offering and $19,359 from our existing credit facility. 38 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS THE STATEMENTS IN THIS DISCUSSION REGARDING THE INDUSTRY OUTLOOK, OUR EXPECTATIONS REGARDING THE FUTURE PERFORMANCE OF OUR BUSINESSES, AND THE OTHER NON-HISTORICAL STATEMENTS IN THIS DISCUSSION ARE FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING STATEMENTS ARE SUBJECT TO NUMEROUS RISKS AND UNCERTAINTIES, INCLUDING BUT NOT LIMITED TO THE RISKS AND UNCERTAINTIES DESCRIBED IN THE "RISK FACTORS" SECTION. YOU SHOULD READ THE FOLLOWING DISCUSSION OF OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION TOGETHER WITH THE SECTIONS ENTITLED "RISK FACTORS" AND "SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA" AND WITH THE CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO AND UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS AND THE NOTES THERETO INCLUDED ELSEWHERE IN THIS PROSPECTUS. OVERVIEW We believe we are the largest North American manufacturer and distributor of metal accessories and forms used in concrete construction and of metal accessories used in masonry construction. Although almost all of our products are used in concrete or masonry construction, the function and nature of the products differ widely. We have four principal operating units, which are organized around the following product lines: - Concrete Accessories (Dayton/Richmond-Registered Trademark-); - Concrete Forming Systems (Symons-Registered Trademark-); - Paving Products (American Highway Technology-Registered Trademark-); and - Masonry Products (Dur-O-Wal-Registered Trademark-). Through our business units, we design, manufacture and distribute metal accessories and forms to independent distributors for resale to contractors, brokers and other manufacturers. In some of our product lines we also may sell directly to end users and may provide equipment for rental. When our business was started in 1924, it consisted primarily of the concrete accessories business and operated primarily in the eastern United States. In 1982, we acquired Superior Concrete Accessories, Inc., which expanded our geographic reach to include the rest of the continental United States and doubled the size of our company. In 1995, we acquired our masonry products business unit through the acquisition of Dur-O-Wal, which we believe is the leading North American manufacturer of masonry wall reinforcement products and other metal masonry accessories. In 1996, we created a separate paving products business unit to operate a business that was previously a part of our concrete accessories business unit. In 1997, we again almost doubled our size when we acquired our concrete forming systems business unit and added to our concrete accessories business unit through the acquisition of Symons Corporation. With the addition of Symons, we also approximately doubled the number of our distribution and manufacturing locations. We believe that Symons is the leading North American manufacturer of concrete forming systems. We also have expanded some of our business units through additional smaller acquisitions. Unless otherwise indicated, the discussion of our results of operations that follows includes information for Symons, Dur-O-Wal and the other acquisitions only from the dates that we acquired each of those companies. In connection with our recapitalization, we have refinanced our outstanding indebtedness which will result in an estimated charge net of taxes of $4.3 million as of March 31, 2000, associated with certain charges and write-offs of deferred financing costs. Following the recapitalization, since we will no longer have public shareholders, we expect to save approximately $0.5 million a year in public company expenses. CONCRETE ACCESSORIES (DAYTON/RICHMOND-REGISTERED TRADEMARK-). Our concrete accessories business unit derives its revenues from the sale of products primarily to independent distributors. We also provide some equipment on a rental basis. Our concrete accessories business unit manufactures substantially all of 39 the products it sells, which are shipped to customers based on orders. We design and manufacture or customize most of the machines we use to produce concrete accessories, and these proprietary designs allow for quick changeover of machine set-ups. This flexibility, together with our extensive distribution system, enable this business unit to deliver many of its products within 24 hours of a customer order. Therefore, product inventories are maintained at relatively low levels. Cost of sales for our concrete accessories business unit consists primarily of purchased steel, as well as the costs associated with manufacturing, assembly, testing, internal shipping and associated overhead. CONCRETE FORMING SYSTEMS (SYMONS-REGISTERED TRADEMARK-). Our concrete forming systems business unit derives its revenues from the sale and rental of engineered, reusable modular forming systems and related accessories to independent distributors and contractors. Sales of concrete forming systems and specific consumables generally represent approximately two-thirds of the revenues of this business unit, and rentals represent the remaining one-third. Sales of concrete forming systems generally are more sensitive to economic cycles than rentals. Rental equipment also can be sold as used equipment. This business unit's products include systems with steel frames and a plywood face, also known as Steel-Ply-Registered Trademark-, and systems that use steel in both the frame and face. All-steel forming systems are characterized by larger, project-driven orders, which increases backlog relative to the Steel-Ply-Registered Trademark- forms which are held in inventory for rental and sale. Our concrete forming systems business unit manufactures and assembles Steel-Ply-Registered Trademark- forms and outsources some of the manufacturing involved in all-steel forms. This outsourcing strategy allows us to fulfill larger orders without increased overhead. Cost of sales for our concrete forming systems business unit consists primarily of purchased steel and specialty plywood, and other raw materials, depreciation and maintenance of rental equipment, and the costs associated with manufacturing, assembly and overhead. PAVING PRODUCTS (AMERICAN HIGHWAY TECHNOLOGY-REGISTERED TRADEMARK-). Our paving products business unit derives its revenues from sales to independent distributors and contractors. Orders from customers are affected by state and local governmental infrastructure expenditures and their related bid processes. This is our business unit most affected by the demand expected to be generated as a consequence of TEA-21. Due to the project-oriented nature of paving jobs, these products generally are made to order. This serves to keep inventories low but increases the importance of backlog in this business unit. Our paving products business unit manufactures nearly all of its products. Cost of sales for our paving products business unit consists primarily of steel, as well as the costs associated with manufacturing and overhead. MASONRY PRODUCTS (DUR-O-WAL-REGISTERED TRADEMARK-). Our masonry products business unit derives its revenues from sales to independent distributors and brick and concrete block manufacturers who package our products with other products for resale to customers. Our masonry products business unit sells two principal categories of products: new construction products and restoration and repair products. New construction products are used to strengthen masonry walls or the connection between masonry and other portions of the wall at the time a building is constructed. Restoration and repair products are used to refurbish masonry and brick buildings and strengthen connections between masonry and the interior portions of the wall and are more engineered and generally generate higher margins than new construction products. The masonry products business unit manufactures and assembles the majority of its products before shipping to customers based on orders. Cost of sales for the masonry products business unit consists primarily of steel, as well as costs associated with manufacturing and overhead. 40 RESULTS OF OPERATIONS The following table summarizes our results of operations as a percentage of net sales for the periods indicated:
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED ------------------------------------ ------------------------------ 1997 1998 1999 APRIL 2, 1999 MARCH 31, 2000 -------- -------- -------- ------------- -------------- Net sales.................................. 100.0% 100.0% 100.0% 100.0% 100.0% Cost of goods sold....................... 66.3 62.6 61.9 64.4 63.5 ----- ----- ----- ----- ----- Gross profit............................. 33.7 37.4 38.1 35.6 36.5 Selling, general and administrative expenses............................... 22.0 26.1 25.4 31.3 31.0 Amortization of goodwill and intangibles............................ 1.1 0.8 0.7 0.9 0.8 ----- ----- ----- ----- ----- Total selling, general and administrative expenses.............. 23.1 26.9 26.1 32.2 31.1 ----- ----- ----- ----- ----- Income from operations................... 10.6 10.5 12.0 3.4 4.7 Interest expense, net.................... 3.3 4.1 3.6 4.3 3.6 Other expense (income), net.............. -- (0.1) 0.1 -- -- ----- ----- ----- ----- ----- Income before income taxes and extraordinary item..................... 7.3 6.5 8.3 (0.9) 1.1 Provision for income taxes............... 3.1 2.9 3.8 (0.4) 0.5 ----- ----- ----- ----- ----- Net income............................. 4.2 3.6 4.5 (0.5) 0.6 Dividends on company-obligated mandatorily redeemable convertible trust preferred securities net of income tax benefit of tax.............. -- -- 0.1 -- 0.4 ----- ----- ----- ----- ----- Net income available to common shareholders........................... 4.2% 3.6% 4.4% (0.5)% 0.2% ===== ===== ===== ===== =====
COMPARISON OF THREE MONTHS ENDED APRIL 2, 1999 AND MARCH 31, 2000 NET SALES. Net sales increased $8.3 million, or 12.2%, to $76.5 million in the first quarter of 2000 from $68.2 million in the first quarter of 1999. The following table summarizes our net sales by segment:
THREE MONTHS ENDED ------------------------------------------------------------ APRIL 2, 1999 MARCH 31, 2000 -------------------- -------------------- NET SALES % NET SALES % CHANGE --------- -------- --------- -------- -------- (DOLLARS IN THOUSANDS) Concrete accessories............................. $31,741 46.5% $36,169 47.3% 14.0% Concrete forming systems......................... 26,108 38.3 28,493 37.2 9.1 Paving products.................................. 6,770 9.9 7,954 10.4 17.5 Masonry products................................. 5,966 8.7 7,843 10.3 31.5 Intersegment eliminations........................ (2,389) (3.4) (3,954) (5.2) 65.5 ------- ------ ------- ----- ---- Net sales.................................. $68,196 100.0% $76,505 100.0% 12.2% ======= ====== ======= ===== ====
Net sales of concrete accessories increased by 14.0% to $36.2 million in the first quarter of 2000 from $31.7 million in the first quarter of 1999, due to increases in volume from new products and penetration into new markets and, to a lesser extent, the contribution of Southern Construction Products. Net sales of concrete forming systems increased 9.1% to $28.5 million for the first quarter of 2000 compared to $26.1 million in the first quarter of 1999, due to volume gains and the expansion and introduction of new products, including distribution rights to two European forming systems. Net sales of paving products increased $1.2 million, or 17.5%, in the first quarter of 2000 compared to the first quarter of 1999 due to an increase in volume as a result of TEA-21 and marketing initiatives. Net sales 41 of masonry products increased $1.9 million, or 31.5%, primarily due to the acquisitions of Southern Construction Products and Polytite Manufacturing, and other volume gains. GROSS PROFIT. Gross profit for the first quarter of 2000 was $28.0 million, a 15.1% increase from $24.3 million in the first quarter of 1999, due primarily to the increased net sales. Gross margin was 36.5% in the first quarter of 2000, increasing from 35.6% in 1999 due to manufacturing efficiencies and purchasing synergies, a higher mix of rental revenue, and leverage of fixed manufacturing costs. OPERATING EXPENSES. Selling, general, and administrative expenses, including amortization of goodwill and intangibles ("SG&A expenses"), increased $2.4 to $24.4 million in the first quarter of 2000, from $22.0 million in the first quarter of 1999, due to the acquisitions and higher volume. SG&A expenses were lower as a percent of net sales to 31.8% in the first quarter of 2000 from 32.2% in the first quarter of 1999, due to the leverage of fixed costs on higher net sales, partially offset by increases in new product development and sales personnel. INTEREST EXPENSE. Interest expense decreased to $2.7 million in the first quarter of 2000 from $3.0 million in the first quarter of 1999 due to lower long-term debt balances resulting from the issuance of the convertible trust preferred securities, partially offset by higher interest rates. INCOME BEFORE INCOME TAXES. Income before income taxes in the first quarter of 2000 increased to $0.9 million from a loss of ($0.6) million in the first quarter of 1999 and was comprised of the following:
THREE MONTHS ENDED ---------------------------------- APRIL 2, 1999 MARCH 31, 2000 ------------- -------------- (DOLLARS IN THOUSANDS) Concrete accessories............................ $ 2,679 $ 4,126 Concrete forming systems........................ 139 409 Paving products................................. (499) (148) Masonry products................................ (386) (182) Intersegment eliminations....................... (1,181) (1,869) Corporate....................................... (1,398) (1,483) ------- ------- Income before income taxes.................... $ (646) $ 853 ======= =======
Income before income taxes from concrete accessories of $4.1 million, or 11.4% of net sales in the first quarter of 2000 from $2.7 million, or 8.4% of net sales in the first quarter of 1999 due primarily to the increase in net sales, manufacturing efficiencies and leverage of fixed costs. Income before income taxes from concrete forming systems was $0.4 million, or 1.4% of net sales in the first quarter of 2000 in comparison to $0.1 million, or 0.5% of net sales, in the first quarter of 1999 due to the increase in net sales, higher growth in rental revenue, and leverage of fixed costs. Income before income taxes from paving products improved to ($0.2) million in the first quarter of 2000 from ($0.5) million in the first quarter of 1999 due to higher net sales. Income before income taxes from masonry products improved to ($0.2) million in the first quarter of 2000 compared to ($0.4) million in the first quarter of 1999 due to the increase in net sales. Elimination of profit on intersegment sales was $1.9 million in the first quarter of 2000, increasing from $1.2 million in the first quarter of 1999, due to higher intersegment sales. Corporate expenses increased slightly to $1.5 million from $1.4 million. NET INCOME. The effective tax rate was 44.5% in the first quarter of 2000 compared to 45.0% in the first quarter of 1999. The difference in effective tax rates from statutory rates is due to nondeductible goodwill amortization and state and local income taxes. Net income available to common shareholders for the first quarter of 2000 was $0.2 million, or $0.03 per basic and diluted share, compared to ($0.4) million, or ($0.06) per basic and diluted share, in the first quarter of 1999. COMPARISON OF YEARS ENDED DECEMBER 31, 1998 AND 1999 NET SALES. Our 1999 net sales reached $322.2 million, a 13.9% increase from $282.8 million in 1998. 42 The following table summarizes our net sales by segment for the periods indicated:
YEAR ENDED DECEMBER 31, ------------------------------------------------------------ 1998 1999 -------------------- -------------------- NET SALES % NET SALES % CHANGE --------- -------- --------- -------- -------- (DOLLARS IN THOUSANDS) Concrete accessories............................ $131,467 46.5% $144,722 44.9% 10.1% Concrete forming systems........................ 104,711 37.0 122,720 38.1 17.2 Paving products................................. 30,967 10.9 36,695 11.4 18.5 Masonry products................................ 24,292 8.6 28,265 8.8 16.4 Intersegment eliminations....................... (8,588) (3.0) (10,232) (3.2) 19.1 -------- ----- -------- ----- ---- Net sales................................. $282,849 100.0% $322,170 100.0% 13.9% ======== ===== ======== ===== ====
Net sales of concrete accessories increased by 10.1% to $144.7 million in 1999 from $131.5 million in 1998, due primarily to increases in volume, new product initiatives, and the contribution of the acquired Cempro business. Net sales of concrete forming systems increased by 17.2% to $122.7 million in 1999 from $104.7 million in 1998, due to a full year's sales from the 1998 acquisitions of Symons Concrete Forms and Northwoods and the expansion and introduction of new products, including exclusive distribution rights to two European forming systems. Net sales of paving products increased by 18.5% to $36.7 million in 1999 from $31.0 million in 1998, due to an increase in volume as a result of TEA-21 and marketing initiatives. Net sales of masonry products increased by 16.4% to $28.3 million in 1999 from $24.3 million in 1998, due to the acquisition of Southern Construction Products, higher existing volume and strategic pricing initiatives. GROSS PROFIT. Gross profit for 1999 was $122.7 million, a 16.0% increase over $105.8 million for 1998. Gross margin was 38.1% in 1999 compared to 37.4% in 1998. Gross margin increased primarily due to higher volume absorbing fixed costs in all business units, and a better mix of higher gross margin rental revenue in the concrete forming systems business. This more than offset the effects of the lower gross margin Cempro and Southern Construction Products businesses. SELLING, GENERAL AND ADMINISTRATIVE. Our SG&A expenses increased to $84.2 million in 1999 from $75.9 million in 1998. The increase is due to the effect of 1998 and 1999 acquisitions, higher distribution costs associated with higher net sales volume, increases in new product development and sales personnel, and legal fees to defend ourselves in the EFCO litigation. These were partially offset by a $0.7 million non-recurring pension plan termination gain in the second quarter of 1999. SG&A expenses were lower as a percent of sales to 26.1% in 1999 from 26.9% in 1998, due to the effect of higher net sales on fixed costs. INTEREST EXPENSE. Interest expense remained flat at $11.7 million in 1999 and 1998. Interest expense increased due to higher debt from the acquisition of Cempro. However, this was offset by the lower debt as a result of increased operating cash flow and the fourth quarter issuance of our convertible trust preferred securities. 43 INCOME BEFORE INCOME TAXES. Income before income taxes in 1999 increased 45.4% to a record $26.6 million from $18.3 million in 1998, and was comprised of the following:
YEAR ENDED DECEMBER 31, ------------------------- 1998 1999 -------- -------- (DOLLARS IN THOUSANDS) Concrete accessories.................................. $19,387 $22,964 Concrete forming systems.............................. 6,133 10,876 Paving products....................................... 1,677 1,569 Masonry products...................................... 487 1,058 Intersegment eliminations............................. (4,153) (4,903) Corporate............................................. (5,211) (4,918) ------- ------- Income before income taxes...................... $18,320 $26,646 ======= =======
Concrete accessories income before income taxes of $23.0 million, or 15.9% of net sales, in 1999 increased from $19.4 million, or 14.7% of net sales, in 1998, due primarily to the increase in net sales of concrete accessories. Concrete forming systems income before income taxes of $10.9 million, or 8.9% of net sales, in 1999 increased from $6.1 million, or 5.9% of net sales, in 1998, due primarily to the full year effect of the 1998 acquisition of Symons Concrete Forms, and increased sales from the existing business. Income before income taxes from paving products decreased to $1.6 million, or 4.3% of net sales, in 1999 from $1.7 million, or 5.4% of net sales, in 1998, due to personnel increases made in anticipation of the growth of the business as a result of TEA-21. Income before income taxes from masonry products increased to $1.1 million, or 3.7% of net sales, in 1999 from $0.5 million, or 2.0% of net sales, in 1998, due to the acquisition of Southern Construction Products and a shift to higher margin engineered products. Corporate expenses decreased to $4.9 million from $5.2 million due to the non-recurring pension gain which was offset by the addition of personnel in 1998 and 1999. Elimination of gross profit on intersegment sales increased to $4.9 million in 1999 from $4.2 million in 1998 due to higher intersegment sales. NET INCOME. Our effective tax rate was 45.0% in both 1999 and 1998. Net income increased $4.6 million to $14.7 million in 1999 from $10.1 million in 1998 due to the factors described above. COMPARISON OF YEARS ENDED DECEMBER 31, 1997 AND 1998 NET SALES. Our 1998 net sales reached a record $282.8 million, a 69.0% increase from $167.4 million in 1997 and a 12.1% increase from pro forma 1997 sales of $252.3 million as if Symons had been acquired on January 1, 1997. The following table summarizes our net sales by segment for the periods indicated:
YEAR ENDED DECEMBER 31, ------------------------------------------------------------ 1997 1998 -------------------- -------------------- NET SALES % NET SALES % CHANGE --------- -------- --------- -------- -------- (DOLLARS IN THOUSANDS) Concrete accessories............................ $ 92,251 55.1% $131,467 46.5% 42.5% Concrete forming systems........................ 21,066 12.6 104,711 37.0 397.1 Paving products................................. 29,177 17.4 30,967 10.9 6.1 Masonry products................................ 24,918 14.9 24,292 8.6 (2.5) Intersegment eliminations....................... -- -- (8,588) (3.0) -- -------- ----- -------- ----- ----- Net sales................................. $167,412 100.0% $282,849 100.0% 69.0% ======== ===== ======== ===== =====
Net sales of concrete accessories increased by 42.5% from $92.2 million in 1997 to $131.5 million in 1998, due primarily to a full year's net sales from the Richmond Screw Anchor division of Symons that was acquired in September 1997. Net sales of concrete forming systems increased from 44 $21.1 million in 1997 to $104.7 million in 1998, due to a full year's net sales resulting from the acquisition of Symons. Net sales of paving products increased by 6.1% to $31.0 million in 1998 from $29.2 million in 1997 due to increased market share and sales volume. Net sales of masonry accessories decreased to $24.3 million in 1998 from $24.9 million in 1997, due to a high level of competition in the hot dipped and mill galvanized masonry wall reinforcement product markets, which was somewhat offset by a shift to higher margin, lower volume engineered products. GROSS PROFIT. Gross profit for 1998 was $105.8 million, an 87.6% increase over $56.4 million for 1997. Gross margin was 37.4% in 1998 compared to 33.7% in 1997. Gross margin increased primarily due to the inclusion of the Symons business for a full year as concrete forming systems have higher gross margins, primarily due to rental revenues, than our other product lines. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Our SG&A expenses increased from $38.6 million in 1997 to $75.9 million in 1998. The increase is due to the inclusion of a full year of expenses resulting from the acquisition of Symons. SG&A expenses increased as a percent of sales from 23.1% in 1997 to 26.9% in 1998, due to concrete forming systems having a higher percentage of SG&A expenses to net sales than our other operating segments. This reflects the additional distribution costs associated with the management of the rental equipment fleet. INTEREST EXPENSE. Interest expense increased to $11.7 million in 1998 from $5.6 million in 1997 due primarily to the full-year effect of higher debt resulting from the Symons acquisition, and to a lesser extent, higher capital expenditures. INCOME BEFORE INCOME TAXES. Income before income taxes in 1998 increased 49.8% to $18.3 million from $12.2 million in 1997, and was comprised of the following:
YEAR ENDED DECEMBER 31, ------------------------- 1997 1998 -------- -------- (DOLLARS IN THOUSANDS) Concrete accessories.................................. $13,723 $19,387 Concrete forming systems.............................. 364 6,133 Paving products....................................... 1,377 1,677 Masonry products...................................... 5 487 Intersegment eliminations............................. -- (4,153) Corporate............................................. (3,239) (5,211) ------- ------- Income before income taxes...................... $12,230 $18,320 ======= =======
Concrete accessories' income before income taxes of $19.4 million, or 14.7% of net sales in 1998 increased 41.3% from $13.7 million, or 14.9% of net sales, due primarily to the full-year effect of the 1997 acquisition of Richmond Screw Anchor. Concrete forming systems' income before income taxes of $6.1 million, or 5.9% of net sales, in 1998 increased from $0.4 million, or 1.7% of net sales, in 1997 due primarily to the full-year effect of the acquisition of Symons. Income before income taxes from paving products increased to $1.7 million, or 5.4% of net sales, in 1998 from $1.4 million or 4.7% of net sales, in 1997 due to higher net sales. Income before income taxes from masonry products was $0.5 million in 1998 compared to virtually breakeven in 1997, despite the decrease in net sales, due to a shift to higher margin, lower volume engineered products. Corporate expenses increased to $5.2 million from $3.2 million primarily due to the addition of personnel in the finance, treasury, tax, purchasing, logistics and corporate development functions. Elimination of profit on intersegment sales was $4.2 million in 1998. NET INCOME. Our effective tax rate in 1998 was 45.0%, or $8.2 million, compared to a rate of 43.1%, or $5.3 million, in 1997. Nondeductible goodwill amortization and state and local taxes caused our effective tax rate to exceed federal statutory levels. Net income increased $3.2 million to $10.1 million in 1998 from $6.9 million in 1997 due to the factors described above. 45 LIQUIDITY AND CAPITAL RESOURCES Our key statistics for measuring liquidity and capital resources are net cash provided by operating activities, capital expenditures, debt to total capitalization ratio, amounts available under our revolving credit facility, and cash gap. We define cash gap as the average number of days our accounts receivable are outstanding plus the average number of days of inventory we have, less the average number of days our accounts payable are outstanding. Our capital requirements relate primarily to capital expenditures, debt service and the cost of acquisitions. Historically, our primary sources of financing have been cash generated from operations, borrowings under our revolving credit facility and the issuance of long-term debt and equity. Net cash used in operating activities in the first quarter of 2000 was $10.6 million. Sources of operating cash flow in the first quarter of 2000 were comprised of $0.5 million in net income, $1.4 million in non-cash reductions to net income, and ($12.5) million of normal seasonal working capital growth. We invested $3.7 million in net capital expenditures and $1.2 million in acquisitions, net of a $0.3 million refund for a working capital adjustment from a 1999 acquisition. Net cash provided by financing activities was comprised of $13.4 million of draws on our existing revolving credit facility and ($0.3) million in dividends on our convertible trust preferred securities, net of income tax benefit. As a result of the above, cash decreased by $2.4 million. Net cash provided by operating activities for 1999 was $23.6 million. Sources of operating cash flow for 1999 were comprised of $14.7 million in net income, and $11.8 million in non-cash reductions of net income, less ($2.9) million of working capital changes. This cash was used for net capital expenditures of $11.5 million, and acquisitions of $14.1 million. In the fourth quarter of 1999, we completed an underwritten public offering of 1,062,500 of our convertible trust preferred securities at a price of $20 per security, generating $19.6 million in net proceeds. The securities were issued by a limited purpose Delaware trust which used the proceeds to purchase from us the same principal amount of our convertible junior subordinated debentures. The securities are guaranteed by us on a subordinated basis. Dividends are payable on the convertible trust preferred securities at the rate of 10% per year and the securities are convertible into our Class A Common Shares at the rate of 0.80 common shares for each preferred security, which equates to a conversion price of $25 per common share, a 47% premium on the closing price on the date of issuance. The $19.6 million of net proceeds from our convertible trust preferred securities offering were used for $13.0 million of long-term debt repayment, a cash increase of $4.0 million, and net cash used in operating, investing and other financing activities of $2.6 million. Capital expenditures in 1999 included net additions to the rental equipment fleet of $4.1 million to support the growth of our concrete forming systems business unit as well as property, plant and equipment additions of $7.7 million as we continued to focus on cost improvement programs. Net cash provided by operating activities for 1998 was $19.7 million. Sources of operating cash flow for 1998 included $10.1 million in net income, $6.7 million from non-cash reductions of net income and working capital changes of $2.9 million. Net cash generated by operations was used for net capital expenditures of $12.9 million, acquisitions of $1.8 million, and to repay long-term debt of $4.3 million, including long-term debt assumed in acquisitions of $2.2 million. Capital expenditures included net additions to the rental equipment fleet of $6.8 million to support the growth in concrete forming systems and, to a lesser extent, concrete accessories, as well as property, plant and equipment additions of $7.2 million as we continued to focus on cost improvement programs. Proceeds from sales of property, plant, and equipment of $1.1 million related to the sale of duplicate facilities as a result of the acquisition of Symons. Net cash provided by operating activities for 1997 was $10.5 million. Sources of operating cash flow for 1997 included $7.0 million in net income and $5.7 million from non-cash reductions of net 46 income, less working capital changes of ($2.2) million. We invested $5.7 million in capital expenditures and $33.4 million in acquisitions, almost all of which was to acquire Symons Corporation. Net cash provided by financing activities was $28.5 million and was comprised of repayments of existing long-term debt of $67.2 million, including $47.7 million assumed with the acquisition of Symons Corporation, issuance of new long-term debt of $100.0 million, $4.6 million of financing costs, and $0.3 million from the issuance of Class A common shares. At March 31, 2000, working capital was $60.4 million, compared to $50.5 million at December 31, 1999. The growth in working capital is primarily attributable to seasonal growth as net sales in March 2000 were greater than net sales in December 1999 and inventories were increased to meet the expected demand from the spring and summer construction season. At March 31, 2000, all of our existing $50.0 million revolving credit facility was available, of which $13.4 million of borrowings were outstanding. The term loan under our existing credit agreement had an outstanding balance at March 31, 2000 of $100.0 million. Other long-term debt consisted of the Nash Note. At March 31, 2000, we had $118.6 million of long-term debt outstanding, of which $5.0 million was current. Our net debt to total capitalization ratio increased to 51.8% as of March 31, 2000 from 48.2% as of December 31, 1999 due to normal seasonal increase of long-term debt. Our net debt to total capitalization ratio decreased to 51.8% as of March 31, 2000 from 64.3% as of April 2, 1999, due to the net income generated in the last twelve months and the issuance of our convertible trust preferred securities. For the first quarter of 2000, our average net cash gap days were 71, flat with the first quarter of 1999, as we have maintained focus on working capital management as it grows. We define cash gap as the average number of days our accounts receivable are outstanding plus the average number of days of inventory we have, less the average number of days our accounts payable are outstanding. In connection with the recapitalization, we incurred substantial new indebtedness and refinanced certain outstanding indebtedness including all borrowings under our previous credit agreement. See the "Capitalization" section. After giving effect to the recapitalization and the related financing transactions, we are capitalized with (i) the $93.8 million Odyssey investment, (ii) the $6.2 million rollover investment, (iii) $170.0 million in principal amount of the notes and (iv) the $133.5 million new credit facility borrowings which consist of a $50.0 million revolving credit facility, a $30.0 million acquisition facility, a $23.5 million term loan under the delayed-draw tranche A facility and a $30.0 million term loan under the tranche B facility. The interest rate for the new credit facility will be, at our option, either (i) a floating rate equal to the Base Rate (as defined) plus the Applicable Margin (as defined), or (ii) the Eurodollar Rate (as defined) for fixed periods of one, two, three, or six months, plus the Applicable Margin. The new credit facility is subject to mandatory prepayment with a defined percentage of net proceeds from certain asset sales, insurance proceeds or other awards (payable in connection with the loss, destruction or condemnation of any assets), certain new debt and equity offerings and 50% of excess cash flow (as defined in the new credit facility) in excess of a predetermined amount under the new credit facility. The notes bear cash interest at 13% per annum. The notes do not require principal payments prior to maturity. The revolving credit facility, the acquisition facility and the delayed-draw tranche A facility will each mature on the six-year anniversary and the tranche B facility will mature on the eight-year anniversary of the consummation of the notes offering. The new credit facility requires us to amortize the outstanding indebtedness under each of the delayed-draw tranche A facility and the tranche B facility, commencing in year 2001 and under the acquisition facility commencing in year 2003 or 2004, and contains restrictive covenants that, among other things, limits the incurrence of additional indebtedness, the payment of dividends, transactions with affiliates, asset sales, acquisitions, mergers and consolidations, liens and encumbrances, and prepayments of other indebtedness. See the "Description of the Notes" and "Description of Other Indebtedness--The New Credit Facility" sections. 47 After giving effect to the recapitalization, our primary cash needs consist of capital expenditures and debt service. We intend to pursue additional acquisitions that present opportunities to realize significant synergies, operating expense economies or overhead cost savings or to increase our market position. We regularly engage in discussions with respect to potential acquisitions and investments. Except for the Conspec acquisition agreement, there are no definitive agreements with respect to any material acquisitions at this time, and we cannot assure you that we will be able to reach an agreement with respect to any future acquisition. Our acquisition strategy may require substantial capital, and no assurance can be given that we will be able to raise any necessary funds on terms acceptable to us or at all. If we incur additional debt to finance acquisitions, our total interest expense will increase. See "Risk Factors--Risks associated with acquisitions." Our ability to make scheduled payments of principal of, or to pay the interest on, or to refinance, our indebtedness (including the notes), or to fund planned capital expenditures and research and development will depend on our future performance, which, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Based on our current level of operations and anticipated operating improvements, management believes that cash flow from operations and available borrowings under our new credit facility, will be adequate to meet our future liquidity for the foreseeable future. We cannot assure you, however, that our business will generate sufficient cash flow from operations, that operating improvements will be realized on schedule or that future borrowings will be available to us under our new credit facility in an amount sufficient to enable us to pay our indebtedness, including the notes, or to fund our other liquidity needs. We may need to refinance all or a portion of our indebtedness, including the notes on or before maturity. We cannot assure you that we will be able to refinance any of our indebtedness, including our new credit facility and the notes, on commercially reasonable terms or at all. See the "Risk Factors" section. SEASONALITY Our operations are seasonal in nature with approximately 55% to 60% of sales historically occurring in the second and third quarters. Our working capital and borrowings fluctuate with our sales volume. Historically, more than 50% of our cash flow from operations is generated in the fourth quarter. INFLATION We do not believe inflation had a significant impact on our operations over the past two years. In the past, we have been able to pass along to our customers all or a portion of the effects of increases in the price of steel, our principal raw material. There can be no assurance we will be able to continue to pass on the cost of such increases in the future. YEAR 2000 Certain software and hardware systems are date sensitive. Older date sensitive systems often use a two digit dating convention ("00" rather than "2000") that could have resulted in system failure and disruption of operations. This is referred to as the "Year 2000" issue. We have not experienced any significant disruptions to our businesses as a result of the Year 2000 issue. To date, we have incurred approximately $0.9 million in costs, of which approximately $0.8 million was capitalized and approximately $0.1 million was expensed. These costs were to replace existing hardware and third party software and professional fees for external assistance. We estimate that our future cost to resolve remaining Year 2000 issues is not significant. 48 RECENTLY ISSUED ACCOUNTING STANDARDS In June 1998, the FASB issued Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities," which requires companies to recognize all derivative contracts at their fair values, as either assets or liabilities on the balance sheet. Our only derivatives are our interest rate swap agreements. Changes in the fair value of the swaps would be recorded each period as an adjustment to interest expense. We do not expect the adoption of SFAS No. 133 to have a material impact on the consolidated statements of income. In June 1999, the FASB issued Statement No. 137, which amended SFAS No. 133 so that the effective date of adoption will be for all fiscal quarters beginning after June 15, 2000. We do not intend to adopt SFAS No. 133 prior to its effective date. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As of March 31, 2000, we had financial instruments that were sensitive to changes in interest rates. Following the closing of the recapitalization and all of the related transactions, these financial instruments consist of: - $133.5 million new credit facility; and - $5.2 million in other fixed-rate, long-term debt. Our new credit facility is comprised of a revolving credit facility, an acquisition facility and a delayed-draw tranche A facility term loan that each terminate in 2006 and a tranche B facility term loan that terminates in 2008. The new credit facility bears interest at the sum of the (i) Applicable Margin and (ii) at our option, either the Base Rate or the Eurodollar Rate. See "Description of Other Indebtedness--The New Credit Facility." Our other long-term debt at March 31, 2000 consisted of the Nash Note with an estimated fair value of $5.4 million and the Parsons Note due in installments of $31,500 per year with an estimated fair value as of March 31, 2000 of $0.2 million. In the ordinary course of our business, we also are exposed to price changes in raw materials (particularly steel rod and steel bar) and products purchased for resale. The prices of these items can change significantly due to changes in the markets in which our suppliers operate. We generally do not, however, use financial instruments to manage our domestic or international exposure to changes in commodity prices. 49 BUSINESS We believe we are the largest North American manufacturer and distributor of metal accessories and forms used in concrete construction and of metal accessories used in masonry construction. In many of our product lines, we believe we are the market leader and lowest cost manufacturer competing primarily with smaller, regional suppliers with more limited product offerings. Our products are used primarily in two segments of the construction industry: infrastructure construction, such as highways, bridges, utilities, water and waste treatment facilities and airport runways, and non-residential building, such as schools, stadiums, prisons, retail sites, commercial offices and manufacturing facilities. For the twelve-month period ended March 31, 2000, our pro forma net sales would have been $338.4 million and our pro forma EBITDA would have been $55.4 million. We derive our revenue from a profitable mix of sales of consumable products and the sale and rental of engineered equipment. We believe that the breadth of our product offerings and national distribution network allow us to maintain a large customer base that prefers a "one-stop" supplier. We manufacture the substantial majority of our 18,000 products, which we sell under a number of well-established brand names. Our national distribution system, which we believe is the largest in our industry, allows us to efficiently cross-sell and distribute newly developed and acquired product lines on a nationwide basis. Through our network of 62 service/distribution centers, we serve over 6,000 customers, comprised of independent distributors and a broad array of precast concrete manufacturers, general contractors, subcontractors and metal fabricators. This nationwide customer base provides us with a geographically diversified sales mix and reduces our dependence on the economic cycles of any one region. We currently have four principal business units, which are organized around the following product lines: CONCRETE ACCESSORIES (DAYTON/RICHMOND-REGISTERED TRADEMARK-). We believe we are the leading North American manufacturer of concrete accessories, which are used in connecting forms for poured-in-place concrete walls, anchoring or bracing for walls and floors, supporting bridge framework and positioning steel reinforcing bars. For the twelve-month period ended March 31, 2000, our concrete accessories business unit would have had pro forma net sales to external customers of $145.1 million, or 43% of our total pro forma net sales. CONCRETE FORMING SYSTEMS (SYMONS-REGISTERED TRADEMARK-). We believe we are the leading North American manufacturer of concrete forming systems, which are reusable, engineered forms and related accessories used in the construction of concrete walls, columns and bridge supports to hold concrete in place while it hardens. Sales from concrete forming systems and related accessories represented 63% and rental revenue represented 37% of Symons' total sales in 1999. For the twelve-month period ended March 31, 2000, our concrete forming systems business unit would have had pro forma net sales to external customers of $119.2 million, or 35% of our total pro forma net sales. PAVING PRODUCTS (AMERICAN HIGHWAY TECHNOLOGY-REGISTERED TRADEMARK-). We believe we are the leading North American manufacturer of welded dowel assemblies and dowel baskets, which are paving products used in the construction and rehabilitation of concrete roads, highways and airport runways to extend the life of the pavement. These consumable products are used to transfer dynamic loads between adjacent slabs of concrete roadway. For the twelve-month period ended March 31, 2000, our paving products business unit would have had pro forma net sales to external customers of $37.1 million, or 11% of our total pro forma net sales. MASONRY PRODUCTS (DUR-O-WAL-REGISTERED TRADEMARK-). We believe we are the leading North American manufacturer of masonry products, which are placed between layers of brick and concrete blocks and covered with mortar to provide additional strength to walls. Masonry products also include engineered products used to repair or restore brick and stone buildings. For the twelve-month period ended March 31, 2000, our 50 masonry products business unit would have had pro forma net sales to external customers of $37.0 million, or 11% of our total pro forma net sales. Each of our four principal business units also sells specialty construction chemicals that are used in conjunction with its other products. COMPETITIVE STRENGTHS We believe that our key competitive strengths are: - LEADING MARKET POSITIONS. We believe that we are the market leader in many of our product lines, competing primarily with smaller, regional suppliers with limited product offerings. Our market share, combined with our breadth of product offerings, allows us to attract and maintain customers nationwide who prefer to deal with a "one-stop" supplier. We differentiate ourselves from competitors based on the quality of our products, our national brand recognition, and our technical support services to customers. - LOW-COST MANUFACTURER. We manufacture the substantial majority of the products that we sell, and believe that we are the lowest cost manufacturer in many of our product lines. We design and build or customize much of our automated manufacturing equipment, which would be difficult for a competitor to duplicate cost effectively, and have achieved significantly greater productivity, higher product quality and lower inventory levels than many of our competitors. In addition, we believe that our size allows us to achieve economies of scale in raw materials purchasing that cannot be realized by many of our competitors. - EXTENSIVE DISTRIBUTION SYSTEM AND CUSTOMER NETWORK. Our national distribution system, which we believe is the largest in our industry, allows us to efficiently cross-sell and distribute newly developed and acquired product lines on a nationwide basis. This nationwide network also provides us with a geographically diversified sales mix which reduces our dependence on the economic cycles of any one region. - ABILITY TO INTEGRATE ACQUISITIONS. As part of our focused acquisition strategy, we have successfully completed 13 acquisitions since January 1994. Our senior management has demonstrated a strong record of integrating acquisitions profitably and efficiently, while realizing targeted synergies on schedule. Although most of our acquisitions have been add-on acquisitions of small, privately held producers of one or more product lines for a single geographic market, our 1995 acquisition of Dur-O-Wal for $23.6 million and our 1997 acquisition of Symons for approximately $83.5 million represented larger acquisitions that provided us with an increased share in existing markets and access to related new markets. - EXPERIENCED MANAGEMENT TEAM. Our management team is one of the most experienced in the concrete and masonry accessories businesses. Our executive officers average approximately 23 years of experience in these industries and have demonstrated an ability to identify and successfully execute internal growth and acquisition strategies. BUSINESS STRATEGY Key elements of our strategy are to: - DESIGN, MANUFACTURE AND MARKET NEW PRODUCTS. We believe that we are the leader in introducing product innovations to our markets. Our new product strategy is focused on developing engineered products that offer valuable features to our customers, including improved product performance, increased safety and higher productivity. Each business unit has new product development teams comprised of engineers, manufacturing managers and sales and marketing managers who are responsible for meeting annual new product sales targets. 51 - IMPLEMENT MANUFACTURING IMPROVEMENT PROGRAMS. We continue to implement strategic initiatives designed to reduce manufacturing costs. To improve our efficiency, we design and build or customize much of our high-volume, automated manufacturing equipment. Approximately half of our annual capital expenditures for fixed assets are targeted for expense reduction programs and manufacturing improvements. For example, our top three productivity initiatives in 1998 cost approximately $0.5 million in capital expenditures, and we estimate that these initiatives generated over $0.7 million of annual cost savings in 1999. - LEVERAGE OUR EXTENSIVE DISTRIBUTION SYSTEM AND CUSTOMER NETWORK. We leverage our national distribution network and diverse customer base to efficiently introduce on a nationwide basis internally developed product lines or product lines of acquired companies that previously had a limited geographic presence. In addition, we establish strategic agreements to distribute new products manufactured by others who have a limited marketing and distribution presence in our industry. For example, our concrete accessories business unit has an exclusive domestic distribution arrangement for a new rebar splicing system originally introduced in Europe. - CONTINUE TO INCREASE RENTAL REVENUE. We plan to continue our focus on increasing rental revenue of concrete forming systems and other engineered equipment. In September 1997, we acquired Symons Corporation, a privately-held national provider of engineered concrete forming systems. Since the acquisition, we have increased rental revenue from concrete forming systems by increasing the size, utilization and make-up of the rental fleet. We will continue to target above-market growth rates in rental revenue by improving utilization of rental assets and investing in new rental products. - PURSUE SELECTED ACQUISITIONS. We will continue to selectively pursue acquisition opportunities. Many of our competitors are small, regional manufacturers with limited product offerings that may present attractive acquisition candidates. We intend to acquire companies where we see opportunities to significantly increase profit margins by leveraging our economies of scale in materials purchasing and our proprietary manufacturing expertise. Additionally we seek to acquire related product lines where we see opportunities to increase sales through our nationwide distributor and customer network. INDUSTRY The total value of construction put-in-place in 1999 was $706 billion, according to statistics published by the Census Bureau. Over 90% of our net sales are derived from the infrastructure and non-residential construction segments, according to an independent study conducted by Investor Group Services in the fall of 1999 at the request of Odyssey. Furthermore, over two-thirds of our net sales are generated in the infrastructure and institutional construction segments, which have exhibited steady and consistent growth over the past 28 years. The infrastructure and non-residential construction segments are less cyclical than overall construction and single family residential construction, a segment to which we have limited exposure. 52
U.S. CONSTRUCTION DAYTON SUPERIOR'S 1999 TOTAL PUT-IN-PLACE SPENDING PRIMARY MARKETS - --------------------------------------------- --------------------------------------------- Pie chart entitled "Dayton Superior's primary markets." The chart describes Dayton Pie chart entitled "U.S. Construction: 1999 Superior's primary markets as 35% total put-in-place spending." The chart infrastructure, 33% institutional, 24% describes spending as 46% residential, 21% commercial and 8% residential. Source: commercial, 18% infrastructure and 15% Investor Group Services estimates (based on institutional. Source: Census Bureau. Dayton Superior's net sales).
INFRASTRUCTURE This segment of the construction industry is comprised of construction of highways, bridges, utilities, water and waste treatment facilities and airport runways. An estimated 35% of our net sales come from this segment. According to Census Bureau statistics, the value put-in-place of infrastructure projects has increased in 26 of the past 28 years, with a compounded annual growth rate of 5.2%. Compared to other segments of the construction industry, infrastructure construction is less dependent on general economic conditions, as funding for infrastructure projects often comes from federal, state and local taxes. In certain instances, infrastructure spending has increased notwithstanding a soft economy, as local, state and federal governments attempted to offset recessionary trends. The 53 following illustrates the consistent growth in the value of infrastructure construction put-in-place over the past three decades: INFRASTRUCTURE (VALUE PUT-IN-PLACE)
INFRASTRUCTURE VALUE PUT-IN-PLACE DATES $ IN BILLIONS - --------------------- ------------------ 1/1/72 34.72 1/1/73 38.18 01/01/1974* 44.44 01/01/1975* 50.04 01/01/1976* 54.18 1/1/77 55.53 1/1/78 64.21 1/1/79 73.02 1/1/80 80.98 01/01/1981* 84.36 01/01/1982* 80.56 01/01/1983* 76.87 1/1/84 82.99 1/1/85 87.86 1/1/86 91.31 1/1/87 91.2 1/1/88 91.31 1/1/89 95.09 01/01/1990* 98.66 01/01/1991* 102.09 01/01/1992* 108.86 1/1/93 108.5 1/1/94 110.56 1/1/95 113.79 1/1/96 116.34 1/1/97 120.86 1/1/98 122.99 1/1/99 130.13
* Recessionary Periods Source: Census Bureau 54 The June 1998 enactment of TEA-21 will continue to have a significant positive impact on infrastructure spending. TEA-21 authorizes $218 billion in federal spending on highway and infrastructure projects through the year 2004 and represents a 44% increase over the 1991 Intermodal Surface Transportation Efficiency Act, the previous six-year federal program (which was funded at a higher level than its predecessor program). At a minimum, $162 billion of the $218 billion has been allocated to highway and bridge programs. Unlike its predecessor program, funds under TEA-21 are mandated and not subject to the annual appropriations process. Due primarily to the lag in the appropriation of funds and the lead time in large new construction projects, the impact of TEA-21 only started to materialize during the second half of 1999. Infrastructure spending will also benefit from AIR-21, which was recently enacted into law. Guaranteed grants for airport construction and improvements would total at least $3.2 billion in fiscal 2001 (a 64% increase over 2000 appropriations), $3.3 billion in 2002 and $3.4 billion in 2003. AIR-21 will specifically benefit concrete construction as all major airport runways are constructed primarily with concrete. NON-RESIDENTIAL NON-RESIDENTIAL/INSTITUTIONAL. This construction segment includes institutional buildings such as schools, government buildings and hospitals. An estimated 33% of our net sales come from this segment. According to Census Bureau statistics, the value put-in-place of institutional related buildings has increased in 27 of the past 28 years, with a compounded annual growth rate of 7.1%. The institutional construction segment is less cyclical than other non-residential building because the funding sources for institutional projects are somewhat independent of the general economy and interest rates. 55 INSTITUTIONAL (VALUE PUT-IN-PLACE)
INSTITUTIONAL VALUE PUT-IN-PLACE DATES $ IN BILLIONS - --------------------- ------------------ 1/1/72 18.16 1/1/73 19.78 01/01/1974* 21.51 01/01/1975* 22.49 01/01/1976* 22.9 1/1/77 21.88 1/1/78 23.99 1/1/79 26.3 1/1/80 30.6 01/01/1981* 32.31 01/01/1982* 33.94 01/01/1983* 36.12 1/1/84 38.99 1/1/85 42.59 1/1/86 46.4 1/1/87 51.14 1/1/88 56.34 1/1/89 60.25 01/01/1990* 67.71 01/01/1991* 70.3 01/01/1992* 73.39 1/1/93 74.67 1/1/94 76.35 1/1/95 84.71 1/1/96 90.68 1/1/97 100.65 1/1/98 105.48 1/1/99 109.1
* Recessionary Periods Source: Census Bureau 56 We anticipate that the institutional construction segment will benefit from continuing growth in new school construction. According to Census Bureau statistics, school enrollment in 1999 increased to a record number for the fourth consecutive year. Educational construction has been driven by the echo demand from the children of the "baby-boomer" generation passing through school age years. According to Census Bureau statistics, the population of school age children between the ages of 5 and 19 will continue to increase through 2009. The historical growth in educational related construction, as demonstrated below, remains strong. EDUCATIONAL (VALUE PUT-IN-PLACE)
EDUCATIONAL VALUE PUT-IN-PLACE DATES $ IN BILLIONS - --------------------- ------------------ 1/1/80 9.71 01/01/1981* 10.35 01/01/1982* 9.02 01/01/1983* 9.79 1/1/84 9.69 1/1/85 10.25 1/1/86 11.77 1/1/87 14.54 1/1/88 15.19 1/1/89 17.65 01/01/1990* 20.75 01/01/1991* 21.81 01/01/1992* 25.46 1/1/93 23.18 1/1/94 23.11 1/1/95 28.72 1/1/96 33.88 1/1/97 35.45 1/1/98 39.28 1/1/99 39.98 1/1/00 49.02
* Recessionary Periods Source: Census Bureau NON-RESIDENTIAL/COMMERCIAL. Commercial buildings include retail sites, commercial offices, hotels and manufacturing facilities. An estimated 24% of our net sales come from this segment. According to Census Bureau statistics, the value put-in-place of commercial buildings has increased in 21 out of 28 years since 1972, at a compounded annual growth rate of 7.4%. 57 COMMERCIAL (VALUE PUT-IN-PLACE)
COMMERCIAL VALUE PUT-IN-PLACE DATES $ IN BILLIONS - --------------------- ------------------ 1/1/72 25.49 1/1/73 30.66 01/01/1974* 33.11 01/01/1975* 28.97 01/01/1976* 27.49 1/1/77 30.79 1/1/78 40.58 1/1/79 55.73 1/1/80 62.28 01/01/1981* 73.97 01/01/1982* 80.06 01/01/1983* 72.93 1/1/84 92.03 1/1/85 112.16 1/1/86 105.37 1/1/87 104.24 1/1/88 109.41 1/1/89 118.01 01/01/1990* 119.7 01/01/1991* 94.2 01/01/1992* 81.95 1/1/93 84.36 1/1/94 93.01 1/1/95 107.91 1/1/96 119.32 1/1/97 130.46 1/1/98 142.42 1/1/99 145.28
* Recessionary Periods Source: Census Bureau 58 The commercial construction segment, which has historically been the most cyclical component of the non-residential construction segment, stands to benefit from low commercial vacancy rates and greater market discipline in the supply of new construction. F.W. Dodge reported 1999 commercial office vacancy rates below 11%, the lowest level in over 15 years, and well below historically high levels that ranged from 18% to 20% from 1987 to 1993. 59 VACANCY RATES
VACANCY RATES % ------------------------------- DATES WAREHOUSE OFFICE RETAIL - --------------------- --------- -------- -------- 1/1/85 10.71 15.25 6.48 4/1/85 10.81 15.48 6.68 7/1/85 11.01 15.87 6.75 10/1/85 11.27 16.59 6.86 1/1/86 11.59 17.16 6.97 4/1/86 11.84 17.76 7.4 7/1/86 12.07 18.35 7.79 10/1/86 12.29 18.63 7.71 1/1/87 12.5 18.76 7.99 4/1/87 12.73 18.83 8 7/1/87 12.84 18.68 7.96 10/1/87 12.8 19.33 8.01 1/1/88 12.74 19.12 8.43 4/1/88 12.77 18.72 8.38 7/1/88 12.58 18.78 8.55 10/1/88 12.54 18.77 8.63 1/1/89 12.38 18.75 8.78 4/1/89 12.3 18.66 9.54 7/1/89 12.44 18.63 9.63 10/1/89 12.55 18.77 9.87 1/1/90 12.58 19.1 9.27 4/1/90 12.81 19.23 9.49 7/1/90 12.83 19.28 10.12 10/1/90 12.85 19.59 10.3 1/1/91 13 19.86 10.39 4/1/91 13.17 19.99 10.56 7/1/91 13.3 20.01 10.35 10/1/91 13.49 20.17 10.54 1/1/92 13.86 20.36 10.85 4/1/92 14.1 20.25 10.62 7/1/92 14.18 20 10.5 10/1/92 13.94 19.72 9.89 1/1/93 13.65 19.69 9.52 4/1/93 13.5 19.4 9.07 7/1/93 13.31 18.89 8.83 10/1/93 13.17 18.2 8.88 1/1/94 12.82 17.68 8.8 4/1/94 12.47 17.09 8.4 7/1/94 12.18 16.66 8.15 10/1/94 11.72 16.36 7.63 1/1/95 11.25 16.11 7.51 4/1/95 10.9 15.75 7.56 7/1/95 10.49 15.34 7.56 10/1/95 10.62 14.96 7.39 1/1/96 10.63 14.8 7.39 4/1/96 10.19 14.29 7.48
60
VACANCY RATES % ------------------------------- DATES WAREHOUSE OFFICE RETAIL - --------------------- --------- -------- -------- 7/1/96 10.25 13.81 7.49 10/1/96 9.92 13.22 7.5 1/1/97 9.72 12.95 7.44 4/1/97 9.51 12.57 7.44 7/1/97 9.46 12.15 7.43 10/1/97 9.6 11.49 7.4 1/1/98 9.4 11.52 7.43 4/1/98 8.97 11.11 7.41 7/1/98 8.74 11.09 7.39 10/1/98 8.94 11.03 7.4 1/1/99 8.78 11.43 7.42 4/1/99 8.49 11.3 7.43 7/1/99 8.16 10.95 7.48 10/1/99 8.16 10.78 7.54
* Recessionary Periods Source: F.W. Dodge The speculative supply of new commercial construction and other market factors that magnified the last cyclical slowdown in commercial construction from 1991 to 1992 are significantly less prevalent today. The early '90s was characterized by historically high vacancy rates and an overhang from previous years of speculative commercial construction due in part to tax incentives from The Economic Recovery Tax Act of 1981 which no longer exist, and significant availability of real estate funding from private international investors. Today, more favorable dynamics exist in commercial construction markets due to less speculative construction and the growing significance of public real estate finance vehicles that had a limited presence in prior cycles. According to Census Bureau statistics, calculated on a constant currency basis in 1992 dollars, the annual average value of commercial construction put-in-place has remained below levels reached prior to 1991 and 1992, averaging $82 billion from 1995 to 1999 versus $98 billion from 1985 to 1989. In addition, public funding vehicles such as real estate investment trusts now constitute the majority of commercial real estate financing, which has created broader sources of capital and early, public market signals of changing market conditions. ACQUISITIONS We believe we have been successful in implementing our acquisition strategy, having completed and integrated 13 acquisitions since the beginning of 1994. Although the majority of these acquisitions were small add-on acquisitions, two of them represented large stand-alone acquisitions that provided us with access to new markets: - Our 1995 acquisition of Dur-O-Wal, for which we paid $23.6 million, established us as a leader in the masonry accessories market; and - Our 1997 acquisition of Symons, for which we paid $83.5 million, established us as a leader in the prefabricated concrete forming equipment market. 61 The following table summarizes the acquisitions that we have made since the beginning of 1994 in chronological order:
PURCHASE PRICE YEAR BUSINESS ACQUIRED BUSINESS UNIT (IN MILLIONS) - ---- ----------------------------------- ----------------------------------- -------------- 1994 Alpha Rebar Paving Products $ 0.1 1995 C&B Construction Supplies Concrete Accessories 0.2 1995 Dur-O-Wal Masonry Accessories 23.6 1996 Steel Structures Paving Products 5.6 1997 Ironco Paving Products 1.5 1997 Baron Steel Concrete Accessories 0.3 1997 Symons Corporation: 83.5 Symons Division Concrete Forming Systems Richmond Screw Concrete Accessories Anchor Division 1998 Symons Concrete Forms Concrete Forming Systems 6.7 (formerly known as CAI) 1998 Northwoods Concrete Forming Systems 0.8 1998 Secure Paving Products 0.6 1999 Cempro Concrete Accessories 5.4 1999 Southern Construction Products Masonry Accessories 8.3 Concrete Accessories 2000 Polytite Manufacturing Co. Masonry Accessories 1.5*
- ------------------------ * Subject to working capital adjustment. PRODUCTS Although almost all of our products are used in concrete or masonry construction, the function and nature of the products differ widely. Most of our products are consumable, providing us with a source of recurring revenue. In addition, while our products represent a relatively small portion of a construction project's total cost, our products assist in ensuring the on-time, quality completion of those projects. We continually attempt to increase the number of products we offer by using engineers and product development teams to introduce new products and refine existing products. CONCRETE ACCESSORIES. Our concrete accessories business unit manufactures and sells concrete accessories primarily under the Dayton/Richmond(-Registered Trademark-) brand name. For the twelve-month period ended March 31, 2000, pro forma net sales of our concrete accessories business unit to external customers accounted for $145.1 million, or approximately 43% of our total pro forma net sales. Concrete accessories include: - WALL-FORMING PRODUCTS. Wall-forming products include shaped metal ties and accessories that are used with modular forms to hold concrete in place when walls are poured at a construction site or are prefabricated off site. These products, which generally are not reusable, are made of wire or plastic or a combination of both materials. We generally manufacture these products on customized high-speed automatic equipment. - BRIDGE DECK PRODUCTS. Bridge deck products are metal assemblies of varying designs used to support the formwork used by contractors in the construction and rehabilitation of bridges. - BAR SUPPORTS. Bar supports are non-structural metal or plastic supports used to position rebar within a horizontal slab or form to be filled with concrete. Bar supports are often plastic or epoxy coated, galvanized or equipped with plastic tips to prevent creating a conduit for corrosion of the embedded rebar. - PRECAST AND PRESTRESSED CONCRETE CONSTRUCTION PRODUCTS. Precast and prestressed concrete construction products are metal assemblies of varying designs used in the manufacture of precast 62 concrete panels and prestressed concrete beams and structural members. Precast concrete panels and prestressed concrete beams are fabricated away from the construction site and transported to the site. Precast concrete panels are used in the construction of prisons, freeway sound barrier walls, external building facades and other similar applications. Prestressed concrete beams use multiple strands of steel cable under tension embedded in concrete beams to provide rigidity and bearing strength, and often are used in the construction of bridges, parking garages and other applications where long, unsupported spans are required. - TILT-UP CONSTRUCTION PRODUCTS. Tilt-up construction products include a complete line of inserts, lifting hardware and adjustable beams used in the tilt-up method of construction, in which the concrete floor slab is used as part of a form for casting the walls of a building. After the cast walls have hardened on the floor slab, a crane is used to "tilt-up" the walls, which then are braced in place until they are secured to the rest of the structure. Tilt-up construction generally is considered to be a faster method of constructing low-rise buildings than conventional poured-in-place concrete construction. Some of our tilt-up construction products can be rented as well as sold. - FORMLINER PRODUCTS. Formliner products include plastic and elastomeric products that adhere to the inside face of forms to provide shape to the surface of the concrete. - CHEMICAL PRODUCTS. Chemical products sold by our concrete accessories business unit include a broad spectrum of chemicals for use in concrete construction, including form release agents, bond breakers, curing compounds, liquid hardeners, sealers, water repellents, bonding agents, grouts and epoxies, and other chemicals used in the pouring and placement of concrete. CONCRETE FORMING SYSTEMS. Our concrete forming systems business unit manufactures, sells and rents reusable modular concrete forming systems primarily under the Symons(-Registered Trademark-) name. These products include standard and specialty concrete forming systems, shoring systems and accessory products. To capitalize on the durability and relatively high unit cost of prefabricated forming equipment, we also rent forming products. For the twelve-month period ended March 31, 2000, pro forma net sales of our concrete forming systems business unit to external customers accounted for $119.2 million, or approximately 35% of our total pro forma net sales. Our concrete forming system products include: - CONCRETE FORMING SYSTEMS. Concrete forming systems are reusable, engineered modular forms which hold liquid concrete in place on concrete construction jobs while it hardens. Standard forming systems are made of steel and plywood and are used in the creation of concrete walls and columns. Specialty forming systems consist primarily of steel forms that are designed to meet architects' specific needs for concrete placements. Both standard and specialty forming systems and related accessories are sold and rented for use. - SHORING SYSTEMS. Shoring systems, including aluminum beams and joists, post shores and shoring frames used to support deck and other raised forms while concrete is being poured. - CONSTRUCTION CHEMICALS. Construction chemicals sold by the concrete forming systems business unit include form release agents, sealers, water repellents, grouts and epoxies and other chemicals used in the pouring, stamping and placement of concrete. PAVING PRODUCTS. Our paving products business unit sells products, primarily consisting of welded dowel assemblies and dowel baskets, used in the construction and rehabilitation of concrete roads, highways and airport runways to extend the life of the pavement. This business unit sells paving products primarily under the American Highway Technology-Registered Trademark- name, but we also offer some paving products under the Dayton/Richmond-Registered Trademark- name. We manufacture welded dowel assemblies primarily using automated and semi-automated equipment. For the twelve-month period ended March 31, 2000, pro forma net sales of paving products accounted for $37.1 million, or approximately 11% of our total pro forma net sales. 63 Paving products include: - WELDED DOWEL ASSEMBLIES AND DOWEL BASKETS. Welded dowel assemblies and dowel baskets are used to transfer dynamic loads between two adjacent slabs of concrete roadway. Metal dowels are part of a dowel basket design that is imbedded in two adjacent slabs to transfer the weight of vehicles as they move over a road. - CORROSIVE-PREVENTING EPOXY COATINGS. Corrosive-preventing epoxy coatings are used for infrastructure construction products and a wide range of industrial and construction uses. - CONSTRUCTION CHEMICALS. Construction chemicals sold by our paving products business unit include curing compounds used in concrete road construction. MASONRY PRODUCTS. Our masonry products business unit manufactures and sells masonry products under the Dur-O-Wal(-Registered Trademark-) name. Our masonry product line consists primarily of masonry wall reinforcement products, masonry anchors, engineered products and other accessories used in masonry construction and restoration to reinforce brick and concrete walls, anchor inner to outer walls and provide avenues for water to escape. For the twelve-month period ended March 31, 2000, pro forma net sales of masonry products accounted for approximately $37.0 million, or approximately 11% of our total pro forma net sales. Masonry products are wire products that improve the performance and longevity of masonry walls by providing crack control, greater elasticity and higher strength to withstand seismic shocks and better resistance to rain penetration. We have the in-house ability to produce hot-dipped zinc galvanized finishes on masonry wall reinforcement products. Hot-dipped galvanized finishes are considered to provide superior protection against corrosion compared to alternative finishes. In recent years, model building codes in a number of regions of the country in which masonry construction is used have been amended to require use of hot-dipped galvanized masonry wall reinforcement products. We also sell other masonry products which connect one form of masonry to another or masonry to a building structure. Masonry products are used in the restoration of existing masonry construction, for seismic retrofitting of existing brick veneer surfaces to strengthen the surfaces against earthquake damage and for moisture control applications. MANUFACTURING We manufacture the substantial majority of the products we sell. Most of our concrete accessories, paving products and masonry products are manufactured at eighteen principal facilities in the United States, although a majority of our service/distribution facilities also can produce smaller lots of some products. Our production volumes enable us to design and build or custom modify much of the equipment we use to manufacture these products, using a team of experienced manufacturing engineers and tool and die makers. By developing our own automatic high-speed manufacturing equipment, we believe we generally have achieved significantly greater productivity, lower capital equipment costs, lower scrap rates, higher product quality, faster changeover times, and lower inventory levels than most of our competitors. In addition, our masonry products business unit's ability to "hot-dip" galvanize products provides it with an advantage over many competitors' manufacturing masonry wall reinforcement products, which lack this internal capability. We also have a flexible manufacturing setup and can make the same products at several locations using short and discrete manufacturing processing. We manufacture our concrete forming systems at two facilities in the United States. These facilities incorporate semi-automated and automated production lines, heavy metal presses, forging equipment, stamping equipment, robotic welding machines, drills, punches, and other heavy machinery typical for this type of manufacturing operation. 64 We generally operate our manufacturing facilities two shifts per day, five days per week (six days per week during peak months and, in some instances, three shifts), with the number of employees increasing or decreasing as necessary to satisfy demand on a seasonal basis. DISTRIBUTION We distribute our products through over 3,000 independent distributors and our own network of 62 service/distribution centers located in the United States and Canada. Eighteen of the service/ distribution centers are associated with our manufacturing plants. Of these 62 locations, 24 are dedicated principally to the distribution of concrete accessories, 30 are dedicated principally to the distribution of forming systems, 3 are dedicated primarily to the distribution of paving products, 5 are dedicated principally to the distribution of masonry products and some locations carry more than one of our product lines. We ship most of our products to our service/distribution centers from our manufacturing plants; however, a majority of our centers also are able to produce smaller batches of some products on an as-needed basis to fill rush orders. We have an on-line inventory tracking system for the concrete accessories, paving products and construction chemicals businesses, which enables our customer service representatives to identify, reserve and ship inventory quickly from any of our locations in response to telephone orders. Our system provides us with a competitive advantage since our service representatives are able to answer customer questions about availability and shipping dates while still on the telephone. We primarily use third-party common carriers to ship our products. We also use our distribution system to sell products which are manufactured by others. These products usually are sold under our brand names and often are produced for us on an exclusive basis. Sales of these products allow us to utilize our distribution network to increase sales without making significant capital investments. We believe there is an increasing trend among our distributors to consolidate into larger entities, which could result in increased price competition. See "Risk Factors--Consolidation of our distributors." SALES AND MARKETING We employ approximately 400 sales and marketing personnel, of whom approximately one-half are field sales people and one-half are customer service representatives. Sales and marketing personnel are located in all of our locations. We produce product catalogs and promotional materials that illustrate certain construction techniques in which our products can be used to solve typical construction problems. We promote our products through seminars and other customer education efforts and work directly with architects and engineers to secure the use of our products whenever possible. We consider our engineers to be an integral part of the sales and marketing effort. Our engineers have developed proprietary software applications to conduct extensive pre-testing on both new products and construction projects. CUSTOMERS We have over 6,000 customers, of which over 50% purchase our products for resale. Our customer base is geographically diverse, with no customer accounting for more than 4% of net sales in 1999. Our ten largest customers accounted for less than 15% of our net sales in 1999. CONCRETE ACCESSORIES. Our concrete accessories business unit has approximately 1,800 customers, consisting of distributors, rebar fabricators and precast and prestressed concrete manufacturers. We estimate that 80% of the customers of this business unit purchase our products for resale. The largest customer of this business unit accounted for approximately 3% of its 1999 net sales. The business unit's top ten customers accounted for approximately 20% of its 1999 net sales. 65 Our concrete accessories business unit has instituted a certified dealer program for those dealers who handle our tilt-up construction products. This program was established to educate dealers in the proper use of our tilt-up products and to assist them in providing engineering assistance to their customers. Certified dealers are not permitted to carry other manufacturers' tilt-up products, which we believe are incompatible with ours and, for that reason, could be unsafe if used with our products. The business unit currently has 109 certified tilt-up construction product dealers. CONCRETE FORMING SYSTEMS. Our concrete forming systems business unit has approximately 3,000 customers, consisting of distributors, precast and prestressed concrete manufacturers, general contractors and subcontractors. We estimate that 90% of the customers of this business unit are the end-users of its products, while the remainder of those customers purchase its products for resale or re-rent. This business unit's largest customer accounted for approximately 6% of its 1999 net sales, and its ten largest customers accounted for approximately 25% of its 1999 net sales. PAVING PRODUCTS. Our paving products business unit has approximately 200 customers, consisting primarily of distributors of construction supplies and, to a lesser extent, general contractors and subcontractors. This business unit's largest customer accounted for approximately 16% of the business unit's 1999 net sales and its ten largest customers accounted for approximately 70% of its 1999 net sales. MASONRY PRODUCTS. Our masonry products business unit has approximately 1,750 customers, consisting of distributors, brick and concrete block manufacturers, general contractors and sub-contractors. We estimate that 90% of this business unit's customers purchase its products for resale. This business unit's largest customer accounted for approximately 4% of its 1999 net sales, and its ten largest customers accounted for approximately 20% of its 1999 net sales. RAW MATERIALS Our principal raw materials are steel wire rod, steel hot rolled bar, metal stampings and flat steel, aluminum sheets and extrusions, plywood, cement and cementitious ingredients, liquid chemicals, zinc and injection-molded plastic parts. Steel, in its various forms, constitutes approximately 30-35% of our cost of sales. We currently purchase raw material from over 300 vendors and are not dependent on any single vendor or small group of vendors for any significant portion of our raw material purchases. COMPETITION Our industry is highly competitive in most product categories and geographic regions. We compete with a relatively small number of full-line national manufacturers of concrete accessories, concrete forming systems, masonry products and paving products, and a much larger number of regional manufacturers and manufacturers with limited product lines. We believe competition in our industry is largely based on, among other things, price, quality, breadth of product lines, distribution capabilities (including quick delivery times) and customer service. Due primarily to factors such as freight rates, quick delivery times and customer preference for local suppliers, some local or regional manufacturers and suppliers may have a competitive advantage over us in a given region. We believe the size, breadth and quality of our product lines provide us with advantages of scale in both distribution and production relative to our competitors. TRADEMARKS AND PATENTS We sell most products under the registered trade names Dayton Superior(-Registered Trademark-), Dayton/Richmond(-Registered Trademark-), Symons(-Registered Trademark-), Dur-O-Wal(-Registered Trademark-) and American Highway Technology(-Registered Trademark-), which we believe are widely recognized in the construction industry and, therefore, are important to our business. Although some of our products (and components of some products) are protected by patents, we do not believe these patents are material to our business. We have approximately 120 trademarks and 90 patents. 66 EMPLOYEES As of December 31, 1999, we employed 845 salaried and 1,456 hourly personnel, of whom 986 of the hourly personnel and six of the salaried personnel are represented by labor unions. Employees at our Miamisburg, Ohio; Parsons, Kansas; Des Plaines, Illinois; New Braunfels, Texas; Tremont, Pennsylvania; St. Joseph, Missouri; Aurora, Illinois and Kankakee, Illinois manufacturing/distribution plants and our service/distribution centers in Baltimore, Maryland; Atlanta, Georgia and Santa Fe Springs, California are covered by collective bargaining agreements. We believe we have good employee and labor relations. See "Risk Factors--Risks associated with our workforce." SEASONALITY Our operations are seasonal in nature, with approximately 55% to 60% of our sales historically occurring in the second and third quarters. Working capital and borrowings fluctuate with sales volume. Historically, more than 50% of our cash flow from operations is generated in the fourth quarter. BACKLOG We typically ship most of our products, other than paving products and some specialty forming systems, within one week and often within 24 hours after we receive the order. Other product lines, including paving products and specialty forming systems, may be shipped up to six months after we receive the order, depending on our customer's needs. Accordingly, we do not maintain significant backlog, and backlog as of any particular date is not representative of our actual sales for any succeeding period. PRINCIPAL PROPERTIES Our corporate headquarters are located in leased facilities in Dayton, Ohio. We believe our facilities provide adequate manufacturing and distribution capacity for our needs. We also believe all of the leases were entered into on market terms. Our other principal facilities are located throughout North America as follows:
LEASED/ SIZE LOCATION USE PRINCIPAL BUSINESS UNIT OWNED (SQ. FT.) - ----------------------- ----------------------- ----------------------- -------- --------- Des Plaines, Illinois Manufacturing/ Concrete Forming Owned 171,650 Distribution Systems and Symons Headquarters Miamisburg, Ohio Manufacturing/ Concrete Accessories Owned 126,000 Distribution and Dayton/Richmond Headquarters Aurora, Illinois Manufacturing/ Masonry Products Owned 109,000 Distribution and Dur-O-Wal Headquarters Kankakee, Illinois Manufacturing/ Paving Products Leased 107,900 Distribution and American Highway Technology Headquarters Tremont, Pennsylvania Manufacturing/ Concrete Accessories Owned 102,650 Distribution Parsons, Kansas Manufacturing/ Paving Products Owned 98,250 Distribution New Braunfels, Texas Manufacturing/ Concrete Forming Owned 89,600 Distribution Systems Parker, Arizona Manufacturing/ Concrete Accessories Leased 60,000 Distribution
67
LEASED/ SIZE LOCATION USE PRINCIPAL BUSINESS UNIT OWNED (SQ. FT.) - ----------------------- ----------------------- ----------------------- -------- --------- Birmingham, Alabama Service/Distribution Concrete Accessories Leased 55,000 Centralia, Illinois Service/Distribution Concrete Accessories Owned 53,500 St. Joseph, Missouri Manufacturing/ Concrete Accessories Owned 53,342 Distribution Atlanta, Georgia Service/Distribution Concrete Accessories Leased 49,392 Grand Prairie, Texas Service/Distribution Concrete Accessories Leased 45,000 Seattle, Washington Service/Distribution Concrete Accessories Leased 42,825 Santa Fe Springs, Service/Distribution Concrete Accessories Leased 40,000 California Toronto, Ontario Service/Distribution Concrete Accessories Leased 40,000 Oregon, Illinois Service/Distribution Concrete Accessories Owned 39,000 Helena, Alabama Manufacturing/ Paving Products Leased 32,000 Distribution Folcroft, Pennsylvania Service/Distribution Concrete Accessories Owned 32,000 Baltimore, Maryland Service/Distribution Masonry Products Owned 30,000
LEGAL PROCEEDINGS Our Symons business unit currently is a defendant involved in a civil suit brought in 1996 in the United States District Court for the Southern District of Iowa (Case No. 4-96-CV-80552) by EFCO Corp., a competitor of Symons in one portion of its business. EFCO alleged that Symons engaged in false advertising, misappropriation of trade secrets, intentional interference with contractual relations, and certain other activities. After a jury trial, preliminary damages of approximately $14 million were awarded against Symons in January 1999. In a ruling on post-trial motions in April 1999, the district court judge dismissed EFCO's claim of intentional interference with contractual relations but increased the damages awarded to EFCO by $0.1 million. Briefs were filed and oral arguments were heard before the United States Court of Appeals for the Eighth Circuit on March 13, 2000. We are awaiting the appellate decision. We believe Symons has grounds for a successful appeal and we remain committed to vigorously pursuing our appellate rights. A successful appeal could overturn the judgment against Symons or result in a new trial. Symons' liability, if any, cannot finally be determined until all rights of the parties have been exhausted or have expired by lapse of time. We consider the outcome of this litigation to be not estimable and, accordingly, we have not recorded any liability for the resolution of this suit. In the event Symons is unsuccessful in its appeal, we could be required to pay the full amount of the judgment plus interest or a potentially higher amount. An unsuccessful decision or appeal could have a material adverse effect on our business, financial condition and results of operations. We and all of our directors were defendants in a purported shareholder class action lawsuit brought in January 2000 in the Court of Common Pleas for Montgomery County in Dayton, Ohio. The lawsuit was filed to enjoin the closing of our recapitalization. We filed a motion to dismiss the complaint, which was granted by the court on May 19, 2000. The plaintiff has the right to appeal the judgment or file another lawsuit. As of the date of this prospectus, no appeal or other lawsuit has been filed. During the ordinary course of our business, we are from time to time threatened with, or may become a party to, legal actions and other proceedings. While we are currently involved in certain other legal proceedings, we believe the results of these proceedings will not have a material effect on our business, financial condition or results of operations, in part due to certain indemnification arrangements. We believe that our potential exposure to such legal actions is adequately covered by product and general liability insurance. 68 ENVIRONMENTAL MATTERS Our businesses are subject to regulation under various and changing federal, state and local laws and regulations relating to the environment and to employee safety and health. These environmental laws and regulations govern the generation, storage, transportation, disposal and emission of various substances. Permits are required for operation of our businesses (particularly air emission permits), and these permits are subject to renewal, modification and, in certain circumstances, revocation. We believe we are in compliance with these laws and permitting requirements. Our businesses also are subject to regulation under various and changing federal, state and local laws and regulations which allow regulatory authorities to compel (or seek reimbursement for) cleanup of environmental contamination at sites now or formerly owned or operated by our businesses and at facilities where their waste is or has been disposed. We expect to incur ongoing capital and operating costs to maintain compliance with currently applicable environmental laws and regulations; however, we do not expect those costs, in the aggregate, to be material. See "Risk Factors--Potential exposure to environmental liabilities." 69 MANAGEMENT DIRECTORS AND EXECUTIVE OFFICERS The following table sets forth the name, age and position of each person who is, following the consummation of the recapitalization, an executive officer or director of Dayton Superior.
NAME AGE POSITION - --------------------------------------- ----------- ----------------------------------------------------- John A. Ciccarelli..................... 60 Chairman of the Board, President and Chief Executive Officer Raymond E. Bartholomae................. 53 Vice President and General Manager, Symons Michael C. Deis, Sr.................... 49 Vice President and General Manager, Dayton/Richmond James W. Fennessy...................... 56 Vice President and General Manager, Dayton Superior Canada Ltd. Mark K. Kaler.......................... 42 Vice President and General Manager, American Highway Technology Alan F. McIlroy........................ 49 Vice President and Chief Financial Officer William C. Mongole..................... 50 Vice President and General Manager, Dur-O-Wal John R. Paine, Jr...................... 57 Vice President, Sales and Marketing, Dayton/Richmond Thomas W. Roehrig...................... 34 Corporate Controller John M. Rutherford..................... 40 Treasurer and Assistant Secretary James C. Stewart....................... 52 Vice President, Corporate Development Jaime Taronji, Jr...................... 55 Vice President, General Counsel and Secretary Stephen Berger......................... 60 Director Joshua C. Cascade...................... 27 Director William F. Hopkins..................... 36 Director Douglas Rotatori....................... 39 Director
JOHN A. CICCARELLI has been President since 1989 and has been Chief Executive Officer and a director since 1994. After the consummation of the recapitalization, Mr. Ciccarelli will also become Chairman of our Board of Directors. RAYMOND E. BARTHOLOMAE has been Vice President and General Manager, Symons, since February 1998, and was Executive Vice President and General Manager of Symons from 1986 to February 1998. MICHAEL C. DEIS, SR. has been Vice President and General Manager, Dayton/Richmond since February 1998. From 1987 to February 1998, Mr. Deis was Vice President, Eastern Division of Dayton/ Richmond (formerly, Concrete Accessories). JAMES W. FENNESSY has been Vice President and General Manager, Dayton Superior Canada, Ltd. since 1988. MARK K. KALER has been Vice President and General Manager, American Highway Technology since April 1996. From 1990 to April 1996, Mr. Kaler was Vice President, Engineering and Product Manager, Paving Division. ALAN F. MCILROY has been Vice President and Chief Financial Officer since July 1997. From January 1994 until July 1997, Mr. McIlroy was President of The Greenock Group, a private operational investment company. WILLIAM C. MONGOLE has been Vice President and General Manager, Dur-O-Wal since May 1999. From 1987 until May 1999, he was a Vice President of our Dur-O-Wal business unit. JOHN R. PAINE, JR. has been Vice President, Sales and Marketing of Dayton/Richmond (formerly, Concrete Accessories) since 1984. 65 THOMAS W. ROEHRIG has been Corporate Controller since April 1998. From 1987 until March 1998, Mr. Roehrig was employed by Arthur Andersen LLP, an international public accounting firm, most recently as a Manager in the Assurance and Business Advisory division. JOHN M. RUTHERFORD has been Treasurer and Assistant Secretary since February 1998. From January 1993 until January 1998, Mr. Rutherford was Director of Treasury and Risk Management for Gibson Greetings, Inc., a greeting card manufacturer. JAMES C. STEWART has been Vice President, Corporate Development since February 1998. From 1984 to February 1998, Mr. Stewart was Vice President, Western Division of Dayton/Richmond (formerly Concrete Accessories). JAIME TARONJI, JR. joined us in August 1999 and was elected Vice President, General Counsel and Secretary in October 1999. From 1996 to 1999, Mr. Taronji was Law Vice President of NCR Corporation. From 1988 to 1995, Mr. Taronji was Vice President, General Counsel and Assistant Secretary of Packaging Corporation of America, a subsidiary of Tenneco, Inc. STEPHEN BERGER is currently chairman of Odyssey Investment Partners, LLC. Prior to joining Odyssey Investment Partners, LLC, Mr. Berger was a general partner of Odyssey Partners, LP. From 1990 to 1993, Mr. Berger served as Chairman and CEO of FGIC, a wholly-owned subsidiary of GE Capital Corp. and subsequently became Executive Vice President of GE Capital Corp. Mr. Berger presently serves as a member of the Board of Trustees of Brandeis University and is a director of TransDigm Inc. and TransDigm Holding Co. JOSHUA C. CASCADE has been an associate of Odyssey Investment Partners, LLC since 1998. From 1994 to 1998, Mr. Cascade was employed by The Blackstone Group, LP, most recently as an associate in the restructuring and reorganization group. WILLIAM F. HOPKINS has been a member and Managing Principal of Odyssey Investment Partners, LLC since 1997. From 1994 to 1996, Mr. Hopkins was a principal in the private equity investing group of Odyssey Partners, LP. Prior to joining Odyssey, Mr. Hopkins was a member of the merchant banking group of GE Capital Corp. Mr. Hopkins is a director of TransDigm Inc. and TransDigm Holding Co. DOUGLAS ROTATORI has been a principal of Odyssey Investment Partners, LLC since 1998. From 1995 to 1998, Mr. Rotatori was a principal with Wellspring Capital Management, LLC. From 1987 to 1995, Mr. Rotatori was in the Investment Banking Department of Bear, Stearns & Co. Inc. We will have five directors immediately following the recapitalization. Each director is elected to serve until the next annual meeting of shareholders or until a successor is elected. Our executive officers are elected by the directors to serve at the pleasure of the directors. There are no family relationships between any of our directors or executive officers. BOARD COMMITTEES Our Board of Directors has three committees: An Executive Committee, which may exercise any of the Board's authority between meetings of the Board. An Audit Committee, which: - recommends the engagement of the independent public accountants; - reviews the professional services provided by, and the fees charged by, the independent public accountants; - reviews the scope of the internal and external audit; and - reviews the financial statements and matters relating to the audit. 66 A Compensation and Benefits Committee, which is responsible for assuring that officers and other key management are effectively compensated and that compensation is internally equitable and externally competitive. We do not have a Nominating Committee. EXECUTIVE COMPENSATION The following table summarizes the 1999, 1998 and 1997 compensation of our chief executive officer and each of our four other most highly compensated executive officers who was serving as an executive officer on December 31, 1999: SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION ----------------------- ANNUAL COMPENSATION AWARDS PAYOUTS ------------------------------------------------- ---------- ---------- SHARES LONG TERM ALL OTHER OTHER ANNUAL UNDERLYING INCENTIVE COMPENSATION NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) COMPENSATION($) OPTIONS(#) PAYOUTS($) ($)(1) - ------------------------------ -------- --------- -------- --------------- ---------- ---------- ------------ John A. Ciccarelli............ 1999 $310,961 $315,000 $ 0 15,000(2) $0 $12,800 President and Chief 1998 293,077 275,000 0 15,000(2) 0 12,800 Executive Officer 1997 227,692 160,000 0 0 0 3,000 Alan F. McIlroy............... 1999 $197,423 $150,000 $10,000(4) 8,000(2) $0 $10,400 Vice President and 1998 191,154 148,000 16,202(4) 6,000(2) 0 10,400 Chief Financial Officer(3) 1997 65,856 37,000 39,617(4) 25,000(5) 0 0 Raymond E. Bartholomae........ $ 0 Vice President and 0 General Manager, Symons(6) 1999 $185,000 $120,000 6,000(2) $0 $10,400 1998 173,000 126,000 6,000(2) 0 9,515 Michael C. Deis, Sr........... 1999 $151,500 $120,000 $ 0 8,000(2) $0 $10,400 Vice President and 1998 146,154 129,000 0 6,000(2) 0 10,400 General Manager, 1997 105,231 60,000 0 0 0 3,166 Dayton/Richmond James C. Stewart.............. 1999 $151,500 $101,787 $ 0 7,000(2) $0 $10,400 Vice President, 1998 146,231 110,000 0 6,000(2) 0 10,400 Corporate Development 1997 107,538 60,000 1,600(4) 0 0 3,166
- -------------------------- (1) For 1999 and 1998, consists of (a) our retirement account contributions to our Savings Plan in the amount of $9,600 for Mr. Ciccarelli and $7,200 for each of the other named executive officers and (b) our matching Section401(k) contributions to the Savings Plan in the amount of $3,200 and $2,315, respectively, for Mr. Bartholomae and $3,200 in both years for each of the other named executive officers. For 1997, consists only of Company matching Section401(k) contributions to the Savings Plan. (2) Options to purchase common shares were granted under our stock option plan at an exercise price of $19.44 per share (in the case of options granted in 1999), and $16.81 per share (in the case of options granted in 1998), the average of the high and low prices on the date of the grant. The options have a term of ten years and become exercisable in three equal annual installments, commencing on the first anniversary of the date of grant; however, the options became fully exercisable upon completion of our recapitalization merger with Stone Acquisition Corp. (3) Mr. McIlroy was elected an executive officer on July 17, 1997. (4) Relocation expense paid by us. (5) Options to purchase 25,000 Common Shares were granted to Mr. McIlroy in July 1997 under our 1996 Stock Option Plan in connection with Mr. McIlroy's employment by us. The options have an exercise price of $12.5625 per share, the average of the high and low prices on the date of the grant, and a term of ten years. 67 The options were exercisable on the date of grant with respect to 12,500 shares and become exercisable with respect to an additional 6,250 shares on the first and second anniversaries of the date of grant. (6) Mr. Bartholomae was elected an executive officer on February 26, 1998 following the acquisition of Symons Corporation by us in September 1997. EMPLOYMENT AGREEMENTS We entered into employment agreements with each of the executive officers named in the Summary Compensation Table which became effective upon the consummation of the recapitalization. Generally, each employment agreement provides: - The initial term of employment is three years and automatically will be extended for additional one-year periods unless either we or the executive notifies the other of termination no later than 90 days before the end of a term. - The annual base salary, which may be increased by our Board of Directors in its discretion, is as follows: John A. Ciccarelli.......................................... $350,000 Alan F. McIlroy............................................. 225,000 Raymond E. Bartholomae...................................... 197,000 Michael C. Deis, Sr......................................... 190,000 James C. Stewart............................................ 175,000
- Each executive officer is entitled to participate in our executive annual bonus plan and in our various other employee benefit plans and arrangements which are applicable to senior officers and which, during the first 12 months after the recapitalization, must provide benefits substantially equivalent to those being provided at the time of the recapitalization, other than stock options. - If an executive officer is terminated without cause, is entitled to receive a pro rata share of his bonus for the year of termination, to continue to receive his annual base salary for 24 months and to continue coverage under our medical and dental programs for one year on the same basis as he was entitled to participate prior to his termination. - Each executive officer is prohibited from competing with us during the term of his employment and for two years following termination of his employment. Mr. Ciccarelli's employment agreement differs from the other agreements described above in the following respects: - He serves as Chairman of the Board as well as in his current offices of President and Chief Executive Officer. - At the end of the initial three-year term, his employment automatically will be extended for a period of two years unless we or he notifies the other of the termination no later than 60 days before the end of the initial term. - We and he may agree prior to the end of the initial term that, effective at the end of the initial term, he will retire as President and Chief Executive Officer but will continue as non-executive Chairman of the Board with compensation commensurate with his duties and responsibilities. - He is entitled to receive an annual car allowance, payment of annual membership fees for membership in two country, alumni, or social clubs of his choice and payment for reasonable expenses incurred by him for professional assistance with taxes and financial management, consistent with our current practices. - If he elects in the future to purchase common shares pursuant to the exercise of pre-emptive rights, we or one of our affiliates will lend him up to $500,000 to pay for the shares. The loan 68 will be secured by the shares purchased and will be on a recourse basis with interest at the applicable federal rate, although payment of the interest will be deferred until the shares are sold. - If he remains employed by us for the full initial three year term of his employment agreement, he may during the following two years require us to purchase some of his common shares at their fair market value if our EBITDA reaches specified levels and he satisfies other conditions. In addition, if he exercises this put right and notifies us that he intends to exercise stock options, we or an affiliate will lend him the amount of the exercise price plus the amount of his income tax liability. This loan generally would be on the same terms as the loan to purchase shares described above. MANAGEMENT STOCKHOLDERS' AGREEMENT In connection with the consummation of the recapitalization, we along with Odyssey and our employee stockholders, including the officers named in the Summary Compensation Table (the "Management Stockholders"), entered into a Management Stockholders' Agreement (the "Management Stockholders' Agreement") which governs the shares of our common stock, options to purchase our common stock and shares acquired upon exercise of options. See "--Stock Option Plan." The Management Stockholders' Agreement generally provides that except for certain transfers to family members and family trusts, no Management Stockholder may transfer common stock except in accordance with the Management Stockholders' Agreement. The Management Stockholders' Agreement generally also provides that upon termination of the employment of a Management Stockholder, such Management Stockholder will have certain put rights and we will have certain call rights regarding his or her common stock. If the provisions of any law, the terms of credit and financing arrangements or our financial circumstances would prevent us from making a repurchase of shares pursuant to the Management Stockholders' Agreement, we will not make such purchase until all such prohibitions lapse, and will then also pay the Management Stockholder a specified rate of interest on the repurchase price. The Management Stockholders' Agreement further provides that in the event of certain transfers of common stock by Odyssey, the Management Stockholders may participate in such transfers and/or Odyssey may require the Management Stockholders to transfer their shares in such transactions, in each case on a pro rata basis. Certain Management Stockholders are entitled to participate on a pro rata basis with, and on the same terms as, Odyssey in any future offering of common stock. SEVERANCE AGREEMENTS We entered into severance agreements with 29 of our executives, not including the nine executive officers with whom we signed employment agreements, to be effective upon completion of the recapitalization. Generally, the severance agreements provide that if we experience a change of control, which includes the recapitalization, prior to January 19, 2001 and the executive's employment is terminated under the circumstances described in the agreements within two years after the change of control, the executive will be entitled to receive various benefits, including the following: - a cash payment equal to 50% of the executive's then current base salary; - the executive's full prior year bonus, if not already paid, and a pro-rated portion of the executive's targeted bonus for the year in which the termination occurs; - continuation of basic medical, dental, life and disability insurance for six months; and - reimbursement of legal fees and expenses reasonably incurred by the executive in good faith as a result of the termination of employment. 69 As a condition to entering into a severance agreement, the executive was required to agree not to compete with us or solicit any of our employees during the 12-month period following a termination of the executive's employment, if it occurs within the period during which benefits are payable under the severance agreements. We did not terminate the employment of any of these executives in connection with the recapitalization. STOCK OPTION PLAN Upon consummation of the recapitalization, we adopted the 2000 Stock Option Plan of Dayton Superior Corporation. The stock option plan permits the grant of non-qualified stock options and incentive stock options to purchase common shares covering 421,324 authorized but unissued or reacquired common shares and 97,930 of "rollover options," subject to adjustment to reflect events such as stock dividends, stock splits, recapitalizations, mergers or reorganizations of the company. The stock option plan in part constitutes the amendment and merger into one plan of the four option plans that were in place prior to the recap, and governs options that remain outstanding following the recapitalization, as well as new option grants. Options to purchase 97,930 common shares remain outstanding following the recapitalization. These "rollover options" were fully vested upon the recapitalization. The exercise prices of the rollover options range from $1.96 to $19.44. Shortly after the recapitalization, we expect to grant options to purchase common shares to certain management employees, including the executives named in the Management table. The terms of these new option grants will generally be as follows: the options will be designated as "incentive stock options" as that term is used under the Internal Revenue Code of 1986, as amended; the exercise price will be $27.00 per share; 5% of each optionee's new options will be vested when granted. Subject to the optionee's continued employment with us, an additional 5% will vest on each of the second, third, fourth and fifth anniversaries of the date of consummation of the recapitalization. The remaining 75% of each optionee's new options will be eligible to vest in installments over five years based on our actual performance. In addition, these options may be subject to accelerated vesting upon certain change in control events based on Odyssey's return on investment. 70 PRINCIPAL SHAREHOLDERS The following table sets forth certain information regarding the beneficial ownership of our common shares immediately following the recapitalization, before giving effect to the exercise of the warrants that were included in the units offering of June 16, 2000, with respect to each person who is a beneficial owner of more than 5.0% of our outstanding common shares and beneficial ownership of our common shares by each director and executive officer named in the Summary Compensation Table and all directors and executive officers as a group: Except as otherwise indicated below, each of the following persons can be reached care of Dayton Superior Corporation, 7777 Washington Village Drive, Suite 130, Dayton, Ohio 45459.
NUMBER OF COMMON SHARES BENEFICIALLY % OF COMMON NAME OF BENEFICIAL OWNER: OWNED(1) SHARES(1) - ------------------------- ------------------- ----------- Raymond E. Bartholomae(2)...................... 23,185 * Stephen Berger(3).............................. 3,472,761 94.0 Joshua C. Cascade(3)........................... 3,472,761 94.0 John A. Ciccarelli............................. 37,038 1.0 Michael C. Deis, Sr.(4)........................ 31,818 * William F. Hopkins(3).......................... 3,472,761 94.0 Alan F. McIlroy(5)............................. 35,860 1.0 Odyssey (as defined in footnote 3)............. 3,472,761 94.0 Douglas Rotatori(3)............................ 3,472,761 94.0 James C. Stewart(6)............................ 30,818 * All executive officers and directors as a group (16 persons)(7).............................. 3,736,283 99.6
- ------------------------ * Signifies less than 1%. (1) Beneficial ownership as reported above has been determined in accordance with Rule 13d-3 under the Securities Exchange Act of 1934, as amended and generally includes sole or shared voting or investment power with respect to the shares. Includes the number of common shares subject to all outstanding options, including those that will become exercisable as a result of the recapitalization and those that are cashed out in the recapitalization. The percentages of our outstanding common shares are based on 3,693,990 shares outstanding, except for certain parties who hold options that are exercisable into common shares within 60 days. The percentages for those parties who hold options that are exercisable within 60 days are based on the sum of 3,693,990 shares outstanding plus the number of common shares subject to options exercisable within 60 days held by them and no other person, as indicated in the following notes. The number of common shares beneficially owned has been determined by assuming the exercise of options exercisable into common shares within 60 days. Unless otherwise indicated, voting and investment power are exercised solely by each individual and/or a member of his household. (2) Includes 3,205 common shares issuable upon exercise of options exercisable within 60 days. (3) Consists of 3,472,761 common shares owned in the aggregate by Odyssey Investment Partners Fund, LP (the "Fund"), certain of its affiliates and certain co-investors (together with the Fund, "Odyssey"). Odyssey Capital Partners, LLC is the general partner of the Fund. Odyssey Investment Partners, LLC is the manager of the Fund. The principal business address for Odyssey is 280 Park Avenue, West Tower, 38th Floor, New York, New York 10017. Messrs. Berger and Hopkins are managing members of Odyssey Capital Partners, LLC and Odyssey Investment Partners, LLC and, therefore, may each be deemed to share voting and investment power with respect to the shares 71 deemed to be beneficially owned by Odyssey. Mr. Rotatori is a member and Mr. Cascade is an associate of Odyssey Investment Partners, LLC. Each of Messrs. Berger, Cascade, Hopkins and Rotatori disclaim beneficial ownership of these shares. (4) Includes 10,556 common shares issuable upon exercise of options exercisable within 60 days. (5) Includes 18,929 common shares issuable upon exercise of options exercisable within 60 days. (6) Includes 9,695 common shares issuable upon exercise of options exercisable within 60 days. (7) As described in note 3, Messrs. Berger and Hopkins may each be deemed to share voting and investment power with respect to the shares deemed to be beneficially owned by Odyssey and Messrs. Berger, Cascade, Hopkins and Rotatori disclaim beneficial ownership of the shares deemed to be owned by Odyssey. Excluding the shares deemed to be owned by Odyssey, all executive officers and directors as a group beneficially own 263,522 common shares. 72 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS EMPLOYMENT AND ROLLOVER AGREEMENTS In connection with the recapitalization, we entered into employment and other "rollover" agreements with John A. Ciccarelli, Raymond E. Bartholomae, Michael C. Deis, Sr., James W. Fennessy, Mark K. Kaler, Alan F. McIlroy, William C. Mongole, James C. Stewart, and Jaime Taronji, Jr., each of whom is an executive officer. These agreements became effective upon consumation of the recapitalization. Generally, the "rollover" agreements require each executive officer to retain common shares and, in most cases, stock options, with a specified aggregate value following the recapitalization. In some cases, the executive officer agreed to exercise stock options in order to obtain some of the common shares which he agreed to retain following the recapitalization. These agreements provided that: - The executive officer was required to vote his common shares in favor of the recapitalization. - Stock options which were not exercised or retained by the executive following the recapitalization were to be cancelled at the time of the recapitalization in exchange for a cash payment equal to the spread between $27.00 per share and the exercise price of the option. - If the executive officer was required to exercise stock options in order to obtain some of the common shares he was required to retain and he so requested, we made a non-interest bearing, recourse loan to him in a maximum amount equal to the exercise price of the options plus the estimated federal and state income tax liability he would incur in connection with the exercise. These loans would be secured by a pledge of the shares issued upon exercise of the options. ODYSSEY FINANCIAL SERVICES In connection with the recapitalization, we agreed to pay Odyssey a fee of approximately $4.0 million in cash which was paid upon consummation of the recapitalization and all of the related transactions. 73 DESCRIPTION OF OTHER INDEBTEDNESS THE NEW CREDIT FACILITY The new credit facility consists of (i) a $50.0 million revolving credit facility maturing six years from the date of the closing of the new credit facility, (ii) a $30.0 million acquisition facility, converting from revolving loans into term loans three or four years from the closing and maturing six years from the closing and (iii) term loan facilities in an aggregate principal amount of $53.5 million, consisting of a $23.5 million delayed-draw tranche A facility maturing six years from the closing and a $30.0 million tranche B facility maturing eight years from the closing. In addition, prior to the 18-month anniversary of the closing, we have the right to request that the delayed-draw tranche A facility and/or the tranche B facility be increased by up to $73.5 million in the aggregate, subject to certain terms and conditions, although no lender under the new credit facility is obligated to participate in any such increase. The new credit facility provides that we will repay (i) the tranche A facility in quarterly installments commencing on the seventh quarter after the closing, (ii) the tranche B facility (A) in quarterly payments during the first six years, commencing on the seventh quarter after the closing equal to 0.25% of the original outstanding balance thereunder and (B) in eight quarterly installments during the remaining two years, the sum of which shall be the remaining aggregate principal amount under the tranche B facility and (iii) the acquisition facility, in equal quarterly installments commencing three or four years from the closing. In addition, subject to certain limited exceptions, the new credit facility requires mandatory repayment of the outstanding indebtedness thereunder (and reduction to the commitments thereunder) with the proceeds from (i) asset sales, (ii) issuance of debt, (iii) issuance of equity interests and capital contributions, (iv) insurance and condemnation claims and (v) 50% of annual excess cash flow (as defined in the new credit facility) from operations by us or our subsidiaries, which percent of excess cash flow will be increased to 75% based on certain total leverage ratios. We have the option at any time and from time to time to prepay the outstanding Indebtedness under the new credit facility without penalty or premium, subject to customary breakage costs for Eurodollar Loans (as defined in the new credit facility). The new credit facility bears interest at the sum of the (i) Applicable Margin and (ii) at our option, either the Base Rate or the Eurodollar Rate (as defined in the new credit facility). The "Base Rate" means the higher of (i) the rate that Bankers Trust Company announces from time to time as its prime lending rate, as in effect from time to time, and (ii) 1/2 of 1% in excess of the overnight federal funds rate. The "Applicable Margin" means the percentage per annum equal to (i) in the case of the delayed-draw tranche A facility, the acquisition facility and the revolving credit facility, subject to quarterly step-ups and step-downs based on our total leverage ratio, (A) for loans bearing an interest rate determined by the Base Rate, 1.50% and (B) for loans bearing an interest rate determined by the Eurodollar Rate, 2.50% and (ii) in the case of tranche B facility, subject to quarterly step-ups to be determined based on our total leverage ratio, (A) for loans bearing an interest rate determined by the Base Rate, 2.00% and (B) for loans bearing an interest rate determined by the Eurodollar Rate, 3.00%. The new credit facility contains various covenants, customary for similar credit facilities or otherwise appropriate under the circumstances, that (i) restrict us and our subsidiaries from various actions, including, among others, mergers and sales of assets, use of proceeds, granting of liens, incurrence of indebtedness, capital expenditures, paying dividends, business activities, investments and acquisitions, transactions with affiliates, certain restrictions affecting subsidiaries, voluntary prepayment of certain indebtedness, including the notes and amendments or modifications to instruments governing such other indebtedness and (ii) require us to achieve and maintain certain financial covenants. The new credit facility includes events of default provisions that are typical for senior credit facilities or otherwise appropriate under the circumstances. All obligations under the new credit facility are guaranteed by our direct and indirect domestic subsidiaries. As security for the indebtedness under the new credit facility, we and each subsidiary guarantor (i) pledged our and their interest, respectively, 74 in the stock of our subsidiaries (except that no more than 65% of the voting stock of our foreign subsidiaries will be pledged) and (ii) grant a perfected lien and security interest in our and their assets (tangible and intangible). THE TRUST PREFERRED SECURITIES In the second half of 1999, Dayton Superior Capital Trust, an entity formed by us for tax purposes, issued 10% convertible trust preferred securities to the public. Simultaneous with the issuance by the trust of the convertible trust preferred securities, we issued 10% convertible subordinated debentures due 2029 to the trust. We own all of the common securities of the trust. The debentures and the convertible trust preferred securities have almost identical terms. Upon the consummation of the units offering, we liquidated the trust and distributed our debentures pro-rata to the holders of the convertible trust preferred securities. Holders of our convertible trust preferred securities also had the option at that time to convert their securities into cash. The indenture for the debentures provides that interest is payable quarterly in arrears in cash. However, the indenture provides that we may defer payments up to 20 consecutive quarters (5 years), provided that we, among other things, may not pay dividends or make payments with respect to PARI PASSU or junior debt. The deferred payments bear interest at the same rate as the principal. The indenture provides for optional redemption of the debentures, in whole or in part, by us at any time after October 1, 2002, with a premium until 2009. However, if the current market price of our common stock exceeds 150% of the conversion price, we may redeem all or part of the debentures between October 1, 2001 and October 1, 2002 at a premium. The trust agreement and the indenture provide that the convertible trust preferred securities and the debentures may be converted to our class A common shares solely at the option of the holders of convertible trust preferred securities. Holders of convertible trust preferred securities may exercise their conversion rights up to the redemption date, at an initial conversion ratio of 0.8 of our class A common shares for each preferred security or debenture, subject to certain adjustments (which include fundamental changes such as the recapitalization), equating to an initial conversion price of $25.00 per class A common share ($20.00 per preferred security or principal amount of each debenture convertible into 0.8 shares of our Class A common shares). Upon consummation of the recapitalization, holders of debentures no longer had the right to receive our class A common stock, but did have the right to receive the $27.00 payable for each share of class A common stock. The indenture also provides that if we merge with another company, the entities involved must comply with certain criteria. If we are the surviving entity, essentially the covenant will be complied with if no default occurs, no violation of the trust agreement or the related guarantee occurs and if we provide an officers' certificate and opinion of counsel to the trustee that the merger complies with the relevant documentation. OTHER OUTSTANDING DEBT INSTRUMENTS Our $5.0 million senior note due 2004 issued to Merrill L. Nash in connection with our Symons acquisition bears interest at 10.5% per year payable in arrears on the first day of each month. The note is redeemable at the option of Mr. Nash upon 30 days' notice, and is redeemable at our option only upon the death of Mr. Nash. We currently owe $0.2 million of principal to the City of Parsons, Kansas, on a $0.3 million note which bears interest at 7% per year payable quarterly, with principal amortized over a 10 year period ending 2005. The note is secured by a mortgage on property for which the proceeds were used to construct and does not provide prepayment terms. 75 DESCRIPTION OF THE NOTES GENERAL You can find the definitions of certain terms used in this description under the subheading "--Certain Definitions." In this description: - "Dayton Superior" refers only to Dayton Superior Corporation and its successors and not to any of its subsidiaries; and - "notes" means the exchange notes and the old notes, in each case outstanding at any given time and issued under the indenture. The old notes were, and the exchange notes will be, issued under an indenture between Dayton Superior, Symons Corporation and Dur-O-Wal, Inc., as guarantors, and United States Trust Company of New York, as trustee. The terms of the exchange notes are identical in all material respects to the old notes except that, upon completion of the exchange offer, the exchange notes will be: - registered under the Securities Act, and - free of any covenants regarding exchange registration rights. 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 following is a summary of the material provisions of the indenture. It does not include all of the provisions of the indenture. We urge you to read the indenture because it, and not this description, defines your rights as a holder of notes. We have filed a copy of the indenture as an exhibit to the registration statement which includes this prospectus. The registered Holder of a note will be treated as the owner of it for all purposes. Only registered Holders will have rights under the indenture. Dayton Superior will issue the notes in fully registered form in denominations of $1,000 and integral multiples of $1,000. The trustee will initially act as paying agent and registrar. The notes may be presented for registration of transfer and exchange at the offices of the registrar. Dayton Superior may change any paying agent and registrar without notice to Holders. Dayton Superior will pay principal (and premium, if any) on the notes at the trustee's corporate office in New York, New York. At Dayton Superior's option, interest also may be paid by mailing a check to the Holders' registered address. Any notes that remain outstanding after the completion of the exchange offer, together with the exchange notes issued in connection with the exchange offer, will be treated as a single class of securities under the indenture. BRIEF DESCRIPTION OF THE NOTES AND THE GUARANTEES The notes: - are general unsecured obligations of Dayton Superior; - are subordinated in right of payment to all existing and future Senior Debt of Dayton Superior; - are PARI PASSU in right of payment with any existing and future senior subordinated Indebtedness of Dayton Superior; and - are unconditionally guaranteed by the guarantors. 76 THE GUARANTEES The notes are guaranteed by all of Dayton Superior's domestic subsidiaries. Each guarantee of the notes: - is a general unsecured obligation of the guarantor; - is subordinated in right of payment to all existing and future Senior Debt of that guarantor; and - is PARI PASSU in right of payment with any future senior subordinated Indebtedness of that guarantor. Assuming Dayton Superior had completed the recapitalization and the related financings as of March 31, 2000, on a pro forma basis, Dayton Superior would have had Senior Debt of $65.3 million and $73.4 million would have been available for future borrowings under the new credit facility. As indicated above and as discussed in detail below in the caption "--Subordination," payments on the notes and under the guarantees will be subordinate to the payment of Senior Debt. The indenture will permit Dayton Superior and the guarantors to incur additional Senior Debt. PRINCIPAL, MATURITY AND INTEREST The notes are limited in aggregate principal amount to $270.0 million, of which $170.0 million in aggregate principal amount will be issued in this offering. Additional notes in an aggregate principal amount of up to $100.0 million may be issued from time to time, subject to the limitations set forth under "--Certain Covenants--Limitation on Incurrence of Additional Indebtedness." The notes will mature on June 15, 2009. Interest on the notes will accrue at the rate PER ANNUM shown on the cover page hereof and will be payable semiannually in cash on each June 15 and December 15, commencing December 15, 2000. Dayton Superior will make interest payments to the persons who are registered Holders at the close of business on the June 1 and December 1 immediately preceding the applicable interest payment date. Interest on the notes will accrue from the most recent date on which interest on the notes was paid or, if no interest has been paid, from and including the date of issuance. The notes do not contain any mandatory sinking fund. REDEMPTION OPTIONAL REDEMPTION. Except as described below, the notes are not redeemable before June 15, 2007. Thereafter, Dayton Superior may redeem the notes at its option, in whole or in part, upon not less than 30 nor more than 60 days notice, at the following redemption prices (expressed as percentages of the principal amount thereof) if redeemed during the twelve month period commencing on June 15 of the year set forth below.
YEAR PERCENTAGE - ---- ---------- 2007........................................................ 102.167% 2008 and thereafter......................................... 100.000%
In addition, Dayton Superior must pay all accrued and unpaid interest on the notes redeemed. OPTIONAL REDEMPTION UPON EQUITY OFFERINGS. On one or more occasions prior to June 15, 2003, Dayton Superior may use the net cash proceeds of one or more Equity Offerings to redeem up to 25% of the principal amount of the notes (including any additional notes) issued under the indenture at a 77 redemption price of 113.0% of the principal amount thereof plus accrued and unpaid interest thereon, if any, to the date of redemption; PROVIDED that: (1) at least 75% of the aggregate principal amount of notes (including any additional notes) issued under the indenture remains outstanding immediately after any such redemption; and (2) Dayton Superior makes such redemption not more than 90 days after the consummation of such Equity Offering. SELECTION AND NOTICE OF REDEMPTION In the event that Dayton Superior 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 an 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. Notice of redemption will be mailed by first-class mail at least 30 but not more than 60 days before the redemption date to each Holder of notes to be redeemed at its registered address. On and after the redemption date, interest will cease to accrue on notes or portions thereof called for redemption as long as Dayton Superior has deposited with the paying agent funds in satisfaction of the applicable redemption price. SUBORDINATION The payment of all Obligations on the notes is subordinated in right of payment to the prior payment in full in cash or Cash Equivalents of all Obligations on Senior Debt of Dayton Superior, including its Obligations under the New Credit Facility. The holders of Senior Debt will be entitled to receive payment in full in cash or Cash Equivalents of all Obligations due in respect of Senior Debt (including interest accruing 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 the Holders of notes will be entitled to receive any payment with respect to the notes in the event of any distribution to creditors of Dayton Superior: (1) in a liquidation or dissolution of Dayton Superior; (2) in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to Dayton Superior or its property; (3) in an assignment for the benefit of creditors; or (4) in any marshalling of Dayton Superior's assets and liabilities. Dayton Superior also may not make any payment in respect of the notes if: (1) a payment default on Designated Senior Debt occurs and is continuing; or (2) any other default occurs and is continuing on Designated Senior Debt that permits holders of the Designated Senior Debt to accelerate its maturity and the trustee receives a notice of such default (a "Payment Blockage Notice") from the Representative of any Designated Senior Debt. 78 Payments on the notes may and shall be resumed: (1) in the case of a payment default, upon the date on which such default is cured or waived; and (2) in the case of a nonpayment default, upon the earliest of (x) the date on which such nonpayment default is cured or waived (so long as no other event of 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 from the Representative for the applicable Designated Senior Debt rescinding the Payment Blockage Notice, unless the maturity of any Designated Senior Debt has been accelerated. No new Payment Blockage Notice may be delivered unless and until 360 days have elapsed since the effectiveness of the immediately prior Payment Blockage Notice. No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage notice to the trustee shall be, or be made, the basis for a subsequent Payment Blockage Notice unless such default shall have been cured or waived for a period of not less than 90 days. Dayton Superior must promptly notify holders of Senior Debt if payment of the notes is accelerated because of an Event of Default. As a result of the subordination provisions described above, in the event of a bankruptcy, liquidation or reorganization of Dayton Superior, Holders of the notes may recover less ratably than creditors of Dayton Superior who are holders of Senior Debt. See "Risk Factors--Subordination." After giving effect to the transactions, on a pro forma basis, at March 31, 2000, the aggregate principal amount of Senior Debt outstanding would have been approximately $65.3 million (excluding unused commitments of approximately $73.4 million under the New Credit Facility). SUBSIDIARY GUARANTEES The obligations of Dayton Superior under the notes and the indenture will be guaranteed on a senior subordinated basis by the Domestic Restricted Subsidiaries. A form of such guarantee will be attached as an exhibit to the indenture. The guarantees will be subordinated in right of payment to all Senior Debt of the guarantors to the same extent that the notes are subordinated to Senior Debt of Dayton Superior. The obligations of each guarantor under its guarantee will be limited as necessary to prevent the guarantee from constituting a fraudulent conveyance or fraudulent transfer under applicable law. Each guarantor may consolidate with or merge into or sell its assets to Dayton Superior or another guarantor without limitation, or with other persons upon the terms and conditions set forth in the indenture. See "Certain Covenants--Merger, Consolidation and Sale of Assets." In the event all of the capital stock of a guarantor is sold by Dayton Superior and the sale complies with the provisions set forth in "Certain Covenants--Limitation on Asset Sales," the guarantor's guarantee will be released. Separate financial statements of the guarantors are not included herein because the guarantors are jointly and severally liable with respect to Dayton Superior's obligations pursuant to the notes, and the aggregate net assets, earnings and equity of the guarantors and Dayton Superior are substantially equivalent to the net assets, earnings and equity of Dayton Superior on a consolidated basis. CHANGE OF CONTROL If a Change of Control occurs, each Holder will have the right to require that Dayton Superior 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 79 interest to the date of purchase. Within 30 days following the date upon which the Change of Control occurred, Dayton Superior must send, by first-class mail, a notice to each Holder, which notice shall govern the terms of the Change of Control Offer. Such notice shall state, among other things, the purchase date, which must be no earlier than 30 days nor later than 60 days from the date such notice is mailed, other than as may be required by law (the "Change of Control Payment Date"). 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. Prior to the mailing of the notice referred to above, but in any event within 30 days following any Change of Control, Dayton Superior covenants to: (1) repay in full all Indebtedness under the New Credit Facility and all other Senior Debt the terms of which require repayment upon a Change of Control; or (2) obtain the requisite consents under the New Credit Facility and all other such Senior Debt to permit the repurchase of the notes as provided below. Dayton Superior's failure to comply with the covenant described in the immediately preceding sentence shall constitute an Event of Default described in clause (3) and not in clause (2) under "Events of Default" below. Dayton Superior will 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 in compliance with the indenture. If a Change of Control Offer is made, there can be no assurance that Dayton Superior will have available funds sufficient to pay the Change of Control purchase price for all the notes that might be delivered by Holders seeking to accept the Change of Control Offer. In the event Dayton Superior is required to purchase outstanding notes pursuant to a Change of Control Offer, Dayton Superior expects that it would seek third party financing to the extent it does not have available funds to meet its purchase obligations. However, there can be no assurance that Dayton Superior would be able to obtain such financing. Neither the board of directors of Dayton Superior nor the trustee may waive the covenant relating to a Holder's right to redemption upon a Change of Control. Restrictions in the indenture described herein on the ability of Dayton Superior and its Restricted Subsidiaries to incur additional Indebtedness, to grant liens on its property, to make Restricted Payments and to make Asset Sales may also make more difficult or discourage a takeover of Dayton Superior, whether favored or opposed by the management of Dayton Superior. Consummation of any such transaction in certain circumstances may require redemption or repurchase of the notes, and there can be no assurance that Dayton Superior or the acquiring party will have sufficient financial resources to effect such redemption or repurchase. Such restrictions and the restrictions on transactions with Affiliates may, in certain circumstances, make more difficult or discourage any leveraged buyout of Dayton Superior or any of its Subsidiaries by the management of Dayton Superior. While such restrictions cover a wide variety of arrangements which have traditionally been used to effect highly leveraged transactions, the indenture may not afford the Holders protection in all circumstances from the adverse aspects of a highly leveraged transaction, reorganization, restructuring, merger or similar transaction. Dayton Superior will comply with the requirements of Rule 14e-1 under the Exchange Act 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 Dayton Superior complies with the provisions of any such securities laws or regulations, Dayton Superior shall not be deemed to have breached its obligations under the "Change of Control" provisions of the indenture. 80 CERTAIN COVENANTS The indenture will contain, among others, the following covenants: LIMITATION ON INCURRENCE OF ADDITIONAL INDEBTEDNESS. Dayton Superior will not, and will 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, Dayton Superior and the guarantors may incur Indebtedness (including, without limitation, Acquired Indebtedness) and Restricted Subsidiaries of Dayton Superior that are not guarantors may incur Acquired Indebtedness, in each case if on the date of the incurrence of such Indebtedness, after giving effect thereto, the Consolidated Fixed Charge Coverage Ratio of Dayton Superior would have been greater than 2.0 to 1.0 if such Indebtedness is incurred on or prior to June 15, 2002, or 2.25 to 1.0 if such Indebtedness is incurred thereafter. LIMITATION ON RESTRICTED PAYMENTS. Dayton Superior will not, and will 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 Dayton Superior) on or in respect of shares of Dayton Superior's Capital Stock to holders of such Capital Stock; (2) purchase, redeem or otherwise acquire or retire for value any Capital Stock of Dayton Superior or any direct or indirect parent of Dayton Superior 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 Dayton Superior that is subordinate or junior in right of payment to the notes; 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; (ii) Dayton Superior is not able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in compliance with the "Limitation on Incurrence of Additional Indebtedness" covenant; or (iii) the aggregate amount of Restricted Payments (including such proposed Restricted Payment) made subsequent to the date of original issuance of the notes (other than Restricted Payments made pursuant to clauses (2)(i), (3), (4), (5), (6), (7) and (8) of the following paragraph) (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 Dayton Superior) shall exceed the sum, without duplication, 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 Dayton Superior earned subsequent to the beginning of the first fiscal quarter commencing after the date of original issuance of the notes and on or prior to the date the Restricted Payment occurs (the "Reference Date") (treating such period as a single accounting period); plus 81 (x) 100% of the aggregate net proceeds (including the fair market value of property other than cash that would constitute Marketable Securities or a Permitted Business) received by Dayton Superior from any Person (other than a Subsidiary of Dayton Superior) from the issuance and sale subsequent to the date of original issuance of the notes and on or prior to the Reference Date of Qualified Capital Stock of Dayton Superior; 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 Dayton Superior from a holder of Dayton Superior's Capital Stock (excluding, in the case of clauses (iii)(x) and (y), any net cash proceeds from an Equity Offering to the extent used to redeem the notes in compliance with the provisions set forth under "--Redemption--Optional Redemption upon Equity Offerings"); plus (z) 100% of the aggregate net proceeds (including the fair market value of property other than cash that would constitute Marketable Securities or a Permitted Business) of any (A) sale or other disposition of any Investment (other than a Permitted Investment) made by Dayton Superior and its Restricted Subsidiaries or (B) dividend from, or the sale of the stock of, an Unrestricted Subsidiary. Notwithstanding the foregoing, the provisions set forth in the immediately preceding paragraph do not prohibit: (1) the payment of any dividend or the consummation of any irrevocable redemption within 60 days after the date of declaration of such dividend or notice of redemption if the dividend or payment of the redemption price, as the case may be, would have been permitted on the date of declaration or notice; (2) if no Default or Event of Default shall have occurred and be continuing or shall occur as a consequence thereof, the acquisition of any shares of Capital Stock of Dayton Superior (the "Retired Capital Stock") either (i) solely in exchange for shares of Qualified Capital Stock of Dayton Superior (the "Refunding Capital Stock") or (ii) through the application of net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of Dayton Superior) of shares of Qualified Capital Stock of Dayton Superior and, in the case of subclause (i) of this clause (2), if immediately prior to the retirement of the Retired Capital Stock the declaration and payment of dividends thereon was permitted under clause (4) of this paragraph, the declaration and payment of dividends on the Refunding Capital Stock in an aggregate amount per year no greater than the aggregate amount of dividends PER ANNUM that was declarable and payable on such Retired Capital Stock immediately prior to such retirement; PROVIDED that at the time of the declaration of any such dividends on the Refunding Capital Stock, no Default or Event of Default shall have occurred and be continuing or shall occur as a consequence thereof; (3) if no Default or Event of Default shall have occurred and be continuing or shall occur as a consequence thereof, the acquisition of any indebtedness of Dayton Superior that is subordinate or junior in right of payment to the notes either (i) solely in exchange for shares of Qualified Capital Stock of Dayton Superior or (ii) through the application of net proceeds of a substantially concurrent sale for cash (other than to a Subsidiary of Dayton Superior) of (A) shares of Qualified Capital Stock of Dayton Superior or (B) Refinancing Indebtedness; (4) if no Default or Event of Default shall have occurred and be continuing or shall occur as a consequence thereof, the declaration and payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Capital Stock) issued after the date of original issuance of the notes (including, without limitation, the declaration and payment of dividends on Refunding Capital Stock in excess of the dividends declarable and 82 payable thereon pursuant to clause (2) of this paragraph); PROVIDED that, at the time of such issuance, Dayton Superior, after giving effect to such issuance on a PRO FORMA basis, would have been able to incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to the proviso of the "Limitation on Incurrence of Additional Indebtedness" covenant; (5) if no Default or Event of Default shall have occurred and be continuing or shall occur as a consequence thereof, the redemption or repurchase of Dayton Superior's common equity or options in respect thereof, in each case in connection with the repurchase provisions of employee stock option or stock purchase agreements or other agreements to compensate management employees; PROVIDED that all such redemptions or repurchases pursuant to this clause (5) shall not exceed $2.5 million (with unused amounts in any fiscal year being carried over to succeeding fiscal years subject to a maximum of $5.0 million in any fiscal year) in any fiscal year (which amount shall be increased by the amount of any net cash proceeds received from the sale since the date of original issuance of the notes of Capital Stock (other than Disqualified Capital Stock) to members of Dayton Superior's management team that have not otherwise been applied to the payment of Restricted Payments pursuant to the terms of clause (iii) of the immediately preceding paragraph and by the cash proceeds of any "key-man" life insurance policies that are used to make such redemptions or repurchases) since the date of original issuance of the notes; PROVIDED, FURTHER, that the cancellation of Indebtedness owing to Dayton Superior from members of management of Dayton Superior or any of its Restricted Subsidiaries in connection with any repurchase of Capital Stock of Dayton Superior (or warrants or options or rights to acquire such Capital Stock) will not be deemed to constitute a Restricted Payment under the indenture; (6) repurchases of Capital Stock deemed to occur upon the exercise of stock options if such Capital Stock represents a portion of the exercise price thereof; (7) if no Default or Event of Default shall have occurred and be continuing or shall occur as a consequence thereof, other Restricted Payments in an aggregate amount not to exceed $5.0 million; and (8) payments to holders of Trust Preferred Securities and/or Convertible Subordinated Debentures who elected to convert their Trust Preferred Securities and/or Convertible Subordinated Debentures into the right to receive cash in accordance with the Trust Preferred Documents and the documents governing the recapitalization and other payments in connection with the recapitalization and the documents governing the recapitalization. In determining the aggregate amount of Restricted Payments made subsequent to the date of original issuance of the notes in accordance with clause (iii) of the immediately preceding paragraph, (a) amounts expended pursuant to clauses (1) and (2)(ii) shall be included in such calculation, and (b) amounts expended pursuant to clauses (2)(i), (3), (4), (5), (6), (7) and (8) shall be excluded from such calculation. LIMITATION ON ASSET SALES. Dayton Superior will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless: (1) Dayton Superior 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 Dayton Superior's board of directors); 83 (2) at least 75% of the consideration received by Dayton Superior 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 the amount of: (A) liabilities (as shown on Dayton Superior's or such Restricted Subsidiary's most recent balance sheet) of Dayton Superior or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the notes) that are assumed by the transferee of any such assets; (B) any notes or other obligations received by Dayton Superior or any such Restricted Subsidiary from such transferee that are converted by Dayton Superior or such Restricted Subsidiary into cash within 90 days of the receipt thereof (to the extent of the cash received); and (C) any Designated Noncash Consideration received by Dayton Superior or any of its Restricted Subsidiaries in such Asset Sale having an aggregate fair market value, when taken together with all other Designated Noncash Consideration received pursuant to this clause (C) that is at that time outstanding, not to exceed 5% of Total Assets at the time of the receipt of such Designated Noncash Consideration (with the fair market value of each item of Designated Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value) shall be deemed to be cash for the purposes of this provision or for purposes of the second paragraph of this covenant; and (3) upon the consummation of an Asset Sale, Dayton Superior shall apply, or cause such Restricted Subsidiary to apply, the Net Cash Proceeds relating to such Asset Sale within 365 days of receipt thereof: (A) to prepay any Senior Debt or Indebtedness of a Restricted Subsidiary that is not a guarantor and, in the case of any such Indebtedness under any revolving credit facility, effect a corresponding reduction in the availability under such revolving credit facility (or effect a permanent reduction in the availability under such revolving credit facility regardless of the fact that no prepayment is required in order to do so (in which case no prepayment shall be required)), (B) to reinvest in Productive Assets, or (C) a combination of prepayment and investment permitted by the foregoing clauses (A) and (B). Pending the final application of any such Net Cash Proceeds, Dayton Superior or such Restricted Subsidiary may temporarily reduce Indebtedness under a revolving credit facility, if any, or otherwise invest such Net Cash Proceeds in Cash Equivalents. On the 366th day after an Asset Sale or such earlier date, if any, as the board of directors of Dayton Superior or of such Restricted Subsidiary determines not to apply the Net Cash Proceeds relating to such Asset Sale as set forth in clause (3)(A), (3)(B) or (3)(C) of the next preceding paragraph (each, a "Net Proceeds Offer Trigger Date"), such aggregate amount of Net Cash Proceeds which have not been so applied on or before such Net Proceeds Offer Trigger Date (each, a "Net Proceeds Offer Amount") shall be applied by Dayton Superior or such Restricted Subsidiary to make an offer to purchase (the "Net Proceeds Offer") on a date (the "Net Proceeds Offer Payment Date") not less than 30 nor more than 60 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 (including any 84 Designated Noncash Consideration) received by Dayton Superior or any Restricted Subsidiary of Dayton Superior, 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 covenant. Notwithstanding the foregoing, if a Net Proceeds Offer Amount is less than $10.0 million, the application of the Net Cash Proceeds constituting such Net Proceeds Offer Amount to a Net Proceeds Offer may be deferred until such time as such Net Proceeds Offer Amount plus the aggregate amount of all Net Proceeds Offer Amounts arising subsequent to the Net Proceeds Offer Trigger Date relating to such initial Net Proceeds Offer Amount from all Asset Sales by Dayton Superior and its Restricted Subsidiaries aggregate at least $10.0 million, at which time Dayton Superior or such Restricted Subsidiary shall apply all Net Cash Proceeds constituting all Net Proceeds Offer Amounts that have been so deferred to make a Net Proceeds Offer (the first date the aggregate of all such deferred Net Proceeds Offer Amounts is equal to $10.0 million or more shall be deemed to be a Net Proceeds Offer Trigger Date). Notwithstanding the immediately preceding paragraph, Dayton Superior and its Restricted Subsidiaries will be permitted to consummate an Asset Sale without complying with such paragraph to the extent that: (1) at least 75% of the consideration for such Asset Sale constitutes Productive Assets, cash and/or Cash Equivalents; and (2) such Asset Sale is for fair market value; PROVIDED that any consideration consisting of cash and/or Cash Equivalents received by Dayton Superior or any of its Restricted Subsidiaries in connection with any Asset Sale permitted to be consummated under this paragraph shall constitute Net Cash Proceeds subject to the provisions of the preceding paragraph. Each Net Proceeds Offer will be mailed to the record Holders as shown on the register of Holders within 30 days following the Net Proceeds Offer Trigger Date, with a copy to the trustee, and shall comply with the procedures set forth in the indenture. Upon receiving notice of the Net Proceeds Offer, Holders may elect to tender their notes in whole or in part in integral multiples of $1,000 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. To the extent that the aggregate amount of notes tendered pursuant to a Net Proceeds Offer is less than the Net Proceeds Offer Amount, Dayton Superior may use any remaining Net Proceeds Offer Amount for general corporate purposes or for any other purpose not prohibited by the indenture. Upon completion of any such Net Proceeds Offer, the Net Proceeds Offer Amount shall be reset at zero. Dayton Superior will 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 the "Asset Sale" provisions of the indenture, Dayton Superior shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under the "Asset Sale" provisions of the indenture by virtue thereof. LIMITATION ON PERMITTED ACQUISITIONS. Dayton Superior will, and will cause its Restricted Subsidiaries to, comply with Section 8.14(a)(viii)(I) of the New Credit Facility as in effect on the date of original issuance of the notes only until the first anniversary of the date of original issuance of the notes. 85 Section 8.14(a)(viii)(I) of the New Credit Facility will generally provide that with respect to certain permitted acquisitions consummated on or prior to the first anniversary of the date of original issuance of the notes: (a) at least 25% of the aggregate consideration paid therefor shall consist of or shall be funded with new cash equity received by Dayton Superior and/or common stock and/or Qualified Preferred Stock issued by Dayton Superior; and (b) Dayton Superior's leverage ratio as of the last day of a calculation period, calculated on a pro forma basis taking into account such permitted acquisition as well as other permitted acquisitions consummated during the applicable calculation period, shall be less than or equal to Dayton Superior's leverage ratio immediately prior to such permitted acquisition. The New Credit Facility will exclude the Conspec acquisition from Section 8.14(a)(viii)(I) if the Conspec acquisition is consummated on or prior to the date that is 90 days after the date of original issuance of the notes. LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES. Dayton Superior will not, and will not cause or permit any of its Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or permit to exist or become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary of Dayton Superior to: (1) pay dividends or make any other distributions on or in respect of its Capital Stock; (2) make loans or advances or pay any Indebtedness or other obligation owed to Dayton Superior or any other Restricted Subsidiary of Dayton Superior; or (3) transfer any of its property or assets to Dayton Superior or any other Restricted Subsidiary of Dayton Superior, except for such encumbrances or restrictions existing under or by reason of: (A) applicable law; (B) the notes or the indenture; (C) non-assignment provisions of any contract or any lease of any Restricted Subsidiary of Dayton Superior entered into in the ordinary course of business; (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) the New Credit Facility; (F) agreements existing on the date of original issuance of the notes to the extent and in the manner such agreements are in effect on the date of original issuance of the notes; (G) restrictions on the transfer of assets subject to any Lien permitted under the indenture imposed by the holder of such Lien; (H) restrictions imposed by any agreement to sell assets or Capital Stock permitted under the indenture to any Person pending the closing of such sale; (I) any agreement or instrument governing capital stock of any Person that is acquired; (J) 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; 86 (K) other Indebtedness or Permitted Subsidiary Preferred Stock outstanding on the date of original issuance of the notes or permitted to be issued or incurred under the indenture; PROVIDED that any such restrictions are ordinary and customary with respect to the type of indebtedness being incurred or preferred stock being issued (under the relevant circumstances); (L) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business; and (M) any encumbrances or restrictions imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (A) through (L) above; PROVIDED that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of Dayton Superior's board of directors (evidenced by a board resolution), whose judgment shall be conclusively binding, not materially more restrictive with respect to such dividend and other payment restrictions than those contained in the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing. LIMITATION ON PREFERRED STOCK OF RESTRICTED SUBSIDIARIES. Dayton Superior will not permit any of its Restricted Subsidiaries that are not guarantors to issue any preferred stock (other than to Dayton Superior or to a Restricted Subsidiary of Dayton Superior) or permit any Person (other than Dayton Superior or a Restricted Subsidiary of Dayton Superior) to own any preferred stock of any Restricted Subsidiary of Dayton Superior that is not a guarantor, other than Permitted Subsidiary Preferred Stock. LIMITATION ON LIENS. Dayton Superior will not, and will 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 or any proceeds therefrom of Dayton Superior or any of its Restricted Subsidiaries whether owned on the date of original issuance of the notes or acquired after the date of original issuance of the notes, in each case to secure indebtedness or trade payables, unless: (1) in the case of Liens securing Indebtedness that is expressly subordinate or junior in right of payment to the notes, the notes 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 are equally and ratably secured, except for: (a) Liens existing as of the date of original issuance of the notes to the extent and in the manner such Liens are in effect on the date of original issuance of the notes; (b) Liens securing Senior Debt; (c) Liens securing the notes and the guarantees; (d) Liens of Dayton Superior or a Wholly Owned Restricted Subsidiary of Dayton Superior on assets of any Restricted Subsidiary of Dayton Superior; (e) Liens securing Refinancing Indebtedness which is incurred to refinance any Indebtedness that was secured by a Lien permitted under the indenture and that has been incurred in accordance with the provisions of the indenture; PROVIDED, HOWEVER, that such Liens do not extend to or cover any categories of property or assets of Dayton Superior or any of its Restricted Subsidiaries not securing the Indebtedness so refinanced; and (f) Permitted Liens. 87 PROHIBITION ON INCURRENCE OF SENIOR SUBORDINATED DEBT. Dayton Superior will not, and will not permit any guarantor to, incur or suffer to exist any 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 Dayton Superior or such guarantor, as the case may be. MERGER, CONSOLIDATION AND SALE OF ASSETS. Dayton Superior will 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 Dayton Superior to sell, assign, transfer, lease, convey or otherwise dispose of) all or substantially all of Dayton Superior's assets (determined on a consolidated basis for Dayton Superior and Dayton Superior's Restricted Subsidiaries) whether as an entirety or substantially as an entirety to any Person unless: (1) either: (a) Dayton Superior shall be the surviving or continuing corporation; or (b) the Person (if other than Dayton Superior) formed by such consolidation or into which Dayton Superior is merged or the Person that acquires by sale, assignment, transfer, lease, conveyance or other disposition the properties and assets of Dayton Superior and of Dayton Superior's Restricted Subsidiaries substantially as an entirety (the "Surviving Entity"): (x) shall be a corporation organized and validly existing under the laws of 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 premium, if any, and interest on all of the notes and the performance of every covenant of the notes, the indenture and the Registration Rights Agreement on the part of Dayton Superior to be performed or observed; (2) except in the case of a merger of Dayton Superior with or into a Wholly Owned Restricted Subsidiary of Dayton Superior and except in the case of a merger entered into solely for the purpose of reincorporating Dayton Superior in another jurisdiction, immediately after giving effect to such transaction and the assumption contemplated by clause (1)(b)(y) above (including giving effect to any Indebtedness and Acquired Indebtedness incurred in connection with or in respect of such transaction), Dayton Superior or such Surviving Entity, as the case may be, shall be able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to the proviso of the "Limitation on Incurrence of Additional Indebtedness" covenant; (3) except in the case of a merger of Dayton Superior with or into a Wholly Owned Restricted Subsidiary of Dayton Superior and except in the case of a merger entered into solely for the purpose of reincorporating Dayton Superior in another jurisdiction, immediately after giving effect to such transaction and the assumption contemplated by clause (1)(b)(y) above (including, without limitation, giving effect to any Indebtedness and Acquired Indebtedness 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) Dayton Superior 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 the indenture and that all conditions precedent in the indenture relating to such transaction have been satisfied. 88 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 Dayton Superior the Capital Stock of which constitutes all or substantially all of the properties and assets of Dayton Superior shall be deemed to be the transfer of all or substantially all of the properties and assets of Dayton Superior. However, transfer of assets between or among the Company and its Restricted Subsidiaries will not be subject to the foregoing covenant. The indenture will provide that upon any consolidation, combination or merger or any transfer of all or substantially all of the assets of Dayton Superior in accordance with the foregoing in which Dayton Superior is not the continuing corporation, the successor Person formed by such consolidation or into which Dayton Superior 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, Dayton Superior under the indenture and the notes with the same effect as if such surviving entity had been named as such and that, in the event of a conveyance, lease or transfer, the conveyor, lessor or transferor will be released from the provisions of the indenture. Each guarantor (other than any guarantor whose guarantee is to be released in accordance with the terms of its guarantee and the indenture in connection with any transaction complying with the provisions of "--Limitation on Asset Sales") will not, and Dayton Superior will not cause or permit any guarantor to, consolidate with or merge with or into any Person other than Dayton Superior or any other guarantor unless: (1) the entity formed by or surviving any such consolidation or merger (if other than the guarantor) 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, Dayton Superior could satisfy the provisions of clause (2) of the first paragraph of this covenant. Any merger or consolidation of a guarantor with and into Dayton Superior (with Dayton Superior being the surviving entity) or another guarantor need only comply with clause (4) of the first paragraph of this covenant. LIMITATIONS ON TRANSACTIONS WITH AFFILIATES. Dayton Superior will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, enter into or permit to occur 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 (an "Affiliate Transaction"), other than Affiliate Transactions on terms that are not materially 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 Dayton Superior; PROVIDED, HOWEVER, that for an Affiliate Transaction with an aggregate value of $2.5 million or more, at Dayton Superior's option, either: (1) a majority of the disinterested members of the board of directors of Dayton Superior shall determine in good faith that such Affiliate Transaction is on terms that are not materially 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 Dayton Superior; or 89 (2) the board of directors of Dayton Superior or any such Restricted Subsidiary party to such Affiliate Transaction shall obtain an opinion from a nationally recognized investment banking, appraisal or accounting firm that such Affiliate Transaction is on terms that are not materially 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 Dayton Superior, and PROVIDED, FURTHER, that for an Affiliate Transaction with an aggregate value of $10.0 million or more the board of directors of Dayton Superior or any such Restricted Subsidiary party to such Affiliate Transaction shall obtain an opinion from a nationally recognized investment banking, appraisal or accounting firm that such Affiliate Transaction is on terms not materially 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 Dayton Superior. The restrictions set forth in the first paragraph of this covenant shall not apply to: (1) reasonable fees and compensation paid to, and indemnity provided on behalf of, officers, directors, employees or consultants of Dayton Superior or any Restricted Subsidiary of Dayton Superior as determined in good faith by Dayton Superior board of directors or senior management; (2) transactions exclusively between or among Dayton Superior and any of its Restricted Subsidiaries or exclusively between or among such Restricted Subsidiaries, PROVIDED such transactions are not otherwise prohibited by the indenture; (3) any agreement as in effect as of the date of original issuance of the notes 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 date of original issuance of the notes; (4) Restricted Payments or Permitted Investments permitted by the indenture; (5) transactions effected as part of a Qualified Securitization Transaction; (6) the payment of customary annual management, consulting and advisory fees and related expenses to the Permitted Holders and their Affiliates made pursuant to any financial advisory, financing, underwriting or placement agreement or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures which are approved by the board of directors of Dayton Superior or such Restricted Subsidiary in good faith; (7) payments or loans to employees or consultants that are approved by the board of directors of Dayton Superior in good faith; (8) sales of Qualified Capital Stock; and (9) the existence of, or the performance by Dayton Superior or any of its Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the date of original issuance of the notes and any similar agreements which it may enter into thereafter; PROVIDED, HOWEVER, that the existence of, or the performance by Dayton Superior or any of its Restricted Subsidiaries of obligations under, any future amendment to any such existing agreement or under any similar agreement entered into after the date of original issuance of the notes shall only be permitted by this clause (9) to the extent that the terms of any such amendment or new agreement are not disadvantageous to the Holders of the notes in any material respect. 90 FUTURE GUARANTEES BY RESTRICTED SUBSIDIARIES. Dayton Superior will not create or acquire another Domestic Restricted Subsidiary unless such Domestic Restricted Subsidiary executes and delivers a supplemental indenture to the indenture, providing for a guarantee of payment of the notes by such Domestic Restricted Subsidiary. Notwithstanding the foregoing, any such guarantee by a Domestic Restricted Subsidiary of the notes shall provide by its terms that it shall be automatically and unconditionally released and discharged, without any further action required on the part of the trustee or any Holder, upon any sale or other disposition (by merger or otherwise) to any Person which is not a Restricted Subsidiary of Dayton Superior of all of Dayton Superior's capital stock in, or all or substantially all of the assets of, such Domestic Restricted Subsidiary; PROVIDED that such sale or disposition of such capital stock or assets is otherwise in compliance with the terms of the indenture. CONDUCT OF BUSINESS. Dayton Superior will not, and will not permit any of its Restricted Subsidiaries to, engage in any businesses a majority of whose revenues are not derived from businesses that are the same as, or reasonably similar, ancillary or related to, or a reasonable extension, development or expansion of, the businesses in which Dayton Superior and its Restricted Subsidiaries are engaged on the date of original issuance of the notes. REPORTS TO HOLDERS. Whether or not required by the rules and regulations of the SEC, so long as any notes are outstanding, Dayton Superior will furnish to the Holders of notes: (1) all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if Dayton Superior 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 Dayton Superior 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 Dayton Superior and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of Dayton Superior) and, with respect to the annual information only, a report thereon by Dayton Superior's certified independent accountants; and (2) all current reports that would be required to be filed with the SEC on Form 8-K if Dayton Superior were required to file such reports, in each case, within the time periods specified in the SEC's rules and regulations. In addition, following the consummation of the exchange offer contemplated by the Registration Rights Agreement, whether or not required by the rules and regulations of the SEC, Dayton Superior will file a copy of all such information and reports with the SEC for public availability within the time periods specified in the SEC's rules and regulations (unless the SEC will not accept such a filing) and make such information available to securities analysts and prospective investors upon request. In addition, Dayton Superior has agreed that, for so long as any notes remain outstanding, it will 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. EVENTS OF DEFAULT The following events will be defined in the indenture 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 the subordination provisions of the indenture); 91 (2) the failure to pay the principal of 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 the subordination provisions of the indenture); (3) a default in the observance or performance of any other covenant or agreement contained in the indenture which default continues for a period of 30 days after Dayton Superior 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 the "Merger, Consolidation and Sale of Assets" covenant, 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 Dayton Superior or any Restricted Subsidiary of Dayton Superior (other than a Securitization Entity) which failure continues for at least 20 days, or the acceleration of the final stated maturity of any such Indebtedness, which acceleration remains uncured or unrescinded for at least 20 days, 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 maturity or which has been accelerated (in each case with respect to which the 20-day period described above has passed), aggregates $7.5 million or more at any time; (5) one or more judgments in an aggregate amount in excess of $7.5 million shall have been rendered against Dayton Superior or any of its Significant Subsidiaries 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) certain events of bankruptcy affecting Dayton Superior or any of its Significant Subsidiaries; or (7) 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 by reason of release of a guarantor in accordance with the terms of the indenture). If an Event of Default (other than an Event of Default specified in clause (6) above with respect to Dayton Superior) 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 Dayton Superior and the trustee specifying the applicable Event of Default and that it is a "notice of acceleration" (the "Acceleration Notice"), and the same: (1) shall become immediately due and payable; or (2) if there are any amounts outstanding under the New Credit Facility, shall become immediately due and payable upon the first to occur of an acceleration under the New Credit Facility or five business days after receipt by Dayton Superior and the Representative under the New Credit Facility of such Acceleration Notice but only if such Event of Default is then continuing. If an Event of Default specified in clause (6) above with respect to Dayton Superior occurs and is continuing, then all unpaid principal of and premium, if any, and accrued and unpaid interest on all of 92 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. The indenture will provide that, at any time after a declaration of acceleration with respect to the notes as described in the next preceding paragraph, 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 Dayton Superior 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 clause (6) of the description above of Events of Default, 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 the 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 the indenture or the notes except as provided in the indenture and under the Trust Indenture Act of 1939 (the "TIA"). Subject to the provisions of the indenture relating to the duties of the trustee, the trustee is under no obligation to exercise any of its rights or powers under the 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 the 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. Under the indenture, Dayton Superior is required to provide an officers' certificate to the trustee promptly upon any such officer obtaining knowledge of any Default or Event of Default (provided that such officers shall provide such certification at least annually whether or not they know of any Default or Event of Default) that has occurred and, if applicable, describe such Default or Event of Default and the status thereof. LEGAL DEFEASANCE AND COVENANT DEFEASANCE Dayton Superior may, at its option and at any time, elect to have its Obligations and the Obligations of the guarantors discharged with respect to the outstanding notes ("Legal Defeasance"). Such Legal Defeasance means that Dayton Superior shall be deemed to have paid and discharged the entire indebtedness represented by the outstanding notes, except for: (1) the rights of Holders to receive payments in respect of the principal of, premium, if any, and interest on the notes when such payments are due; (2) Dayton Superior's obligations with respect to the notes concerning issuing temporary notes, registration of notes, mutilated, destroyed, lost or stolen notes and the maintenance of an office or agency for payments; 93 (3) the rights, powers, trust, duties and immunities of the trustee and Dayton Superior's obligations in connection therewith, and (4) the Legal Defeasance provisions of the indenture. In addition, Dayton Superior may, at its option and at any time, elect to have the Obligations of Dayton Superior released with respect to certain covenants that are described in the indenture ("Covenant Defeasance") and thereafter any omission to comply with such Obligations shall not constitute a Default or Event of Default with respect to the notes. In the event Covenant Defeasance occurs, certain events (not including nonpayment, bankruptcy, receivership, reorganization and insolvency events) described under "Events of Default" will no longer constitute an Event of Default with respect to the notes. In order to exercise either Legal Defeasance or Covenant Defeasance: (1) Dayton Superior must irrevocably deposit with the trustee, in trust, for the benefit of the Holders cash in U.S. dollars, non-callable U.S. government obligations, 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; (2) in the case of Legal Defeasance, Dayton Superior shall have delivered to the trustee an opinion of counsel in the United States reasonably acceptable to the trustee confirming that: (a) Dayton Superior has received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the date of the indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion of counsel shall confirm that, the Holders will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to 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; (3) in the case of Covenant Defeasance, Dayton Superior shall have delivered to the trustee an opinion of counsel in the United States reasonably acceptable to the trustee confirming that the Holders will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; (4) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or an 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 insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit; (5) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of or constitute a default under the indenture (other than a Default or an 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 to which Dayton Superior or any of its Subsidiaries is a party or by which Dayton Superior or any of its Subsidiaries is bound; 94 (6) Dayton Superior shall have delivered to the trustee an officers' certificate stating that the deposit was not made by Dayton Superior with the intent of preferring the Holders over any other creditors of Dayton Superior or with the intent of defeating, hindering, delaying or defrauding any other creditors of Dayton Superior or others; (7) Dayton Superior shall have delivered to the trustee an officers' certificate and an opinion of counsel, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with; and (8) certain other customary conditions precedent are satisfied. Notwithstanding the foregoing, the opinion of counsel required by clause (2) above 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 within one year under arrangements satisfactory to the trustee for the giving of notice of redemption by the trustee in the name, and at the expense, of Dayton Superior. SATISFACTION AND DISCHARGE The indenture will be discharged and will cease to be of further effect (except as to surviving rights of registration of transfer or exchange of the notes, as expressly provided for in the indenture) as to all outstanding notes when (1) either: (a) all the notes theretofore authenticated and delivered (except lost, stolen or destroyed notes which have been replaced or paid and notes for whose payment money has theretofore been deposited in trust or segregated and held in trust by Dayton Superior and thereafter repaid to Dayton Superior 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, pursuant to an optional redemption notice or otherwise, and Dayton Superior 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 Dayton Superior directing the trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be; and (2) Dayton Superior has paid all other sums payable under the indenture by Dayton Superior. The trustee will acknowledge the satisfaction and discharge of the indenture if Dayton Superior has delivered to the trustee an officers' certificate and an opinion of counsel stating that all conditions precedent under the indenture relating to the satisfaction and discharge of the indenture have been complied with. MODIFICATION OF THE INDENTURE From time to time, Dayton Superior, the guarantors and the trustee, without the consent of the Holders, may amend the indenture for certain specified purposes, including curing ambiguities, defects or inconsistencies, so long as such change does not, in the opinion of the trustee, adversely affect the rights of any of the Holders in any material respect. In formulating its opinion on such matters, the trustee will be entitled to rely on such evidence as it deems appropriate, including, without limitation, solely on an opinion of counsel. Other modifications and amendments of the indenture may be made with the consent of the Holders of a majority in principal amount of the then outstanding notes issued 95 under the indenture, except that, without the consent of each Holder affected thereby, no amendment may: (1) reduce the amount of notes whose Holders must consent to an amendment; (2) reduce the rate of or change or have the effect of changing the time for payment of interest, including defaulted interest, on any notes; (3) 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; (4) make any notes payable in money other than that stated in the notes; (5) make any change in the provisions of the 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; (6) after Dayton Superior's obligation to purchase notes arises thereunder, amend, change or modify in any material respect the obligation of Dayton Superior to make and consummate a Change of Control Offer in the event of a Change of Control or modify any of the provisions or definitions with respect thereto after a Change of Control has occurred; (7) modify or change any provision of the indenture or the related definitions affecting the subordination or ranking of the notes or any guarantee in a manner which adversely affects the Holders; or (8) release any guarantor that is a Significant Subsidiary from any of its obligations under its guarantee or the indenture otherwise than in accordance with the terms of the indenture. GOVERNING LAW The indenture will provide that it and the notes and the guarantees will be governed by, and construed in accordance with, the laws of the State of New York but without giving effect to applicable principles of conflicts of law to the extent that the application of the law of another jurisdiction would be required thereby. THE TRUSTEE The indenture will provide that, except during the continuance of an Event of Default, the trustee will perform only such duties as are specifically set forth in the indenture. During the existence of an Event of Default, the trustee will exercise such rights and powers vested in it by the indenture, and use the same degree of care and skill in its exercise as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. The indenture and the provisions of the TIA contain certain limitations on the rights of the trustee, should it become a creditor of Dayton Superior, to obtain payments of claims in certain cases or to realize on certain property received in respect of any such claim as security or otherwise. Subject to the TIA, the trustee will be permitted to engage in other transactions; PROVIDED that if the trustee acquires any conflicting interest as described in the TIA, it must eliminate such conflict or resign. CERTAIN DEFINITIONS Set forth below is a summary of certain of the defined terms used in the indenture. Reference is made to the indenture for the full definition of all such terms, as well as any other terms used herein for which no definition is provided. 96 "ACQUIRED INDEBTEDNESS" means Indebtedness of a Person or any of its Subsidiaries existing at the time such Person becomes a Restricted Subsidiary of Dayton Superior or at the time it merges or consolidates with or into Dayton Superior 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 Dayton Superior or such acquisition, merger or consolidation. "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. Notwithstanding the foregoing, no Person (other than Dayton Superior or any Subsidiary of Dayton Superior) in whom a Securitization Entity makes an Investment in connection with a Qualified Securitization Transaction shall be deemed to be an Affiliate of Dayton Superior or any of its Subsidiaries solely by reason of such Investment. "ASSET ACQUISITION" means (a) an Investment by Dayton Superior or any Restricted Subsidiary of Dayton Superior in any other Person pursuant to which such Person shall become a Restricted Subsidiary of Dayton Superior, or shall be merged with or into Dayton Superior or any Restricted Subsidiary of Dayton Superior, or (b) the acquisition by Dayton Superior or any Restricted Subsidiary of Dayton Superior of the assets of any Person (other than a Restricted Subsidiary of Dayton Superior) which constitute all or substantially all of the assets of such Person or comprises 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. "ASSET SALE" means any direct or indirect sale, issuance, conveyance, transfer, lease (other than operating leases entered into in the ordinary course of business), assignment or other transfer for value by Dayton Superior or any of its Restricted Subsidiaries (including any Sale and Leaseback Transaction) to any Person other than Dayton Superior or a Restricted Subsidiary of Dayton Superior of: (1) any Capital Stock of any Restricted Subsidiary of Dayton Superior, or (2) any other property or assets of Dayton Superior or any Restricted Subsidiary of Dayton Superior 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 Dayton Superior or its Restricted Subsidiaries receive aggregate consideration of less than $1.0 million; (b) the sale, lease, conveyance, disposition or other transfer of all or substantially all of the assets of Dayton Superior as permitted under "--Certain Covenants--Merger, Consolidation and Sale of Assets" or any disposition that constitutes a Change of Control; (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) disposals or replacements of obsolete equipment in the ordinary course of business; (e) the sale, lease, conveyance, disposition or other transfer by Dayton Superior or any Restricted Subsidiary of assets or property to one or more Restricted Subsidiaries in connection with Investments permitted under the "Limitation on Restricted Payments" covenant or pursuant to any Permitted Investment; and (f) sales of accounts receivable, equipment and related assets (including contract rights) of the type specified in the definition of "Qualified Securitization Transaction" to a Securitization 97 Entity for the fair market value thereof, including cash in an amount at least equal to 75% of the fair market value thereof as determined in accordance with GAAP. For the purposes of this clause (f), Purchase Money Notes shall be deemed to be cash. "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 or other equity interests of such Person. "CAPITALIZED LEASE OBLIGATION" 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. 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. "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 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 or any state thereof or the District of Columbia or any United States 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; and (6) investments in money market funds which invest substantially all their assets in securities of the types described in clauses (1) through (5) above. "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 Dayton Superior to any Person or group of related Persons for purposes of Section 13(d) of the Exchange Act (a "GROUP"), other than to the Permitted Holders or their Related Parties or any Permitted Group; (2) the approval by the holders of Capital Stock of Dayton Superior of any plan or proposal for the liquidation or dissolution of Dayton Superior (whether or not otherwise in compliance with the provisions of the indenture); (3) any Person or Group (other than the Permitted Holders or their Related Parties or any Permitted Group) shall become the owner, directly or indirectly, beneficially or of record, of shares representing more than 40% of the aggregate ordinary voting power represented by the issued and outstanding Capital Stock of Dayton Superior at a time when the Permitted 98 Holders and their Related Parties in the aggregate own a lesser percentage of the aggregate ordinary voting power represented by such issued and outstanding Capital Stock; or (4) the first day on which a majority of the members of the board of directors of Dayton Superior are not Continuing Directors. "CONSOLIDATED EBITDA" means, with respect to any Person, for any period, the sum (without duplication) of such Person's: (1) Consolidated Net Income, and (2) to the extent Consolidated Net Income has been reduced thereby: (a) all income taxes and foreign withholding taxes of such Person and its Restricted Subsidiaries paid or accrued in accordance with GAAP for such period; (b) Consolidated Interest Expense; (c) Consolidated Non-cash Charges less any non-cash items increasing Consolidated Net Income for such period (other than normal accruals in the ordinary course of business), all as determined on a consolidated basis for such Person and its Restricted Subsidiaries in accordance with GAAP; and (d) any cash charges resulting from the recapitalization, the related financings and the Conspec acquisition that are incurred prior to the six month anniversary of the date of original issuance of the notes. "CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, with respect to any Person, the ratio of (x) 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 (y) 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 or the issuance of any Designated Preferred Stock 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 or the issuance or redemption of other preferred stock (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 revolving credit 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 or issuance or redemption, as the case may be (and the application of the proceeds thereof), had occurred on the first day of the Four-Quarter Period; and (2) Asset Sales or other dispositions or Asset Acquisitions (including, without limitation, (A) 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 Restricted Subsidiary as a result of the Asset Acquisition) incurring, assuming or otherwise being liable for Acquired Indebtedness, and (B) any Consolidated EBITDA (including any pro forma expense and cost reductions and other operating improvements that have occurred or are reasonably expected to occur to the extent consistent with Regulation S-X promulgated under the Securities Act) attributable to the assets which are the subject of the Asset Acquisition or Asset Sale or other disposition and without regard to clause (4) of the definition of Consolidated Net Income) occurring during the Four-Quarter Period or at any time 99 subsequent to the last day of the Four-Quarter Period and on or prior to the Transaction Date, as if such Asset Sale or other disposition 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 cash dividend payments on any series of preferred stock of such Person 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; PROVIDED that with respect to any series of preferred stock that was not paid cash dividends during such period but that is eligible to be paid cash dividends during any period prior to the maturity date of the notes, cash dividends shall be deemed to have been paid with respect to such series of preferred stock during such period for purposes of this clause (2); PLUS (3) the product of (x) the amount of all dividend payments on any series of Permitted Subsidiary Preferred Stock 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. "CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person for any period, the sum of, without duplication: (1) the aggregate of all cash and non-cash interest expense with respect to all outstanding Indebtedness of such Person and its Restricted Subsidiaries, including the net costs associated with Interest Swap Obligations, for such period determined on a consolidated basis in accordance with GAAP, but excluding amortization or write-off of debt issuance costs; (2) the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period; and (3) 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 LEVERAGE RATIO" means, with respect to any Person, the ratio of: 100 (1) the sum of the aggregate outstanding amount of Indebtedness of such Person and its Restricted Subsidiaries as of the Transaction Date on a consolidated basis determined in accordance with GAAP after giving effect to the incurrence of the Indebtedness on the Transaction Date and the receipt and application of the proceeds therefrom to (2) Consolidated EBITDA of such Person for the Four-Quarter Period ending prior to the Transaction Date calculated on a pro forma basis for the period of such calculation as set forth in the definition of "Consolidated Fixed Charge Coverage Ratio." "CONSOLIDATED NET INCOME" means, for any period, the aggregate net income (or loss) of Dayton Superior and its Restricted Subsidiaries for such period on a consolidated basis, determined in accordance with GAAP and without any deduction in respect of preferred stock dividends; PROVIDED that there shall be excluded therefrom: (1) gains and losses from Asset Sales (without regard to the $1.0 million limitation set forth in the definition thereof) and the related tax effects according to GAAP; (2) gains and losses due solely to fluctuations in currency values and the related tax effects according to GAAP; (3) all extraordinary, unusual or nonrecurring charges, gains and losses (including, without limitation, all restructuring costs and any expense or charge related to the repurchase of capital stock or warrants or options to purchase capital stock) and the related tax effects according to GAAP; (4) the net income (or loss) of any Person acquired in a pooling of interests transaction accrued prior to the date it becomes a Restricted Subsidiary of Dayton Superior or is merged or consolidated with or into Dayton Superior or any Restricted Subsidiary of Dayton Superior; (5) the net income (but not loss) of any Restricted Subsidiary of Dayton Superior to the extent that the declaration of dividends or similar distributions by that Restricted Subsidiary of Dayton Superior of that income is prohibited by contract, operation of law or otherwise; (6) the net loss of any Person, other than a Restricted Subsidiary of Dayton Superior; (7) the net income of any Person, other than a Restricted Subsidiary of Dayton Superior, except to the extent of cash dividends or distributions paid to Dayton Superior or a Restricted Subsidiary of Dayton Superior by such Person; (8) 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; and (9) any non-cash compensation charges, including any arising from existing stock options resulting from any merger or recapitalization transaction. For purposes of clause (iii)(w) of the first paragraph of the "Limitation on Restricted Payments" covenant, Consolidated Net Income shall be reduced by any cash dividends paid with respect to any series of Designated Preferred Stock. "CONSOLIDATED NON-CASH CHARGES" means, with respect to any Person, for any period, the aggregate depreciation, amortization and other non-cash charges and 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 payments for any future period other than accruals or reserves associated with mandatory repurchases of equity securities). 101 "CONTINUING DIRECTOR" means, as of any date of determination, any member of the board of directors of Dayton Superior who: (1) was a member of the board of directors of Dayton Superior on the date of original issuance of the notes; or (2) was nominated for election or elected to the board of directors of Dayton Superior by any of the Permitted Holders or with the approval of a majority of the Continuing Directors who were members of such board at the time of such nomination or election or the applicable guarantor, as the case may be. "CONVERTIBLE SUBORDINATED DEBENTURES" means Dayton Superior's 10% Convertible Subordinated Debentures due September 30, 2029, originally issued to Dayton Superior Capital Trust, which may be issued to holders of the Trust Preferred Securities in accordance with the terms of the Trust Preferred Documents. "CREDIT FACILITIES" means one or more debt facilities (including, without limitation, the New Credit Facility) or commercial paper facilities with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) and/or letters of credit, bank guarantees or banker's acceptances. "CURRENCY AGREEMENT" means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement designed to protect Dayton Superior or any Restricted Subsidiary of Dayton Superior against fluctuations in currency values. "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. "DESIGNATED NONCASH CONSIDERATION" means any noncash consideration received by Dayton Superior or one of its Restricted Subsidiaries in connection with an Asset Sale that is designated as Designated Noncash Consideration pursuant to an officers' certificate executed by the principal executive officer and the principal financial officer of Dayton Superior or such Restricted Subsidiary at the time of such Asset Sale. Any particular item of Designated Noncash Consideration will cease to be considered to be outstanding once it has been sold for cash or Cash Equivalents. At the time of receipt of any Designated Noncash Consideration, Dayton Superior shall deliver an officers' certificate to the trustee which shall state the fair market value of such Designated Noncash Consideration and shall state the basis of such valuation, which shall be a report of a nationally recognized investment banking, appraisal or accounting firm with respect to the receipt in one transaction or a series of related transactions of Designated Noncash Consideration with a fair market value in excess of $10.0 million. "DESIGNATED PREFERRED STOCK" means preferred stock that is designated as Designated Preferred Stock pursuant to an officers' certificate executed by the principal executive officer and the principal financial officer of Dayton Superior on the issue date thereof, the cash proceeds of which are excluded from the calculation set forth in clause (iii)(x) of the first paragraph of the "Limitation on Restricted Payments" covenant. "DESIGNATED SENIOR DEBT" means: (1) Indebtedness under or in respect of the New Credit Facility, and (2) any other Indebtedness constituting Senior Debt which, 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 Dayton Superior or the applicable guarantor, as the case may be. 102 "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 (excluding any maturity as the result of an optional redemption by the issuer thereof) 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 Dayton Superior that is incorporated under the laws of the United States or any state thereof or the District of Columbia. "EQUITY OFFERING" means any offering of Qualified Capital Stock of Dayton Superior generating gross proceeds to Dayton Superior of at least $25.0 million. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto. "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 Dayton Superior acting reasonably and in good faith and shall be evidenced by a board resolution of the board of directors of Dayton Superior delivered to the trustee. "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States, as in effect from time to time. "HEDGING AGREEMENT" means any agreement with respect to the hedging of price risk associated with the purchase of commodities used in the business of Dayton Superior and its Restricted Subsidiaries, so long as any such agreement has been entered into in the ordinary course of business and not for purposes of speculation. "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; (7) all Obligations of any other Person of the type referred to in clauses (1) through (6) which are secured by any lien on any property or asset of such Person, the amount of such Obligation 103 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 Obligations 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 the 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. For the purposes of calculating the amount of Indebtedness of a Securitization Entity outstanding as of any date, the face or notional amount of any interest in receivables or equipment that is outstanding as of such date shall be deemed to be Indebtedness but any such interests held by Affiliates of such Securitization Entity shall be excluded for purposes of such calculation. "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. "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 Dayton Superior and its Restricted Subsidiaries in accordance with normal trade practices of Dayton Superior or such Restricted Subsidiary, as the case may be. If Dayton Superior or any Restricted Subsidiary of Dayton Superior sells or otherwise disposes of any common stock of any direct or indirect Restricted Subsidiary of Dayton Superior such that, after giving effect to any such sale or disposition, such Restricted Subsidiary is no longer a Restricted Subsidiary of Dayton Superior, Dayton Superior 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. "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). "MARKETABLE SECURITIES" means publicly traded debt or equity securities that are listed for trading on a national securities exchange and that were issued by a corporation whose debt securities are rated in one of the three highest rating categories by either S&P or Moody's. "MOODY'S" means Moody's Investors Service, Inc. "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 104 form of cash or Cash Equivalents (other than the portion of any such deferred payment constituting interest) received by Dayton Superior 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; and (3) appropriate amounts to be provided by Dayton Superior 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 Dayton Superior 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. "NEW CREDIT FACILITY" means the Credit Agreement dated as of the date of original issuance of the notes among Dayton Superior, the lenders party thereto in their capacities as lenders thereunder, and Bankers Trust Company, as administrative 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 Dayton Superior 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. "OBLIGATIONS" means all obligations for principal, premium, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness. "PERMITTED BUSINESS" means any business (including stock or assets) that derives a majority of its revenues from the business engaged in by Dayton Superior and its Restricted Subsidiaries on the date of original issuance of the notes and/or activities that are reasonably similar, ancillary or related to, or a reasonable extension, development or expansion of, the businesses in which Dayton Superior and its Restricted Subsidiaries are engaged on the date of original issuance of the notes. "PERMITTED GROUP" means any group of investors that is deemed to be a "person" (as such term is used in Section 13(d)(3) of the Exchange Act) by virtue of the Stockholders Agreements, as the same may be amended, modified or supplemented from time to time, PROVIDED that no single Person (together with its Affiliates), other than the Permitted Holders and their Related Parties, is the "beneficial owner" (as such term is used in Section 13(d) of the Exchange Act), directly or indirectly, of more than 50% of the voting power of the issued and outstanding Capital Stock of Dayton Superior that is "beneficially owned" (as defined above) by such group of investors. "PERMITTED HOLDERS" means Odyssey Investment Partners Fund, LP, its Affiliates and any general or limited partners of Odyssey Investment Partners Fund, LP. "PERMITTED INDEBTEDNESS" means, without duplication, each of the following: (1) Indebtedness under the notes and the indenture issued on the date of original issuance of the notes and any notes issued in exchange therefor pursuant to the indenture and any guarantees thereof in an aggregate principal amount not to exceed $170.0 million; (2) Indebtedness of Dayton Superior or any of its Restricted Subsidiaries incurred pursuant to one or more Credit Facilities in an aggregate principal amount at any time outstanding not to 105 exceed the sum of (A) $80.0 million PLUS (B) up to $23.5 million the proceeds of which will initially be applied to pay the holders of the Trust Preferred Securities and/or the Convertible Subordinated Debentures who elected to convert their Trust Preferred Securities and/or Convertible Subordinated Debentures into the right to receive cash in accordance with the Trust Preferred Documents and the documents governing the recapitalization PLUS (C) up to $23.5 million the proceeds of which will initially be applied on or prior to the three-month anniversary of the date of original issuance of the notes to consummate the Conspec acquisition PLUS (D) $30.0 million the proceeds of which are used to consummate any acquisition, so long as after giving pro forma effect to such acquisition, the Consolidated Leverage Ratio of Dayton Superior would have been 4.75 to 1.0 or less, less: (i) the aggregate amount of Indebtedness of Securitization Entities at the time outstanding, less (ii) the amount of all mandatory principal payments actually made by Dayton Superior or any such Restricted Subsidiary since the date of original issuance of the notes with the Net Cash Proceeds of an Asset Sale in respect of term loans under a Credit Facility (excluding any such payments to the extent refinanced at the time of payment), and (iii) further reduced by any repayments of revolving credit borrowings under a Credit Facility with the Net Cash Proceeds of an Asset Sale that are accompanied by a corresponding commitment reduction thereunder; PROVIDED that the amount of Indebtedness permitted to be incurred pursuant to the Credit Facilities in accordance with this clause (2) shall be in addition to any Indebtedness permitted to be incurred pursuant to the Credit Facilities in reliance on, and in accordance with, clauses (7), (13) and (15) below; (3) other Indebtedness of Dayton Superior and its Restricted Subsidiaries outstanding on the date of original issuance of the notes reduced by the amount of any scheduled amortization payments or mandatory prepayments when actually paid or permanent reductions thereof; (4) Interest Swap Obligations of Dayton Superior or any of its Restricted Subsidiaries covering Indebtedness of Dayton Superior or any of its Restricted Subsidiaries; PROVIDED that any Indebtedness to which any such Interest Swap Obligations correspond is otherwise permitted to be incurred under the indenture; and PROVIDED, FURTHER, that such Interest Swap Obligations are entered into, in the judgment of Dayton Superior, to protect Dayton Superior or any of its Restricted Subsidiaries from fluctuations in interest rates on its outstanding Indebtedness; (5) Indebtedness of Dayton Superior or any Restricted Subsidiary of Dayton Superior under Hedging Agreements and Currency Agreements; (6) the incurrence by Dayton Superior or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Dayton Superior and any such Restricted Subsidiaries; PROVIDED, HOWEVER, that: (a) if Dayton Superior is the obligor on such Indebtedness and the payee is a Restricted Subsidiary that is not a guarantor, such Indebtedness is expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, and (b) (i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than Dayton Superior or a Restricted Subsidiary thereof, and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either Dayton Superior or a Restricted Subsidiary of Dayton Superior (other than by way of 106 granting a Lien permitted under the indenture or in connection with the exercise of remedies by a secured creditor) shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Dayton Superior or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6); (7) Indebtedness (including Capitalized Lease Obligations) incurred by Dayton Superior or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any Person owning such assets) in an aggregate principal amount outstanding not to exceed $5.0 million; (8) Refinancing Indebtedness; (9) guarantees by Dayton Superior and its Restricted Subsidiaries of one another's Indebtedness; PROVIDED that such Indebtedness is permitted to be incurred under the indenture; and PROVIDED, FURTHER, that in the event such Indebtedness (other than Acquired Indebtedness) is incurred pursuant to the Consolidated Fixed Charge Coverage Ratio, such guarantees are by Dayton Superior or a guarantor only; (10) Indebtedness arising from agreements of Dayton Superior or a Restricted Subsidiary of Dayton Superior providing for indemnification, adjustment of purchase price, earn out or other similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Restricted Subsidiary of Dayton Superior, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; PROVIDED that the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by Dayton Superior and its Restricted Subsidiaries in connection with such disposition; (11) obligations in respect of performance and surety bonds and completion guarantees provided by Dayton Superior or any Restricted Subsidiary of Dayton Superior in the ordinary course of business; (12) the incurrence by a Securitization Entity of Indebtedness in a Qualified Securitization Transaction that is non-recourse to Dayton Superior or any Subsidiary of Dayton Superior (except for Standard Securitization Undertakings); (13) additional Indebtedness of Dayton Superior and its Restricted Subsidiaries in an aggregate principal amount that does not, when taken together with any Permitted Subsidiary Preferred Stock then outstanding, exceed $7.5 million at any one time outstanding (which amount may, but need not, be incurred in whole or in part under a Credit Facility); (14) 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 that such Indebtedness is extinguished within five business days of incurrence; and (15) Indebtedness of Dayton Superior or any of its Restricted Subsidiaries represented by letters of credit for the account of Dayton Superior or such Restricted Subsidiary, as the case may be, issued in the ordinary course of business of Dayton Superior or such Restricted Subsidiary, including, without limitation, in order to provide security for workers' compensation claims or payment obligations in connection with self-insurance or similar requirements in the ordinary course of business and other Indebtedness with respect to workers' compensation claims, self-insurance obligations, performance, surety and similar bonds and completion guarantees provided by Dayton Superior or any Restricted Subsidiary of Dayton Superior in the ordinary course of business. 107 For purposes of determining compliance with the "Limitation on Incurrence of Additional Indebtedness" covenant, 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 (15) above or is permitted to be incurred pursuant to the Consolidated Fixed Charge Coverage Ratio provisions of such covenant, Dayton Superior shall, in its sole discretion, classify (or later reclassify) such item of Indebtedness in any manner that complies with such covenant. Accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Capital Stock in the form of additional shares of the same class of Disqualified Capital Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Capital Stock for purposes of the "Limitation on Incurrence of Additional Indebtedness" covenant. "PERMITTED INVESTMENTS" means: (1) Investments by Dayton Superior or any Restricted Subsidiary of Dayton Superior in any Restricted Subsidiary of Dayton Superior (whether existing on the date of original issuance of the notes or created thereafter) or any Person (including by means of any transfer of cash or other property) if as a result of such Investment such Person shall become a Restricted Subsidiary of Dayton Superior or that will merge with or consolidate into Dayton Superior or a Restricted Subsidiary of Dayton Superior and Investments in Dayton Superior by any Restricted Subsidiary of Dayton Superior; (2) Investments in cash and Cash Equivalents; (3) loans and advances to employees and officers of Dayton Superior and its Restricted Subsidiaries for bona fide business purposes in an aggregate principal amount not to exceed $5.0 million at any one time outstanding; (4) Currency Agreements, Hedging Agreements and Interest Swap Obligations entered into in the ordinary course of business and otherwise in compliance with the indenture; (5) 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; (6) Investments made by Dayton Superior or its Restricted Subsidiaries as a result of consideration received in connection with an Asset Sale made in compliance with the "Limitation on Asset Sales" covenant; (7) Investments existing on the date of original issuance of the notes; (8) accounts receivable created or acquired in the ordinary course of business; (9) guarantees by Dayton Superior or a Restricted Subsidiary of Dayton Superior permitted to be incurred under the indenture; (10) additional Investments having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (10) that are at that time outstanding, not to exceed $10.0 million (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value); (11) any Investment by Dayton Superior or a Subsidiary of Dayton Superior 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; and (12) Investments the payment for which consists exclusively of Qualified Capital Stock of Dayton Superior. 108 "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 Dayton Superior or the applicable Restricted Subsidiary has set aside on its 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); (4) judgment Liens not giving rise to an Event of Default; (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 Dayton Superior or any of its Restricted Subsidiaries; (6) any interest or title of a lessor under any Capitalized Lease Obligation; (7) purchase money Liens to finance property or assets of Dayton Superior or any Restricted Subsidiary of Dayton Superior acquired, constructed or improved in the ordinary course of business; PROVIDED, HOWEVER, that (a) the related purchase money Indebtedness shall not exceed the cost of such property or assets and shall not be secured by any property or assets of Dayton Superior or any Restricted Subsidiary of Dayton Superior other than the property and assets so acquired, and (b) the Lien securing such Indebtedness shall be created within 90 days of such acquisition; (8) 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; (9) 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; (10) Liens encumbering deposits made to secure obligations arising from statutory, regulatory, contractual or warranty requirements of Dayton Superior or any of its Restricted Subsidiaries, including rights of offset and set-off; (11) Liens securing Interest Swap Obligations which Interest Swap Obligations relate to Indebtedness that is otherwise permitted under the Indenture; 109 (12) Liens securing Indebtedness under Currency Agreements and Hedging Agreements; (13) Liens incurred in the ordinary course of business of Dayton Superior or any Restricted Subsidiary with respect to obligations that do not in the aggregate exceed $5.0 million at any one time outstanding; (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; (15) leases or subleases granted to others that do not materially interfere with the ordinary course of business of Dayton Superior and its Restricted Subsidiaries; (16) Liens arising from filing Uniform Commercial Code financing statements regarding leases; (17) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of custom duties in connection with the importation of goods; (18) Liens securing Acquired Indebtedness incurred in compliance with the "Limitation on Incurrence of Additional Indebtedness" covenant; (19) Liens placed upon assets of a Restricted Subsidiary of Dayton Superior that is not a guarantor to secure Indebtedness of such Restricted Subsidiary that is otherwise permitted under the indenture; and (20) Liens existing on the date of original issuance of the notes, together with any Liens securing Indebtedness incurred in reliance on clause (8) of the definition of Permitted Indebtedness in order to refinance the Indebtedness secured by Liens existing on the date of original issuance of the notes; PROVIDED that the Liens securing the refinancing Indebtedness shall not extend to property other than that pledged under the Liens securing the Indebtedness being refinanced. "PERMITTED SUBSIDIARY PREFERRED STOCK" means any series of preferred stock of a Restricted Subsidiary of Dayton Superior that constitutes Qualified Capital Stock and has a fixed dividend rate, the liquidation value of all series of which, when combined with the aggregate amount of Indebtedness of Dayton Superior and its Restricted Subsidiaries incurred pursuant to clause (13) of the definition of Permitted Indebtedness, does not exceed $7.5 million. "PERSON" means an individual, partnership, corporation, limited liability company, unincorporated organization, trust or joint venture, or a governmental agency or political subdivision thereof. "PRODUCTIVE ASSETS" means assets (including Capital Stock) that are used or usable by Dayton Superior and its Restricted Subsidiaries in Permitted Businesses. "PURCHASE MONEY NOTE" means a promissory note of a Securitization Entity evidencing a line of credit, which may be irrevocable, from Dayton Superior or any Subsidiary of Dayton Superior 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. "QUALIFIED CAPITAL STOCK" means any Capital Stock that is not Disqualified Capital Stock. "QUALIFIED PREFERRED STOCK" means any preferred stock that is not Disqualified Preferred Stock. 110 "QUALIFIED SECURITIZATION TRANSACTION" means any transaction or series of transactions that may be entered into by Dayton Superior or any of its Restricted Subsidiaries pursuant to which Dayton Superior or any of its Subsidiaries may sell, convey or otherwise transfer to: (1) a Securitization Entity (in the case of a transfer by Dayton Superior or any of its Restricted Subsidiaries); and (2) any other Person (in the case of a transfer by a Securitization Entity), or may grant a security interest in any accounts receivable or equipment (whether now existing or arising or acquired in the future) of Dayton Superior or any of its Restricted Subsidiaries, and any assets related thereto, including, without limitation, all collateral securing such accounts receivable and equipment, all contracts and contract rights and all guarantees or other obligations in respect of such accounts receivable and equipment, proceeds of such accounts receivable and equipment and other assets (including contract rights) which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions involving accounts receivable and equipment. "REFINANCING INDEBTEDNESS" means any refinancing, modification, replacement, restatement, refunding, deferral, extension, substitution, supplement, reissuance or resale of existing or future Indebtedness (other than intercompany Indebtedness), including any additional Indebtedness incurred to pay interest or premiums required by the instruments governing such existing or future Indebtedness as in effect at the time of issuance thereof ("Required Premiums") and fees in connection therewith; PROVIDED that any such event shall not: (1) directly or indirectly result in an increase in the aggregate principal amount of Permitted Indebtedness, except to the extent such increase is a result of a simultaneous incurrence of additional Indebtedness: (a) to pay Required Premiums and related fees; or (b) otherwise permitted to be incurred under the indenture; and (2) create Indebtedness with a Weighted Average Life to Maturity at the time such Indebtedness is incurred that is less than the Weighted Average Life to Maturity at such time of the Indebtedness being refinanced, modified, replaced, renewed, restated, refunded, deferred, extended, substituted, supplemented, reissued or resold. "RELATED PARTY" with respect to any Permitted Holder means: (a) (1) any spouse, sibling, parent or child of such Permitted Holder; or (2) the estate of any Permitted Holder during any period in which such estate holds Capital Stock of Dayton Superior for the benefit of any Person referred to in clause (a) (1); or (b) any trust, corporation, partnership, limited liability company or other entity the beneficiaries, stockholders, partners, owners or Persons beneficially owning an interest of more than 50% of which consist of, or the sole managing partner or managing member of which is, one or more Permitted Holders and/or such other Persons referred to in the immediately preceding clause (a). "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. 111 "RESTRICTED SUBSIDIARY" of any Person means any Subsidiary of such Person which at the time of determination is not an Unrestricted Subsidiary. "S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. "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 Dayton Superior or a Restricted Subsidiary of any property, whether owned by Dayton Superior or any Restricted Subsidiary at the date of original issuance of the notes or later acquired, which has been or is to be sold or transferred by Dayton Superior 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. "SECURITIZATION ENTITY" means a Wholly Owned Subsidiary of Dayton Superior (or another Person in which Dayton Superior or any Subsidiary of Dayton Superior makes an Investment and to which Dayton Superior or any Subsidiary of Dayton Superior transfers accounts receivable or equipment and related assets) which engages in no activities other than in connection with the financing of accounts receivable or equipment and which is designated by the board of directors of Dayton Superior (as provided below) as a Securitization Entity: (1) no portion of the Indebtedness or any other obligations (contingent or otherwise) of which: (a) is guaranteed by Dayton Superior or any Restricted Subsidiary of Dayton Superior (excluding guarantees of obligations (other than the principal of, and interest on, Indebtedness)) pursuant to Standard Securitization Undertakings; (b) is recourse to or obligates Dayton Superior or any Restricted Subsidiary of Dayton Superior in any way other than pursuant to Standard Securitization Undertakings; or (c) subjects any property or asset of Dayton Superior or any Restricted Subsidiary of Dayton Superior, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings; (2) with which neither Dayton Superior nor any Restricted Subsidiary of Dayton Superior has any material contract, agreement, arrangement or understanding other than on terms no less favorable to Dayton Superior or such Restricted Subsidiary than those that might be obtained at the time from Persons that are not Affiliates of Dayton Superior, other than fees payable in the ordinary course of business in connection with servicing receivables of such entity; and (3) to which neither Dayton Superior nor any Restricted Subsidiary of Dayton Superior 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 Dayton Superior shall be evidenced to the trustee by filing with the trustee a certified copy of the board resolution of Dayton Superior 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 Dayton Superior or any guarantor, whether outstanding on the date of original issuance of the notes 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 or the guarantee of such guarantor, as the case may be. Without limiting the generality of the foregoing, "Senior Debt" shall also include the principal of, premium, if any, interest (including any 112 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 of every nature of Dayton Superior or any guarantor under the New Credit Facility, including, without limitation, obligations 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 (and guarantees thereof) under Currency Agreements and Hedging Agreements, in each case whether outstanding on the date of original issuance of the notes or thereafter incurred. Notwithstanding the foregoing, "Senior Debt" shall not include: (i) any Indebtedness of Dayton Superior or a guarantor to Dayton Superior or to a Subsidiary of Dayton Superior; (ii) any Indebtedness to, or guaranteed on behalf of, any director, officer or employee of Dayton Superior or any Subsidiary of Dayton Superior (including, without limitation, amounts owed for compensation); (iii) Indebtedness to trade creditors and other amounts incurred in connection with obtaining goods, materials or services; (iv) Indebtedness represented by Disqualified Capital Stock; (v) any liability for federal, state, local or other taxes owed or owing by Dayton Superior or any guarantor; (vi) that portion of any Indebtedness incurred in violation of the indenture provisions set forth under "Limitation on Incurrence of Additional Indebtedness" (but, as to any such obligation, no such violation shall be deemed to exist for purposes of this clause (vi) if the holder(s) of such obligation or their representative and the trustee shall have received an officers' certificate of Dayton Superior 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 the indenture); (vii) Indebtedness which, when incurred and without respect to any election under Section 1111(b) of Title 11, United States Code, is without recourse to Dayton Superior; and (viii) any Indebtedness which is, by its express terms, subordinated in right of payment to any other Indebtedness of Dayton Superior, including, without limitation, the Convertible Subordinated Debentures. "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 Dayton Superior or any Subsidiary of Dayton Superior which are reasonably customary in an accounts receivable or equipment transaction. 113 "STOCKHOLDERS AGREEMENTS" means those certain stockholders agreements entered into in connection with the recapitalization. "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. "TOTAL ASSETS" means the total consolidated assets of Dayton Superior and its Restricted Subsidiaries, as set forth on Dayton Superior's most recent consolidated balance sheet. "TRUST AGREEMENT" means the Amended and Restated Trust Agreement, dated as of October 5, 1999, among Dayton Superior, as depositor, Firstar Bank, N.A. as property trustee, Mark A. Ferrucci as Delaware trustee, and the administrative trustees named therein, as in effect on the date of original issuance of the notes. "TRUST PREFERRED DOCUMENTS" means (i) the Trust Preferred Securities, (ii) the Trust Agreement, (iii) the Trust Preferred Guarantee Agreement, and (iv) the indenture governing the Convertible Subordinated Debentures. "TRUST PREFERRED GUARANTEE AGREEMENT" means the Guarantee Agreement, dated as of October 5, 1999, between Dayton Superior and Firstar Bank, N.A. as guarantee trustee thereunder, executed and delivered by Dayton Superior in favor of the holders of the Trust Preferred Securities, as in effect on the date of original issuance of the notes. "TRUST PREFERRED SECURITIES" means the preferred securities of Dayton Superior Capital Trust, liquidation preference $20 per security, exchangeable in certain circumstances for a portion (equal to the aggregate liquidation preference of the preferred securities so exchanged) of the Convertible Subordinated Debentures held by Dayton Superior Capital Trust. "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, Dayton Superior or any other Subsidiary of Dayton Superior that is not a Subsidiary of the Subsidiary to be so designated; PROVIDED that: (1) Dayton Superior certifies to the trustee that such designation complies with the "Limitation on Restricted Payments" covenant; 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 Dayton Superior or any of its Restricted Subsidiaries. The board of directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary only if (x) immediately after giving effect to such designation, Dayton Superior is able to incur at least 114 $1.00 of additional Indebtedness (other than Permitted Indebtedness) in compliance with the "Limitation on Incurrence of Additional Indebtedness" covenant, and (y) 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 of Dayton Superior 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. "WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any Indebtedness at any date, the number of years obtained by dividing: (1) the then outstanding aggregate principal amount of such Indebtedness into (2) the sum of the total of the products obtained by multiplying (a) 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 (b) 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. "WHOLLY OWNED SUBSIDIARY" of any Person means any Subsidiary of such Person of which all the outstanding voting securities (other than 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) are owned by such Person or any Wholly Owned Subsidiary of such Person. 115 BOOK-ENTRY, DELIVERY AND FORM The certificates representing the exchange notes will be issued in fully registered form without interest coupons. Except as described herein under the heading "Certificated Securities," exchange notes will initially be represented by a permanent global exchange note in fully registered form without interest coupons and will be deposited with the trustee as custodian for the Depository Trust Company and registered in the name of a nominee of such depositary. THE GLOBAL NOTE We expect that according to procedures established by the Depository Trust Company (A) upon the issuance of the global note, the Depository Trust Company or its custodian will credit, on its internal system, the principal amount of the individual beneficial interests represented by the global note to the respective accounts of persons who have accounts with that depositary and (B) ownership of beneficial interests in the global note will be shown on, and the transfer of that ownership will be effected only through, records maintained by the Depository Trust Company or its nominee and the records of participants. Ownership of beneficial interests in the global notes will be limited to persons who have accounts with the Depository Trust Company ("participants") or persons who hold interests through participants. So long as the Depository Trust Company, or its nominee, is the registered owner or holder of the exchange notes, the Depository Trust Company or that nominee, as the case may be, will be considered the sole owner or holder of the exchange notes represented by the global note for all purposes under the indenture. No beneficial owner of an interest in the global note will be able to transfer that interest except in accordance with the Depository Trust Company's procedures, in addition to those provided for under the indenture. Payments of the principal of, premium, if any, and interest on, the global note will be made to the Depository Trust Company or its nominee, as the case may be, as the registered owner of that global note. None of us, the trustee or any paying agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the global note or for maintaining, supervising or reviewing any records relating to those beneficial ownership interests. We expect that the Depository Trust Company or its nominee, upon receipt of any payment of principal, premium, if any, or interest on the global note, will credit participants' accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of the global note as shown on the records of the Depository Trust Company or its nominee. We also expect that payments by participants to owners of beneficial interests in the global note held through those participants will be governed by standing instructions and customary practice, as is now the case with securities held for the accounts of customers registered in the names of nominees for such customers. Those payments will be the responsibility of those participants. Transfers between participants in the Depository Trust Company will be effected in the ordinary way through DTC's same-day funds system in accordance with the Depository Trust Company rules and will be settled in same-day funds. If a holder requires physical delivery of a certificated security for any reason, including to sell exchange notes to persons in states that require physical delivery of the exchange notes, or to pledge such securities, that holder must transfer its interest in the global note, in accordance with the normal procedures of DTC and with the procedures set forth in the indenture. The Depository Trust Company has advised us that it will take any action permitted to be taken by a holder of exchange notes, including the presentation of exchange notes for exchange as described below, only at the direction of one or more participants to whose accounts the the Depository Trust Company interests in the global note are credited and only in respect of that portion of the aggregate 116 principal amount of exchange notes as to which that participant or those participants has or have given that direction. However, if there is an event of default under the indenture applicable to the global note, the Depository Trust Company will exchange the global note for Certificated Securities, which it will distribute to its participants. Although the Depository Trust Company has agreed to the foregoing procedures in order to facilitate transfers of interests in the global note among participants of the Depository Trust Company, it is under no obligation to perform those procedures and those procedures may be discontinued at any time. Neither we nor the trustee will have any responsibility for the performance by the Depository Trust Company or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations. CERTIFICATED SECURITIES Certificated securities shall be issued in exchange for the old notes in the exchange offer or for beneficial interest in the global note, in each case, if requested by a Holder of such old note or such beneficial interests, respectively. In addition, certificated securities shall be issued in exchange for beneficial interests in the global note if the Depository Trust Company is at any time unwilling or unable to continue as a depositary for the global note and a successor depositary is not appointed by us within 90 days. 117 IMPORTANT FEDERAL INCOME TAX CONSIDERATIONS SCOPE OF DISCUSSION This general discussion of certain United States federal income and estate tax consequences of the exchange of old notes for exchange notes and the ownership and disposition of notes applies to you if you acquire the old notes at original issue for cash and hold the notes, as a "capital asset," generally, for investment, under Section 1221 of the Internal Revenue Code of 1986, as amended (the "Code"). This summary, however, does not consider state, local or foreign tax laws. In addition, it does not include all of the rules which may affect the United States tax treatment of your investment in the notes. For example, special rules not discussed here may apply to you if you are: - a broker-dealer, a dealer in securities or a financial institution; - a flow-through entity (such as a partnership or an S corporation); - an insurance company; - a tax-exempt organization; - subject to the alternative minimum tax provisions of the Code; - holding the notes as part of a hedge, straddle or other risk reduction or constructive sale transaction; - a nonresident alien or foreign corporation subject to net-basis United States federal income tax on income or gain derived from a note because such income or gain is effectively connected with the conduct of a United States trade or business; or - a United States expatriate. This discussion only represents our best attempt to describe certain federal income tax consequences that may apply to you based on current United States federal tax law. This discussion may in the end inaccurately describe the federal income tax consequences which are applicable to you because the law may change, possibly retroactively, and because the Internal Revenue Service (the "IRS") or any court may disagree with this discussion. THIS SUMMARY MAY NOT COVER YOUR PARTICULAR CIRCUMSTANCES BECAUSE IT DOES NOT CONSIDER FOREIGN, STATE OR LOCAL TAX RULES, DISREGARDS CERTAIN FEDERAL TAX RULES, AND DOES NOT DESCRIBE FUTURE CHANGES IN FEDERAL TAX RULES. PLEASE CONSULT YOUR TAX ADVISOR RATHER THAN RELYING ON THIS GENERAL DESCRIPTION. UNITED STATES HOLDERS If you are a "United States Holder," as defined below, this section applies to you. Otherwise, the next section, "Non-United States Holders," applies to you. DEFINITION OF UNITED STATES HOLDER You are a "United States Holder" if you hold the notes and you are: - a citizen or resident of the United States, including an alien individual who is a lawful permanent resident of the United States or meets the "substantial presence" test under Section 7701(b) of the Code; - a corporation created or organized in the United States or under the laws of the United States or of any political subdivision of the United States; - an estate, the income of which is subject to United States federal income tax regardless of its source; or 118 - a trust, if a United States court can exercise primary supervision over the administration of the trust and one or more United States persons can control all substantial decisions of the trust, or if the trust was in existence on August 20, 1996 and has elected to continue to be treated as a United States person. DETERMINATION OF THE ISSUE PRICE OF THE NOTES For United States federal income tax purposes, a note will be treated as issued as part of an investment unit comprised of a note and a warrant. The issue price of each unit will be the first price at which a substantial portion of the units are sold in the offering (excluding sales to bond houses, brokers or similar persons acting in the capacity of the underwriter, placement agent or wholesaler). The issue price of each unit is required to be allocated between the notes and the warrants based on their respective fair market values at the time of issuance. Your initial basis in each of the notes is equal to the amount allocated to such notes. We intend to treat $955.75 of the issue price of a unit as allocable to the note. We intend to file information returns with the IRS based on such allocation. Our allocation of the issue price is binding on you for federal income tax purposes unless you disclose the use of a different allocation in your federal income tax return for the year in which the units was acquired. However, our allocation is not binding to the IRS, and there can be no assurance that the IRS will not challenge such allocation. If the IRS successfully asserts that the issue price of a note is less than the amount allocated by us, there will be a greater amount of original issue discount accruing under the note. EXCHANGE The exchange of old notes for exchange notes under the terms of the exchange offer should not constitute a taxable exchange. As a result, a holder (A) should not recognize taxable gain or loss as a result of exchanging old notes for exchange notes under the terms of the exchange offer, (B) the holding period of the exchange notes should include the holding period of the old notes exchanged for the exchange notes and (C) the adjusted tax basis of the exchange notes should be the same as the adjusted tax basis, immediately before the exchange of the old notes for the exchange notes. TAXATION OF STATED INTEREST You must generally include the stated interest on the notes in ordinary income: - when it accrues, if you use the accrual method of accounting for United States federal income tax purposes; or - when you receive it, if you use the cash method of accounting for United States federal income tax purposes. ORIGINAL ISSUE DISCOUNT The notes are issued with original issue discount ("OID") for United States federal income tax purposes. The amount of OID on a note equals the excess of the "stated redemption price at maturity" of a note over its "issue price." As discussed above, the "issue price" of each note will be that portion of the issue price of the unit that is allocated to the note (i.e., $955.75). The "stated redemption price at maturity" of a note is the sum of its principal amount plus all other payments thereunder, other than "qualified stated interest" payments. The term "qualified stated interest" generally means stated interest that is unconditionally payable in cash or property (other than debt instruments of the issuer) at least annually at a single fixed rate. The stated interest payable on the notes will be qualified stated interest. 119 Since the notes are issued with OID, you (whether you report on the cash or accrual basis of accounting for tax purposes) will be required to include in taxable income for any particular taxable year the daily portion of the OID described in the preceding paragraph that accrues on the note for each day during the taxable year on which you hold the note. Thus, you will be required to include OID in income in advance of the receipt of the cash to which such OID is attributable. The daily portion is determined by allocating to each day of an accrual period (generally, the period between interest payments or compounding dates) a pro rata portion of the OID allocable to such accrual period. The amount of OID that will accrue during an accrual period is the product of the "adjusted issue price" of the note at the beginning of an accrual period multiplied by the yield to maturity of the note less the amount of qualified stated interest allocable to such accrual period. The "adjusted issue price" of a note at the beginning of an accrual period will equal its issue price, increased by the aggregate amount of OID that has accrued on the note in all prior accrual periods, and decreased by any payments made during all prior accrual periods other than qualified stated interest. SALE OR OTHER TAXABLE DISPOSITION OF THE NOTES You must recognize taxable gain or loss on the sale, exchange, redemption, retirement or other taxable disposition of a note. The amount of your gain or loss equals the difference, if any, between the amount you receive for the note (in cash or other property, valued at fair market value), minus the amount attributable to accrued interest on the note, minus your adjusted tax basis in the note. Your initial tax basis in a note equals the price you paid for the note (i.e., the portion of the price paid for a unit that was allocated to the note) and will subsequently be increased by the OID includible in your taxable income under the rules described in "--Original Issue Discount," above, and will be reduced by any payments received on the note other than qualified stated interest. Your gain or loss will generally be a long-term capital gain or loss if you have held the note for more than one year. Otherwise, it will be a short-term capital gain or loss. Payments attributable to accrued interest which you have not yet included in income will be taxed as ordinary interest income. BACKUP WITHHOLDING You may be subject to a 31% backup withholding tax when you receive interest payments on the note or proceeds upon the sale or other disposition of a note. Certain holders (including, among others, corporations and certain tax-exempt organizations) are generally not subject to backup withholding. In addition, the 31% backup withholding tax will not apply to you if you provide your taxpayer identification number ("TIN") in the prescribed manner unless: - the IRS notifies us or our agent that the TIN you provided is incorrect; - you fail to report interest and dividend payments that you receive on your tax return and the IRS notifies us or our agent that withholding is required; or - you fail to certify under penalties of perjury that you are not subject to backup withholding. If the 31% backup withholding tax does apply to you, you may use the amounts withheld as a refund or credit against your United States federal income tax liability as long as you provide certain information to the IRS. NON-UNITED STATES HOLDERS DEFINITION OF NON-UNITED STATES HOLDER A "Non-United States Holder" is any person other than a United States Holder. Please note that if you are subject to United States federal income tax on a net basis on income or gain with respect to a note because such income or gain is effectively connected with the conduct of a United States trade or business, this disclosure does not cover the United States federal tax rules that apply to you. 120 STATED INTEREST AND OID ON THE NOTES PORTFOLIO INTEREST EXEMPTION. You will generally not have to pay United States federal income tax on stated interest or OID paid on the notes because of the "portfolio interest exemption" if either: - you represent that you are not a United States person for United States federal income tax purposes and you provide your name and address to us or our paying agent on a properly executed IRS Form W-8 (or a suitable substitute form) signed under penalties of perjury; or - a securities clearing organization, bank, or other financial institution that holds customers' securities in the ordinary course of its business holds the Note on your behalf, certifies to us or our agent under penalties of perjury that it has received IRS Form W-8 (or a suitable substitute) from you or from another qualifying financial institution intermediary, and provides a copy to us or our agent. You will not, however, qualify for the portfolio interest exemption described above if: - you own, actually or constructively, 10% or more of the total combined voting power of all classes of our capital stock; - you are a controlled foreign corporation with respect to which we are a "related person" within the meaning of Section 864(d)(4) of the Code; - you are a bank receiving interest described in Section 881(c)(3)(A) of the Code. WITHHOLDING TAX IF THE INTEREST IS NOT PORTFOLIO INTEREST. If you do not claim, or do not qualify for, the benefit of the portfolio interest exemption, you may be subject to a 30% withholding tax on interest payments made on the notes. However, you may be able to claim the benefit of a reduced withholding tax rate under an applicable income tax treaty. The required information for claiming treaty benefits is generally submitted, under current regulations, on Form 1001. Successor forms will require additional information, as discussed below under the heading "Non-United States Holders--New Withholding Regulations." SALE OR OTHER DISPOSITION OF THE NOTES. You will generally not be subject to United States federal income tax or withholding tax on gain recognized on a sale, exchange, redemption, retirement, or other disposition of a note. You may, however, be subject to tax on such gain if you are an individual who was present in the United States for 183 days or more in the taxable year of the disposition, in which case you may have to pay a United States federal income tax of 30% (or a reduced treaty rate) on such gain. UNITED STATES FEDERAL ESTATE TAXES. If you qualify for the portfolio interest exemption under the rules described above when you die, the notes will not be included in your estate for United States federal estate tax purposes. BACKUP WITHHOLDING AND INFORMATION REPORTING PAYMENTS FROM UNITED STATES OFFICE. If you receive payments made in respect of a note directly from us or through the United States office of a custodian, nominee, agent or broker, there is a possibility that you will be subject to both backup withholding at a rate of 31% and information reporting. With respect to interest made, however, backup withholding and information reporting will not apply if you certify, generally on a Form W-8 or substitute form, that you are not a United States person in the manner described above under the heading "Non-United States Holders--Interest." Moreover, with respect to proceeds received on the sale, exchange, redemption, or other disposition of a note backup withholding or information reporting generally will not apply if you 121 properly provide, generally on Form W-8 or a substitute form, a statement that you are an "exempt foreign person" for purposes of the broker reporting rules, and other required information. If you are not subject to United States federal income or withholding tax on the sale or other disposition of a note, as described above under the heading "Non-United States--Sale or Other Disposition of the notes you will generally qualify as an "exempt foreign person" for purposes of the broker reporting rules. PAYMENTS FROM FOREIGN OFFICE. If payments are made to you outside the United States by or through the foreign office of your foreign custodian, nominee or other agent, or if you receive the proceeds of the sale of a note through a foreign office of a "broker," as defined in the pertinent United States Treasury Regulations, you will generally not be subject to backup withholding or information reporting. You will, however, be subject to backup withholding and information reporting if the foreign custodian, nominee, agent or broker has actual knowledge or reason to know that the payee is a United States person. You will also be subject to information reporting, but not backup withholding, if the payment is made by a foreign office of a custodian, nominee, agent or broker that is a United States person or a controlled foreign corporation for United States federal income tax purposes, or that derives 50% or more of its gross income from the conduct of a United States trade or business for a specified three year period, unless the broker has in its records documentary evidence that you are a Non-United States Holder and certain other conditions are met. REFUNDS. Any amounts withheld under the backup withholding rules may be refunded or credited against the Non-United States Holder's United States federal income tax liability, provided that the required information is furnished to the IRS. NEW WITHHOLDING REGULATIONS. New regulations relating to withholding tax on income paid to foreign persons (the "New Withholding Regulations") will generally be effective for payments made after December 31, 2000, subject to certain transition rules. The New Withholding Regulations modify and, in general, unify the way in which you establish your status as a non-United States "beneficial owner" eligible for withholding exemptions including the portfolio interest exemption, a reduced treaty rate or an exemption from backup withholding. For example, the new regulations will require new forms, which you will generally have to provide earlier than you would have had to provide replacements for expiring existing forms. The New Withholding Regulations clarify withholding agents' reliance standards. They also require additional certifications for claiming treaty benefits. The New Withholding Regulations also provide somewhat different procedures for foreign intermediaries and flow-through entities (such as foreign partnerships) to claim the benefit of applicable exemptions on behalf of non-United States beneficial owners for which or for whom they receive payments. When you purchase the notes, you will be required to submit certification that complies with the temporary Treasury Regulations in order to obtain an available exemption from or reduction in withholding tax. The New Withholding Regulations provide that certifications satisfying the requirements of the New Withholding Regulations will be deemed to satisfy the requirement of the Treasury Regulations now in effect. If you are a Non-United States Holder claiming benefit under an income tax treaty, you should be aware that you may be required to obtain a taxpayer identification number and to certify your eligibility under the applicable treaty's limitations on benefits article in order to comply with the New Withholding Regulations' certification requirements. THE NEW WITHHOLDING REGULATIONS ARE COMPLEX, AND THIS SUMMARY DOES NOT COMPLETELY DESCRIBE THEM. PLEASE CONSULT YOUR TAX ADVISOR TO DETERMINE HOW THE NEW WITHHOLDING REGULATIONS WILL AFFECT YOUR PARTICULAR CIRCUMSTANCES. 122 PLAN OF DISTRIBUTION Each broker-dealer that receives exchange notes for its own account in the exchange offer must acknowledge that it will deliver a prospectus together with any resale of those exchange notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in the resales of exchange notes received in exchange for old notes where those old notes were acquired as a result of market-making activities or other trading activities. We have agreed that for a period of up to 180 days after the expiration date, we will make this prospectus, as amended or supplemented, available to any broker-dealer that requests it in the letter of transmittal for use in any such resale. We will not receive any proceeds from any sale of exchange notes by broker-dealers or any other persons. Exchange notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such exchange notes. Any broker-dealer that resells exchange notes that were received by it for its own account pursuant to the exchange offer and any broker or dealer that participates in a distribution of those exchange notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of exchange notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. We have agreed to pay all expenses incident to our performance of, or compliance with, the registration rights agreement and will indemnify the holders of old notes including any broker-dealers, and certain parties related to such holders, against certain types of liabilities, including liabilities under the Securities Act. LEGAL MATTERS The validity of the securities offered hereby is being passed upon for us by Thompson Hine & Flory LLP, Dayton, Ohio. New York, New York. EXPERTS The consolidated financial statements of Dayton Superior as of December 31, 1999 and 1998, and for each of the three years in the period ended December 31, 1999 included in this prospectus, have been audited by Arthur Andersen LLP, independent public accountants, as stated in their report appearing herein. 123 INDEX TO FINANCIAL STATEMENTS Report of Arthur Andersen LLP, Independent Public Accountants............................................... F-2 Consolidated Balance Sheets as of December 31, 1999 and 1998...................................................... F-3 Consolidated Statements of Income for each of the three years ended December 31, 1999, 1998 and 1997.......................... F-4 Consolidated Statements of Shareholders' Equity for each of the three years ended December 31, 1999, 1998 and 1997.......................... F-5 Consolidated Statements of Cash Flows for each of the three years ended December 31, 1999, 1998 and 1997.......................... F-6 Consolidated Statements of Comprehensive Income for each of the three years ended December 31, 1999, 1998 and 1997.......................... F-7 Notes to Consolidated Financial Statements for each of the three years ended December 31, 1999, 1998 and 1997.......................... F-8 Unaudited Consolidated Balance Sheets as of March 31, 2000 and December 31, 1999......................................... F-28 Unaudited Consolidated Statements of Income for the three months ended March 31, 2000 and April 2, 1999.......................... F-29 Unaudited Consolidated Statements of Cash Flows for the three months ended March 31, 2000 and April 2, 1999.......................... F-30 Unaudited Consolidated Statements of Comprehensive Income for the three months ended March 31, 2000 and April 2, 1999.......................... F-31 Notes to Unaudited Consolidated Financial Statements for the three months ended March 31, 2000 and April 2, 1999.......................... F-32
F-1 REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Shareholders of Dayton Superior Corporation: We have audited the accompanying consolidated balance sheets of Dayton Superior Corporation (an Ohio corporation) and Subsidiaries as of December 31, 1999 and 1998, and the related consolidated statements of income, shareholders' equity, cash flows and comprehensive income for each of the three years in the period ended December 31, 1999. 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 financial statements referred to above present fairly, in all material respects, the financial position of Dayton Superior Corporation and Subsidiaries as of December 31, 1999 and 1998, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1999, in conformity with accounting principles generally accepted in the United States. ARTHUR ANDERSEN LLP Dayton, Ohio February 4, 2000 F-2 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31 (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
1999 1998 -------- -------- ASSETS (NOTE 4) Current assets: Cash...................................................... $ 4,553 $ 560 Accounts receivable, net of allowances for doubtful accounts and sales returns and allowances of $5,589 and $4,432.................................................. 45,085 42,996 Inventories (Note 3)...................................... 39,340 36,058 Prepaid expenses and other current assets................. 5,551 4,396 Prepaid income taxes...................................... 1,038 828 Future income tax benefits (Notes 3 and 8)................ 3,998 3,521 -------- -------- Total current assets.................................. 99,565 88,359 -------- -------- Rental equipment, net (Note 3).............................. 58,748 52,586 -------- -------- Property, plant and equipment (Note 3) Land and improvements..................................... 4,553 5,481 Building and improvements................................. 22,478 20,030 Machinery and equipment................................... 46,620 38,339 -------- -------- 73,651 63,850 Less accumulated depreciation............................. (29,741) (22,069) -------- -------- Net property, plant and equipment..................... 43,910 41,781 -------- -------- Goodwill and intangible assets, net of accumulated amortization (Note 3)....................................... 75,522 70,130 Other assets................................................ 934 764 -------- -------- Total assets........................................ $278,679 $253,620 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current portion of long-term debt (Note 4)................ $ 5,032 $ 5,032 Accounts payable.......................................... 22,802 20,749 Accrued compensation and benefits......................... 11,302 12,443 Other accrued liabilities................................. 9,960 10,408 -------- -------- Total current liabilities............................. 49,096 48,632 Long-term debt (Note 4)..................................... 100,141 113,173 Deferred income taxes (Notes 3 and 8)....................... 16,566 11,544 Other long-term liabilities (Note 7)........................ 4,548 5,683 -------- -------- Total liabilities..................................... 170,351 179,032 -------- -------- Company-obligated mandatorily redeemable convertible trust preferred securities of Dayton Superior Capital Trust which holds solely debentures, $20 liquidation value per security; 1,062,500 and 0 securities authorized, issued and outstanding (Note 5).................................... 19,556 -- -------- -------- Shareholders' equity (Note 6) Class A common shares; no par value; 20,539,500 shares authorized; 5,962,200 and 5,200,372 shares issued and 5,943,183 and 5,193,174 shares outstanding; 1 vote per share...................................... 47,417 42,316 Class B common shares; no par value; 0 and 757,569 shares authorized, issued, and outstanding; 10 votes per share.............................................. -- 5,037 Class A treasury shares, at cost, 19,017 and 7,298 shares................................................. (387) (145) Cumulative other comprehensive income..................... (254) (281) Retained earnings......................................... 41,996 27,661 -------- -------- Total shareholders' equity............................ 88,772 74,588 -------- -------- Total liabilities and shareholders' equity.......... $278,679 $253,620 ======== ========
The accompanying notes to consolidated financial statements are an integral part of these consolidated balance sheets. F-3 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME YEARS ENDED DECEMBER 31 (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
1999 1998 1997 ---------- ---------- ---------- Net sales (Note 3)....................................... $ 322,170 $ 282,849 $ 167,412 Cost of sales............................................ 199,464 177,094 111,044 ---------- ---------- ---------- Gross profit........................................... 122,706 105,755 56,368 Selling, general and administrative expenses............. 81,800 73,721 36,761 Amortization of goodwill and intangibles................. 2,369 2,213 1,885 ---------- ---------- ---------- Income from operations................................. 38,537 29,821 17,722 Other expenses Interest expense, net.................................. 11,661 11,703 5,556 Other expense (income), net............................ 230 (202) (64) ---------- ---------- ---------- Income before income taxes............................. 26,646 18,320 12,230 Provision for income taxes (Note 8)...................... 11,991 8,244 5,277 ---------- ---------- ---------- Net income............................................. 14,655 10,076 6,953 Dividends on Company-obligated mandatorily redeemable convertible trust preferred securities, net of income tax benefit............................................ 320 -- -- ---------- ---------- ---------- Net income available to common shareholders............ $ 14,335 $ 10,076 $ 6,953 ========== ========== ========== Basic net income per share............................... $ 2.41 $ 1.72 $ 1.22 ========== ========== ========== Weighted average common shares outstanding............... 5,944,667 5,867,338 5,703,601 ========== ========== ========== Diluted net income per share............................. $ 2.30 $ 1.65 $ 1.17 ========== ========== ========== Weighted average common and common share equivalents outstanding............................................ 6,376,935 6,098,205 5,933,244 ========== ========== ==========
The accompanying notes to consolidated financial statements are an integral part of these consolidated statements. F-4 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY YEARS ENDED DECEMBER 31, 1999, 1998, AND 1997 (AMOUNTS IN THOUSANDS, EXCEPT SHARE AMOUNTS)
CUMULATIVE CLASS A CLASS B CLASS A FOREIGN COMMON SHARES COMMON SHARES TREASURY SHARES CURRENCY -------------------- -------------------- ------------------- TRANSLATION SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT ADJUSTMENT --------- -------- --------- -------- -------- -------- ------------- Balances at December 31, 1996........ 4,199,200 $32,636 1,466,350 $9,749 -- $ -- (145) Net income........................... Foreign currency translation adjustment......................... (46) Issuance of Class A common stock in lieu of directors' fees............ 8,258 104 Issuance of Class A common shares in conjunction with acquisition (Note 2)................................. 26,254 346 Exercise of stock options, net....... 28,094 300 --------- ------- --------- ------ ------ ----- ----- Balances at December 31, 1997........ 4,261,806 33,386 1,466,350 9,749 -- -- (191) Net income........................... Foreign currency translation adjustment......................... (75) Excess pension liability adjustment......................... Issuance of Class A common stock in lieu of directors' fees............ 6,363 124 Issuance of Class A common shares in conjunction with acquisition (Note 2)................................. 222,396 4,078 Exercise of stock options, net....... 1,026 16 Conversion of Class B common shares into Class A common shares......... 708,781 4,712 (708,781) (4,712) Purchase of Class A treasury shares............................. 7,298 (145) --------- ------- --------- ------ ------ ----- ----- Balances at December 31, 1998........ 5,200,372 42,316 757,569 5,037 7,298 (145) (266) Net income........................... Dividends on Company-obligated mandatorily redeemable convertible trust preferred securities......... Foreign currency translation adjustment......................... 12 Excess pension liability adjustment......................... Issuance of Class A common stock in lieu of directors' fees............ 7,731 153 Return of Class A common shares in conjunction with acquisition (Note 2)................................. (6,456) (117) Exercise of stock options, net....... 2,984 28 Conversion of Class B common shares into Class A common shares......... 757,569 5,037 (757,569) (5,037) Purchase of Class A treasury shares............................. 11,719 (242) --------- ------- --------- ------ ------ ----- ----- Balances at December 31, 1999........ 5,962,200 $47,417 -- $ -- 19,017 $(387) $(254) ========= ======= ========= ====== ====== ===== ===== EXCESS PENSION RETAINED LIABILITY EARNINGS TOTAL --------- -------- -------- Balances at December 31, 1996........ $-- $10,632 $52,872 Net income........................... 6,953 6,953 Foreign currency translation adjustment......................... (46) Issuance of Class A common stock in lieu of directors' fees............ 104 Issuance of Class A common shares in conjunction with acquisition (Note 2)................................. 346 Exercise of stock options, net....... 300 --- ------- ------- Balances at December 31, 1997........ -- 17,585 60,529 Net income........................... 10,076 10,076 Foreign currency translation adjustment......................... (75) Excess pension liability adjustment......................... (15) (15) Issuance of Class A common stock in lieu of directors' fees............ 124 Issuance of Class A common shares in conjunction with acquisition (Note 2)................................. 4,078 Exercise of stock options, net....... 16 Conversion of Class B common shares into Class A common shares......... -- Purchase of Class A treasury shares............................. (145) --- ------- ------- Balances at December 31, 1998........ (15) 27,661 74,588 Net income........................... 14,655 14,655 Dividends on Company-obligated mandatorily redeemable convertible trust preferred securities......... (320) (320) Foreign currency translation adjustment......................... 12 Excess pension liability adjustment......................... 15 15 Issuance of Class A common stock in lieu of directors' fees............ 153 Return of Class A common shares in conjunction with acquisition (Note 2)................................. (117) Exercise of stock options, net....... 28 Conversion of Class B common shares into Class A common shares......... -- Purchase of Class A treasury shares............................. (242) --- ------- ------- Balances at December 31, 1999........ $-- $41,996 $88,772 === ======= =======
The accompanying notes to consolidated financial statements are an integral part of these consolidated statements. F-5 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31 (AMOUNTS IN THOUSANDS)
1999 1998 1997 -------- -------- -------- Cash Flows From Operating Activities: Net income................................................ $ 14,655 $ 10,076 $ 6,953 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation............................................ 11,717 10,076 5,131 Amortization of goodwill and intangibles................ 2,369 2,213 1,885 Deferred income taxes................................... 3,801 1,792 1,017 Amortization of deferred financing costs and issuance costs on Company-obligated mandatorily redeemable convertible trust preferred securities................. 848 821 565 Gain on sales of rental equipment and property, plant and equipment.......................................... (6,904) (8,236) (2,871) Change in assets and liabilities, net of effects of acquisitions: Accounts receivable..................................... 37 (4,830) 3,111 Inventories............................................. (1,701) (2,110) 527 Prepaid expenses and other current assets............... (826) (1,332) (165) Prepaid income taxes.................................... (343) 1,259 (865) Accounts payable........................................ 1,435 3,991 (2,136) Accrued liabilities and other long-term liabilities..... (897) 5,487 (2,690) Other, net.............................................. (623) 518 9 -------- -------- -------- Net cash provided by operating activities............. 23,568 19,725 10,471 -------- -------- -------- Cash Flows From Investing Activities: Property, plant and equipment additions................... (7,728) (7,215) (4,410) Proceeds from sale of fixed assets........................ 259 1,097 -- Rental equipment additions................................ (16,029) (18,081) (4,875) Proceeds from sales of rental equipment................... 11,977 11,298 3,628 Acquisitions, net of cash acquired (Note 2)............... (13,734) (1,784) (33,467) Other investing activities................................ (320) -- (15) -------- -------- -------- Net cash used in investing activities................. (25,575) (14,685) (39,139) -------- -------- -------- Cash Flows From Financing Activities: Repayments of long-term debt.............................. (13,032) (4,276) (67,203) Issuance of long-term debt................................ -- -- 100,000 Issuance of Class A common shares......................... 28 16 300 Financing costs and fees.................................. -- -- (4,586) Purchase of treasury shares............................... (242) (145) -- Issuance of Company-obligated mandatorily redeemable convertible trust preferred securities, net of issuance costs................................................... 19,554 -- -- Dividends on Company-obligated mandatorily redeemable convertible trust preferred securities, net of income tax benefit............................................. (320) -- -- -------- -------- -------- Net cash provided by (used in) financing activities... 5,998 (4,405) 28,511 -------- -------- -------- Effect of Exchange Rate Changes on Cash..................... 12 (75) (46) -------- -------- -------- Net increase (decrease) in cash....................... 3,993 560 (203) Cash, beginning of year..................................... 560 -- 203 -------- -------- -------- Cash, end of year........................................... $ 4,553 $ 560 $ -- ======== ======== ======== Supplemental Disclosures: Cash paid for income taxes................................ $ 8,146 $ 5,055 $ 4,919 Cash paid for interest.................................... 9,833 10,763 4,736 Issuance of long-term debt to seller in conjunction with acquisition............................................. -- -- 5,000 Issuance of Class A common shares in conjunction with acquisitions (117) 4,078 346 Issuance of Class A common shares in lieu of directors' fees 153 124 104
The accompanying notes to consolidated financial statements are an integral part of these consolidated statements. F-6 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31 (AMOUNTS IN THOUSANDS)
1999 1998 1997 -------- -------- -------- Net income........................................ $14,655 $10,076 $6,953 Dividends on Company-obligated mandatorily redeemable convertible trust preferred securities...................................... (320) -- -- Other comprehensive income Foreign currency translation adjustment......... 12 (75) (46) Excess pension liability adjustment............. 15 (15) -- ------- ------- ------ Comprehensive income.............................. $14,362 $ 9,986 $6,907 ======= ======= ======
The accompanying notes to consolidated financial statements are an integral part of these consolidated statements. F-7 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1999, 1998 AND 1997 (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (1) THE COMPANY The accompanying consolidated financial statements include the accounts of Dayton Superior Corporation and its wholly owned subsidiaries, Dayton Superior Canada Ltd., Dur-O-Wal, Inc., Dur-O-Wal, Ltd., and commencing September 29, 1997, Symons Corporation ("Symons") (collectively referred to as the "Company"). All significant intercompany transactions have been eliminated. The Company is the largest North American manufacturer and distributor of metal accessories and forms used in concrete construction and of metal accessories used in masonry construction. As of December 31, 1999, the Company has a distribution network consisting of 18 manufacturing/distribution plants and 44 service/distribution centers in the United States and Canada. The Company employs approximately 800 salaried and 1,450 hourly personnel, of whom approximately 1,000 of the hourly personnel and six of the salaried personnel are represented by labor unions. There are six collective bargaining agreements expiring in 2000. The agreements cover 430 employees at the St. Joseph's, MO, Santa Fe Springs, CA, Atlanta, GA, Parson, KS, Los Angeles, CA, and Des Plaines, IL facilities. On January 19, 2000, the Company signed a definitive merger agreement with an affiliate of Odyssey Investment Partners, LLC, the manager of a New York based private equity investment fund, for $27.00 per share in cash, for a total transaction value (debt and equity) of approximately $315 million. Holders of the Company-obligated mandatorily redeemable convertible trust preferred securities will have the right to receive cash in the amount of $22.00, plus accrued dividends, per preferred security upon consummation of the recapitalization merger. The recapitalization merger is conditioned on Company shareholder approval, receipt of financing, government regulatory approvals and other customary conditions. The closing is currently anticipated to occur in the second quarter of 2000. (2) ACQUISITIONS (A) SYMONS CORPORATION-- On September 29, 1997, the Company purchased the stock of Symons Corporation ("Symons"). The purchase agreement between the Company and the former stockholders of Symons ("the Former Stockholders") relating to the Acquisition ("the Purchase Agreement") provides for an adjustment to the purchase price under certain circumstances. The Company has advised the Former Stockholders that it believes it is entitled to a purchase price adjustment in its favor, and the Former Stockholders similarly advised the Company that they believe they are entitled to a purchase price adjustment in their favor. The dispute has been referred to a mutually satisfactory accounting firm, which is expected to resolve such differences in accordance with the Purchase Agreement. On June 12, 1998, the Former Stockholders filed a lawsuit in Delaware Chancery Court seeking a determination with respect to a limited number of issues involved in the dispute, which the Company believes can be resolved only through arbitration. On October 28, 1998, the court granted the Company's motion to dismiss with respect to certain of these issues (as to which the Company intends to proceed with arbitration) and retained jurisdiction with respect to the remainder of the issues. On December 28, 1998, the Court stayed the proceeding with respect to the issues as to which it had retained jurisdiction, pending the outcome of arbitration commenced by the parties with respect to the purchase price adjustment. Either party may seek to reopen the proceedings following the arbitration. F-8 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1999, 1998 AND 1997 (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (2) ACQUISITIONS (CONTINUED) At this time, the Company can make no determination as to the amount of the adjustment, if any, which will be made to the purchase price. The Company intends to vigorously pursue its rights under the Purchase Agreement. (B) SOUTHERN CONSTRUCTION PRODUCTS, INC.-- Effective October 4, 1999, the Company acquired substantially all of the assets and assumed certain of the liabilities of Southern Construction Products, Inc. ("Southern") for approximately $8,300 in cash, including acquisition costs, and net of a purchase price reduction of approximately $300 received in January 2000. The business is being operated as part of the Company's masonry products and concrete accessories businesses. The acquisition has been accounted for as a purchase, and the results of Southern have been included in the accompanying consolidated financial statements since the date of acquisition. The purchase price has been allocated based on the estimated fair values of the assets acquired and liabilities assumed. Certain appraisals and evaluations are preliminary and may change. Pro forma financial information is not required. (C) CEMPRO, INC.-- Effective January 1, 1999, the Company acquired substantially all of the assets and assumed certain of the liabilities of Cempro, Inc. ("Cempro") for approximately $5,400 in cash, including acquisition costs of approximately $100. The business is being operated as a part of the Company's concrete accessories business. The acquisition has been accounted for as a purchase, and the results of Cempro have been included in the accompanying consolidated financial statements since the date of acquisition. The purchase price has been allocated based on the estimated fair values of the assets acquired and liabilities assumed. Pro forma financial information is not required. (D) SECURE, INC.-- In June 1998, the Company purchased substantially all of the assets of Secure, Inc. ("Secure"), a subsidiary of The Lofland Company, for approximately $700 in cash, including acquisition costs of approximately $100. This business is being operated as a part of the Company's paving products division. The acquisition has been accounted for as a purchase, and the results of Secure have been included in the accompanying consolidated financial statements since the date of acquisition. The purchase price has been allocated based on the estimated fair values of the assets acquired. Pro forma financial information is not required. (E) SYMONS CONCRETE FORMS, INC.-- In May 1998, the Company purchased the stock of Symons Concrete Forms, Inc. (formerly known as CAI). The purchase price was approximately $6,600, including acquisition costs of approximately F-9 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1999, 1998 AND 1997 (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (2) ACQUISITIONS (CONTINUED) $200, and was paid in cash of approximately $400, assumption of long-term debt of approximately $2,200, and delivery of 215,940 Class A Common Shares valued at approximately $4,000, which is net of a purchase price reduction of approximately $100 (6,456 Class A Common Shares) in 1999 related primarily to uncollected accounts receivable. The business is being operated as a part of the Company's concrete forming systems division. The acquisition has been accounted for as a purchase, and the results of Symons Concrete Forms have been included in the accompanying consolidated financial statements since the date of acquisition. The purchase price has been allocated based on the estimated fair values of the assets acquired and liabilities assumed. Pro forma financial information is not required. (F) NORTHWOODS-- In May 1998, the Company purchased the assets of the Northwoods branches of Concrete Forming, Inc. ("Northwoods") for approximately $800 in cash. The Northwoods branches are being operated as a part of the Company's concrete forming systems division. The acquisition has been accounted for as a purchase, and the results of the Northwoods branches have been included in the accompanying consolidated financial statements since the date of acquisition. The purchase price has been allocated based on the estimated fair values of the assets acquired. Pro forma financial information is not required. (G) IRONCO MANUFACTURING CO., INC.-- In February 1997, the Company acquired certain of the assets and assumed certain of the liabilities of Ironco Manufacturing Co., Inc. and Birmingham Bar Coating, Inc. The purchase price, including acquisition costs, was approximately $1,500 and was paid in cash of approximately $1,200 and 26,254 Class A Common Shares valued at approximately $300. The acquisition was accounted for as a purchase and the results of the companies have been included in the accompanying consolidated financial statements since the date of acquisition. The purchase price has been allocated based on the fair value of the assets acquired and liabilities assumed. Pro forma financial information is not required. (3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (A) INVENTORIES-- Substantially all inventories of the domestic concrete accessories, paving products and masonry products operations are stated at the lower of last-in, first-out ("LIFO") cost (which approximates current cost) or market. All other inventories of the Company are stated at the lower of first-in, first-out ("FIFO") cost or market. The Company provides net realizable value reserves which reflect the Company's best estimate of the excess of the cost of potential obsolete and slow moving inventory over the expected net realizable value. The Company had no LIFO reserve as of December 31, 1999 F-10 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1999, 1998 AND 1997 (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) and 1998. Following is a summary of the components of inventories as of December 31, 1999 and December 31,1998:
DECEMBER 31, DECEMBER 31, 1999 1998 ------------ ------------ Raw materials....................................... $ 8,787 $ 7,659 Finished goods and work in progress................. 32,920 30,022 ------- ------- 41,707 37,681 Net realizable value reserve........................ (2,367) (1,623) ------- ------- $39,340 $36,058 ======= =======
(B) RENTAL EQUIPMENT-- Rental equipment is manufactured by the Company for resale and for rent to others on a short-term basis. Rental equipment is recorded at the lower of FIFO cost or market and is depreciated over the estimated useful life of the equipment, twelve to fifteen years, on a straight-line method. The balances as of December 31, 1999 and 1998 are net of accumulated depreciation of $9,855 and $6,796, respectively. Rental revenues and cost of sales associated with rental revenue are as follows:
FOR THE YEAR ENDING ------------------------------------------ DECEMBER 31, DECEMBER 31, DECEMBER 31, 1999 1998 1997 ------------ ------------ ------------ Rental revenue.......................... $51,079 $44,242 $11,336 Cost of sales........................... 8,402 7,114 1,991
(C) PROPERTY, PLANT AND EQUIPMENT-- Property, plant and equipment are valued at cost and depreciated using straight-line and accelerated methods over their estimated useful lives of 10-30 years for buildings and improvements and 3-10 years for machinery and equipment. Leasehold improvements are amortized over the lesser of the term of the lease or the estimated useful life of the improvement. Improvements and replacements are capitalized, while expenditures for maintenance and repairs are charged to expense as incurred. (D) GOODWILL AND INTANGIBLE ASSETS-- Goodwill and intangible assets are recorded at the date of acquisition at their allocated cost. Amortization is provided over the estimated useful lives of 40 years for goodwill, the term of the loan (5 to 8 years) for deferred financing costs and the term of the agreement (3 to 10 years) for non-compete agreements. F-11 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1999, 1998 AND 1997 (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) In accordance with Statement of Financial Accounting Standard No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of" ("SFAS 121"), the carrying value of goodwill and other long-lived assets is assessed for recoverability by management when changes in circumstances indicate that the carrying amount may not be recoverable, based on an analysis of undiscounted future expected cash flows from the use and ultimate disposition of the asset. Management believes there has been no impairment of the carrying values of the Company's long-lived assets as of December 31, 1999 and 1998. (E) INCOME TAXES-- Deferred income taxes are determined by applying current statutory tax rates to the cumulative temporary differences between the carrying value of assets and liabilities for financial reporting and tax purposes. (F) ENVIRONMENTAL REMEDIATION LIABILITIES-- The Company accounts for environmental remediation liabilities in accordance with the American Institute of Certified Public Accountants issued Statement of Position 96-1, "Environmental Remediation Liabilities," ("SOP 96-1"). The Company accrues for losses associated with environmental remediation obligations when such losses are probable and reasonably estimable. Accruals for estimated losses from environmental remediation obligations generally are recognized no later than completion of the remedial feasibility study. Such accruals are adjusted as further information develops or circumstances change. Costs of future expenditures for environmental remediation obligations are not discounted to their present value. Recoveries of environmental remediation costs from other parties are recorded as assets when their receipt is deemed probable. (G) FOREIGN CURRENCY TRANSLATION ADJUSTMENT-- The financial statements of foreign subsidiaries and branches are maintained in their functional currency (Canadian dollars) and are then translated into U.S. dollars. The balance sheets are translated at end of year rates while revenues, expenses and cash flows are translated at weighted average rates throughout the year. Translation adjustments, which result from changes in exchange rates from period to period, are accumulated in a separate component of shareholders' equity. Transactions in foreign currencies are translated into U.S. dollars at the rate in effect on the date of the transaction. Changes in foreign exchange rates from the date of the transaction to the date of the settlement of the asset or liability is recorded as income or expense. (H) NET INCOME PER SHARE-- Basic net income per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the year. Diluted net income per share is computed by dividing net income available to common shareholders by the weighted average number of common and common share equivalents outstanding F-12 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1999, 1998 AND 1997 (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) during the year. Common share equivalents include, if dilutive, the number of shares issuable upon conversion of the Company-obligated mandatory redeemable convertible trust preferred securities. Common Share equivalents also include the number of shares issuable upon the exercise of outstanding options, less the shares that could be purchased with the proceeds from the exercise of the options, based on the Company's average trading price.
1999 1998 1997 --------- --------- --------- Net income.................................. $ 14,655 $ 10,076 $ 6,953 Dividends on Company-obligated mandatorily redeemable convertible trust preferred securities, net of income tax benefit..... 320 -- -- --------- --------- --------- Net income available to common shareholders.............................. $ 14,335 $ 10,076 $ 6,953 ========= ========= ========= Weighted average number of Class A and Class B common shares outstanding............... 5,944,667 5,867,338 5,703,601 Dilutive effect of stock options (Note 6a)....................................... 220,350 230,867 229,643 Dilutive effect of Company-obligated mandatorily redeemable convertible trust preferred securities, assuming conversion................................ 211,918 -- -- --------- --------- --------- Diluted shares outstanding.................. 6,376,935 6,098,205 5,933,244 ========= ========= ========= Basic net income per share.................. $ 2.41 $ 1.72 $ 1.22 ========= ========= ========= Diluted net income per share................ $ 2.30 $ 1.65 $ 1.17 ========= ========= =========
(I) FINANCIAL INSTRUMENTS-- The Company uses interest rate swaps to manage interest rate risk associated with its floating rate borrowings. The swap agreements are contracts to exchange floating rate for fixed rate interest payments periodically over the life of the agreements without the exchange of the underlying amounts. The differential paid or received on the interest rate swap agreements is recognized as an adjustment to interest expense. (J) REVENUE RECOGNITION-- The Company recognizes revenue on product and rental equipment sales on the date of shipment. Rental revenues are recognized ratably over the terms of the rental agreements. (K) USE OF ESTIMATES-- The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates. Examples of accounts in F-13 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1999, 1998 AND 1997 (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) which estimates are used include the reserve for excess and obsolete inventory, the allowance for doubtful accounts and sales returns and allowances, the accrual for self-insured employee medical claims, the self-insured product and general liability accrual, the self-insured workers' compensation accrual, accruals for litigation losses, the valuation allowance for deferred tax assets, actuarial assumptions used in determining pension benefits, and actuarial assumptions used in determining other post-retirement benefits. (L) RECLASSIFICATIONS-- Certain reclassifications have been made to prior years' amounts to conform to their 1999 classification. (4) CREDIT ARRANGEMENTS The Company has a Credit Agreement to provide for a term loan and revolving credit facility, each of which is secured by substantially all of the assets of the Company. The $100,000 Term Loan requires quarterly interest payments, with principal amount due in 2005. The Term Loan permits the Company to choose from various interest rate options and has a weighted average interest rate of 8.93% at December 31, 1999. Amounts available under the Revolving Credit Facility are equal to the lesser of (i) $50,000 or (ii) the sum of (x) 85% of eligible accounts receivable, and (y) 60% of eligible inventories. The amount available under the Revolving Credit Facility was $50,000 at December 31, 1999. The Revolving Credit Facility will terminate in 2002, and has interest options based on (a) Bank One, Dayton, NA's prime rate (8.50% at December 31, 1999) plus an amount between 0% and 1% depending on the level of certain financial ratios (0.25% at December 31, 1999), or (b) LIBOR plus an amount between 0.75% and 2.00% depending on the level of certain financial ratios (1.25% at December 31, 1999). A commitment fee of between 0.125% and 0.400% per annum will be payable on the average unused amount depending on the level of certain financial ratios (0.175% at December 31, 1999). The Company used the proceeds of the Credit Agreement to fund the acquisition of all outstanding shares of Symons and to repay all amounts outstanding on the existing term and revolving loans of both the Company and Symons. As a result, deferred financing costs of $255 related to the Company's term and revolving loans were expensed and reflected as interest expense in the accompanying 1997 statement of income. The average borrowings, maximum borrowings, and weighted average interest rate for the periods indicated are as follows:
FOR THE YEAR ENDED ------------------------------------------ DECEMBER 31, DECEMBER 31, DECEMBER 31, 1999 1998 1997 ------------ ------------ ------------ Average borrowings...................... $22,027 $19,679 $25,266 Maximum borrowings...................... 37,140 26,620 32,403 Weighted average interest rate.......... 7.0% 7.7% 7.6%
F-14 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1999, 1998 AND 1997 (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (4) CREDIT ARRANGEMENTS (CONTINUED) To manage its interest rate risk, the Company entered into two interest rate swap agreements on a total of $50,000 of long-term debt that fixed the LIBOR-based component of the interest rate formula. The swaps have a fixed ninety-day LIBOR component of 6.30% and 6.33%, and expire on November 1, 2000. The ninety-day LIBOR as of December 31, 1999 was 6.18%. All fluctuations in rate resulting from the swaps are accounted for as interest expense. These swaps are required by the Company's Credit Agreement and are contracts to exchange floating rate for fixed rate interest payments without the exchange of underlying amounts. The Credit Agreement contains certain restrictive covenants, which require that, among other things, the Company not exceed a certain leverage ratio, maintain a minimum fixed charge coverage ratio and limit its ability to pay dividends on Common Shares. The Company was in compliance with its loan covenants as of December 31, 1999. In conjunction with the acquisition of Symons, the Company issued a $5,000, seven-year unsecured note to one of the Former Stockholders. The note requires monthly interest payments, with principal due in September 2004. The note bears interest at a fixed rate of 10.5%. The Former Stockholder has the right to put the note to the Company at any time prior to its maturity. Accordingly, this note is classified as a current liability. The Company has an Economic Development Loan from the city of Parsons, Kansas. The loan bears interest at 7.0% and is payable in quarterly installments of $8 through July 2005. The loan is secured by real estate in Parsons. Following is a summary of the Company's long-term debt as of December 31, 1999 and 1998:
1999 1998 -------- -------- Revolving lines of credit............................... $ -- $ 13,000 Term Loan............................................... 100,000 100,000 Note payable to one of the Former Stockholders.......... 5,000 5,000 City of Parsons, Kansas Economic Development Loan....... 173 205 -------- -------- Total long-term debt.................................... 105,173 118,205 Less current portion.................................... (5,032) (5,032) -------- -------- Long-term portion....................................... $100,141 $113,173 ======== ========
Scheduled maturities of long-term debt are:
YEAR AMOUNT - ---- -------- 2000........................................................ $ 5,032 2001........................................................ 32 2002........................................................ 32 2003........................................................ 32 2004........................................................ 32 Thereafter.................................................. 100,013 -------- $105,173 ========
F-15 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1999, 1998 AND 1997 (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (4) CREDIT ARRANGEMENTS (CONTINUED) The fair market value of the Company's fixed rate long-term debt is estimated using discounted cash flow analyses based on current incremental borrowing rates for similar types of borrowing arrangements. At December 31, 1999, the estimated fair value of the Note payable to the Former Stockholder of Symons is $5,345. The estimated fair value of the City of Parsons, Kansas Economic Development Loan is $165. The estimated fair value of the Term Loan approximates, its face value, as these facilities have variable interest rates tied to market rates. The estimated fair value of the interest rate swap agreements is a liability of $16. (5) COMPANY-OBLIGATED MANDATORILY REDEEMABLE CONVERTIBLE TRUST PREFERRED SECURITIES In October 1999, the Company completed an underwritten public offering of 1,062,500 Company-obligated mandatorily redeemable convertible trust preferred securities at a price of $20 per security. Net proceeds to the Company after issuance costs were $19,554. The securities were issued by a limited purpose Delaware trust which used the proceeds to purchase from the Company the same principal amount of convertible junior subordinated debentures. The securities are guaranteed by the Company on a subordinated basis. Dividends are payable on the preferred securities at the rate of 10% per year and the securities are convertible into Class A Common Shares at the rate of 0.80 common shares for each preferred security, which equates to a conversion price of $25 per common share. (6) COMMON SHARES (A) STOCK OPTION PLANS- The Company has five stock option plans, the 1994 Stock Option Plan ("the 1994 Plan"), the 1995 Stock Option Plan ("the 1995 Plan"), the 1996 Stock Option Plan ("the 1996 Plan"), the 1997 Stock Option and Restricted Stock Plan ("the 1997 Restricted Plan") and the 1997 Non-employee Director Stock Option Plan ("the 1997 Director Plan"). Under all Plans, the option exercise price equals the stock's market price on date of grant. The Company accounts for these plans under APB Opinion No. 25, under which no compensation costs have been recognized. Had compensation cost for these plans been determined consistent with Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"), the Company's net income and earnings per share would have been reduced to the following pro forma amounts:
1999 1998 1997 -------- -------- -------- Net income available to common As Reported $14,335 $10,076 $6,953 shareholders: Pro Forma 13,933 9,835 6,857 Basic net income per share: As Reported 2.41 1.72 1.22 Pro Forma 2.34 1.68 1.20 Diluted net income per share: As Reported 2.30 1.65 1.17 Pro Forma 2.25 1.62 1.16
F-16 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1999, 1998 AND 1997 (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (6) COMMON SHARES (CONTINUED) Because the SFAS 123 method of accounting has not been applied to options granted prior to January 1, 1995, the resulting pro forma compensation cost may not be representative of that to be expected in future years. As of December 31, 1999, the Company may grant options for up to 152,766 and 12,667 shares under the 1997 Restricted Plan and the 1997 Director Plan, respectively. No further options may be granted under the 1994, 1995 and 1996 Plans. The Company granted 92,600 options during 1999, of which 12,000 vested immediately, and the other 80,600 vest ratably over three years. All options expire ten years after the date of grant. All options will immediately vest upon completion of the merger discussed in Note 1. A summary of the status of the Company's stock option plans at December 31, 1999, 1998, and 1997, and changes during the years then ended is presented in the table and narrative below:
WEIGHTED AVERAGE NUMBER OF EXERCISE PRICE PER SHARES SHARE --------- ------------------ Outstanding at December 31, 1996................... 297,750 $3.11 Granted at a weighted average fair value of $5.25............................................ 31,000 12.52 Exercised.......................................... (40,000) 4.17 Canceled........................................... (12,500) 10.38 ------- ----- Outstanding at December 31, 1997................... 276,250 3.57 Granted at a weighted average fair value of $6.83............................................ 83,833 17.11 Exercised.......................................... (2,050) 2.46 ------- ----- Outstanding at December 31, 1998................... 358,033 6.75 Granted at a weighted average fair value of $8.27............................................ 92,600 19.44 Exercised.......................................... (2,984) 4.80 Canceled........................................... (5,366) 18.04 ------- ----- Outstanding at December 31, 1999................... 442,283 $9.28 ======= =====
Price ranges and other information for stock options outstanding at December 31, 1999 are as follows:
OUTSTANDING EXERCISABLE ------------------------------- ------------------- WEIGHTED WEIGHTED WEIGHTED AVERAGE AVERAGE AVERAGE EXERCISE REMAINING EXERCISE RANGE OF EXERCISE PRICES SHARES PRICE LIFE SHARES PRICE - ------------------------ -------- -------- --------- -------- -------- $ 1.96--$ 4.00 240,650 $2.44 4.7 years 240,650 $ 2.44 $12.50--$12.63 31,000 12.52 7.5 31,000 12.52 $16.81--$19.91 170,633 18.35 8.7 46,166 18.06 ------- ----- --------- ------- ------ 442,283 $9.28 6.5 years 317,816 $ 5.69 ======= ===== ========= ======= ======
F-17 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1999, 1998 AND 1997 (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (6) COMMON SHARES (CONTINUED) The fair value of each option grant is estimated on the date of grant using the Black Scholes options pricing model with the following weighted average assumptions used for grants in 1999, 1998, and 1997, respectively:
1999 1998 1997 ------ ------------- ------------- Risk-free interest rates.............. 5.67% to 6.17% to 4.68% 5.70% 6.56% Expected dividend yield............... 0% 0% 0% Expected lives........................ 6 years 6 years 6 years Expected volatility................... 34.10% 27.87% 28.50%
(B) TREASURY SHARES-- The Company agreed to repurchase Class A Common Shares issued to the former shareholders of Symons Concrete Forms. During the period December 1, 1998 through May 22, 1999, under certain circumstances, the former shareholders could require the Company to purchase Class A Common Shares at the previous day's closing price per share. As of December 31, 1999, 19,017 Class A Common Shares had been repurchased for $387 under such agreement. (7) RETIREMENT PLANS (A) COMPANY-SPONSORED PENSION PLANS-- During 1999, the Company completed its process of merging and terminating certain of its pension plans. As a result, the Company recorded a $797 non-recurring pension gain related to the termination of its pension plan for salaried employees. As of December 31, 1999, only one pension plan remained, which covers virtually all salaried and hourly employees not covered by multi-employer pension plans and provides benefits of stated amounts for each year of credited service. The Company funds such plans at a rate that meets or exceeds the minimum amounts required by applicable regulations. The plans' assets are primarily invested in mutual funds comprised primarily of common stocks and corporate and U.S. government obligations. F-18 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1999, 1998 AND 1997 (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (7) RETIREMENT PLANS (CONTINUED) Postretirement Benefits--The Company provides postretirement health care benefits on a contributory basis and life insurance benefits for Symons salaried and hourly employees that retired prior to May 1, 1995.
PENSION PENSION OTHER OTHER BENEFITS BENEFITS BENEFITS BENEFITS 1999 1998 1999 1998 -------- -------- -------- -------- CHANGE IN BENEFIT OBLIGATION Benefit obligation at beginning of year.................. $ 30,481 $29,169 $ 875 $ 681 Service cost............................................. 378 619 -- -- Interest cost............................................ 412 1,630 57 71 Amendments............................................... (360) (360) -- 312 Actuarial loss (gain).................................... 557 135 (8) (128) Benefits paid............................................ (23,023) (712) (61) (61) Terminated plan.......................................... (2,976) -- -- -- -------- ------- ----- ----- Benefit obligation at end of year........................ $ 5,469 $30,481 $ 863 $ 875 ======== ======= ===== ===== CHANGE IN PLAN ASSETS Fair value of plan assets at beginning of year........... $ 29,155 $27,249 $ -- $ -- Actual return on plan assets............................. 438 2,402 -- -- Employer contribution.................................... 194 216 61 61 Transfer to other Company-sponsored defined contribution plan................................................... (984) -- -- -- Benefits paid............................................ (23,023) (712) (61) (61) -------- ------- ----- ----- Fair value of plan assets at end of year................. $ 5,780 $29,155 $ -- $ -- ======== ======= ===== ===== FUNDED STATUS............................................ $ 311 $(1,326) $(863) $(875) Unrecognized prior service cost.......................... (152) (155) 264 288 Unrecognized net gain.................................... (470) (759) (130) (124) -------- ------- ----- ----- Net amount recognized.................................... $ (311) $(2,240) $(729) $(711) ======== ======= ===== ===== AMOUNTS RECOGNIZED IN THE STATEMENT OF FINANCIAL POSITION CONSIST OF: Accrued benefit liability................................ $ (311) $(2,440) $(863) $(875) Intangible asset......................................... -- 185 134 164 Accumulated other comprehensive income................... -- 15 -- -- -------- ------- ----- ----- Net amount recognized.................................... $ (311) $(2,240) $(729) $(711) ======== ======= ===== ===== ASSUMPTIONS AS OF DECEMBER 31 Discount rate............................................ 6.75% 6.75% 7.0% 6.75% Expected return on plan assets........................... 8% 8% N/A N/A Rate of compensation increase............................ N/A 4% N/A N/A
F-19 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1999, 1998 AND 1997 (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (7) RETIREMENT PLANS (CONTINUED)
PENSION PENSION OTHER OTHER BENEFITS BENEFITS BENEFITS BENEFITS 1999 1998 1999 1998 -------- -------- -------- -------- COMPONENTS OF NET PERIODIC BENEFIT COST Service cost............................................. $ 378 $ 619 $ -- $ -- Interest cost............................................ 412 1,630 57 70 Expected return on plan assets........................... (396) (1,655) (3) (4) Amortization of prior service cost....................... (3) (3) 24 24 Recognized actuarial gain................................ -- (3) -- -- -------- ------- ----- ----- Recurring net periodic pension cost...................... 391 588 78 90 Termination gain......................................... (797) -- -- -- -------- ------- ----- ----- Total net pension cost................................... $ (406) $ 588 $ 78 $ 90 ======== ======= ===== =====
As of December 31, 1999, the plan's accumulated benefit obligation did not exceed its plan assets. The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the pension plans with accumulated benefit obligations in excess of plan assets were $2,893, $2,855, and $2,692, respectively, as of December 31, 1998. The weighted average assumed rate of increase in the per capita cost of covered benefits is 6.5% for 1999 and subsequent years. Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plan. A one percentage point change in assumed health care cost trend rates would have the following effects:
1 PERCENTAGE 1 PERCENTAGE POINT INCREASE POINT DECREASE -------------- -------------- Effect on total of service and interest cost components...................................... $ 3 $ (3) Effect on the postretirement benefit obligation... 46 (42)
(B) MULTI-EMPLOYER PENSION PLAN- Approximately 10% of the Company's employees are currently covered by collectively bargained, multi-employer pension plans. Contributions are determined in accordance with the provisions of negotiated union contracts and generally are based on the number of hours worked. The Company does not have the information available to determine its share of the accumulated plan benefits or net assets available for benefits under the multi-employer pension plans. The aggregate amount charged to expense under these plans was $330, $287, and $157, for the years ended December 31, 1999, 1998, and 1997, respectively. (C) 401(K) SAVINGS PLAN- Most employees are eligible to participate in Company sponsored 401(k) savings plans. Company matching contributions vary from 0% to 50% (on the first 2%) according to terms of the individual F-20 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1999, 1998 AND 1997 (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (7) RETIREMENT PLANS (CONTINUED) plans and collective bargaining agreements. The aggregate amount charged to expense under these plans was $724, $531, and $345, for the years ended December 31, 1999, 1998, and 1997, respectively. (D) RETIREMENT CONTRIBUTION ACCOUNT- During 1998, the Company implemented a defined contribution plan for substantially all salaried employees to replace the terminated defined benefit plan discussed in Note 7a. No contributions are permitted by the employees, and the Company contributes 1.5% to 6.0% of eligible compensation, depending on the age of the employee. The amount expensed for the years ended December 31, 1999 and 1998 was $1,393 and $1,167, respectively. (8) INCOME TAXES The following is a summary of the components of the Company's income tax provision for the years ended December 31, 1999, 1998, and 1997:
1999 1998 1997 -------- -------- -------- Currently payable: Federal.......................................... $ 8,014 $5,312 $3,521 State and local.................................. 1,444 1,398 704 Deferred........................................... 2,533 1,534 1,052 ------- ------ ------ Total provision.................................... $11,991 $8,244 $5,277 ======= ====== ======
The effective income tax rate differs from the statutory federal income tax rate for the years ended December 31, 1999, 1998, and 1997 for the following reasons:
1999 1998 1997 -------- -------- -------- Statutory income tax rate................................. 35.0% 35.0% 34.0% State income taxes (net of federal tax benefit)........... 3.9 4.8 4.0 Nondeductible goodwill amortization and other permanent differences............................................. 3.7 5.2 5.1 Other, net................................................ 2.4 -- -- ---- ---- ---- Effective income tax rate................................. 45.0% 45.0% 43.1% ==== ==== ====
F-21 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1999, 1998 AND 1997 (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (8) INCOME TAXES (CONTINUED) The components of the Company's future income tax benefits and deferred tax liabilities as of December 31, 1999 and 1998 are as follows:
1999 1998 -------- -------- Current deferred taxes: Inventory reserves.................................... $ 432 $ 50 Accounts receivable reserves.......................... 1,138 1,712 Accrued liabilities................................... 2,406 2,280 Other................................................. 22 (521) -------- -------- Total............................................. 3,998 3,521 -------- -------- Long-term deferred taxes: Accelerated depreciation.............................. (16,261) (13,034) Other long-term liabilities........................... 1,828 2,428 Other................................................. (2,133) (938) -------- -------- Total............................................. (16,566) (11,544) -------- -------- Net deferred taxes................................ $(12,568) $ (8,023) ======== ========
(9) SEGMENT REPORTING The Company operates in four segments, each with a general manager: concrete accessories (Dayton/Richmond-Registered Trademark-), concrete forming systems (Symons-Registered Trademark-), paving products (American Highway Technology-Registered Trademark-) and masonry products (Dur-O-Wal-Registered Trademark-). The segments are differentiated by their products and services, all of which serve the construction industry. Sales between segments for the years ended December 31, 1999 and December 31, 1998 are recorded at normal selling price by the selling division and at cost for the buying division, with the profit recorded as an intersegment elimination. For the year ended December 31, 1997 intersegment sales were not significant. Segment assets include accounts receivable; inventories; property, plant, and equipment; rental equipment; and an allocation of goodwill. Corporate and unallocated assets include cash, prepaid income taxes, future tax benefits, and financing costs. Export sales and sales by non-U.S. affiliates are not significant. Information about the profit (loss) of each segment and the reconciliations to the consolidated amounts for the years ended December 31, 1999, 1998, and 1997 is as follows:
1999 1998 1997 -------- -------- -------- Concrete Accessories........................................ $139,844 $128,119 $ 92,251 Concrete Forming Systems.................................... 117,555 99,471 21,066 Paving Products............................................. 36,506 30,967 29,177 Masonry Products............................................ 28,265 24,292 24,918 -------- -------- -------- Net sales to external customers............................. $322,170 $282,849 $167,412 ======== ======== ========
F-22 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1999, 1998 AND 1997 (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (9) SEGMENT REPORTING (CONTINUED)
1999 1998 1997 -------- -------- -------- Concrete Accessories........................................ $ 4,878 $ 3,348 $ -- Concrete Forming Systems.................................... 5,165 5,240 -- Paving Products............................................. 189 -- -- -------- -------- -------- Net sales to other segments................................. $ 10,232 $ 8,588 $ -- ======== ======== ======== Concrete Accessories........................................ $ 3,587 $ 4,053 $ 2,744 Concrete Forming Systems.................................... 6,899 6,543 1,903 Paving Products............................................. 629 567 466 Masonry Products............................................ 546 540 443 -------- -------- -------- Interest expense............................................ $ 11,661 $ 11,703 $ 5,556 ======== ======== ======== Concrete Accessories........................................ $ 22,964 $ 19,387 $ 13,723 Concrete Forming Systems.................................... 10,876 6,133 364 Paving Products............................................. 1,569 1,677 1,377 Masonry Products............................................ 1,058 487 5 Intersegment Eliminations................................... (4,903) (4,153) -- Corporate................................................... (4,918) (5,211) (3,239) -------- -------- -------- Income before income taxes.................................. $ 26,646 $ 18,320 $ 12,230 ======== ======== ======== Concrete Accessories........................................ $ 3,755 $ 3,383 $ 2,618 Concrete Forming Systems.................................... 5,735 4,992 891 Paving Products............................................. 839 379 311 Masonry Products............................................ 1,333 1,279 1,264 Corporate................................................... 55 43 47 -------- -------- -------- Depreciation................................................ $ 11,717 $ 10,076 $ 5,131 ======== ======== ======== Concrete Accessories........................................ $ 1,437 $ 1,265 $ 1,225 Concrete Forming Systems.................................... 298 341 24 Paving Products............................................. 170 177 206 Masonry Products............................................ 464 430 430 -------- -------- -------- Amortization of goodwill and intangibles.................... $ 2,369 $ 2,213 $ 1,885 ======== ======== ========
F-23 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1999, 1998 AND 1997 (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (9) SEGMENT REPORTING (CONTINUED) Information regarding each segment's assets and the reconciliation to the consolidated amounts as of December 31, 1999 and 1998 is as follows:
1999 1998 -------- -------- Concrete Accessories.................................... $ 97,360 $ 89,985 Concrete Forming Systems................................ 121,836 116,064 Paving Products......................................... 14,085 13,358 Masonry Products........................................ 33,350 26,115 Corporate and Unallocated............................... 12,048 8,098 -------- -------- Total Assets............................................ $278,679 $253,620 ======== ========
Information regarding capital expenditures by segment and the reconciliation to the consolidated amounts for the years ended December 31, 1999, 1998 and 1997 is as follows:
1999 1998 1997 -------- -------- -------- Concrete Accessories........................................ $ 3,033 $ 3,348 $2,449 Concrete Forming Systems.................................... 2,199 2,044 1,231 Paving Products............................................. 2,035 1,200 401 Masonry Products............................................ 397 439 320 Corporate................................................... 64 184 9 ------- ------- ------ Property, Plant, and Equipment Additions.................... $ 7,728 $ 7,215 $4,410 ======= ======= ====== Concrete Accessories........................................ $ 1,457 $ 2,860 $1,966 Concrete Forming Systems.................................... 14,449 15,221 2,909 Masonry Products............................................ 123 -- -- ------- ------- ------ Rental Equipment Additions.................................. $16,029 $18,081 $4,875 ======= ======= ======
(10) COMMITMENTS AND CONTINGENCIES (A) OPERATING LEASES-- Rental expense for property, plant and equipment (principally office and warehouse facilities and office equipment) was $4,608, $4,233, and $2,758, for the years ended December 31, 1999, 1998 and 1997, respectively. Lease terms generally range from one to ten years and some contain renewal options. F-24 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1999, 1998 AND 1997 (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (10) COMMITMENTS AND CONTINGENCIES (CONTINUED) Aggregate minimum annual rental commitments under non-cancelable operating leases are as follows:
YEAR AMOUNT - ---- -------- 2000........................................................ $ 3,687 2001........................................................ 2,496 2002........................................................ 2,016 2003........................................................ 1,352 2004........................................................ 978 Thereafter.................................................. 1,019 ------- Total....................................................... $11,548 -------
(B) LITIGATION-- (i) Symons currently is a defendant in a civil suit brought by EFCO Corp., a competitor of Symons in one portion of its business, in 1996 in the United States District Court for the Southern District of Iowa (Case No. 4-96-DV-80552). EFCO Corp. alleged that Symons engaged in false advertising, misappropriation of trade secrets, intentional interference with contractual relations, and certain other activities. After a jury trial, preliminary damages of approximately $14,000 were awarded against Symons in January 1999. In ruling on post-trial motions in April 1999, the Judge dismissed EFCO's claim of intentional interference with contractual relations but increased the damages awarded to EFCO by $100. This case is currently on appeal before the United States Court of Appeals for the Eighth Circuit. Symons and EFCO have filed their briefs with the Court and have requested the opportunity to present oral arguments. The Company is awaiting the decision of the Court. The Company believes that Symons has grounds for a successful appeal and remains committed to vigorously pursuing its appellate rights. A successful appeal could overturn the judgment against Symons or result in a new trial. Symons' liability, if any, cannot finally be determined until such time as all rights of the parties have been exhausted or have expired by lapse of time. The Company considers the outcome of this litigation to be not estimable and, accordingly, the Company has not recorded any liability for the resolution of this suit. In the event the Company is unsuccessful in its appeals, the Company could be required to pay the full amount of the judgment plus interest or a potentially higher amount. An unsuccessful appeal may have a material adverse effect on the Company's consolidated financial position, results of operations, or cash flows. (ii) The Company, all of its directors and one officer are defendants in a purported shareholder class action civil suit brought in January 2000 in the Court of Common Pleas in Montgomery County, Ohio (Case No. 2000 CV 00415). The plaintiff alleges that the Company and the other defendants have engaged in self dealing and breached their fiduciary duties to shareholders with respect to the recapitalization merger discussed in Note 1. The Company believes this suit is without merit and is committed to vigorously defending itself and the other defendants. We have filed a motion to dismiss the complaint with the Court. In the event the Company is unsuccessful in its defense, it may have a material adverse effect on its consolidated financial position, results of operations, or cash flows. F-25 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1999, 1998 AND 1997 (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (10) COMMITMENTS AND CONTINGENCIES (CONTINUED) (C) SELF-INSURANCE-- The Company is self-insured for certain of its group medical, workers' compensation and product and general liability claims. The Company has stop loss insurance coverage at various per occurrence and per annum levels depending on type of claim. The Company consults with third party administrators to estimate the reserves required for these claims. No material revisions were made to the estimates for the years ended December 31, 1999, 1998 and 1997. The Company has reserved $3,844 and $4,737 as of December 31, 1999 and 1998, respectively. (11) RELATED PARTY TRANSACTIONS On February 17, 1999, Ripplewood informed the Company that it was converting all 757,569 Class B Common Shares held by it into an equal number of Class A Common Shares and sold those Class A Common Shares. As a result of the conversion, no Class B Common Shares remain outstanding. During 1997, the Company paid Ripplewood a fee of $400 for financial advisory services in connection with the acquisition of Symons Corporation and related financing transactions. (12) QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
1999 ---------------------------------------------------- FIRST SECOND THIRD FOURTH FULL QUARTERLY OPERATING DATA QUARTER QUARTER QUARTER QUARTER YEAR - ------------------------ -------- -------- -------- -------- -------- Net sales........................................... $68,196 $88,636 $93,729 $71,609 $322,170 Gross profit........................................ 23,425 32,883 37,872 28,526 122,706 Net income (loss)................................... (355) 5,271 7,501 1,918 14,335 Basic net income (loss) per share (a)............... $ (0.06) $ 0.89 $ 1.26 $ 0.32 $ 2.41 Diluted net income (loss) per share (a)............. $ (0.06) $ 0.85 $ 1.22 $ 0.31 $ 2.30 Stock Price: High.............................................. $23.500 $20.125 $20.750 $19.688 $ 23.500 Low............................................... $17.313 $16.750 $16.500 $11.750 $ 11.750
F-26 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) DECEMBER 31, 1999, 1998 AND 1997 (DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (12) QUARTERLY FINANCIAL INFORMATION (UNAUDITED) (CONTINUED)
1998 ---------------------------------------------------- FIRST SECOND THIRD FOURTH FULL QUARTERLY OPERATING DATA QUARTER QUARTER QUARTER QUARTER YEAR - ------------------------ -------- -------- -------- -------- -------- Net sales........................................... $59,227 $76,754 $82,809 $64,059 $282,849 Gross profit........................................ 19,717 27,783 33,297 24,958 105,755 Net income (loss)................................... (1,009) 3,731 6,226 1,128 10,076 Basic net income (loss) per share (a)............... $ (0.18) $ 0.64 $ 1.05 $ 0.19 $ 1.72 Diluted net income (loss) per share (a)............. $ (0.18) $ 0.61 $ 1.01 $ 0.18 $ 1.65 Stock Price: High.............................................. $20.375 $22.125 $21.375 $20.875 $ 22.125 Low............................................... $15.875 $16.500 $16.625 $14.375 $ 14.375
- ------------------------ (a) The total of the quarterly income (loss) per share does not equal the annual income per share due to the timing of the issuance of the Company's common shares and common share equivalents and the omission of common share equivalents in quarters with net losses. F-27 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2000 AND DECEMBER 31, 1999 (AMOUNTS IN THOUSANDS) (UNAUDITED)
MARCH 31, DECEMBER 31, 2000 1999 ---------- ------------- ASSETS Current assets Cash...................................................... $ 2,188 $ 4,553 Accounts receivable, net of allowances for doubtful accounts and sales returns and allowances of $7,010 and $5,589.................................................. 53,090 45,085 Inventories (Note 4)...................................... 43,680 39,340 Prepaid expenses and other current assets................. 5,007 5,551 Prepaid income taxes...................................... 131 1,038 Future income tax benefits................................ 3,920 3,998 -------- -------- Total current assets.................................... 108,016 99,565 -------- -------- Rental equipment, net (Note 4).............................. 60,309 58,748 -------- -------- Property, plant and equipment............................... 75,924 73,651 Less accumulated depreciation............................. (31,465) (29,741) -------- -------- Net property, plant and equipment....................... 44,459 43,910 -------- -------- Goodwill and intangible assets, net of accumulated amortization.............................................. 76,184 75,522 Other assets................................................ 1,032 934 -------- -------- Total assets.......................................... $290,000 $278,679 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Current portion of long-term debt (Note 5)................ $ 5,032 $ 5,032 Accounts payable.......................................... 25,484 22,802 Accrued compensation and benefits......................... 8,615 11,302 Other accrued liabilities................................. 8,465 9,960 -------- -------- Total current liabilities............................... 47,596 49,096 Long-term debt (Note 5)..................................... 113,581 100,141 Deferred income taxes....................................... 15,404 16,566 Other long-term liabilities................................. 4,917 4,548 -------- -------- Total liabilities....................................... 181,498 170,351 -------- -------- Company-obligated mandatorily redeemable convertible trust preferred securities of Dayton Superior Capital Trust which holds solely debentures............................. 19,558 19,556 -------- -------- Shareholders' equity Class A common shares..................................... 47,424 47,417 Class A treasury shares................................... (387) (387) Cumulative other comprehensive income..................... (246) (254) Retained earnings......................................... 42,153 41,996 -------- -------- Total shareholders' equity.............................. 88,944 88,772 -------- -------- Total liabilities and shareholders' equity.............. $290,000 $278,679 ======== ========
The accompanying notes to consolidated financial statements are an integral part of these consolidated balance sheets. F-28 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE FISCAL MONTHS ENDED MARCH 31, 2000 AND APRIL 2, 1999 (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (UNAUDITED)
THREE FISCAL MONTHS ENDED ------------------------------ MARCH 31, 2000 APRIL 2, 1999 -------------- ------------- Net sales................................................... $ 76,505 $ 68,196 Cost of sales............................................... 48,544 43,898 ---------- ---------- Gross profit.............................................. 27,961 24,298 Selling, general and administrative expenses................ 23,737 21,322 Amortization of goodwill and intangibles.................... 624 647 ---------- ---------- Income from operations.................................... 3,600 2,329 Other expenses Interest expense, net..................................... 2,728 2,975 Other expense, net........................................ 19 -- ---------- ---------- Income (loss) before provision for income taxes........... 853 (646) Provision (benefit) for income taxes........................ 380 (291) ---------- ---------- Net income (loss)........................................... 473 (355) Dividends on Company-obligated mandatorily redeemable convertible trust preferred securities, net of income tax benefit................................................... 316 -- ---------- ---------- Net income (loss) available to common shareholders.......... $ 157 $ (355) ========== ========== Basic net income per share.................................. $ 0.03 $ (0.06) ========== ========== Basic weighted average common shares outstanding............ 5,945,093 5,947,516 ========== ========== Diluted net income per share................................ $ 0.03 $ (0.06) ========== ========== Diluted weighted average common and common equivalent shares outstanding............................................... 6,189,874 5,947,516 ========== ==========
The accompanying notes to consolidated financial statements are an integral part of these consolidated statements. F-29 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE FISCAL MONTHS ENDED MARCH 31, 2000 AND APRIL 2, 1999 (AMOUNTS IN THOUSANDS) (UNAUDITED)
THREE FISCAL MONTHS ENDED -------------------------- MARCH 31, APRIL 2, 2000 1999 ------------ ----------- Cash Flows From Operating Activities: Net income (loss)......................................... $ 473 $ (355) Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation............................................ 3,073 3,015 Amortization of goodwill and intangibles................ 624 647 Deferred income taxes................................... (1,084) (430) Amortization of deferred financing costs................ 193 200 Gain on sales of rental equipment and property, plant and equipment......................................... (1,407) (2,076) Changes in assets and liabilities, net of effects of acquisitions: Accounts receivable....................................... (7,863) (5,111) Inventories............................................... (4,134) (1,990) Accounts payable.......................................... 2,515 2,630 Accrued liabilities and other long-term liabilities....... (3,815) (3,711) Prepaid income taxes and other, net....................... 794 1,106 -------- ------- Net cash used in operating activities............... (10,631) (6,075) -------- ------- Cash Flows From Investing Activities: Property, plant and equipment additions................... (2,207) (1,607) Proceeds from sales of fixed assets....................... -- 232 Rental equipment additions................................ (4,158) (6,012) Proceeds from sales of rental equipment................... 2,639 2,971 Acquisitions (Note 3)..................................... (1,467) (5,528) Other investing activities................................ 320 -- -------- ------- Net cash used in investing activities............... (4,873) (9,944) -------- ------- Cash Flows From Financing Activities: Issuance of long-term debt, net........................... 13,440 15,562 Dividends on Company-obligated mandatorily redeemable convertible trust preferred securities, net of income tax benefit............................................. (316) -- Purchase of treasury shares............................... -- (121) Issuance of Class A common shares......................... 7 -- -------- ------- Net cash provided by financing activities........... 13,131 15,441 -------- ------- Effect of exchange rate changes on cash..................... 8 18 -------- ------- Net decrease in cash................................ (2,365) (560) Cash, beginning of period................................... 4,553 560 -------- ------- Cash, end of period......................................... $ 2,188 $ -- ======== ======= Supplemental Disclosures: Cash paid (refunded) for income taxes..................... $ (86) $ 353 Cash paid for interest.................................... 3,927 2,715
The accompanying notes to consolidated financial statements are an integral part of these consolidated statements. F-30 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE FISCAL MONTHS ENDED MARCH 31, 2000 AND APRIL 2, 1999 (AMOUNTS IN THOUSANDS) (UNAUDITED)
THREE FISCAL MONTHS ENDED ------------------------------ MARCH 31, 2000 APRIL 2, 1999 -------------- ------------- Net income (loss)........................................... $ 473 $(355) Dividends on Company-obligated mandatorily redeemable convertible trust preferred securities, net of income tax benefit................................................... (316) -- Other comprehensive income: Foreign currency translation adjustment..................... 8 18 ----- ----- Comprehensive income (loss)................................. $ 165 $(337) ===== =====
The accompanying notes to consolidated financial statements are an integral part of these consolidated statements. F-31 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2000 AND APRIL 2, 1999 (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (UNAUDITED) (1) CONSOLIDATED FINANCIAL STATEMENTS The interim consolidated financial statements included herein have been prepared by the Company, without audit, and include, in the opinion of management, all adjustments necessary to state fairly the information set forth therein. Any such adjustments were of a normal recurring nature. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been omitted, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these unaudited consolidated financial statements be read in conjunction with the consolidated financial statements and the notes thereto included in the Company's annual financial statements for the year ended December 31, 1999. (2) THE COMPANY On January 19, 2000, the Company signed a definitive merger agreement with an affiliate of Odyssey Investment Partners, LLC, the manager of a New York based private equity investment fund, for $27.00 per share in cash, for a total transaction value (debt and equity) of approximately $315 million. Holders of the Company-obligated mandatorily redeemable convertible trust preferred securities have the right to receive cash in the amount of $22.00, plus accrued dividends, per preferred security. The recapitalization was completed on June 16, 2000. The Federal Trade Commission has granted early termination of the Hart-Scott-Rodino waiting period. A Special Shareholders' Meeting to vote on the merger agreement is scheduled for May 23, 2000. The closing is currently anticipated to occur in the second quarter of 2000. (3) ACQUISITIONS (a) SYMONS CORPORATION--On September 29, 1997, the Company purchased the stock of Symons Corporation ("Symons"). The purchase agreement between the Company and the former stockholders of Symons ("the Former Stockholders") relating to the acquisition provides for an adjustment to the purchase price under certain circumstances. In April 2000, an arbitrator determined that the Company was entitled to receive a purchase price reduction of approximately $1,800, which will be recorded as a reduction of goodwill, net of professional fees, upon receipt from the Former Stockholders. In 1998, the Former Stockholders had filed a lawsuit in Delaware to contest the purchase price adjustment. As a result of the arbitrator's ruling in April 2000, the Company has filed, with the Former Stockholders, a joint motion to dismiss the lawsuit. (b) POLYTITE MANUFACTURING CORP.--On February 9, 2000, the Company acquired substantially all of the assets and assumed certain of the liabilities of Polytite Manufacturing Corp. ("Polytite") for approximately $1,500 in cash, including acquisition costs and is subject to a working capital adjustment. The business is being operated as part of the Company's masonry products and concrete accessories businesses. The acquisition has been accounted for as a purchase, and the results of Polytite have been included in the accompanying consolidated financial statements since the date of acquisition. F-32 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2000 AND APRIL 2, 1999 (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (UNAUDITED) (3) ACQUISITIONS (CONTINUED) The purchase price has been allocated based on the estimated fair values of the assets acquired and liabilities assumed. Certain appraisals and evaluations are preliminary and may change. Pro forma financial information is not required. (c) SOUTHERN CONSTRUCTION PRODUCTS, INC.--On October 4, 1999, the Company acquired substantially all of the assets and assumed certain of the liabilities of Southern Construction Products, Inc. ("Southern") for approximately $8,300 in cash, including acquisition costs, and net of a purchase price reduction of approximately $300 received in January 2000. The business is being operated as part of the Company's masonry products and concrete accessories businesses. The acquisition has been accounted for as a purchase, and the results of Southern have been included in the accompanying consolidated financial statements since the date of acquisition. The purchase price has been allocated based on the estimated fair values of the assets acquired and liabilities assumed. Certain appraisals and evaluations are preliminary and may change. Pro forma financial information is not required. (d) CEMPRO, INC.--Effective January 1, 1999, the Company acquired substantially all of the assets and assumed certain of the liabilities of Cempro, Inc. ("Cempro") for approximately $5,400 in cash, including acquisition costs. The business is being operated as a part of the Company's concrete accessories business. The acquisition has been accounted for as a purchase, and the results of Cempro have been included in the accompanying consolidated financial statements since the date of acquisition. The purchase price has been allocated based on the estimated fair values of the assets acquired and liabilities assumed. Pro forma financial information is not required. (4) ACCOUNTING POLICIES The interim consolidated financial statements have been prepared in accordance with the accounting policies described in the notes to the Company's consolidated financial statements for the year ended December 31, 1999. While management believes that the procedures followed in the preparation of interim financial information are reasonable, the accuracy of some estimated amounts is dependent upon facts that will exist or calculations that will be accomplished at year end. Examples of such estimates include changes in the LIFO reserve (based upon the Company's best estimate of inflation to date) and management bonuses. Any adjustments pursuant to such estimates during the fiscal quarter were of a normal recurring nature. (a) FISCAL QUARTER--The Company's fiscal quarters are defined as the periods ending on the Friday nearest to the end of March, June and September. (b) INVENTORIES--Substantially all inventories of the domestic Dayton Superior and Dur-O-Wal operations are stated at the lower of last in, first out (LIFO) cost or market (which approximates current cost). All other inventories are stated at the lower of first-in, first-out (FIFO) cost or market. The Company had no LIFO reserve as of March 31, 2000 and F-33 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2000 AND APRIL 2, 1999 (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (UNAUDITED) (4) ACCOUNTING POLICIES (CONTINUED) December 31, 1999. Following is a summary of the components of inventories as of March 31, 2000 and December 31, 1999:
MARCH 31, DECEMBER 31, 2000 1999 ---------- ------------- Raw materials......................................... $10,091 $ 8,787 Finished goods and work in progress................... 36,365 32,920 ------- ------- 46,456 41,707 Net realizable value reserve.......................... (2,776) (2,367) ------- ------- $43,680 $39,340 ======= =======
(c) RENTAL EQUIPMENT--Rental equipment is manufactured by the Company for resale and for rent to others on a short-term basis. Rental equipment is recorded at the lower of FIFO cost or market and is depreciated over the estimated useful life of the equipment, twelve to fifteen years, on a straight-line method. The balances as of March 31, 2000 and December 31, 1999 are net of accumulated depreciation of $11,288 and $9,855, respectively. Rental revenues and cost of sales associated with rental revenue are as follows:
THREE FISCAL MONTHS ENDED ---------------------- MARCH 31, APRIL 2, 2000 1999 ---------- --------- Rental revenue........................................... $11,280 $10,509 Cost of sales............................................ 2,175 1,900
(d) FINANCIAL INSTRUMENTS--The Company uses interest rate swaps to manage interest rate risk associated with its floating rate borrowings. The swap agreements are contracts to exchange floating rate for fixed interest payments periodically over the life of the agreements without the exchange of the underlying amounts. The differential paid or received on the interest rate agreements is recognized as an adjustment to interest expense. The fair value of the interest rate swaps in place at March 31, 2000 is an asset of $39. (e) RECLASSIFICATIONS--Certain reclassifications have been made to the 1999 amounts to conform to their 2000 classifications. F-34 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2000 AND APRIL 2, 1999 (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (UNAUDITED) (5) CREDIT ARRANGEMENTS Following is a summary of the Company's long-term debt as of March 31, 2000 and December 31, 1999:
MARCH 31, DECEMBER 31, 2000 1999 ---------- ------------- Revolving line of credit, weighted average interest rate of 7.5%...................................................... $ 13,440 $ -- Term Loan, weighted average interest rate of 8.7%........... 100,000 100,000 Note payable to one of the Former Stockholders, 10.5%....... 5,000 5,000 City of Parsons, Kansas Economic Development Loan, 7.0%..... 173 173 -------- -------- Total long-term debt........................................ 118,613 105,173 Less current portion........................................ (5,032) (5,032) -------- -------- Long-term portion........................................... $113,581 $100,141 ======== ========
At March 31, 2000, $50,000 of the $50,000 Revolving Credit Facility was available, of which $13,440 of borrowings was outstanding. The average borrowings, maximum borrowings, and weighted average interest rate for the periods indicated are as follows:
THREE FISCAL MONTHS ENDED ---------------------- MARCH 31, APRIL 2, 2000 1999 ---------- --------- Average borrowings....................................... $5,545 $23,043 Maximum borrowings....................................... 14,095 29,770 Weighted average interest rate........................... 9.5% 7.1%
The Credit Agreement contains certain restrictive covenants which, among other things, require that the Company maintain a minimum fixed charge coverage ratio, not to exceed a certain leverage ratio and prohibit the payment of dividends on Common Shares. The Company was in compliance with its loan covenants as of March 31, 2000. (6) STOCK OPTION PLANS The Company has five stock option plans all of which provide for an option exercise price equal to the stock's market price on the date of grant and all of which are accounted for under APB Opinion No. 25, under which no compensation costs have been recognized. Had compensation cost for these plans been determined consistent with Statement of Financial Accounting Standards No.123, "Accounting for Stock-Based Compensation" ("SFAS 123"), the Company's net income F-35 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2000 AND APRIL 2, 1999 (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (UNAUDITED) (6) STOCK OPTION PLANS (CONTINUED) and net income per share for the three fiscal months ended March 31, 2000 and April 2, 1999 would have been reduced to the following pro forma amounts:
THREE FISCAL MONTHS ENDED -------------------- MARCH 31, APRIL 2, 2000 1999 --------- -------- Net income (loss) available to common shareholders As Reported $157 $(355) Pro Forma 99 (438) Basic net income (loss) per share As Reported 0.03 (0.06) Pro Forma 0.02 (0.07) Diluted net income (loss) per share As Reported 0.03 (0.06) Pro Forma 0.02 (0.07)
Because the SFAS 123 method of accounting has not been applied to options granted prior to January 1, 1995, the resulting pro forma compensation cost may not be representative of that to be expected in future years. A summary of the activity of the Company's stock option plans for the three fiscal months ended March 31, 2000 is presented in the table below:
WEIGHTED AVERAGE NUMBER OF EXERCISE PRICE SHARES PER SHARE --------- -------------- Outstanding at December 31, 1999..................... 442,283 $9.28 Exercised............................................ (3,050) 2.29 ------- ----- Outstanding at March 31, 2000........................ 439,233 $9.33 ======= =====
(7) SEGMENT REPORTING The Company operates in four segments, each with a general manager: concrete accessories, concrete forming systems, paving products, and masonry. The segments are differentiated by their products and services, all of which serve the construction industry. Sales between segments are recorded at normal selling price by the selling division and at cost for the buying division, with the profit recorded as an intersegment elimination. Segment assets include accounts receivable; inventories; property, plant, and equipment; rental equipment; and an allocation of goodwill. Corporate and unallocated assets include cash, prepaid income taxes, future tax benefits, and financing costs. Export sales and sales by non-U.S. affiliates are not significant. F-36 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2000 AND APRIL 2, 1999 (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (UNAUDITED) (7) SEGMENT REPORTING (CONTINUED) Information about the profit (loss) of each segment and the reconciliations to the consolidated amounts for the three fiscal months ended March 31, 2000 and April 2, 1999 is as follows:
THREE FISCAL MONTHS ENDED ---------------------- MARCH 31, APRIL 2, 2000 1999 ---------- --------- Concrete Accessories..................................... $34,920 $30,681 Concrete Forming Systems................................. 26,487 24,876 Paving Products.......................................... 7,295 6,673 Masonry Products......................................... 7,803 5,966 ------- ------- Net sales to external customers.......................... $76,505 $68,196 ======= ======= Concrete Accessories..................................... $ 1,249 $ 1,060 Concrete Forming Systems................................. 2,006 1,232 Paving Products.......................................... 659 97 Masonry Products......................................... 40 -- ------- ------- Net sales to other segments.............................. $ 3,954 $ 2,389 ======= ======= Concrete Accessories..................................... $ 736 $ 975 Concrete Forming Systems................................. 1,662 1,701 Paving Products.......................................... 130 182 Masonry Products......................................... 200 117 ------- ------- Interest expense......................................... $ 2,728 $ 2,975 ======= ======= Concrete Accessories..................................... $ 4,126 $ 2,679 Concrete Forming Systems................................. 409 139 Paving Products.......................................... (148) (499) Masonry Products......................................... (182) (386) Intersegment Eliminations................................ (1,869) (1,181) Corporate................................................ (1,483) (1,398) ------- ------- Income before income taxes............................... $ 853 $ (646) ======= ======= Concrete Accessories..................................... $ 893 $ 977 Concrete Forming Systems................................. 1,602 1,470 Paving Products.......................................... 214 223 Masonry Products......................................... 350 332 Corporate................................................ 14 13 ------- ------- Depreciation............................................. $ 3,073 $ 3,015 ======= =======
F-37 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2000 AND APRIL 2, 1999 (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (UNAUDITED) (7) SEGMENT REPORTING (CONTINUED)
THREE FISCAL MONTHS ENDED ---------------------- MARCH 31, APRIL 2, 2000 1999 ---------- --------- Concrete Accessories..................................... $ 357 $ 367 Concrete Forming Systems................................. 97 109 Paving Products.......................................... 29 64 Masonry Products......................................... 141 107 ------- ------- Amortization of goodwill and intangibles................. $ 624 $ 647 ======= =======
Information regarding capital expenditures by segment and the reconciliation to the consolidated amounts for the three fiscal months ended March 31, 2000 and April 2, 1999 is as follows:
THREE FISCAL MONTHS ENDED ---------------------- MARCH 31, APRIL 2, 2000 1999 ---------- --------- Concrete Accessories...................................... $ 546 $ 746 Concrete Forming Systems.................................. 656 385 Paving Products........................................... 471 276 Masonry Products.......................................... 521 155 Corporate................................................. 13 45 ------ ------ Property, Plant, and Equipment Additions.................. $2,207 $1,607 ====== ====== Concrete Accessories...................................... $ 900 $ 328 Concrete Forming Systems.................................. 3,258 5,684 ------ ------ Rental Equipment Additions................................ $4,158 $6,012 ====== ======
There has been no material change in the relative assets employed by each segment since December 31, 1999. (8) CONTINGENCIES Symons is currently a defendant involved in a civil suit brought by EFCO Corp., a competitor of Symons in one portion of their business. EFCO Corp. alleged that Symons engaged in false advertising, misappropriation of trade secrets, intentional interference with contractual relations, and certain other activities. After a jury trial, preliminary damages of approximately $14,000 were awarded against Symons in January 1999. In ruling on post-trial motions in April 1999, the Judge dismissed EFCO's claim of intentional interference with contractual relations, but increased the damages awarded to EFCO by $100. This case is currently on appeal before the United States F-38 DAYTON SUPERIOR CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) MARCH 31, 2000 AND APRIL 2, 1999 (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS) (UNAUDITED) (8) CONTINGENCIES (CONTINUED) Court of Appeals for the Eighth Circuit. Symons and EFCO have filed their briefs with the Court and have presented oral arguments. The Company is waiting the decision of the Court. The Company believes that Symons has grounds for a successful appeal and remains committed to vigorously pursuing its appellate rights. A successful appeal could result in judgment for Symons or a new trial. Symons' liability, if any, cannot finally be determined until such time as all rights of the parties have been exhausted or have expired by lapse of time. The Company considers the ultimate outcome of this litigation to be not estimable. Accordingly, the Company has not recorded any liability for the resolution of this suit. In the event that Symons is unsuccessful in its post-trial motions and appeals, it may have a material adverse effect on its consolidated financial position, results of operations, or cash flows. F-39 [LOGO] Dayton Superior Corporation OFFER TO EXCHANGE UP TO $170,000,000 OF ITS 13% SENIOR SUBORDINATED NOTES DUE 2009, WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT, FOR UP TO $170,000,000 OF ITS OUTSTANDING 13% SENIOR SUBORDINATED NOTES DUE 2009 --------------- PROSPECTUS --------------- UNTIL , 2000, ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THE UNSOLD ALLOTMENTS OR SUBSCRIPTIONS. , 2000 PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS Article Eighth of the Dayton Superior Corporation's Amended Articles of Incorporation sets forth certain rights of directors and officers of the Dayton Superior Corporation to indemnification. Such rights provide indemnification by the Dayton Superior Corporation to the extent permitted by Ohio law. The liabilities against which a director and officer may be indemnified and factors employed to determine whether a director and officer is entitled to indemnification in a particular instance depend on whether the proceedings in which the claim for indemnification arises were brought (a) other than by and in the right of the Dayton Superior Corporation ("Third-Party Actions") or (b) by and in the right of the Dayton Superior Corporation ("Derivative Actions"). In Third-Party Actions, the Dayton Superior Corporation is required to indemnify each director and officer against expenses, including attorneys' fees, judgments, decrees, fines, penalties and amounts paid in settlement actually and reasonably incurred by such person in connection with any threatened or actual proceeding in which such person may be involved by reason of having acted in such capacity, if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Dayton Superior Corporation and, with respect to any matter the subject of a criminal proceeding, such person had no reasonable cause to believe that such person's conduct was unlawful. In Derivative Actions, the Dayton Superior Corporation is required to indemnify each director and officer against expenses, including attorneys' fees, actually and reasonably incurred by such person in connection with the defense or settlement of any such proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Dayton Superior Corporation, except that no indemnification is permitted with respect to (1) any matter as to which such person has been adjudged to be liable for negligence or misconduct in the performance of such person's duty to the the Dayton Superior Corporation unless a court determines such person is entitled to indemnification and (2) any liability asserted in connection with unlawful loans, dividends, distribution, distributions of assets and repurchases of shares of the Dayton Superior Corporation under Section 1701.95 of the Ohio Revised Code. Unless indemnification is ordered by a court, the determination as to whether or not a person has satisfied the applicable standards of conduct (and therefore may be indemnified) is made by the Board of Directors of the Dayton Superior Corporation by a majority vote of a quorum consisting of directors of the Dayton Superior Corporation who were not parties to the action; or if such a quorum is not obtainable, or if a quorum of disinterested directors so directs, by independent legal counsel in a written opinion; or by shareholders of the Dayton Superior Corporation. Article Eighth of the Amended Articles of Incorporation does not limit in any way other indemnification rights to which those seeking indemnification may be entitled. The Dayton Superior Corporation maintains insurance policies which presently provide protection, within the maximum liability limits of the policies and subject to a deductible amount for each claim, to the Dayton Superior Corporation under its indemnification obligations and to the directors and officers with respect to certain matters which are not covered by the Dayton Superior Corporation's indemnification obligations. II-1 ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) Exhibits
EXHIBIT NO. DESCRIPTION OF EXHIBIT --- ---------------------- 3.1 Amended Articles of Incorporation of Dayton Superior Corporation, filed on June 16, 2000. 3.2 Certificate of Incorporation of Symons Corporation, as amended, filed on December 14, 1981. 3.3 Certificate of Incorporation of Dur-O-Wal, Inc., as amended, filed on December 24, 1980. 3.4 Regulations of Dayton Superior Corporation. 3.5 By-laws of Symons Corporations. 3.6 By-laws of Dur-O-Wal, Inc. 4.1 The indenture dated June 16, 2000 among Dayton Superior Corporation, the Guarantors named therein, as guarantors, and United States Trust Company of New York, as trustee, relating to the $170,000,000 in aggregate principal amount of 13% Senior Subordinated Notes due 2009 and the registered 13% Senior Subordinated Notes due 2009. 4.2 Specimen Certificate of 13% Senior Subordinated Notes due 2009 (included in Exhibit 4.1 hereto). 4.3 Specimen Certificate of the registered 13% Senior Subordinated Notes due 2009 (included in Exhibit 4.1 hereto). 4.4 Registration Rights Agreement dated June 16, 2000 among Dayton Superior Corporation and the Guarantors named therein, as issuers, and Deutsche Bank Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial purchasers. *5.1 Opinion of Thompson Hine & Flory LLP regarding the validity of the exchange notes. 10.1 1994 Stock Option Plan (incorporated by reference to Exhibit 10.9 to Dayton Superior Corporation's Registration Statement on Form S-1 (Reg. No. 333-2974) (Form S-1)). 10.1.1 First Amendment to 1994 Stock Option Plan (incorporated by reference to Exhibit 10.1 to Dayton Superior Corporation's Quarterly Report on Form 10-Q (Form 10-Q) for the Quarter ended September 26, 1997). 10.2 1995 Stock Option Plan (incorporated by reference to Exhibit 10.10 to Dayton Superior Corporation's Form S-1). 10.2.1 First Amendment to 1995 Stock Option Plan (incorporated by reference to Exhibit 10.2 to Dayton Superior Corporation's Form 10-Q for the Quarter ended September 26, 1997). 10.3 1996 Stock Option Plan (incorporated by reference to Exhibit 10.12 to Dayton Superior Corporation's Form S-1). 10.4 1997 Stock Option Plan and Restricted Stock Option Plan (incorporated by reference to Exhibit 10.1 to Dayton Superior Corporation's Form 10-Q for the Quarter ended June 27, 1997). 10.5 1997 Nonemployee Director Stock Option Plan (incorporated by reference to Exhibit 10.2 to Dayton Superior Corporation's Form 10-Q for the Quarter ended June 27, 1997). 10.6 Nonemployee Directors Compensation Program (incorporated by reference to Exhibit 10.1 to Dayton Superior Corporation's Form 10-Q for the Quarter ended July 3, 1998).
II-2
EXHIBIT NO. DESCRIPTION OF EXHIBIT --- ---------------------- 10.7 Management Incentive Plan (incorporated by reference to Exhibit 10.7 to the Dayton Superior Corporation's Annual Report on Form 10-K (Form 10-K) for the year ended December 31, 1998). 10.8 $140,000,000 Credit Agreement dated September 29, 1997 among Dayton Superior Corporation, various lending institutions, DLJ Capital Funding Inc., as syndication agent, Bankers Trust Company, as administrative agent, Bank of America National Trust and Savings Association, as documentation agent, and Bank One, N.A., as facility agent (incorporated by reference to Exhibit 4.2 to Dayton Superior Corporation's Current Report on Form 8-K (Form 8-K) dated October 14, 1997). 10.9 $5,000,000 Senior Note due 2004 dated September 29, 1997 by Dayton Superior Corporation in favor of Merrill L. Nash (incorporated by reference to Exhibit A to Exhibit 2.1 to Dayton Superior Corporation's Form 8-K dated June 2, 1997). 10.10 Agreement dated as of May 9, 1997 by and among Symons Corporation, the stockholders of Symons Corporation and the Company (incorporated by reference to Exhibit 2.1 to Dayton Superior Corporation's Form 8-K dated June 2, 1997). 10.11 Amended and Restated Trust Agreement dated October 5, 1999 among Dayton Superior Corporation, as depositor, Firstar Bank, N.A., as property trustee, Mark A. Ferrucci as Delaware trustee, and the administrative trustees named herein (incorporated by reference to Exhibit 4.5 to Dayton Superior Corporation's Registration Statement on Form S-3 (Reg. No. 333-84613) (Form S-3)). 10.12 Guarantee Agreement dated October 5, 1999 between Dayton Superior Corporation and Firstar Bank, N.A., as guarantee trustee thereunder, executed and delivered by Dayton Superior Corporation in favor of the holders of the Trust Preferred Securities, as in effect on June 16, 2000 (incorporated by reference to Exhibit 4.9 to Dayton Superior Corporation's Form S-3). 10.13 Agreement and Plan of Merger dated January 19, 2000 by and between the Company and Stone Acquisition Corp. 10.14 Employment Agreement, dated January 19, 2000 between Dayton Superior Corporation and John A. Ciccarelli (incorporated by reference to Exhibit 10.10 to Dayton Superior Corporation's Form 10-K for the year ended December 31, 1999). 10.15 Employment Agreement, dated January 19, 2000 between Dayton Superior Corporation and Alan F. McIlroy (incorporated by reference to Exhibit 10.11 to Dayton Superior Corporation's Form 10-K for the year ended December 31, 1999). 10.16 Employment Agreement, dated January 19, 2000 between Dayton Superior Corporation and Raymond E. Bartholomae (incorporated by reference to Exhibit 10.12 to Dayton Superior Corporation's Form 10-K for the year ended December 31, 1999). 10.17 Employment Agreement, dated as of January 19, 2000, between Dayton Superior Corporation and Michael C. Deis, Sr. (incorporated by reference to Exhibit 10.13 to Dayton Superior Corporation's Form 10-K for the year ended December 31, 1999). 10.18 Employment Agreement, dated as of January 19, 2000, between Dayton Superior Corporation and James C. Stewart (incorporated by reference to Exhibit 10.14 to Dayton Superior Corporation's Form 10-K for the year ended December 31, 1999). 10.19 Employment Agreement, dated as of January 19, 2000, between Dayton Superior Corporation and William C. Mongole, as in effect on June 16, 2000.
II-3
EXHIBIT NO. DESCRIPTION OF EXHIBIT --- ---------------------- 10.20 Employment Agreement, dated as of January 19, 2000, between Dayton Superior Corporation and Mark K. Kaler, as in effect on June 16, 2000. 10.21 Employment Agreement, dated as of January 19, 2000, between Dayton Superior Corporation and James W. Fennessy, as in effect on June 16, 2000. 10.22 Employment Agreement, dated as of January 19, 2000, between Dayton Superior Corporation and Jaime Taronji, Jr., as in effect on June 16, 2000. 10.23 Form of Option Exercise, Cancellation and Equity Rollover Agreement dated January 19, 2000 by and among Stone Acquisition, Dayton Superior Corporation and each of John A. Ciccarelli, Alan F. McIlroy, Raymond E. Bartholomae, Michael C. Deis, Sr., and James C. Stewart (incorporated by reference to Exhibit 10.15 to Dayton Superior Corporation's Form 10-K for the year ended December 31, 1999). 10.24 Credit Agreement, dated June 16, 2000, among Dayton Superior Corporation, various lending institutions and Bankers Trust Company, as administrative agent, Deutsche Bank Securities, Inc., as lead arranger and book manager, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as syndicating agent and co-arranger. 10.25 Management Stockholders' Agreement dated June 16, 2000 by and among Dayton Superior Corporation, Odyssey Investment Partners Fund, LP and the Management Stockholders named therein. 12.1 Statement of Computation of Ratio of Earnings to Fixed Charges. 21.1 Subsidiaries of Dayton Superior Corporation. *23.1 Consent of Thompson Hine & Flory LLP (included in their opinion filed as Exhibit 5.1 hereto). 23.2 Consent of Arthur Andersen LLP. 24.1 Power of Attorney of Dayton Superior Corporation, Inc. (included on signature page to this Registration Statement on Form S-4). 24.2 Power of Attorney of Symons Corporation (included on signature page to this Registration Statement on Form S-4). 24.3 Power of Attorney of Dur-O-Wal, Inc. (included on signature page to this Registration Statement on Form S-4). 25.1 Statement of Eligibility and Qualification (Form T-1) under the Trust Indenture Act of 1939 of United States Trust Company of New York. 99.1 Form of Letter of Transmittal. 99.2 Form of Notice of Guaranteed Delivery. 99.3 Form of Letter from the Dayton Superior Corporation to Registered Holders and the Depository Trust Company Participants. 99.4 Form of Instructions from Beneficial Owners to Registered Holders and the Depository Trust Company Participants. 99.5 Form of Letter to Clients. 99.6 Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
- ------------------------ * To be filed as an amendment. II-4 SCHEDULES OMITTED Schedules not listed above are omitted because of the absence of the conditions under which they are required or because the information required by such omitted schedules is set forth in the financial statements or the notes thereto. ITEM 22. UNDERTAKINGS. The undersigned co-registrants hereby undertake to respond to requests for information that is incorporated by reference into this prospectus pursuant to Items 4, 10(b), 11, or 13 of Form S-4, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This undertaking also includes documents filed subsequent to the effective date of the registration statement through the date of responding to the request. The undersigned co-registrants hereby undertake to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. The undersigned co-registrants hereby undertake to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (1) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (2) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement (notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of a prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement); and (3) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. The undersigned co-registrants hereby undertake as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other Items of the application form. The undersigned co-registrants hereby undertake that every prospectus: (1) that is filed pursuant to the immediately preceding paragraph or (2) that purports to meet the requirements of Section 10(a)(3) of the Securities Act of 1933, as amended, and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. The undersigned co-registrants hereby undertake to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the exchange offer. II-5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, each of the co-registrants has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of New York, state of New York, on July 13, 2000. DAYTON SUPERIOR CORPORATION By: /s/ JOHN A. CICCARELLI ----------------------------------------- John A. Ciccarelli CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER SYMONS CORPORATION By: /s/ JOHN A. CICCARELLI ----------------------------------------- John A. Ciccarelli PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR DUR-O-WAL, INC. By: /s/ JOHN A. CICCARELLI ----------------------------------------- John A. Ciccarelli PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR
II-6 KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and directors of Dayton Superior Corporation, an Ohio corporation (the "Company"), for himself and not for one another, does hereby constitute and appoint either of Alan F. McIlroy or Jaime Taronji, Jr., his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this registration statement with respect to the proposed issuance, offer, exchange and delivery by the Company of its registered 13% senior subordinated notes due 2009, or any registration statement for this offering that is to be effective upon the filing pursuant to rule 462(b) under the Securities Act of 1933, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and as of the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ JOHN A. CICCARELLI Chairman of the Board, - -------------------------------------- President and Chief July 13, 2000 John A. Ciccarelli Executive Officer /s/ ALAN F. MCILROY - -------------------------------------- Vice President and Chief July 13, 2000 Alan F. McIlroy Financial Officer /s/ THOMAS W. ROEHRIG - -------------------------------------- Corporate Controller July 13, 2000 Thomas W. Roehrig /s/ STEPHEN BERGER - -------------------------------------- Director July 13, 2000 Stephen Berger /s/ JOSHUA C. CASCADE - -------------------------------------- Director July 13, 2000 Joshua C. Cascade /s/ WILLIAM F. HOPKINS - -------------------------------------- Director July 13, 2000 William F. Hopkins /s/ DOUGLAS ROTATORI - -------------------------------------- Director July 13, 2000 Douglas Rotatori
II-7 KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and directors of Symons Corporation, a Delaware corporation (the "Company"), for himself and not for one another, does hereby constitute and appoint either of Alan F. McIlroy or Jaime Taronji, Jr., his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this registration statement with respect to the proposed issuance, offer, exchange and delivery by the Company of its registered 13% senior subordinated notes due 2009, or any registration statement for this offering that is to be effective upon the filing pursuant to rule 462(b) under the Securities Act of 1933, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and as of the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ JOHN A. CICCARELLI - -------------------------------------- President, Chief Executive July 13, 2000 John A. Ciccarelli Officer and Director /s/ ALAN F. MCILROY - -------------------------------------- Vice President, Chief July 13, 2000 Alan F. McIlroy Financial Officer and Director /s/ RAYMOND E. BARTHOLOMAE - -------------------------------------- Vice President, General Manager July 13, 2000 Raymond E. Bartholomae and Director /s/ STEVEN FOLEY - -------------------------------------- Vice President, Finance July 13, 2000 Steven Foley
II-8 KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers and directors of Dur-O-Wal, Inc., a Delaware corporation (the "Company"), for himself and not for one another, does hereby constitute and appoint either of Alan F. McIlroy or Jaime Taronji, Jr., his true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this registration statement with respect to the proposed issuance, offer, exchange and delivery by the Company of its registered 13% senior subordinated notes due 2009, or any registration statement for this offering that is to be effective upon the filing pursuant to rule 462(b) under the Securities Act of 1933, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorney-in-fact or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and as of the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ JOHN A. CICCARELLI - -------------------------------------- President, Chief Executive Officer July 13, 2000 John A. Ciccarelli and Director /s/ WILLIAM C. MONGOLE - -------------------------------------- Vice President, General Manager July 13, 2000 William C. Mongole and Director /s/ STEVEN J. GETZ - -------------------------------------- Vice President July 13, 2000 Steven J. Getz /s/ JOHN M. RUTHERFORD - -------------------------------------- Treasurer and July 13, 2000 John M. Rutherford Assistant Secretary /s/ ALAN F. MCILROY - -------------------------------------- Director July 13, 2000 Alan F. McIlroy
II-9 EX-3.1 2 ex-3_1.txt EXHIBIT 3.1 EXHIBIT 3.1 AMENDED ARTICLES OF INCORPORATION OF DAYTON SUPERIOR CORPORATION FIRST: The name of the Corporation is Dayton Superior Corporation. SECOND: The place in the State of Ohio where the principal office of the Corporation is located is Dayton in Montgomery County. THIRD: The purposes for which the Corporation is formed is to manufacture and supply concrete and masonry accessories and to engage in any other lawful act or activity for which a corporation may be formed under Chapter 1701 of the Ohio Revised code. FOURTH: The Corporation shall have authority to issue 5,000,000 capital shares, all of which shall be classified as Common Shares, without par value ("Common Shares"). The holder or holders of the Common Shares shall be entitled to one vote for each Common Share held of record. The holders of the Common Shares shall not have any preemptive rights under Section 1701.15 of the Ohio Revised Code. FIFTH: When authorized by the affirmative vote of the directors, without any action by the shareholders, the Corporation may purchase its own shares for such prices, in such manner and upon such terms and conditions as the directors from time to time may determine, except that no such purchase shall be made if immediately thereafter the Corporation's assets would be less than its liabilities plus stated capital, if any, or if the Corporation is insolvent (as defined in Chapter 1701 of the Ohio Revised Code) or if there is reasonable ground to believe that by such purchase it would be rendered insolvent. SIXTH: The shareholders of the Corporation shall have no right to vote cumulatively in the election of directors. SEVENTH: Notwithstanding any provision of Chapter 1701 of the Ohio Revised Code (or any successor provision) now or hereafter in force designating for any purpose the vote or consent of the holders of shares entitling them to exercise in excess of a majority of the voting power of the Corporation, or of any particular class or classes of shares of the Corporation, such action, unless otherwise expressly required by statute or these Amended Articles of Incorporation, may be taken by the vote of the holders of shares entitling them to exercise a majority of the voting power of the Corporation or of such class or classes. EIGHTH: 8.1 LIMITATION OF LIABILITY. (a) No person shall be found to have violated any duties to the Corporation as a director of the Corporation in any action brought against the person (including actions involving or affecting any of the following: (i) a change or potential change in control of the Corporation; (ii) a termination or potential termination of the person's service to the Corporation as a director; or (iii) the person's service in any other position or relationship with the Corporation), unless it is proved by clear and convincing evidence that the person did not act in good faith, in a manner the person reasonably believed to be in or not opposed to the best interests of the Corporation, or with the care that an ordinarily prudent person in a like position would use under similar circumstances. (b) In performing any duties to the Corporation as a director, the director shall be entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, that are prepared or presented by: (i) one or more directors, officers, or employees of the Corporation who the director reasonably believes are reliable and competent in the matters prepared or presented; (ii) counsel, public accountants, or other persons as to matters that the director reasonably believes are within the person's professional or expert competence; or (iii) a committee of the director's upon which the director does not serve, duly established in accordance with the provisions of the Corporation's Code of Regulations, as to matters within its designated authority, which committee the director reasonably believes to merit confidence. A director shall not be considered to be acting in good faith if the director has knowledge concerning the matter in question that would cause reliance on information, opinions, reports, or statements that are prepared by the foregoing persons to be unwarranted. (c) In determining what a director reasonably believes to be in the best interests of the Corporation, the director shall consider the interests of the shareholders and, in the director's discretion, may consider any of the following: (i) the interests of the Corporation's employees, suppliers, creditors, and customers; (ii) the economy of the state and nation; (iii) community and societal considerations; and (iv) the long-term as well as short-term interests of the Corporation and its shareholders, including the possibility that these interests may be best served by the continued independence of the Corporation. (d) A director shall be liable in damages for any action the director takes or fails to take as a director only if it is proved by clear and convincing evidence in a court of competent jurisdiction that the action or failure to act involved an act or omission undertaken with deliberate intent to cause injury to the Corporation or undertaken with reckless disregard for the best interests of the Corporation. Notwithstanding the foregoing, nothing contained in this paragraph (d) affects the liability of directors under Section 1701.95 of the Ohio Revised Code or limits relief available under Section 1701.60 of the Ohio Revised Code. 8.2 THIRD PARTY ACTION INDEMNIFICATION. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party, to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of the Corporation) by reason of the fact that the person is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, trustee, officer, employee, member, manager or agent of another corporation, domestic or foreign, nonprofit or for profit, limited liability company, partnership, joint venture, trust, or other enterprise, against expenses, including attorney's fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by the person in connection with such action, suit, or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Corporation, and with respect to any criminal action or proceeding, had no reasonable cause to believe the conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, or conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Corporation and, with respect to any criminal action or proceeding, the person had reasonable cause to believe that the conduct was unlawful. 8.3 DERIVATIVE ACTION INDEMNIFICATION. The Corporation shall indemnify any person who was or is a party or is threatened to be made a party, to any threatened, pending, or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that the person is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, trustee, officer, employee, member, manager or agent of another corporation, domestic or foreign, nonprofit or for profit, limited liability company, partnership, joint venture, trust, or other enterprise, against expenses, including attorney's fees, actually and reasonably incurred by the person in connection with the defense or settlement of such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the Corporation, except that no indemnification shall be made in respect of any of the following: (i) any claim, issue, or matter as to which the person is adjudged to be liable for negligence or misconduct in the performance of the person's duty to the Corporation unless, and only to the extent that, the court of common pleas or the court in which such action or suit was brought determines upon application that, despite the adjudication of liabilities, but in view of all the circumstances of the case, the person is fairly and reasonably entitled to indemnity for such expenses as the court of common pleas or such other court shall deem proper; or (ii) any action or suit in which the only liability asserted against the director is pursuant to Section 1701.95 of the Ohio Revised Code. 8.4 SUCCESS ON MERITS. To the extent that a director, trustee, officer, employee, or agent has been successful on the merits or otherwise in defense of any action, suit, or proceeding referred to in Section 8.2 or 8.3, or in defense of any claim, issue, or matter therein, the person shall be indemnified against expenses, including attorney's fees, actually and reasonably incurred by the person in connection with the action, suit or proceeding. 8.5 AUTHORIZATION OF INDEMNIFICATION. Any indemnification under Section 8.2 or 8.3, unless ordered by a court, shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the director or officer is proper in the circumstances because the person has met the applicable standard of conduct set forth in Section 8.2 or 8.3. Such determination shall be made as follows: (i) by a majority vote of a quorum consisting of directors of the Corporation who were not and are not parties to or threatened with any such action, suit, or proceeding; (ii) if the quorum described in subparagraph (a) of this Section 8.5 is not obtainable or if a majority vote of a quorum of disinterested director so directs, in a written opinion by independent legal counsel other than an attorney, or a firm having associated with it an attorney, who has been retained by or who has performed services for the Corporation or any person to be indemnified within the past five years; (iii) by the shareholders; or (iv) by the court of common pleas or the court in which the action, suit, or proceeding was brought. In the case of an action or suit brought by or in the right of the Corporation under Section 8.3, any determination made by the disinterested directors under subparagraph (i) of this Section 8. 5 or by independent legal counsel under subparagraph (ii) of this Section 8.5 shall be communicated promptly to the person who threatened or brought the action or suit, and within ten days after receipt of the notification, the person shall have the right to petition the court of common pleas or the court in which such action or suit was brought to review the reasonableness of such determination. 8.6 PAYMENT OF EXPENSES IN ADVANCE. (a) Unless the only liability asserted against a director in an action, suit, or proceeding referred to in Section 8.2 or 8.3 is pursuant to Section 1701.95 of the Ohio Revised Code, expenses, including attorney's fees, incurred by the director in defending the action, suit, or proceeding shall be paid by the Corporation as they are incurred, in advance of the final disposition of the action, suit, or proceeding, upon receipt of an undertaking by or on behalf of the director in which the director agrees to do both of the following: (i) repay such amount if it is proved by clear and convincing evidence in a court of competent jurisdiction that the director's action or failure to act involved an act or omission undertaken with deliberate intent to cause injury to the Corporation or undertaken with reckless disregard for the best interests of the Corporation; and (ii) reasonably cooperate with the Corporation concerning the action, suit, or proceeding. (b) Expenses, including attorney's fees, incurred by a director or officer in defending any action, suit, or proceeding referred to in Section 8.2 or 8.3, may be paid by the Corporation as they are incurred, in advance of the final disposition of the action, suit, or proceeding as authorized by the directors in the specific case upon receipt of an undertaking by or on behalf of the director or officer to repay such amount, if it ultimately is determined that the director or officer is not entitled to be indemnified by the Corporation. 8.7 NONEXCLUSIVITY. The indemnification authorized by this Article Eighth shall not be exclusive of, and shall be in addition to, any other rights granted to those seeking indemnification under these Amended Articles of Incorporation, the Code of Regulations or any agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in the person's official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director or officer, and shall inure to the benefit of the heirs, executors, and administrators of such a person. 8.8 INSURANCE. The Corporation may purchase and maintain insurance or furnish similar protection including but not limited to trust funds, letters of credit, or self-insurance, on behalf of or for any person who is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the Corporation as a director, trustee, officer, employee, or agent of another corporation, domestic or foreign, nonprofit or for profit, partnership, joint venture, trust, or other enterprise, against any liability asserted against the person and incurred by the person in any such capacity, or arising out of the person's status as such, whether or not the Corporation would have the power to indemnify the person against such liability under this Article Eighth. Insurance may be purchased from or maintained with a person in which the Corporation has a financial interest. 8.9 NO LIMITATION. The authority of the Corporation to indemnify persons pursuant to Sections 8.2 and 8.3 does not limit the payment of expenses as they are incurred, indemnification, insurance, or other protection that may be provided pursuant to Sections 8.6, 8.7 and 8.8. Sections 8.2 and 8.3 do not create any obligation to repay or return payments made by the Corporation pursuant to Sections 8.6, 8.7 and 8.8. NINTH: The provisions of Section 1701.831 of the Ohio Revised Code shall not apply to control share acquisitions of shares of the Corporation. TENTH: Any and every statute of the State of Ohio hereafter enacted, (i) whereby the rights, powers or privileges of corporations or of the shareholders of corporations organized under the laws of the State of Ohio are increased or diminished or in any way affected, or (ii) whereby effect is given to the action taken by any number, less than all, of the shareholders of any such corporation, or (iii) whereby the authority of the directors to adopt amendments to the articles of incorporation or the regulations without shareholder approval shall be expanded, will apply to the Corporation and will be binding not only upon the Corporation but upon every shareholder of the Corporation to the same extent as if such statute had been in force at the date of filing these Amended Articles of Incorporation in the office of the Secretary of State of Ohio. ELEVENTH: These Amended Articles of incorporation supersede the existing Amended Articles of Incorporation of the Corporation. EX-3.2 3 ex-3_2.txt EXHIBIT 3.2 Exhibit 3.2 CERTIFICATE OF INCORPORATION OF FIFTEENTH CENTURY CORPORATION *********************** 1. The name of the Corporation is FIFTEENTH CENTURY CORPORATION 2. The address of its registered office in the State of Delaware is No. 100 West Tenth Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. 3. The nature of the business of purposes to be conducted or promoted is: To engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. 4. The total number of shares of stock which the Corporation shall have authority to issue is One Thousand (1,000); all such shares to be without par value. 5A. The name and mailing address of each incorporator is as follows: ROBERT L. JONES I Gulf & Western Plaza New York, NY 10023 RUDOLPH J. SANSON, JR. 1 Gulf & Western Plaza New York, New York 10023 5B. The name and mailing address of each person, who is to serve as a director until the first annual meeting of the stockholders or until a successor is elected and qualified, is as follows: ROBERT L. JONES 1 Gulf & Western Plaza New York, New York 10023 RUDOLPH J. SANSON, JR. 1 Gulf & Western Plaza New York, New York 10023 NORMAN R. FORSON 1 Gulf & Western Plaza New York, New York 10023 6. The Corporation is to have perpetual existence. 7. In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, alter or repeal the by-laws of the Corporation. 8. Meetings of stockholders may be held within or without the State of Delaware, as the by-laws may provide. The books of the Corporation may be kept (subject to any provision contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the by-laws of the Corporation. Elections of directors need not be by written ballot unless the by-laws of the Corporation shall so provide. 9. The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. WE, THE UNDERSIGNED, being each of the incorporators hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate hereby declaring and certifying that this is our act and deed 2 and the facts herein stated are true, and accordingly have hereunto set our hand this 14th day of December, 1981. --------------------------------- Robert L. Jones --------------------------------- 3 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF FIFTEENTH CENTURY CORPORATION FIFTEENTH CENTURY CORPORATION, ("the Corporation") a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware DOES HEREBY CERTIFY: FIRST: That the Board of Directors of said corporation, by the unanimous written consent of its members, filed with the minutes of the board, adopted a resolution proposing and declaring advisable the following amendment to the Certificate of Incorporation of said corporation: RESOLVED, that the Certificate of Incorporation of FIFTEENTH CENTURY CORPORATION, be amended by changing the Article thereof numbered "1." so that, as amended, said Article shall be and read as follows: "l. The name of the Corporation is LIVINGSTON-GRAHAM, INC." SECOND: That in lieu of a meeting and vote of stockholders, the stockholders have given unanimous written consent to said amendment in accordance with the provisions of section 228 of the General Corporation Law of the State of Delaware. THIRD: That the aforesaid amendment was duly adopted in accordance with the applicable provisions of Section 242 and 228 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, said FIFTEENTH CENTURY CORPORATION has caused this Certificate to be signed by Robert L. Jones, its Vice President, and attested by Rudolph J. Sanson, Jr., its Secretary. Dated: January 20, 1982 FIFTEENTH CENTURY CORPORATION BY ------------------------------------ Robert L. Jones Vice President ATTEST: BY --------------------------------- Rudolph J. Sanson, Jr. Secretary 2 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF LIVINGSTON-GRAHAM, INC. LIVINGSTON-GRAHAM, INC., ("the Corporation") a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware DOES HEREBY CERTIFY: FIRST: That the Board of Directors of said corporation, by the unanimous written consent of its members, filed with the minutes of the board, adopted a resolution proposing and declaring advisable the following amendment to the Certificate of Incorporation of said corporation: RESOLVED, that the Certificate of Incorporation of LIVINGSTON-GRAHAM, INC., be amended by changing the Article thereof numbered "Fourth" so that, as amended, said Article shall be and read as follows: "FOURTH: The total number of shares of stock which the Corporation shall have authority to issue is One Thousand (1,000) having a par value of $1.00 per share." SECOND: That in lieu of a meeting and vote of stockholders, the stockholders have given unanimous written consent to said amendment in accordance with the provisions of Section 228 of the General Corporation Law of the State of Delaware. THIRD: That the aforesaid amendment was duly adopted in accordance with the applicable provisions of Section 242 and 228 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, said LIVINGSTON-GRAHAM, INC. has caused this Certificate to be signed by Gerald I. Ritthaler, its Vice President, and attested by Thomas M. Bartlett, its Assistant Secretary, this 12th day of August, 1983. LIVINGSTON-GRAHAM, INC. BY ---------------------------------- Gerald I. Ritthaler Vice President ATTEST: BY -------------------------------- Thomas M. Bartlett Assistant Secretary 2 CERTIFICATE OF MERGER OF SAN GABRIEL MERGING CORP. INTO LIVINGSTON-GRAHAM, INC. * * * LIVINGSTON-GRAHAM, INC. hereby certifies that: FIRST: The name and state of incorporation of each of the Constituent Corporations is as follows:
NAME STATE OF INCORPORATION - ---- ---------------------- San Gabriel Merging Corp................ Delaware Livingston-Graham, Inc.................. Delaware
SECOND: A Merger Agreement between the parties to the Merger has been approved, adopted, certified, executed and acknowledged by each of the Constituent Corporations in accordance with the requirements of subsection (c) of Section 251 of the General Corporation Law of the State of Delaware. THIRD: The name of the Surviving Corporation is Livingston-Graham, Inc. FOURTH: The Certificate of Incorporation of the Surviving Corporation shall be that of Livingston-Graham, Inc., except that the same is amended as follows: (a) Article 4 of the Certificate of Incorporation of Livingston-Graham, Inc. is amended to change the total number of authorized shares, reduce the par value of the common stock, authorize the issuance of preferred stock and to set forth the designation and the powers, preferences and rights and the qualifications, limitations and restrictions in respect of the shares of the preferred stock and of the common stock. Such Article 4, as amended, shall be and read in its entirety as follows: "4. The total number of shares of all classes of stock which the corporation shall have authority to issue is 30,000; of which 25,000 shares, having no par value per share, will be 14% cumulative preferred stock (hereinafter referred to as "Preferred Stock"), and 5,000 shares, having a par value of $.01 per share, will be common stock (hereinafter referred to as "Common Stock"). The designation and the powers, preferences and rights and the qualifications, limitations or restrictions in respect of the shares of each class of stock are as follows: DIVIDENDS. The holders of record of the outstanding Preferred Stock shall be entitled to receive, when and as declared by the Board of Directors, preferential cumulative dividends in each fiscal year out of earnings or surplus at the rate of $14 per share per year payable in cash semiannually on the 15th day of March and September in each year. No dividend on the Common Stock may be declared by the Board of Directors unless and until all the outstanding Preferred Stock has been redeemed or retired as set forth below. From and after the date when all the outstanding referred Stock has been redeemed or retired as set forth below, all dividends, whether in cash or other property, as may be declared by the Board of Directors from time to time, shall be paid ratably and equally, share for share, on all the outstanding shares of Common Stock. VOTING RIGHTS. The holders of the Common Stock shall have the exclusive voting power for all purposes and the holders of the Preferred Stock shall have no voting rights or voice whatsoever in the affairs or management of the corporation or the right to notice of any meeting of stockholders, except as may be specifically required by law. On all matters to be voted or acted upon by the stockholders, each holder of the Common Stock will be entitled to one vote for each share of such stock held of record in the holder's name on the books of the corporation at the time determined according to law. However, at all elections of directors of the corporation, each holder of the Common Stock shall be entitled to as many votes as shall equal the number of votes which (except for this provision as to cumulative voting) such holder would be entitled to cast for the election of directors with respect to such holder's shares of the Common Stock multiplied by the number of directors to be 2 elected by such holder, and such holder may cast all of such votes for a single director or may distribute them among the number to be voted for, or for any two or more of them as such holder may see fit. REDEMPTION OR REPURCHASE. (a) The corporation may at its election, pursuant to resolution of the Board of Directors adopted at any time or from time to time, redeem all or any of the shares of the outstanding Preferred Stock by paying to the holder or holders thereof as a redemption price the sum of $100 per share plus all accumulated and unpaid dividends, if any. The corporation shall give notice if any proposed redemption of Preferred Stock by mailing a copy of such notice at least fifteen days prior to the date fixed for such redemption to the holder or holders of record of the Preferred Stock to be redeemed at their respective addresses appearing on the books of the corporation. The Board of Directors shall have absolute discretion to determine the times, terms, conditions and amount of such redemption, including the right to designate all or any number of shares of any particular Preferred Stockholder or Stockholders; PROVIDED, HOWEVER, that, to the extent permitted by law, the corporation shall redeem all outstanding shares of Preferred Stock at the redemption price of $100 per share on or before the eighth anniversary date of the original issuance thereof. From and after the date fixed for redemption in any such notice, all rights of the holders of the Preferred Stock with respect to the shares to be so redeemed shall cease except for the right to receive the redemption price without interest. (b) The corporation may also at the election, by resolution of the Board of Directors adopted at any time or from time to time, purchase for retirement at the public or private sale all or any of the shares of the outstanding Preferred Stock upon the best terms reasonably obtainable, but in no event at a price greater than the redemption price of the Preferred Stock. The corporation shall not purchase or otherwise acquire any shares of Preferred Stock wither as treasury stock or for reissue. (c) Any Preferred Stock so redeemed or purchased for retirement as aforesaid shall be cancelled and shall not be reissued and the authorized capital stock shall be reduced by the amount of the Preferred Stock so redeemed or purchased and such stock shall be retired from time to time in the manner provided by law. LIQUIDATION RIGHTS. In the event of any liquidation, dissolution or winding up of the corporation, voluntary or otherwise, all available assets shall be distributed in cash to the holders of the Preferred Stock ratably, share for share, until the holders thereof have received an amount equal to $100 per share plus all accumulated and unpaid dividends before the holders of the Common Stock will be entitled to receive any assets. All remaining available assets shall be distributed in cash or other property, or 3 both, to the holders of the outstanding Common Stock ratably, share for share." (b) To add an indemnification provision as Article 10, which Article 10 shall be and read as Follows: "10. The corporation shall, to the fullest extent permitted by Section 145 of the Delaware General Corporation Law, as amended from time to time, indemnify all persons whom it may indemnify pursuant thereto." FIFTH: The executed Merger Agreement is on file at the principal place of business of the Surviving Corporation, the address of which is 16080 Arrow Highway, Irwindale, California 91706. SIXTH: A copy of the Merger Agreement will be furnished by the Surviving Corporation, on request and without cost, to any stockholder of any of the Constituent Corporations. SEVENTH: The Merger shall be effective immediately upon the filing of this Certificate with the Secretary of State of the State of Delaware. IN WITNESS WHEREOF, Livingston-Graham, Inc., as the surviving corporation, has caused this certificate to be executed by its officers thereunto duly authorized as of this 7th day of September, 1983. LIVINGSTON-GRAHAM, INC. By ------------------------------ Title: 4 Attest: - -------------------------------- Secretary 5 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION Livingston-Graham, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, does hereby certify: FIRST: That the Board of Directors of Livingston-Graham, Inc., by unanimous consent of its members, filed with the minutes of the Board, duly adopted resolutions setting forth a proposed amendment to the Certificate of Incorporation of said corporation. The resolution setting forth the proposed amendment is as follows: "RESOLVED, that Article 4 of the Certificate of Incorporation of this corporation be amended by changing the first paragraph thereof (but with-out change to any other paragraph of Article 4) to read in its entirety as follows: "4. The total number of shares of all classes of stock which the corporation shall have authority to issue is 30,000; of which 25,000 shares, having a par value of $0.01 per share, will be 14% cumulative preferred stock (hereinafter referred to as "Preferred Stock"), and 5,000 shares, having a par value of $0.01 per share, will be common stock (hereinafter referred to as "Common Stock"). Upon the filing of this Certificate of Amendment each outstanding share of Preferred Stock, without par value, shall thereupon be changed into and reclassified as one share of Preferred Stock, $0.01 par value. The Common Stock shall not be affected by the foregoing amendment." SECOND: That thereafter the sole stockholder of said corporation approved said amendment by written consent. THIRD: That said amendment was duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. IN WITNESS WHEREOF, said Livingston-Graham, Inc., has caused this certificate to be signed by its President and attested by its Secretary this 18th day of November, 1983. LIVINGSTON-GRAHAM, INC. By -------------------------------- Merrill L. Nash, President Attest: - --------------------------------- George Salisbury, Secretary 2 CERTIFICATE OF OWNERSHIP AND MERGER MERGING RICHMOND SCREW ANCHOR CO., INC. AND SYMONS CORPORATION INTO LIVINGSTON-GRAHAM, INC. Livingston-Graham, Inc., does hereby certify: FIRST: That this corporation is incorporated under the laws of the State of Delaware. SECOND: That this corporation owns all of the outstanding shares of stock of Richmond Screw Anchor, Co., Inc., a corporation incorporated under the laws of the State of Delaware. THIRD: That this corporation, by the following resolutions of its Board of Directors, adopted the unanimous written consent without a meeting as of November 30, 1983, adopted resolutions with respect to the merger and liquidation of Richmond Screw Anchor Co., Inc. into itself, as follows: "WHEREAS, this corporation is the sole stockholder of Richmond Screw Anchor Co., Inc., a Delaware corporation, and it is in the best interests of this corporation to merge and liquidate into this corporation, and to assume all liabilities of, Richmond Screw Anchor Co., Inc.; NOW, THEREFORE, BE IT RESOLVED, that this corporation merge and liquidate Richmond Screw Anchor Co., Inc., a Delaware corporation, its wholly-owned subsidiary corporation, into itself, and assume all of its obligations, pursuant to Section 253 of the General Corporation Law of the State of Delaware." FOURTH: That this corporation owns all of the outstanding shares of stock of Symons Corporation, a Corporation incorporated under the laws of the State of Delaware. FIFTH: That this corporation, by the following resolutions of its Board of Directors, adopted the unanimous written consent without a meeting as of November 30, 1983, adopted resolution with respect to merger and liquidation of Symons Corporation into itself and the change of its name, as follows: WHEREAS, this corporation is the sole stockholder of Symons Corporation, a Delaware corporation, and it is in the best interest of this corporation to merge and liquidate into this corporation, and to assume all liabilities of, Symons Corporation, and thereupon to change the name of this corporation; NOW, THEREFORE, BE IT RESOLVED, that this corporation merge and liquidate Symons Corporation, a Delaware corporation, its wholly-owned subsidiary corporation into itself, and assume all of its obligations, pursuant to Section 253 of the General Corporation Law of the State of Delaware; RESOLVED FURTHER, that Article 1 of the Certificate of Incorporation of this corporation be amended to read in its entirety as follows: "1. The name of this corporation is Symons Corporation." SIXTH: The merger and amendment shall be effective immediately upon the filing of this certificate with the Secretary of State of the State of Delaware. IN WITNESS WHEREOF, said Livingston-Graham, Inc. has caused this certificate to be signed by its President and attested to by its Secretary this 30th day of November, 1983. LIVINGSTON-GRAHAM, INC. By --------------------------------- Merrill L. Nash, President Attest: - ----------------------------------- George Salisbury, Secretary 2 CERTIFICATE OF OWNERSHIP AND MERGER MERGING L-T TRANSPORT, INC. INTO SYMONS CORPORATION Symons Corporation, a corporation organized and existing under the laws of the State of Delaware (the "Corporation") DOES HEREBY CERTIFY: FIRST: That the Corporation was organized pursuant to the provisions of the Delaware General Corporation Law on December 21, 1981. SECOND: That the Corporation owns 100% of the outstanding shares of capital stock of L-T Transport, Inc., ("L-T") , a corporation organized pursuant to the provisions of the California Corporations Code on April 16, 1975. THIRD: That pursuant to Section 253(a) of the Delaware General Corporation Law the Corporation's Board of Directors has determined to merge L-T into the Corporation and has duly adopted as of April 28, 1987 the following resolutions by unanimous written consent of the members thereof, filed with the minutes of such Board of Directors. RESOLVED, that the Corporation does hereby approve a merger of L-T into the Corporation, upon which the Corporation shall assume all of the obligations of L-T. RESOLVED FURTHER, that, pursuant to the merger, each outstanding share of L-T capital stock shall be cancelled. IN WITNESS WHEREOF, the Corporation has caused this Certificate to be signed by Merrill L. Nash, its President, and attested to by George Salisbury, its Secretary, this 27th day of April, 1987. By -------------------------------- Merrill L. Nash, President Attest: - ----------------------------------- George Salisbury, Secretary 2 CERTIFICATE OF OWNERSHIP AND MERGER OF SYMONS CORPORATION SYMONS CORPORATION, a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: FIRST: That said corporation owns all of the outstanding shares of capital stock of S Land Company, a California corporation. SECOND: That the Board of Directors of said corporation determined to merge into itself its wholly-owned subsidiary, S Land Company, and adopted the following resolutions as of September 26, 1990: WHEREAS, this corporation owns all of the issued and outstanding shares of capital stock of S Land Company, a California corporation; and WHEREAS, S Land Company has adopted a Plan of Liquidation which shall qualify as a liquidation under Section 332 of the Internal Revenue Code, to be effected by the merger of S Land company into this corporation; NOW, THEREFORE, BE IT RESOLVED, that this corporation merge S Land Company, its wholly-owned subsidiary corporation, into itself and assume all of its obligations pursuant to Section 253 of the Delaware General Corporation Law and Sections 1108 and 1110 of the California Corporations Code; and RESOLVED FURTHER, that the officers of this corporation be, and each of them hereby is, authorized, empowered and directed to execute a Certificate of Ownership and Merger merging S Land Company into this corporation, to cause said Certificate to be filed with the Delaware Secretary of State and the California Secretary of State, and to execute such other documents and take such other actions as such officer or officers shall deem necessary, appropriate or advisable in order to carry out the intent and purposes of the foregoing resolutions. IN WITNESS WHEREOF, SYMONS CORPORATION has caused this certificate to be signed by Merrill L. Nash, its President, and attested by Kevin J. Combs, its Secretary, this 28th day of September, 1990. SYMONS CORPORATION By -------------------------------- Merrill L. Nash, President ATTEST: - --------------------------- Kevin J. Combs Secretary 2 CERTIFICATE OF OWNERSHIP AND MERGER OF ARCADIA INDUSTRIES, INC. ARCADIA INDUSTRIES, INC., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY: FIRST: That said corporation owns all of the outstanding shares of capital stock of Symons Corporation, a Delaware corporation. SECOND: That the Board of Directors of said corporation determined to merge said corporation into Symons Corporation, its wholly-owned subsidiary, and adopted the following resolutions as of September 26, 1990: WHEREAS, this corporation owns all of the issued and outstanding shares of capital stock of Symons Corporation, a Delaware corporation; and WHEREAS, it is deemed to be advisable and in the best interest of this corporation that this corporation merge itself into Symons Corporation; NOW, THEREFORE, BE IT RESOLVED, that this corporation merge itself into Symons Corporation, with Symons Corporation being the surviving corporation, pursuant to Section 253 of the Delaware General Corporation Law; and RESOLVED FURTHER, that, upon the effective date of the merger of this corporation into Symons Corporation, the sole holder of all of the outstanding shares of capital stock of this corporation may surrender his certificate or certificates representing such shares of capital stock to this corporation, and shall be entitled to receive, in exchange therefor, a certificate or certificates representing the same number of shares of capital stock of Symons Corporation; and RESOLVED FURTHER, that the merger of this corporation into Symons Corporation has been duly approved by the written consent of the sole holder of all of the issued and outstanding shares of capital stock of this corporation; and RESOLVED FURTHER, that the officers of this corporation be, and each of them hereby is, authorized, empowered and directed to execute a Certificate of Ownership and Merger merging this corporation into Symons Corporation, to cause said Certificate to be filed with the Delaware Secretary of State, and to execute such other documents and take such other actions as such officer or officers shall deem necessary, appropriate or advisable in order to carry out the intent and purposes of the foregoing resolutions. IN WITNESS WHEREOF, ARCADIA INDUSTRIES, INC. has caused this certificate to be signed by Merrill L. Nash, its President, and attested by Kevin J. Combs, its Secretary, this 28th day of September, 1990. ARCADIA INDUSTRIES, INC. By: ---------------------------------- Merrill L. Nash, President ATTEST: - -------------------------------- Kevin J. Combs, Secretary 2 EX-3.3 4 ex-3_3.txt EXHIBIT 3.3 Exhibit 3.3 CERTIFICATE OF OWNERSHIP AND MERGER MERGING DURO ACQUISITION CO. INTO DUR-O-WAL, INC. Duro Acquisition Co., a corporation organized and existing under the laws of the State of Delaware (the "Corporation"), DOES HEREBY CERTIFY: FIRST: That this Corporation was incorporated on the 29th day of September, 1987, pursuant to the General Corporation Law of the State of Delaware, the provisions of which permit the merger of a parent corporation organized and existing under the laws of said State into a subsidiary corporation organized and existing under the laws of said State. SECOND: That this Corporation owns all of the outstanding shares of the Common Stock, $1.00 par value per share, of DUR-O-WAL, INC. ("Dur-O-Wal"), a corporation incorporated on the 24th day of December, 1980 pursuant to the General Corporation Law of the State of Delaware, and having no class of stock outstanding other than said Common Stock. THIRD: That this Corporation, by the following Resolutions of its Board of Directors, duly adopted by the unanimous written consent of the members thereof, filed with the minutes of the board pursuant to Section 141(f) of the Delaware General Corporation Law on October 21, 1987 determined to, and effective upon the filing of this Certificate of Ownership and Merger with the Secretary of State of the State of Delaware does, merge itself into said Dur-O-Wal: WHEREAS, this Corporation is the legal and beneficial owner of all of the outstanding shares of Capital Stock, $1.00 par value per share (the "Stock"), of DUR-O-WAL, INC., a Delaware corporation ("Dur-O-Wal"); and WHEREAS, this Corporation desires to merge itself into Dur-O-Wal, pursuant to the provisions of Section 253 of the General Corporation Law; NOW, THEREFORE, BE IT RESOLVED, that effective upon the filing of an appropriate Certificate of Ownership and Merger embodying these resolutions with the Secretary of State of Delaware (but subject to the approval of the sole stockholder of this Corporation) this Corporation merge and it hereby does merge itself into Dur-O-Wal, which will assume all of the obligations of this Corporation; and RESOLVED, that the terms and conditions of the merger are an follows: Upon the purposed merger becoming effective, the Certificate of Incorporation of the surviving corporation shall be amended to read in full as set forth in Exhibit I attached hereto; and each outstanding share of Stock owned of record by the Corporation shall cease to be outstanding, without any payment being made in respect thereof; and each outstanding share of Common Stock, $1.00 par value, of this Corporation shall be converted into the same number of shares of Common Stock, $1.00 par value, of Dur-O-Wal and each outstanding share of the Series A Cumulative Preferred Stock, $100.00 par value, of this Corporation shall be converted into the same number of shares of the Series A Cumulative Preferred Stock, $100.00 par value, of Dur-O-Wal, certificates for which shall be issued to the sole stockholder of this Corporation upon surrender to Dur-O-Wal of such stockholder's certificates formerly representing such shares of Common Stock and Series A Cumulative Preferred Stock of this Corporation; and that upon issuance of the shares of Common Stock and Series A Cumulative Preferred Stock of Dur-O-Wal, such shares shall be deemed to be fully paid and non-assessable; and RESOLVED, that the proposed merger be submitted to the sole stockholder of this Corporation and that upon receiving the written consent of such stockholder the proposed merger shall be approved; and RESOLVED, that the President be and hereby is authorized to make and execute, and the Secretary be and hereby is authorized to attest, a Certificate of Ownership and Merger setting forth a copy of these Resolutions providing for the merger of this Corporation into Dur-O-Wal, and the date of adoption hereof, and to cause the same to be filed with the Secretary of State of Delaware and a certified copy recorded in the office of the Recorder of Deeds for the County of New Castle and to do all acts and things, whatsoever, whether within or without the State of Delaware, which may be in any way necessary or appropriate to effect said merger. FOURTH: That the merger has been approved by the sole holder of all of the outstanding stock of this Corporation entitled to vote thereon by unanimous written consent without a meeting in accordance with Section 228 of the Delaware General Corporation Law of the State of Delaware. 2 FIFTH: (a) The total number of shares of stock which the Corporation has authority to issue is as follows:
Class Number of Shares Per value per share ----- ---------------- ------------------- Common 5330 $ 1.00 Series A Preferred 5450 $100.00 Preferred 100 $100.00
(b) The total number of shares of stock which Dur-O-Wal has authority to issue is as follows:
Class Number of Shares Per Value Per Share ----- ---------------- ------------------- Common 20,000 $ 1.00
(c) The Certificate of Incorporation of Dur-O-Wal is amended to read in full as set forth in Exhibit I attached hereto and the attached Certificate of Incorporation can be certified separate and apart from this Certificate of Ownership and Merger. IN WITNESS WHEREOF, said Duro Acquisition Co. has caused this Certificate to be signed by its President and attested by its Secretary, this 21st day of October, 1987. DURO ACQUISITION CO. By: ------------------------------- Mario J. Catani, President ATTEST: - -------------------------- Roger M. Peterson, Secretary 3 EXHIBIT I CERTIFICATE OF INCORPORATION OF DUR-O-WAL INC. FIRST: The name of the Corporation is Dur-O-Wal, Inc. SECOND: The address of the Corporation's registered office in the State of Delaware is 1209 Orange Street, in the city of Wilmington, County of New Castle. The name of the Corporation' s registered agent at such address is The Corporation Trust Company. THIRD: The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware. FOURTH: The aggregate number of shares which the Corporation shall be authority to issue is 10,450 divided into 5,000 shares of Common Stock of the par value of $1.00 per share and 5,450 shares of Series A Cumulative Preferred Stock of the par value of $100.00 per share (the "Series A Preferred"). FIFTH: The Series A Preferred shall have the powers, preferences. and rights and the qualifications. limitations or restrictions thereon as follows: 1. PREFERENCE. The preferences of each share of Series A Preferred with respect to dividend payments and distributions of the Corporation's assets upon redemption and upon the voluntary or involuntary liquidation, dissolution or winding up of the Corporation shall be equal to the preferences of every other share of Series A Preferred from time to time outstanding in every respect. The preferences of Series A Preferred in relation to all other equity Securities, whether now or hereafter authorized, shall be as stated herein. 2. VOTING RIGHTS. Except as otherwise provided herein or by law, the Holder of each outstanding share of Series A Preferred shall have no voting rights. 3. DIVIDEND RIGHTS. The Holders of the Series A Preferred shall be entitled to receive cash dividends when and as declared by the Board out of funds legally available for such purpose, in an amount equal to $60.00 per share per annum, and no more. Dividends shall be payable quarterly on the 15th day of January, April, July and October in each year, unless such date is a non-business day, in which event on the next business day, commencing on the first such date after the issuance of the Series A Preferred, to Holders of record at 9:00 A.M., Central Time, on the payment date. Dividends shall be cumulative and shall accrue on each share of Series A Preferred from the date of issue thereof. No interest, or sum of money in lieu of interest, shall be payable in respect of any dividend payment or payments which may be in arrears. 4. REDEMPTION AT OPTION OF THE CORPORATION. The Corporation shall have the right to redeem shares of Series A Preferred pursuant to the following provisions: (A) The Corporation shall have the right, at its sole option and election, to redeem the shares of the Series A Preferred, in whole or in part, at any time and from time to time at a redemption price of $1,000.00 per share plus an amount equal to all accrued and unpaid dividends thereon, whether or not declared, to the Redemption Date (defined below) (the "Redemption Amount"). (B) If less than all of the outstanding Series A Preferred are to be redeemed, the shares so to be redeemed shall be selected by lot, pro-rata or in such other manner as the Board may determine to be fair and proper. (C) Notice of any redemption of the Series A Preferred shall be mailed at least twenty, but not more than sixty, days prior to the date fixed for redemption (the "Redemption Date") to each Holder of the Series A Preferred to be redeemed at such Holder's address as it appears on the books of the Corporation. In order to facilitate the redemption of the Series A Preferred, the Board may fix a record date for the determination of Holders of Series A Preferred to be redeemed, or may cause the transfer books of the Corporation to be closed for the transfer of the Series A Preferred, not more than sixty days prior to the Redemption Date. (D) On or before the Redemption Date, each Holder of Series A Preferred shall surrender the certificate or certificates for such Series A Preferred held by such Holder to the Corporation for redemption. On the Redemption Date, the Corporation shall pay the Redemption Amount to each Holder who has surrendered such Holder's certificate or certificates for Series A Preferred. In the event that a Holder fails to surrender such Holder's certificate or certificates for the Series A Preferred, the Corporation may place the Redemption Amount in an escrow account for the benefit of such Holder and thereafter the Corporation may deem such Holder to have ceased to be a Holder of Series A Preferred, to the extent the Corporation has redeemed such Holder's Series A Preferred, and the Corporation may deem itself to be the Holder of such redeemed shares of Series A Preferred. (E) If the Corporation shall redeem less than all of the outstanding Series A Preferred the Corporation shall on the Redemption Date also deliver to the Holder of the shares being redeemed a certificate, of like tenor with the certificate or certificates surrendered, for the number of shares evidenced by such surrendered certificate or certificates less the number of shares redeemed. (F) All redemptions under this Section 4 shall be deemed to have been made at the close of business on the Redemption Date. 5. REDEMPTION AT OPTION OF HOLDER. (A) To the extent permitted by applicable law and subject to the provisions of any loan agreement with respect to borrowed money to which the Corporation is a party, on November 1, 1997 (the "Holder Redemption Date"), each Holder of the Series A Preferred shall have the right, at the sole option and election of such Holder, to require the Corporation to redeem some or all of the Series A Preferred held by such Holder on such date at a purchase 2 price in cash equal to the sum of (i) $1,000.00 per share, plus (ii) an amount equal to all accrued and unpaid dividends, whether or not declared, through the Holder Redemption Date, on such shares being redeemed (the "Holder Redemption Amount"). (B) A Holder of Series A Preferred may exercise the right to require the Corporation to redeem the Series A Preferred shares held by such Holder by sending written notice of such exercise, which notice shall state the number of shares of Series A Preferred to be redeemed to the Corporation at its principal office or such other office or agency of the Corporation maintained for that purpose ("Corporate Office") not later than 30 days prior to the Holder Redemption Date and by surrendering to the Corporation at the Corporate Office the certificate or certificates representing the shares of Series A Preferred to be redeemed on the Holder Redemption Date. Upon receipt of such certificate or certificates, the Corporation shall deliver or cause to be delivered to the Holder of the shares being redeemed the Holder Redemption Amount therefor and, if less than the full number of shares of the Series A Preferred evidenced by the surrendered certificate or certificates are to be redeemed, a certificate, of like tenor with the certificate or certificates surrendered, for the number of shares evidenced by such surrendered certificate or certificates less the number of shares redeemed. Such redemptions shall be deemed to have been made at the close of business on the Holder Redemption Date. 6. LIQUIDATION RIGHTS. If the Corporation shall be voluntarily or involuntarily liquidated, dissolved or wound up at any time when any of the Series A Preferred shall be outstanding, the preferences of the Holders of the then outstanding equity Securities of the Corporation to the assets of the Corporation available for distribution to such Holders shall be as follows: (A) First, the Holders of the then outstanding Series A Preferred shall have a preference senior to the preference of the Holders of all other equity Securities of the Corporation, whether now or hereafter authorized, equal to the sum of $ 1,000.00 per share plus accrued and unpaid dividends thereon, whether or not declared; and (B) Second, the remainder, if any, of the assets of the Corporation shall be distributed to the Holders of all the remaining Securities in accordance with the Certificate of Incorporation or any resolution of the Board fixing and determining the preferential rights of any such Securities. 7. PROTECTIVE PROVISIONS. So long as any Series A Preferred shall be outstanding, the Corporation shall not without the approval by the vote or written consent of the Holders of at least 51% (or more if required by law) of the shares of Series A Preferred outstanding at the time: (A) Amend or repeal any provision of, or add any provision to, the Corporation's Certificate of Incorporation or the Corporation's By-laws, if such action would alter or change the Series A Preferred or any right or preference thereof; or (B) Authorize or issue shares of Series A Preferred in excess of the first 4,905 shares of Series A Preferred issued by the Corporation pursuant to the authority granted hereby. 3 8. DEFINITIONS. As used herein, the following terms have the following meanings: "Holders" shall mean the Persons who shall, from time to time own, of record, or beneficially, any Security. The term "Holder" shall mean one of the Holders. "Person" shall mean an individual, a corporation, a partnership, a trust, an unincorporated organization or a government organization or an agency or political subdivision thereof. "Securities" shall mean any debt or equity securities of the Corporation, whether now or hereafter authorized, and any instrument convertible into or exchangeable for Securities or a Security. The term "Security" shall mean one of the Securities. SIXTH: No director of the Corporation shall have personal liability to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director; PROVIDED, HOWEVER, that this provision shall not eliminate or limit the personal liability of a director (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 175 of the General Corporation Law of the State of Delaware (regarding the payment of an unlawful dividend and unlawful stock purchases or redemptions), (iv) for any transaction from which the director received an improper personal benefit; or (v) for any act or omission occurring prior to the date this provisions becomes effective. SEVENTH: The By-Laws of the Corporation may be adopted, amended, or repealed by either the Board of Directors of the Corporation or the holders of the outstanding shares of stock of the Corporation entitled to vote thereon. EIGHTH: The election of directors need not be by written ballot. NINTH: The name and address of the incorporators are:
NAME ADDRESS ---- ------- K. L. Husfelt 100 West Tenth Street Wilmington, Delaware 19801 B. A. Schuman 100 West Tenth Street Wilmington, Delaware 19801 E. L. Kinsler 100 West Tenth Street Wilmington, Delaware 19801
4 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF DUR-O-WAL, INC. Dur-O-Wal, Inc., a Delaware corporation (the "Corporation"), DOES HEREBY CERTIFY: FIRST: That the Board of Directors of the Corporation, by unanimous written consent, duly adopted resolutions setting forth proposed amendments of the Certificate of Incorporation of the Corporation, declaring said amendments to be advisable, and submitting said amendments to the stockholders of the Corporation for consideration thereof. The resolution setting forth the proposed amendments is as follows: RESOLVED, that the Certificate of Incorporation of the Corporation be amended, effective as of March 21, 1988, by changing Articles Fourth and Fifth thereof so that, as amended, said Articles shall be and read as follows: FOURTH: The aggregate number of shares which the Corporation shall be authorized to issue shall be 11,610, divided into 6,110 shares of Common Stock of the par value of $1.00 per share and 5,500 shares of Series A Cumulative Preferred Stock of the par value of $100.00 per share (the "Series A Preferred"). FIFTH: The Series A Preferred shall have the powers, preferences and rights and the qualifications, limitations or restrictions thereon as follows: 1. PREFERENCE. The preferences of each share of Series A Preferred with respect to dividend payments and distributions of the Corporation's assets upon the voluntary or involuntary liquidation, dissolution or winding up of the Corporation shall be equal to the preferences of every other share of Series A Preferred from time to time outstanding in every respect. The preferences of Series A Preferred in relation to all other equity Securities, whether now or hereafter authorized, shall be as stated herein. 2. VOTING RIGHTS. Except as otherwise provided herein or by law, the Holder of each outstanding share of Series A Preferred shall, by virtue of his ownership thereof, be entitled to cast the number of votes on each matter submitted to the Corporation's stockholders for voting equal to the number of votes which may be cast by a Holder of ten (10) outstanding shares of Common Stock, and such votes shall be cast together with those cast by the Holders of Common Stock and not as a separate class except as otherwise provided herein or by law. 3. DIVIDEND RIGHTS. The Holders of the Series A Preferred shall be entitled to receive cash dividends, when and as declared by the Board of Directors of the Corporation out of funds legally available for such purpose, at the rate of $60.00 per share per annum, and no more. Dividends shall be payable quarterly on the 15th day of January, April, July and October in each year, unless such day is a non-business day, in which event on the next business day, to holders of record on such respective dates, or on such other record date an may be determined by the Board of Directors of the Corporation, any such other record date not to be more than 90 days in advance of any such payment. Such dividends shall commence to be payable on April 15, 1988, and shall be cumulative and shall accrue on each share of Series A Preferred from the date of original issue thereof. No interest, or sum of money in lieu of interest shall be payable in respect of any dividend payment or payments which may be in arrears. 4. LIQUIDATION RIGHTS. If the Corporation shall be voluntarily or involuntarily liquidated, dissolved or wound up at any time when any of the Series A Preferred shall be outstanding, the preferences of the Holders of the then outstanding equity Securities of the Corporation to the assets of the Corporation available for distribution to such Holders shall be as follows: (A) First, the Holders of the then outstanding Series A Preferred shall have a preference senior to the preference of the Holders of all other equity Securities of the Corporation, whether now or hereafter authorized, equal to the sum of $1,000.00 per share plus accrued and unpaid dividends thereon, whether or not declared. If the assets of the Corporation shall be insufficient to pay in full such preferential amount than such assets shall be distributed among such Holders ratably in accordance with the respective amounts which would be payable on such shares if all amounts payable thereon were paid in full. (B) Second, the Holders of the then outstanding shares of Common Stock of the Corporation shall be entitled to receive, on a per share basis, $100.00 plus the excess of (i) an amount computed at a rate of $6.00 per annum from the date of issuance of each such share ever (ii) any previously paid dividends with respect to each such share. If the assets of the Corporation shall be insufficient to pay in full such amounts than such assets shall be distributed among such Holders ratably in accordance with the respective amounts which would be payable on such shares if all amounts payable thereon were paid in full. (C) Then, the remainder, if any, of the assets of the Corporation shall be distributed to the Holders of all the equity Securities of the Corporation treated as one class for such purpose each then outstanding share of Series A Preferred to be deemed to be the equivalent of ten (10) shares of Common Stock. 5. PROTECTIVE PROVISIONS. So long as any Series A Preferred shall be outstanding, the Corporation shall not, without the approval by the vote or written consent of the Holders of at least 51% (or more if required by law) of the shares of Series A Preferred outstanding at the time: (A) Amend or repeal any provision of, or add any provision to, the Corporation's Certificate of Incorporation or the Corporation's By-laws, if such action would alter or change the Series A Preferred or any right or preference thereof; or 2 (B) Authorize or issue shares of Series A Preferred in excess of the 5,500 shares of Series A Preferred authorized hereby; or (C) Authorize or issue shares of Common Stock in excess of the 6,110 shares authorized hereby. 6. CONVERSION. On March 21, 1988, each outstanding share of Common Stock shall be reclassified, changed and converted into 0.1 shares of Series A Preferred. From and after March 21, 1988, each outstanding certificate, which prior to such date represented Common Stock, shall be deemed for all corporate purposes to evidence the ownership of that number of duly issued, outstanding, fully paid and non-assessable shares of Series A Preferred into which the shares of Common Stock represented by such certificate prior to March 21, 1988 have been so converted, and upon surrender of such certificate to the Corporation the Holder shall be entitled to receive in exchange therefor a certificate or certificates representing the number of shares of Series A Preferred into which the shares of Common Stock theretofore represented by such certificate shall have been converted. 7. DEFINITIONS. As used herein, the following terms have the following meanings: "Holders, shall mean the Persons who shall, from time to time, own of record, or beneficially, any Security. The term "Holder" shall mean one of the Holders. "Person" shall mean an individual, a corporation, a partnership, a trust, an unincorporated organization or a government organization or an agency or political subdivision thereof. "Securities" shall mean any debt or equity securities of the Corporation, whether now or hereafter authorized, and any instrument convertible into or exchangeable for Securities or a Security. The term "Security" shall mean one of the Securities. SECOND: That thereafter, pursuant to resolution of the Board of Directors, a special meeting of the stockholders was duly called and that the stockholders of the Corporation entitled to vote thereon approved said amendments by unanimous written consent. THIRD: That said amendments were duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. FOURTH: That the capital of the Corporation shall not be reduced under or by reason of said amendments. FIFTH: That said amendments shall become effective on March 21, 1988. 3 IN WITNESS WHEREOF, the Corporation has caused this Certificate to be executed by its President and attested by its Secretary, this 15th day of March, 1988. ATTEST: DUR-O-WAL, INC. By: - ---------------------------- -------------------------------- Roger M. Peterson, Mario J. Catani Secretary President 4 CERTIFICATE OF AMENDMENT OF CERTIFICATE OF INCORPORATION OF DUR-O-WAL, INC. Dur-O-Wal, Inc., a Delaware corporation (the "Corporation"), DOES HEREBY CERTIFY: FIRST: That the Board of Directors of the Corporation, by unanimous written consent, duly adopted resolutions setting forth proposed amendments to the Certificate of Incorporation of the Corporation, declaring said amendments to be advisable, and submitting said amendments to the stockholders of the Corporation for consideration thereof. The resolution setting forth the proposed amendments is as follows: WHEREAS, it is in the best interests of the Corporation to increase the aggregate number of shares which the Corporation shall be authorized to issue and to modify the preferences, rights, qualifications, limitations and restrictions pertaining to the Series A Preferred (as defined below); NOW, THEREFORE, BE IT RESOLVED, that the Certificate of Incorporation of the Corporation be amended by changing Articles Fourth and Fifth so that as amended, said Articles shall be and read as follows: FOURTH: The aggregate number of shares which the Corporation shall be authorized to issue shall be 15,710 divided into 10,210 shares of common stock, $1.00 par value per share, and 5,500 shares of Series A Preferred Stock, $100.00 par value per share ("Series A Preferred"). FIFTH: The Series A Preferred shall have the powers, preferences and rights and the qualifications, limitations or restrictions thereon as follows: 1. PREFERENCE. The preferences of each share of Series A Preferred with respect to dividend payments and distributions of the Corporation's assets upon the voluntary or involuntary liquidation, dissolution or winding up of the Corporation shall be equal to the preferences of every other share of Series A Preferred from time to time outstanding in every respect and prior in right to such preferences of all other equity Securities of the Corporation, whether now or hereafter authorized. 2. VOTING RIGHTS; PREEMPTIVE RIGHTS. The Holders of Series A Preferred shall have no right to vote on matters submitted to the Corporation's stockholders, except as otherwise provided herein or in the Certificate of Incorporation or by-laws of the Corporation or by law (in which case the Holders of Series A Preferred shall be entitled to cast one vote per share). The Holders of Series A Preferred shall not have any preemptive rights upon the issuance or sale of any Security. 3. LIQUIDATION RIGHTS. If the Corporation shall be voluntarily or involuntarily liquidated, dissolved or wound up, at any time when any Series A Preferred shall be outstanding, each then outstanding share of Series A Preferred shall entitle the Holder thereof to a preference against the Property of the Corporation available for distribution to the Holders of the Corporation's equity Securities equal to (i) $1,000 per share together with an amount equal to all unpaid dividends accrued and cumulated on such share to the date of payment of such preference, whether or not earned, whether or not funds of the Corporation are legally available for the payment of dividends and whether or not such dividends have been declared by the Board, but less the aggregate sum, if any, of all dividends paid on such share from the date of issuance (the "Liquidation Amount-Part I"), plus (ii) an amount equal to that percentage of the Property of the Corporation available for distribution to the Holders of the Corporation's equity Securities after setting aside the Liquidation Amount-Part I payable to the Holders of Series A Preferred which equals the percentage that the number of shares of Series A Preferred outstanding immediately prior to such liquidation, dissolution or winding up represents on a share for share basis of the total number of shares of Common and Series A Preferred then outstanding (collectively, the "Liquidation Amount"). All of the preferential amounts to be paid to the Holders of Series A Preferred as provided in this Section 3 shall be paid or set apart for payment before the payment or setting apart for payment of any amount for, or the distribution of any Property of the Corporation to, the Holders of any other equity Security of the Corporation, whether now or hereafter authorized, in connection with such liquidation, dissolution or winding up. 4. DIVIDENDS. No dividend or distribution in cash or other Property (other than a liquidating distribution made pursuant to Section 3 hereof or a redemption payment made pursuant to Section 5 hereof) shall be declared or paid or set apart for payment on the Series A Preferred, except for such dividends or distributions as are from time to time declared by the Board of Directors of the Corporation (the "Board"). 5. REDEMPTION. (A) MANDATORY REDEMPTION UPON THE OCCURRENCE OF CERTAIN EVENTS. Upon the sale, lease or other transfer by the Corporation, in one transaction or any series of related transactions, of all or substantially all of its Property, then the Corporation shall redeem all the outstanding Series A Preferred not less than 40 days and not more than 70 days following the date of consummation of such transaction for an amount per share of Series A Preferred equal to the Liquidation Amount which would be payable with respect to shares of Series A Preferred if the Corporation were liquidated immediately following the consummation of such sale, lease or other transfer; PROVIDED, HOWEVER, that the creation of security interests in or the granting of mortgages on Property shall not be deemed to effect a transfer thereof and PROVIDED, FURTHER, that no shares of Series A Preferred shall be redeemed pursuant to this Section 5 upon the sale, lease or other transfer by the Corporation, in one transaction or any series of related transactions, of all or substantially all of its Property if either (1) immediately prior to the consummation of such transaction or transactions, the Corporation shall be in default in the making of a payment of principal, interest or premium under the Household Indebtedness or with respect to a financial covenant contained in the Household Indebtedness or (2) such a default shall have existed within 180 days prior to the date of such consummation and shall have been terminated solely by a 2 waiver granted by the Holder of the Household Indebtedness or by an amendment or modification of the Household Indebtedness, and the proceeds of such transaction or transactions (net of expenses related to such transactions) are applied concurrently with the receipt thereof either exclusively to the payment of all amounts due under the Household Indebtedness or, if such net proceeds exceed the amount then due under the Household Indebtedness, if such net proceeds are applied to the full payment of all amounts then due under the Household Indebtedness. The Corporation shall specify a Redemption Date not less than 40 days and not more than 70 days after such consummation. Within 14 days after such consummation, the Corporation shall mail a copy of a notice (a "Redemption Notice") to each Holder of Series A Preferred, by first-class mail, postage paid, to such Holder's address as shown on the books of the Corporation, stating (i) the Redemption Date, (ii) the cash portion of the estimated redemption price expressed in dollars and cents, and, if applicable, such other consideration as is payable with respect to each share of Series A Preferred, accompanied by the calculation of such price set out in reasonable detail, and (iii) the place where certificates evidencing Series A Preferred are to be surrendered in exchange for payment of the redemption price. (B) MANNER OF REDEMPTION. On the Redemption Date, the Corporation shall pay to each Holder of Series A Preferred with respect to each share of Series A Preferred tendered by such Holder at the place specified in the Redemption Notice the Liquidation Amount in effect on such Redemption Date, such payment to be made by the bank or trust company selected in accordance with Section 5(C). If the Corporation shall fail to make the deposit required by Section 5(C), the redemption price per share of Series A Preferred shall be the Liquidation Amount in effect on the date the required deposit is made in full. (C) PROVISION FOR PAYMENT. On or prior to the Redemption Date, the Corporation shall deposit as a trust fund with any bank or trust company selected by the Board cash and other consideration, if any, sufficient to redeem for the applicable redemption price, on the Redemption Date, all Series A Preferred then outstanding. The Corporation shall give to the said bank or trust company irrevocable instructions and authority to pay such sum to the Holders of Series A Preferred upon surrender of a certificate or certificates therefor at the place designated in the Corporation's Redemption Notice. (D) EFFECT OF PROVISION FOR PAYMENT. If on the Redemption Date, funds and other consideration, if any, necessary for the redemption of all the Series A Preferred then outstanding shall have been deposited as provided for in Section 5(C), then from and after the Redemption Date, the Series A Preferred shall be deemed to be redeemed, and the redemption price shall become fixed, and the Holders of Series A Preferred shall cease to be shareholders of the Corporation with respect to Series A Preferred, and shall have no rights with respect thereto from and after the Redemption Date, except the right to receive from the bank or trust company payment of cash and other consideration, if any, sufficient to redeem their Series A Preferred upon surrender of the certificate or certificate evidencing Series A Preferred. In the event that certificates for any shares of Series A Preferred shall not have been duly surrendered for redemption within one (1) year from and after the Redemption Date, the cash and other consideration, if any, deposited with the said bank or trust company, as set forth above, may be withdrawn by the Corporation and used for its corporate purposes, and the Holders of the certificates for shares of Series A Preferred unsurrendered after such one (1) year shall have only the rights of general creditors against the Corporation for the cash and other consideration, if 3 any, sufficient to redeem the shares of such Holder without interest thereon. Any interest accrued on any cash so deposited by the Corporation shall be the property of, and payable to, the Corporation. (E) NO REISSUANCE OF SERIES A PREFERRED. All shares of Series A Preferred redeemed as hereinabove required shall be retired and cancelled and shall not be reissued. (F) DETERMINATION OF REDEMPTION PRICE. If, within 30 days after receipt of a Redemption Notice, the Holders of not less than a majority of the Series A Preferred then outstanding shall notify the Corporation's board of directors in writing of their objection to the amount of the redemption price or the method of calculating such price, a determination of the redemption price shall be made by arbitration in accordance with the commercial rules of the American Arbitration Association, by an arbitrator in the City of Chicago, Illinois. If the Holders of a majority of the Series A Preferred then outstanding shall so object, no redemption of Series A Preferred shall occur until a determination of the redemption price has been made by such arbitrator. Upon such determination being made, the Corporation shall give the Holders of Series A Preferred not less than 10 nor more than 30 days notice by a notice in the form and mailed in the manner specified in Section 5(A), and the deposit required by Section 5(C) shall be made on or prior to such new Redemption Date. 6. RIGHT TO ELECT DIRECTORS. If, at any time, a Majority Voting Right Event shall occur and be continuing, the term of office of each member of the Board shall terminate effective upon the election of Preferred Directors pursuant to this Section 6; and each outstanding share of Series A Preferred shall entitle the Holder thereof to one vote, and the Holders of not less than a majority of the then outstanding Series A Preferred (the "Preferred Voting Majority"), voting as a class, shall have the right, exercisable in accordance with the paragraph immediately below, to elect Preferred Directors in such numbers as shall constitute a majority of the then authorized number of directors of the Corporation; PROVIDED, HOWEVER, that at such time as the Majority Voting Right Event or Events which gave rise to the exercise of the voting rights provided for in this Section 6 has been cured by waiver, payment or otherwise, and all other events creating a Majority Voting Right Event, if any, shall have been cured by waiver, payment or otherwise, the right of the Holders of Series A Preferred to vote as provided in this Section 6 shall cease, subject to renewal from time to time upon the same terms and conditions. Waiver of any Majority Voting Right Event shall require the approval by vote or written consent of the Holders of not less than a majority of the then outstanding shares of Series A Preferred. At any time after the voting power to elect directors pursuant to this Section 6 shall have become vested in the Holders of Series A Preferred, as provided in this Section 6, the Corporation may, and upon the written request of the Holders of that number of then outstanding shares of Series A Preferred which equal at least 20% of the number of shares of Series A Preferred then outstanding, addressed to the Corporation at its principal office, shall, call a special meeting of the Holders of the Series A Preferred for the purpose of electing the Preferred Directors, such meeting to be hold not less than 10 nor more than 20 days following receipt by the Corporation of such written request. If notice of such meeting shall not be transmitted by the Corporation within 5 days after personal service of the request therefor, or within 10 days after mailing of the same by registered mail within the United States of America, then the Holders of that number of shares of the then outstanding Series A Preferred which equal at least 20% of the 4 number of shares of Series A Preferred then outstanding may designate in writing one of their number to call such meeting, and the person so designated may call such meeting at the place designated in the by-laws of the Corporation for meetings of the Corporation's stockholders and upon not less than 10 nor more than 20 days notice and for that purpose shall have access to the stock books of the Corporation. At any meeting so called or at any annual meeting held while the Holders of Series A Preferred have the voting power to elect directors pursuant to this Section 6, the Preferred Voting Majority, present in person or by proxy, shall be sufficient to constitute a quorum for the election of Preferred Directors as provided in this Section 6, and the Preferred Directors, together with any and all other directors who are then elected members of the Board by the Holders of Common (the "Other Directors"), shall constitute the duly elected directors of the Corporation. Any vacancy which shall arise for any reason with respect to a Preferred Director at any time when the Holders of Series A Preferred have the right to elect Preferred Directors pursuant to the provisions of this Section 6, if filled, shall be filled by action of the remainder of the Preferred Directors, or if there be none, by the Holders of the then outstanding Series A Preferred at a meeting called in the manner set forth hereinabove in this Section 6 and voting in the manner set forth hereinabove in this Section 6. Any vacancy which shall arise for any reason with respect to an Other Director, if filled, shall be filled by action of the remainder of the other Directors, or if there be none, by the Holders of the then outstanding Common at a meeting called in the manner set forth in the Corporation's by-laws and voting in the manner set forth hereinabove in this Section 6. Whenever the special voting power of the Holders of Preferred pursuant to this Section 6 has ceased as provided hereinabove in this Section 6, the term of office of all persons who are at the time Preferred Directors, shall terminate and the vacancies created thereby shall be filled at a meeting called in a manner set forth in accordance with the Corporation's by-laws. 7. PROTECTIVE PROVISIONS. So long as any shares of Series A Preferred shall be outstanding, the Corporation shall not, without the approval by the vote or written consent of the Holders of at least a majority (or more if required by law) of the then outstanding shares of Series A Preferred (which, in the case of subsection (L) of this Section 7, shall not be unreasonably withheld): (A) Amend or repeal any provisions of, or add any provision to, this Article Fifth; (B) Amend or repeal any provision of, or add any provision to, the Corporation's certificate of incorporation other than this Article Fifth or the Corporation's by-laws, if such action would adversely affect or alter or change the Series A Preferred or any right or preference thereof; (C) Authorize, create, issue or sell any shares of Parity Stock or Superior Stock, or reclassify any shares of any Security into shares of Parity Stock or Superior Stock; (D) Invest cash or other capital in any business except (i) the Corporation's own business as conducted on the date of issuance of the Series A Preferred, and (ii) the businesses of entities principally engaged in activities within Standard Industrial Classification 5 Codes that are the same as those in which the Corporation is engaged as of the date of issuance of the Series A Preferred; (E) Pay any management fee, service fee, consulting fee or any other distribution to Omni or its subsidiaries, Roger M. Peterson or Thomas H. Stamataky in excess of amounts permitted under the terms of the Household Indebtedness; (F) Prior to October 1, 1992, permit Indebtedness of itself and the Subsidiaries to exist which in the aggregate exceeds the sum of (i) the maximum amount of the Corporation's Household indebtedness which may be extended to the Corporation under the Secured Credit Agreement, dated October 15, 1987, by and between the Corporation and Household Commercial Financial Services, Inc., as amended to January 24, 1990, and as supplemented by a letter agreement dated April 6, 1990, by and between the Corporation and Household Commercial Services, Inc., but not as otherwise amended or modified subsequent to January 24, 1990, (ii) the obligations in existence on March 31, 1990 under the Non-Compete Agreements, and (iii) $2,000,000; (G) Authorize, issue or create more than 5,500 shares of Series A Preferred; (H) Take any action which would cause a dividend or other distribution to be deemed to be received by the Holders of Series A Preferred for federal income tax purposes unless such dividend or other distribution is actually received by such Holders; (I) Purchase, redeem or otherwise acquire directly or indirectly through a Subsidiary or otherwise any of the Corporation's Stock other than Series A Preferred redeemed pursuant to Section 5 hereof; (J) Pay any dividend or make any other distribution of any kind, or permit any Subsidiary to pay any dividend or make any other distribution of any kind, with respect to any Stock of the Corporation, other then a dividend or distribution in complete liquidation of the Corporation or a redemption payment pursuant to Section 5 hereof; (K) Enter into, or permit any Subsidiary to enter into, any agreement, indenture or other instrument which contains any provisions restricting the redemption of the Series A Preferred to the full extent required by Section 5 hereof or amend or modify, or permit any Subsidiary to amend or modify, any agreement, indenture or other instrument so as to add any such provisions, in each case other than provisions in an agreement, indenture or other instrument creating, providing for or evidencing Indebtedness which provisions are not more restrictive than those contained, on the date that such provisions become effective, in the Household Indebtedness; or (L) Authorize, create, issue or sell Common so that more than 8,640 shares of Common are outstanding or authorized for issuance other than up to 1,570 shares of Common in addition to such 8,640 shares or reclassify any shares of any Security into shares of Common; PROVIDED, HOWEVER, that such 1,570 shares may be issued or authorized for issuance only to Persons who, on the date of issuance, are officers or employees of the Corporation or a Subsidiary, and PROVIDED, FURTHER, that none of such 1,570 shares shall be issued to Roger M. 6 Peterson, Thomas H. Stamataky, the spouse of either of them or any lineal descendant or the spouse of any lineal descendant of either of them, 8. DEFINITIONS. As used herein, the following terms have the following meanings; "Board" shall have the meaning set forth in Section 4. "Common" shall mean the Corporation's common stock, $1.00 par value per share, and any Stock into which such common stock may hereafter be changed. "Exchange Agreement" means that certain Share Exchange Agreement, dated as of April 9, 1990, by and among Allstate Insurance Company, Omni, Omnitrus Merging Corp., the Corporation, Roger M. Peterson and Thomas H. Stamataky. "Holders" shall mean the Persons who shall, from time to time, own of record, or beneficially, any Security. The term "Holder" shall mean one of the Holders. "Household Indebtedness" shall mean the indebtedness evidenced by that certain Secured Credit Agreement, dated October 15, 1987, as amended, by and between the Corporation and Household Commercial Financial Services, Inc., and any renewal or extension or refunding or refinancing in whole or in part (whether or not such refunding or refinancing is by Household Commercial Financial Services, Inc.) thereof. "Indebtedness" of any corporation shall mean the principal of (and premium, if any) and unpaid interest on: (i) indebtedness which is for money borrowed from others; (ii) indebtedness guaranteed, directly or indirectly, in any manner by such corporation, or in effect guaranteed, directly or indirectly, by such corporation through an agreement, contingent or otherwise, to supply funds to or in any manner invest in the debtor or to purchase indebtedness, or to purchase Property or services primarily for the purposes of enabling the debtor to make payment of the indebtedness or of assuring the owner of the indebtedness against loss; (iii) all indebtedness secured by any mortgage, lien, pledge, charge or other encumbrance upon Property owned by such corporation, even if such corporation has not in any manner become liable for the payment of such indebtedness; (iv) all indebtedness of such corporation created or arising under any conditional sale, lease or other title retention agreement with respect to Property acquired by such corporation even though the rights and remedies of the seller, lessor or lender under such agreement or lease in the event of default are limited to repossession or sale of such Property; and (v) renewals, extensions and refundings or refinancings of any such indebtedness. 7 "Liquidation Amount" shall have the meaning specified in Section 3 hereof. "Liquidation Amount-Part I" shall have the meaning specified in Section 3 hereof. "Majority Voting Right Event" shall mean any of the following: (i) violation by the Corporation of Section 5 or 7 hereof, provided that such violation has continued for not less than 30 days; (ii) the commencement by the Corporation, or any holder of more than 50% of the Corporation's Voting Securities (the "Parent") or any Subsidiary of a voluntary case as a debtor concerning the Corporation, or the Parent or any subsidiary under Title 11 of the United States Code entitled "Bankruptcy" as now or hereafter in effect, or any successor thereto (the "Bankruptcy Code"); or the commencement of an involuntary case against the Corporation, or the Parent or any Subsidiary under the Bankruptcy Code if relief is ordered against the corporation, or the Parent or any Subsidiary, or the petition is controverted but is not dismissed within 60 days after the commencement of such case; or if a custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge of, all or substantially all of the Property of the Corporation, or the Parent or any Subsidiary; or if the Corporation, or the Parent or any Subsidiary commences any other proceeding under any reorganization, arrangement, readjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Corporation or the Parent or any Subsidiary or there is commenced against the Corporation, or the Parent or any Subsidiary any such proceeding which remains undismissed for a period of 60 days; or the Corporation, or the Parent or any Subsidiary is adjudicated insolvent or bankrupt; or if the Corporation, or the Parent or any Subsidiary fails to controvert in a timely manner any such case under the Bankruptcy Code or any such proceeding, or any order of relief or other order approving any such case or proceeding is entered; or if the Corporation, or the Parent or any Subsidiary by any act or failure to act indicates its consent to, approval of or acquiescence in any such case or proceeding or in the appointment of any custodian or the like of or for it or any substantial part of its Property or suffers any such appointment to continue undischarged or unstayed for a period of 90 days; or if the Corporation, or the Parent or any Subsidiary makes a general assignment for the benefit of creditors; or if the Corporation, or the Parent or any Subsidiary takes any action for the purpose of effecting any of the foregoing; (iii) the existence of a final judgment or judgments for the payment of money aggregating in excess of $100,000 which has been outstanding against the Corporation or any Subsidiary for not less than 30 days from the date of its entry and has not been discharged in full or stayed; (iv) if any material representation or warranty made by the Corporation or Omni in the Exchange Agreement pertaining to the issuance and sale of the Series A Preferred or any material statement made by the Corporation, Omni, Roger M. Peterson or Thomas H. Stamataky in any certificate or other instrument or document delivered 8 under or pursuant to any provision of the Exchange Agreement shall prove to have been false or incorrect in any material respect on the date as of which made; (v) failure by the Corporation, Omni, Roger M. Peterson or Thomas H. Stamataky to observe and perform in any material respect any of its or his covenants, undertakings and agreements set forth in the Exchange Agreement if such failure continues for not less than 30 days after notice of such failure has been given by any Holder of Series A Preferred; and (vi) failure by the Corporation to redeem on the Redemption Date all Series A Preferred outstanding on such date. "Non-Compete Agreements" shall mean those two separate Consulting and Non-Compete Agreements, each dated October 21, 1987, by and between the Corporation's predecessor, Duro Acquisition Co. and Edwin C. Parker and R. Douglas Petrie, respectively. "Omni" shall mean Omni Investors, Inc., a Delaware corporation. "Other Directors" shall have the meaning set forth in Section 6 hereof, "Parity Stock" shall mean any shares of any class of Stock of the Corporation having any preference or priority as to dividends or Property on a parity with any such preference or priority of the Series A Preferred and no preference or priority as to dividends or Property superior to any such preference or priority of the Series A Preferred and any instrument or Security convertible into or exchangeable for Parity Stock. Without limiting the generality of the foregoing, a dividend rate, mandatory or optional sinking fund payment amounts or schedules or optional redemption provisions, the existence of a conversion right or the existence of liquidation preferences with respect to any class of Stock, differing from that of the Series A Preferred shall not prevent such class of Stock from being Parity Stock. "Person" shall mean an individual, a corporation, a partnership, a trust, an unincorporated organization or a government organization or an agency or political subdivision thereof. "Preferred Directors" shall mean the directors elected by the Preferred Voting Majority pursuant to Section 6 hereof, "Preferred Director" shall mean one of the Preferred Directors. "Preferred Voting Majority" shall have the meaning set forth in Section 6 hereof. "Property" shall mean an interest in any kind of property or assets, whether real, personal or mixed, or tangible or intangible. "Redemption Date" shall mean the date specified by the Corporation for redemption of the Series A Preferred, which date shall not be less than 40 days nor more than 70 days following the consummation of the transactions described in Section 5(A) and 5(B) hereof. "Redemption Notice" shall mean the notice set forth in Section 5(A) hereof. 9 "Securities" shall mean any debt or equity securities of the Corporation or Omni, whether now or hereafter authorized, and any instrument convertible into or exchangeable for securities or a Security. The term "Security" shall mean one of the Securities. "Series A Preferred" shall mean the Corporation's Series A Preferred Stock, $100.00 par value per share, and any Stock into which such Stock may hereafter be changed. "Stock" shall include any and all shares, interests or other equivalents (however designated) of, or participations in, corporate stock. "Subsidiary" shall mean any corporation at least 50% of whose outstanding Voting Securities and capital stock shall at the time be owned directly or indirectly by the Corporation or by one or more Subsidiaries or by the Corporation and one or more Subsidiaries. "Superior Stock" shall mean any shares of any class of Stock of the Corporation having any preference or priority as to dividends or Property superior to any such preference or priority of the Series A Preferred and any instrument convertible into or exchangeable for Superior Stock. "Voting Securities," as applied to the securities of any corporation, shall mean securities of any class or classes (however designated) having ordinary voting power for the election of a member of the Board of Directors (or other governing body) of such corporation, other than securities having such power only by reason of the happening of a contingency. SECOND: That thereafter, pursuant to resolution of the Board of Directors, the stockholders of the Corporation entitled to vote thereon approved said amendments by unanimous written consent. THIRD: That said amendments were duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware. FOURTH: That the capital of the Corporation shall not be reduced under or by reason of said amendments. FIFTH: That said amendments shall become effective on the date that this Certificate is filed with the Secretary of State of Delaware. IN WITNESS WHEREOF, the Corporation has caused this Certificate to be executed by its President and attested by its Secretary, this 12th day of April, 1990. ATTEST: DUR-O-WAL, INC. By: - ------------------------ ---------------------------- Roger M. Peterson, Mario J. Catani Secretary President 10 CERTIFICATE OF INCORPORATION OF PARKER-PETRIE, INC. (A Close Corporation) * * * * * 1. The name of the corporation is PARKER-PETRIE, INC. 2. The address of its registered office in the State of Delaware is No. 100 West Tenth Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. 3. The nature of business or purposes to be conducted or promoted is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. 4. The total number of shares or stock which the corporation shall have authority to issue is twenty thousand (20,000) shares of Common stock and the par value of each of such shares is One Dollar ($1.00) amounting in the aggregate to Twenty Thousand Dollars ($20,000.00). The designations and the powers, preferences and rights, and the qualifications, limitations or restrictions thereof are an follows: Shares of stock of this corporation are to be issued and held by each and every stockholder of this corporation upon and subject to the following terns and conditions: All of the issued and outstanding stock or all classes shall be held of record by not more than thirty (30) persons, as defined in section 342 of the General Corporation Law; and the corporation shall make no offering of any of its stock of any class which would constitute a "public offering" within the meaning of the United States Securities Act of 1933, as it may be amended from time to time. All of the issued stock of all classes shall be subject to one or more of the restrictions on transfer permitted by section 202 of the Delaware General Corporation Law. The holders of Common stock shall, upon the issue or sale of shares of stock of any class (whether now or hereafter authorized) or any securities convertible into such stock, have the right, during such period of time and on such conditions as the board of directors shall prescribe, to subscribe to and purchase such shares of securities in proportion to their respective holdings of Common stock, at such price or prices as the board of directors may from time to time fix and as may be permitted by law. 5. The name and mailing address of each incorporator is as follows:
NAME MAILING ADDRESS ---- --------------- K. L. Husfelt 100 West Tenth Street Wilmington, Delaware 19801 B. A. Schuman 100 West Tenth Street Wilmington, Delaware 19801 E. L. Kinsler 100 West Tenth Street Wilmington, Delaware 19801
6. The corporation is to have perpetual existence. 7. In furtherance and not in limitation of the powers conferred by statute, the board of directors is expressly authorized to make, alter or repeal the by-laws of the corporation. 8. Elections of directors need not be by written ballot unless the by-laws of the corporation shall so provide. Meetings of stockholders may be held within or without the State of Delaware, as the by-laws may provide. The books of the corporation may be kept (subject to any provision 2 contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to tine by the board of directors or in the by-laws of the corporation. 9. The corporation reserves the right to amend, alter, change or repeal any provision contained in this certificate of incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation. WE, THE UNDERSIGNED, being each of the incorporators hereinbefore named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, do make this certificate, hereby declaring and certifying that this is our act and deed and the facts herein stated are true, and accordingly have hereunto set our hands this 24th day of December, 1980. -------------------------------- K. L. Husfelt -------------------------------- B. A. Schuman -------------------------------- E. L. Kinsler 3 EX-3.4 5 ex-3_4.txt EXHIBIT 3.4 EXHIBIT 3.4 REGULATIONS OF DAYTON SUPERIOR CORPORATION TABLE OF CONTENTS Page ARTICLE I SHAREHOLDERS'MEETINGS..............................................1 Section 1. Annual Meeting..................................................1 Section 2. Special Meetings................................................1 Section 3. Place of Meetings...............................................2 Section 4. Notice of Meetings..............................................2 Section 5. Shareholders Entitled to Notice and to Vote.....................3 Section 6. Inspectors of Election; List of Shareholders....................3 Section 7. Quorum..........................................................3 Section 8. Voting..........................................................4 Section 9. Reports to Shareholders.........................................4 Section 10. Action Without a Meeting.......................................4 Section 11. Chairman of Meeting............................................5 ARTICLE II DIRECTORS.........................................................5 Section 1. Election, Number and Term of Office.............................5 Section 2. Meetings........................................................6 Section 3. Quorum and Voting...............................................6 Section 4. Action Without a Meeting........................................7 Section 5. Committees......................................................7 Section 6. Removal.........................................................8 Section 7. Vacancies.......................................................8 ARTICLE III OFFICERS.........................................................9 Section 1. Officers........................................................9 Section 2. Authority and Duties of Officers................................9 ARTICLE IV INDEMNIFICATION AND INSURANCE....................................10 Section 1. Indemnification................................................10 Section 2. Insurance......................................................11 Section 3. Agreements.....................................................11 ARTICLE V MISCELLANEOUS.....................................................11 Section 1. Transfer and Registration of Certificates......................11 Section 2. Substituted Certificates.......................................12 Section 3. Voting of Shares Held by the Corporation.......................12 Section 4. Amendments.....................................................12 i REGULATIONS OF DAYTON SUPERIOR CORPORATION ARTICLE I SHAREHOLDERS' MEETINGS SECTION 1. ANNUAL MEETING. The annual meeting of shareholders shall be held at 10:00 a.m., or at such other hour as may be designated in the notice of said meeting, on the first Monday in March in each year, if not a legal holiday, and if a legal holiday, then on the next day not a legal holiday, for the election of Directors and the consideration of reports to be laid before such meeting.1 Upon due notice, there may also be considered and acted upon at an annual meeting any matter which could properly be considered and acted upon at a special meeting, in which case and for which purpose the annual meeting shall also be considered as, and shall be, a special meeting. When the annual meeting is not held or Directors are not elected thereat, they may be elected at a special meeting called for that purpose.(2) SECTION 2. SPECIAL MEETINGS. Special meetings of shareholders may be called by (i) the Chairman of the Board or the President or a Vice President, (ii) the Directors by action at a meeting, or by a majority of the Directors acting without a meeting, or (iii) the person or persons who hold not less than 50 percent of all shares outstanding and entitled to be voted at said meeting.(3) - ---------- (1) Section 1701.39. (2) Id. (3) Section 1701.40(A). 1 Upon request in writing delivered either in person or by registered mail to the President or Secretary by any person or persons entitled to call a meeting of shareholders, such officer shall forthwith cause to be given, to the shareholders entitled thereto, notice of a meeting to be held not less than seven nor more than 60 days after the receipt of such request, as such officer shall fix.4 If such notice is not given within 20 days after the delivery or mailing of such request, the person or persons calling the meeting may fix the time of the meeting and give, or cause to be given, notice in the manner hereinafter provided.(5) SECTION 3. PLACE OF MEETINGS. Any meeting of shareholders may be held either at the principal office of the Corporation or at such other place within or without the State of Ohio as may be designated in the notice of said meeting.(6) SECTION 4. NOTICE OF MEETINGS. Not more than 60 days nor less than seven days before the date fixed for a meeting of shareholders, whether annual or special, written notice of the time, place and purposes of such meeting shall be given by or at the direction of the President, a Vice President, the Secretary or an Assistant Secretary. Such notice shall be given either by personal delivery or by mail to each shareholder of record entitled to notice of such meeting.7 If such notice is mailed, it shall be addressed to the shareholders at their respective addresses as they appear on the records of the Corporation,8 and notice shall be deemed to have been given on the day so mailed.(9) Notice of - ---------- (4) Section 1701.41(B). (5) Id. (6) Section 1701.40(B). (7) Section 1701.41(A). (8) Id. (9) Section 1701.02. 2 adjournment of a meeting need not be given if the time and place to which it is adjourned are fixed and announced at such meeting.(10) SECTION 5. SHAREHOLDERS ENTITLED TO NOTICE AND TO VOTE. If a record date shall not be fixed pursuant to statutory authority,(11) the record date for the determination of shareholders who are entitled to notice of, or who are entitled to vote at, a meeting of shareholders, shall be the close of business on the date next preceding the day on which notice is given, or the close of business on the date next preceding the day on which the meeting is held, as the case may be.(12) SECTION 6. INSPECTORS OF ELECTION; LIST OF SHAREHOLDERS. Inspectors of election may be appointed to act at any meeting of shareholders in accordance with the Ohio General Corporation Law.(13) At any meeting of shareholders, an alphabetically arranged list, or classified lists, of the shareholders of record as of the applicable record date who are entitled to vote, showing their respective addresses and the number and classes of shares held by each, shall be produced on the request of any shareholder.(14) SECTION 7. QUORUM.(15) To constitute a quorum at any meeting of shareholders, there shall be present in person or by proxy shareholders of record entitled to exercise not less than a majority of the voting power of the Corporation in respect of any one of the purposes for which the meeting is called. - ---------- (10) Section 1701.41(A). (11) Section 1701.45(A) and (B). (12) Section 1701.45(E). (13) Section 1701.50. (14) Section 1701.37(C). (15) Section 1701.51. 3 The holders of a majority of the voting power represented in person or by proxy at a meeting of shareholders, whether or not a quorum be present, may adjourn the meeting from time to time. SECTION 8. VOTING. In all cases, except as otherwise expressly required by statute, the Articles of Incorporation of the Corporation or these Regulations, a majority of the votes cast at a meeting of shareholders shall control. An abstention shall not represent a vote cast. Cumulative voting in the election of Directors shall be permitted in accordance with the Ohio General Corporation Law.(16) SECTION 9. REPORTS TO SHAREHOLDERS. At the annual meeting, or the meeting held in lieu thereof, the officers of the Corporation shall lay before the shareholders a financial statement as required by the Ohio General Corporation Law.(17) SECTION 10. ACTION WITHOUT A MEETING. Except as otherwise provided in these Regulations, any action which may be authorized or taken at a meeting of the shareholders may be authorized or taken without a meeting with the affirmative vote or approval of, and in a writing or writings signed by, all of the shareholders who would be entitled to notice of a meeting for such purpose, which writing or writings shall be filed with or entered upon the records of the Corporation.(18) - ---------- (16) Section 1701.55(C). (17) Section 1701.38. (18) Section 1701.54. 4 SECTION 11. CHAIRMAN OF MEETING. The chairman of any meeting of shareholders shall be the Chairman of the Board or, if the Directors have not elected a Chairman of the Board, the President of the Corporation. The Chairman of the Board or, if the Directors have not elected a Chairman of the Board or the Chairman of the Board is unavailable to do so, the President may appoint any other officer of the Corporation to act as chairman of any shareholders' meeting. Notwithstanding the foregoing, the Directors may appoint any individual to act as chairman of any shareholders' meeting. ARTICLE II DIRECTORS SECTION 1. ELECTION, NUMBER AND TERM OF OFFICE. The Directors shall be elected at the annual meeting of shareholders, or if not so elected, at a special meeting of shareholders called for that purpose, and each Director shall hold office until the date fixed by these Regulations for the next succeeding annual meeting of shareholders and until his successor is elected, or until his earlier resignation, removal from office or death.19 At any meeting of shareholders at which Directors are to be elected, only persons nominated as candidates shall be eligible for election.(20) The number of Directors, which shall not be less than three (unless all of the shares of the Corporation are owned of record by one or two shareholders, in which case the number of Directors may be less than three but not less than the number of shareholders),(21) may be fixed or changed: - ---------- (19) Section 1701.57(A). (20) Section 1701.55(A). (21) Section 1701.56(A). 5 o At a meeting of the shareholders called for that purpose by the affirmative vote of the holders of a majority of the shares represented at the meeting and entitled to vote on such proposal; or o At a meeting of the Directors called for that purpose by the affirmative vote of a majority of Directors.(22) In case the shareholders at any meeting for the election of Directors shall fail to fix the number of Directors to be elected, the number elected shall be deemed to be the number of Directors so fixed. SECTION 2. MEETINGS. Regular meetings of the Directors shall be held immediately after the annual meeting of shareholders and at such other times and places as may be fixed by the Directors, and such meetings may be held without further notice.(23) Special meetings of the Directors may be called by the Chairman of the Board or by the President or by a Vice President or by the Secretary of the Corporation, or by not less than one-third of the Directors.(24) Notice of the time and place of a special meeting shall be served upon or telephoned to each Director at least 24 hours, or mailed, telegraphed or cabled to each Director at least 48 hours, prior to the time of the meeting.(25) SECTION 3. QUORUM AND VOTING. A majority of the number of Directors then in office shall be necessary to constitute a quorum for the transaction of business,(26) but if at any meeting of the Directors there shall be less - ---------- (22) Section 1701.56(A)(2). (23) Section 1701.61. (24) Section 1701.61(A). (25) Section 1701.61(C). (26) Section 1701.62. 6 than a quorum present, a majority of those present may adjourn the meeting from time to time without notice other than announcement at the meeting until a quorum shall attend.(27) In all cases, except as otherwise expressly required by statute, the Articles of Incorporation of the Corporation or these Regulations, the act of a majority of the Directors present at a meeting at which a quorum is present is the act of the Directors.(28) SECTION 4. ACTION WITHOUT A MEETING. Any action which may be authorized or taken at a meeting of the Directors may be authorized or taken without a meeting with the affirmative vote or approval of, and in a writing or writings signed by, all of the Directors, which writing or writings shall be filed with or entered upon the records of the Corporation.(29) SECTION 5. COMMITTEES. The Directors may from time to time create a committee or committees of Directors to act in the intervals between meetings of the Directors and may delegate to such committee or committees any of the authority of the Directors other than that of filling vacancies among the Directors or in any committee of the Directors.(30) No committee shall consist of less than three Directors.(31) The Directors may appoint one or more Directors as alternate members of any such committee, who may take the place of any absent member or members at any meeting of such committee.(32) - ---------- (27) Section 1701.61(D). (28) Section 1701.62. (29) Section 1701.54. (30) Section 1701.63(A). (31) Id. (32) Section 1701.63(B). 7 In particular, the Directors may create and define the powers and duties of an Executive Committee. Except as above provided and except to the extent that its powers are limited by the Directors, the Executive Committee during the intervals between meetings of the Directors shall possess and may exercise, subject to the control and direction of the Directors, all of the powers of the Directors in the management and control of the business of the Corporation, regardless of whether such powers are specifically conferred by these Regulations.(33) All action taken by the Executive Committee shall be reported to the Directors at their first meeting thereafter. Unless otherwise ordered by the Directors, a majority of the members of any committee appointed by the Directors pursuant to this section shall constitute a quorum at any meeting thereof, and the act of a majority of the members present at a meeting at which a quorum is present shall be the act of such committee.(34) Action may be taken by any such committee without a meeting by a writing or writings signed by all of its members.(35) Any such committee shall prescribe its own rules for calling and holding meetings and its method of procedure, subject to any rules prescribed by the Directors, and shall keep a written record of all action taken by it. SECTION 6. REMOVAL. Any Director or the entire Board may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of Directors. SECTION 7. VACANCIES. Vacancies on the Board by reason of death, resignation, removal from office or otherwise, and newly created directorships resulting from any increase in the authorized number - ---------- (33) Section 1701.63(A) and (C). (34) Section 1701.63(D). (35) Id. 8 of Directors, may be filled by a majority of the Directors then in office, although less than a quorum, or by a sole remaining Director. The Directors so chosen shall hold office until the next annual election of Directors and until their successors are duly elected and shall qualify, unless sooner displaced.(36) ARTICLE III OFFICERS SECTION 1. OFFICERS.(37) The Corporation may have a Chairman of the Board (who shall be a Director) and shall have a President, a Secretary and a Treasurer. The Corporation may also have one or more Vice Presidents and such other officers and assistant officers as the Directors may deem necessary. All of the officers and assistant officers shall be elected by the Directors. SECTION 2. AUTHORITY AND DUTIES OF OFFICERS. The officers of the Corporation shall have such authority and shall perform such duties as are customarily incident to their respective offices, or as may be specified from time to time by the Directors,(38) regardless of whether such authority and duties are customarily incident to such office. - ---------- (36) Section 1701.56(A)(2) (37) Section 1701.64(A). (38) Section 1701.64(B)(1). 9 ARTICLE IV INDEMNIFICATION AND INSURANCE SECTION 1. INDEMNIFICATION.(39) The Corporation shall indemnify, to the full extent then permitted by law, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a member of the Board of Directors or an officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, trustee, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise. The Corporation shall pay, to the full extent then required by law, expenses, including attorney's fees, incurred by a member of the Board of Directors in defending any such action, suit or proceeding as they are incurred, in advance of the final disposition thereof, and may pay, in the same manner and to the full extent then permitted by law, such expenses incurred by any other person. The indemnification and payment of expenses provided hereby shall not be exclusive of, and shall be in addition to, any other rights granted to those seeking indemnification under any law, the Articles of Incorporation, any agreement, vote of shareholders or disinterested members of the Board of Directors, or otherwise, both as to action in official capacities and as to action in another capacity while he is a member of the Board of Directors, officer, employee or agent of the Corporation, and shall continue as to a person who has ceased to be a member of the Board of Directors, trustee, officer, employee or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.(40) - ---------- (39) Section 1701.13(E). (40) Section 1701.13(E)(6). 10 SECTION 2. INSURANCE. The Corporation may, to the full extent then permitted by law and authorized by the Directors, purchase and maintain insurance or furnish similar protection, including but not limited to trust funds, letters of credit or self-insurance, on behalf of or for any persons described in Section 1 against any liability asserted against and incurred by any such person in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify such person against such liability. Insurance may be purchased from or maintained with a person in which the Corporation has a financial interest.(41) SECTION 3. AGREEMENTS. The Corporation, upon approval by the Board of Directors, may enter into agreements with any persons whom the Corporation may indemnify under these Regulations or under law and undertake thereby to indemnify such persons and to pay the expenses incurred by them in defending any action, suit or proceeding against them, whether or not the Corporation would have the power under these Regulations or law to indemnify any such person.(42) ARTICLE V MISCELLANEOUS SECTION 1. TRANSFER AND REGISTRATION OF CERTIFICATES. The Directors shall have authority to make such rules and regulations as they deem expedient concerning the issuance, transfer and registration of certificates for shares and the shares represented thereby(43) and may appoint transfer agents and registrars thereof.(44) - ---------- (41) Section 1701.13(E)(7). (42) Section 1701.13(E)(7) and (8). (43) Section 1701.11(B)(8). (44) Section 1701.26. 11 SECTION 2. SUBSTITUTED CERTIFICATES. Any person claiming a certificate for shares to have been lost, stolen or destroyed shall make an affidavit or affirmation of that fact, shall give the Corporation and its registrar or registrars and its transfer agent or agents a bond of indemnity satisfactory to the Directors or to the Executive Committee or to the President or a Vice President and the Secretary or the Treasurer, and, if required by the Directors or the Executive Committee or such officers, shall advertise the same in such manner as may be required, whereupon a new certificate may be executed and delivered of the same tenor and for the same number of shares as the one alleged to have been lost, stolen or destroyed.(45) SECTION 3. VOTING OF SHARES HELD BY THE CORPORATION. Unless otherwise ordered by the Directors, any officer or assistant officer of the Corporation, in person or by proxy or proxies appointed by him, shall have full power and authority on behalf of the Corporation to vote, act and consent with respect to any shares issued by other corporations which the Corporation may own.(46) SECTION 4. AMENDMENTS. These Regulations may be amended by the affirmative vote or the written consent of the shareholders of record entitled to exercise a majority of the voting power on such proposal;(47) provided, however, that if an amendment is adopted by written consent without a meeting of the shareholders, the Secretary shall mail a copy of such amendment to each shareholder of record who would have been entitled to vote thereon and did not participate in the adoption thereof.(48) - -------- (45) Section 1701.11(B)(7). (46) Section 1701.47(A). (47) Section 1701.11(A). (48) Section 1701.11(D). 12 EX-3.5 6 ex-3_5.txt EXHIBIT 3.5 EXHIBIT 3.5 FIFTEENTH CENTURY CORPORATION BY-LAWS ARTICLE I OFFICES Section 1. REGISTERED OFFICE. The registered office shall be in the City of Wilmington, County of New Castle, State of Delaware. Section 2. OTHER OFFICES. The Corporation may also have offices at such other places both within and without the State of Delaware as the Board of Directors may from time to time determine or the business of the Corporation may require. ARTICLE II ARTICLE II MEETING OF STOCKHOLDERS Section 1. PLACE OF MEETING. All meetings of the stockholders of the Corporation shall be held at such place either within or without the State of Delaware as shall be stated in the notice of the meeting or in a duly executed notice of waiver thereof. Section 2. NOTICE OF MEETING. Written notice of all meetings of the shareholders of the Corporation stating the place, date and hour of the meeting shall be given not less than ten nor more than fifty days before the date of the meeting, to each stockholder entitled to vote at such meeting. Section 3. LIST OF STOCKHOLDERS. The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced at the time and kept at the place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. Section 4. ANNUAL MEETING. Annual meeting of stockholders shall be held at a date, time and place as shall be fixed by resolution of the Board of Directors and as shall be stated in the notice of meeting, for the election, by a plurality vote, of a Board of Directors and for the transaction of such other business as may properly be brought before the meeting. Section 5. SPECIAL MEETINGS. Special meetings of the stockholders, for any purpose or purposes, may be called by the President and shall be called by the President or Secretary at the request in writing of a majority of the Board of Directors, or at the request in writing of stockholders owning a majority in amount of the entire capital stock of the Corporation issued and outstanding and entitled to vote. Such request shall state the purpose or purposes of the proposed meeting. Section 6. AGENDA. Business transacted at any special meeting of stockholders shall be limited to the purposes stated in the notice. Section 7. QUORUM. The holders of a majority of the stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business, except as otherwise provided by statute or by the Certificate of Incorporation. If, however, such quorum shall not be present or represented at any meeting of the stockholders, the stockholders entitled to 2 vote thereat, present in person or represented by proxy, shall have power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present or represented. At such adjourned meeting at which a quorum shall be present or represented any business may be transacted which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 8. VOTES REQUIRED FOR ACTION. When a quorum is present at any meeting, the vote of the holders of a majority of the stock having voting power present in person or represented by proxy and voting shall decide any question brought before such meeting, unless the question is one upon which by express provision of statute or of the Certificate of Incorporation, a different vote is required, in which case such express provision shall govern and control the decision of such question. Section 9. VOTING. Each stockholder shall at every meeting of the stockholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such stockholder, but no proxy shall be voted or acted upon after three years from its date unless the proxy provides for a longer period, provided, however, that with respect to the election of directors of the Corporation, each holder of stock or of any class or classes or of a series or series thereof shall be entitled to as many votes as shall equal the number of votes which (except for this provision and the provision in the Certificate of Incorporation as to cumulative voting) he would be entitled to cast for the election of directors with respect to his shares of stock multiplied by the number of directors to be elected by him, and he may cast all of 3 such votes for a single director or may distribute them among the number to be voted for, or for any two or more of them as he may see fit. ARTICLE III DIRECTORS Section 1. NUMBER OF DIRECTORS. The number of Directors which shall constitute the whole Board shall be not less than three nor more than seven. The first Board shall consist of three Directors. Thereafter, within the limits above specified, the number of Directors shall be determined by resolution of the Board of Directors or by the stockholders at the annual meeting. The Directors shall be elected at the annual meeting of the stockholders, except as provided in Section 2 of this Article, and each Director elected shall hold office until the next annual election and until his successor is elected and qualified or until his earlier resignation or removal. Any director may resign at any time upon written notice to the Corporation. Directors need not be stockholders. Section 2. VACANCIES. Vacancies and newly created directorships resulting from any increase in the authorized number of Directors may be filled by a majority of the Directors then in office, though less than a quorum, or by a sole remaining Director, and any Director so chosen shall hold office until the next annual election and until his successor is duly elected and shall qualify or until his earlier resignation or removal. If there are no Directors in office, then an election of Directors may be held in the manner provided by statute. Section 3. POWERS. The business of the Corporation shall be managed by its Board of Directors which may exercise all powers of the Corporation and do all such lawful acts and things as are not by statute or by the Certificate of Incorporation or by these By-Laws directed or required to be executed or done by the stockholders. 4 Section 4. REMOVAL. Directors may be removed with cause by a majority of the Board of Directors, and may be removed by the holders of a majority of the stock with or without cause at a duly called meeting at which a quorum is present and acting or by written consent in lieu of meeting of a majority of the stock having voting power. Section 5. MEETINGS. Meetings of the Board of Directors shall be held at such place within or without the State of Delaware as may from time to time be fixed by resolutions of the Board of Directors or as may be specified in the notice of the meeting. Regular meetings of the Board of Directors shall be held at such times as may from time to time be fixed by resolution of the Board of Directors. Special meetings may be held at any time upon the call of the Chairman of the Board, the President or Executive Vice President and shall be so called at the request of any three directors by telegraphic or written notice duly served on or sent or mailed to each director not less than one day before such meeting. A meeting of the Board of Directors may be held without notice immediately after the annual meeting of stockholders. Notice need not be given of regular meetings of the Board of Directors. Meetings may be held at any time without notice if all the Directors are present, or if at any time without notice if all the Directors are present, or if at any time before or after the meeting those not present waive notice of the meeting in writing. A notice, or waiver of notice, need not specify the purpose of any meeting of the Board of Directors. Section 6. QUORUM. At all meetings of the Board a majority of the Directors shall constitute a quorum for the transaction of business and the act of a majority of the Directors present at any meeting at which there is a quorum shall be the act of the Board of Directors except as may be otherwise specifically provided by statute or by the Certificate of Incorporation. If a quorum shall not be present at any meeting of the Board of Directors the 5 Directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present. Section 7. ACTION WITHOUT A MEETING. Unless otherwise restricted by the Certificate of Incorporation or these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors. Section 8. PARTICIPATION OTHER THAN IN PERSON. The members of the Board of Directors or any committee thereof may participate in a meeting of such Board or committee, as the case may be, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this subsection shall constitute presence in person at such a meeting. Section 9. COMMITTEES OF DIRECTORS. The Board of Directors may, by resolution passed by a majority of the whole Board, designate one or more Committees, including without limitation an Executive Committee, each Committee to consist of one or more directors of the Corporation. The Board may designate one or more directors as alternate members of any Committee who may replace any absent or disqualified member at any meeting of the Committee. Such Committees shall have and may exercise such power and authority as the Board of Directors shall designate by resolution passed by a majority of the whole Board. The Executive Committee shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the Corporation, including without limitation the power and authority to declare dividends and authorize the issuance of stock, and may authorize the seal of the Corporation to be affixed to all papers which may require it. 6 In the absence or disqualification of any member of any Committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not he or they constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Such Committees shall have such names as may be determined from time to time by resolution adopted by the Board of Directors. The Board may from time to time suspend, alter, continue or terminate any such committee or the powers and functions thereof. Section 10. OTHER COMMITTEES. The Board of Directors shall also have the power to appoint such regular and special Committees consisting of directors, officers and/or other persons and having such powers and functions as the board may prescribe. The Board may from time to time suspend, alter, continue or terminate any such Committee or the powers and functions thereof. Section 11. THE BOARD AS AN EXECUTIVE COMMITTEE. In the event a quorum shall not be present at any regular or special meeting of the Board, the directors present at such meeting, if not less than three, shall be considered and meet as an Executive Committee and shall act only by the concurring vote of a majority of the number present. In the absence of the Chairman of the Board, the President, and in his absence, the Senior Director present, shall preside over any such Executive Committee meeting. Section 12. MINUTES OF COMMITTEE MEETINGS. Each Committee shall prepare minutes of its meetings, which minutes shall be kept in the minute book of the Corporation, and the minutes of each meeting of any Committee held since the preceding meeting of the Board shall be reported to the Board at the meeting of the Board next following any such Committee meeting. 7 Section 13. COMPENSATION OF DIRECTORS. The Directors may be paid their expenses, if any, of attendance at each meeting of the Board of Directors any may be paid a fixed sum for attendance at each meeting of the Board of Directors or a stated salary as Director. No such payment shall preclude any Director from serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing Committees may be allowed like compensation for attending committee meetings. ARTICLE IV OFFICERS Section 1. OFFICES. The officers of the Corporation shall consist of a Chairman of the Board, a President, one or more Vice Presidents, a Secretary and a Treasurer, and such other additional officers with such titles as the Board of Directors shall determine, all of whom shall be chosen by the Board of Directors and hold office for one year and until their successors are chosen and qualify, or until their earlier removal or resignation. Any two or more offices, except those of President and Secretary, may be held by the same person. Section 2. DUTIES. Said officers shall have the usual powers and shall perform all the usual duties incident to their respective offices and shall in addition perform such other duties as shall be assigned to them from time to time by the Board of Directors. Section 3. ABSENCE OF AN OFFICER. In the absence or disability of any officer of the Corporation, the Board of Directors may, during such period, delegate his powers and duties to any other executive officer or to any Director and the person to whom such powers and duties are delegated shall for the time being, hold such office. Section 4. OFFICERS SUBJECT TO BOARD. All officers shall be subject to the supervision and direction of the Board. The authority, duties or responsibilities of any officer of the Corporation may be suspended by the Chairman or the President with or without cause and 8 any officer elected or appointed by the Board may be removed by the Board with or without cause. Any vacancy occurring in any office, unless such office shall be abolished by the Board, shall be filled at any regular or special meeting of the Board. ARTICLE V INDEMNIFICATION To the fullest extent permitted by the laws of the State of Delaware: (a) The Corporation shall indemnify any person, his heirs, executors or administrators, who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (brought by or in the right of the Corporation or otherwise), whether civil, criminal, administrative or investigative, by reason of the fact that he is or was a director or officer of the Corporation, or is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against all expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person or such heirs, executors or administrators in connection with such action, suit or proceeding. (b) The Corporation may indemnify any person, his heirs, executors or administrators, who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (brought by or in the right of the Corporation or otherwise), whether civil, criminal, administrative or investigative, by reason of the fact that he is or was an employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against all expenses (including attorneys' fees), judgments, fines and amounts paid in 9 settlement actually and reasonably incurred by such person or such heirs, executors or administrators in connection with such action, suit or proceeding. (c) The Corporation may, in the discretion of the Board of Directors, pay expenses incurred in defending any action, suit or proceeding described in subsection (a) or (b) of this Article in advance of the final disposition of such action, suit or proceeding. (d) The Corporation may purchase and maintain insurance on behalf of any person described in subsections (a) and (b) of this Article against any liability asserted against him, whether or not the Corporation would have the power to indemnify him against such liability by law. The indemnification provided by this Article shall not be deemed exclusive of any other rights to indemnification to which those seeking indemnification may be entitled under any By-Law, agreement, vote of stockholders or disinterested directors or otherwise. ARTICLE VI NOTICES Section 1. DEFINITION. Whenever under the provisions of the statutes or of the Certificate of Incorporation or of these By-Laws notice is required to be given to any Director or stockholder, it shall not be construed to mean personal notice, but such notice may be given in writing by mail, addressed to such Director or stockholder at his address as it appears on the records of the Corporation with postage thereon prepaid, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail. Notice to Directors may also be given by telegram. Section 2. WAIVER. Whenever any notice is required to be given under the provisions of the statutes or of the Certificate of Incorporation or of these By-Laws, a waiver 10 thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. ARTICLE VII STOCK AND CERTIFICATES Section 1. FORM. Every holder of stock in the Corporation shall be entitled to have a certificate signed by or in the name of the Corporation by the Chairman of The Board of Directors, or President or Vice President and any Treasurer or Assistant Treasurer, or Secretary or Assistant Secretary of the Corporation, certifying the number of shares owned by him in the Corporation. If such certificate is countersigned (1) by a transfer agent other than the Corporation or its employee or (2) by a registrar other than the Corporation or its employee, any other signature on the certificate may be a facsimile. Certificates may be issued for partly paid shares and in such case upon the face or back of the certificates issued to represent any such partly paid shares the total amount of the consideration to be paid therefor and the amount paid thereon shall be specified. If the Corporation shall be authorized to issue more than one class of stock or more than one series of any class, the designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate which the Corporation shall issue to represent such class or series of stock, provided that, except as otherwise provided in Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements there may be set forth on the face or back of the certificate which the Corporation shall issue to represent such class or series of stock a statement that the Corporation will furnish without charge to each stockholder who so requests the designations, preferences and relative, participating, optional or 11 other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights. Section 2. LOST CERTIFICATES. The Board of Directors may direct a new certificate or certificates to be issued in place of any certificate or certificates theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon such terms and conditions as it may deem advisable and as may be permitted by applicable law. Section 3. TRANSFERS. Transfers of shares shall be made on the books of the Corporation only by the person named in the certificate or by power of attorney duly executed, witnessed and filed with the Secretary of the Corporation or other proper officer of the Corporation, and upon surrender and cancellation of a certificate or certificates for a like number of shares of the same class of stock with duly executed assignment and power of transfer endorsed thereon or attached thereto, and with such proof of the authenticity of the signatures as the Corporation or its agents may reasonably require. No transfer of stock other than on the records of the Corporation shall be valid except between the parties thereto until such transfer shall have been made upon the records of the Corporation. Section 4. REGISTERED STOCKHOLDERS. The Corporation shall be entitled to treat the person in whose name any share, right, option, warrant, security or other obligation is registered as the owner thereof for all purposes and shall not be bound to recognize any equitable or other claim to or interest in such share, right, option, warrant, security or other obligation on the part of any other person whether or not the Corporation shall have express or other notice thereof except as otherwise provided by the laws of Delaware. Section 5. FIXING RECORD DATE. In order that the Corporation may determine the stockholders entitled to receive notice of or to vote at any meeting of stockholders or any 12 adjournment thereof, or to express consent to corporate action in writing without a meeting, or to receive payment of any dividend or other distribution or allotment of any rights, or to exercise any rights in respect of any change, conversion or exchange of stock or of any other lawful action, the Board of Directors may fix in advance a record date which shall not be more than sixty nor less than ten days before the date of such meeting or other action. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. ARTICLE VIII GENERAL PROVISIONS Section 1. DIVIDENDS. Dividends upon the capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation, if any, may be declared pursuant to law by the Board of Directors at any regular or special meeting. Dividends may be paid in cash, property, or shares of capital stock of the Corporation, subject to the provisions of the Certificate of Incorporation. Section 2. RESERVES. Before payment of any dividend there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the Directors shall think conducive to the interest of the Corporation, and the Directors may modify or abolish any such reserve. Section 3. FISCAL YEAR. The fiscal year of the Corporation shall begin on August 1 of each year and end on July 31 of the following year. 13 Section 4. SEAL. The corporate seal shall have inscribed thereon the name of the Corporation, the year of its organization and the words "Corporate Seal, Delaware." The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. ARTICLE IX AMENDMENTS The By-Laws of the Corporation may be altered, amended or repealed and new By-Laws not inconsistent with law or any provision of the Certificate of Incorporation, as amended, may be adopted by action of the Board of Directors. EX-3.6 7 ex-3_6.txt EXHIBIT 3.6 EXHIBIT 3.6 BY-LAWS OF DUR-O-WAL, INC. ARTICLE I STOCKHOLDERS Section 1.01 ANNUAL MEETING. An annual meeting of the stockholders shall be held on such day of the month of May of each year as shall be determined by the Board of Directors for the purpose of electing directors and for the transaction of such other business as may come before the meeting. Section 1.02 SPECIAL MEETINGS. Special meetings of the stockholders may be called for a specific purpose or purposes, which shall be stated in the call of the meeting. Except as otherwise specified herein or in the Certificate of Incorporation, special meetings may be called by the President, by the Board of Directors, or by the holders of not less than two-fifths of all the outstanding capital stock of the Corporation entitled to vote on the matters stated in the call of the meeting. Section 1.03 PLACE OF MEETING. The Board of Directors may designate any place, either within or without the State of Delaware, as the place of meeting for any annual meeting or for any special meeting called by the Board of Directors. If no designation is made or if a special meeting be otherwise called, the place of meeting shall be in the Corporation's main office. Section 1.04 NOTICE OF MEETING. Written notice stating the place, date, and hour of the meeting, and in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be delivered not less than 10 nor more than 60 days before the date of the meeting, or in the case of a merger, consolidation or sale of assets not less than 20 nor more than 60 days before the meeting, either personally or by mail, by or at the direction of the President, the Secretary, or the officer or persons calling the meeting, to each stockholder of record entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, addressed to the stockholder at his address as it appears on the records of the Corporation, with postage prepaid. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 1.05 FIXING OF RECORD DATE. For the purpose of determining the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or to receive payment of any dividend or other distribution or allotment of any rights, or to exercise any rights in respect of any change, conversion or exchange of shares, or for the purpose of any other lawful action, the Board of Directors of the Corporation may fix in advance a record date which shall not be more than 60 days and, for a meeting of stockholders, not less than 10 days, or in the case of a merger, consolidation or sale of assets, not less than 20 days, before the date of such action or meeting. If no record date is fixed, the record date for the determination of stockholders entitled to notice of or to vote at a meeting of stockholders shall be the date on which notice of the meeting is mailed, and the record date for the determination of stockholders for any other purpose shall be at the close of business on the date an which the Board of Directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting. Section 1.06 VOTING LISTS. The officer or agent having charge of the transfer books for shares of the Corporation shall make, at least 10 days before each meeting of stockholders, a complete list of the stockholders entitled to vote at such meeting, arranged in alphabetical order, showing the address of and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list of stockholders or the books of the Corporation, or to vote in person or by proxy at the meeting of stockholders. Section 1.07 PROXIES. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for him by proxy, but no such proxy shall be valid after three years from the date it is signed, unless otherwise provided in the proxy. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or another duly executed proxy bearing a later date with the Secretary of the Corporation Section 1.08 QUORUM. Except as may be specified in the Certificate of Incorporation, the holders of a majority of the Corporation's outstanding capital stock having voting rights, present in person or represented by proxy, shall constitute a quorum at any meeting of stockholders. In the absence of a quorum, a majority of the stock so represented may adjourn the meeting from time to time until a quorum shall attend. At any adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the original meeting. Withdrawal of stockholders from any meeting shall not cause failure of a duly constituted quorum at that meeting. 2 Section 1.09 VOTING OF SHARES. Every holder of Common Stock shall be entitled to one vote, in person or by proxy, for each share of capital stock having voting rights held by such stockholder, upon each matter submitted to a vote at a stockholders meeting. The affirmative vote of the majority of such stock represented at a meeting at which a quorum is present shall be the act of the stockholders unless the vote of a greater number or voting by classes in required by law, the Certificate of Incorporation, or these By-Laws. Section 1.10 VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing in the name of another corporation, domestic or foreign, may be voted by such officer, agent, or proxy as the By-Laws of such corporation may prescribe, or, in the absence of such provision, as the Board of Directors of such corporation may determine. Persons holding stock in a fiduciary capacity shall be entitled to vote the shares so held. A stockholder whose shares are pledged shall be entitled to vote such shares unless in the transfer by the pledger on the books of the Corporation the pledger has expressly empowered the pledgee to vote thereon, in which case only the pledgee, or his proxy, may represent such stock and vote thereon. Shares of its stock belonging to this Corporation shall not be voted, directly or indirectly, at any meeting and shall not be counted in determining the total number of outstanding shares at any given time, but shares of its own stock held by it in a fiduciary capacity may be voted and shall be counted in determining the total number of outstanding shares at any given time. Section 1.11 INSPECTORS. At any meeting of stockholders, the presiding officer may, or upon the request of any stockholder entitled to vote shall, appoint one or more persons as inspectors for such meeting. Such inspectors shall ascertain and report the number of shares represented at the meeting, based upon their determination of the validity and effect of such proxies; count all votes and report the results; and do such other acts as are proper to conduct the election and voting with impartiality and fairness to all the stockholders. Each report of any inspector shall be in writing and signed by him or by a majority of them if there be more than one inspector acting at such meeting. If there is more than one inspector, the report of the majority shall be the report of the inspectors. The report of the inspector or inspectors on the number of shares represented at the meeting and the results of the voting shall be prima facie evidence thereof. Section 1.12 INFORMAL ACTION BY STOCKHOLDERS. Any action required to be taken or which may be taken at any annual or special meeting of stockholders may be taken without a meeting, without prior notice, and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted. Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing. Any such consent signed by all the stockholders entitled to vote shall have the same force and effect as a unanimous vote of stockholders and may be stated as such. Section 1.13 VOTING BY BALLOT. Voting on any question or in any election may be by voice unless the presiding officer shall order or any stockholder shall demand that voting be by ballot. 3 ARTICLE II DIRECTORS Section 2.01 GENERAL POWERS. The business of the Corporation shall be managed by its Board of Directors. Section 2.02 NUMBER, TENURE AND QUALIFICATIONS. The number of Directors of the Corporation shall be three (3). The Directors shall be elected at the annual meeting of stockholders, and each Director shall hold office until the next annual meeting of the stockholders or until his successor shall have been elected and qualified. Directors need not be residents of any particular state or stockholders of the Corporation. Any Director may resign at any time upon written notice to the Corporation. Except as otherwise specified herein or in the Certificate of Incorporation, stockholders may remove Directors with or without cause. Section 2.03 REGULAR MEETINGS. A regular meeting of the Board of Directors shall be held without notice other than this By-Law immediately after the annual meeting of stockholders. The Board of Directors may provide, by resolution, the time and place, within or without the State of Delaware, for the holding of additional regular meetings without notice other than such resolution. Section 2.04 SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by the President, the Chairman of the Board of Directors, or any two (2) Directors. The person or persons authorized to call special meetings of the Board of Directors may fix any place as the place for holding any special meeting of the Board of Directors called by them. Section 2.05 NOTICE. Notice of any special meeting shall be given at least two (2) days previous thereto by oral or written notice to each Director at his business or home address. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail so addressed, with postage prepaid. The attendance of a Director at any meeting shall constitute a waiver of notice of such meeting, except where a Director attends a meeting for the express purpose of objecting to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted nor the purpose of any regular or special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. Section 2.06 QUORUM. A majority of the number of Directors fixed by these By-Laws shall constitute a quorum for the transaction of business at any meeting of the Board of Directors. If less than such number of Directors are present at said meeting, a majority of the Directors present may adjourn the meeting at any time without further notice. Section 2.07 MANNER OF ACTING. The act of a majority of the Directors shall be the act of the Board of Directors, unless the act of a greater number in required by statute, these By-Laws, or the Certificate of Incorporation. Section 2.08 VACANCIES. Except as otherwise specified herein or in the Certificate of Incorporation, any vacancy occurring in the Board of Directors and any directorship to be filled by reason of an increase in the number of Directors may be filled by a 4 majority of the Directors then in office, though less than a quorum, and the Director(s) so chosen shall hold office until the next annual election or until their successors are duly elected and qualified, unless sooner displaced. Section 2.09 CONSENT IN LIEU OF MEETING OF DIRECTORS. Any action required to be taken or which may be taken at a meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if a consent in writing, setting forth the action so taken, is signed by all the Directors entitled to vote with respect to the subject matter thereof, or by all the members of such committee, as the case may be. Any such consent signed by all the Directors or all the members of the committee shall have the same effect as a unanimous vote and may be stated as such. Section 2.10 COMMITTEES. To the extent permitted by law, the Board of Directors may by resolution designate one or more committees, which, to the extent provided in the resolution, shall have and may exercise any, some, or all of the powers of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require the same. Section 2.11 COMMITTEE RULES. Each committee may fix its own rules of procedure and shall hold its meeting as provided by such rules, except as may otherwise be provided by the resolution of the Board of Directors designating such committee, but in all cases the presence of at least a majority of the members of such committee shall be necessary to constitute a quorum. Each committee shall keep regular minutes of its proceedings and report the same to the Board when required. ARTICLE III OFFICERS Section 3.01 NUMBER. The officers of the Corporation shall be a Chairman of the Board of Directors, a President, one or more Vice-Presidents (the number thereof to be determined by resolution of the Board of Directors), a Treasurer, a Secretary, and such Assistant Treasurers, Assistant Secretaries or other officers as may be elected by the Board of Directors. Any number of offices may be held by the same person. Section 3.02 ELECTION AND TERM OF OFFICE. The officers of the Corporation shall be elected annually by the Board of Directors at the first meeting of the Board of Directors held after each annual meeting of stockholders. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as conveniently may be. Vacancies may be filled or new offices created and filled at any meeting of the Board of Directors. Each officer shall hold office until his successor shall have been duly elected and shall have qualified or until his death or until he shall resign or shall have been removed in the manner hereinafter provided. Section 3.03 REMOVAL. Any officer elected or appointed by the Board of Directors may be removed by the Board of Directors whenever in its judgment the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. 5 Section 3.04 CHAIRMAN OF THE BOARD OF DIRECTORS. The Chairman of the Board of Directors ("Chairman") shall be the Chief Executive Officer of the Corporation, shall supervise all activities of the Corporation and shall preside at all meetings of the stockholders and Directors. During the absence or disability of the President, he shall exercise all the powers and discharge all the duties of the President. Section 3.05 PRESIDENT. The President shall be the Chief Operating Officer of the Corporation. Subject to the direction and control of the Chairman and the Board of Directors, he shall be in charge of the operation of the Corporation; he shall see that the resolutions and directions of the Chairman and the Board of Directors are carried into effect except in those instances in which that responsibility is specifically assigned to some other person by the Chairman or the Board of Directors; and, in general, he shall discharge all duties incidental to the office of President and such other duties as may be prescribed by the Chairman or the Board of Directors from time to time. He shall preside at all meetings of the stockholders and of the Board of Directors if the Chairman is absent. Except in those instances in which the authority to execute is expressly delegated to another officer or agent of the Corporation or a different mode of execution is expressly prescribed by the Board of Directors or these By-Laws, he may execute for the Corporation certificates for its shares, and any contracts, deeds, mortgages, bonds, or other instruments which the Board of Directors has authorized to be executed, and he may accomplish such execution either under or without the seal of the Corporation and either individually or with the Secretary, any Assistant Secretary, or any other officer thereunto authorized by the Board of Directors, according to the requirements of the form of the instrument. He may vote all securities which the Corporation in entitled to vote except as and to the extent such authority shall be vested in a different officer or agent of the Corporation by the Board of Directors. Section 3.06 THE VICE-PRESIDENT. The Vice-President (or in the event there be more than one Vice-President, each of the Vice-Presidents) shall assist the President in the discharge of his duties as the President may direct and shall perform such other duties as from time to time may be assigned to him by the President or by the Board of Directors. In the absence of the President or in the event of his inability or refusal to act, the Vice-President (or in the event there be more than one Vice-President, the Vice-Presidents in the order designated by the Board of Directors, or by the President if the Board of Directors has not made such a designation, or in the absence of any designation, then in the order of seniority of tenure as Vice-President) shall perform the duties of the President, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. Except in those instances in which the authority to execute is expressly delegated to another officer or agent of the Corporation or a different mode of execution is expressly prescribed by the Board of Directors or these By-Laws, the Vice-President (or each of them if there are more than one) may execute for the Corporation certificates for its shares and any contracts, deeds, mortgages, bonds or other instruments which the Board of Directors has authorized to be executed, and he may accomplish such execution either under or without the seal of the Corporation and either individually or with the Secretary, any Assistant Secretary, or any other officer thereunto authorized by the Board of Directors, according to the requirements of the form of the instrument. Section 3.07 THE TREASURER. The Treasurer shall be the principal accounting and financial officer of the Corporation. He shall: (a) have charge of and be responsible for the 6 maintenance of adequate books of accounts for the Corporation; (b) have charge and custody of all funds and securities of the Corporation, and be responsible therefor and for the receipt and disbursement thereof; and (c) perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him by the Chairman, the President or the Board of Directors. If required by the Board of Directors, the Treasurer shall give a bond for the faithful discharge of his duties in such sum and with such surety or sureties an the Board of Directors may determine. Section 3.08 THE SECRETARY. The Secretary shall: (a) record the minutes of the stockholders and of the Board of Directors meetings in one or more books provided for the purpose; (b) see that all notices are duly given in accordance with the provisions of these By-Laws or as required by law; (c) be custodian of the corporate records and of the seal of the Corporation; (d) keep a register of the address of each stockholder which shall be furnished to the Secretary by such stockholder; (e) sign with the President, or a Vice-President, or any other officer thereunto authorized by the Board of Directors, certificates for shares of the Corporation, the issuance of which shall have been authorized by the Board of Directors, and any contracts, deeds, mortgages, bonds, or other instruments which the Board of Directors has authorized to be executed, according to the requirements of the form of the instrument, except when a different mode of execution is expressly prescribed by the Board of Directors or these By-Laws; (f) have general charge of the stock transfer books of the Corporation; and (g) perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him by the Chairman, the President or the Board of Directors. Section 3.09 SALARIES. The salaries of the officers shall be fixed from time to time by the Board of Directors, and no officer shall be prevented from receiving such salary by reason of the fact that he is also a Director of the Corporation ARTICLE IV STOCK Section 4.01 CERTIFICATES OF SHARES. Certificates representing shares of the Corporation shall be signed by the President or a Vice-President or by such officer as shall be designated by resolution of the Board of Directors and by the Secretary or an Assistant Secretary, and shall be sealed with the seal or a facsimile of the seal of the Corporation. Section 4.02 LOST CERTIFICATES. The Corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or his legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate. Section 4.03 TRANSFERS OF SHARES. Transfers of shares of the Corporation shall be recorded on the books of the Corporation and, except in the case of a lost or destroyed certificate, on surrender for cancellation of the certificate for such shares. 7 ARTICLE V MISCELLANEOUS Section 5.01 OFFICES. The Corporation shall continuously maintain in the State of Delaware a registered office and a registered agent whose office identical with such registered office, and may have other offices within or without the State of Delaware. Section 5.02 FISCAL YEAR. The fiscal year of the Corporation shall be fixed by the resolution of the Board of Directors. Section 5.03 SEAL. The corporate seal shall have inscribed thereon the state of incorporation, the name of the Corporation, and the words "Corporate Seal." Section 5.04 WAIVER OF NOTICE. Any written waiver of notice, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting in not lawfully called or convened. Neither the business to be transacted at, nor the purpose of any regular or special meeting of the stockholders, directors, or members of a committee of directors need be specified in any written waiver of notice. Section 5.05 INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES. The Corporation shall indemnify to the full extent authorized by law any person made or threatened to be made a party to an action or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he, his testator or intestate in or was a director, officer or employee of the Corporation or any predecessor of the Corporation or serves or served any other enterprise as director, officer or employee at the request of the Corporation or any predecessor of the Corporation. Section 5.06 INTERESTED DIRECTORS; QUORUM. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association, or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board or committee thereof which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose, if: (1) the material facts as to his relationship or interest and to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (2) the material facts as to his relationship or interests and as to the contract or transaction are disclosed or are known to the stockholders; or (3) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof, or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction. 8 Section 5.07 FORM OF RECORDS. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account, and minute books, may be kept on, or be in the form of, punch cards, magnetic tape, photographs, microphotographs, or any other information storage device, provided that the records so kept can be converted into clearly legible form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect the same. Section 5.08 AMENDMENT OF BY-LAWS. These By-Laws may be altered, amended, or repealed, and new by-laws made, by the Board of Directors or the stockholders entitled to vote thereon. Adopted: October 21, 1987 EX-4.1 8 ex-4_1.txt EXHIBIT 4.1 ================================================================================ DAYTON SUPERIOR CORPORATION, the GUARANTORS named herein and UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee ------------------ INDENTURE Dated as of June 16, 2000 ------------------ up to $270,000,000 13% Senior Subordinated Notes due 2009 ------------------- ================================================================================ CROSS-REFERENCE TABLE*
Trust Indenture Act Section Indenture Section - ----------- ----------------- 310(a)(1)..................................................................... 7.10 (a)(2)..................................................................... 7.10 (a)(3)..................................................................... N.A. (a)(4)..................................................................... N.A. (a)(5)..................................................................... 7.10 (b)........................................................................ 7.03; 7.10 (c)........................................................................ N.A. 311(a)........................................................................ 7.11 (b)........................................................................ 7.11 (c)........................................................................ N.A. 312(a)........................................................................ 2.05 (b)........................................................................ 12.03 (c)........................................................................ 12.03 313(a)........................................................................ 7.06 (b)(2)..................................................................... 7.06; 7.07 (c)........................................................................ 7.06; 12.02 (d)........................................................................ 7.06 314(a)........................................................................ 4.03; 12.05 (c)(1)..................................................................... 12.04 (c)(2)..................................................................... 12.04 (c)(3)..................................................................... N.A. (e)........................................................................ 12.05 (f)........................................................................ N.A. 315(a)........................................................................ 7.01(b) (b)........................................................................ 7.05; 12.02 (c)........................................................................ 7.01(a) (d)........................................................................ 7.01 (e)........................................................................ 6.11 316(a)(last sentence)......................................................... 2.09 (a)(1)(A).................................................................. 6.05 (a)(1)(B).................................................................. 6.04 (a)(2)..................................................................... N.A. (b)........................................................................ 6.07 (c)........................................................................ 2.12 317(a)(1)..................................................................... 6.08 (a)(2)..................................................................... 6.09 (b)........................................................................ 2.04 318(a)........................................................................ 12.01 (b)........................................................................ N.A. (c)........................................................................ 12.01
- -------------------- N.A. means not applicable. * This Cross-Reference Table is not part of the Indenture. TABLE OF CONTENTS
Page ---- ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01. Definitions..............................................................................1 SECTION 1.02. Other Definitions.......................................................................31 SECTION 1.03. Trust Indenture Act Definitions.........................................................31 SECTION 1.04. Rules of Construction...................................................................32 ARTICLE 2 THE NOTES SECTION 2.01. Form and Dating.........................................................................32 SECTION 2.02. Execution and Authentication............................................................34 SECTION 2.03. Registrar and Paying Agent..............................................................34 SECTION 2.04. Paying Agent to Hold Money in Trust.....................................................35 SECTION 2.05. Holder Lists............................................................................35 SECTION 2.06. Transfer and Exchange...................................................................35 SECTION 2.07. Replacement Notes.......................................................................50 SECTION 2.08. Outstanding Notes.......................................................................50 SECTION 2.09. Treasury Notes..........................................................................50 SECTION 2.10. Temporary Notes.........................................................................51 SECTION 2.11. Cancellation............................................................................51 SECTION 2.12. Defaulted Interest......................................................................51 SECTION 2.13. CUSIP Numbers...........................................................................51 ARTICLE 3 REDEMPTION AND PREPAYMENT SECTION 3.01. Notices to Trustee......................................................................52 SECTION 3.02. Selection of Notes to Be Redeemed.......................................................52 SECTION 3.03. Notice of Redemption....................................................................52 SECTION 3.04. Effect of Notice of Redemption..........................................................53 SECTION 3.05. Deposit of Redemption Price.............................................................53 SECTION 3.06. Notes Redeemed in Part..................................................................54 SECTION 3.07. Optional Redemption.....................................................................54 SECTION 3.08. Mandatory Redemption....................................................................55 SECTION 3.09. Offer to Purchase by Application of Net Proceeds Offer Amount...........................55 -i- ARTICLE 4 COVENANTS SECTION 4.01. Payment of Notes........................................................................57 SECTION 4.02. Maintenance of Office or Agency.........................................................57 SECTION 4.03. Reports to Holders......................................................................58 SECTION 4.04. Compliance Certificate..................................................................58 SECTION 4.05. Payment of Taxes........................................................................59 SECTION 4.06. Stay, Extension and Usury Laws..........................................................59 SECTION 4.07. Limitation on Restricted Payments.......................................................60 SECTION 4.08. Limitation on Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries.............................................................63 SECTION 4.09. Limitation on Incurrence of Additional Indebtedness.....................................64 SECTION 4.10. Limitation on Asset Sales...............................................................65 SECTION 4.11. Limitation on Transactions with Affiliates..............................................67 SECTION 4.12. Limitation on Liens.....................................................................69 SECTION 4.13. Conduct of Business.....................................................................69 SECTION 4.14. Corporate Existence.....................................................................70 SECTION 4.15. Offer to Repurchase upon Change of Control..............................................70 SECTION 4.16. No Senior Subordinated Debt.............................................................71 SECTION 4.17. Future Guarantees by Restricted Subsidiaries............................................71 SECTION 4.18. Limitation on Preferred Stock of Restricted Subsidiaries................................71 SECTION 4.19. Limitation on Permitted Acquisitions....................................................71 ARTICLE 5 SUCCESSORS SECTION 5.01. Merger, Consolidation and Sale of Assets................................................72 SECTION 5.02. Successor Corporation Substituted.......................................................73 ARTICLE 6 DEFAULTS AND REMEDIES SECTION 6.01. Events of Default.......................................................................73 SECTION 6.02. Acceleration............................................................................75 SECTION 6.03. Other Remedies..........................................................................76 SECTION 6.04. Waiver of Past Defaults.................................................................76 SECTION 6.05. Control by Majority.....................................................................76 SECTION 6.06. Limitation on Suits.....................................................................77 SECTION 6.07. Rights of Holders of Notes to Receive Payment...........................................77 SECTION 6.08. Collection Suit by Trustee..............................................................77 SECTION 6.09. Trustee May File Proofs of Claim........................................................77 -ii- SECTION 6.10. Priorities..............................................................................78 SECTION 6.11. Undertaking for Costs...................................................................78 SECTION 6.12. Restoration of Rights and Remedies......................................................79 ARTICLE 7 TRUSTEE SECTION 7.01. Duties of Trustee.......................................................................79 SECTION 7.02. Rights of Trustee.......................................................................80 SECTION 7.03. Individual Rights of Trustee............................................................81 SECTION 7.04. Trustee's Disclaimer....................................................................81 SECTION 7.05. Notice of Defaults......................................................................81 SECTION 7.06. Reports by Trustee to Holders of the Notes..............................................81 SECTION 7.07. Compensation and Indemnity..............................................................82 SECTION 7.08. Replacement of Trustee..................................................................83 SECTION 7.09. Successor Trustee by Merger, etc........................................................84 SECTION 7.10. Eligibility; Disqualification...........................................................84 SECTION 7.11. Preferential Collection of Claims Against Company.......................................84 ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE SECTION 8.01. Option to Effect Legal Defeasance or Covenant Defeasance................................85 SECTION 8.02. Legal Defeasance and Discharge..........................................................85 SECTION 8.03. Covenant Defeasance.....................................................................85 SECTION 8.04. Conditions to Legal or Covenant Defeasance..............................................86 SECTION 8.05. Deposited Money and Government Securities to Be Held in Trust; Other Miscellaneous Provisions......................................................87 SECTION 8.06. Satisfaction and Discharge..............................................................88 SECTION 8.07. Repayment to Company....................................................................89 SECTION 8.08. Reinstatement...........................................................................89 SECTION 8.09. Survival................................................................................89 ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER SECTION 9.01. Without Consent of Holders of Notes.....................................................89 SECTION 9.02. With Consent of Holders of Notes........................................................90 SECTION 9.03. Compliance with Trust Indenture Act.....................................................92 SECTION 9.04. Revocation and Effect of Consents.......................................................92 SECTION 9.05. Notation on or Exchange of Notes........................................................92 SECTION 9.06. Trustee to Sign Amendments, etc.........................................................93 -iii- ARTICLE 10 SUBORDINATION SECTION 10.01. Agreement to Subordinate................................................................93 SECTION 10.02. Liquidation; Dissolution; Bankruptcy....................................................93 SECTION 10.03. Default on Designated Senior Debt.......................................................94 SECTION 10.04. Acceleration of Notes...................................................................95 SECTION 10.05. When Distribution Must Be Paid Over.....................................................96 SECTION 10.06. Notice by Company.......................................................................96 SECTION 10.07. Subrogation.............................................................................96 SECTION 10.08. Relative Rights.........................................................................97 SECTION 10.09. Subordination May Not Be Impaired by Company............................................97 SECTION 10.10. Distribution or Notice to Representative................................................98 SECTION 10.11. Rights of Trustee and Paying Agent......................................................98 SECTION 10.12. Authorization to Effect Subordination...................................................99 SECTION 10.13. Amendments..............................................................................99 ARTICLE 11 GUARANTEES SECTION 11.01. Guarantee...............................................................................99 SECTION 11.02. Subordination of Guarantee.............................................................100 SECTION 11.03. Limitation on Guarantor Liability......................................................100 SECTION 11.04. Execution and Delivery of Guarantee....................................................101 SECTION 11.05. Guarantors May Consolidate, etc., on Certain Terms.....................................101 SECTION 11.06. Releases Following Certain Events......................................................102 ARTICLE 12 MISCELLANEOUS SECTION 12.01. Trust Indenture Act Controls...........................................................103 SECTION 12.02. Notices................................................................................103 SECTION 12.03. Communication by Holders of Notes with Other Holders of Notes..........................104 SECTION 12.04. Certificate and Opinion as to Conditions Precedent.....................................104 SECTION 12.05. Statements Required in Certificate or Opinion..........................................105 SECTION 12.06. Rules by Trustee and Agents............................................................105 SECTION 12.07. No Personal Liability of Directors, Officers, Employees and Stockholders.......................................................................105 SECTION 12.08. Governing Law..........................................................................105 SECTION 12 .09. No Adverse Interpretation of Other Agreements..........................................106 SECTION 12.10. Successors.............................................................................106 SECTION 12.11. Severability...........................................................................106 -iv- SECTION 12.12. Counterpart Originals..................................................................106 SECTION 12.13. Table of Contents, Headings, etc.......................................................106
EXHIBITS Exhibit A FORM OF NOTE Exhibit B FORM OF CERTIFICATE OF TRANSFER Exhibit C FORM OF CERTIFICATE OF EXCHANGE Exhibit D FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR Exhibit E FORM OF GUARANTEE Exhibit F FORM OF SUPPLEMENTAL INDENTURE -v- INDENTURE dated as of June 16, 2000 among Dayton Superior Corporation, an Ohio corporation (the "COMPANY"), the Guarantors (as defined herein) and United States Trust Company of New York, a New York corporation, as trustee (the "TRUSTEE"). The Company, the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the Notes: ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE SECTION 1.01. DEFINITIONS. "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" means all additional interest then owing pursuant to Section 4 of the Registration Rights Agreement. "ADDITIONAL NOTES" means up to $100.0 million in aggregate principal amount of Notes (other than the Initial Notes) issued under this Indenture in accordance with Sections 2.02 and 4.09. "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. Notwithstanding the foregoing, no Person (other than the Company or any Subsidiary of the Company) in whom a Securitization Entity makes an Investment in connection with a Qualified Securitization Transaction shall be deemed to be an Affiliate of the Company or any of its Subsidiaries solely by reason of such Investment. "AGENT" means any Registrar, Paying Agent or co-registrar. "ALL OR SUBSTANTIALLY ALL" shall have the meaning given such phrase in the Revised Model Business Corporation Act. -2- "APPLICABLE PROCEDURES" means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange. "ASSET ACQUISITION" means (a) 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 shall be merged with or into the Company or any Restricted Subsidiary of the Company, or (b) 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) which 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. "ASSET SALE" means any direct or indirect sale, issuance, conveyance, transfer, lease (other than operating leases entered into in the ordinary course of business), 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 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 $1.0 million; (b) the sale, lease, conveyance, disposition or other transfer of all or substantially all of the assets of the Company as permitted by Section 5.01 or any disposition that constitutes a Change of Control; (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) disposals or replacements of obsolete equipment in the ordinary course of business; (e) the sale, lease, conveyance, disposition or other transfer by the Company or any Restricted Subsidiary of assets or property to one or more Restricted Subsidiaries in connection with Investments permitted under Section 4.07 or pursuant to any Permitted Investment; and (f) sales of accounts receivable, equipment and related assets (including contract rights) of the type specified in the definition of Qualified Securitization Transaction to a Secu- -3- ritization Entity for the fair market value thereof, including cash in an amount at least equal to 75% of the fair market value thereof as determined in accordance with GAAP. For the purposes of this clause (f), Purchase Money Notes shall be deemed to be cash. "BANKRUPTCY LAW" means Title 11, U.S. Code or any similar federal or state law for the relief of debtors. "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. "BUSINESS DAY" means any day that is not a Legal Holiday. "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 or other equity interests of such Person. "CAPITALIZED LEASE OBLIGATION" 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. 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. "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 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; -4- (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 or any state thereof or the District of Columbia or any United States 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; and (6) investments in money market funds which invest substantially all their assets in securities of the types described in clauses (1) through (5) above. "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"), other than to the Permitted Holders or their Related Parties or any Permitted Group; (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 the Permitted Holders or their Related Parties or any Permitted Group) shall become the owner, directly or indirectly, beneficially or of record, of shares representing more than 40% of the aggregate ordinary voting power represented by the issued and outstanding Capital Stock of the Company at a time when the Permitted Holders and their Related Parties in the aggregate own a lesser percentage of the aggregate ordinary voting power represented by such issued and outstanding Capital Stock; or (4) the first day on which a majority of the members of the Board of Directors of the Company are not Continuing Directors. "CLEARSTREAM" means Clearstream Banking, S.A. "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. -5- "COMPANY" means Dayton Superior Corporation and any and all successors thereto. "CONSOLIDATED EBITDA" means, with respect to any Person, for any period, the sum (without duplication) of such Person's: (1) Consolidated Net Income, and (2) to the extent Consolidated Net Income has been reduced thereby,: (a) all income taxes and foreign withholding taxes of such Person and its Restricted Subsidiaries paid or accrued in accordance with GAAP for such period; (b) Consolidated Interest Expense; (c) Consolidated Non-cash Charges less any non-cash items increasing Consolidated Net Income for such period (other than normal accruals in the ordinary course of business), all as determined on a consolidated basis for such Person and its Restricted Subsidiaries in accordance with GAAP; and (d) any cash charges resulting from the Recapitalization, the related financings and the Conspec Acquisition that are incurred prior to the six month anniversary of the Issue Date. "CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, with respect to any Person, the ratio of (x) 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 (y) 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 or the issuance of any Designated Preferred Stock 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 or the issuance or redemption of other Preferred Stock (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 revolving credit 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 or issuance or redemption, as the case may be (and the application of the proceeds thereof), had occurred on the first day of the Four-Quarter Period; and (2) Asset Sales or other dispositions or Asset Acquisitions (including, without limitation, (A) any Asset Acquisition giving rise to the need to make such calculation as a re- -6- sult of such Person or one of its Restricted Subsidiaries (including any Person who becomes a Restricted Subsidiary as a result of the Asset Acquisition) incurring, assuming or otherwise being liable for Acquired Indebtedness, and (B) any Consolidated EBITDA (including any pro forma expense and cost reductions and other operating improvements that have occurred or are reasonably expected to occur, to the extent consistent with Regulation S-X promulgated under the Securities Act) attributable to the assets which are the subject of the Asset Acquisition or Asset Sale or other disposition and without regard to clause (4) of the definition of Consolidated Net Income) 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 other disposition 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 cash dividend payments on any series of Preferred Stock of such Person 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; PROVIDED that with respect to any series of Preferred Stock that was not paid cash dividends during such period but that is eligible to be paid cash dividends during any period prior to the maturity date of the Notes, cash dividends shall be deemed to have been paid with respect to such series of Preferred Stock during such period for purposes of this clause (2); plus (3) the product of (x) the amount of all dividend payments on any series of Permitted Subsidiary Preferred Stock times (y) a fraction, the numerator of which is one and the -7- 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. "CONSOLIDATED INTEREST EXPENSE" means, with respect to any Person for any period, the sum of, without duplication: (1) the aggregate of all cash and non-cash interest expense with respect to all outstanding Indebtedness of such Person and its Restricted Subsidiaries, including the net costs associated with Interest Swap Obligations, for such period determined on a consolidated basis in accordance with GAAP, but excluding amortization or write-off of debt issuance costs; (2) the consolidated interest expense of such Person and its Restricted Subsidiaries that was capitalized during such period; and (3) 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 LEVERAGE RATIO" means, with respect to any Person, the ratio of: (1) the sum of the aggregate outstanding amount of Indebtedness of such Person and its Restricted Subsidiaries as of the Transaction Date on a consolidated basis determined in accordance with GAAP after giving effect to the incurrence of the Indebtedness on the Transaction Date and the receipt and application of the proceeds therefrom to (2) Consolidated EBITDA of such Person for the Four-Quarter Period ending prior to the Transaction Date calculated on a pro forma basis for the period of such calculation as set forth in the definition of Consolidated Fixed Charge Coverage Ratio. "CONSOLIDATED NET INCOME" means, for any period, the aggregate net income (or loss) of the Company and its Restricted Subsidiaries for such period on a consolidated basis, determined in accordance with GAAP and without any deduction in respect of Preferred Stock dividends; PROVIDED that there shall be excluded therefrom: (1) gains and losses from Asset Sales (without regard to the $1.0 million limitation set forth in the definition thereof) and the related tax effects according to GAAP; (2) gains and losses due solely to fluctuations in currency values and the related tax effects according to GAAP; (3) all extraordinary, unusual or nonrecurring charges, gains and losses (including, without limitation, all restructuring costs and any expense or charge related to the repurchase of Capital Stock or warrants or options to purchase Capital Stock) and the related tax effects according to GAAP; -8- (4) the net income (or loss) of any Person acquired in a pooling of interests transaction accrued prior to the date it becomes a Restricted Subsidiary of the Company or is merged or consolidated with or into the Company or any Restricted Subsidiary of the Company; (5) the net income (but not loss) of any Restricted Subsidiary of the Company to the extent that the declaration of dividends or similar distributions by that Restricted Subsidiary of the Company of that income is prohibited by contract, operation of law or otherwise; (6) the net loss of any Person, other than a Restricted Subsidiary of the Company; (7) 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 a Restricted Subsidiary of the Company by such Person; (8) 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; (9) any non-cash compensation charges, including any arising from existing stock options resulting from any merger or recapitalization transaction; and (10) For purposes of clause (iii)(w) of the first paragraph of Section 4.07, Consolidated Net Income shall be reduced by any cash dividends paid with respect to any series of Designated Preferred Stock. "CONSOLIDATED NON-CASH CHARGES" means, with respect to any Person, for any period, the aggregate depreciation, amortization and other non-cash charges and 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 payments for any future period other than accruals or reserves associated with mandatory repurchases of equity securities). "CONSPEC" means, collectively, Conspec Marketing & Manufacturing Co., Inc., Conspec Performance Products, Inc. and Bristol Investments, Inc. "CONSPEC ACQUISITION" means the acquisition by the Company of Conspec. "CONTINUING DIRECTOR" means, as of any date of determination, any member of the Board of Directors of the Company who: (1) was a member of the Board of Directors of the Company on the Issue Date; or (2) was nominated for election or elected to the Board of Directors of the Company by any of the Permitted Holders or with the approval of a majority of the Continuing Di- -9- rectors who were members of such Board at the time of such nomination or election or the applicable Guarantor, as the case may be. "CONVERTIBLE SUBORDINATED DEBENTURES" means the Company's 10% Convertible Subordinated Debentures due September 30, 2029, originally issued to Dayton Superior Capital Trust, which may be issued to holders of the Trust Preferred Securities in accordance with the terms of the Trust Preferred Documents. "CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of the Trustee specified in Section 12.02 or such other address as to which the Trustee may give notice to the Company. "CREDIT FACILITIES" means one or more debt facilities (including, without limitation, the New Credit Facility) or commercial paper facilities with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) and/or letters of credit, bank guarantees or banker's acceptances. "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. "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 NOTE" means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06, in the form of Exhibit A-1 except that such Note shall not bear the Global Note Legend and shall not have the "Schedule of Exchanges of Interests in the Global Note" attached thereto. "DEPOSITARY" means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of this Indenture. "DESIGNATED NONCASH CONSIDERATION" means any non-cash consideration received by the Company or one of its Restricted Subsidiaries in connection with an Asset Sale that is designated as Designated Noncash Consideration pursuant to an Officers' Certificate that is delivered to the Trustee and executed by the principal executive officer and the principal financial officer of the Company or such Restricted Subsidiary at the time of such Asset Sale. Any particular item of Designated Noncash Consideration will cease to be considered to be outstanding once it has been sold for cash or Cash Equivalents. At the time of receipt of any Designated Noncash Consideration, the Company shall deliver an Officers' Certificate to the Trustee which shall state the fair market value of such Designated Noncash Consideration and shall state the basis of such valuation, which shall be a report of a nationally recognized investment banking, appraisal or accounting firm with respect to the receipt -10- in one transaction or a series of related transactions, of Designated Noncash Consideration with a fair market value in excess of $10.0 million. "DESIGNATED PREFERRED STOCK" means Preferred Stock that is designated as Designated Preferred Stock pursuant to an Officers' Certificate executed by the principal executive officer and the principal financial officer of the Company to the Trustee on the issue date thereof, the cash proceeds of which are excluded from the calculation set forth in clause (iii)(x) of the first paragraph of Section 4.07. "DESIGNATED SENIOR DEBT" means: (1) Indebtedness under or in respect of the New Credit Facility, and (2) any other Indebtedness constituting Senior Debt which, 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 or the applicable Guarantor, as the case may be. "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 (excluding any maturity as the result of an optional redemption by the issuer thereof) 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. "DISTRIBUTION COMPLIANCE PERIOD" means as defined in Regulation S. "DOMESTIC RESTRICTED SUBSIDIARY" means any Restricted Subsidiary of the Company that is incorporated under the laws of the United States or any state thereof or the District of Columbia. "EQUITY OFFERING" means any offering of Qualified Capital Stock of the Company generating gross proceeds to the Company of at least $25.0 million. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, or any successor statute or statutes thereto. "EXCHANGE NOTES" means the 13% Senior Subordinated Notes due 2009 to be issued in exchange for (1) the Initial Notes pursuant to the Registration Rights Agreement and (2) the Additional Notes, if any, issued under Section 2.02 pursuant to a registration rights agreement substantially similar to the Registration Rights Agreement. "EXCHANGE OFFER" has the meaning set forth in the Registration Rights Agreement. -11- "EXCHANGE OFFER REGISTRATION STATEMENT" has the meaning set forth in the Registration Rights Agreement. "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. "FOUR-QUARTER PERIOD" has the meaning specified 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 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, as in effect from time to time. "GLOBAL NOTE LEGEND" means the legend set forth in Section 2.06(g)(ii) which is required to be placed on all Global Notes issued under this Indenture. "GLOBAL NOTES" means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes, in the form of Exhibit A, issued in accordance with Section 2.01, 2.06(b)(iv), 2.06(d)(ii) or 2.06(f). "GOVERNMENT SECURITIES" means direct obligations of, or obligations guaranteed by, the United States of America, and for the payment of which the United States pledges its full faith and credit. "GUARANTEE" means: (1) the senior subordinated guarantee of the Notes by the Domestic Restricted Subsidiaries of the Company; and (2) the senior subordinated guarantee of the Notes by any Domestic Restricted Subsidiary required under the terms of Section 4.17. "GUARANTOR" means any Restricted Subsidiary that incurs a Guarantee; PROVIDED that upon the release and discharge of such Restricted Subsidiary from its Guarantee in accordance with Section 11.06, such Restricted Subsidiary shall cease to be a Guarantor. "HEDGING AGREEMENT" means any agreement with respect to the hedging of price risk associated with the purchase of commodities used in the business of the Company and its Restricted -12- Subsidiaries, so long as any such agreement has been entered into in the ordinary course of business and not for purposes of speculation. "HOLDER" means a Person in whose name a Note is registered. "IAI GLOBAL NOTE" means the global Note in the form of Exhibit A-1 hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold to Institutional Accredited Investors. "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; (7) all Obligations of any other Person of the type referred to in clauses (1) through (6) which 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 Obligations 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 -13- 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. For the purposes of calculating the amount of Indebtedness of a Securitization Entity outstanding as of any date, the face or notional amount of any interest in receivables or equipment that is outstanding as of such date shall be deemed to be Indebtedness but any such interests held by Affiliates of such Securitization Entity shall be excluded for purposes of such calculation. "INDENTURE" means this Indenture, as amended or supplemented from time to time. "INDIRECT PARTICIPANT" means a Person who holds a beneficial interest in a Global Note through a Participant. "INITIAL NOTES" means $170.0 million in aggregate principal amount of 13% Senior Subordinated Notes due 2009 of the Company issued on the Issue Date for so long as such securities constitute Restricted Securities. "INSTITUTIONAL ACCREDITED INVESTOR" means an institution that is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, that is not also a QIB. "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. "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 in accordance with normal trade practices of the Company or such Restricted Subsidiary, as the case may be. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Common Stock of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposition, such Restricted Subsidiary is no longer a Restricted Subsidiary of the Company, 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. "ISSUE DATE" means June 16, 2000, the date on which the Initial Notes were originally issued. -14- "LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking institutions in The City of New York, the city in which the principal corporate trust office of the Trustee is located or at a place of payment are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on such payment for the intervening period. "LETTER OF TRANSMITTAL" means the letter of transmittal to be prepared by the Company and sent to all Holders of the Notes for use by such Holders in connection with the Exchange Offer. "LIEN" means 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). "MARKETABLE SECURITIES" means publicly traded debt or equity securities that are listed for trading on a national securities exchange and that were issued by a corporation whose debt securities are rated in one of the three highest rating categories by either S&P or Moody's. "MOODY'S" means Moody's Investors Service, Inc. "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; and (3) 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. "NEW CREDIT FACILITY" means the Credit Agreement dated as of the Issue Date among the Company, the lenders party thereto in their capacities as lenders thereunder, and Bankers Trust Company, as administrative 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 -15- 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. "NON-U.S. PERSON" means a Person who is not a U.S. Person. "NOTE CUSTODIAN" means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto. "NOTES" means, collectively, the Initial Notes, the Additional Notes, if any, and the Exchange Notes, treated as a single class of securities, as amended or supplemented from time to time in accordance with the terms hereof, that are issued pursuant to this Indenture. "OBLIGATIONS" means all obligations for principal, premium, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness. "OFFICER" means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person. "OFFICERS' CERTIFICATE" means a certificate signed on behalf of the Company or any Restricted Subsidiary, as the case may be, by two Officers of the Company or such Restricted Subsidiaries, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company or such Restricted Subsidiary, that meets the requirements of Sections 12.04 and 12.05. "144A GLOBAL NOTE" means a global note in the form of Exhibit A-1 hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A. "OPINION OF COUNSEL" means an opinion from legal counsel who is reasonably acceptable to the Trustee that meets the requirements of Sections 12.04 and 12.05. The counsel may be an employee of or counsel to the Company, any Subsidiary of the Company or the Trustee. "PARTICIPANT" means, with respect to the Depositary, Euroclear or Cedel, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to The DTC, shall include Euroclear and Clearstream). "PARTICIPATING BROKER-DEALER" has the meaning set forth in the Registration Rights Agreement. -16- "PERMITTED BUSINESS" means any business (including stock or assets) that derives a majority of its revenues from the business engaged in by the Company and its Restricted Subsidiaries on the Issue Date and/or activities that are reasonably similar, ancillary or related to, or a reasonable extension, development or expansion of, the businesses in which the Company and its Restricted Subsidiaries are engaged on the Issue Date. "PERMITTED GROUP" means any group of investors that is deemed to be a "person" (as such term is used in Section 13(d)(3) of the Exchange Act) by virtue of the Stockholders Agreements, as the same may be amended, modified or supplemented from time to time, PROVIDED that no single Person (together with its Affiliates), other than the Permitted Holders and their Related Parties, is the "beneficial owner" (as such term is used in Section 13(d) of the Exchange Act), directly or indirectly, of more than 50% of the voting power of the issued and outstanding Capital Stock of the Company that is "beneficially owned" (as defined above) by such group of investors. "PERMITTED HOLDERS" means Odyssey Investment Partners Fund, LP, its Affiliates and any general or limited partners of Odyssey Investment Partners Fund, LP. "PERMITTED INDEBTEDNESS" means, without duplication, each of the following: (1) Indebtedness under the Notes and this Indenture and any Guarantees thereof in an aggregate principal amount not to exceed $170.0 million; (2) Indebtedness of the Company or any of its Restricted Subsidiaries incurred pursuant to one or more Credit Facilities in an aggregate principal amount at any time outstanding not to exceed the sum of (A) $80.0 million PLUS (B) up to $23.5 million the proceeds of which will initially be applied to pay the holders of the Trust Preferred Securities and/or the Convertible Subordinated Debentures who elected to convert their Trust Preferred Securities and/or Convertible Subordinated Debentures into the right to receive cash in accordance with the Trust Preferred Documents and the documents governing the Recapitalization PLUS (C) up to $23.5 million the proceeds of which will initially be applied on or prior to the three-month anniversary of the Issue Date to consummate the Conspec Acquisition PLUS (D) $30.0 million the proceeds of which are used to consummate any acquisition, so long as after giving pro forma effect to such acquisition, the Consolidated Leverage Ratio of the Company would have been 4.75 to 1.0 or less, LESS: (i) the aggregate amount of Indebtedness of Securitization Entities at the time outstanding, less (ii) the amount of all mandatory principal payments actually made by the Company or any such Restricted Subsidiary since the Issue Date with the Net Cash Proceeds of an Asset Sale in respect of term loans under a Credit Facility (excluding any such payments to the extent refinanced at the time of payment), and -17- (iii) further reduced by any repayments of revolving credit borrowings under a Credit Facility with the Net Cash Proceeds of an Asset Sale that are accompanied by a corresponding commitment reduction thereunder; PROVIDED that the amount of Indebtedness permitted to be incurred pursuant to the Credit Facilities in accordance with this clause (2) shall be in addition to any Indebtedness permitted to be incurred pursuant to the Credit Facilities in reliance on, and in accordance with, clauses (7), (13) and (15) below; (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 thereof; (4) Interest Swap Obligations of the Company or any of its Restricted Subsidiaries covering Indebtedness of the Company or any of its Restricted Subsidiaries; PROVIDED that any Indebtedness to which any such Interest Swap Obligations correspond is otherwise permitted to be incurred under this Indenture; and PROVIDED, FURTHER, that such Interest Swap Obligations are entered into, in the judgment of the Company, to protect the Company or any of its Restricted Subsidiaries from fluctuations in interest rates on its outstanding Indebtedness; (5) Indebtedness of the Company or any Restricted Subsidiary of the Company under Hedging Agreements and Currency Agreements; (6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any such Restricted Subsidiaries; PROVIDED, HOWEVER, that: (a) if the Company is the obligor on such Indebtedness and the payee is a Restricted Subsidiary that is not a Guarantor, such Indebtedness is expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes; and (b) (i) any subsequent issuance or transfer of Capital Stock that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof, and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary of the Company (other than by way of granting a Lien permitted under this Indenture or in connection with the exercise of remedies by a secured creditor) shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6); -18- (7) Indebtedness (including Capitalized Lease Obligations) incurred by the Company or any of its Restricted Subsidiaries to finance the purchase, lease or improvement of property (real or personal) or equipment (whether through the direct purchase of assets or the Capital Stock of any person owning such assets) in an aggregate principal amount outstanding not to exceed $5.0 million; (8) Refinancing Indebtedness; (9) guarantees by the Company and its Restricted Subsidiaries of one another's Indebtedness; PROVIDED that such Indebtedness is permitted to be incurred under this Indenture and PROVIDED, FURTHER, that in the event such Indebtedness (other than Acquired Indebtedness) is incurred pursuant to the Consolidated Fixed Charge Coverage Ratio, such guarantees are by the Company or a Guarantor only; (10) Indebtedness arising from agreements of the Company or a Restricted Subsidiary of the Company providing for indemnification, adjustment of purchase price, earn out or other similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Restricted Subsidiary of the Company, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Restricted Subsidiary for the purpose of financing such acquisition; PROVIDED that the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with such disposition; (11) obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any Restricted Subsidiary of the Company in the ordinary course of business; (12) the incurrence by a Securitization Entity of Indebtedness in a Qualified Securitization Transaction that is non-recourse to the Company or any Subsidiary of the Company (except for Standard Securitization Undertakings); (13) additional Indebtedness of the Company and its Restricted Subsidiaries in an aggregate principal amount that does not, when taken together with any Permitted Subsidiary Preferred Stock then outstanding, exceed $7.5 million at any one time outstanding (which amount may, but need not, be incurred in whole or in part under a Credit Facility); (14) 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 that such Indebtedness is extinguished within five business days of incurrence; and (15) 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, issued in the ordinary course of business of the Company or such Restricted Subsidi- -19- ary, including, without limitation, in order to provide security for workers' compensation claims or payment obligations in connection with self-insurance or similar requirements in the ordinary course of business and other Indebtedness with respect to workers' compensation claims, self-insurance obligations, performance, surety and similar bonds and completion guarantees provided by the Company or any Restricted Subsidiary of the Company in the ordinary course of business. For purposes of determining compliance with Section 4.09, 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 (15) above or is entitled to be incurred pursuant to the Consolidated Fixed Charge Coverage Ratio provisions of Section 4.09, the Company shall, in its sole discretion, classify (or later reclassify) such item of Indebtedness in any manner that complies with Section 4.09. Accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, and the payment of dividends on Disqualified Capital Stock in the form of additional shares of the same class of Disqualified Capital Stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Capital Stock for purposes of Section 4.09. "PERMITTED INVESTMENTS" means: (1) Investments by the Company or any Restricted Subsidiary of the Company in any Restricted Subsidiary of the Company (whether existing on the Issue Date or created thereafter) or any Person (including by means of any transfer of cash or other property) if as a result of such Investment such Person shall become a Restricted Subsidiary of the Company or that will merge with or consolidate into the Company or a Restricted Subsidiary of the Company and Investments in the Company by any Restricted Subsidiary of the Company; (2) Investments in cash and Cash Equivalents; (3) loans and advances to employees and officers of the Company and its Restricted Subsidiaries for bona fide business purposes in an aggregate principal amount not to exceed $5.0 million at any one time outstanding; (4) Currency Agreements, Hedging Agreements and Interest Swap Obligations entered into in the ordinary course of business and otherwise in compliance with this Indenture; (5) 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; (6) 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; -20- (7) Investments existing on the Issue Date; (8) accounts receivable created or acquired in the ordinary course of business; (9) guarantees by the Company or a Restricted Subsidiary of the Company permitted to be incurred under this Indenture; (10) additional Investments having an aggregate fair market value, taken together with all other Investments made pursuant to this clause (10) that are at that time outstanding, not to exceed $10.0 million (with the fair market value of each Investment being measured at the time made and without giving effect to subsequent changes in value); (11) any Investment by the Company or a 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; and (12) Investments the payment for which consists exclusively of Qualified Capital Stock of the Company. "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 the applicable Restricted Subsidiary has set aside on its 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 shall have 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); (4) judgment Liens not giving rise to an Event of Default; -21- (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) any interest or title of a lessor under any Capitalized Lease Obligation; (7) purchase money Liens to finance property or assets of the Company or any Restricted Subsidiary of the Company acquired, constructed or improved in the ordinary course of business; PROVIDED, HOWEVER, that (a) the related purchase money 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, and (b) the Lien securing such Indebtedness shall be created within 90 days of such acquisition; (8) 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; (9) 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; (10) 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; (11) Liens securing Interest Swap Obligations which Interest Swap Obligations relate to Indebtedness that is otherwise permitted under this Indenture; (12) Liens securing Indebtedness under Currency Agreements and Hedging Agreements; (13) Liens incurred in the ordinary course of business of the Company or any Restricted Subsidiary with respect to obligations that do not in the aggregate exceed $5.0 million at any one time outstanding; (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; -22- (15) leases or subleases granted to others that do not materially interfere with the ordinary course of business of the Company and its Restricted Subsidiaries; (16) Liens arising from filing Uniform Commercial Code financing statements regarding leases; (17) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of custom duties in connection with the importation of goods; (18) Liens securing Acquired Indebtedness incurred in compliance with Section 4.09; (19) Liens placed upon 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; and (20) Liens existing on the Issue Date, together with any Liens securing Indebtedness incurred in reliance on clause (8) of the definition of Permitted Indebtedness in order to refinance the Indebtedness secured by Liens existing on the Issue Date; PROVIDED that the Liens securing the refinancing Indebtedness shall not extend to property other than that pledged under the Liens securing the Indebtedness being refinanced. "PERMITTED SUBSIDIARY PREFERRED STOCK" means any series of Preferred Stock of a Restricted Subsidiary of the Company that constitutes Qualified Capital Stock and has a fixed dividend rate, the liquidation value of all series of which, when combined with the aggregate amount of Indebtedness of the Company and its Restricted Subsidiaries incurred pursuant to clause (13) of the definition of Permitted Indebtedness, does not exceed $7.5 million. "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. "PRIVATE PLACEMENT LEGEND" means the legend set forth in Section 2.06(g)(i) to be placed on all Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture. "PRODUCTIVE ASSETS" means assets (including Capital Stock) that are used or usable by the Company and its Restricted Subsidiaries in Permitted Businesses. "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 -22- 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 or any of its Restricted Subsidiaries pursuant to which the Company or any of its Subsidiaries may sell, convey or otherwise transfer to: (1) a Securitization Entity (in the case of a transfer by the Company or any of its Restricted Subsidiaries); and (2) any other Person (in the case of a transfer by a Securitization Entity), or may grant a security interest in any accounts receivable or equipment (whether now existing or arising or acquired in the future) of the Company or any of its Restricted Subsidiaries, and any assets related thereto, including, without limitation, all collateral securing such accounts receivable and equipment, all contracts and contract rights and all guarantees or other obligations in respect of such accounts receivable and equipment, proceeds of such accounts receivable and equipment and other assets (including contract rights) which are customarily transferred or in respect of which security interests are customarily granted in connection with assets securitization transactions involving accounts receivable and equipment. "RECAPITALIZATION" means the recapitalization of the Company consummated on the Issue Date. "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, modification, replacement, restatement, refunding, deferral, extension, substitution, supplement, reissuance or resale of existing or future Indebtedness (other than intercompany Indebtedness), including any additional Indebtedness incurred to pay interest or premiums required by the instruments governing such existing or future Indebtedness as in effect at the time of issuance thereof ("REQUIRED PREMIUMS") and fees in connection therewith; PROVIDED that any such event shall not: -24- (1) directly or indirectly result in an increase in the aggregate principal amount of Permitted Indebtedness, except to the extent such increase is a result of a simultaneous incurrence of additional Indebtedness: (a) to pay Required Premiums and related fees; or (b) otherwise permitted to be incurred under this Indenture; and (2) create Indebtedness with a Weighted Average Life to Maturity at the time such Indebtedness is incurred that is less than the Weighted Average Life to Maturity at such time of the Indebtedness being refinanced, modified, replaced, renewed, restated, refunded, deferred, extended, substituted, supplemented, reissued or resold. "REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement dated as of the Issue Date by and among the Company, the Guarantors and Deutsche Bank Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated. "REGULATION S" means Regulation S promulgated under the Securities Act. "REGULATION S GLOBAL NOTE" means a Regulation S Temporary Global Note or Regulation S Permanent Global Note, as appropriate. "REGULATION S PERMANENT GLOBAL NOTE" means a permanent global Note in the form of Exhibit A-1 hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Regulation S Temporary Global Note upon expiration of the Distribution Compliance Period. "REGULATION S TEMPORARY GLOBAL NOTE" means a temporary global Note in the form of Exhibit A-2 hereto bearing the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 903 of Regulation S. "RELATED PARTY" with respect to any Permitted Holder means: (a) (1) any spouse, sibling, parent or child of such Permitted Holder; or (2) the estate of any Permitted Holder during any period in which such estate holds Capital Stock of the Company for the benefit of any Person referred to in clause (a)(1); or (b) any trust, corporation, partnership, limited liability company or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially owning an interest of more than 50% of which consist of, or the sole managing partner or managing member of -25- which is, one or more Permitted Holders and/or such other Persons referred to in the immediately preceding clause (a). "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, means any officer within the Corporate Trust Administration of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "RESTRICTED DEFINITIVE NOTE" means a Definitive Note bearing the Private Placement Legend. "RESTRICTED GLOBAL NOTE" means a Global Note bearing the Private Placement Legend. "RESTRICTED SUBSIDIARY" of any Person means any Subsidiary of such Person which at the time of determination is not an Unrestricted Subsidiary. "RULE 144" means Rule 144 promulgated under the Securities Act. "RULE 144A" means Rule 144A promulgated under the Securities Act. "RULE 903" means Rule 903 promulgated under the Securities Act. "RULE 904" means Rule 904 promulgated under the Securities Act. "S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc. "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. "SEC" means the Securities and Exchange Commission. "SECURITIES ACT" means the Securities Act of 1933, as amended. -26- "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 or equipment and related assets) which engages in no activities other than in connection with the financing of accounts receivable or equipment and which is designated by the Board of Directors of the Company (as provided below) as a Securitization Entity: (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 (excluding guarantees of Obligations (other than the principal of, and interest on, Indebtedness)) pursuant to Standard Securitization Undertakings; (b) is recourse to or obligates the Company or any Restricted Subsidiary of the Company in any way other than pursuant to Standard Securitization Undertakings; or (c) subjects any property or asset of the Company or any Restricted Subsidiary of the Company, directly or indirectly, contingently or otherwise, to the satisfaction thereof, other than pursuant to Standard Securitization Undertakings; (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 obligations 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 of the Company giving effect to such designation and an Officers' Certificate certifying that such designation complied with 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 or any 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 Notes or the Guarantees of such Guarantor, as the case may be. Without limiting the generality of the foregoing, "Senior Debt" shall -27- 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 of every nature of the Company or any Guarantor under the New Credit Facility, including, without limitation, obligations to pay principal, premium and interest, reimbursement obligations under letters of credit, fees, expenses and indemnities (and guarantees thereof); (y) all Interest Swap Obligations (and guarantees thereof); and (z) all obligations (and guarantees thereof) under Currency Agreements and Hedging Agreements, in each case whether outstanding on the Issue Date or thereafter incurred. Notwithstanding the foregoing, "Senior Debt" shall not include: (i) any Indebtedness of the Company or a Guarantor to the Company or to a Subsidiary of the Company; (ii) any 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); (iii) Indebtedness and other amounts incurred to trade creditors in connection with obtaining goods, materials or services; (iv) Indebtedness represented by Disqualified Capital Stock; (v) any liability for federal, state, local or other taxes owed or owing by the Company or any Guarantor; (vi) that portion of any Indebtedness incurred in violation of Section 4.09 (but, as to any such obligation, no such violation shall be deemed to exist for purposes of this clause (vi) if the holder(s) of such obligation or their representative and the Trustee shall have received an Officers' Certificate of the Company 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); (vii) Indebtedness which, when incurred and without respect to any election under Section 1111(b) of Title 11, United States Code, is without recourse to the Company; and -28- (viii) any Indebtedness which is, by its express terms, subordinated in right of payment to any other Indebtedness of the Company or such Guarantor, including, without limitation, the Convertible Subordinated Debentures. "SHELF REGISTRATION STATEMENT" means the Shelf Registration Statement 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 which are reasonably customary in an accounts receivable or equipment transaction. "STATED MATURITY" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which such payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof. "STOCKHOLDERS AGREEMENTS" means those certain stockholders agreements entered into in connection with the Recapitalization. "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. "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bbbb) as in effect on the date on which this Indenture is qualified under the TIA (except as provided for in Section 9.03). "TOTAL ASSETS" means the total consolidated assets of the Company and its Restricted Subsidiaries, as set forth on the Company's most recent consolidated balance sheet. "TRANSACTION DATE" has the meaning specified in the definition of Consolidated Fixed Charge Coverage Ratio. -29- "TRANSACTIONS" means the Recapitalization and the related financings, including the refinancing of the Convertible Subordinated Debentures and other existing indebtedness of the Company. "TRUST AGREEMENT" means the Amended and Restated Trust Agreement, dated as of October 5, 1999, among the Company, as depositor, Firstar Bank N.A. as property trustee, Mark A. Ferrucci as Delaware trustee, and the administrative trustees named therein, as in effect on the Issue Date. "TRUST PREFERRED DOCUMENTS" means (i) the Trust Preferred Securities, (ii) the Trust Agreement, (iii) the Trust Preferred Guarantee Agreement, and (iv) the indenture governing the Convertible Subordinated Debentures. "TRUST PREFERRED GUARANTEE AGREEMENT" means the Guarantee Agreement, dated as of October 5, 1999, between the Company and Firstar Bank, N.A. as guarantee trustee thereunder, executed and delivered by the Company in favor of the holders of the Trust Preferred Securities, as in effect on the Issue Date. "TRUST PREFERRED SECURITIES" means the preferred securities of Dayton Superior Capital Trust, liquidation preference $20 per security, exchangeable in certain circumstances for a portion (equal to the aggregate liquidation preference of the preferred securities so exchanged) of the Convertible Subordinated Debentures held by Dayton Superior Capital Trust. "TRUSTEE" means the party named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder. "UNRESTRICTED DEFINITIVE NOTE" means one or more Definitive Notes that do not bear and are not required to bear the Private Placement Legend. "UNRESTRICTED GLOBAL NOTE" means a permanent global Note in the form of Exhibit A-1 attached hereto that bears the Global Note Legend and that has the "Schedule of Exchanges of Interests in the Global Note" attached thereto, and that is deposited with or on behalf of and registered in the name of the Depositary, representing a series of Notes that do not bear the Private Placement Legend. "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. -30- 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 4.07; 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. The Board of Directors may designate any Unrestricted Subsidiary to be a Restricted Subsidiary only if (x) 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 4.09 and (y) 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 of the Company 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. PERSON" means a U.S. person as defined in Rule 902(o) under the Securities Act. "VOTING STOCK" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person. "WEIGHTED AVERAGE LIFE TO MATURITY" means, when applied to any Indebtedness at any date, the number of years obtained by dividing: (1) the then outstanding aggregate principal amount of such Indebtedness into (2) the sum of the total of the products obtained by multiplying (a) 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 (b) 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. -31- "WHOLLY OWNED SUBSIDIARY" of any Person means any Subsidiary of such Person of which all the outstanding voting securities (other than 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) are owned by such Person or any Wholly Owned Subsidiary of such Person. SECTION 1.02. OTHER DEFINITIONS.
Defined in Term Section ---- ------- "ACCELERATION NOTICE"................................................... 6.02 "AFFILIATE TRANSACTION"................................................. 4.11 "BLOCKAGE PERIOD"....................................................... 10.03 "CHANGE OF CONTROL OFFER"............................................... 4.15 "CHANGE OF CONTROL PAYMENT DATE"........................................ 4.15 "COVENANT DEFEASANCE"................................................... 8.03 "DEFAULT NOTICE"........................................................ 10.03 "DTC"................................................................... 2.03 "EVENT OF DEFAULT"...................................................... 6.01 "INCUR"................................................................. 4.09 "LEGAL DEFEASANCE"...................................................... 8.02 "NET PROCEEDS OFFER".................................................... 4.10 "NET PROCEEDS OFFER AMOUNT"............................................. 4.10 "NET PROCEEDS OFFER PAYMENT DATE"....................................... 4.10 "NET PROCEEDS OFFER TRIGGER DATE"....................................... 4.10 "OFFER PERIOD".......................................................... 3.09 "PAYING AGENT".......................................................... 2.03 "PURCHASE DATE"......................................................... 3.09 "REFERENCE DATE"........................................................ 4.07 "REFUNDING CAPITAL STOCK"............................................... 4.07 "REGISTRAR"............................................................. 2.03 "RESTRICTED PAYMENTS"................................................... 4.07 "RETIRED CAPITAL STOCK"................................................. 4.07 "SURVIVING ENTITY"...................................................... 5.01
SECTION 1.03. TRUST INDENTURE ACT DEFINITIONS. 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: "INDENTURE SECURITIES" means the Notes; -32- "INDENTURE SECURITY HOLDER" means a Holder of a Note; "INDENTURE TO BE QUALIFIED" means this Indenture; "INDENTURE TRUSTEE" or "institutional trustee" means the Trustee; and "OBLIGOR" on the Notes and the Guarantees means the Company and the Guarantors, respectively, and any successor obligor upon the Notes and the Guarantees, respectively. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them. SECTION 1.04. RULES OF CONSTRUCTION. Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (3) "or" is not exclusive; (4) words in the singular include the plural, and in the plural include the singular; (5) provisions apply to successive events and transactions; and (6) references to sections of or rules under the Securities Act shall be deemed to include substitute, replacement of successor sections or rules adopted by the SEC from time to time. ARTICLE 2 THE NOTES SECTION 2.01. FORM AND DATING. (a) GENERAL. The Notes and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note shall be dated the date of its authentication. The Notes shall be in denominations of $1,000 and integral multiples thereof. -33- The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture, and 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. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling. (b) GLOBAL NOTES. Notes issued in global form shall be substantially in the form of Exhibit A-1 or A-2 (including the Global Note Legend thereon and the "Schedule of Exchanges of Interests in the Global Note" or "Schedule of Exchanges of Interests in the Regulation S Temporary Global Note," as applicable, attached thereto). Notes issued in definitive form shall be substantially in the form of Exhibit A-1 (but without the Global Note Legend thereon and without the "Schedule of Exchanges of Interests in the Global Note" or "Schedule of Exchanges of Interests in the Regulation S Temporary Global Note," as applicable, attached thereto). Each Global Note shall represent such of the outstanding Notes as shall be specified therein and each shall provide that it shall represent the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee or the Note Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06. (c) TEMPORARY GLOBAL NOTES. Notes offered and sold in reliance on Regulation S shall be issued initially in the form of the Regulation S Temporary Global Note, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Trustee, at its New York office, as custodian for the Depositary, and registered in the name of the Depositary or the nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Clearstream, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The Distribution Compliance Period shall be terminated upon the receipt by the Trustee of (i) a written certificate from the Depositary, together with copies of certificates from Euroclear and Clearstream certifying that they have received certification of non-United States beneficial ownership of 100% of the aggregate principal amount of the Regulation S Temporary Global Note (except to the extent of any beneficial owners thereof who acquired an interest therein during the Distribution Compliance Period pursuant to another exemption from registration under the Securities Act and who will take delivery of a beneficial ownership interest in a 144A Global Note or an IAI Global Note bearing a Private Placement Legend, all as contemplated by Section 2.06(g)(i)), and (ii) an Officers' Certificate from the Company. Following the termination of the Distribution Compliance Period, beneficial interests in the Regulation S Temporary Global Note shall be exchanged for beneficial interests in Regulation S Permanent Global Notes pursuant to the Applicable Procedures. Simultaneously with the authentication of Regulation S Permanent Global Notes, the Trustee shall cancel the Regulation S Temporary Global Note. The aggregate principal amount of the Regulation S Temporary Global Note and the Regulation S Permanent Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided. -34- (d) EUROCLEAR AND CLEARSTREAM PROCEDURES APPLICABLE. The provisions of the "Operating Procedures of the Euroclear System" and "Terms and Conditions Governing Use of Euroclear" and the "General Terms and Conditions of Clearstream" and "Customer Handbook" of Cedel Bank shall be applicable to transfers of beneficial interests in the Regulation S Temporary Global Note and the Regulation S Permanent Global Notes that are held by Participants through Euroclear or Clearstream. SECTION 2.02. EXECUTION AND AUTHENTICATION. One Officer shall sign the Notes for the Company by manual or facsimile signature. If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid. A Note shall not be valid until authenticated by the manual signature of the Trustee. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture. The Trustee shall authenticate Notes for original issue in aggregate principal amount not to exceed $170,000,000 (other than as provided in Section 2.07) in one or more series upon a written order of the Company in the form of an Officers' Certificate. The Trustee shall authenticate Additional Notes thereafter (so long as permitted by the terms of this Indenture) for original issue upon a written order of the Company in the form of an Officers' Certificate in aggregate principal amount as specified in such order (other than as provided in Section 2.07). Each such written order shall specify the amount of Notes to be authenticated, whether the Notes are to be Initial Notes, Additional Notes or Exchange Notes and whether the Notes are to be issued as Definitive Notes or Global Notes or such other information as the Trustee shall reasonably request. The Notes shall be issued only in fully registered form, without coupons and only in denominations of $1,000 and any integral multiple thereof. All Notes issued under this Indenture shall vote and consent together on all matters as one class and no series of Notes will have the right to vote or consent as a separate class on any matter. The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Company. SECTION 2.03. REGISTRAR AND PAYING AGENT. The Company shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange ("REGISTRAR") and an office or agency where Notes may be presented for payment ("PAYING AGENT"). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term "REGISTRAR" includes any co-registrar and the term "PAYING AGENT" in- -35- cludes any additional paying agent. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar. The Company initially appoints The Depository Trust Company ("DTC") to act as Depositary with respect to the Global Notes. The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Note Custodian with respect to the Global Notes. SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium, if any, or interest (including Additional Interest, if any) on the Notes, and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money. If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee shall serve as Paying Agent for the Notes. SECTION 2.05. HOLDER LISTS. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least seven Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes and the Company shall otherwise comply with TIA Section 312(a). SECTION 2.06. TRANSFER AND EXCHANGE. (a) TRANSFER AND EXCHANGE OF GLOBAL NOTES. A Global Note may not be transferred as a whole except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. All Global Notes will be exchanged by the Company for Definitive Notes if (i) the Company delivers to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not -36- appointed by the Company within 90 days after the date of such notice from the Depositary or (ii) the Company in its sole discretion determines that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and delivers a written notice to such effect to the Trustee; PROVIDED that in no event shall the Regulation S Temporary Global Note be exchanged by the Company for Definitive Notes prior to (x) the expiration of the Distribution Compliance Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903(c)(3)(ii)(B) under the Securities Act. Upon the occurrence of either of the preceding events in (i) or (ii) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10, shall be authenticated and delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a); however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or (f). (b) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN THE GLOBAL NOTES. The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable: (i) TRANSFER OF BENEFICIAL INTERESTS IN THE SAME GLOBAL NOTE. Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; PROVIDED, HOWEVER, that prior to the expiration of the Distribution Compliance Period, transfers of beneficial interests in the Temporary Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(i). (ii) ALL OTHER TRANSFERS AND EXCHANGES OF BENEFICIAL INTERESTS IN GLOBAL NOTES. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(i) above, the transferor of such beneficial interest must deliver to the Depositary either (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Partici- -37- pant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above; PROVIDED that in no event shall Definitive Notes be issued upon the transfer or exchange of beneficial interests in the Regulation S Temporary Global Note prior to (x) the expiration of the Distribution Compliance Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903 under the Securities Act. Upon consummation of an Exchange Offer by the Company in accordance with Section 2.06(f), the requirements of this Section 2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions contained in the Letter of Transmittal delivered by the Holder of such beneficial interests in the Restricted Global Notes. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h). (iii) TRANSFER OF BENEFICIAL INTERESTS TO ANOTHER RESTRICTED GLOBAL NOTE. A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(ii) above and the Registrar receives the following: (A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; (B) if the transferee will take delivery in the form of a beneficial interest in the Regulation S Temporary Global Note or the Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and (C) if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications and certificates and Opinion of Counsel required by item (3) thereof in form reasonably acceptable to the Company and the Registrar, if applicable. (iv) TRANSFER AND EXCHANGE OF BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL NOTE FOR BENEFICIAL INTERESTS IN THE UNRESTRICTED GLOBAL NOTE. A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(ii) above and: -38- (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal or via the Depositary's book-entry system that it is not (1) a broker-dealer, (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 Statement in accordance with the Registration Rights Agreement; (C) such transfer is effected by a Participating Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of EXHIBIT C, including the certifications in item (1)(a) thereof; or (2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of EXHIBIT B, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar or the Company so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar and the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of a written authentication order in accordance with Section 2.02, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above. Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note. -39- (c) TRANSFER OR EXCHANGE OF BENEFICIAL INTERESTS FOR DEFINITIVE NOTES. (i) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO RESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon receipt by the Registrar of the following documentation: (A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder in the form of EXHIBIT C, including the certifications in item (2)(a) thereof; (B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in EXHIBIT B, including the certifications in item (1) thereof; (C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set forth in EXHIBIT B, including the certifications in item (2) thereof; (D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in EXHIBIT B, including the certifications in item (3)(a) thereof; (E) if such beneficial interest is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in EXHIBIT B, including the certifications, certificates and Opinion of Counsel required by item (3) thereof in form reasonably acceptable to the Company and the Registrar, if applicable; (F) if such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in EXHIBIT B, including the certifications in item (3)(b) thereof; or (G) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in EXHIBIT B, including the certifications in item (3)(c) thereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h), and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note -40- in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein. (ii) Notwithstanding Sections 2.06(c)(i)(A) and (C), a beneficial interest in the Regulation S Temporary Global Note may not be exchanged for a Definitive Note or transferred to a Person who takes delivery thereof in the form of a Definitive Note prior to (x) the expiration of the Distribution Compliance Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903(c)(3)(ii)(B) under the Securities Act, except in the case of a transfer pursuant to an exemption from the registration requirements of the Securities Act other than Rule 903 or Rule 904. (iii) BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES TO UNRESTRICTED DEFINITIVE NOTES. A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of such beneficial interest, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the 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 Statement in accordance with the Registration Rights Agreement; (C) such transfer is effected by a Participating Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Definitive Note that does not bear the Private Placement Legend, a certificate from such holder in the form of EXHIBIT C, including the certifications in item (1)(b) thereof; or -41- (2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a Definitive Note that does not bear the Private Placement Legend, a certificate from such holder in the form of EXHIBIT B, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar or the Company so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar and the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. (iv) BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES TO UNRESTRICTED DEFINITIVE NOTES. If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 2.06(b)(ii), the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h), and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iv) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iv) shall not bear the Private Placement Legend. (d) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR BENEFICIAL INTERESTS. (i) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES. If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation: (A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of EXHIBIT C, including the certifications in item (2)(b) thereof; (B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in EXHIBIT B, including the certifications in item (1) thereof; -42- (C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set forth in EXHIBIT B, including the certifications in item (2) thereof; (D) if such Restricted Definitive 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, including the certifications in item (3)(a) thereof; (E) if such Restricted Definitive Note is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in EXHIBIT B, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable; (F) if such Restricted Definitive Note is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in EXHIBIT B, including the certifications in item (3)(b) thereof; or (G) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in EXHIBIT B, including the certifications in item (3)(c) thereof, the Trustee shall cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the appropriate Restricted Global Note, in the case of clause (B) above, the 144A Global Note, in the case of clause (C) above, the Regulation S Global Note, and in all other cases, the IAI Global Note. (ii) RESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES. A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the 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 Statement in accordance with the Registration Rights Agreement; -43- (C) such transfer is effected by a Participating Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of EXHIBIT C, including the certifications in item (1)(c) thereof; or (2) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of EXHIBIT B, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar or the Company so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar and the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note. (iii) UNRESTRICTED DEFINITIVE NOTES TO BENEFICIAL INTERESTS IN UNRESTRICTED GLOBAL NOTES. A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes. If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of a written authentication order in accordance with Section 2.02, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred. (e) TRANSFER AND EXCHANGE OF DEFINITIVE NOTES FOR DEFINITIVE NOTES. Upon request by a Holder of Definitive Notes and such Holder's compliance with the provisions of this Section 2.06(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such -44- registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by his attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e). (i) RESTRICTED DEFINITIVE NOTES TO RESTRICTED DEFINITIVE NOTES. Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following: (A) if the transfer will be made pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form of EXHIBIT B, 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, 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, including the certifications, certificates and Opinion of Counsel required by item (3) thereof in form reasonably acceptable to the Company and the Registrar, if applicable. (ii) RESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE NOTES. Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the 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 Statement in accordance with the Registration Rights Agreement; (C) any such transfer is effected by a Participating Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: -45- (1) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of EXHIBIT C, including the certifications in item (1)(d) thereof; or (2) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of EXHIBIT B, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar or the Company so requests, an Opinion of Counsel in form reasonably acceptable to the Company and the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. (iii) UNRESTRICTED DEFINITIVE NOTES TO UNRESTRICTED DEFINITIVE NOTES. A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof. (f) EXCHANGE OFFER. Upon the occurrence of the Exchange Offer in accordance with the Registration Rights Agreement, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02, the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Notes tendered for acceptance by Persons that certify in the applicable Letters of Transmittal that (x) they are not broker-dealers, (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 accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Company shall execute and the Trustee shall authenticate and deliver to the Persons designated by the Holders of Definitive Notes so accepted Definitive Notes in the appropriate principal amounts. (g) LEGENDS. The following legends shall appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture. -46- (i) PRIVATE PLACEMENT LEGEND. (A) Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form: "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 UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF: (1) EACH INITIAL PURCHASER AND ITS DIRECT TRANSFEREES 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 INSTITUTIONAL ACCREDITED INVESTOR (AS DEFINED IN RULE 501(a)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT (AN "ACCREDITED INVESTOR")), (2) EACH HOLDER 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 COMPANY 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 RESTRICTIONS 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 -47- WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) EACH HOLDER 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 COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT." (B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraph (b)(iv), (c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend. (ii) GLOBAL NOTE LEGEND. Each Global Note shall bear a legend in substantially the following form: "THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY." -48- (iii) REGULATION S TEMPORARY GLOBAL NOTE LEGEND. The Regulation S Temporary Global Note shall bear a legend in substantially the following form: "THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON." (iv) UNIT LEGEND. Each Note shall bear a legend in substantially the following form: "PRIOR TO THE SEPARABILITY DATE (AS DEFINED) THIS NOTE MAY NOT BE TRANSFERRED OR EXCHANGED WITHOUT THE SIMULTANEOUS TRANSFER OR EXCHANGE OF A WARRANT TO PURCHASE 0.68986 OF A COMMON SHARE (THE "WARRANTS") FOR EACH $1,000 PRINCIPAL AMOUNT OF NOTES BEING TRANSFERRED OR EXCHANGED. THE "SEPARABILITY DATE" SHALL MEAN THE EARLIEST OF (I) DECEMBER 18, 2000; (II) THE OCCURRENCE OF A CHANGE OF CONTROL OR AN EVENT OF DEFAULT; (III) THE DATE ON WHICH A REGISTRATION STATEMENT WITH RESPECT TO THE NOTES OR THE EXCHANGE NOTES IS DECLARED EFFECTIVE; (IV) IMMEDIATELY PRIOR TO THE REDEMPTION OF NOTES BY THE COMPANY WITH THE PROCEEDS OF AN EQUITY OFFERING; (V) THE CONSUMMATION OF AN INITIAL PUBLIC OFFERING OF THE COMPANY; OR (VI) SUCH EARLIER DATE AS MAY BE DETERMINED BY DEUTSCHE BANK SECURITIES INC. IN ITS SOLE DISCRETION." (h) CANCELLATION AND/OR ADJUSTMENT OF GLOBAL NOTES. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount at maturity of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase. -49- (h) GENERAL PROVISIONS RELATING TO TRANSFERS AND EXCHANGES. (i) To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon the Company's order or at the Registrar's request. (ii) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05). (iii) The Registrar shall not be required (A) to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of the mailing of notice of redemption under Section 3.03 and ending at the close of business on such day, or (B) to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part. (iv) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange. (v) The Company shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of the mailing of notice of redemption under Section 3.03 and ending at the close of business on such day, or (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part. (vi) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary. (vii) The Trustee shall authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02. (viii) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile. -50- SECTION 2.07. REPLACEMENT NOTES. If any mutilated Note is surrendered to the Trustee or the Company and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Company shall issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Note if the Trustee's requirements are met. If required by the Trustee or the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Company may charge for its reasonable out-of-pocket expenses in replacing a Note. Every replacement Note is an additional obligation of the Company and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder. SECTION 2.08. OUTSTANDING NOTES. The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section as not outstanding. Except as set forth in Section 2.09, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note. If a Note is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser. If the principal amount of any Note is considered paid under Section 4.01, it ceases to be outstanding and interest on it ceases to accrue. If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest. SECTION 2.09. TREASURY NOTES. In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company, or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that the Trustee knows are so owned shall be so disregarded. -51- SECTION 2.10. TEMPORARY NOTES. Until certificates representing Notes are ready for delivery, the Company may prepare and the Trustee, upon receipt of a written authentication order pursuant to Section 2.02, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of certificated Notes but may have variations that the Company considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Notes in exchange for temporary Notes. Holders of temporary Notes shall be entitled to all of the benefits of this Indenture. SECTION 2.11. CANCELLATION. The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall return canceled Notes to the Company. Certification of the destruction of all canceled Notes shall be delivered to the Company. Subject to Section 2.07, the Company may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation. SECTION 2.12. DEFAULTED INTEREST. If the Company defaults in a payment of interest on the Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01. The Company shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Company shall fix or cause to be fixed each such special record date and payment date, PROVIDED that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) shall mail or cause to be mailed to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid. SECTION 2.13. CUSIP NUMBERS. The Company in issuing the Notes may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use CUSIP numbers in notices of redemption as a convenience to Holders; PROVIDED that any such notice may 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 a redemption 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 in or the omission of such numbers. The Company will promptly notify the Trustee of any change in the CUSIP numbers. -52- ARTICLE 3 REDEMPTION AND PREPAYMENT SECTION 3.01. NOTICES TO TRUSTEE. If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07, it shall furnish to the Trustee, at least 30 days but not more than 60 days before a redemption date an Officers' Certificate setting forth (i) the clause of Section 3.07 pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the redemption price, (iv) the CUSIP numbers of the Notes to be redeemed and (v) that such redemption will comply with the conditions contained in this Article 3. SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED. If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any time, the Trustee shall select the Notes to be redeemed or purchased among the Holders of the Notes in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not so listed, on a PRO RATA basis, by lot or in accordance with any other method the Trustee considers fair and appropriate. Notwithstanding the foregoing, if less than all of the Notes are to be redeemed pursuant to Section 3.07(b) or purchased pursuant to Section 3.09, the Trustee shall select the Notes to be redeemed among the Holders of the Notes PRO RATA basis or on as nearly a PRO RATA basis as is practicable. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption. The Trustee shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount to be redeemed. Notes and portions of Notes selected shall be in amounts of $1,000 or whole multiples of $1,000. The provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. SECTION 3.03. NOTICE OF REDEMPTION. Subject to the provisions of Section 3.09, at least 30 days but not more than 60 days before a redemption date, the Company shall mail or cause to be mailed, by first-class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address. The notice shall identify the Notes to be redeemed, including CUSIP numbers, and shall state: (a) the redemption date; -53- (b) the redemption price and the amount of accrued and unpaid interest, if any, to be paid; (c) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion shall be issued upon cancellation of the original Note; (d) the name and address of the Paying Agent; (e) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price; (f) that, unless the Company defaults in making such 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 upon surrender of the applicable Note to the Paying Agent; (g) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and (h) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes. At the Company's written request, the Trustee shall give the notice of redemption in the Company's name and at its expense; PROVIDED, HOWEVER, that the Company shall have delivered to the Trustee, at least 45 days prior to the redemption date, an Officers' Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph. SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption is mailed in accordance with Section 3.03, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price. A notice of redemption may not be conditional. SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. On or before 10:00 a.m. New York City time on the redemption date, the Company shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption price of and accrued interest on all Notes to be redeemed on that date. The Trustee or the Paying Agent shall promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption price of, and accrued interest on, all Notes to be redeemed. -54- If the Company complies with the provisions of the preceding paragraph, on and after the redemption date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption unless the payment thereof is prohibited by the provisions of Article 10. If a Note is redeemed on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01. SECTION 3.06. NOTES REDEEMED IN PART. Upon surrender of a Note that is redeemed in part, the Company shall issue and, upon the Company's written request, the Trustee shall authenticate for the Holder at the expense of the Company a new Note equal in principal amount to the unredeemed portion of the Note surrendered. SECTION 3.07. OPTIONAL REDEMPTION. (a) Except as provided in paragraph (b) below, the Notes shall not be redeemable at the Company's option prior to June 15, 2007. Thereafter, the Notes shall be subject to redemption at any time at the option of the Company, in whole or in part, upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount thereof) set forth below plus accrued and unpaid interest and Additional Interest thereon, if any, to the applicable redemption date, if redeemed during the twelve-month period commencing on June 15 of the years set forth below:
Percentage of Principal Year Amount ---- ------------ 2007...................................... 102.167% 2008 and thereafter....................... 100.000%
(b) Notwithstanding the foregoing, prior to June 15, 2003, the Company may on any one or more occasions redeem up to 25% of the principal amount of Initial Notes and Additional Notes issued under this Indenture at a redemption price of 113.0% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, thereon to the redemption date, with the net cash proceeds of one or more Equity Offerings; PROVIDED that at least 75% of the aggregate principal amount of Initial Notes and Additional Notes issued under this Indenture remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company and its Subsidiaries); and PROVIDED FURTHER that such redemption shall occur within 90 days after the consummation of any such Equity Offering. -55- (c) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06. SECTION 3.08. MANDATORY REDEMPTION. The Company shall not be required to make mandatory redemption payments with respect to the Notes. SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF NET PROCEEDS OFFER AMOUNT. In the event that the Company shall be required to commence a Net Proceeds Offer pursuant to Section 4.10, it shall follow the procedures specified below. The Net Proceeds Offer shall remain open for a period of 20 Business Days following its commencement or such longer period as may be required by applicable law (the "OFFER PERIOD"). No later than five Business Days after the termination of the Offer Period (the "PURCHASE DATE"), the Company shall purchase the Net Proceeds Offer Amount except as provided in Section 3.02 or, if Notes in an aggregate principal amount less than the Net Proceeds Offer Amount have been tendered, all Notes validly tendered in response to the Net Proceeds Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made. If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest shall be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Net Proceeds Offer. Upon the commencement of a Net Proceeds Offer, the Company shall send, by first-class mail, a notice of such Net Proceeds Offer to the Trustee and each of the Holders, with a copy to the Trustee. The notice shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Net Proceeds Offer. The Net Proceeds Offer shall be made to all Holders. The notice, which shall govern the terms of the Net Proceeds Offer, shall state: (a) that the Net Proceeds Offer is being made pursuant to this Section 3.09 and Section 4.10 and the length of time the Net Proceeds Offer shall remain open; (b) the Net Proceeds Offer Amount, the purchase price and the Purchase Date; (c) that any Note not validly tendered or accepted for payment shall continue to accrue interest; (d) that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Net Proceeds Offer shall cease to accrue interest after the Purchase Date and the only remaining right of the Holder is to receive payment of the purchase price upon surrender of the applicable Note to the Paying Agent; -56- (e) that Holders electing to have a portion of a Note purchased pursuant to a Net Proceeds Offer may only elect to have such Note purchased in integral multiples of $1,000; (f) that Holders electing to have a Note purchased pursuant to any Net Proceeds Offer shall be required to surrender the Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, or transfer by book-entry transfer, to the Company, a depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date; (g) that Holders shall be entitled to withdraw their election if the Company, the depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased; (h) that, if the aggregate principal amount of Notes surrendered by Holders exceeds the Offer Amount, the Company shall select the Notes to be purchased on a PRO RATA basis (based on amounts tendered and with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $1,000, or integral multiples thereof, shall be purchased); and (i) that Holders whose Notes were purchased only in part shall be issued a new Note or Notes in principal amount equal to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer) in the name of the Holder thereof upon cancellation of the original Note. On or before the Purchase Date, the Company shall, to the extent lawful, accept for payment, on a PRO RATA basis to the extent necessary and, except as provided in Section 3.02, the Net Proceeds Offer Amount of Notes or portions thereof validly tendered pursuant to the Net Proceeds Offer, or if less than the Net Proceeds Offer Amount has been validly tendered, all Notes or portions thereof validly tendered, and shall deliver to the Trustee an Officers' Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as the case may be, shall promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company shall promptly issue a new Note, and the Trustee, upon written request from the Company shall authenticate and mail or deliver such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company shall publicly announce the results of the Net Proceeds Offer on the Purchase Date. Other than as specifically provided in this Section 3.09, any purchase pursuant to this Section 3.09 and Section 4.10 shall be made pursuant to the provisions of Sections 3.01 through 3.06. -57- To the extent that the provisions of any securities laws or regulations conflict with this Section 3.09 or Section 4.10, the Company shall comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations under this Section 3.09 or Section 4.10. ARTICLE 4 COVENANTS SECTION 4.01. PAYMENT OF NOTES. The Company shall pay or cause to be paid the principal amount, premium, if any, and interest and Additional Interest, if any, on the Notes on the dates and in the manner provided in the Notes. Principal amount, premium, if any, and interest and Additional Interest, if any, shall be considered paid on the date due if the Paying Agent, if other than the Company or a Subsidiary thereof, holds as of 10:00 a.m. Eastern Time on the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal amount, premium, if any, and interest and Additional Interest, if any, then due unless the provisions of Article 10 hereof prohibit such payment. The Company shall pay all Additional Interest, if any, in the same manner on the dates and in the amounts set forth in the Registration Rights Agreement. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess of the then applicable interest rate on the Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Additional Interest (without regard to any applicable grace period) at the same rate to the extent lawful. SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY. The Company shall maintain in the Borough of Manhattan, The City of New York, an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; PROVIDED, HOWEVER, that no such designation or rescission shall -58- in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, The City of New York for such purposes. The Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. The Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03. SECTION 4.03. REPORTS TO HOLDERS. (a) Whether or not required by the rules and regulations of the SEC, so long as any Notes are outstanding, the Company shall furnish to the Holders of Notes: (1) all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were required to file such forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" that describes the financial condition and results of operations of the Company and its consolidated Subsidiaries (showing in reasonable detail, either on the face of the financial statements or in the footnotes thereto and in "Management's Discussion and Analysis of Financial Condition and Results of Operations," the financial condition and results of operations of the Company and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries of the Company) and, with respect to the annual information only, a report thereon by the Company's certified independent accountants; and (2) all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports, in each case, within the time periods specified in the SEC's rules and regulations. In addition, following the consummation of the Exchange Offer contemplated by the Registration Rights Agreement, whether or not required by the rules and regulations of the SEC, the Company shall file a copy of all such information and reports with the SEC for public availability within the time periods specified in the SEC's rules and regulations (unless the SEC will not accept such a filing) and make such information available to securities analysts and prospective investors upon request. The Company shall at all times comply with TIA Section 314(a). In addition, for so long as any Notes remain outstanding, the Company 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. SECTION 4.04. COMPLIANCE CERTIFICATE. (a) The Company and each Guarantor (to the extent that such Guarantor is so required under the TIA) shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers' Certificate stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to -59- determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event and what action the Company is taking or proposes to take with respect thereto. For purposes of this paragraph, such compliance shall be determined without regard to any period of grace or requirement of notice provided under this Indenture. (b) So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, the year-end financial statements delivered pursuant to Section 4.03(a) above shall be accompanied by a written statement of the Company's independent public accountants (who shall be a firm of established national reputation) that in making the examination necessary for certification of such financial statements, nothing has come to their attention that would lead them to believe that the Company has violated any provisions of Article 4 or Article 5 or, if any such violation has occurred, specifying the nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation. (c) The Company shall, so long as any of the Notes are outstanding, deliver to the Trustee, forthwith upon any Officer becoming 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 4.05. PAYMENT OF TAXES. The Company shall pay, and shall cause each of its Subsidiaries to pay, prior to delinquency, all material taxes, assessments and governmental levies except such as are contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes. SECTION 4.06. STAY, EXTENSION AND USURY LAWS. The Company and each of the Guarantors covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company and each of the Guarantors (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, hinder, de- -60- lay 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 has been enacted. SECTION 4.07. LIMITATION ON RESTRICTED PAYMENTS. 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 direct or indirect parent 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 (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; (ii) the Company is not able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.09; or (iii) the aggregate amount of Restricted Payments (including such proposed Restricted Payment) made subsequent to the Issue Date (other than Restricted Payments made pursuant to clauses (2)(i), (3), (4), (5), (6), (7) and (8) of the following paragraph) (the amount expanded 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, without duplication, 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 Company earned subsequent to the beginning of the first fiscal quarter commencing after 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 -61- (x) 100% of the aggregate net proceeds (including the fair market value of property other than cash that would constitute Marketable Securities or a Permitted Business) 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 an Equity Offering to the extent used to redeem the Notes in compliance with the provisions set forth under Section 3.07(b)); PLUS (z) 100% of the aggregate net proceeds (including the fair market value of property other than cash that would constitute Marketable Securities or a Permitted Business) of any (A) sale or other disposition of any Investment (other than a Permitted Investment) made by the Company and its Restricted Subsidiaries or (B) dividend from, or the sale of the stock of, an Unrestricted Subsidiary. Notwithstanding the foregoing, the provisions set forth in the immediately preceding paragraph shall not prohibit: (1) the payment of any dividend or the consummation of any irrevocable redemption within 60 days after the date of declaration of such dividend or notice of such redemption if the dividend or payment of the redemption price, as the case may be, would have been permitted on the date of declaration or notice; (2) if no Default or Event of Default shall have occurred and be continuing or shall occur as a consequence thereof, the acquisition of any shares of Capital Stock of the Company (the "RETIRED CAPITAL STOCK") either (i) solely in exchange for shares of Qualified Capital Stock of the Company (the "REFUNDING CAPITAL STOCK") or (ii) through the application 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 and, in the case of subclause (i) of this clause (2), if immediately prior to the retirement of the Retired Capital Stock the declaration and payment of dividends thereon was permitted under clause (4) of this paragraph, the declaration and payment of dividends on the Refunding Capital Stock in an aggregate amount per year no greater than the aggregate amount of dividends per annum that was declarable and payable on such Retired Capital Stock immediately prior to such retirement; PROVIDED that at the time of the declaration of any such dividends on the Refunding Capital Stock, no Default or Event of Default shall have occurred and be continuing or shall occur as a consequence thereof; (3) if no Default or Event of Default shall have occurred and be continuing or shall occur as a consequence thereof, the acquisition of any Indebtedness of the Company that -62- is subordinate or junior in right of payment to the Notes 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 or shall occur as a consequence thereof, the declaration and payment of dividends to holders of any class or series of Designated Preferred Stock (other than Disqualified Capital Stock) issued after the Issue Date (including, without limitation, the declaration and payment of dividends on Refunding Capital Stock in excess of the dividends declarable and payable thereon pursuant to clause (2) of this paragraph); PROVIDED that, at the time of such issuance, the Company, after giving effect to such issuance on a pro forma basis, would have been able to incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) in compliance with Section 4.09 hereof; (5) if no Default or Event of Default shall have occurred and be continuing or shall occur as a consequence thereof, the redemption or repurchase of the Company's common equity or options in respect thereof, in each case in connection with the repurchase provisions of employee stock option or stock purchase agreements or other agreements to compensate management employees; PROVIDED that all such redemptions or repurchases pursuant to this clause (5) shall not exceed $2.5 million (with unused amounts in any fiscal year being carried over to succeeding fiscal years subject to a maximum of $5.0 million in any fiscal year) in any fiscal year (which amount shall be increased by the amount of any net cash proceeds received from the sale since the Issue Date of Capital Stock (other than Disqualified Capital Stock) to members of the Company's management team that have not otherwise been applied to the payment of Restricted Payments pursuant to the terms of clause (iii) of the immediately preceding paragraph and by the cash proceeds of any "key-man" life insurance policies that are used to make such redemptions or repurchases); PROVIDED, FURTHER, that the cancellation of Indebtedness owing to the Company from members of management of the Company or any of its Restricted Subsidiaries in connection with any repurchase of Capital Stock of the Company (or warrants or options or rights to acquire such Capital Stock) will not be deemed to constitute a Restricted Payment under this Indenture; (6) repurchases of Capital Stock deemed to occur upon the exercise of stock options if such Capital Stock represents a portion of the exercise price thereof; (7) if no Default or Event of Default shall have occurred and be continuing or shall occur as a consequence thereof, other Restricted Payments in an aggregate amount not to exceed $5.0 million; and (8) payments to holders of Trust Preferred Securities and/or Convertible Subordinated Debentures who elected to convert their Trust Preferred Securities and/or Convertible Subordinated Debentures into the right to receive cash in accordance with the Trust Preferred -63- Documents and the documents governing the Recapitalization and other payments in connection with the Recapitalization and the documents governing the Recapitalization. In determining the aggregate amount of Restricted Payments made subsequent to the Issue Date in accordance with clause (iii) of the immediately preceding paragraph, (a) amounts expended pursuant to clauses (1) and (2)(ii) shall be included in such calculation, and (b) amounts expended pursuant to clauses (2)(i), (3), (4), (5), (6), (7) and (8) shall be excluded from such calculation. SECTION 4.08. 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 or become effective any consensual encumbrance or consensual 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 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, except for such encumbrances or restrictions existing under or by reason of: (A) applicable law; (B) the Notes or this Indenture; (C) non-assignment provisions of any contract or any lease of any Restricted Subsidiary of the Company entered into in the ordinary course of business; (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) the New Credit Facility; (F) agreements existing on the Issue Date to the extent and in the manner such agreements are 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; -64- (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) any agreement or instrument governing Capital Stock of any Person that is acquired; (J) 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; (K) other Indebtedness or Permitted Subsidiary Preferred Stock outstanding on the Issue Date or permitted to be issued or incurred under this Indenture; PROVIDED that any such restrictions are ordinary and customary with respect to the type of Indebtedness being incurred or Preferred Stock being issued (under the relevant circumstances); (L) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business; and (M) any encumbrances or restrictions imposed by any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (A) through (L) above; PROVIDED that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are, in the good faith judgment of the Company's Board of Directors (evidenced by a Board Resolution) whose judgment shall be conclusively binding, not materially more restrictive with respect to such dividend and other payment restrictions than those contained in the dividend or other payment restrictions prior to such amendment, modification, restatement, renewal, increase, supplement, refunding, replacement or refinancing. SECTION 4.09. 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, issue, 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 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 Restricted Subsidiaries of the Company that are not Guarantors 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 would have been greater than 2.0 to 1.0 if such Indebtedness is incurred on or prior to June 15, 2002, or 2.25 to 1.0 if such Indebtedness is incurred thereafter. -65- SECTION 4.10. LIMITATION ON ASSET SALES. 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); (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 the amount of: (A) liabilities (as shown on the Company's or such Restricted Subsidiary's most recent balance sheet) of the Company or any such Restricted Subsidiary (other than liabilities that are by their terms subordinated to the Notes) that are assumed by the transferee of any such assets; (B) any 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 within 90 days of the receipt thereof (to the extent of the cash received); and (C) any Designated Noncash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate fair market value, when taken together with all other Designated Noncash Consideration received pursuant to this clause (C) that is at that time outstanding, not to exceed 5% of Total Assets at the time of the receipt of such Designated Noncash Consideration (with the fair market value of each item of Designated Noncash Consideration being measured at the time received and without giving effect to subsequent changes in value), shall be deemed to be cash for the purposes of this provision or for purposes of the second paragraph of this Section 4.10; 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: (A) to prepay any Senior Debt or Indebtedness of a Restricted Subsidiary that is not a Guarantor and, in the case of any such Indebtedness under any revolving credit facility, effect a corresponding reduction in the availability under such revolving credit facility (or effect a permanent reduction in the availability under such -66- revolving credit facility regardless of the fact that no prepayment is required in order to do so (in which case no prepayment shall be required)), (B) to reinvest in Productive Assets, or (C) a combination of prepayment and investment permitted by the foregoing clauses (A) and (B). Pending the final application of any such Net Cash Proceeds, the Company or such Restricted Subsidiary may temporarily reduce Indebtedness under a revolving credit facility, if any, or otherwise invest such Net Cash Proceeds in Cash Equivalents. 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)(A), (3)(B) or (3)(C) of the preceding paragraph (each, a "NET PROCEEDS OFFER TRIGGER DATE"), such aggregate amount of Net Cash Proceeds which have not been so applied on or before such Net Proceeds Offer Trigger Date (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 DATE") not less than 30 nor more than 60 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 (including any Designated Noncash 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. Notwithstanding the foregoing, if a Net Proceeds Offer Amount is less than $10.0 million, the application of the Net Cash Proceeds constituting such Net Proceeds Offer Amount to a Net Proceeds Offer may be deferred until such time as such Net Proceeds Offer Amount plus the aggregate amount of all Net Proceeds Offer Amounts arising subsequent to the Net Proceeds Offer Trigger Date relating to such initial Net Proceeds Offer Amount from all Asset Sales by the Company and its Restricted Subsidiaries aggregate at least $10.0 million, at which time the Company or such Restricted Subsidiary shall apply all Net Cash Proceeds constituting all Net Proceeds Offer Amounts that have been so deferred to make a Net Proceeds Offer (the first date the aggregate of all such deferred Net Proceeds Offer Amounts is equal to $10.0 million or more shall be deemed to be a Net Proceeds Offer Trigger Date). Notwithstanding the immediately preceding paragraph, the Company and its Restricted Subsidiaries will be permitted to consummate an Asset Sale without complying with such paragraph to the extent that: (1) at least 75% of the consideration for such Asset Sale constitutes Productive Assets, cash and/or Cash Equivalents; and -67- (2) such Asset Sale is for fair market value; PROVIDED that any consideration consisting of cash and/or Cash Equivalents received by the Company or any of its Restricted Subsidiaries in connection with any Asset Sale permitted to be consummated under this paragraph shall constitute Net Cash Proceeds subject to the provisions of the preceding paragraph. Each Net Proceeds Offer will be mailed to the record Holders as shown on the register of Holders within 30 days following the Net Proceeds Offer Trigger Date, with a copy to the Trustee, and shall comply with the procedures set forth in Section 3.09. To the extent that the aggregate amount of Notes tendered pursuant to a Net Proceeds Offer is less than the Net Proceeds Offer Amount, the Company may use any remaining Net Proceeds Offer Amount for general corporate purposes or for any other purpose not prohibited by this Indenture. Upon completion of any such Net Proceeds Offer, the Net Proceeds Offer Amount shall be reset at zero. The Company will 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 the provisions of this Section 4.10, 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. 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 occur 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 (an "AFFILIATE TRANSACTION"), other than Affiliate Transactions on terms that are not materially 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; PROVIDED, HOWEVER, that for an Affiliate Transaction with an aggregate value of $2.5 million or more, at the Company's option, either: (1) a majority of the disinterested members of the Board of Directors of the Company shall determine in good faith that such Affiliate Transaction is on terms that are not materially 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 (2) the Board of Directors of the Company or any such Restricted Subsidiary party to such Affiliate Transaction shall obtain an opinion from a nationally recognized investment banking, appraisal or accounting firm that such Affiliate Transaction is on terms that are not materially 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; -68- and PROVIDED, FURTHER, that for an Affiliate Transaction with an aggregate value of $10.0 million or more the Board of Directors of the Company or any such Restricted Subsidiary party to such Affiliate Transaction shall obtain an opinion from a nationally recognized investment banking, appraisal or accounting firm that such Affiliate Transaction is on terms not materially 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. (b) The restrictions set forth in Section 4.11(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 effected as part of a Qualified Securitization Transaction; (6) the payment of customary annual management, consulting and advisory fees and related expenses to the Permitted Holders and their Affiliates made pursuant to any financial advisory, financing, underwriting or placement agreement or in respect of other investment banking activities, including, without limitation, in connection with acquisitions or divestitures which are approved by the Board of Directors of the Company or such Restricted Subsidiary in good faith; (7) payments or loans to employees or consultants that are approved by the Board of Directors of the Company in good faith; (8) sales of Qualified Capital Stock; and (9) the existence of, or the performance by the Company or any of its Restricted Subsidiaries of its obligations under the terms of, any stockholders agreement (including any registration rights agreement or purchase agreement related thereto) to which it is a party as of the Issue Date and any similar agreements which it may enter into thereafter; PROVIDED, HOWEVER, that the existence of, or the performance by the Company or any of its Restricted Sub- -69- sidiaries of obligations under, any future amendment to any such existing agreement or under any similar agreement entered into after the Issue Date shall only be permitted by this clause (9) to the extent that the terms of any such amendment or new agreement are not disadvantageous to the Holders of the Notes in any material respect. SECTION 4.12. 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 or any proceeds therefrom of the Company or any of its Restricted Subsidiaries whether owned on the Issue Date or acquired after the Issue Date, in each case to secure Indebtedness or trade payables, unless: (1) in the case of Liens securing Indebtedness that is expressly subordinate or junior in right of payment to the Notes, the Notes 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 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; (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; (e) Liens securing Refinancing Indebtedness which is incurred to Refinance any Indebtedness that was secured by a Lien permitted under this Indenture and that has been incurred in accordance with the provisions of this Indenture; PROVIDED, HOWEVER, that such Liens 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 4.13. CONDUCT OF BUSINESS. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, engage in any businesses a majority of whose revenues are not derived from businesses that are the same as or reasonably similar, ancillary or related to, or a reasonable extension, development or expansion of, the businesses in which the Company and its Restricted Subsidiaries are engaged on the Issue Date. -70- SECTION 4.14. CORPORATE EXISTENCE. Subject to Article 5, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect (i) its corporate existence, and the corporate, partnership or other existence of each of its Restricted Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company or any such Restricted Subsidiary and (ii) the rights (charter and statutory), licenses and franchises of the Company and its Restricted Subsidiaries; PROVIDED, HOWEVER, that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Restricted Subsidiaries, if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Restricted Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the Holders of the Notes. SECTION 4.15. OFFER TO REPURCHASE UPON CHANGE OF CONTROL. (a) If a Change of Control occurs, 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 interest 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, which notice shall govern the terms of the Change of Control Offer. Such notice shall state, among other things, the purchase date, which must be no earlier than 30 days nor later than 60 days from the date such notice is mailed, other than as may be required by law (the "CHANGE OF CONTROL PAYMENT DATE"). (b) On the Change of Control Payment Date, the Company shall, to the extent lawful, (1) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered and (3) deliver or cause to be delivered to the applicable Trustee the Notes so accepted together with an Officers' Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company. The Paying Agent shall promptly mail to each Holder of Notes so tendered the Change of Control Payment for such Notes, and the Trustee shall promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; PROVIDED that each such new Note will be in a principal amount of $1,000 or an integral multiple thereof. The Company shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. Prior to the mailing of the notice referred to in Section 4.15(a) above, but in any event within 30 days following any Change of Control, the Company covenants to: (i) repay in full all Indebtedness under the New Credit Facility and all other Senior Debt the terms of which require repayment upon a Change of Control; or (ii) obtain the requisite consents under the New Credit Facility and all other such Senior Debt to permit the repurchase of the Notes as provided below. The Company's -71- failure to comply with the covenant described in the immediately preceding sentence shall constitute an Event of Default described in clause (c) and not in clause (b) under Section 6.01. (c) The Company will comply with the requirements of Rule 14e-1 under the Exchange Act 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 Company complies with the provisions of any such securities laws or regulations, the Company shall not be deemed to have breached its obligations under this Section 4.15. (d) Notwithstanding anything to the contrary in this Section 4.15, the Company shall not be required to make a Change of Control Offer upon a Change of Control, if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.15 and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. SECTION 4.16. NO 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 4.17. FUTURE GUARANTEES BY RESTRICTED SUBSIDIARIES. The Company shall not create or acquire another Domestic Restricted Subsidiary unless such Domestic Restricted Subsidiary executes and delivers a supplemental indenture to this Indenture, in form and substance reasonably satisfactory to the Trustee, providing for a Guarantee of payment of the Notes by such Domestic Restricted Subsidiary. SECTION 4.18. LIMITATION ON PREFERRED STOCK OF RESTRICTED SUBSIDIARIES. The Company will not permit any of its Restricted Subsidiaries that are not Guarantors to issue any Preferred Stock (other than to the Company or to a Restricted Subsidiary of the Company) or permit any Person (other than the Company or a Restricted Subsidiary of the Company) to own any Preferred Stock of any Restricted Subsidiary of the Company that is not a Guarantor, other than Permitted Subsidiary Preferred Stock. The provisions of this Section 4.18 will not apply to any of the Guarantors. SECTION 4.19. LIMITATION ON PERMITTED ACQUISITIONS. For the period from the Issue Date until the first anniversary of the Issue Date, the Company will, and will cause its Restricted Subsidiaries to, comply with Section 8.14(a)(viii)(I) of the New Credit Facility as in effect on the Issue Date (giving effect to all exceptions to such provision set forth in the New Credit Facility). This covenant shall be of no further force or effect after the first anniversary of the Issue Date. -72- ARTICLE 5 SUCCESSORS SECTION 5.01. MERGER, CONSOLIDATION AND SALE OF ASSETS. 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 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 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) except in the case of a merger of the Company with or into a Wholly Owned Restricted Subsidiary of the Company and except in the case of a merger entered into solely for the purpose of reincorporating the Company in another jurisdiction, immediately after giving effect to such transaction and the assumption contemplated by clause (1)(b)(y) above (including giving effect to any Indebtedness and Acquired Indebtedness incurred in connection with or in respect of such transaction), the Company or such Surviving Entity, as the case may be, shall be able to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.09; -73- (3) except in the case of a merger of the Company with or into a Wholly Owned Restricted Subsidiary of the Company and except in the case of a merger entered into solely for the purpose of reincorporating the Company in another jurisdiction, immediately after giving effect to such transaction and the assumption contemplated by clause (1)(b)(y) above (including, without limitation, giving effect to any Indebtedness and Acquired Indebtedness 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. However, transfer of assets between or among the Company and its Restricted Subsidiaries will not be subject to the foregoing covenant. SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED. 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, 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 and that, in the event of a conveyance, lease or transfer, the conveyor, lessor or transferor will be released from the provisions of this Indenture. ARTICLE 6 DEFAULTS AND REMEDIES SECTION 6.01. EVENTS OF DEFAULT. "Events of Default" are: -74- (a) 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 10); (b) 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 10); (c) a default in the observance or performance of any other covenant or agreement contained herein if the default continues for a period of 30 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); (d) 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 (other than a Securitization Entity) which failure continues for at least 20 days, or the acceleration of the final stated maturity of any such Indebtedness, which acceleration remains uncured and unrescinded for at least 20 days, 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 maturity or which has been accelerated (in each case with respect to which the 20-day period described above has passed), aggregates $7.5 million or more at any time; (e) one or more judgments in an aggregate amount in excess of $7.5 million shall have been rendered against the Company or any of its Significant Subsidiaries and such judgments remain undischarged, unpaid or unstayed for a period of 60 days after such judgment or judgments become final and non-appealable; (f) the Company or any of its Significant Subsidiaries pursuant to or within the meaning of 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 property; or (iv) makes a general assignment for the benefit of its creditors; -75- (g) 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; (ii) appoints a custodian of the Company or any of its Significant Subsidiaries or for all or substantially all of the property of the Company or any of its Significant Subsidiaries; or (iii) orders the liquidation of the Company or any of its Significant Subsidiaries; and the order or decree remains unstayed and in effect for 60 consecutive days; or (h) 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 by reason of release of a Guarantor in accordance with the terms of this Indenture). SECTION 6.02. ACCELERATION. If an Event of Default (other than an Event of Default specified in clause (f) or (g) of Section 6.01 with respect to the Company) occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare the principal of and accrued interest on all the Notes to be due and payable immediately by notice in writing to the Company and the Trustee specifying the applicable Event of Default and that it is a "notice of acceleration" (the "ACCELERATION NOTICE"), and the same (i) shall become immediately due and payable or (ii) if there are any amounts outstanding under the New Credit Facility, shall become immediately due and payable upon the first to occur of an acceleration under the New Credit Facility or five Business Days after receipt by the Company and the Representative under the New Credit Facility of such Acceleration Notice but only if such Event of Default is then continuing. If an Event of Default specified in clause (f) or (g) of Section 6.01 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 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. At any time after a declaration of acceleration with respect to the Notes as described in the preceding paragraph, the Holders of a majority in principal amount of the Notes may rescind and cancel such declaration and its consequences: (i) if the rescission would not conflict with any judgment or decree; (ii) 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; (iii) 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; (iv) if -76- the Company has paid the Trustee its reasonable compensation and reimbursed the Trustee for its expenses, disbursements and advances; and (v) in the event of the cure or waiver of an Event of Default of the type described in clause (f) or (g) of Section 6.01, 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. SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium, if any, and interest and Additional Interest, if any, on the Notes or to enforce the performance of any provision of the Notes or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law. SECTION 6.04. WAIVER OF PAST DEFAULTS. Holders of not less than a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may, on behalf of the Holders of all of the Notes, waive an existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of, premium and Additional Interest, if any, or interest on, the Notes (including in connection with an offer to purchase) (PROVIDED, HOWEVER, that the Holders of a majority in aggregate principal amount at maturity of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration). Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. SECTION 6.05. CONTROL BY MAJORITY. Holders of a majority in principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture that the Trustee determines may be unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal liability. In the event the Trustee takes any action or follows any direction pursuant to this Indenture, the Trustee shall be entitled to indemnification from the Company satisfactory to it in its sole discretion against any fees, loss, liability, cost or expense caused by taking such action or following such direction. -77- SECTION 6.06. LIMITATION ON SUITS. A Holder of a Note may pursue a remedy with respect to this Indenture or the Notes only if: (a) the Holder of a Note gives to the Trustee written notice of a continuing Event of Default; (b) the Holders of at least 25% in principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy; (c) such Holder of a Note or Holders of Notes offer and, if requested, provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; (d) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity; and (e) during such 60-day period the Holders of a majority in principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with the request. A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note. SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT. Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium and Additional Interest, if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal amount of, premium and Additional Interest, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any amounts due the Trustee under Section 7.07. SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for -78- the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Company (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. SECTION 6.10. PRIORITIES. If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: FIRST: to the Trustee, its agents and attorneys for amounts due under Section 7.07, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection; SECOND: to Holders of Notes for amounts due and unpaid on the Notes for principal amount, premium and Additional Interest, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal amount, premium and Additional Interest, if any and interest, respectively; and THIRD: to the Company or to such party as a court of competent jurisdiction shall direct. The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10; PROVIDED, HOWEVER, that the failure to give any such notice shall not affect the establishment of such record date or payment date or any payments 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 a Trustee, a court in its discretion may -79- require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07, or a suit by Holders of more than 10% in principal amount of the then 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 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 Trustee and the Holders shall continue as though no such proceeding had been instituted. ARTICLE 7 TRUSTEE SECTION 7.01. DUTIES OF TRUSTEE. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. (b) Except during the continuance of an Event of Default: (i) the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: -80- (i) this paragraph does not limit the effect of paragraph (b) of this Section; (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof. (d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), (c), (e) and (f) of this Section. (e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to exercise any of its rights and powers under this Indenture or to take any action at the request of any Holders, unless such Holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. SECTION 7.02. RIGHTS OF TRUSTEE. (a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or opinion of such counsel. The Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture. (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company. -81- (f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction. SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company or any Affiliate of the Company with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest (as defined in the TIA) it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11. SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Company's use of the proceeds from the Notes or any money paid to the Company or upon the Company's direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication. SECTION 7.05. NOTICE OF DEFAULTS. (a) The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a Default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture. (b) If a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the Default or Event of Default within 30 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, premium, if any, or interest on any Note, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes. SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES. Within 60 days after each June 15 beginning with June 15, 2000, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA Section 313(a) (but if no event described in TIA Section 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The -82- Trustee also shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA Section 313(c). A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Company and filed with the SEC and each stock exchange on which the Notes are listed in accordance with TIA Section 313(d). The Company shall promptly notify the Trustee when the Notes are listed on any stock exchange. SECTION 7.07. COMPENSATION AND INDEMNITY. The Company and the Guarantors shall pay to the Trustee from time to time such compensation for its acceptance of this Indenture and services hereunder as the parties shall agree from time to time. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company and the Guarantors shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee's agents and counsel. The Company and the Guarantors shall indemnify the Trustee, its directors, officers and employees, and each predecessor Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of this trust and its duties under this Indenture, including the costs and expenses (including reasonable attorney's fees) of enforcing this Indenture against the Company and the Guarantors (including this Section 7.07) and defending itself against any claim (whether asserted by the Company and the Guarantors or any Holder or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its negligence or bad faith. The Trustee shall notify the Company and the Guarantors promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company and the Guarantors need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. The obligations of the Company and the Guarantors under this Section 7.07 shall survive the resignation and removal of the Trustee and the satisfaction and discharge of this Indenture. To secure the Company's and the Guarantors' payment obligations in this Section, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(f) or (g) occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law. -83- The Trustee shall comply with the provisions of TIA Section 313(b)(2) to the extent applicable. SECTION 7.08. REPLACEMENT OF TRUSTEE. A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section 7.08. The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of Notes of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if: (a) the Trustee fails to comply with Section 7.10; (b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; (c) a custodian or public officer takes charge of the Trustee or its property; or (d) the Trustee becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company, or the Holders of Notes of at least 10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee, after written request by any Holder of a Note who has been a Holder of a Note for at least six months, fails to comply with Section 7.10, such Holder of a Note may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders of the Notes. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, PROVIDED all sums owing to the Trustee hereunder have been paid and subject to the Lien pro- -84- vided for in Section 7.07. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company's obligations 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, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee. In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Trustee shall have. SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $50.0 million as set forth in its most recent published annual report of condition. This Indenture shall always have a Trustee who satisfies the requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section 310(b). If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 7.10, the Trustee shall resign immediately in the manner and with the effect specified in this Article 7 SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The Trustee is subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein. -85- ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE SECTION 8.01. OPTION TO EFFECT LEGAL DEFEASANCE OR COVENANT DEFEASANCE. The Company may, at the option of its Board of Directors evidenced by a resolution set forth in an Officers' Certificate, at any time, elect to have either Section 8.02 or 8.03 applied to all outstanding Notes upon compliance with the conditions set forth below in this Article 8. SECTION 8.02. LEGAL DEFEASANCE AND DISCHARGE. Upon the Company's exercise under Section 8.01 of the option applicable to this Section 8.02, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.04, be deemed to have been discharged from its obligations with respect to all outstanding Notes on the date the conditions set forth below are satisfied (hereinafter, "LEGAL DEFEASANCE"). For this purpose, Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, which shall thereafter be deemed to be "outstanding" only for the purposes of Section 8.05 and the other Sections of this Indenture referred to in clauses (a) through (d) below, and to have satisfied all its other obligations under such Notes and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following 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 Section 8.04(a), and as more fully set forth in such Section, payments in respect of the principal amount 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 2 and Section 4.02, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company's obligations in connection therewith, and (d) this Article 8. Subject to compliance with this Article 8, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03. SECTION 8.03. COVENANT DEFEASANCE. Upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company shall, subject to the satisfaction of the conditions set forth in Section -86- 8.04, be released from its obligations under the covenants contained in Sections 4.03, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17 and 4.18 with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 are satisfied (hereinafter, "COVENANT DEFEASANCE"), and the Notes shall thereafter be deemed not "outstanding" for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "outstanding" for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Company's exercise under Section 8.01 of the option applicable to this Section 8.03 and subject to the satisfaction of the conditions set forth in Section 8.04, the failure to comply with the terms of Sections 6.01(d) and 6.01(e) shall not constitute Events of Default. SECTION 8.04. CONDITIONS TO LEGAL OR COVENANT DEFEASANCE. The following shall be the conditions to the application of either Section 8.02 or 8.03 to the outstanding Notes: (a) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in United States dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal amount of, premium and Additional Interest, if any, and interest on the outstanding Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be, in each case in accordance with the terms of this Indenture and the Notes; (b) in the case of an election under Section 8.02, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to 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) in the case of an election under Section 8.03, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the -87- Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; (d) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the incurrence of Indebtedness all or a portion of the proceeds of which will be used to defease the Notes pursuant to this Article 8 concurrently with such incurrence and the grant of a Lien to secure such Indebtedness); (e) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under this Indenture (other than a Default or an 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 to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound; (f) the Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company; (g) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with; and (h) the Company shall have paid or duly provided for payment of all amounts then due to the Trustee pursuant to Section 7.07. Notwithstanding the foregoing, the Opinion of Counsel required by clause (b) above with respect to a Legal Defeasance need not be delivered if all Notes not therefor delivered to the Trustee for cancellation (A) have become due and payable, or (B) will become due and payable on the maturity date within one year under arrangements satisfactory to the Trustee for giving of notice of redemption by the Trustee in the name, and at the expense, of the Company. SECTION 8.05. DEPOSITED MONEY AND GOVERNMENT SECURITIES TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS. Subject to Section 8.06, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee pursuant to Section 8.04 in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all -88- sums due and to become due thereon in respect of principal amount, premium, if any, and interest, but such money need not be segregated from other funds except to the extent required by law. The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 8.04 or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes. Anything in this Article 8 to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the request of the Company any money or non-callable Government Securities held by it as provided in Section 8.04 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a)), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance. SECTION 8.06. SATISFACTION AND DISCHARGE. This Indenture will be discharged and will cease to be of further effect (except as to surviving rights of registration of transfer or exchange of the Notes, as expressly provided for in this Indenture) as to all outstanding Notes when (1) either: (a)all the Notes theretofore authenticated and delivered (except lost, stolen or destroyed Notes which have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust 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, pursuant to an optional redemption notice or otherwise, 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. -89- SECTION 8.07. REPAYMENT TO COMPANY. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal, premium, if any, or interest on any Note and remaining unclaimed for two years after such principal and premium, if any, or interest has become due and payable shall be paid to the Company on its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as a general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company. SECTION 8.08. REINSTATEMENT. If the Trustee or Paying Agent is unable to apply any United States dollars or non-callable Government Securities in accordance with Section 8.02 or 8.03, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03, as the case may be; PROVIDED, HOWEVER, that, if the Company makes any payment of principal of, premium, if any, or interest on any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent. SECTION 8.09. SURVIVAL. The Trustee's rights under this Article 8 shall survive termination of this Indenture. ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES. Notwithstanding Section 9.02, the Company, the Guarantors and the Trustee may amend or supplement this Indenture, the Guarantees or the Notes without the consent of any Holder of a Note: (a) to cure any ambiguity, defect or inconsistency; -90- (b) to provide for uncertificated Notes in addition to or in place of certificated Notes or to alter the provisions of Article 2 (including the related definitions) in a manner that does not materially adversely affect any Holder; (c) to provide for the assumption of the Company's or a Guarantor's obligations to the Holders of the Notes by a successor to the Company or a Guarantor pursuant to Article 5 or Article 11; (d) to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights hereunder of any Holder of the Note; (e) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA; (f) to provide for the issuance of Notes issued after the Issue Date in accordance with the limitations set forth in this Indenture; (g) to allow any Guarantor to execute a supplemental indenture and/or a Guarantee with respect to the Notes; or (h) to evidence and provide for the acceptance of appointment under this Indenture of a successor Trustee. Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental Indenture, and upon receipt by the Trustee of the documents described in Section 7.02, the Trustee shall join with the Company and the Guarantors in the execution of any amended or supplemental Indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental Indenture that affects its own rights, duties or immunities under this Indenture or otherwise. SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES. Except as provided in this Section 9.02, this Indenture (including Sections 3.09, 4.10 and 4.15), the Guarantees and the Notes may be amended or supplemented with 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), and, subject to Sections 6.04 and 6.07, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium, if any, or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture, the Guarantees or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes voting as a single class (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, -91- the Notes). Section 2.08 shall determine which Notes are considered to be "outstanding" for purposes of this Section 9.02. Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental Indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Sections 7.02 and 9.06, the Trustee shall join with the Company in the execution of such amended or supplemental Indenture unless such amended or supplemental Indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental Indenture. It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. After an amendment, supplement or waiver under this Section becomes effective, the Company shall mail to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07, the Holders of a majority in aggregate principal amount of the Notes then outstanding voting as a single class may waive compliance in a particular instance by the Company with any provision of this Indenture or the Notes. However, without the consent of each Holder affected, an amendment or waiver under this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder): (a) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver; (b) reduce the rate of or change or have the effect of changing the time for payment of interest, including defaulted interest, on any Note; (c) reduce the principal of or change or have the effect of changing the fixed maturity of any Note or alter or waive any of the provisions with respect to the redemption of the Notes, other than provisions relating to Section 3.09, 4.10 or 4.15; (d) waive a Default or Event of Default in the payment of principal of or premium, if any, or interest on the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the then outstanding Notes, and a waiver of the payment default that resulted from such acceleration); (e) make any Note payable in money other than that stated in the Notes; -92- (f) make any change in the provisions of this Indenture relating to the right of each Holder of Notes to receive payments of principal of and interest on such Note on or after the due date thereof or to bring suit to enforce such payment; (g) 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 modify any of the provisions or definitions with respect thereto after a Change of Control has occurred; (h) modify or change any provision of this Indenture or the related definitions affecting the subordination or ranking of the Notes or any Guarantee in a manner which adversely affects the Holders; (i) 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; or (j) make any change in the foregoing amendment and waiver provisions (except to increase any percentage set forth therein). SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment or supplement to this Indenture or the Notes shall be set forth in a amended or supplemental Indenture that complies with the TIA as then in effect. SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS. Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder's Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder. SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES. The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver. Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver. -93- SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC. The Trustee shall sign any amended or supplemental Indenture authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Company may not sign an amendment or supplemental Indenture until the Board of Directors approves it. In executing any amended or supplemental indenture, the Trustee shall be entitled to receive and (subject to Section 7.01) shall be fully protected in relying upon, in addition to the documents required by Section 12.04, an Officers' Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture. ARTICLE 10 SUBORDINATION SECTION 10.01. AGREEMENT TO SUBORDINATE. The Company covenants and agrees, and each Holder of the Notes, by its acceptance thereof, likewise covenants and agrees, (i) that all Notes shall be issued subject to the provisions of this Article 10, and each Person holding any Note, whether upon original issue or upon transfer, assignment or exchange thereof, accepts and agrees that the payment of all Obligations on the Notes by the Company shall, to the extent and in the manner herein set forth, be subordinated and junior in right of payment to the prior payment in full in cash or Cash Equivalents of all Obligations on Senior Debt, including, without limitation, the Company's obligations under the New Credit Facility and (ii) that the subordination is for the benefit of, and shall be enforceable directly by, the holders of Senior Debt, and that each holder of Senior Debt whether now outstanding or hereafter created, incurred, assumed or guaranteed shall be deemed to have acquired Senior Debt in reliance upon the covenants and provisions contained in this Indenture and the Notes. SECTION 10.02. LIQUIDATION; DISSOLUTION; BANKRUPTCY. (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 Company or its property, whether voluntary or involuntary, all Obligations due or to become due upon all Senior Debt shall first be paid in full in cash or Cash Equivalents, or such payment duly provided for to the satisfaction of the holders of Senior Debt, before any payment or distribution of any kind or character is made on account of any Obligations on 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 of the Notes or the Trustee under this Indenture would be entitled, except for the provisions hereof, shall be -94- 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 under this Indenture if received by them, 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 has not 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 Section 10.02(a), 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 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. (d) The consolidation of the Company with, or the merger of the Company with or into, another corporation or the liquidation or dissolution of the Company following the conveyance or transfer of all or substantially all of its assets, to another corporation upon the terms and conditions provided in Article Five hereof and as long as permitted under the terms of the Senior Debt shall not be deemed a dissolution, winding-up, liquidation or reorganization for the purposes of this Section 10.02 if such other corporation shall, as a part of such consolidation, merger, conveyance or transfer, assume the Company's obligations hereunder in accordance with Article 5. SECTION 10.03. DEFAULT ON DESIGNATED SENIOR DEBT. (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, interest on, unpaid drawings for letters of credit issued in respect of, or regularly accruing fees with respect to, any Designated Senior Debt, no payment 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 on the Notes or to ac- -95- quire any of the Notes for cash or property or otherwise. In addition, if any other event of 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 and if the Representative for the respective issue of Designated Senior Debt gives notice of the event of default to the Trustee (a "DEFAULT NOTICE"), then, unless and until all events of default have been cured or waived or have ceased to exist or the Trustee receives notice thereof from the Representative for the respective issue of Designated Senior Debt terminating the Blockage Period (as defined below), during the 180 days after the delivery of such Default Notice (the "BLOCKAGE PERIOD"), neither the Company nor any other Person on its behalf shall (x) make any payment of any kind or character with respect to any Obligations on the Notes or (y) acquire any of the Notes for cash or property or otherwise. Notwithstanding anything to the contrary in the immediately preceding sentence, in no event will a Blockage Period extend beyond 180 days from the date the payment on the Notes was due and only one such Blockage Period may be commenced within any 360 consecutive days. No event of default which existed or was continuing on the date of the commencement of any Blockage Period with respect to the Designated Senior Debt shall be, or be made, the basis for commencement of a second 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 commencing after the date of commencement of such 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). (b) In the event that, notwithstanding the foregoing, any payment shall be received by the Trustee or any Holder when such payment is prohibited by Section 10.03(a), 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 10 shall limit the right of the Trustee or the Holders of Notes to take any action to accelerate the maturity of the Notes pursuant to Section 6.02 or to pursue any rights or remedies hereunder; 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 on the Notes. SECTION 10.04. 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. -96- SECTION 10.05. WHEN DISTRIBUTION MUST BE PAID OVER. In the event that the Trustee or any Holder receives any payment of any Obligations with respect to the Notes at a time when such payment is prohibited by Section 10.02 or 10.03, such payment shall be held by the Trustee or such Holder, in trust for the benefit of, and shall be paid forthwith over and delivered, upon written request, to, the holders of Senior Debt as their interests may appear or their Representative under the indenture or other agreement (if any) pursuant to which such Senior Debt may have been issued, as their respective interests may appear, for application to the payment of all Obligations with respect to Senior Debt remaining unpaid to the extent necessary to pay such Obligations in full in cash or Cash Equivalents in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt. With respect to the holders of Senior Debt, the Trustee undertakes to perform only such obligations on the part of the Trustee as are specifically set forth in this Article 10, and no implied covenants or obligations with respect to the holders of Senior Debt shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Debt, and shall not be liable to any such holders if the Trustee shall pay over or distribute to or on behalf of Holders or the Company or any other Person money or assets to which any holders of Senior Debt shall be entitled by virtue of this Article 10, except if such payment is made as a result of the willful misconduct or gross negligence of the Trustee. SECTION 10.06. NOTICE BY COMPANY. The Company shall 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 in respect of the Notes pursuant to the provisions of this Article 10 (although the failure to give any such notice shall not affect the subordination provision of this Article 10). Regardless of anything to the contrary contained in this Article 10 or elsewhere in this Indenture, the Trustee shall not be charged with knowledge of the existence of any default or event of default with respect to any Senior Debt or of any other facts which would prohibit the making of any payment to or by the Trustee unless and until the Trustee shall have received notice in writing from the Company, or from a holder of Senior Debt or a Representative therefor, together with proof satisfactory to the Trustee of such holding of Senior Debt or of the authority of such Representative, and, prior to the receipt of any such written notice, the Trustee shall be entitled to assume (in the absence of actual knowledge to the contrary) that no such facts exist. SECTION 10.07. SUBROGATION. Subject to the payment in full in cash or Cash Equivalents of all Senior Debt, the Holders of the Notes 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 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 10 which otherwise would have been made to the Holders shall, -97- as between the Company and the Holders of the Notes, 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 10 are and are intended solely for the purpose of defining the relative rights of the Holders of the Notes, on the one hand, and the holders of the Senior Debt, on the other hand. SECTION 10.08. RELATIVE RIGHTS. Nothing contained in this Article 10 or elsewhere in this Indenture or in the Notes is intended to or shall impair, as between the Company and the Holders, the obligation of the Company, which is absolute and unconditional, to pay to the Holders the principal of and interest on 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 the Trustee or any Holder from exercising all remedies otherwise permitted by applicable law upon default under this Indenture, subject to the rights, if any, under this Article 10 of the holders of Senior Debt in respect of cash, property or securities of the Company received upon the exercise of any such remedy. Upon any payment or distribution of assets or securities of the Company referred to in this Article 10, the Trustee, subject to the provisions of Sections 7.01 and 7.02, and the Holders shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which any liquidation, dissolution, winding-up or reorganization proceedings are pending, or a certificate of the receiver, trustee in bankruptcy, liquidating trustee or agent or other Person making any payment or distribution to the Trustee or to the Holders for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of Senior Debt and other Indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 10. Nothing in this Article 10 shall apply to the claims of, or payments to, the Trustee in its capacity as such under or pursuant to Section 7.07. 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 10, 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 10, 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 10.09. SUBORDINATION MAY NOT BE IMPAIRED BY COMPANY. (a) No right of any present or future holder of any Senior Debt to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act by any such holder, or by any non- -98- compliance by the Company with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may have or be otherwise charged with. (b) Without limiting the generality of subsection (a) of this Section 10.09, 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 of the Notes, without incurring responsibility to the Holders of the Notes and without impairing or releasing the subordination provided in this Article 10 or the obligations hereunder of the Holders of the Notes to the holders of Senior Debt, do any one or more of the following: (1) change the manner, place, terms or time of payment of, or renew or alter, Senior Debt or any instrument evidencing the same or any agreement under which Senior Debt is outstanding; (2) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Debt; (3) release any Person liable in any manner for the collection or payment of Senior Debt; and (4) exercise or refrain from exercising any rights against the Company and any other Person. SECTION 10.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever a distribution is to be made or a notice given to holders of Senior Debt, the distribution may be made and the notice given to their Representative. Upon any payment or distribution of assets of the Company referred to in this Article 10, the Trustee and the Holders of Notes shall be entitled to rely upon any order or decree made by any court of competent jurisdiction or upon any certificate of such Representative or of the liquidating trustee or agent or other Person making any distribution to the Trustee or to the Holders of Notes for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Debt and other Indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article 10. SECTION 10.11. RIGHTS OF TRUSTEE AND PAYING AGENT. Notwithstanding the provisions of this Article 10 or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment or distribution by the Trustee, and the Trustee and the Paying Agent may continue to make payments on the Notes, unless the Trustee shall have received at its Corporate Trust Office at least 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 10 (although the receipt of such payment shall otherwise be subject to the applicable provisions of this Article 10). Only the Company or a Representative may give the notice. Nothing in this Article 10 shall impair the claims of, or payments to, the Trustee in its capacity as such under or pursuant to Section 7.07. Nothing in this Section 10.11 is intended to or shall relieve any Holder of Notes from the obligations imposed under Section 10.05 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. -99- SECTION 10.12. AUTHORIZATION TO EFFECT SUBORDINATION. Each Holder of the Notes by such Holder's acceptance thereof authorizes and expressly directs the Trustee on such Holder's behalf to take such action as may be necessary or appropriate to effect the subordination provisions contained in this Article 10, and appoints the Trustee such Holder's attorney-in-fact for such purpose, including, in the event of any liquidation, dissolution, winding-up, reorganization, assignment for the benefit of creditors or marshaling of assets of the Company tending towards liquidation or reorganization of the business and assets of the Company, the immediate filing of a claim for the unpaid balance of such Holder's Notes in the form required in said proceedings and cause said claim to be approved. If the Trustee does not file a proper claim or proof of debt in the form required in any proceeding referred to in Section 6.09 prior to 30 days before the expiration of the time to file such claim or claims, then any of the holders of the Senior Debt or their Representative is hereby authorized to file an appropriate claim for and on behalf of the Holders of said Notes. 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 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 10.13. AMENDMENTS. The provisions of this Article 10 shall not be amended or modified without the written consent of the majority of the lenders under the New Credit Facility. ARTICLE 11 GUARANTEES SECTION 11.01. GUARANTEE. Subject to this Article 11, each of the Guarantors hereby, jointly and severally, unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Company hereunder or thereunder, that: (a) the principal of, premium, if any, and interest on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of, premium, if any, and interest on the Notes, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay -100- the same immediately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection. The Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenant that this Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and this Indenture or pursuant to Section 11.06. If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Company or the Guarantors, any amount paid by either to the Trustee or such Holder, this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Guarantee. The Guarantors shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Guarantee. SECTION 11.02. SUBORDINATION OF GUARANTEE. The Obligations of each Guarantor under its Guarantee pursuant to this Article 11 shall be junior and subordinated to the Senior Debt of such Guarantor on the same basis as the Notes are junior and subordinated to the Senior Debt of the Company. For the purposes of the foregoing sentence, the Trustee and the Holders shall have the right to receive and/or retain payments by any of the Guarantors (or any Persons acting on their behalf) only at such times as they may receive and/or retain payments in respect of the Notes pursuant to this Indenture, including Article 10 and the holders of Senior Debt shall have the same rights and remedies provided for in Article 10. SECTION 11.03. LIMITATION ON GUARANTOR LIABILITY. Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Guarantee of such Guarantor not constitute a fraudulent -101- transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor under its Guarantee and this Article 11 shall be limited to the maximum amount as will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws (including, without limitation, all Senior Debt of such Guarantor), and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article 11, result in the obligations of such Guarantor under its Guarantee not constituting a fraudulent transfer or conveyance. SECTION 11.04. EXECUTION AND DELIVERY OF GUARANTEE. To evidence its Guarantee set forth in Section 11.01, each Guarantor hereby agrees that a notation of such Guarantee substantially in the form included in EXHIBIT E shall be endorsed by an Officer of such Guarantor on each Note authenticated and delivered by the Trustee and that this Indenture shall be executed on behalf of such Guarantor by its President, any Vice President, Secretary or Treasurer. Each Guarantor hereby agrees that its Guarantee 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 whose signature is on this Indenture or on the Guarantee no longer holds that office at the time the Trustee authenticates the Note on which a Guarantee is endorsed, the Guarantee shall be valid nevertheless. The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee set forth in this Indenture on behalf of the Guarantors. In the event that the Company creates or acquires any new Subsidiaries subsequent to the date of this Indenture, if required by Section 4.17, the Company shall cause such Subsidiaries to execute supplemental indentures to this Indenture and Guarantees in accordance with Section 4.17 and this Article 11, to the extent applicable. SECTION 11.05. GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS. No Guarantor may consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another Person whether or not affiliated with such Guarantor unless: (a) subject to the other provisions of this Section the Person formed by or surviving any such consolidation or merger (if other than a Guarantor or the Company) shall be a corporation organized and validly existing under the laws of the United States or any state thereof or the District of Columbia, and unconditionally assumes all the obligations of such Guarantor, pursuant to a supplemental indenture in form and substance reasonably satisfactory -102- to the Trustee, under the Notes, this Indenture, the Registration Rights Agreement and the Guarantee on the terms set forth herein or therein; (b) immediately after giving effect to such transaction, no Default or Event of Default exists; and (c) the Company would be permitted, immediately after giving effect to such transaction, to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.09. In case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the Guarantee endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Guarantor, such successor Person shall succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor Person thereupon may cause to be signed any or all of the Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee. All the Guarantees so issued shall in all respects have the same legal rank and benefit under this Indenture as the Guarantees theretofore and thereafter issued in accordance with the terms of this Indenture as though all of such Guarantees had been issued at the date of the execution hereof. Except as set forth in Articles 4 and 5, and notwithstanding clause (c) above, nothing contained in this Indenture or in any of the Notes shall prevent any consolidation or merger of a Guarantor with or into the Company or another Guarantor, or shall prevent any sale or conveyance of the property of a Guarantor as an entirety or substantially as an entirety to the Company or another Guarantor. SECTION 11.06. RELEASES FOLLOWING CERTAIN EVENTS. 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 such Guarantor (in the event of a sale or other disposition, by way of merger, consolidation or otherwise, of all of the capital stock of such Guarantor) or the corporation acquiring the property (in the event of a sale or other disposition of all or substantially all of the assets of such 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 the applicable provisions of this Indenture, including without limitation Section 4.10. Upon delivery by the Company to the Trustee of an Officers' Certificate and an Opinion of Counsel to the effect that such sale or other disposition was made by the Company in accordance with the applicable provisions of this Indenture, including without limitation Section 4.10, the Trustee shall execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations under its Guarantee. -103- Any Guarantor not released from its obligations under its Guarantee shall remain liable for the full amount of principal of and interest on the Notes and for the other obligations of any Guarantor under this Indenture as provided in this Article 11. ARTICLE 12 MISCELLANEOUS SECTION 12.01. TRUST INDENTURE ACT CONTROLS. If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA Section 318(c), the imposed duties shall control. SECTION 12.02. NOTICES. Any notice or communication by the Company, any Guarantor or the Trustee to the others is duly given if in writing and delivered in Person or mailed by first class mail (registered or certified, return receipt requested), telex, telecopier or overnight air courier guaranteeing next day delivery, to the others' address: If to the Company and/or any Guarantor: Dayton Superior Corporation 7777 Washington Village Drive, Suite 130 Dayton, Ohio 45459 Facsimile No.: (937) 428-9115 Attention: General Counsel with copies to: Latham & Watkins 885 Third Avenue, Suite 1000 New York, New York 10022 Facsimile No.: (212) 751-4864 Attention: Kirk A. Davenport, Esq. If to the Trustee: United States Trust Company of New York 114 West 47th Street New York, New York 10036 Facsimile No.: (212) 852-1626 Attention: Corporate Trust Administration F -104- The Company, any Guarantor or the Trustee, by notice to the others may designate additional or different addresses for subsequent notices or communications. All notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Any notice or communication to a Holder shall be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA Section 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time. SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH OTHER HOLDERS OF NOTES. Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c). SECTION 12.04. 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: (a) an Officers' Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 12.05) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and (b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 12.05) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied. -105- SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e) and shall include: (a) a statement that the Person making such certificate or opinion has read such covenant or condition; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of such Person, he or she has or they have 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 satisfied; and (d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied. SECTION 12.06. RULES BY TRUSTEE AND AGENTS. The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. SECTION 12.07. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS. No past, present or future director, officer, employee, incorporator or stockholder of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or such Guarantor under the Notes, the Guarantees, this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. SECTION 12.08. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. -106- SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. SECTION 12.10. SUCCESSORS. All agreements of the Company in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. SECTION 12.11. SEVERABILITY. In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. SECTION 12.12. COUNTERPART ORIGINALS. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. SECTION 12.13. 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 of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof. [Signature pages(s) follow] S-1 Dated as of June 16, 2000 DAYTON SUPERIOR CORPORATION By: ------------------------------ Name: Title: DUR-O-WAL, INC. SYMONS CORPORATION, as Guarantors By: ------------------------------ Name: Title: UNITED STATES TRUST COMPANY OF NEW YORK By: ------------------------------ Name: Title: Authorized Signatory EXHIBIT A [FORM OF GLOBAL NOTE] DAYTON SUPERIOR CORPORATION 13% SENIOR SUBORDINATED NOTES DUE 2009 No. [ ] CUSIP: [ ] $[ ] DAYTON SUPERIOR CORPORATION, a corporation incorporated under the laws of the State of Ohio, promises to pay to CEDE & CO. or their registered assigns, the principal sum of [ ] Dollars on June 15, 2009. Interest Payment Dates: June 15 and December 15, commencing first payment December 15, 2000. Record Dates: June 1 and December 1. Reference is made to the further provisions of this Note contained herein, which will for all purposes have the same effect as if set forth at this place. A-1 IN WITNESS WHEREOF, the Company has caused this Note to be signed by its duly authorized officer. DAYTON SUPERIOR CORPORATION BY: ---------------------------- Name: Title: This is one of the Global Notes referred to in the within-mentioned Indenture: UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee By: Dated: June 16, 2000 --------------------------------------------------- Name: Title: Authorized Signatory A-2 DAYTON SUPERIOR CORPORATION 13% Senior Subordinated Notes due 2009 Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 1. INTEREST. Dayton Superior Corporation, an Ohio corporation (the "COMPANY"), promises to pay interest on the principal amount of this Note at 13% PER ANNUM from June 16, 2000 until maturity and shall pay the Additional Interest payable pursuant to Section 4 of the Registration Rights Agreement referred to below. The Company shall pay interest and Additional Interest semi-annually on June 15 and December 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an "INTEREST PAYMENT DATE"). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; PROVIDED that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; PROVIDED, FURTHER, that the first Interest Payment Date shall be December 15, 2000. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate that is 1% PER ANNUM in excess of the rate then in effect; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Additional Interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 2. METHOD OF PAYMENT. The Company will pay interest on the Notes (except defaulted interest) and Additional Interest to the Persons who are registered Holders of Notes at the close of business on the June 1 or December 1 immediately preceding the applicable Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal, premium and Additional Interest, if any, and interest at the office or agency of the Company maintained for such purpose within or without the City and State of New York, or, at the option of the Company, payments of interest and Additional Interest may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest, premium and Additional Interest on, all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. 3. PAYING AGENT AND REGISTRAR. Initially, United States Trust Company of New York, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity. 4. INDENTURE. The Company issued the Notes under an Indenture dated as of June 16, 2000 (the "INDENTURE") among the Company, the Guarantors named therein and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by A-3 reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code Sections 77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Notes are obligations of the Company. 5. SUBORDINATION. The Notes are subordinated in right of payment, in the manner and to the extent set forth in the Indenture, to the prior payment in full in cash or Cash Equivalents of all Senior Debt of the Company, whether outstanding on the date of the Indenture or thereafter created, incurred, assumed or guaranteed. Each Holder by its acceptance hereof agrees to be bound by such provisions and authorizes and expressly directs the Trustee, on its behalf, to take such action as may be necessary or appropriate to effectuate the subordination provided for in the Indenture. 6. OPTIONAL REDEMPTION. (a) Except as set forth in subparagraph (b) of this Paragraph 6, the Notes will not be redeemable before June 15, 2007. 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, at the following redemption prices (expressed as percentages of the principal amount thereof), if redeemed during the twelve-month period commencing on June 15 of the years indicated below:
PERCENTAGE OF PRINCIPAL YEAR AMOUNT ---- ------------ 2007........................................... 102.167% 2008 and thereafter............................ 100.000%
In addition, the Company must pay all accrued and unpaid interest and Additional Interest on the Notes redeemed. (b) Notwithstanding the foregoing, prior to June 15, 2003, the Company may on any one or more occasions redeem up to 25% of the principal amount of Notes issued under the Indenture at a redemption price of 113.0% of the principal amount thereof, PLUS accrued and unpaid interest and Additional Interest, if any, thereon to the redemption date, with the net cash proceeds of one or more Equity Offerings; PROVIDED that at least 75% of the aggregate principal amount of Notes issued under the Indenture remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company and its Subsidiaries); and PROVIDED FURTHER that the Company makes such redemption note more than 90 days after the consummation of such Equity Offering. A-4 7. MANDATORY REDEMPTION. The Company shall not be required to make mandatory redemption payments with respect to the Notes. 8. REPURCHASE AT OPTION OF HOLDER. (a) If a Change of Control occurs, 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 in the Indenture (the "CHANGE OF CONTROL OFFER"), at a purchase price equal to 101% of the principal amount thereof plus accrued interest 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, which notice shall govern the terms of the Change of Control Offer. Such notice shall state, among other things, the purchase date, which must be no earlier than 30 days nor later than 60 days from the date such notice is mailed, other than as may be required by law (the "CHANGE OF CONTROL PAYMENT DATE"). (b) If the Company or a Restricted Subsidiary consummates any Asset Sale, under certain circumstances the Company is required to commence an offer to all Holders of Notes (as "NET PROCEEDS OFFER") pursuant to Section 3.09 of the Indenture. The offer price for the Notes (the "NET PROCEEDS OFFER AMOUNT") will be at a price equal to 100% of the principal amount thereof plus accrued and unpaid interest thereon, if any, to the date fixed for the closing of such offer, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes tendered pursuant to an Net Proceeds Offer is less than the Net Proceeds Offer Amount, the Company (or such Subsidiary) may use such remaining Net Proceeds Offer Amount for general corporate purposes or for any other purpose not prohibited by the Indenture. If the aggregate principal amount of Notes surrendered by Holders thereof exceeds the amount of Net Proceeds Offer Amount, the Trustee shall select the Notes to be purchased on a PRO RATA basis. Holders of Notes that are the subject of an offer to purchase will receive a Net Proceeds Offer from the Company prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled "Option of Holder to Elect Purchase" on the reverse of the Notes. 9. NOTICE OF REDEMPTION. Notice of redemption will be mailed, by first-class mail, at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption, unless the Company fails to make such payment. 10. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date. A-5 11. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes. 12. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture, the Guarantees or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the Notes then outstanding, if any, voting as a single class, and any existing default or compliance with any provision of the Indenture, the Guarantees or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes, if any, voting as a single class. Without the consent of any Holder of a Note, the Indenture, the Guarantees or the Notes may be amended or supplemented, to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to provide for the assumption of the Company's or Guarantor's obligations to Holders of the Notes in case of a merger or consolidation, to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Indenture of any such Holder, to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act, to provide for the issuance of Notes issued after the Issue Date in accordance with the limitations set forth in the Indenture, to allow any Guarantor to execute a supplemental indenture to the Indenture and/or a Guarantee with respect to the Notes or to evidence and provide for the acceptance of appointment under the Indenture of a successor Trustee. 13. DEFAULTS AND REMEDIES. Events of Default include (in summary form): (i) the failure to pay interest on any Notes when the same becomes due and payable if the default continues for a period of 30 days, whether or not such payment shall be prohibited by Article 10 of the Indenture; (ii) 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 10 of the Indenture; (iii) a default in the observance or performance of any other covenant or agreement contained in the Indenture if the default continues for a period of 30 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; (iv) 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 (other than a Securitization Entity), which failure continues for at least 20 days, or the acceleration of the final stated maturity of any such Indebtedness, which acceleration remains uncured and unrescinded for at least 20 days, 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 maturity or which has been accelerated, (in each case with respect to which the 20-day period described above has passed) aggregates $7.5 million or more at any time; (v) one or more judgments in an aggregate amount in excess of $7.5 million shall have been rendered against the Company or any of its Significant Subsidiaries and such judgments remain undischarged, unpaid or unstayed for a period of 60 days after such judgment or judgments become final and non-appealable; (vi) certain events of bankruptcy affecting the Company or any of its Significant Subsidiaries and (vii) 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 A-6 found to be invalid or any Guarantor that is a Significant Subsidiary denies its liability under its Guarantee (other than by reason of release of a Guarantor in accordance with the terms of the Indenture). If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare the principal of and accrued interest on all the Notes to be due and payable. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy with respect to the Company, all outstanding Notes will become due and payable without further action or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of principal of, premium or additional interest, if any, or interest on the Notes. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default. 14. TRUSTEE DEALINGS WITH COMPANY. The Trustee, 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. 15. NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee, incorporator or stockholder of the Company or any of the Guarantors, as such, shall have any liability for any obligations of the Company or such Guarantor under the Notes, the Guarantees or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes. 16. AUTHENTICATION. This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 17. 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). 18. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of Notes under the Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes shall have all the rights set forth in the Registration Rights Agreement dated as of June 16, 2000, among the Company and the parties named on the signature pages thereof. A-7 19. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. A-8 The Company will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to: Dayton Superior Corporation 7777 Washington Village Drive, Suite 130 Dayton, Ohio 45459 Facsimile No.: (937) 428-9115 Attention: General Counsel A-9 ASSIGNMENT FORM To assign this Note, fill in the form below: (I) or (we) assign and transfer this Note to - -------------------------------------------------------------------------------- (Insert assignee's soc. sec. or tax I.D. no.) - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- (Print or type assignee's name, address and zip code) and irrevocably appoint --------------------------------------------------------- to transfer this Note on the books of the Company. The agent may substitute another to act for him. - -------------------------------------------------------------------------------- Date: ----------------- Your Signature: ----------------------------- (Sign exactly as your name appears on the face of this Note) Tax Identification No: SIGNATURE GUARANTEE: -------------------------------------------- Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. A-10 OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Note purchased by the Company pursuant to Section 3.09, 4.10 or 4.15 of the Indenture, check the box below: / / Section 3.09 / / Section 4.10 / / Section 4.15 If you want to elect to have only part of the Note purchased by the Company pursuant to Section 3.09, 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased: $ -------- Date: --------------------- Your Signature: (Sign exactly as your name appears on the face of this Note) Tax Identification No: ---------------------- SIGNATURE GUARANTEE: --------------------------- Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. A-11 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 UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF: (1) EACH INITIAL PURCHASER AND ITS DIRECT TRANSFEREES 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 INSTITUTIONAL ACCREDITED INVESTOR (AS DEFINED IN RULE 501(A)(1), (2), (3), OR (7) UNDER THE SECURITIES ACT (AN "ACCREDITED INVESTOR")), (2) EACH HOLDER 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 COMPANY 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 RESTRICTIONS 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 COMPANY SO REQUESTS), OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) EACH HOLDER 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 COMPANY SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT A-12 SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY. FOR PURPOSES OF SECTION 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THIS SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT; FOR EACH $1,000 PRINCIPAL AMOUNT OF THIS SECURITY, THE ISSUE PRICE IS $955.75. THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $44.25, THE ISSUE DATE IS JUNE 16, 2000 AND THE YIELD TO MATURITY IS 13.876% PER ANNUM. PRIOR TO THE SEPARABILITY DATE (AS DEFINED) THIS NOTE MAY NOT BE TRANSFERRED OR EXCHANGED WITHOUT THE SIMULTANEOUS TRANSFER OR EXCHANGE OF A WARRANT TO PURCHASE 0.68986 OF A COMMON SHARE (THE "WARRANTS") FOR EACH $1,000 PRINCIPAL AMOUNT OF NOTES BEING TRANSFERRED OR EXCHANGED. THE "SEPARABILITY DATE" SHALL MEAN THE EARLIEST OF (I) DECEMBER 18, 2000; (II) THE OCCURRENCE OF A CHANGE OF CONTROL OR AN EVENT OF DEFAULT; (III) THE DATE ON WHICH A REGISTRATION STATEMENT WITH RESPECT TO THE NOTES OR THE EXCHANGE NOTES IS DECLARED EFFECTIVE; (IV) IMMEDIATELY PRIOR TO THE REDEMPTION OF NOTES BY THE COMPANY WITH THE PROCEEDS OF AN EQUITY OFFERING; (V) THE CONSUMMATION OF AN INITIAL PUBLIC OFFERING OF THE COMPANY; OR (VI) SUCH EARLIER DATE AS MAY BE DETERMINED BY DEUTSCHE BANK SECURITIES INC. IN ITS SOLE DISCRETION. A-13 EXHIBIT B FORM OF CERTIFICATE OF TRANSFER Dayton Superior Corporation 7777 Washington Village Drive, Suite 130 Dayton, Ohio 45459 Facsimile No.: (937) 428-9115 Attention: General Counsel United States Trust Company of New York 114 West 47th Street New York, New York 10036 Facsimile No.: (212) 852-1626 Attention: Corporate Trust Administration Re: 13% SENIOR SUBORDINATED NOTES DUE 2009 Reference is hereby made to the Indenture, dated as of June 16, 2000 (the "Indenture"), between Dayton Superior Corporation, as issuer (the "COMPANY"), the Guarantors named therein and United States Trust Company 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 the principal amount of $___________ in such Note[s] or interests (the "TRANSFER"), to __________ (the "TRANSFEREE"), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that: [CHECK ALL THAT APPLY] 1. / / CHECK IF TRANSFEREE IS A QIB IN ACCORDANCE WITH RULE 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the "SECURITIES ACT"), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believed and believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Global Note and/or the Definitive Note and in the Indenture and the Securities Act. B-1 2. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY PURSUANT TO REGULATION S. The Transfer is being effected pursuant to and in accordance with Regulation S 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, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the Distribution Compliance Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the Global Note and/or the Definitive Note and in the Indenture and the Securities Act. 3. / / CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY 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 beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one): (a) / / such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act; or (b) / / such Transfer is being effected to the Company or a subsidiary thereof; or (c) / / such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act; or (d) / / such Transfer is being effected to an Institutional Accredited Investor and pursuant to an exemption from the registration requirements of the Securities Act B-2 other than Rule 144A, Rule 144 or Regulation S, 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 beneficial interests in a Restricted Global Note or Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the Indenture and (2) if such Transfer is in respect of a principal amount of Notes at the time of transfer of less than $500,000, 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 beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Global Note and/or the Definitive Notes and in the Indenture and the Securities Act. 4. / / CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE. (a) / / CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture. (b) / / CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144 or Regulation S and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture. 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) OR (b)] (a) / / a beneficial interest in the Global Note (CUSIP [ ]), or (b) / / a Restricted Definitive Note. 2. After the Transfer the Transferee will hold: [CHECK ONE] (a) / / a beneficial interest in the Global Note (CUSIP [ ]); or (b) / / a Restricted Definitive Note; or (c) / / an Unrestricted Definitive Note, in accordance with the terms of the Indenture. B-5 EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE Dayton Superior Corporation 7777 Washington Village Drive, Suite 130 Dayton, Ohio 45459 Facsimile No.: (937) 428-9115 Attention: General Counsel United States Trust Company of New York 114 West 47th Street New York, New York 10036 Facsimile No.: (212) 852-1626 Attention: Corporate Trust Administration Re: 13% SENIOR SUBORDINATED NOTES DUE 2009 (CUSIP ______________) Reference is hereby made to the Indenture, dated as of June 16, 2000 (the "INDENTURE"), between Dayton Superior Corporation, as issuer (the "COMPANY"), the Guarantors named therein and United States Trust Company 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 herein, in the principal amount of $____________ in such Note[s] or interests (the "EXCHANGE"). In connection with the Exchange, the Owner hereby certifies that: 1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE: (a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the "SECURITIES ACT"), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. C-1 (b) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. (c) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. (d) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. 2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES (a) / / CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner's own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act. (b) / / CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE] / / 144A Global Note, / / Regulation S Global Note, / / IAI Global Note with an equal principal amount, the Owner hereby certifies (i) the C-2 beneficial interest is being acquired for the Owner's own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act. C-3 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-4 EXHIBIT D FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR Dayton Superior Corporation 7777 Washington Village Drive, Suite 130 Dayton, Ohio 45459 Facsimile No.: (937) 428-9115 Attention: General Counsel United States Trust Company of New York 114 West 47th Street New York, New York 10036 Facsimile No.: (212) 852-1626 Attention: Corporate Trust Administration Re: 13% SENIOR SUBORDINATED NOTES DUE 2009 Reference is hereby made to the Indenture, dated as of June 16, 2000 (the "INDENTURE"), between Dayton Superior Corporation, as issuer (the "COMPANY"), the Guarantors named therein and United States Trust Company 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 beneficial interest in a Global Note, or (b) / / a Definitive 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 Notes or any interest therein, we will do so only (A) to the Company or any subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to a "qualified institutional buyer" (as defined therein), (c) to an institutional "accredited investor" (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Company a signed letter substantially in the form of this letter and, if such transfer is in respect of a principal amount of Notes, at the time of transfer of D-1 less than $250,000, an Opinion of Counsel in form reasonably acceptable to the Company and the Registrar to the effect that such transfer is in compliance with the Securities Act, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or (F) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any person purchasing the Definitive Note or beneficial interest in a Global Note from us in a transaction meeting the requirements of clauses (A) through (E) 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 beneficial interest therein, we will be required to furnish to you and the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect. We further understand that any subsequent transfer by us of the Notes or beneficial interest therein acquired by us must be effected through one of the Placement Agents. 4. We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment. 5. We are acquiring the Notes or beneficial 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. You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. ------------------------------------ [Insert Name of Accredited Investor] By: ----------------------------- Name: Title: Dated: ______________, ____ D-2 EXHIBIT E FORM OF NOTATION OF GUARANTEE For value received, each Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture dated as of June 16, 2000 (the "INDENTURE") among Dayton Superior Corporation, the Guarantors named therein and United States Trust Company of New York, as trustee (the "TRUSTEE"), (a) the due and punctual payment of the principal of, premium, if any, and interest on the Notes (as defined in the Indenture), whether at maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal and premium, and, to the extent permitted by law, interest, and the due and punctual performance of all other obligations of the Company to the Holders or the Trustee all in accordance with the terms of the Indenture and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. The obligations of the Guarantors to the Holders of Notes and to the Trustee pursuant to the Guarantee and the Indenture are expressly set forth in Article 11 of the Indenture and reference is hereby made to the Indenture for the precise terms of the Guarantee. Each Holder of a Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee, on behalf of such Holder, to take such action as may be necessary or appropriate to effectuate the subordination as provided in the Indenture and (c) appoints the Trustee attorney-in-fact of such Holder for such purpose; PROVIDED, HOWEVER, that the Indebtedness evidenced by this Guarantee shall cease to be so subordinated and subject in right of payment upon any defeasance of this Guarantee in accordance with the provisions of the Indenture. DUR-O-WAL, INC. By: ------------------------------ Name: Title: SYMONS CORPORATION By: ------------------------------ Name: Title: E-1 EXHIBIT F FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT GUARANTORS SUPPLEMENTAL INDENTURE (this "SUPPLEMENTAL INDENTURE"), dated as of ________________, among _____________________ (the "GUARANTEEING SUBSIDIARY"), a subsidiary of Dayton Superior Corporation (or its permitted successor), an Ohio corporation (the "COMPANY"), the Company, the other Guarantors (as defined in the Indenture referred to herein) and United States Trust Company of New York, as trustee under the indenture referred to below (the "TRUSTEE"). W I T N E S S E T H : WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the "INDENTURE"), dated as of June 16, 2000 providing for the issuance of an aggregate principal amount of up to $270.0 million of 13% Senior Subordinated Notes due 2009 (the "NOTES"); WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company's Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the "GUARANTEE"); and WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture. NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows: 1. CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture. 2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees as follows: (a) Along with all Guarantors named in the Indenture, to jointly and severally Guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes or the obligations of the Company hereunder or thereunder, that: (i) the principal of and interest on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, F-1 if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately. (b) The obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. (c) The following is hereby waived: 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. (d) This Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and the Indenture or pursuant to Section 6 hereof. (e) If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors, or any custodian, Trustee, liquidator or other similar official acting in relation to either the Company or the Guarantors, any amount paid by either to the Trustee or such Holder, this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. (f) The Guaranteeing Subsidiary shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. (g) As between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 of the Indenture for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 of the Indenture, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Guarantee. F-2 (h) The Guarantors shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Guarantee. (i) Pursuant to Section 11.03 of the Indenture, after giving effect to any maximum amount and any other contingent and fixed liabilities that are relevant under any applicable Bankruptcy or fraudulent conveyance laws (including, without limitation, all Senior Debt of such Guarantor), and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under Article 11 of the Indenture shall result in the obligations of such Guarantor under its Guarantee not constituting a fraudulent transfer or conveyance. 3. SUBORDINATION. The Obligations of the Guaranteeing Subsidiary under its Guarantee pursuant to this Supplemental Indenture shall be junior and subordinated to the Senior Debt of the Guaranteeing Subsidiary on the same basis as the Notes are junior and subordinated to the Senior Debt of the Company. For the purposes of the foregoing sentence, the Trustee and the Holders shall have the right to receive and/or retain payments by the Guaranteeing Subsidiary only at such time as they may receive and/or retain payments in respect of the Notes pursuant to the Indenture, including Article 10 thereof. 4. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees that the Guarantees shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Guarantee. 5. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS. (a) The Guaranteeing Subsidiary may not consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another corporation, Person or entity whether or not affiliated with such Guarantor unless: (i) subject to Section 11.05 of the Indenture, the Person formed by or surviving any such consolidation or merger (if other than a Guarantor or the Company) shall be a corporation organized and validly existing under the laws of the United States or any state thereof or the District of Columbia, and unconditionally assumes all the obligations of such Guarantor, pursuant to a supplemental indenture in form and substance reasonably satisfactory to the Trustee, under the Notes, the Indenture and the Guarantee on the terms set forth herein or therein; (ii) immediately after giving effect to such transaction, no Default or Event of Default exists; and (iii) the company would be permitted, immediately after giving effect to such transaction, to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.09 of the Indenture. F-3 (b) In case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the Guarantee endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of the Indenture to be performed by the Guarantor, such successor Person shall succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor Person thereupon may cause to be signed any or all of the Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee. All the Guarantees so issued shall in all respects have the same legal rank and benefit under the Indenture as the Guarantees theretofore and thereafter issued in accordance with the terms of the Indenture as though all of such Guarantees had been issued at the date of the execution hereof. (c) Except as set forth in Articles 4 and 5 of the Indenture, and notwithstanding clauses(a)(iii) above, nothing contained in the Indenture or in any of the Notes shall prevent any consolidation or merger of a Guarantor with or into the Company or another Guarantor, or shall prevent any sale or conveyance of the property of a Guarantor as an entirety or substantially as an entirety to the Company or another Guarantor. 6. RELEASES. 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 to the capital stock of any Guarantor, then such Guarantor (in the event of a sale or other disposition, by way of merger, consolidation or otherwise, of all of the capital stock of such Guarantor) or the corporation acquiring the property (in the event of a sale or other disposition of all or substantially all of the assets of such 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 the applicable provisions of the Indenture, including without limitation Section 4.10 of the Indenture. Upon delivery by the Company to the Trustee of an Officers' Certificate and an Opinion of Counsel to the effect that such sale or other disposition was made by the Company in accordance with the applicable provisions of the Indenture, including without limitation Section 4.10 of the Indenture, the Trustee shall execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations under its Guarantee. Any Guarantor not released from its obligations under its Guarantee shall remain liable for the full amount of principal of and interest on the Notes and for the other obligations of any Guarantor under the Indenture as provided in Article 11 of the Indenture. 7. NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee, incorporator, stockholder or agent of the Guaranteeing Subsidiary, as such, shall have any liability for any obligations of the Company or any Guaranteeing Subsidiary under the Notes, any Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the F-4 Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the Commission that such a waiver is against public policy. 8. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 9. COUNTERPARTS. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. 10. EFFECT OF HEADINGS. The Section headings herein are for convenience only and shall not affect the construction hereof. 11. THE TRUSTEE. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company. F-5 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written. Dated: _______________, ____ [Guaranteeing Subsidiary] By: ------------------------------------- Name: Title: UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee By: ------------------------------------- Name: Title: SCHEDULE I SCHEDULE OF GUARANTORS The following schedule lists each Guarantor under the Indenture as of the Issue Date: 1. Dur-O-Wal, Inc., a Delaware corporation. 2. Symons Corporation, a Delaware corporation. EX-4.4 9 ex-4_4.txt EXHIBIT 4.4 Exhibit 4.4 ================================================================================ REGISTRATION RIGHTS AGREEMENT Dated as of June 16, 2000 Among DAYTON SUPERIOR CORPORATION and THE GUARANTORS NAMED HEREIN, as Issuers, and THE INITIAL PURCHASERS NAMED HEREIN, 13% Senior Subordinated Notes due 2009 ================================================================================ REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement (this "AGREEMENT") is dated as of June 16, 2000, among DAYTON SUPERIOR CORPORATION, an Ohio corporation (the "COMPANY"), as issuer, and the other entities listed on the signature pages hereto, as guarantors (the "GUARANTORS" and, together with the Company, the "ISSUERS"), and the Initial Purchasers named herein, as initial purchasers (the "INITIAL PURCHASERS"). This Agreement is entered into in connection with the Purchase Agreement, dated as of June 9, 2000, among the Issuers and the Initial Purchasers (the "PURCHASE AGREEMENT"), which provides for, among other things, the sale by the Company to the Initial Purchasers of $170,000,000 aggregate principal amount of the Company's 13% Senior Subordinated Notes due 2009 (the "NOTES"), guaranteed by the Guarantors (the "GUARANTEES"). The Notes and the Guarantees are collectively referred to herein as the "SECURITIES". In order to induce the Initial Purchasers to enter into the Purchase Agreement, the Issuers have agreed to provide the registration rights set forth in this Agreement for the benefit of the Initial Purchasers and any subsequent holder or holders of the Securities. The execution and delivery of this Agreement is a condition to the Initial Purchasers' obligation to purchase the Securities under the Purchase Agreement. The parties hereby agree as follows: 1. DEFINITIONS As used in this Agreement, the following terms shall have the following meanings: ADDITIONAL INTEREST: See Section 4 hereof. ADVICE: See the last paragraph of Section 5 hereof. APPLICABLE PERIOD: See Section 2 hereof. COMPANY: See the introductory paragraphs hereto. EFFECTIVENESS DATE: The 150th day after the Issue Date; PROVIDED, HOWEVER, that with respect to any Shelf Registration, the Effectiveness Date shall be the 150th day after the delivery of a Shelf Notice as required pursuant to Section 2(c) hereof. EFFECTIVENESS PERIOD: See Section 3 hereof. EVENT DATE: See Section 4 hereof. -2- EXCHANGE ACT: The Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder. EXCHANGE NOTES: See Section 2 hereof. EXCHANGE OFFER: See Section 2 hereof. EXCHANGE OFFER REGISTRATION STATEMENT: See Section 2 hereof. FILING DATE: (A) If no Exchange Offer Registration Statement has been filed by the Issuers pursuant to this Agreement, the 60th day after the Issue Date; and (B) with respect to a Shelf Registration Statement, the 60th day after the delivery of a Shelf Notice as required pursuant to Section 2(c) hereof. GUARANTEES: See the introductory paragraphs hereto. GUARANTORS: See the introductory paragraphs hereto. HOLDER: Any holder of a Registrable Note or Registrable Notes. INDEMNIFIED PERSON: See Section 7(c) hereof. INDEMNIFYING PERSON: See Section 7(c) hereof. INDENTURE: The Indenture, dated as of June 16, 2000, by and among the Issuers and United States Trust Company of New York, as trustee, pursuant to which the Securities are being issued, as the same may be amended or supplemented from time to time in accordance with the terms thereof. INITIAL PURCHASERS: See the introductory paragraphs hereto. INITIAL SHELF REGISTRATION: See Section 3(a) hereof. INSPECTORS: See Section 5(m) hereof. ISSUE DATE: June 16, 2000, the date of original issuance of the Notes. ISSUERS: See the introductory paragraphs hereto. NASD: See Section 5(r) hereof. NOTES: See the introductory paragraphs hereto. -3- OFFERING MEMORANDUM: The final offering memorandum of the Company dated June 9, 2000, in respect of the offering of the Securities. PARTICIPANT: See Section 7(a) hereof. PARTICIPATING BROKER-DEALER: See Section 2 hereof. PERSON: An individual, trustee, corporation, partnership, limited liability company, joint stock company, trust, unincorporated association, union, business association, firm or other legal entity. PRIVATE EXCHANGE: See Section 2 hereof. PRIVATE EXCHANGE NOTES: See Section 2 hereof. PROSPECTUS: The prospectus included in any Registration Statement (including, without limitation, any prospectus subject to completion and a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated under the Securities Act and any term sheet filed pursuant to Rule 434 under the Securities Act), as amended or supplemented by any prospectus supplement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus. PURCHASE AGREEMENT: See the introductory paragraphs hereof. RECORDS: See Section 5(m) hereof. REGISTRABLE NOTES: Each Security upon its original issuance and at all times subsequent thereto, each Exchange Note (and the related Guarantee) as to which Section 2(c)(iv) hereof is applicable upon original issuance and at all times subsequent thereto and each Private Exchange Note (and the related Guarantee) upon original issuance thereof and at all times subsequent thereto, until (i) a Registration Statement (other than, with respect only to any Exchange Note as to which Section 2(c)(iv) hereof is applicable, the Exchange Offer Registration Statement) covering such Security, Exchange Note or Private Exchange Note has been declared effective by the SEC and such Security, Exchange Note or such Private Exchange Note (and the related Guarantees), as the case may be, has been disposed of in accordance with such effective Registration Statement, (ii) such Security has been exchanged pursuant to the Exchange Offer for an Exchange Note or Exchange Notes (and the related Guarantees) that may be resold without restriction under state and federal securities laws, (iii) such Security, Exchange Note or Private Exchange Note (and the related Guarantees), as the case may be, ceases to be outstanding for purposes of the Indenture or (iv) such Security, -4- Exchange Note or Private Exchange Note (and the related Guarantees), as the case may be, may be resold without restriction pursuant to Rule 144 (or any similar provision then in force) under the Securities Act. REGISTRATION STATEMENT: Any registration statement of the Issuers that covers any of the Notes, the Exchange Notes or the Private Exchange Notes (and the related Guarantees) filed with the SEC under the Securities Act, including the Prospectus, amendments and supplements to such registration statement, including post-effective amendments, all exhibits, and all material incorporated by reference or deemed to be incorporated by reference in such registration statement. RULE 144: Rule 144 promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule (other than Rule 144A) or regulation hereafter adopted by the SEC providing for offers and sales of securities made in compliance therewith resulting in offers and sales by subsequent holders that are not affiliates of the issuer of such securities being free of the registration and prospectus delivery requirements of the Securities Act. RULE 144A: Rule 144A promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule (other than Rule 144) or regulation hereafter adopted by the SEC. RULE 415: Rule 415 promulgated under the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the SEC. SEC: The Securities and Exchange Commission. SECURITIES: See the introductory paragraphs hereto. SECURITIES ACT: The Securities Act of 1933, as amended, and the rules and regulations of the SEC promulgated thereunder. SHELF NOTICE: See Section 2 hereof. SHELF REGISTRATION: See Section 3(b) hereof. SUBSEQUENT SHELF REGISTRATION: See Section 3(b) hereof. TIA: The Trust Indenture Act of 1939, as amended. TRUSTEE: The trustee under the Indenture and the trustee (if any) under any indenture governing the Exchange Notes and Private Exchange Notes (and the related Guarantees). -5- UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A registration in which securities of one or more of the Issuers are sold to an underwriter for reoffering to the public. 2. EXCHANGE OFFER (a) To the extent not prohibited by any applicable law or applicable interpretation of the staff of the SEC, the Issuers shall use all commercially reasonable efforts to file with the SEC, no later than the Filing Date, a Registration Statement (the "EXCHANGE OFFER REGISTRATION STATEMENT") on an appropriate registration form with respect to a registered offer (the "EXCHANGE OFFER") to exchange any and all of the Registrable Notes for a like aggregate principal amount of notes of the Company, guaranteed by the Guarantors, that are identical in all material respects to the Securities (the "EXCHANGE NOTES"), except that (i) the Exchange Notes shall contain no restrictive legend thereon and (ii) interest on each Exchange Note shall accrue (A) from the later of (i) the last interest payment date on which interest was paid on the Note surrendered in exchange therefor, or (ii) if the Note is surrendered for exchange on a date which is subsequent to the record date for an interest payment date to occur on or after the date of such exchange and as to which interest will be paid, the date of such interest payment date or (B) if no interest has been paid on such Note, from the Issue Date, and which are entitled to the benefits of the Indenture or a trust indenture which is identical in all material respects to the Indenture (other than such changes to the Indenture or any such identical trust indenture as are necessary to comply with the TIA) and which, in either case, has been qualified under the TIA. The Exchange Offer shall comply with all applicable tender offer rules and regulations under the Exchange Act and other applicable law. The Issuers shall use all commercially reasonable efforts to (x) cause the Exchange Offer Registration Statement to be declared effective under the Securities Act on or before the Effectiveness Date; (y) keep the Exchange Offer open for not less than 30 days (or longer if required by applicable law) after the date that notice of the Exchange Offer is mailed to Holders; and (z) consummate the Exchange Offer on or prior to the 185th day after the Issue Date. If, after the Exchange Offer Registration Statement is initially declared effective by the SEC, the Exchange Offer or the issuance of the Exchange Notes thereunder is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court, the Exchange Offer Registration Statement shall be deemed not to have become effective for purposes of this Agreement during the period of such interference, until the Exchange Offer may legally resume. Each Holder that participates in the Exchange Offer will be required, as a condition to its participation in the Exchange Offer, to represent to the Issuers in writing (which may be contained in the applicable letter of transmittal) that: (i) any Exchange Notes to be received by it will be acquired in the ordinary course of its business, (ii) at the time of the commencement of the Exchange Offer such Holder will have no arrangement or understanding with any Person to participate in the distribution of the Exchange Notes in violation of the -6- provisions of the Securities Act, (iii) such Holder is not an "affiliate" (as defined in Rule 405 promulgated under the Securities Act) of the Company, (iv) if such Holder is not a broker-dealer, such Holder is not engaged in, and does not intend to engage in, the distribution of Exchange Notes, (v) if such Holder is a broker-dealer that will receive Exchange Notes for its own account in exchange for Notes that were acquired as a result of market-making or other trading activities, such Holder will deliver a prospectus in connection with any resale of such Exchange Notes and (vi) the Holder is not acting on behalf of any persons or entities who could not truthfully make the foregoing representations. Such Holder will also be required to make such other representations as may be necessary under applicable SEC rules, regulations or interpretations to render available the use of Form S-4 or any other appropriate form under the Securities Act. Upon consummation of the Exchange Offer in accordance with this Section 2, the provisions of this Agreement shall continue to apply solely with respect to Registrable Notes that are Private Exchange Notes, Exchange Notes as to which Section 2(c)(iv) is applicable and Exchange Notes held by Participating Broker-Dealers (as defined), and the Issuers shall have no further obligation to register Registrable Notes (other than Private Exchange Notes and other than in respect of any Exchange Notes as to which clause 2(c)(iv) hereof applies) pursuant to Section 3 hereof. No securities other than the Exchange Notes shall be included in the Exchange Offer Registration Statement. (b) The Issuers shall include within the Prospectus contained in the Exchange Offer Registration Statement a section entitled "Plan of Distribution," reasonably acceptable to the Initial Purchasers, which shall contain a summary statement of the positions taken or policies made by the staff of the SEC with respect to the potential "underwriter" status of any broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under the Exchange Act) of Exchange Notes received by such broker-dealer in the Exchange Offer (a "PARTICIPATING BROKER-DEALER"), whether such positions or policies have been publicly disseminated by the staff of the SEC or such positions or policies represent the prevailing views of the staff of the SEC. Such "Plan of Distribution" section shall also expressly permit, to the extent permitted by applicable policies and regulations of the SEC, the use of the Prospectus by all Persons subject to the prospectus delivery requirements of the Securities Act, including, to the extent permitted by applicable policies and regulations of the SEC, all Participating Broker-Dealers, and include a statement describing the means by which Participating Broker-Dealers may resell the Exchange Notes in compliance with the Securities Act. The Issuers shall use all commercially reasonable efforts to keep the Exchange Offer Registration Statement effective and to amend and supplement the Prospectus contained therein in order to permit such Prospectus to be lawfully delivered by all Persons subject to the prospectus delivery requirements of the Securities Act for such period of time as is neces- -7- sary to comply with applicable law in connection with any resale of the Exchange Notes covered thereby, PROVIDED, HOWEVER, that such period shall not be required to exceed 180 days, or such longer period if extended pursuant to the last sentence of Section 5 (the "APPLICABLE Period"). If, prior to consummation of the Exchange Offer, the Initial Purchasers hold any Notes acquired by them that have the status of an unsold allotment in the initial distribution, the Issuers upon the request of the Initial Purchasers shall simultaneously with the delivery of the Exchange Notes in the Exchange Offer, issue and deliver to the Initial Purchasers, in exchange (the "PRIVATE EXCHANGE") for such Notes held by the Initial Purchasers, a like principal amount of notes (the "PRIVATE EXCHANGE NOTES") of the Issuers, guaranteed by the Guarantors, that are identical in all material respects to the Exchange Notes except for the placement of a restrictive legend on such Private Exchange Notes. The Private Exchange Notes shall be issued pursuant to the same indenture as the Exchange Notes and bear the same CUSIP number as the Exchange Notes. In connection with the Exchange Offer, the Issuers shall: (1) mail, or cause to be mailed, to each Holder of record entitled to participate in the Exchange Offer a copy of the Prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents; (2) use their best efforts to keep the Exchange Offer open for not less than 30 days after the date that notice of the Exchange Offer is mailed to Holders (or longer if required by applicable law); (3) utilize the services of a depositary for the Exchange Offer with an address in the Borough of Manhattan, The City of New York; (4) permit Holders to withdraw tendered Securities at any time prior to the close of business, New York time, on the last business day on which the Exchange Offer shall remain open; and (5) otherwise comply in all material respects with all applicable laws, rules and regulations. As soon as practicable after the close of the Exchange Offer and the Private Exchange, if any, the Issuers shall: (1) accept for exchange all Registrable Notes validly tendered and not validly withdrawn pursuant to the Exchange Offer and the Private Exchange, if any; -8- (2) deliver to the Trustee for cancellation all Registrable Notes so accepted for exchange; and (3) cause the Trustee to authenticate and deliver promptly to each Holder of Securities, Exchange Notes or Private Exchange Notes, as the case may be, equal in principal amount to the Securities of such Holder so accepted for exchange. The Exchange Offer and the Private Exchange shall not be subject to any conditions, other than that (i) the Exchange Offer or the Private Exchange, as the case may be, does not violate applicable law or any applicable interpretation of the staff of the SEC, (ii) no action or proceeding shall have been instituted or threatened in any court or by any governmental agency which might materially impair the ability of the Issuers to proceed with the Exchange Offer or the Private Exchange, (iii) all governmental approvals shall have been obtained, which approvals the Issuers deem necessary for the consummation of the Exchange Offer or the Private Exchange, (iv) there has not been any material change, or development involving a prospective material change, in the business or financial affairs of the Issuers which, in the reasonable judgment of the Issuers, would materially impair the Issuers' ability to consummate the Exchange Offer or the Private Exchange, and (v) there has not been proposed, adopted or enacted any law, statute, rule or regulation which, in the reasonable judgment of the Issuers, would materially impair the Issuers' ability to consummate the Exchange Offer or the Private Exchange or have a material adverse effect on the Issuers if the Exchange Offer or the Private Exchange was consummated. In the event that the Issuers are unable to consummate the Exchange Offer or the Private Exchange due to any event listed in clauses (i) through (v) above, the Issuers shall not be deemed to have breached any covenant under this Section 2. The Exchange Notes and the Private Exchange Notes shall be issued under (i) the Indenture or (ii) an indenture identical in all material respects to the Indenture and which, in either case, has been qualified under the TIA or is exempt from such qualification and shall provide that the Exchange Notes shall not be subject to the transfer restrictions set forth in the Indenture. The Indenture or such indenture shall provide that the Exchange Notes, the Private Exchange Notes and the Securities shall vote and consent together on all matters as one class and that none of the Exchange Notes, the Private Exchange Notes or the Securities will have the right to vote or consent as a separate class on any matter. (c) If (i) because of any change in law or in currently prevailing interpretations of the staff of the SEC, the Issuers are not permitted to effect the Exchange Offer, (ii) the Exchange Offer is not consummated within 185 days of the Issue Date, (iii) the holder of Private Exchange Notes so requests in writing to the Issuers within 60 days after the consummation of the Exchange Offer, or (iv) in the case of any Holder that participates in the Exchange Offer, such Holder does not receive Exchange Notes on the date of the exchange that may be sold without restriction under state and federal securities laws (other than due solely to the -9- status of such Holder as an affiliate of one of the Issuers within the meaning of the Securities Act), then in the case of each of clauses (i) to and including (iv) of this sentence, the Issuers shall promptly deliver to the Holders and the Trustee written notice thereof (the "SHELF NOTICE") and shall file a Shelf Registration pursuant to Section 3 hereof. 3. SHELF REGISTRATION If at any time a Shelf Notice is delivered as contemplated by Section 2(c) hereof, then: (a) SHELF REGISTRATION. The Issuers shall file with the SEC a Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 covering all of the Registrable Notes not exchanged in the Exchange Offer, Private Exchange Notes and Exchange Notes as to which Section 2(c)(iv) is applicable (the "INITIAL SHELF REGISTRATION"). The Issuers shall use all commercially reasonable efforts to file with the SEC the Initial Shelf Registration on or before the applicable Filing Date. The Initial Shelf Registration shall be on Form S-3 or another appropriate form permitting registration of such Registrable Notes for resale by Holders in the manner or manners designated by them (including, without limitation, one or more underwritten offerings). The Issuers shall not permit any securities other than the Registrable Notes to be included in the Initial Shelf Registration or any Subsequent Shelf Registration (as defined below). The Issuers shall, subject to applicable law or applicable interpretation of the staff of the SEC, use all commercially reasonable efforts to cause the Initial Shelf Registration to be declared effective under the Securities Act on or prior to the Effectiveness Date and to keep the Initial Shelf Registration continuously effective under the Securities Act until the date which is two years from the Issue Date or such shorter period ending when (i) all Registrable Notes covered by the Initial Shelf Registration have been sold in the manner set forth and as contemplated in the Initial Shelf Registration or cease to be outstanding or (ii) a Subsequent Shelf Registration covering all of the Registrable Notes covered by and not sold under the Initial Shelf Registration or an earlier Subsequent Shelf Registration has been declared effective under the Securities Act (the "EFFECTIVENESS PERIOD"), PROVIDED, HOWEVER, that the Effectiveness Period in respect of the Initial Shelf Registration shall be extended to the extent required to permit dealers to comply with the applicable prospectus delivery requirements of Rule 174 under the Securities Act and as otherwise provided herein. No holder of Registrable Notes may include any of its Registrable Notes in any Shelf Registration Statement pursuant to this Agreement unless and until such holder furnishes to the Company in writing, within 15 business days after receipt of a request therefor, such information concerning such Holder required to be included in any Shelf Registration Statement or Prospectus or preliminary prospectus included therein. No holder of Registrable Notes shall be entitled to Additional Interest pursuant to Section 4 hereof unless and until -10- such holder shall have provided all such information. Each holder of Registrable Notes as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the Company all information required to be disclosed in order to make information previously furnished to the Company by such Holder not materially misleading. (b) SUBSEQUENT SHELF REGISTRATIONS. If the Initial Shelf Registration or any Subsequent Shelf Registration ceases to be effective for any reason at any time during the Effectiveness Period (other than because of the sale of all of the securities registered thereunder), the Issuers shall use all commercially reasonable efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall within 30 days of such cessation of effectiveness amend the Initial Shelf Registration in a manner to obtain the withdrawal of the order suspending the effectiveness thereof, or file an additional "shelf" Registration Statement pursuant to Rule 415 covering all of the Registrable Notes covered by and not sold under the Initial Shelf Registration or an earlier Subsequent Shelf Registration (each, a "SUBSEQUENT SHELF REGISTRATION"). If a Subsequent Shelf Registration is filed, the Issuers shall use their best efforts to cause the Subsequent Shelf Registration to be declared effective under the Securities Act as soon as practicable after such filing and to keep such subsequent Shelf Registration continuously effective for a period equal to the number of days in the Effectiveness Period less the aggregate number of days during which the Initial Shelf Registration or any Subsequent Shelf Registration was previously continuously effective. As used herein the term "SHELF REGISTRATION" means the Initial Shelf Registration and any Subsequent Shelf Registration. (c) SUPPLEMENTS AND AMENDMENTS. The Issuers shall promptly supplement and amend any Shelf Registration if required by the rules, regulations or instructions applicable to the registration form used for such Shelf Registration, if required by the Securities Act, or if reasonably requested by the Holders of a majority in aggregate principal amount of the Registrable Notes covered by such Registration Statement or by any underwriter of such Registrable Notes. 4. ADDITIONAL INTEREST (a) The Issuers and the Initial Purchasers agree that the Holders will suffer damages if the Issuers fail to fulfill their obligations under Section 2 or Section 3 hereof and that it would not be feasible to ascertain the extent of such damages with precision. Accordingly, the Issuers agree to pay, as liquidated damages, additional interest on the Notes ("ADDITIONAL INTEREST") under the circumstances and to the extent set forth below (each of which shall be given independent effect): (i) if (A) neither the Exchange Offer Registration Statement nor the Initial Shelf Registration has been filed on or prior to the applicable Filing Date or (B) notwithstanding that the Issuers have consummated or will consummate the Ex -11- change Offer, the Issuers are required to file a Shelf Registration and such Shelf Registration is not filed on or prior to the Filing Date applicable thereto, then, commencing on the day after any such Filing Date, Additional Interest shall accrue on the principal amount of the Securities at a rate of 0.50% per annum for the first 90 days immediately following each such Filing Date, and such Additional Interest rate shall increase by an additional 0.50% per annum at the beginning of each subsequent 90-day period; or (ii) if (A) neither the Exchange Offer Registration Statement nor the Initial Shelf Registration is declared effective by the SEC on or prior to the relevant Effectiveness Date or (B) notwithstanding that the Issuers have consummated or will consummate the Exchange Offer, the Issuers are required to file a Shelf Registration and such Shelf Registration is not declared effective by the SEC on or prior to the Effectiveness Date in respect of such Shelf Registration, then, commencing on the day after such Effectiveness Date, Additional Interest shall accrue on the principal amount of the Securities at a rate of 0.50% per annum for the first 90 days immediately following the day after such Effectiveness Date, and such Additional Interest rate shall increase by an additional 0.50% per annum at the beginning of each subsequent 90-day period; or (iii) if (A) the Issuers have not exchanged Exchange Notes for all Securities validly tendered in accordance with the terms of the Exchange Offer on or prior to the 185th day after the Issue Date or (B) if applicable, a Shelf Registration has been declared effective and such Shelf Registration ceases to be effective at any time during the Effectiveness Period, then Additional Interest shall accrue on the principal amount of the Securities at a rate of 0.50% per annum for the first 90 days commencing on the (x) 185th day after the Issue Date in the case of (A) above, or (y) the day such Shelf Registration ceases to be effective in the case of (B) above, and such Additional Interest rate shall increase by an additional 0.50% per annum at the beginning of each such subsequent 90-day period; PROVIDED, HOWEVER, that the Additional Interest rate on the Notes may not accrue under more than one of the foregoing clauses (i)-(iii) at any one time and at no time shall the aggregate amount of Additional Interest exceed 1.00% per annum; PROVIDED, FURTHER, HOWEVER, that (1) upon the filing of the applicable Exchange Offer Registration Statement or the applicable Shelf Registration Statement as required hereunder (in the case of clause (i) above of this Section 4), (2) upon the effectiveness of the Exchange Offer Registration Statement or the applicable Shelf Registration Statement as required hereunder (in the case of clause (ii) of this Section 4), or (3) upon the exchange of the applicable Exchange Notes for all Securities tendered (in the case of clause (iii)(A) of this Section 4), or upon the effectiveness of the applicable Shelf Registration Statement which had ceased to remain effective (in the case of (iii)(B) -12- of this Section 4), Additional Interest on the Notes in respect of which such events relate as a result of such clause (or the relevant subclause thereof), as the case may be, shall cease to accrue. (b) The Issuers shall notify the Trustee within three business days after each and every date on which an event occurs in respect of which Additional Interest is required to be paid (an "EVENT DATE"). Any amounts of Additional Interest due pursuant to (a)(i), (a)(ii) or (a)(iii) of this Section 4 will be payable in cash semiannually on each June 15 and December 15, (to the holders of record on the June 1 and December 1 immediately preceding such dates), commencing with the first such date occurring after any such Additional Interest commences to accrue. The amount of Additional Interest will be determined by multiplying the applicable Additional Interest rate by the principal amount of the Registrable Notes, multiplied by a fraction, the numerator of which is the number of days such Additional Interest rate was applicable during such period (determined on the basis of a 360-day year comprised of twelve 30-day months and, in the case of a partial month, the actual number of days elapsed), and the denominator of which is 360. 5. REGISTRATION PROCEDURES In connection with the filing of any Registration Statement pursuant to Sections 2 or 3 hereof, the Issuers shall effect such registrations to permit the sale of the securities covered thereby in accordance with the intended method or methods of disposition thereof, and pursuant thereto and in connection with any Registration Statement filed by the Issuers hereunder each of the Issuers shall: (a) Prepare and file with the SEC prior to the applicable Filing Date, a Registration Statement or Registration Statements as prescribed by Sections 2 or 3 hereof, and use their reasonable best efforts to cause each such Registration Statement to become effective and remain effective as provided herein; PROVIDED, HOWEVER, that, if (1) such filing is pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period relating thereto, before filing any Registration Statement or Prospectus or any amendments or supplements thereto, the Issuers shall furnish to and afford the Holders of the Registrable Notes included in such Registration Statement or each such Participating Broker-Dealer, as the case may be, their counsel and the managing underwriters, if any, a reasonable opportunity to review copies of all such documents (including copies of any documents to be incorporated by reference therein and all exhibits thereto) proposed to be filed (in each case at least five days prior to such filing, or such later date as is reasonable under the circumstances). The Issuers shall not file any Registration Statement or Prospectus or any amendments or supplements thereto if the Holders of a majority in aggregate principal amount of the Registrable Notes included in such Registration Statement, or any such Participating Broker-Dealer, as the -13- case may be, their counsel, or the managing underwriters, if any, shall reasonably object on a timely basis. (b) Prepare and file with the SEC such amendments and post-effective amendments to each Shelf Registration Statement or Exchange Offer Registration Statement, as the case may be, as may be necessary to keep such Registration Statement continuously effective for the Effectiveness Period or the Applicable Period, as the case may be; cause the related Prospectus to be supplemented by any Prospectus supplement required by applicable law, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) promulgated under the Securities Act; and comply with the provisions of the Securities Act and the Exchange Act applicable to each of them with respect to the disposition of all securities covered by such Registration Statement as so amended or in such Prospectus as so supplemented and with respect to the subsequent resale of any securities being sold by a Participating Broker-Dealer covered by any such Prospectus. The Issuers shall be deemed not to have used all commercially reasonable efforts to keep a Registration Statement effective during the Effectiveness Period or the Applicable Period, as the case may be, relating thereto if any Issuer voluntarily takes any action that would result in selling Holders of the Registrable Notes covered thereby or Participating Broker-Dealers seeking to sell Exchange Notes not being able to sell such Registrable Notes or such Exchange Notes during that period unless such action is required by applicable law or permitted by this Agreement. (c) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period relating thereto from whom the Issuers have received written notice that it will be a Participating Broker-Dealer in the Exchange Offer, notify the selling Holders of Registrable Notes, or each such Participating Broker-Dealer, as the case may be, their counsel and the managing underwriters, if any, promptly (but in any event within two business days), and confirm such notice in writing, (i) when a Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to any applicable Registration Statement or any post-effective amendment, when the same has become effective under the Securities Act (including in such notice a written statement that any Holder may, upon request in writing, obtain, at the sole expense of the Issuers, one conformed copy of such Registration Statement or post-effective amendment including financial statements and schedules, documents incorporated or deemed to be incorporated by reference and exhibits), (ii) of the issuance by the SEC of any stop order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of any preliminary prospectus or the initiation of any proceedings for that purpose, (iii) if at any time when a prospectus is required by the Securities Act to be delivered in connection with sales of the Registrable Notes or resales of Exchange Notes by Participating Broker-Dealers the representations and warranties of the Issuers contained in any agreement (includ- -14- ing any underwriting agreement) contemplated by Section 5(l) hereof cease to be true and correct in all material respects, (iv) of the receipt by any Issuer of any notification with respect to the suspension of the qualification or exemption from qualification of a Registration Statement or any of the Registrable Notes or the Exchange Notes to be sold by any Participating Broker-Dealer for offer or sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, (v) of the happening of any event, the existence of any condition or any information becoming known that makes any statement made in such Registration Statement or related Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in or amendments or supplements to such Registration Statement, Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (vi) of the Issuers' determination that a post-effective amendment to a Registration Statement would be appropriate. (d) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, use its reasonable best efforts to prevent the issuance of any order suspending the effectiveness of a Registration Statement or of any order preventing or suspending the use of a Prospectus or suspending the qualification (or exemption from qualification) of any of the Registrable Notes or the Exchange Notes to be sold by any Participating Broker-Dealer, for sale in any jurisdiction, and, if any such order is issued, to use its reasonable best efforts to obtain the withdrawal of any such order at the earliest possible moment. (e) If a Shelf Registration is filed pursuant to Section 3 and if requested by the managing underwriter or underwriters (if any), the Holders of a majority in aggregate principal amount of the Registrable Notes being sold in connection with an underwritten offering or any Participating Broker-Dealer, (i) as promptly as practicable incorporate in a prospectus supplement or post-effective amendment such information as the managing underwriter or underwriters (if any), such Holders, any Participating Broker-Dealer or counsel for any of them reasonably request to be included therein, (ii) make all required filings of such prospectus supplement or such post-effective amendment as soon as practicable after an Issuer has received notification of the matters to be incorporated in such prospectus supplement or post-effective amendment, and (iii) supplement or make amendments to such Registration Statement. -15- (f) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, furnish to each selling Holder of Registrable Notes and to each such Participating Broker-Dealer who so requests and to their respective counsel and each managing underwriter, if any, at the sole expense of the Issuers, one conformed copy of the Registration Statement or Registration Statements and each post-effective amendment thereto, including financial statements and schedules, and, if requested in writing, all documents incorporated or deemed to be incorporated therein by reference and all exhibits. (g) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, deliver to each selling Holder of Registrable Notes, or each such Participating Broker-Dealer, as the case may be, their respective counsel, and the underwriters, if any, at the sole expense of the Issuers, as many copies of the Prospectus or Prospectuses (including each form of preliminary prospectus) and each amendment or supplement thereto and if requested in writing, any documents incorporated by reference therein as such Persons may reasonably request; and, subject to the last paragraph of this Section 5, the Issuers hereby consent to the use of such Prospectus and each amendment or supplement thereto (provided the manner of such use complies with any limitations resulting from any applicable state securities "Blue Sky" laws as provided in writing to such Holders by the Company and subject to the provisions of this Agreement) each of the selling Holders of Registrable Notes or each such Participating Broker-Dealer, as the case may be, and the underwriters or agents, if any, and dealers (if any), in connection with the offering and sale of the Registrable Notes covered by, or the sale by Participating Broker-Dealers of the Exchange Notes pursuant to, such Prospectus and any amendment or supplement thereto. (h) Prior to any public offering of Registrable Notes or any delivery of a Prospectus contained in the Exchange Offer Registration Statement by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, use its best efforts to register or qualify, and to cooperate with the selling Holders of Registrable Notes or each such Participating Broker-Dealer, as the case may be, the managing underwriter or underwriters, if any, and their respective counsel in connection with the registration or qualification (or exemption from such registration or qualification) of such Registrable Notes for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United States as any selling Holder, Participating Broker-Dealer, or the managing underwriter or underwriters reasonably request in writing; PROVIDED, HOWEVER, that where Exchange Notes held by Participating Broker-Dealers or Registrable Notes are offered other than through an underwritten offering, the Issuers agree to cause their counsel to perform Blue Sky investigations and file -16- registrations and qualifications required to be filed pursuant to this Section 5(h), keep each such registration or qualification (or exemption therefrom) effective during the period such Registration Statement is required to be kept effective and do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Exchange Notes held by Participating Broker-Dealers or the Registrable Notes covered by the applicable Registration Statement; PROVIDED, HOWEVER, that no Issuer shall be required to (A) qualify generally to do business in any jurisdiction where it is not then so qualified, (B) take any action that would subject it to general service of process in any such jurisdiction where it is not then so subject or (C) subject itself to taxation in excess of a nominal dollar amount in any such jurisdiction where it is not then so subject. (i) If a Shelf Registration is filed pursuant to Section 3 hereof, cooperate with the selling Holders of Registrable Notes and the managing underwriter or underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Notes to be sold, which certificates shall not bear any restrictive legends and shall be in a form eligible for deposit with The Depository Trust Company; and enable such Registrable Notes to be in such denominations and registered in such names as the managing underwriter or underwriters, if any, or selling Holders may reasonably request. (j) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, upon the occurrence of any event contemplated by paragraph 5(c)(v) or 5(c)(vi) hereof, as promptly as practicable prepare and (subject to Section 5(a) hereof) file with the SEC, at the sole expense of the Issuers, a supplement or post-effective amendment to the Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Notes being sold thereunder or to the purchasers of the Exchange Notes to whom such Prospectus will be delivered by a Participating Broker-Dealer, any such Prospectus will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, the Issuers shall not be required to amend or supplement a Registration Statement, any related Prospectus or any document incorporated therein by reference, in the event that, and for a period not to exceed an aggregate of 60 days in any calendar year if, (i) an event occurs and is continuing as a result of which the Shelf Registration would, in the Issuers' good faith judgment, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and (ii) (a) the Issuers determine in their good faith judgment that the disclosure of such event at such time would have a material adverse effect on the business, opera- -17- tions or prospects of the Issuers or (b) the disclosure otherwise relates to a pending material business transaction that has not yet been publicly disclosed. (k) Prior to the effective date of the first Registration Statement relating to the Registrable Notes, (i) provide the Trustee with certificates for the Registrable Notes in a form eligible for deposit with The Depository Trust Company and (ii) provide a CUSIP number for the Registrable Notes. (l) In connection with any underwritten offering of Registrable Notes pursuant to a Shelf Registration, enter into an underwriting agreement as is customary in underwritten offerings of debt securities similar to the Securities in form and substance reasonably satisfactory to the Issuers and take all such other actions as are reasonably requested by the managing underwriter or underwriters in order to expedite or facilitate the registration or the disposition of such Registrable Notes and, in such connection, (i) make such representations and warranties to, and covenants with, the underwriters with respect to the business of the Issuers and the subsidiaries of the Issuers (including any acquired business, properties or entity, if applicable) and the Registration Statement, Prospectus and documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, as are customarily made by issuers to underwriters in underwritten offerings of debt securities similar to the Securities, and confirm the same in writing if and when requested in form and substance reasonably satisfactory to the Issuers; (ii) upon the request of Holders of 10% of the Registrable Notes, obtain the written opinions of counsel to the Issuers and written updates thereof in form, scope and substance reasonably satisfactory to the managing underwriter or underwriters, addressed to the underwriters covering the matters customarily covered in opinions reasonably requested in underwritten offerings and such other matters as may be reasonably requested by the managing underwriter or underwriters; (iii) upon the request of Holders of 10% of the Registrable Notes, use its reasonable best efforts to obtain "cold comfort" letters and updates thereof in form, scope and substance reasonably satisfactory to the managing underwriter or underwriters from the independent public accountants of the Issuers (and, if necessary, any other independent public accountants of the Issuers, any subsidiary of the Issuers or of any business acquired by the Issuers for which financial statements and financial data are, or are required to be, included or incorporated by reference in the Registration Statement), addressed to each of the underwriters, such letters to be in customary form and covering matters of the type customarily covered in "cold comfort" letters in connection with underwritten offerings of debt securities similar to the Securities and such other matters as reasonably requested by the managing underwriter or underwriters as permitted by the Statement on Auditing Standards No. 72; and (iv) if an underwriting agreement is entered into, cause the same to contain indemnification provisions and procedures no less favorable to the sellers and underwriters, if any, than those set forth in Section 7 hereof (or such other provisions and procedures acceptable to Holders of a majority in aggregate principal amount of Registrable Notes covered by such Registration Statement and the managing underwriter or underwriters or agents, if any). -18- The above shall be done at each closing under such underwriting agreement, or as and to the extent required thereunder. (m) If (1) a Shelf Registration is filed pursuant to Section 3 hereof, or (2) a Prospectus contained in the Exchange Offer Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period, make available for inspection by any selling Holder of such Registrable Notes being sold, or each such Participating Broker-Dealer, as the case may be, any underwriter participating in any such disposition of Registrable Notes, if any, and any attorney, accountant or other agent retained by any such selling Holder or each such Participating Broker-Dealer, as the case may be, or underwriter (collectively, the "INSPECTORS"), at the offices where normally kept, during reasonable business hours, all financial and other records, pertinent corporate documents and instruments of the Issuers and subsidiaries of the Issuers (collectively, the "RECORDS") as shall be reasonably necessary to enable them to exercise any applicable due diligence responsibilities, and cause the officers, directors and employees of the Issuers and any of their subsidiaries to supply all information reasonably requested by any such Inspector in connection with such Registration Statement and Prospectus. The foregoing inspection and information gathering shall be coordinated on behalf of the other parties by one counsel designated by such parties as described in Section 6(b) hereof. Each Inspector shall agree in writing that it will keep the Records confidential and that it will not disclose any of the Records that the Issuers determine, in good faith, to be confidential (i) the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, or (ii) the information in such Records has been made generally available to the public; PROVIDED, HOWEVER, that prior notice shall be provided as soon as practicable to the Issuers of the potential disclosure of any information by such Inspector pursuant to clause (i) of this sentence to permit the Issuers to obtain a protective order or take other appropriate action to prevent the disclosure of such information at the Company's sole expense (or waive the provisions of this paragraph (m)) and that such Inspector shall take such actions as are reasonably necessary to protect the confidentiality of such information (if practicable) to the extent such action is otherwise not inconsistent with, an impairment of or in derogation of the rights and interests of the Holder or any Inspector. (n) Provide an indenture trustee for the Registrable Notes or the Exchange Notes, as the case may be, and cause the Indenture or the trust indenture provided for in Section 2(a) hereof, as the case may be, to be qualified under the TIA not later than the effective date of the first Registration Statement relating to the Registrable Notes; and in connection therewith, cooperate with the trustee under any such indenture and the Holders of the Registrable Notes to effect such changes to such indenture as may be required for such indenture to be so qualified in accordance with the terms of the TIA; and execute, and use its best efforts to cause such trustee to execute, all documents as may be required to effect such changes, and all -19- other forms and documents required to be filed with the SEC to enable such indenture to be so qualified in a timely manner. (o) Comply with all applicable rules and regulations of the SEC and make generally available to its securityholders with regard to any applicable Registration Statement, a consolidated earnings statement satisfying the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 60 days after the end of any fiscal quarter (or 120 days after the end of any 12-month period if such period is a fiscal year) (i) commencing at the end of any fiscal quarter in which Registrable Notes are sold to underwriters in a firm commitment or best efforts underwritten offering and (ii) if not sold to underwriters in such an offering, commencing on the first day of the first fiscal quarter of the Issuers after the effective date of a Registration Statement, which statements shall cover said 12-month periods. (p) Upon consummation of the Exchange Offer or a Private Exchange, obtain an opinion of counsel to the Issuers, in a form customary for underwritten transactions, addressed to the Trustee for the benefit of all Holders of Registrable Notes participating in the Exchange Offer or the Private Exchange, as the case may be, that the Exchange Notes or Private Exchange Notes, as the case may be, the related Guarantee and the related indenture constitute legal, valid and binding obligations of the Issuers, enforceable against them in accordance with their respective terms, subject to customary exceptions and qualifications. (q) If the Exchange Offer or a Private Exchange is to be consummated, upon delivery of the Registrable Notes by Holders to the Issuers (or to such other Person as directed by the Issuers) in exchange for the Exchange Notes or the Private Exchange Notes, as the case may be, the Issuers shall mark, or cause to be marked, on such Registrable Notes that such Registrable Notes are being cancelled in exchange for the Exchange Notes or the Private Exchange Notes, as the case may be; in no event shall such Registrable Notes be marked as paid or otherwise satisfied. (r) Cooperate with each seller of Registrable Notes covered by any Registration Statement and each underwriter, if any, participating in the disposition of such Registrable Notes and their respective counsel in connection with any filings required to be made with the National Association of Securities Dealers, Inc. (the "NASD"). (s) Use all commercially reasonable efforts to take all other steps reasonably necessary to effect the registration of the Registrable Notes covered by a Registration Statement contemplated hereby. The Issuers may require each seller of Registrable Notes as to which any registration is being effected to furnish to the Issuers such information regarding such seller and the distribution of such Registrable Notes as the Issuers may, from time to time, reasonably re- -20- quest. The Issuers may exclude from such registration the Registrable Notes of any seller so long as such seller fails to furnish such information within a reasonable time after receiving such request. Each seller as to which any Shelf Registration is being effected agrees to furnish promptly to the Issuers all information required to be disclosed in order to make the information previously furnished to the Issuers by such seller not materially misleading. Each Holder of Registrable Notes and each Participating Broker-Dealer agrees by its acquisition of such Registrable Notes or Exchange Notes to be sold by such Participating Broker-Dealer, as the case may be, that, upon actual receipt of any notice from the Issuers of the happening of any event of the kind described in Section 5(c)(ii), 5(c)(iv), 5(c)(v), or 5(c)(vi) hereof, such Holder will forthwith discontinue disposition of such Registrable Notes covered by such Registration Statement or Prospectus or Exchange Notes to be sold by such Holder or Participating Broker-Dealer, as the case may be, until such Holder's or Participating Broker-Dealer's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 5(j) hereof, or until it is advised in writing (the "ADVICE") by the Issuers that the use of the applicable Prospectus may be resumed, and has received copies of any amendments or supplements thereto. In the event that the Issuers shall give any such notice, the Applicable Period shall be extended by the number of days during such periods from and including the date of the giving of such notice to and including the date when each seller of Registrable Notes covered by such Registration Statement or Exchange Notes to be sold by such Participating Broker-Dealer, as the case may be, shall have received (x) the copies of the supplemented or amended Prospectus contemplated by Section 5(j) hereof or (y) the Advice. 6. REGISTRATION EXPENSES (a) All fees and expenses incident to the performance of or compliance with this Agreement by the Issuers (other than any underwriting discounts or commissions) shall be borne by the Issuers including, without limitation, (i) all registration and filing fees (including, without limitation, (A) fees with respect to filings required to be made with the NASD in connection with an underwritten offering and (b) reasonable fees and expenses of compliance with state securities or Blue Sky laws (including, without limitation, fees and disbursements of counsel in connection with Blue Sky qualifications of the Registrable Notes or Exchange Notes and determination of the eligibility of the Registrable Notes or Exchange Notes for investment under the laws of such jurisdictions (x) where the holders of Registrable Notes are located, in the case of the Exchange Notes, or (y) as provided in Section 5(h) hereof, in the case of Registrable Notes or Exchange Notes to be sold by a Participating Broker-Dealer during the Applicable Period)), (ii) printing expenses, including, without limitation, expenses of printing certificates for Registrable Notes or Exchange Notes in a form eligible for deposit with The Depository Trust Company and of printing prospectuses if the printing of prospectuses is requested by the managing underwriter or underwriters, if any, by the Holders of a majority in aggregate principal amount of the Registrable Notes included in any Regis- -21- tration Statement or in respect of Registrable Notes or Exchange Notes to be sold by any Participating Broker-Dealer during the Applicable Period, as the case may be, (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Issuers, (v) fees and disbursements of all independent certified public accountants referred to in Section 5(l)(iii) hereof (including, without limitation, the expenses of any special audit and "cold comfort" letters required by or incident to such performance), (vi) Securities Act liability insurance, if the Issuers desire such insurance, (vii) fees and expenses of all other Persons retained by the Issuers, (viii) internal expenses of the Issuers (including, without limitation, all salaries and expenses of officers and employees of the Issuers performing legal or accounting duties), (ix) the expense of any annual audit, (x) any fees and expenses incurred in connection with the listing of the securities to be registered on any securities exchange, and the obtaining of a rating of the securities, in each case, if applicable, and (xi) the expenses relating to printing, word processing and distributing all Registration Statements, underwriting agreements, indentures and any other documents necessary in order to comply with this Agreement. (b) The Issuers shall (i) reimburse the Holders of the Registrable Notes being registered in a Shelf Registration or the reasonable fees and disbursements of not more than one counsel (in addition to appropriate local counsel) chosen by the Holders of a majority in aggregate principal amount of the Registrable Notes to be included in such Registration Statement and (ii) reimburse reasonable out-of-pocket expenses (other than legal expenses and other sale commissions or similar costs) of Holders of Registrable Notes incurred in connection with the registration and sale of Registrable Notes pursuant to a Shelf Registration or in connection with exchange of the Registrable Notes in connection with the Exchange Offer. In addition, the Issuers shall reimburse the Initial Purchasers for the reasonable fees and expenses of one counsel in connection with the Exchange Offer, which shall be Cahill Gordon & Reindel, and shall not be required to pay any other legal expenses in connection therewith. 7. INDEMNIFICATION (a) Each of the Issuers, jointly and severally, agrees to indemnify and hold harmless each Holder of Registrable Notes and each Participating Broker-Dealer selling Exchange Notes during the Applicable Period, the affiliates, officers, directors, representatives, employees and agents of each such Person, and each Person, if any, who controls any such Person within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act (each, a "PARTICIPANT"), from and against any and all losses, claims, damages, judgments, liabilities and expenses (including, without limitation, the reasonable legal fees and other expenses actually incurred in connection with any suit, action or proceeding or any claim asserted) caused by, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement (or any amendment thereto) or Prospectus (as amended or supplemented if the Issuers shall have furnished any amendments or supplements thereto) or any preliminary prospectus, or caused by, arising out -22- of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the case of the Prospectus in light of the circumstances under which they were made, not misleading, EXCEPT insofar as such losses, claims, damages or liabilities are caused by any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information relating to any Participant furnished to the Issuers in writing by such Participant expressly for use therein and with respect to any preliminary Prospectus, to the extent that any such loss, claim, damage or liability arises solely from the fact that any Participant sold Notes to a person to whom there was not sent or given a copy of the Prospectus (as amended or supplemented) at or prior to the written confirmation of such sale if the Issuers shall have previously furnished copies thereof to the Participant in accordance herewith and the Prospectus (as amended or supplemented) would have corrected any such untrue statement or omission. (b) Each Participant agrees, severally and not jointly, to indemnify and hold harmless the Issuers, their respective affiliates, officers, directors, representatives, employees and agents of each Issuer and each Person who controls each Issuer within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent (but on a several, and not joint, basis) as the foregoing indemnity from the Issuers to each Participant, but only with reference to information relating to such Participant furnished to the Issuers in writing by such Participant expressly for use in any Registration Statement or Prospectus, any amendment or supplement thereto, or any preliminary prospectus. The liability of any Participant under this paragraph shall in no event exceed the proceeds received by such Participant from sales of Registrable Notes or Exchange Notes giving rise to such obligations. (c) If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any Person in respect of which indemnity may be sought pursuant to either of the two preceding paragraphs, such Person (the "INDEMNIFIED PERSON") shall promptly notify the Persons against whom such indemnity may be sought (the "INDEMNIFYING PERSONS") in writing, and the Indemnifying Persons, upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to represent the Indemnified Person and any others the Indemnifying Person may reasonably designate in such proceeding and shall pay the reasonable fees and expenses actually incurred by such counsel related to such proceeding; PROVIDED, HOWEVER, that the failure to so notify the Indemnifying Persons will not relieve it from any liability under paragraph (a) or (b) above unless and to the extent such failure results in the forfeiture by the Indemnifying Person of substantial rights and defenses and the Indemnifying Person was not otherwise aware of such action or claim. In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Persons and the Indemnified Person shall have mutually agreed to the contrary, (ii) the Indemnifying Persons shall have failed within a reasonable period of time to retain counsel reasonably satisfactory to -23- the Indemnified Person or (iii) the named parties in any such proceeding (including any impleaded parties) include both any Indemnifying Person and the Indemnified Person and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the Indemnifying Persons shall not, in connection with such proceeding or separate but substantially similar related proceeding in the same jurisdiction arising out of the same general allegations, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be reimbursed promptly as they are incurred. Any such separate firm for the Participants and such control Persons of Participants shall be designated in writing by Participants who sold a majority in interest of Registrable Notes and Exchange Notes sold by all such Participants and shall be reasonably acceptable to the Issuers, and any such separate firm for the Issuers, their affiliates, officers, directors, representatives, employees and agents and such control Persons of such Issuer shall be designated in writing by such Issuer and shall be reasonably acceptable to the Holders. The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its prior written consent (which consent shall not be unreasonably withheld or delayed), but if settled with such consent or if there be a final non-appealable judgment for the plaintiff for which the Indemnified Person is entitled to indemnification pursuant to this Agreement, each Indemnifying Person agrees to indemnify and hold harmless each Indemnified Person from and against any loss or liability by reason of such settlement or judgment. No Indemnifying Person shall, without the prior written consent of the Indemnified Person (which consent shall not be unreasonably withheld or delayed), effect any settlement or compromise of any pending or threatened proceeding in respect of which any Indemnified Person is or could have been a party, or indemnity could have been sought hereunder by such Indemnified Person, unless such settlement (A) includes an unconditional written release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (B) does not include any statement as to an admission of fault, culpability or failure to act by or on behalf of such Indemnified Person. (d) If the indemnification provided for in the first and second paragraphs of this Section 7 is for any reason unavailable to, or insufficient to hold harmless, an Indemnified Person in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraphs, in lieu of indemnifying such Indemnified Person thereunder and in order to provide for just and equitable contribution, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities in such proportion as is appropriate to reflect the relative fault of the Indemnifying Person or Persons on the one hand and the Indemnified Person or Persons on the other in connection with the statements or omissions or alleged statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof) as well as -24- any other relevant equitable considerations. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuers on the one hand or such Participant or such other Indemnified Person, as the case may be, on the other, the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission, and any other equitable considerations appropriate in the circumstances. (e) The parties agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by PRO RATA allocation (even if the Participants were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages, judgments, liabilities and expenses referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any reasonable legal or other expenses actually incurred by such Indemnified Person in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 7, in no event shall a Participant be required to contribute any amount in excess of the amount by which proceeds received by such Participant from sales of Registrable Notes or Exchange Notes, as the case may be, exceeds the amount of any damages that such Participant has otherwise been required to pay or has paid by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. (f) Any losses, claims, damages, liabilities or expenses for which an indemnified party is entitled to indemnification or contribution under this Section 7 shall be paid by the Indemnifying Person to the Indemnified Person as such losses, claims, damages, liabilities or expenses are incurred. The indemnity and contribution agreements contained in this Section 7 and the representations and warranties of the Issuers set forth in this Agreement shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of any Holder or any person who controls a Holder, the Issuers, their directors, officers, employees or agents or any person controlling an Issuer, and (ii) any termination of this Agreement. (g) The indemnity and contribution agreements contained in this Section 7 will be in addition to any liability which the Indemnifying Persons may otherwise have to the Indemnified Persons referred to above. -25- 8. RULES 144 AND 144A Each of the Issuers covenants and agrees that it will file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the SEC thereunder in a timely manner in accordance with the requirements of the Securities Act and the Exchange Act and, for so long as any Registrable Notes remain outstanding, and if such Issuer is not required to file such reports, such Issuer will, upon the request of any Holder or beneficial owner of Registrable Notes, make available such information of the type specified in Sections 13 and 15(d) of the Exchange Act. Each of the Issuers further covenants and agrees, for so long as any Registrable Notes remain outstanding, to make available to any Holder or beneficial owner of Registrable Notes in connection with any sale thereof and any prospective purchaser of such Registrable Notes from such Holder or beneficial owner the information required by Rule 144A(d)(4) and 144(c) under the Securities Act in order to permit resales of such Registrable Notes pursuant to Rule 144A and Rule 144(k). 9. UNDERWRITTEN REGISTRATIONS If any of the Registrable Notes covered by any Shelf Registration are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will manage the offering will be selected by the Holders of a majority in aggregate principal amount of such Registrable Notes included in such offering and shall be reasonably acceptable to the Issuers. No Holder of Registrable Notes may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder's Registrable Notes on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and (b) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements. 10. MISCELLANEOUS (a) NO INCONSISTENT AGREEMENTS. The Issuers have not, as of the date hereof, and the Issuers shall not, after the date of this Agreement, enter into any agreement with respect to any of their securities that is inconsistent with the rights granted to the Holders of Registrable Notes in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Issuers' other issued and outstanding securities under any such agreements. The Issuers will not enter into any agreement with respect to any of their securities which will grant to any Person piggy-back registration rights with respect to any Registration Statement. -26- (b) ADJUSTMENTS AFFECTING REGISTRABLE NOTES. The Issuers shall not, directly or indirectly, take any action with respect to the Registrable Notes as a class that would adversely affect the ability of the Holders of Registrable Notes to include such Registrable Notes in a registration undertaken pursuant to this Agreement. (c) ADDITIONAL AMOUNTS OF NOTES. The Notes are limited in aggregate principal amount to $270,000,000, of which $170,000,000 will be issued on the date hereof. Additional amounts of Notes may be issued in one or more series from time to time under the Indenture (collectively "ADDITIONAL NOTES") prior to the filing of any Registration Statement. The Issuers shall provide the registration rights set forth under this Agreement to the Initial Purchasers and any subsequent holder or holders of such Additional Notes and notwithstanding anything contained herein may include such Additional Notes in any Registration Statement filed hereunder. (d) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, otherwise than with the prior written consent of (I) the Issuers and (II)(A) the Holders of not less than a majority in aggregate principal amount of the then outstanding Registrable Notes and (B) in circumstances that would adversely affect the Participating Broker-Dealers, the Participating Broker-Dealers holding not less than a majority in aggregate principal amount of the Exchange Notes held by all Participating Broker-Dealers; provided, HOWEVER, that Section 7 and this Section 10(c) may not be amended, modified or supplemented without the prior written consent of each Holder and each Participating Broker-Dealer (including any person who was a Holder or Participating Broker-Dealer of Registrable Notes or Exchange Notes, as the case may be, disposed of pursuant to any Registration Statement) affected by any such amendment, modification or supplement. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders of Registrable Notes whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect, impair, limit or compromise the rights of other Holders of Registrable Notes may be given by Holders of at least a majority in aggregate principal amount of the Registrable Notes being sold pursuant to such Registration Statement. (e) NOTICES. All notices and other communications (including, without limitation, any notices or other communications to the Trustee) provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, next-day air courier or facsimile: (i) if to a Holder of the Registrable Notes or any Participating Broker-Dealer, at the most current address of such Holder or Participating Broker-Dealer, as the case may be, set forth on the records of the registrar under the Indenture. -27- (ii) if to the Issuers, at the address as follows: Dayton Superior Corporation 7777 Washington Village Drive, Suite 130 Dayton, OH 45459 Facsimile No.: (937) 428-9115 Attention: General Counsel with copies to: Latham & Watkins 885 Third Avenue, Suite 1000 New York, New York 10022 Facsimile No.: (212) 751-4864 Attention: Kirk A. Davenport, Esq. All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; five business days after being deposited in the mail, postage prepaid, if mailed; one business day after being timely delivered to a next-day air courier; and when transmission is confirmed, if sent by facsimile. Copies of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Trustee at the address and in the manner specified in such Indenture. (f) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties hereto, the Holders and the Participating Broker-Dealers; PROVIDED, however, that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Notes in violation of the terms of the Purchase Agreement or the Indenture. (g) COUNTERPARTS. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. (h) HEADINGS. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. (i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED -28- ENTIRELY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. (j) SEVERABILITY. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable. (k) SECURITIES HELD BY THE ISSUERS OR THEIR AFFILIATES. Whenever the consent or approval of Holders of a specified percentage of Registrable Notes is required hereunder, Registrable Notes held by the Issuers or their affiliates (as such term is defined in Rule 405 under the Securities Act) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage. (l) THIRD-PARTY BENEFICIARIES. Holders of Registrable Notes and Participating Broker-Dealers are intended third-party beneficiaries of this Agreement, and this Agreement may be enforced by such Persons. (m) ENTIRE AGREEMENT. This Agreement, together with the Purchase Agreement and the Indenture, is intended by the parties as a final and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein and any and all prior oral or written agreements, representations, or warranties, contracts, understandings, correspondence, conversations and memoranda between the Holders on the one hand and the Issuers on the other, or between or among any agents, representatives, parents, subsidiaries, affiliates, predecessors in interest or successors in interest with respect to the subject matter hereof and thereof are merged herein and replaced hereby. S-1 WITNESS the due execution hereof by the respective duly authorized officers of the undersigned as of the date first written above. DAYTON SUPERIOR CORPORATION, as Issuer By:________________________________________ Name: Title: DUR-O-WAL, INC. SYMONS CORPORATION as Guarantors By:________________________________________ Name: Title: S-2 The foregoing Agreement is hereby confirmed and accepted as of the date first above written. DEUTSCHE BANK SECURITIES INC., as Initial Purchaser By: ______________________________ Name: Title: By: ______________________________ Name: Title: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as Initial Purchaser By: ______________________________ Name: Title: EX-10.13 10 ex-10_13.txt EXHIBIT 10.13 Exhibit 10.13 Execution Copy ================================================================================ AGREEMENT AND PLAN OF MERGER by and between DAYTON SUPERIOR CORPORATION, an Ohio corporation and STONE ACQUISITION CORP., an Ohio corporation Dated: January 19, 2000 ================================================================================ TABLE OF CONTENTS Page ARTICLE I. DEFINITIONS.........................................................1 1.1 Defined Terms................................................1 1.2 Other Defined Terms..........................................7 ARTICLE II. THE MERGER.........................................................8 2.1 The Merger...................................................8 2.2 Effective Time...............................................8 2.3 Closing......................................................8 2.4 Articles of Incorporation and Code of Regulations............8 2.5 Directors....................................................9 2.6 Officers.....................................................9 ARTICLE III. Effect of merger on securities of sub and the company.............9 3.1 Conversion of Sub Common Shares..............................9 3.2 Conversion of Company Common Shares..........................9 3.3 Options......................................................9 3.4 Exchange of Certificates; Payment of Cash Merger Consideration.............................................10 3.5 Dissenting Shares...........................................12 ARTICLE IV. representations and warranties of the company.....................13 4.1 Organization and Capitalization.............................13 4.2 Authorization...............................................14 4.3 Subsidiaries................................................14 4.4 Absence of Certain Changes or Events........................15 4.5 Title to Assets; Absence of Liens and Encumbrances..........15 4.6 Contracts...................................................15 4.7 No Conflict or Violation....................................16 4.8 Consents and Approvals......................................16 4.9 SEC Documents; Financial Statements, etc....................16 4.10 Undisclosed Liabilities.....................................17 4.11 Litigation..................................................17 4.12 Labor Matters...............................................17 4.13 Compliance with Law.........................................18 4.14 No Brokers..................................................18 4.15 Employee Plans..............................................18 4.16 Tax Matters.................................................23 4.17 Customers and Suppliers.....................................24 i 4.18 Compliance with Environmental Laws..........................24 4.19 Opinion of Financial Advisors...............................25 4.20 Board Recommendation........................................25 4.21 Required Company Vote.......................................26 4.22 Proxy Statement.............................................26 4.23 Takeover Laws...............................................26 ARTICLE V. REPRESENTATIONS AND WARRANTIES OF SUB..............................26 5.1 Organization................................................26 5.2 Authorization...............................................26 5.3 Consents and Approvals......................................27 5.4 No Conflict or Violation....................................27 5.5 Proxy Statement.............................................27 5.6 Financing...................................................27 5.7 No Broker Payments by Company...............................28 ARTICLE VI. COVENANTS OF THE COMPANY and Sub..................................28 6.1 Maintenance of Business Prior to Closing....................28 6.2 Investigation by Sub........................................31 6.3 Consents and Efforts........................................31 6.4 Other Offers................................................33 6.5 Meeting of Shareholders.....................................35 6.6 Proxy Statement.............................................35 6.7 Director and Officer Liability..............................36 6.8 Notices of Certain Events...................................37 6.9 Sub Notice..................................................37 6.10 Resignation of Directors....................................37 6.11 Financial Statements, Etc...................................38 6.12 Exchange of Company Common Shares...........................38 6.13 Benefit Arrangements........................................38 ARTICLE VII. CONDITIONS TO THE MERGER.........................................38 7.1 Conditions to the Obligations of Each Party.................38 7.2 Conditions to the Obligations of the Company................39 7.3 Conditions to the Obligations of Sub........................39 ARTICLE VIII. MISCELLANEOUS...................................................40 8.1 Termination.................................................40 8.2 Assignment..................................................42 8.3 Notices.....................................................42 8.4 Entire Agreement; Waivers...................................43 8.5 Multiple Counterparts.......................................44 8.6 Invalidity..................................................44 ii 8.7 Titles......................................................44 8.8 Fees and Expenses...........................................44 8.9 Cumulative Remedies.........................................44 8.10 GOVERNING LAW...............................................44 8.11 Amendment...................................................44 8.12 Public Announcements........................................44 8.13 Enforcement of Agreement....................................45 8.14 Non-survival of Representations, Warranties.................45 8.15 Interpretive Provisions.....................................45 Exhibit A Form of Articles of Incorporation Schedule A Preferred Shareholders Schedule 3.3 Option Retention Schedule 6.1(c) Preferred Share Designation Schedule 7.3(f) Indebtedness iii AGREEMENT AND PLAN OF MERGER This Agreement and Plan of Merger (this "AGREEMENT"), dated January 19, 2000, is by and between DAYTON SUPERIOR CORPORATION, an Ohio corporation (the "COMPANY"), and STONE ACQUISITION CORP., an Ohio corporation ("SUB"). RECITALS A........This Agreement provides for the merger (the "MERGER") of Sub with and into the Company, with the Company as the surviving corporation in such merger, all in accordance with the provisions of this Agreement. B........The respective Boards of Directors of Sub and the Company have approved this Agreement, and deemed it advisable and in the best interests of their respective companies and shareholders to consummate the Merger. The Company intends promptly to submit to its Shareholders the approval of the Merger and the approval and adoption of this Agreement. C........The parties desire to make certain representations, warranties, covenants and agreements in connection with the Merger and also to prescribe various conditions to the Merger. D........It is intended that the Merger be recorded as a recapitalization for financial reporting purposes. AGREEMENT NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE I. DEFINITIONS 1.1 DEFINED TERMS. As used herein, the terms below shall have the following meanings: "AFFILIATE" shall mean, with respect to any Person (the "REFERENT PERSON"), any Person which controls the referent person, any Person which the referent person controls, or any Person which is under common control with the referent person. For purposes of the preceding sentence, the term "control" shall mean the power, direct or indirect, to direct or cause the direction of the management and policies of a Person through voting securities, by contract or otherwise. "ASSETS" shall mean all of the Company's and its Subsidiaries' right, title and interest in and to all properties, assets and rights of any kind, whether tangible or intangible, real or personal, owned by the Company or its Subsidiaries or in which the Company or any of its Subsidiaries has any interest whatsoever. "BENEFIT ARRANGEMENT" shall mean any employment, consulting, severance or other similar contract, arrangement or policy (written or oral) and each plan, arrangement, program, agreement or commitment (written or oral) providing for insurance coverage (including, without limitation, any self-insured arrangements), workers' compensation, disability benefits, supplemental unemployment benefits, vacation benefits, retirement benefits, life, health or accident benefits (including, without limitation, any "voluntary employees' beneficiary association" as defined in Section 501(c)(9) of the Code providing for the same or other benefits) or for deferred compensation, profit-sharing, bonuses, stock options, stock appreciation rights, stock purchases or other forms of incentive compensation or post-retirement insurance, compensation or benefits which (a) is not a Welfare Plan, Pension Plan or Multiemployer Plan, (b) is entered into, maintained, contributed to or required to be contributed to, as the case may be, by the Company, its Subsidiaries or any ERISA Affiliate or under which the Company, its Subsidiaries or any ERISA Affiliate may incur any liability, and (c) covers any current or former employee, director, officer or consultant of the Company, its Subsidiaries or any ERISA Affiliate (with respect to their relationship with such an entity). "CODE" shall mean the Internal Revenue Code of 1986, as amended, and any successor statute. "COMPANY COMMON SHARES" shall mean the Class A Common Shares, without par value, of the Company. "COMPANY REPORTS" shall mean (a) the Company's annual report on Form 10-K of the SEC for the fiscal year ended December 31, 1998 and (b) the Company's quarterly reports on Form 10-Q of the SEC for the quarters ended April 2, 1999, July 2, 1999, and October 1, 1999. "CONTRACT" shall mean any agreement, contract, lease, note, loan, evidence of indebtedness, purchase order, letter of credit, franchise agreement, undertaking, covenant not to compete, employment agreement, license and instrument to which the Company or its Subsidiaries is a party or to which the Company or its Subsidiaries or any of their respective Assets are subject, and which pursuant to its terms has not expired, terminated or been fully performed by the parties thereto. "DEBENTURES" shall mean the 10% Convertible Subordinated Debentures, Due September 30, 2029, of the Company. "DISSENTING SHAREHOLDERS" shall mean those Shareholders who hold Dissenting Shares. "DISSENTING SHARES" shall mean any Company Common Shares as to which a Shareholder is entitled to relief as a dissenting shareholder under Sections 1701.84 and 1701.85 of the OCL, to the extent that such Shareholder has properly exercised, perfected and not subsequently withdrawn or lost such Shareholder's dissenting shareholder rights in accordance with the OCL. 2 "EMPLOYEE PLANS" shall mean all Benefit Arrangements, Multiemployer Plans, Pension Plans, and Welfare Plans. "ENCUMBRANCE" shall mean any claim, lien, pledge, option, charge, easement, security interest, deed of trust, mortgage, right-of-way, encroachment, building or use restriction or encumbrance, whether voluntarily incurred or arising by operation of law, and includes, without limitation, any agreement to give any of the foregoing in the future, and any contingent or conditional sale agreement or other title retention agreement or lease in the nature thereof. "ENVIRONMENTAL CLAIMS" shall mean all notices of violation, liens, claims, demands, suits, or causes of action for any damage, including, without limitation, personal injury, property damage (including, without limitation, any depreciation or diminution of property values), lost use of property or consequential damages, arising directly or indirectly out of Environmental Conditions or Environmental Laws. By way of example only (and not by way of limitation), Environmental Claims include (i) violations of or obligations under any contract related to Environmental Laws or Environmental Conditions between the Company or its Subsidiaries and any other Person, (ii) actual or threatened damages to natural resources, (iii) claims for nuisance or its statutory equivalent, (iv) claims for the recovery of response costs, or administrative or judicial orders directing the performance of investigations, responses or remedial actions under any Environmental Laws, (v) requirements to implement "corrective action" pursuant to any order or permit issued pursuant to the Resource Conservation and Recovery Act, as amended, or similar provisions of applicable state law, (vi) claims related to Environmental Laws or Environmental Conditions for restitution, contribution, or indemnity, (vii) fines, penalties or liens of any kind against property related to Environmental Laws or Environmental Conditions, (viii) claims related to Environmental Laws or Environmental Conditions for injunctive relief or other orders or notices of violation from federal, state or local agencies or courts, and (ix) with regard to any present or former employees, claims relating to exposure to or injury from Environmental Conditions. "ENVIRONMENTAL CONDITIONS" shall mean the state of the environment, including natural resources (E.G., flora and fauna), soil, surface water, ground water, any present or potential drinking water supply, subsurface strata or ambient air. "ENVIRONMENTAL LAWS" shall mean all applicable foreign, federal, state, district and local laws, all rules or regulations promulgated thereunder, and all orders, consent orders, judgments, notices or permits issued, promulgated or entered pursuant thereto, relating to pollution or protection of the environment (including, without limitation, ambient air, surface water, ground water, land surface, or subsurface strata), including, without limitation, (i) laws relating to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals, industrial materials, wastes or other substances into the environment and (ii) laws relating to the identification, generation, manufacture, processing, distribution, use, treatment, storage, disposal, recovery, transport or other handling of pollutants, contaminants, chemicals, industrial materials, wastes or other substances. Environmental Laws shall include, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), the Toxic Substances Control Act, as amended, the Hazardous Materials Transportation Act, as amended, the Resource Conservation and Recovery Act, as 4 amended ("RCRA"), the Clean Water Act, as amended, the Safe Drinking Water Act, as amended, the Clean Air Act, as amended, the Occupational Safety and Health Act, as amended, and all analogous laws promulgated or issued by any state or other governmental authority. "ENVIRONMENTAL REPORTS" shall mean any and all material written analyses, summaries or explanations, in the possession of the Company or its Subsidiaries, of (a) any Environmental Conditions in, on or about the properties of the Company or its Subsidiaries or (b) the Company's or its Subsidiaries' compliance with Environmental Laws. "EQUITY SECURITIES" shall mean (i) shares of capital stock or other equity securities, (ii) subscriptions, calls, warrants, options or commitments of any kind or character relating to, or entitling any Person to purchase or otherwise acquire, any capital stock or other equity securities and (iii) securities convertible into or exercisable or exchangeable for shares of capital stock or other equity securities. "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended. "ERISA AFFILIATE" shall mean any entity which is (or at any relevant time was) a member of a "controlled group of corporations" with, under "common control" with, or a member of an "affiliated service group" with, or otherwise required to be aggregated with, the Company or its Subsidiaries as set forth in Section 414(b), (c), (m) or (o) of the Code. "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended. "FACILITIES" shall mean all plants, offices, manufacturing facilities, warehouses, administration buildings and all real property and related facilities owned or leased by the Company or its Subsidiaries. "FIXTURES AND EQUIPMENT" shall mean all of the furniture, fixtures, furnishings, machinery, equipment, spare parts, appliances and vehicles owned by the Company or its Subsidiaries, wherever located. "GAAP" shall mean, with respect to any Person, generally accepted accounting principles in the United States of America, as in effect from time to time. "HAZARDOUS SUBSTANCES" shall mean all pollutants, contaminants, chemicals, wastes, and any other carcinogenic, ignitable, corrosive, reactive, toxic or otherwise hazardous substances or materials (whether solids, liquids or gases) subject to regulation, control or remediation under Environmental Laws. By way of example only, the term Hazardous Substances includes petroleum, urea formaldehyde, flammable, explosive and radioactive materials, PCBs, pesticides, herbicides, asbestos, sludge, slag, acids, metals, solvents and waste waters. "HSR ACT" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder. 4 "MATERIAL ADVERSE EFFECT" or "MATERIAL ADVERSE CHANGE" or a similar phrase shall mean, with respect to any Person, any material adverse effect on or change with respect to (i) the business, operations, assets (taken as a whole), liabilities (taken as a whole), condition (financial or otherwise) or results of operations of such Person and its Subsidiaries, taken as a whole or (ii) the right or ability of such Person or its Subsidiaries to consummate any of the transactions contemplated hereby, except any change, effect, event, occurrence or state of facts resulting from adverse changes in economic or financial market conditions generally. "MULTIEMPLOYER PLAN" shall mean any "multiemployer plan," as defined in Section 4001(a)(3) or 3(37) of ERISA, which (a) the Company, its Subsidiaries or any ERISA Affiliate maintains, administers, contributes to or is required to contribute to, or, after September 25, 1980, maintained, administered, contributed to or was required to contribute to, or under which the Company, its Subsidiaries or any ERISA Affiliate may incur any liability and (b) covers any current or former employee of the Company, its Subsidiaries or any ERISA Affiliate (with respect to their relationship with any such entity). "NYSE" shall mean the New York Stock Exchange, Inc. "OCL" shall mean Chapters 1701 and 1704 of the Ohio Revised Code of the State of Ohio. "OPTIONS" shall mean the options to purchase in the aggregate 442,283 Company Common Shares issued to certain employees and non-employee directors of the Company pursuant to the Stock Option Plans. "PBGC" shall mean the Pension Benefit Guaranty Corporation. "PENSION PLAN" shall mean any "employee pension benefit plan" as defined in Section 3(2) of ERISA (other than a Multiemployer Plan) (a) which the Company, its Subsidiaries or any ERISA Affiliate maintains, administers, contributes to or is required to contribute to, or, within the five years prior to the Closing Date, maintained, administered, contributed to or was required to contribute to, or under which the Company, its Subsidiaries or any ERISA Affiliate may incur any liability (including, without limitation, any contingent liability) and (b) which covers any current or former employee, director, officer or consultant of the Company, its Subsidiaries or any ERISA Affiliate (with respect to their relationship with any such entity). "PERMITS" shall mean all licenses, permits, franchises, approvals, authorizations, consents or orders of any governmental or regulatory authority or body, whether foreign, federal, state or local, necessary for the present or currently anticipated conduct of, or relating to the operation of the business of, the Company or its Subsidiaries. "PERMITTED ENCUMBRANCES" shall mean (a) liens for Taxes or governmental charges or claims (i) not yet due and payable or (ii) being contested in good faith, if a reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made therefor, (b) statutory liens of landlords, liens of carriers, warehouse persons, mechanics and material persons and other liens imposed by law incurred in the ordinary course of business for sums 5 (i) not yet due and payable or (ii) being contested in good faith, if a reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made therefor, (c) liens incurred or deposits made in connection with workers' compensation, unemployment insurance and other similar types of social security programs or to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, government contracts, performance and return of money bonds and similar obligations, in each case in the ordinary course of business, consistent with past practice, (d) purchase money liens incurred in the ordinary course of business, consistent with past practice, (e) Encumbrances which do not interfere with the ordinary conduct of business of the Company or its Subsidiaries and do not materially detract from the value of the property to which such Encumbrance relates and (f) liens arising under existing credit facilities. "PERSON" shall mean any person or entity, whether an individual, trustee, corporation, partnership, limited partnership, limited liability company, trust, unincorporated organization, business association, firm, joint venture, governmental agency or authority, or any other form of entity. "PERSONNEL" shall mean all officers and employees of the Company or its Subsidiaries. "RETURNS" shall mean any and all returns, reports, declarations and information statements with respect to Taxes required to be filed by or on behalf of the Company or its Subsidiaries with any governmental authority or Tax authority or agency, whether domestic or foreign, including, without limitation, consolidated, combined and unitary returns and all amendments thereto or thereof. "SEC" shall mean the Securities and Exchange Commission. "SECURITIES ACT" shall mean the Securities Act of 1933, as amended. "SERIES A SHARES" shall mean the Series A Preferred Shares, without par value, of the Company to be issued to the Persons identified on SCHEDULE A. "SHAREHOLDER VOTE" shall mean the meeting of the Shareholders or any adjourned meeting thereof at which this Agreement and the Merger are voted upon. "SHAREHOLDERS" shall mean the record holders of Company Common Shares. "STOCK OPTION PLANS" shall mean the 1994 Stock Option Plan, 1995 Stock Option Plan, 1996 Stock Option Plan, 1997 Stock Option and Restricted Stock Plan, and 1997 Non-Employee Director Stock Option Plan. "SUBSIDIARY" shall mean, with respect to any of the parties to this Agreement, any corporation or other business entity, whether or not incorporated, of which at least a majority of the securities or interests having, by their terms, ordinary voting power to elect members of the board of directors, or other persons performing similar functions with respect to such entity, are held, directly or indirectly, by such party. 6 "TAX(ES)" shall mean all taxes, estimated taxes, withholding taxes, assessments, levies, imposts, fees and other charges, including, without limitation, any interest, penalties, additions to tax or additional amounts that may become payable in respect thereof, imposed by any foreign, federal, state or local government or taxing authority, which taxes shall include, without limitation, all income taxes, payroll and employee withholding taxes, unemployment insurance, social security, sales and use taxes, value-added taxes, excise taxes, franchise taxes, gross receipts taxes, occupation taxes, real and personal property taxes, stamp taxes, transfer taxes, workers' compensation and other obligations of the same or of a similar nature. "TREASURY SECURITIES" shall mean Company Common Shares owned by Sub, the Company and/or any Subsidiary of Sub or the Company. "WELFARE PLAN" shall mean any "employee welfare benefit plan" as defined in Section 3(1) of ERISA, (a) which the Company, its Subsidiaries or any ERISA Affiliate maintains, administers, contributes to or is required to contribute to, or under which the Company, its Subsidiaries or any ERISA Affiliate may incur any liability and (b) which covers any current or former employee, officer, director or consultant of the Company, its Subsidiaries or any ERISA Affiliate (with respect to their relationship with any such entity). 1.2 OTHER DEFINED TERMS. In addition to the terms defined in the Recitals to this Agreement and SECTION 1.1, the following terms shall have the meanings defined for such terms in the Sections set forth below: Term Section ---- ------- "Acquisition Proposal"........................6.4(a) "Actions".....................................4.11 "Applicable Law"..............................4.13 "Cash Merger Consideration"...................3.2(a) "Closing".....................................2.3 "Closing Date"................................2.3 "Confidentiality Letter"......................6.2 "Disclosure Letter" ..........................Article IV Preamble "Effective Time"..............................2.2 "Exchange Fund"...............................3.4(e) "Exchange Agent...............................3.4(a) "Exclusive Distribution Agreement"............4.6(a) "Financial Statements"........................4.9 "Financing"...................................5.6 "Financing Letters"...........................5.6 "Foreign Plans"...............................4.15(b)(vi) "Identified Matter"...........................6.3(f) "Material Contract"...........................4.6 "Merger"......................................Recitals "Net Value"...................................3.3(a) "Other Contracts".............................4.6(a) "Payment Event"...............................6.4(b) "Preferred Shares"............................4.1(b) "Proxy Statement".............................6.6(a) "Regulatory Filings"..........................4.8 "SEC Documents"...............................4.9(b) "Series A Share Consideration"................3.2(b) "Significant Contract"........................4.6(a) "Significant Subsidiary"......................6.4(a) "Special Meeting".............................4.22 "Subject Litigation"..........................6.7(b) "Superior Proposal"...........................8.1(a)(vi) "Surviving Corporation".......................2.1 "Surviving Corporation Common Shares".........3.1 "Trust".......................................7.3(e)(ii) "Trust Preferred Securities"..................7.3(e)(ii) "Third Party".................................6.4(a) 7 ARTICLE II. THE MERGER 2.1 .THE MERGER. Upon the terms and subject to the conditions of this Agreement, and in accordance with the OCL, at the Effective Time, Sub shall be merged with and into the Company. Upon the effectiveness of the Merger, the separate corporate existence of Sub shall cease and the Company, under the name "Dayton Superior Corporation", shall continue as the surviving corporation (the "SURVIVING CORPORATION"). The Merger shall have the effects specified under the OCL. 2.2 EFFECTIVE TIME. On the Closing Date, the parties shall cause the Merger to be consummated by causing a certificate of merger with respect to the Merger to be executed and filed in accordance with the relevant provisions of the OCL and shall make all other filings or recordings required under the OCL. The Merger shall become effective at the time of filing of the certificate of merger or at such later time as is specified therein (the "EFFECTIVE TIME"). 2.3 CLOSING. Upon the terms and subject to the conditions of this Agreement, the closing of the Merger (the "CLOSING") shall take place (a) at the offices of Latham & Watkins, 885 Third Avenue, New York, New York at 10:00 a.m., local time, on the first business day immediately following the day on which the last to be satisfied or waived of the conditions set forth in Article VII (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions) shall be satisfied or waived in accordance herewith or (b) at such other time, date or place as Sub and the Company may agree. The date on which the Closing occurs is herein referred to as the "CLOSING DATE." 2.4 ARTICLES OF INCORPORATION AND CODE OF REGULATIONS. ------------------------------------------------- (a) At the Effective Time, and without any further action on the part of the Company or Sub, the articles of incorporation of the Company, as in effect immediately prior to the Effective Time, shall be amended so as to read in its entirety in the form set forth as EXHIBIT A 8 hereto, and, as so amended, until thereafter further amended as provided therein and under the OCL, shall be the articles of incorporation of the Surviving Corporation following the Merger. (b) At the Effective Time, and without any further action on the part of the Company or Sub, the code of regulations of Sub as in effect immediately prior to the Effective Time shall be the code of regulations of the Surviving Corporation following the Merger until thereafter changed or amended as provided therein or by Applicable Law. 2.5 DIRECTORS. At the Effective Time, the directors of the Company shall be changed so that they are the same as the directors of Sub immediately prior to the Effective Time. 2.6 OFFICERS. The officers of the Company immediately prior to the Effective Time shall remain as the officers of the Surviving Corporation and shall hold office until their respective successors are duly elected, or their earlier death, resignation or removal. ARTICLE III. EFFECT OF MERGER ON SECURITIES OF SUB AND THE COMPANY 3.1 CONVERSION OF SUB COMMON SHARES. At the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof, each common share, without par value, of Sub issued and outstanding immediately prior to the Effective Time shall automatically be converted into and thereafter represent one validly issued, fully paid and non-assessable common shares, without par value, of the Surviving Corporation (the "SURVIVING CORPORATION COMMON SHARES"). 3.2 CONVERSION OF COMPANY COMMON SHARES. At the Effective Time, by virtue of the Merger and without any action on the part of the holder thereof: (a) Each Company Common Share outstanding immediately prior to the Effective Time (other than Treasury Securities and Dissenting Shares, if any) shall automatically be converted into the right to receive, and each certificate which immediately prior to the Effective Time represented such Company Common Shares shall evidence solely the right to receive, $27.00 in cash (the "CASH MERGER CONSIDERATION") upon surrender of the certificate formerly representing such Company Common Shares as provided in SECTION 3.4. (b) Each Series A Share outstanding immediately prior to the Effective Time shall automatically be converted into the right to receive one Surviving Corporation Common Share (the "SERIES A SHARE CONSIDERATION") upon surrender of the certificate formerly representing Series A Shares as provided in SECTION 3.4. (c) All Treasury Securities shall automatically be canceled and cease to exist at and after the Effective Time and no consideration shall be paid with respect thereto. 3.3 OPTIONS. (a) Except as otherwise agreed to in writing between the Company and the holder of any Option, and as consented to by Sub, immediately prior to the Effective Time, each 9 outstanding Option granted under the Stock Option Plans whether or not then exercisable, either (i) shall be canceled by the Company, and at the Effective Time, or as soon as practicable thereafter, the former holder thereof shall be entitled to receive from the Company in consideration for such cancellation an amount in cash equal to the product of (x) the number of Company Common Shares previously subject to such Option and (y) the excess, if any, of the Cash Merger Consideration per share over the exercise price per share, if any, previously subject to such Option (the "NET VALUE"), subject to withholding or other taxes required by law to be withheld or (ii) in the event the holder thereof does not consent to such cancellation, shall after the Effective Time represent solely the right to receive the Cash Merger Consideration per share upon exercise thereof; PROVIDED, HOWEVER, that with respect to the individuals listed on SCHEDULE 3.3 (as such schedule may be amended by the mutual consent of Sub and the Company (such consent not to be unreasonably withheld by Sub or the Company) from time to time prior to the Effective Time; it being understood that it is contemplated that additional employees of the Company and its Subsidiaries may be added to such schedule and the aggregate Net Value set forth opposite the name of any Person set forth on such schedule may be modified as agreed with such Person), Options held by each such individual representing an aggregate Net Value not less than the amount set forth opposite such person's name on SCHEDULE 3.3 shall be retained and shall not be cancelled. (b) Except as provided herein or as otherwise agreed by the parties, the Stock Option Plans and any other plan, program or arrangement with any current or former employee, officer, director or consultant providing for the issuance or grant of any other interest in respect of the capital stock of the Company or any Subsidiary, including the 1996 Non-Employee Director Compensation Program, shall terminate as of the Effective Time, and the Company shall exercise its reasonable best efforts to ensure that following the Effective Time, no current or former employee, officer, director or consultant shall have any Option to purchase Company Common Shares or any other equity interest in the Company under any Stock Option Plan or any other Employee Plan maintained by the Company. (c) Prior to the Effective Time, the Board of Directors (or, if appropriate, any committee administering the Stock Option Plans) shall adopt such resolutions or take such actions as are necessary, subject, if necessary, to obtaining consents of the holders of Options to the cancellation thereof in exchange for the consideration set forth in Section 3.3(a)(i), to carry out the terms of this SECTION 3.3. 3.4 EXCHANGE OF CERTIFICATES; PAYMENT OF CASH MERGER CONSIDERATION. -------------------------------------------------------------- (a) As of or promptly after the Effective Time, Sub will cause the Surviving Corporation to deposit with a paying agent to be selected by Sub and reasonably acceptable to the Company (the "EXCHANGE AGENT") for the benefit of the holders of Company Common Shares, for payment in accordance with this Article III, the funds necessary to pay the Cash Merger Consideration for each share and certificates for Surviving Corporation Common Shares. (b) As soon as practicable after the Effective Time, (i) each holder of an outstanding certificate or certificates which pursuant to SECTION 3.2(B) represents the right to receive Surviving Corporation Common Shares, upon surrender to the Exchange Agent of such 10 certificate or certificates and acceptance thereof by the Exchange Agent, shall be entitled to a certificate or certificates representing the Series A Share Consideration, into which the number of Series A Shares previously represented by such certificate or certificates surrendered shall have been converted pursuant to this Agreement and (ii) each holder of an outstanding certificate or certificates which immediately prior to the Effective Time represented Company Common Shares, upon surrender to the Exchange Agent of such certificate or certificates and acceptance thereof by the Exchange Agent, shall be entitled to receive in exchange therefor the Cash Merger Consideration multiplied by the number of Company Common Shares formerly represented by such certificate. No interest will be paid on or accrue on the Cash Merger Consideration or Series A Share Consideration. The Exchange Agent shall accept such certificates upon compliance with such reasonable terms and conditions as the Exchange Agent may impose (with the consent of the Company not to be unreasonably withheld) to effect an orderly exchange thereof in accordance with customary exchange practices. After the Effective Time, there shall be no further transfer on the records of the Company or its transfer agent of certificates formerly representing Company Common Shares which have been converted, in whole or in part, pursuant to this Agreement, into the right to receive cash, and if such certificates are presented to the Company for transfer, they shall be canceled against delivery of such cash. Until surrendered as contemplated by this SECTION 3.4(B), (i) each certificate formerly representing Series A Shares shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender a new certificate or certificates representing Surviving Corporation Common Shares, as contemplated by SECTION 3.2(B), and (ii) each certificate formerly representing Company Common Shares (other than the Dissenting Shares) shall be deemed at any time after the Effective Time to represent only the right to receive upon such surrender the Cash Merger Consideration for each Company Common Share. (c) No dividends or other distributions with respect to Surviving Corporation Common Shares with a record date after the Effective Time shall be paid to the holder of any certificate formerly representing Series A Shares not surrendered with respect to the Merger. Subject to applicable law, following surrender of any such certificate, there shall be paid to the holder of such certificate or certificates, without interest, at the appropriate payment date, the proportionate amount of dividends or other distributions with a record date after the Effective Time but prior to such surrender and a payment date subsequent to such surrender payable with respect to such shares. (d) All cash paid upon the surrender for exchange of certificates formerly representing Company Common Shares in accordance with the terms of this Article III shall be deemed to have been paid in full satisfaction of all rights pertaining to the shares exchanged for cash theretofore represented by such certificates. (e) Any cash or Series A Share Consideration deposited with the Exchange Agent pursuant to this SECTION 3.4 (the "EXCHANGE FUND") which remains undistributed to the holders of the certificates formerly representing Company Common Shares or Series A Shares one year after the Effective Time shall be delivered to the Surviving Corporation at such time and any former holders of Company Common Shares or Series A Shares prior to the Merger who have not theretofore complied with this Article III shall thereafter look only to the Surviving 11 Corporation and only as general unsecured creditors thereof for payment of their claim for Cash Merger Consideration or Series A Share Consideration, if any. (f) None of Sub, the Company or the Exchange Agent shall be liable to any Person in respect of any cash from the Exchange Fund delivered to a public office pursuant to any applicable abandoned property, escheat or similar law. If any certificates representing Company Common Shares shall not have been surrendered prior to two years after the Effective Time (or immediately prior to such earlier date on which any cash in respect of such certificate would otherwise escheat to or become the property of any federal, state, local, or municipal, foreign or other government or subdivision, branch, department or agency thereof and any governmental or quasi-governmental authority of any nature, including any court or other tribunal), any such cash in respect of such certificate shall, to the extent permitted by applicable law, become the property of the Surviving Corporation, free and clear of all claims or interest of any Person previously entitled thereto. (g) In the event any certificate formerly representing Company Common Shares or Series A Shares shall have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the Person claiming such certificate to be lost, stolen or destroyed and, if required by the Surviving Corporation, the posting by such Person of a bond in such reasonable amount as the Surviving Corporation may direct as indemnity against any claim that may be made against it with respect to such certificate, the Exchange Agent will issue or pay, as the case may be, in exchange for such lost, stolen or destroyed certificate the shares representing the Series A Share Consideration, and unpaid dividends and distributions on shares representing the Series A Share Consideration deliverable in respect thereof pursuant to this Agreement, or the Cash Merger Consideration, as applicable. 3.5 DISSENTING SHARES. Notwithstanding SECTION 3.2 hereof, Dissenting Shares shall not be converted into a right to receive the Cash Merger Consideration. The holders thereof shall be entitled only to such rights as are granted by Sections 1701.84 and 1701.85 of the OCL. Each holder of Dissenting Shares who becomes entitled to payment for such shares pursuant to Section 1701.85 of the OCL shall receive payment therefor from the Surviving Corporation in accordance with the OCL; PROVIDED, HOWEVER, that (i) if any such holder of Dissenting Shares shall have failed to establish his entitlement to relief as a dissenting shareholder as provided in Section 1701.85 of the OCL, (ii) if any such holder of Dissenting Shares shall have effectively withdrawn his demand for relief as a dissenting shareholder with respect to such shares or lost his right to relief as a dissenting shareholder and payment for his shares under Section 1701.85 of the OCL, or (iii) if neither any holder of Dissenting Shares nor the Surviving Corporation shall have filed a complaint demanding a determination of the value of all Dissenting Shares within the time provided in Section 1701.85 of the OCL, such holder shall forfeit the right to relief as a dissenting shareholder with respect to such shares and each such share shall be treated as if it had been converted, as of the Effective Time, into the right to receive the Cash Merger Consideration, without interest thereon, from the Surviving Corporation as provided in SECTION 3.2. The Company shall give Sub prompt notice of any demands received by the Company for relief as a dissenting shareholder, and Sub shall have the right to participate in all negotiations and proceedings with respect to such demands. The Company shall not, except with the prior 12 written consent of Sub, make any payment with respect to, or settle or offer to settle, any such demands. ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY As an inducement to Sub to enter into this Agreement, the Company hereby makes the following representations and warranties to Sub, except as otherwise set forth in the letter dated as of the date of this Agreement (the "DISCLOSURE LETTER") delivered by the Company to Sub and with cross-references to this Agreement as indicated herein. 4.1 ORGANIZATION AND CAPITALIZATION. ------------------------------- (a) ORGANIZATION. The Company is duly organized, validly existing and in good standing under the laws of the State of Ohio and has full corporate power and authority to conduct its business as it is presently being conducted and to own and lease its Assets. The Company is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which such qualification is necessary under Applicable Law except where the failure to be so qualified and in good standing would not reasonably be expected to have a Material Adverse Effect on the Company. The Company has delivered to Sub true, correct and complete copies of its articles of incorporation and code of regulations (in each case, as amended to date). (b) CAPITALIZATION. The authorized capital stock of the Company consists of 22,005,850 Company Common Shares and 5,000,000 preferred shares, without par value, of the Company (the "PREFERRED SHARES"). As of January 19, 2000, (i) 5,943,183 Company Common Shares were issued and outstanding, (ii) no Preferred Shares were issued and outstanding, (iii) Options to acquire 442,283 Company Common Shares pursuant to the Stock Option Plans were outstanding, (iv) 850,000 Company Common Shares were reserved for issuance upon conversion of the Debentures and (v) 25,473 Company Common Shares were held by the Company in treasury. SECTION 4.1(B) of the Disclosure Letter includes a complete and correct list of outstanding Options under the Stock Option Plans (including the number of Options, the exercise price of each such Option and the vesting schedule for each such Option). Except for the Options and Debentures and except as set forth in SECTION 4.1(B) of the Disclosure Letter, the Company has no outstanding subscriptions for Company Common Shares and no outstanding bonds, debentures, notes or other obligations the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the shareholders of the Company on any matter. All issued and outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights. The Company and Sub acknowledge and agree that 300,000 Preferred Shares will be designated by the Company as the Series A Shares prior to the Closing Date and up to such amount will be issued to the Persons listed on SCHEDULE A prior to the Closing Date in accordance with SECTION 6.12 hereof. The Series A Shares, when issued, will be duly authorized, validly issued, fully paid, nonassessable and free of preemptive rights. Except as set forth in this SECTION 4.1(B), there are no (i) outstanding Equity Securities of the Company or (ii) 13 commitments or obligations of any kind or character for the repurchase, redemption or other acquisition of any Equity Securities of the Company. (c) VOTING TRUSTS, PROXIES, ETC. To the knowledge of the Company, there are no shareholder agreements, voting trusts, proxies or other agreements with respect to or concerning the voting of the Equity Securities of the Company. (d) INDEBTEDNESS. SECTION 4.1(D) of the Disclosure Letter contains a list of (i) all Contracts pursuant to which any indebtedness for borrowed money of the Company or any of its Subsidiaries is outstanding or may be incurred and (ii) the respective principal amounts outstanding thereunder as of the date of this Agreement. 4.2 AUTHORIZATION. The Company has all necessary corporate power and authority to execute and deliver this Agreement and all agreements and documents contemplated to be executed by it by this Agreement. Subject only to the adoption of this Agreement and the transactions contemplated hereby by the affirmative vote of the holders of a majority of the Company Common Shares and the affirmative vote of the holders of a majority of the outstanding Series A Shares, the consummation by the Company of the transactions contemplated hereby has been duly authorized by all requisite corporate action. This Agreement has been duly authorized, executed and delivered by the Company and is a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as the enforceability thereof may be limited by (a) applicable bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance or similar laws in effect which affect the enforcement of creditors' rights generally or (b) general principles of equity, whether considered in a proceeding at law or in equity. 4.3 SUBSIDIARIES. ------------ (a) OWNERSHIP; CAPITALIZATION. Each of the Company's Subsidiaries are set forth in SECTION 4.3(A) of the Disclosure Letter. The Company is the beneficial and record owner of all of the outstanding shares of capital stock of each Subsidiary of the Company, free and clear of any and all Encumbrances. All of the shares of capital stock of each Subsidiary of the Company have been duly authorized and validly issued and are fully paid and non-assessable, and were not issued in violation of any preemptive or other similar rights. No Subsidiary of the Company has any outstanding bonds, debentures, notes or other obligations the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the shareholders of the Company on any matter. Except as set forth in this SECTION 4.3(A), there are no (i) outstanding Equity Securities of any of the Company's Subsidiaries or (ii) commitments or obligations of any kind or character for the repurchase, redemption or other acquisition of any Equity Securities of any of the Company's Subsidiaries. There are no shareholder agreements, voting trusts, proxies or other agreements or understandings with respect to or concerning the purchase, sale or voting of the Equity Securities of the Company's Subsidiaries. (b) ORGANIZATION. Each of the Company's Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has full 14 corporate power and authority to conduct its business as it is presently being conducted and to own and lease its Assets. Each of the Company's Subsidiaries is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which such qualification is necessary under Applicable Law except whether the failure to be so qualified and in good standing would not reasonably be expected to have a Material Adverse Effect on the Company. The Company has made available to Sub true, correct and complete copies of each of its Subsidiaries' certificate of incorporation and by-laws or other similar organization documents (in each case, as amended to date). 4.4 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in SECTION 4.4 of the Disclosure Letter and for the negotiation of this Agreement, since December 31, 1998, (x) the Company and its Subsidiaries (1) have been operated in the ordinary course of business, consistent with past practice, (2) have not declared or set aside or paid any dividend or other distribution with respect to the Company Common Shares and (3) except as set forth in the Company Reports, have not changed the Company's accounting principles or methods and (y) there has been no Material Adverse Change with respect to the Company. 4.5 TITLE TO ASSETS; ABSENCE OF LIENS AND ENCUMBRANCES. The Company and its Subsidiaries own, or have valid leasehold or license interests in, all Assets used in the conduct of their business except where the absence of such ownership, leasehold or license interests would not, individually or in the aggregate, have a Material Adverse Effect on the Company. 4.6 CONTRACTS. --------- (a) SECTION 4.6(A) of the Disclosure Letter sets forth a list of all Contracts of the Company and its Subsidiaries that are material to the business, operation, condition (financial or otherwise) or results of operations of the Company and its Subsidiaries, taken as a whole (the "MATERIAL CONTRACTS" and, together with the Other Contracts (as defined herein), the "SIGNIFICANT CONTRACTS"), and, prior to the date hereof, the Company has made available to Sub true copies of each Significant Contract. For purposes of this Agreement, the term "OTHER CONTRACTS" shall mean (a) each Contract required to be disclosed pursuant to Item 401 of Regulation S-K of the SEC, (b) each Contract for the future lease or purchase of materials, supplies, merchandise or equipment providing for payments in excess of $500,000 during fiscal year 2000, (c) each Contract for the sale or lease of any of the Assets involving revenues to the Company and its Subsidiaries or lease payments to the Company or its Subsidiaries of more than $500,000 during fiscal year 2000, other than sales or leases of inventory and rental equipment in the ordinary course of business consistent with past practice, and (d) except exclusive distributor agreements providing for the right of a Person to sell the products of the Company and its Subsidiaries on an exclusive basis within a defined territory ("EXCLUSIVE DISTRIBUTION AGREEMENT") entered into in the ordinary course of business consistent with past practices, each non-competition or similar Contract which materially restricts the geographic or operational scope of the Company's or its Subsidiaries' business or the ability of the Company or its Subsidiaries to enter into new lines of business. (b) ABSENCE OF BREACHES OR DEFAULTS IN GENERAL. Except as set forth in SECTION 4.6(B) of the Disclosure Letter, with respect to each Significant Contract, (i) there is no default by the 15 Company or its Subsidiaries or, to the knowledge of the Company, any other party to any Significant Contract, and (ii) such Significant Contract is a legal, valid and binding obligation of the Company or its Subsidiaries party thereto, is in full force and effect and is enforceable against the Company or its Subsidiaries and, to the knowledge of the Company, against each other party thereto in accordance with its terms, except as the enforceability thereof may be limited by (A) applicable bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance or similar laws in effect which affect the enforcement of creditors' rights generally or (B) general principles of equity, whether considered in a proceeding at law or in equity, except in the case of clauses (i) and (ii), where the default or failure to be so valid and binding, in full force and effect, or enforceable, could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. 4.7 NO CONFLICT OR VIOLATION. Except as set forth in SECTION 4.7 of the Disclosure Letter, neither the execution, delivery and performance of this Agreement, nor the consummation of the transactions contemplated hereby, by the Company will result in (a) a violation of or a conflict with any provision of the charter documents or other organizational documents of the Company or its Subsidiaries, (b) a breach of, or a default under, or the creation of any right of any party to accelerate, terminate or cancel pursuant to (including, without limitation, by reason of the failure to obtain a consent or approval under any such Contract), any term or provision of any Contract or Permit to which the Company or its Subsidiaries is a party or by which any of the Assets are bound, (c) a violation by the Company or its Subsidiaries of any Applicable Law, or (d) an imposition of any Encumbrance (other than Permitted Encumbrances) on any of the Assets, except in the case of clauses (b), (c) and (d), where such breach, default, creation of any such right, violation or imposition would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. 4.8 CONSENTS AND APPROVALS. Except as set forth in SECTION 4.8 of the Disclosure Letter, no Permit of or declaration, filing, notice or registration to or with, any federal, state, local or foreign governmental or regulatory authority or body is required to be made or obtained by the Company or its Subsidiaries in connection with the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby other than (a) filings required in connection with or in compliance with the provisions of the HSR Act, the Securities Act, the Exchange Act or applicable state securities and "Blue Sky" laws (collectively, the "REGULATORY FILINGS"), (b) the filing of the certificate of merger under the OCL, or (c) those Permits, declarations, filings, notices or registrations that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on the Company. 4.9 Sec Documents; Financial Statements, etc. ---------------------------------------- (a) The Company has filed all forms, reports and documents required to be filed by it with the SEC since December 31, 1998, pursuant to the Exchange Act. (b) The Company has made available to Sub (i) the Company Reports, (ii) the Company's proxy or information statements relating to meetings of, or actions taken without a meeting by, the shareholders of the Company held since December 31, 1998, and (iii) all of the 16 Company's other reports, statements, schedules and registration statements filed with the SEC since December 31, 1998 (collectively, the "SEC DOCUMENTS"). (c) Each SEC Document filed pursuant to the Exchange Act, as of its filing date, (i) complied in all material respects with the applicable requirements of the Exchange Act and the rules and regulations thereunder applicable to such SEC Document and (ii) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading. (d) Each SEC Document, as amended or supplemented, if applicable, filed pursuant to the Securities Act, as of the date such SEC Document or amendment or supplement became effective, (i) complied in all material respects with the applicable requirements of the Securities Act and the rules and regulations thereunder applicable to such SEC Document and (ii) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading. (e) The consolidated financial statements of the Company included in or incorporated by reference in the SEC Documents (the "FINANCIAL STATEMENTS") (i) comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto; (ii) have been prepared in accordance with GAAP (except, in the case of unaudited statements, as permitted by Form 10-Q of the SEC), consistently applied throughout the periods covered thereby (except as may be indicated in the notes thereto) and (iii) present fairly in all material respects in accordance with GAAP, consistently applied throughout the periods covered thereby (except as may be indicated in the notes thereto), the consolidated financial condition of the Company and its Subsidiaries as of the respective dates thereof and the consolidated results of operations, shareholders' equity and cash flows for the periods covered thereby (subject, in the case of unaudited statements, to normal year-end adjustments which would not be material in amount or effect). 4.10 UNDISCLOSED LIABILITIES. Except (a) as set forth in the Company Reports, (b) for liabilities and obligations incurred since October 1, 1999, in the ordinary course of business consistent with past practice and (c) as set forth in SECTION 4.10 of the Disclosure Letter, neither the Company nor its Subsidiaries has any liabilities, obligations or commitments of any nature (whether accrued, absolute, contingent or otherwise) required by GAAP or the rules and regulations of the SEC to be discussed in or set forth on the consolidated balance sheet of the Company and its Subsidiaries or in the notes thereto that could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. 4.11 LITIGATION. Except as set forth in SECTION 4.11 of the Disclosure Letter, there are no outstanding actions, orders, writs, injunctions, judgments or decrees or any claims, suits, charges, or proceedings, or arbitrations, governmental audits or investigations (collectively, "ACTIONS") pending or threatened that could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company 17 4.12 LABOR MATTERS. As of the date of this Agreement, there is no labor strike or material slow-down, work stoppage or labor disturbance pending or, to the knowledge of the Company, threatened, against the Company or its Subsidiaries. 4.13 Compliance With Law. ------------------- (a) Except as disclosed in SECTION 4.13 of the Disclosure Letter, the Company and its Subsidiaries are in compliance in all respects with all statutes, laws, ordinances, rules, orders or regulations ("APPLICABLE LAW") applicable to the Company or any of its Subsidiaries, except for instances of noncompliance that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on the Company. (b) Except as set forth in SECTION 4.13 of the Disclosure Letter, neither the Company nor any of its Subsidiaries has received any written communication from any federal, state, local or foreign governmental or regulatory authority or body during the past three years that alleges that the Company or any of its Subsidiaries is not in compliance in any material respect with any Applicable Law. No representation or warranty is made in this SECTION 4.13(B) with respect to the receipt of written communications to the extent such matters are covered in SECTIONS 4.15 (Employee Plans), 4.16 (Tax Matters) and 4.18 (Compliance with Environmental Laws). 4.14 NO BROKERS. Other than Merrill Lynch & Co. and Robert W. Baird & Co., the arrangements with which have been disclosed in writing to Sub prior to the date hereof, none of the Company, its Subsidiaries or any of their officers, directors, employees or other Affiliates has employed or made any agreement with any broker, finder or similar agent or any other Person to pay any finder's fee, brokerage fee or commission or similar payment in connection with the transactions contemplated hereby 4.15 Employee Plans. -------------- (a) DISCLOSURE; DELIVERY OF COPIES OF RELEVANT DOCUMENTS AND OTHER INFORMATION. SECTION 4.15 of the Disclosure Letter contains a complete list of Employee Plans (other than immaterial Benefit Arrangements) which cover or, with respect to any Pension Plan or Multiemployer Plan subject to Title IV of ERISA, within the past six years, has covered current or former employees, directors, officers or consultants of the Company or its Subsidiaries. True and complete copies of each of the following documents have been made available to Sub: (i) each Welfare Plan and Pension Plan (and, if applicable, related trust agreements) which covers or has covered current or former employees, directors, officers or consultants of the Company or its Subsidiaries and all amendments thereto, all written descriptions thereof which have been distributed to the Company's employees, directors, officers or consultants and all annuity contracts or other funding instruments, (ii) each material Benefit Arrangement which covers current or former employees, directors, officers or consultants of the Company or its Subsidiaries including the most recent written descriptions thereof which have been distributed to the Company's employees (including descriptions of the number and level of employees covered by any Benefit Arrangements providing severance benefits or bonus payments) and a complete description of any material Benefit Arrangement which is not in writing, (iii) the most recent determination or opinion letter issued by the Internal Revenue Service or analogous ruling 18 under foreign law with respect to each Pension Plan and each applicable Welfare Plan (other than a Multiemployer Plan) which covers current or former employees, directors, officers or consultants of the Company or its Subsidiaries, (iv) for the three most recent plan years prior to the date of this Agreement, Annual Reports on Form 5500 Series required to be filed with any governmental agency for each Pension Plan and each Welfare Plan (other than a Multiemployer Plan) which covers or, with respect to any Pension Plan subject to Title IV of ERISA, within the past six years, has covered current or former employees, directors, officers or consultants of the Company or its Subsidiaries, (v) all actuarial reports prepared for the last three plan years for each Pension Plan which covers or has covered current or former employees, directors, officers or consultants of the Company or its Subsidiaries, and (vi) nondiscrimination tests performed under the Code (including, without limitation, 401(k) and 401(m) tests) for each Pension Plan which covers or, with respect to any Pension Plan subject to Title IV of ERISA, within the past six years, has covered current or former employees, directors, officers or consultants of the Company or its Subsidiaries. (b) Representations. --------------- (i) Pension Plans ------------- (A) The Company has hired an enrolled actuary in order to evaluate the funded status of the Pension Plans subject to Title IV of ERISA and, to the knowledge of the Company, the funding method used by such actuary in connection with each Pension Plan which is subject to the minimum funding requirements of ERISA is acceptable and the actuarial assumptions used by such actuary in connection with funding each such plan are reasonable. As of the last day of the last plan year of each Pension Plan and as of the Closing Date, there are (and were) no material "unfunded benefit liabilities" as defined in Section 4001(a)(18) of ERISA (but excluding from the definition of "current value" of "assets" of such Pension Plan, accrued but unpaid contributions) with respect to any Pension Plan. Within the six years immediately preceding the Closing Date, no "accumulated funding deficiency" (for which an excise tax is due or would be due in the absence of a waiver) as defined in Section 412 of the Code or as defined in Section 302(a)(2) of ERISA, whichever may apply, has been incurred with respect to any Pension Plan with respect to any plan year, whether or not waived. Neither the Company nor any ERISA Affiliate has failed to pay when due any "required installment," within the meaning of Section 412(m) of the Code and Section 302(e) of ERISA, whichever may apply, with respect to any Pension Plan. Neither Company nor any ERISA Affiliate is subject to any lien imposed under Section 412(n) of the Code or Section 302(f) of ERISA, whichever may apply, with respect to any Pension Plan. (B) Neither the Company nor any ERISA Affiliate is required to provide security to a Pension Plan under Section 401(a)(29) of the Code. (C) Each Pension Plan and each related trust agreement, annuity contract or other funding instrument which covers or, with respect to any Pension Plan subject to Title IV of ERISA, within the past six years, has covered current or former employees, directors, officers or consultants of Company is qualified and tax-exempt under the provisions of Code 19 Sections 401(a) (or 403(a), as appropriate) and 501(a) and nothing has occurred during the period from its adoption to date that could materially affect such qualification. (D) The Company has paid all premiums (and interest charges and penalties for late payment, if applicable) due the PBGC with respect to each Pension Plan for each plan year thereof for which such premiums are required. Neither Company nor any ERISA Affiliate has engaged in, or is a successor or parent corporation to an entity that has engaged in, a transaction described in Section 4069 of ERISA. Within the six years ending on the date of this Agreement, (1) there has been no "reportable event" (as defined in Section 4043(c) of ERISA and the PBGC regulations under such Section) with respect to any Pension Plan and neither Company nor any ERISA Affiliate is subject to Section 4043(b) of ERISA and no analogous event under applicable foreign law and (2) except as set forth on SECTION 4.15 of the Disclosure Letter, no filing has been made by the Company or any ERISA Affiliate with the PBGC, and no proceeding has been commenced by the PBGC, to terminate any Pension Plan. No condition exists and no event has occurred that could constitute grounds for the termination of any Pension Plan by the PBGC. Within the six years ending on the date of this Agreement, neither the Company nor any ERISA Affiliate has, at any time, (1) ceased operations at a facility so as to become subject to the provisions of Section 4062(e) of ERISA or analogous foreign law, (2) withdrawn as a substantial employer so as to become subject to the provisions of Section 4063 of ERISA or analogous foreign law, or (3) ceased making contributions to any Pension Plan subject to Section 4064(a) of ERISA or analogous foreign law to which Company or any ERISA Affiliate made contributions during the six years prior to the Closing Date. (ii) MULTIEMPLOYER PLANS (A) Within the six years ending on the date of this Agreement, neither the Company nor any ERISA Affiliate has, at any time, withdrawn from a Multiemployer Plan in a "complete withdrawal" or a "partial withdrawal" as defined in Sections 4203 and 4205 of ERISA, respectively, so as to result in a liability, contingent or otherwise (including without limitation the obligations pursuant to an agreement entered into in accordance with Section 4204 of ERISA), of the Company or any ERISA Affiliate. Neither the Company nor any ERISA Affiliate has engaged in, or is a successor or parent corporation to an entity that has engaged in, a transaction described in Section 4212(c) of ERISA. (B) All contributions required to be made by Company or any ERISA Affiliate to each Multiemployer Plan have been made when due. (C) If, as of the Closing Date, Company (and all ERISA Affiliates) were to withdraw from all Multiemployer Plans to which it (or any of them) has contributed or been obligated to contribute, it (and they) would incur no material liabilities to such plans under Title IV of ERISA or analogous foreign law. (D) As of the date of this Agreement, to the best of the Company's knowledge, with respect to each Multiemployer Plan: (1) no such Multiemployer Plan has been terminated or has been in reorganization under ERISA so as to result, directly or indirectly, in any liability, contingent or otherwise, of the Company or any ERISA Affiliate under Title IV of 20 ERISA; (2) no proceeding has been initiated by any person (including the PBGC) to terminate such Multiemployer Plan; (3) a "mass withdrawal," as defined in PBGC Reg. Section 2640.7, with respect to such Multiemployer Plan has not occurred; (4) the Company and the ERISA Affiliates have no reason to believe that such Multiemployer Plan will be terminated or will be reorganized under ERISA or that a "mass withdrawal," as defined in PBGC Reg. Section 2640.7, will occur with respect to such Multiemployer Plan; and (5) the Company and the ERISA Affiliates do not expect to withdraw in a "complete withdrawal" or "partial withdrawal" from such Multiemployer Plan. (iii) WELFARE PLANS (A) Except as set forth in SECTION 4.15(B)(III)(A) of the Disclosure Letter, none of the Company, any ERISA Affiliate or any Welfare Plan has any present or future obligation to make any payment to, or with respect to any present or former employee of the Company or any ERISA Affiliate pursuant to, any retiree medical benefit plan, or other retiree Welfare Plan, and, to the knowledge of the Company, no condition exists which would prevent Company from amending or terminating any such benefit plan or Welfare Plan. (B) Each Welfare Plan which covers current or former employees, directors, officers or consultants of the Company or an ERISA Affiliate and which is a "group health plan," as defined in Section 607(1) of ERISA, has been operated, in all material respects, in compliance with provisions of Part 6 of Title I, Subtitle B of ERISA and Section 4980B of the Code at all times. (C) Neither the Company nor any ERISA Affiliate has incurred any liability with respect to any Welfare Plan that is a "multiemployer plan," as defined in Section 3(37) of ERISA, under the terms of such Welfare Plan, any collective bargaining agreement or otherwise resulting from any cessation of contributions, cessation of obligation to make contributions or other form of withdrawal from such Welfare Plan. (iv) COMPLIANCE WITH LAW. Each Employee Plan presently complies and has been maintained in compliance with its terms and with the requirements prescribed by any and all statutes, orders, rules and regulations which are applicable to such Employee Plan, including without limitation, ERISA and the Code, and by its terms can be amended or terminated at any time. Through the date of this Agreement, the Company has made all contributions and payments required to be made by it with respect to each Employee Plan, including any Foreign Plan (as defined below), or adequate accruals therefor have been provided for and will be reflected in accordance with GAAP on the Financial Statements provided to the Sub by the Company. (v) DEDUCTIBILITY OF PAYMENTS. There is no contract, agreement, plan or arrangement covering any current or former employee, director, officer or consultant of the Company (with respect to its relationship with such entities) that, individually or collectively, provides for the payment by the Company of any amount that is not deductible under Section 162(m) or 404 of the Code. 21 (vi) FOREIGN PLANS. Each Employee Plan that covers any current or former employee, director, officer or consultant of any Foreign Subsidiary or is otherwise not subject to ERISA or the Code (each, a "FOREIGN PLAN") has been maintained in substantial compliance with its terms and with the requirements prescribed by any and all applicable statutes, orders, rules and regulations (including without limitation any special provisions relating to the tax status of contributions to, earnings of or distributions from such Plans where each such Plan was intended to have such tax status) and has been maintained in good standing with applicable regulatory authorities. (vii) FIDUCIARY DUTIES AND PROHIBITED TRANSACTIONS. Neither Company nor any plan fiduciary of any Welfare Plan or Pension Plan which covers or, with respect to any Pension Plan subject to Title IV of ERISA, within the past six years, has covered current or former employees, directors, officers or consultants of the Company or any ERISA Affiliate, has engaged in any transaction in violation of Sections 404 or 406 of ERISA or any "prohibited transaction," as defined in Section 4975(c)(1) of the Code, for which no exemption exists under Section 408 of ERISA or Section 4975(c)(2) or (d) of the Code, or has otherwise violated the provisions of Part 4 of Title I, Subtitle B of ERISA. The Company has not knowingly participated in a violation of Part 4 of Title I, Subtitle B of ERISA by any plan fiduciary of any Welfare Plan or Pension Plan (or other employee benefit plan subject to ERISA) and has not been assessed any civil penalty under Section 502(l) of ERISA. (viii) LITIGATION. As of the date of this Agreement, there is no action, order, writ, injunction, judgment or decree outstanding or claim, suit, litigation, proceeding, arbitral action, governmental audit or investigation relating to or seeking benefits under any Employee Plan that is pending, threatened or anticipated against the Company, any ERISA Affiliate or any Employee Plan, other than routine claims of participants. (ix) NO AMENDMENTS. As of the date of this Agreement, neither the Company nor any ERISA Affiliate has any announced plan or legally binding commitment to create any additional Employee Plans which are intended to cover current or former employees, directors, officers or consultants of the Company or to amend or modify any existing Employee Plan which covers or has covered current or former employees, directors, officers or consultants of the Company. (x) INSURANCE CONTRACTS. To the best of the Company's knowledge, neither the Company nor any Employee Plan (other than a Multiemployer Plan) holds as an asset of any Employee Plan any interest in any annuity contract, guaranteed investment contract or any other investment or insurance contract issued by an insurance company that is the subject of bankruptcy, conservatorship or rehabilitation proceedings, the consequence of which would be reasonably likely to have, individually or in the aggregate, a Material Adverse Effect on the Company. (xi) NO ACCELERATION OR CREATION OF RIGHTS. Except as set forth in SECTION 4.15 of the Disclosure Letter, neither the execution and delivery of this Agreement or other related agreements by the Company nor the consummation of the transactions contemplated hereby or the related transactions will result in the acceleration or creation of any rights of any person to 22 benefits under any Employee Plan (including, without limitation, the acceleration of the vesting or exercisability of any stock options, the acceleration of the vesting of any restricted stock, the acceleration of the accrual or vesting of any benefits under any Pension Plan or the acceleration or creation of any rights under any severance, parachute or change in control agreement). 4.16 Tax Matters. ----------- (a) FILING OF TAX RETURNS. The Company and its Subsidiaries have timely filed with the appropriate taxing authorities all material Returns (including, without limitation, information returns and other material information) in respect of Taxes required to be filed through the date hereof and will timely file any such returns required to be filed on or prior to the Closing Date. All Returns and other information filed are complete and accurate in all material respects. Except as disclosed in SECTION 4.16(A) of the Disclosure Letter, no extension of time within which to file Returns (including, without limitation, information Returns) relating to Taxes currently is in effect. The Company and its Subsidiaries have made available to Sub complete and accurate copies of the federal, state and local income tax Returns for the years 1996, 1997 and 1998. (b) PAYMENT OF TAXES. All Taxes for which the Company and its Subsidiaries are or may be liable, in respect of periods (or portions thereof) ending on or before the Closing Date, have been timely paid, or an adequate reserve or accrual (in conformity with GAAP) has been established therefor. (c) AUDITS, INVESTIGATIONS OR CLAIMS. No material deficiencies for Taxes have been claimed, proposed or assessed in writing by any taxing or other governmental authority against the Company or its Subsidiaries which have not been paid or reserved on the Financial Statements. There are no pending or, to the Company's knowledge, threatened audits, investigations or claims for or relating to any liability in respect of Taxes that in the reasonable judgment of the Company or its counsel are likely to result in a material additional amount of Taxes. Outstanding audits of federal, state, and local returns for Taxes by the relevant taxing or other governmental authorities as of the date of this Agreement are listed in SECTION 4.16(C) of the Disclosure Letter. No extension of any statute of limitations relating to Taxes is in effect with respect to the Company or its Subsidiaries. Except as disclosed in SECTION 4.16(C) of the Disclosure Letter, no power of attorney has been executed by the Company or its Subsidiaries with respect to any matters relating to Taxes which is currently in force. (d) LIENS. Except as set forth in SECTION 4.16(D) of the Disclosure Letter, there are no liens for Taxes (other than for current Taxes not yet due and payable) on the Assets. (e) SAFE HARBOR LEASE PROPERTY. None of the Assets is property that is required to be treated as being owned by any other Person pursuant to the so-called safe harbor lease provisions of former Section 168(f)(8) of the Code. (f) TAX ELECTION. Neither the Company nor its Subsidiaries has consented at any time under Section 341(f)(1) of the Code to have the provisions of Section 341(f)(2) of the Code (or similar provisions under state or local law) apply to any disposition of the Assets. The Company and its Subsidiaries have not agreed to make, or are not required to make, any adjustment under 23 Section 481(a) of the Code (or similar provisions under state or local law) by reason of a change in accounting method or otherwise. (g) TAX SHARING AGREEMENTS. Except as set forth in SECTION 4.16(G) of the Disclosure Letter, there are no tax sharing agreements or similar arrangements (whether written or unwritten) with respect to or involving the Company or its Subsidiaries. (h) PARTNERSHIPS. The Company and its Subsidiaries are not a party to any joint venture, partnership or other arrangement or contract which is treated as a partnership for federal income tax purposes. (i) PARACHUTE PAYMENTS. The Company and its Subsidiaries are not a party to any agreement or arrangement that could reasonably be expected to result, individually or in the aggregate, in the payment of any "excess parachute payment" within the meaning of Section 280G of the Code, including, without limitation, as a result of any event connected with the Merger or any other transaction contemplated herein. (j) AFFILIATED GROUP. Except as set forth in SECTION 4.16(J) of the Disclosure Letter, since July 1, 1990, the Company and its Subsidiaries have not been a member of an affiliated group that has filed a consolidated return or any group that has filed a combined, consolidated or unitary state or local return, other than the group of which the Company is currently the parent. 4.17 CUSTOMERS AND SUPPLIERS. SECTION 4.17 of the Disclosure Letter sets forth a true and correct list of (a) the 10 largest customers of the Company and its Subsidiaries, on a consolidated basis, in terms of sales during the twelve months ended December 31, 1999, (b) the 10 largest customers of each business platform of the Company and its Subsidiaries, in terms of sales during the twelve months ended December 31, 1999, and (c) the 10 largest suppliers of the Company and its Subsidiaries, on a consolidated basis, in terms of purchases in the twelve months ended December 31, 1999. 4.18 COMPLIANCE WITH ENVIRONMENTAL LAWS. Except as set forth in SECTION 4.18 of the Disclosure Letter: (a) The Company and its Subsidiaries are in compliance with all Environmental Laws, including, without limitation, all Permits required thereunder to conduct their business as currently being conducted, except for instances of noncompliance that have not had and would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. In addition, as of the date of this Agreement, to the knowledge of the Company, the Company and its Subsidiaries are in material compliance with all Environmental Laws, including, without limitation, all Permits required thereunder to conduct their business as currently being conducted. (b) As of the date of this Agreement, there are no existing Environmental Claims against the Company or its Subsidiaries, nor have any of them received any written notification of any allegation of any actual, or potential responsibility for, or any inquiry or investigation regarding, any disposal, release or threatened release at any location of any Hazardous Substance generated or transported by the Company or its Subsidiaries. There are no existing 24 Environmental Claims against the Company or its Subsidiaries, nor have any of them received any written notification of any allegation of any actual, or potential responsibility for, or any inquiry or investigation regarding, any disposal, release or threatened release at any location of any Hazardous Substance generated or transported by the Company or its Subsidiaries, except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. (c) There have been no releases (I.E., any past or present releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, disposing, or dumping) of Hazardous Substances on, upon or into the Facilities other than those authorized by Environmental Laws including, without limitation, the Permits required thereunder, the consequences of which would be a Material Adverse Effect on the Company. (d) Except as would not have a Material Adverse Effect on the Company, there are no PCBs or asbestos-containing materials located at or on the Facilities. (e) Except as set forth in SECTION 4.18(E) of the Disclosure Letter and except with respect to the Facilities, the Company and its Subsidiaries are not a party to any contract and are not obligated by any representation, warranty, indemnification, covenant, restriction or other undertaking concerning Environmental Conditions or compliance with Environmental Laws. (f) As of the date of this Agreement, there are no currently effective consent decrees, consent orders, judgments, judicial or administrative orders or agreements (other than Permits) with or liens by, any governmental authority or quasi-governmental entity relating to any Environmental Law which regulate, obligate or bind the Company or its Subsidiaries. There are no currently effective consent decrees, consent orders, judgments, judicial or administrative orders or agreements (other than Permits) with or liens by, any governmental authority or quasi-governmental entity relating to any Environmental Law which regulate, obligate or bind the Company or its Subsidiaries, except as could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect on the Company. (g) True and correct copies of the Environmental Reports have been made available to Sub. 4.19 OPINION OF FINANCIAL ADVISORS. The Company has received the opinion of each of Merrill Lynch & Co. and Robert W. Baird & Co., dated the date of this Agreement, to the effect that, as of such date, the consideration to be received in the Merger by the holders of Company Common Shares is fair to such holders from a financial point of view, a signed copy of each such opinion has been delivered to Sub. 4.20 BOARD RECOMMENDATION. The Board of Directors of the Company, at a meeting duly called and held, has by unanimous vote (i) determined that this Agreement and the transactions contemplated hereby, including the Merger, taken together are fair to and in the best interests of the Shareholders, (ii) approved this Agreement and the transactions contemplated hereby, including the Merger, which approval satisfies the requirements of the OCL for action by the Board of Directors to approve this Agreement and (iii) resolved to recommend that the 25 holders of the Company Common Shares adopt this Agreement and approve the transactions contemplated by this Agreement, including the Merger. 4.21 REQUIRED COMPANY VOTE. The affirmative vote of a majority of the outstanding Company Common Shares and the affirmative vote of a majority of the outstanding Series A Shares are the only votes of the holders of any class or series of the Company's securities necessary to adopt this Agreement and approve the Merger and the other transactions contemplated by this Agreement. The Company's articles of incorporation contain a provision in which the Company expressly elects not to be governed by Section 1701.831 of the OCL, and therefor Section 1701.831 does not restrict the consummation of the Merger or the other transactions contemplated by this Agreement. 4.22 PROXY STATEMENT. The Proxy Statement to be mailed to the Shareholders in connection with the special meeting of the Shareholders (the "SPECIAL MEETING") and any amendment thereof or supplement thereto (excluding any information supplied in writing by Sub specifically for inclusion therein), when mailed to the Shareholders and at the time of the Special Meeting, and any schedules required to be filed with the SEC as a result of the Merger or the transactions contemplated by this Agreement, when filed, shall not contain any untrue statement of a material fact, or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and shall comply as to form with all requirements of the Exchange Act. Notwithstanding the foregoing, the Company makes no representation or warranty with respect to any information furnished in writing by Sub or its representatives specifically for inclusion in any of the foregoing documents. 4.23 TAKEOVER LAWS. No "fair price," "moratorium," "control share acquisition" or other similar anti-takeover statute or regulation enacted under the laws of the State of Ohio or, to the knowledge of the Company, the Federal laws of the United States or the laws of any other state, applicable to the Company or its Subsidiaries is applicable to the execution, delivery and performance of this Agreement or the consummation of the Merger or the transactions relating to the Merger. ARTICLE V. REPRESENTATIONS AND WARRANTIES OF SUB As an inducement to the Company to enter into this Agreement, Sub hereby makes the following representations and warranties to the Company: 5.1 ORGANIZATION. Sub is duly organized, validly existing and in good standing under the laws of the State of Ohio. 5.2 AUTHORIZATION. Sub has all necessary corporate power and authority to, and has taken all corporate action necessary on its part to, execute and deliver this Agreement and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by Sub and is a legal, valid and binding obligation of Sub, enforceable against Sub in accordance with its terms, except as the enforceability thereof may be limited by (a) applicable bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance or similar laws in 26 effect which affect the enforcement of creditors' rights generally or (b) general principles of equity, whether considered in a proceeding at law or in equity. 5.3 CONSENTS AND APPROVALS. No consent, waiver, agreement, approval, permit or declaration, filing, notice or registration to or with, any federal, state, local or foreign governmental or regulatory authority or body is required to be made or obtained by Sub in connection with the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby other than any Regulatory Filings and the filing of the certificate of merger under the OCL. 5.4 NO CONFLICT OR VIOLATION. Neither the execution, delivery and performance of this Agreement, nor the consummation of the transactions contemplated hereby, by Sub will result in (a) a violation of or a conflict with any provision of the articles of incorporation or code of regulations of Sub, (b) a breach of, or a default under, or the creation of any right of any party to accelerate, terminate or cancel pursuant to (including, without limitation, by reason of the failure to obtain a consent or approval under any such contract, encumbrance or permit), any term or provision of any contract, encumbrance or permit to which Sub is a party or by which any of its assets are bound, a violation by Sub of any Applicable Law, or an imposition of any Encumbrance on the business of Sub or on any of its assets, except where such breach, default, violation, imposition or creation of any such right would not reasonably be expected to have a Material Adverse Effect on Sub. 5.5 PROXY STATEMENT. The information furnished in writing to the Company by Sub specifically for use in the Proxy Statement and any amendment or supplement thereto, when mailed to the Shareholders or at the time of the Shareholders Meeting, and any schedules required to be filed with the SEC as a result of the Merger or the transactions contemplated by this Agreement, when filed, shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Notwithstanding the foregoing, Sub makes no representation or warranty with respect to any information supplied by the Company or any of its representatives which is contained in or incorporated by reference in any of the foregoing documents. 5.6 FINANCING. Sub has delivered to the Company complete and correct executed copies of letters (the "FINANCING LETTERS") related to the commitment of the lenders to provide the financing in connection with the Merger and other transactions contemplated hereby and to refinance existing indebtedness of Sub and the Company and to pay related fees and expenses (the "FINANCING"). As of the date of this Agreement, Sub has no reason to believe that any of the conditions to the Financing will not be satisfied or that the funds for the Financing will not be available on a timely basis for the transactions contemplated by this Agreement. Assuming satisfaction of all conditions set forth in SECTIONS 7.1 and 7.3 and full funding of all the amounts contemplated by the Financing Letters, Sub at Closing shall be capitalized with an equity contribution in an amount of $84.0 million, less (a) the aggregate value of all Equity Securities of the Company retained and/or rolled-over by certain existing holders of Equity Securities of the Company (currently contemplated to be approximately $4.0 to $5.0 million), plus (b) if a payment is made with respect to the Identified Matter in accordance with Section 6.3(f), an 27 amount up to $3.5 million to the extent, and only to the extent, required by the Financing Letters as a result of Incremental Existing Indebtedness (as defined in the Financing Letters) being greater that $25.0 million, and such funds, together with the proceeds from the Financing, will provide sufficient funds to consummate the transactions contemplated hereby. 5.7 NO BROKER PAYMENTS BY COMPANY. Unless the Merger is consummated, the Company will not be responsible for any finder's fee, brokerage fee or commission or similar payment in connection with the transactions contemplated hereby due to any arrangement between any broker, finder or similar agent and Sub or any of its Affiliates, except as otherwise contemplated by this Agreement or agreed to by the Company. ARTICLE VI. COVENANTS OF THE COMPANY AND SUB The Company and Sub covenant and agree with each other that from the date hereof through the Closing: 6.1 MAINTENANCE OF BUSINESS PRIOR TO CLOSING. Prior to the Effective Time, except as set forth in SECTION 6.1 of the Disclosure Letter or as contemplated by any other provision of this Agreement, unless Sub has consented in writing thereto (such consent not to unreasonably withheld), the Company: (a) shall, and shall cause each of its Subsidiaries to, conduct its operations and business according to their usual, regular and ordinary course consistent with past practice; (b) to the extent consistent with SECTION 6.1(A), shall use its reasonable best efforts, and shall cause each of its Subsidiaries to use its reasonable best efforts, to preserve intact their business organizations and goodwill, keep available the services of their respective officers and employees and maintain satisfactory relationships with those persons having business relationships with them; (c) shall not, and shall cause its Subsidiaries not to, amend their respective articles of incorporation or code of regulations or comparable governing instruments, other than to authorize the Series A Shares with rights, preferences and designations set forth on SCHEDULE 6.1(C) and as expressly provided by the terms of this Agreement; (d) upon the discovery by any of the Persons set forth on SECTION 6.1(D) of the Disclosure Letter, shall promptly notify Sub of (i) any Material Adverse Change with respect to the Company, (ii) any material litigation or material governmental complaints, investigations or hearings (or communications indicating that the same may be contemplated), or (iii) the breach in any material respect of any representation or warranty contained herein; (e) shall promptly deliver to Sub correct and complete copies of any report, statement or schedule filed with the SEC subsequent to the date of this Agreement; (f) shall not, and shall not permit any of its Subsidiaries to, (A) authorize, propose or announce an intention to authorize or propose, or enter into an agreement with respect to, (1) any 28 release or relinquishment of any material contract rights, or (2) any acquisition, disposition, lease or license of, or mortgage, pledge or other encumbrance or lien on, any Assets (including Equity Securities of any Subsidiary), except the purchase or sale of inventory, the sale or lease of rental equipment and the sale of excess or obsolete assets, each in the ordinary course of business consistent with past practice, or the purchase, lease, license or sale of Assets in the ordinary course of business consistent with past practice which, individually or in the aggregate, are not material to the Company and its Subsidiaries taken as a whole (or the placement of liens pursuant to the existing credit facility or purchase money liens, in each case, on Assets acquired after the date of this Agreement in accordance with the terms hereof and in the ordinary course of business, consistent with past practice), or (B) adopt a plan of complete or partial liquidation or adopt resolutions providing for complete or partial liquidation, dissolution, consolidation, merger, restructuring or recapitalization, other than the Merger; (g) shall not, and shall not permit any of its Subsidiaries to, (i) grant, confer or award any options, warrants, conversion rights or other rights or Equity Securities (other than (x) Company Common Shares issued upon exercise of Options or conversion of the Debentures in accordance with their present terms and (y) the issuance of the Series A Shares to the Persons listed on SCHEDULE A in accordance with SECTION 6.12) not existing on the date hereof, to acquire any shares of its capital stock or other securities of the Company or its Subsidiaries or (ii) except as contemplated by SECTION 3.3, accelerate, amend or change the period of exercisability of options or restricted stock granted under any employee stock plan or authorize cash payments in exchange for any options granted under any of such plans; (h) except as required by Applicable Law, shall not, and shall not permit any of its Subsidiaries to, amend the terms of the Employee Plans, including, without limitation, any employment, severance or similar agreements or arrangements in existence on the date hereof, or adopt any new employee benefit plans, programs or arrangements or any employment, severance or similar agreements or arrangements; (i) shall not, and shall not permit any of its Subsidiaries to, (i) increase or agree to increase the compensation payable or to become payable to its officers or, other than increases in accordance with past practice which are not material, to its employees or (ii) enter into any collective bargaining agreement other than renewals in the ordinary course of business consistent with past practice; (j) shall not, and shall not permit any of its Subsidiaries to, (i) incur, create, assume or otherwise become liable for borrowed money or assume, guarantee, endorse or otherwise become responsible or liable for the obligations of any other individual, corporation or other entity or (ii) make any loans or advances to any other Person, except in the case of clause (i) for borrowings under existing credit facilities as of the date of this Agreement in the ordinary course of business and, except in the case of clause (ii) for advances consistent with past practice which are not material; (k) shall not, and shall not permit any of its Subsidiaries to, (i) materially change any practice with respect to Taxes, (ii) make, change or revoke any material Tax election, or (iii) settle or compromise any material dispute involving a Tax liability; 29 (l) shall not, and shall not permit any of its Subsidiaries to, (i) declare, set aside or pay any dividend or make any other distribution or payment with respect to any shares of its capital stock or other ownership interests other than dividends and distributions by a direct or indirect wholly owned Subsidiary of the Company to its parent or (ii) directly or indirectly redeem, purchase or otherwise acquire any shares of its capital stock or capital stock of any of its Subsidiaries, or make any commitment for any such action or (iii) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for share of its capital stock, except, in the case of clause (ii), the acquisition of the Company Common Shares in exchange for the Series A Shares as set forth in SECTION 6.12; (m) shall not, and shall not permit any of its Subsidiaries to, issue, deliver, sell, pledge or otherwise encumber any shares of its capital stock or any Equity Security (other than (i) the issuance of Company Common Shares upon the exercise of Options or the conversion of the Debentures, outstanding on the date of this Agreement, in accordance with their present terms or (ii) the issuance of the Series A Shares as set forth in SECTION 6.12); (n) shall not, and shall not permit any of its Subsidiaries to, make or agree to make any capital expenditure except in accordance with the Company's capital expenditure plan for fiscal year 2000, a true, correct and complete copy of which has been delivered to Sub; (o) shall not, and shall not permit any of its Subsidiaries to, change any accounting principles or practices, except insofar as may be required by a change in GAAP; (p) shall not, and shall not permit any of its Subsidiaries to, pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), other than the payment, discharge or satisfaction, in the ordinary course of business consistent with past practice or in accordance with their terms, of liabilities reflected or reserved against in, or contemplated by, the most recent consolidated financial statements (or the notes thereto) of the Company included in the Company Reports or incurred thereafter in the ordinary course of business consistent with past practice; provided that in no event shall any of the liabilities and obligations set forth in SECTION 6.1(P) of the Disclosure Letter be paid, discharged or satisfied without the prior written consent of Sub; (q) shall not (i) acquire (by merger, consolidation, acquisition of stock, other securities or assets or otherwise) or (ii) make a capital investment in (whether through the acquisition of an equity interest, the making of a loan or advance or otherwise) (A) any Person, other than a wholly-owned subsidiary of the Company, or (B) any portion of the assets of any Person that constitutes a division or operating unit of such Person; (r) shall not, and shall not permit any of its Subsidiaries to, (A) enter into any non-competition or similar Contracts, except Exclusive Distribution Agreements entered into in the ordinary course of business consistent with past practice or (B) enter into any Contract providing for payments by the Company or its Subsidiaries or involving revenues to the Company and its Subsidiaries of more than $1,000,000 over any twelve-month period during the life of such Contract; and 30 (s) shall not, and shall not permit any of its Subsidiaries to take, or agree (in writing or otherwise) or resolve to take, any of the foregoing actions. 6.2 INVESTIGATION BY SUB. The Company shall allow Sub, its counsel, accountants and other representatives and the financial institutions (and their counsel and representatives) providing Financing in connection with this Agreement and the transactions contemplated hereby, during regular business hours upon reasonable notice, to make such reasonable inspection of the Assets, Facilities, business and operations of the Company and its Subsidiaries and to inspect and make copies of Contracts, books and records and all other documents and information reasonably requested by Sub and related to the operations and business of the Company and its Subsidiaries including, without limitation, historical financial information concerning the business of the Company and its Subsidiaries and to meet with designated Personnel of the Company or its Subsidiaries and/or their representatives. The Company and its Subsidiaries shall furnish to Sub promptly upon request (a) all additional documents and information with respect to the affairs of the Company and its Subsidiaries relating to their businesses and (b) access to the Personnel and to the Company's and its Subsidiaries' accountants and counsel as Sub, or its counsel or accountants, may from time to time reasonably request and the Company and its Subsidiaries shall instruct their Personnel, accountants and counsel to cooperate with Sub, and to provide such documents and information as Sub and its representatives may reasonably request. Sub will hold, and will use its reasonable best efforts to cause its counsel, accountants and other representatives and the financial institutions (and their counsel and representatives) providing Financing in connection herewith, any nonpublic information in confidence to the extent required by, and in accordance with, that certain confidentiality letter, dated October 27, 1999, between Dayton Superior Corporation and Odyssey Investment Partners, LLC (the "CONFIDENTIALITY LETTER"). In addition, Sub will use its reasonable best efforts to obtain the Financing contemplated by the Financing Letters. 6.3 Consents and Efforts. -------------------- (a) Upon the terms and subject to the conditions set forth in this Agreement, each of the parties agrees to (A) promptly make its respective filings under the HSR Act with respect to the Merger and (B) use its reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective, in the most expeditious manner practicable, the Merger and the other transactions contemplated by this Agreement. Sub and the Company will use their reasonable best efforts and cooperate with one another (i) in promptly determining whether any filings are required to be made or consents, approvals, waivers, licenses, permits or authorizations are required to be obtained (or, which if not obtained, would result in an event of default, termination or acceleration of any agreement or any put right under any agreement) under any applicable law or regulation or from any governmental authorities or third parties, including parties to loan agreements or other debt instruments, in connection with the transactions contemplated by this Agreement, including the Merger, and (ii) in promptly making any such filings, in furnishing information required in connection therewith and in timely seeking to obtain any such consents, approvals, waivers, licenses, permits or authorizations. 31 (b) The Company shall cooperate with any reasonable requests of Sub or the SEC related to the recording of the Merger as a recapitalization for financial reporting purposes, including, without limitation, to assist Sub and its Affiliates with any presentation to the SEC with regard to such recording and to include appropriate disclosure with regard to such recording in all filings with the SEC and all mailings to shareholders made in connection with the Merger. (c) The Company will provide, and will cause its Subsidiaries and its and their respective officers, employees and advisors to provide, all reasonable cooperation in connection with the arrangement of the Financing to be consummated contemporaneous with or at or after the Closing in respect of the transactions contemplated by this Agreement, including without limitation, (x) participation in meetings, due diligence sessions and road shows, (y) the preparation of offering memoranda, private placement memoranda, prospectuses and similar documents, and (z) the execution and delivery of any customary commitment letters, underwriting or placement agreements, pledge and security documents, other definitive financing documents, or other requested certificates or documents, including comfort letters of accountants and legal opinions, in each case as may be reasonably requested by Sub; provided that the form and substance of any of the documents referred to in clause (y), and the terms and conditions of any of the agreements and other documents referred to in clause (z), shall be substantially consistent with the terms and conditions of the Financing required to satisfy the condition precedent set forth in SECTION 7.3(F). In addition, in conjunction with the obtaining the Financing, the Company agrees, at the request of Sub, to call for prepayment or redemption, as the case may be, any then existing indebtedness of the Company (other than the Debentures) which by its terms permits prepayment or redemption; PROVIDED that such prepayment or redemption shall only be made contemporaneously with or after the Effective Time. (d) Each of the parties agrees to cooperate with each other in taking, or causing to be taken, all actions necessary to delist the Common Shares from the NYSE, PROVIDED, that such delisting shall not be effective until after the Effective Time. (e) The Company agrees to cooperate with Sub and to take such actions as may be reasonably requested by Sub to cause or permit the cancellation or satisfaction and discharge of the Trust Preferred Securities and/or Debentures as of the Closing Date, in exchange for the amounts to which the holders of the Trust Preferred Securities and/or Debentures would be entitled to receive after the consummation of the transactions contemplated by this Agreement. (f) With respect to the matter set forth in SECTION 6.3(P) of the Disclosure Letter (the "IDENTIFIED Matter"), neither the Company or any of its Subsidiaries shall pay any amount (other than reasonable costs, filing fees, and reasonable legal fees and expenses) with respect to the Identified Matter unless and until (i) Sub consents in writing to the Company's or any of its Subsidiaries' payment of any such amount or (ii) Symons Corporation: (A) has exhausted all appeals, including, but not limited to, requests for reconsideration or re-argument or other similar requests, lawfully available to it, which in the good faith opinion of Symons Corporation's outside counsel are appropriate in the circumstances (the Company agrees to give Sub as much advance notice as possible prior to determining any 32 such appeal is not lawfully available to it or any of its Subsidiaries or is not appropriate in the circumstances); (B) has taken all lawful steps available to extend, where possible, and in any event exhaust any time period allowed for payment of any judgment issued against Symons Corporation and upheld by the applicable appellate court (the "relevant judgment"); and (C) has given Sub prior notice of its belief that it has no lawful option available to it (which in the good faith opinion of Symons Corporation's outside counsel is appropriate in the circumstances) other than paying the relevant judgment by a certain date (the Company agrees to give as much advance notice as is possible to Sub of its determination and to consult with Sub concerning whether any other lawful option is available to Symons Corporation or whether any such lawful option is appropriate in the circumstances). The Company agrees to notify Sub of all material developments with respect to the Identified Matter, including, without limitation, with respect to the matters described above in clauses (A), (B) and (C) of this Section 6.3(f). 6.4 Other Offers. ------------ (a) The Company shall not, nor shall it authorize or permit any of its Subsidiaries to (whether directly or indirectly through advisors, agents or other intermediaries), nor shall the Company or any of its Subsidiaries authorize or permit any of its or their officers, directors, agents, representatives or advisors to, (x) solicit, initiate, encourage or take any action knowingly to facilitate the submission of inquiries, proposals or offers from any Person or group, other than Sub and its representatives and Affiliates, relating to (i) any acquisition or purchase of 20% or more of the Assets (other than purchases and sales or leases of inventory and rental equipment in the ordinary course of business consistent with past practice) or of over 20% of any class of Equity Securities of (A) the Company or (B) any of the Company's Subsidiaries whose Assets constitute more than 20% of the Assets (a "SIGNIFICANT SUBSIDIARY" (it being understood and agreed that in any event Symons Corporation shall be deemed to be a Significant Subsidiary)), (ii) any tender offer (including a self tender offer) or exchange offer that if consummated would result in any Person beneficially owning 20% or more of any class of Equity Securities of the Company or any of its Significant Subsidiaries, or (iii) any merger, consolidation, recapitalization, sale of all or substantially all of the assets, liquidation, dissolution or similar transaction involving the Company or any of its Significant Subsidiaries other than the transactions contemplated by this Agreement (each such transaction being referred to herein as an "ACQUISITION PROPOSAL"), or agree to or endorse any Acquisition Proposal, (y) enter into or participate in any discussions or negotiations regarding any of the foregoing or (z) grant any material waiver or release under any standstill, non-solicitation or similar agreement with respect to any Equity Securities of the Company or any of its Subsidiaries; PROVIDED, HOWEVER, that the foregoing shall not prohibit the Company or its Subsidiaries (either directly or indirectly through advisors, agents or other intermediaries) from (i) furnishing information pursuant to a customary confidentiality letter concerning the Company and its businesses, properties or Assets to any Person or "group," as defined in Section 13(d) of the Exchange Act, other than Sub or any of its Affiliates (a "THIRD PARTY") who has made a bona fide Acquisition Proposal, (ii) engaging in 33 discussions or negotiations with such a Third Party who has made a bona fide Acquisition Proposal and/or (iii) taking any non-appealable, final action ordered to be taken by the Company or its Subsidiaries by any court of competent jurisdiction, but in each case referred to in the foregoing clauses (i) and (ii), only to the extent that, in response to a bona fide Acquisition Proposal that the Board of Directors of the Company shall have determined in good faith is reasonably likely to result in a Superior Proposal (as defined in SECTION 8.1(A)(VI), the Board of Directors of the Company shall have concluded in good faith after consultation with outside counsel that such action is required to prevent the Board of Directors of the Company from breaching its fiduciary duties to the shareholders of the Company under applicable law; PROVIDED, FURTHER, that the Board of Directors of the Company shall not take any of the foregoing actions referred to in clauses (i) and (ii) until after the Company has given Sub notice thereof as contemplated by SECTION 6.4(D). Notwithstanding the foregoing, if, prior to the Shareholder Vote, the Board of Directors of the Company receives a bona fide Acquisition Proposal and as a result thereof the Board of Directors determines in good faith, after consultation with outside counsel, that it is necessary to do so in order to comply with their fiduciary obligations, the Board of Directors of the Company may withdraw or modify its approval or recommendation of the Merger and this Agreement. The Company shall immediately cease and order its advisors, agents and other intermediaries to cease any and all existing activities, discussions or negotiations with any parties conducted heretofore with respect to any of the foregoing; PROVIDED that the Company shall be responsible for any such advisor, agent or other intermediary failing to cease such activities, discussions and negotiations. Nothing contained in this SECTION 6.4 shall prohibit the Company from taking or disclosing to its shareholders a position contemplated by Rule 14e-2(a) under the Exchange Act or from making any disclosure to its shareholders if, in the good faith judgment of the Board of Directors of the Company, after consultation with outside counsel, failure to so disclose would be in violation of its obligations under Applicable Law. (b) If a Payment Event (as hereinafter defined) occurs, the Company shall pay to Sub, within one business day following such Payment Event, a fee of $6,000,000. "PAYMENT EVENT" means (1) the termination of this Agreement pursuant to SECTION 8.1(A)(V); (2) the termination of this Agreement pursuant to SECTION 8.1(A)(VI); or (3) the occurrence of any of the following events if this Agreement shall have been terminated (i) by Sub pursuant to SECTION 8.1(A)(III) due to a failure of the condition set forth in SECTION 7.1(A) to be satisfied or (ii) by the Company pursuant to SECTION 8.1(A)(III) due to a failure of the condition set forth in SECTION 7.1(A) to be satisfied: (A) prior to the Shareholder Vote, (x) any Third Party shall have become the beneficial owner of more than 20% of the outstanding Company Common Shares or (y) any Third Party shall have made, or proposed, communicated or disclosed in a manner which is or otherwise becomes public a bona fide intention to make an Acquisition Proposal (including by making such an Acquisition Proposal) and (B) on or prior to the date that is within 12 months of the termination of this Agreement, the Company either consummates with a Third Party a transaction the proposal of which would otherwise qualify as an Acquisition Proposal under SECTION 6.4(A) or enters into a definitive agreement with a Third Party with respect to a transaction the proposal of which would otherwise qualify as an Acquisition Proposal under SECTION 6.4(A) and such transaction is consummated within six months of the date of such definitive agreement (whether or not such Third Party is the Third Party referred to in clause (x) above) (it being understood that for purposes of this clause (B) the phrase "50%" is substituted 34 for the phrase "20%" in the definition of Acquisition Proposal and that in determining whether such 50% threshold shall have been satisfied, all Assets and Equity Securities acquired by the Third Party that consummates the Acquisition Proposal prior to the termination of this Agreement shall be included). (c) Upon termination of this Agreement (1) pursuant to SECTION 8.1(A)(V), 8.1(A)(VI) or 8.1(A)(VII), (2) by Sub pursuant to SECTION 8.1(A)(III) due to a failure of a condition set forth in SECTION 7.1(A) or SECTIONS 7.3(A), (E) or (F) to be satisfied or (3) by the Company pursuant to SECTION 8.1(A)(III) due to a failure of the condition set forth in SECTION 7.1(A) to be satisfied, the Company shall reimburse Sub and its Affiliates not later than two business days after submission of reasonable documentation thereof for all of their documented out-of-pocket fees and expenses (including, without limitation, the reasonable fees and expenses for their counsel and investment banking fees), actually incurred by any of them or on their behalf in connection with this Agreement and the transactions contemplated hereby and the arrangement of, obtaining the commitment to provide or obtaining the Financing for transactions contemplated by this Agreement (including any reasonable fees payable to the entities providing for Financing and their respective counsel); PROVIDED that the aggregate amount payable pursuant to this SECTION 6.4(D) shall not exceed $1,250,000. (d) The Company shall (i) promptly notify Sub (orally and in writing) if any offer is made, any discussions or negotiations are sought to be initiated, any inquiry, proposal or contact is made or any information is requested with respect to any Acquisition Proposal, (ii) promptly notify Sub of the material terms of any proposal which it may receive in respect of any such Acquisition Proposal, including, without limitation, the identity of the prospective purchaser or soliciting party, (iii) promptly provide Sub with a copy of any such offer, if written, or a written summary (in reasonable detail) of such offer, if not in writing, and (iv) keep Sub informed of the status of such offer and the offeror's efforts and activities with respect thereto (including, without limitation, the response of the Board of Directors with respect thereto). 6.5 MEETING OF SHAREHOLDERS. The Company shall take all action necessary in accordance with applicable law and its articles of incorporation and code of regulations, including the timely mailing of the Proxy Statement, to convene the Special Meeting of its Shareholders as promptly as practicable to consider and vote upon the adoption of this Agreement and the approval of the transactions contemplated hereby. The Board of Directors of the Company shall recommend such adoption and approval, shall not withdraw or modify such recommendation and shall take all lawful action to solicit such adoption and approval; PROVIDED that the Board of Directors of the Company may fail to make or withdraw or modify such recommendation, but only to the extent that the Board of Directors of the Company shall have concluded in good faith after consultation with outside counsel that such action is required to prevent the Board of Directors of the Company from breaching its fiduciary duties to the shareholders of the Company under applicable law. The Company will use its reasonable best efforts to hold such meeting as soon as reasonably practicable after the date hereof. 35 6.6 Proxy Statement. --------------- (a) Sub and the Company shall cooperate and prepare, and the Company shall file with the SEC as soon as reasonably practicable, a proxy statement with respect to the Special Meeting of the Shareholders in connection with the Merger (the "PROXY STATEMENT"), respond to comments of the staff of the SEC, clear the Proxy Statement with the staff of the SEC and promptly thereafter mail the Proxy Statement to all holders of record of Company Common Shares. The Company shall comply in all material respects with the requirements of the Exchange Act and the Securities Act and the rules and regulations of the SEC thereunder applicable to the Proxy Statement and the solicitation of proxies for the Special Meeting (including any requirement to amend or supplement the Proxy Statement) and each party shall furnish to the other such information relating to it and its Affiliates and the transactions contemplated by this Agreement and such further and supplemental information as may be reasonably requested by the other party. The Proxy Statement shall include the recommendation of the Company's Board of Directors in favor of the Merger, unless otherwise required by the fiduciary duties of the directors under applicable law as contemplated hereby. (b) No amendment or supplement to the Proxy Statement shall be made by the Company to which Sub reasonably objects. Prior to filing any amendment or supplement to the Proxy Statement, the Company shall give Sub reasonable advance notice and a copy of the proposed amendment or supplement. The Company shall advise Sub of any request by the SEC for amendment of the Proxy Statement or comments thereon and responses thereto or requests by the SEC for additional information. 6.7 Director and Officer Liability. ------------------------------ (a) For a period of six years after the Effective Time, Sub will cause the Surviving Corporation to indemnify and hold harmless the present and former officers and directors of the Company in respect of acts or omissions occurring prior to the Effective Time to the extent provided under the Company's articles of incorporation and code of regulations in effect on the date hereof; PROVIDED that such indemnification shall be subject to any limitation imposed from time to time under applicable law. To the maximum extent permitted by the OCL, such indemnification shall be mandatory rather than permissive and the Surviving Corporation shall advance expenses in connection with such indemnification. The articles of incorporation and the code of regulations of the Surviving Corporation shall contain provisions substantially similar in terms of the rights granted to the provisions with respect to indemnification and insurance set forth in the Company's articles of incorporation, which provisions shall not be amended in any manner that would adversely affect the rights under those code of regulations of the Company's employees, agents, directors or officers for acts or omissions on or prior to the Effective Time, except if such amendment is required by law. For a period of six years after the Effective Time, Sub will cause the Surviving Corporation to use its reasonable best efforts to provide officers' and directors' liability insurance in respect of acts or omissions occurring prior to the Effective Time covering each such Person currently covered by the Company's officers' and directors' liability insurance policy on terms with respect to coverage and amount no less favorable than those of such policy in effect on the date hereof, PROVIDED that in satisfying its obligation under this SECTION 6.7, Sub shall not be obligated to cause the Surviving Corporation to pay premiums in excess of 200% of the amount per annum the Company paid in its last full fiscal year, which amount has been disclosed to Sub. 36 (b) In furtherance of and not in limitation of the preceding paragraph, Sub agrees that the officers and directors of the Company that are defendants in all litigation commenced by shareholders of the Company with respect to (x) the performance of their duties as such officers and/or directors under federal or state law (including litigation under federal and state securities laws) and (y) the Merger, including, without limitation, any and all such litigation commenced on or after the date of this Agreement (the "SUBJECT LITIGATION") shall be entitled to be represented, at the reasonable expense of the Company, in the Subject Litigation by one counsel (and Ohio counsel if appropriate and one local counsel in each jurisdiction in which a case is pending) each of which such counsel shall be selected by a plurality of such director defendants; PROVIDED that the Company shall not be liable for any settlement effected without its prior written consent (which consent shall not be unreasonably withheld) and that a condition to the indemnification payments provided in SECTION 6.8(A) shall be that such officer/director defendant not have settled any Subject Litigation without the consent of the Company (such consent not to be unreasonably withheld) and, prior to the Closing, Sub; and PROVIDED FURTHER that neither Sub nor the Company shall have any obligation hereunder to any officer/director defendant when and if a court of competent jurisdiction shall ultimately determine, and such determination shall have become final and non-appealable, that indemnification of such officer/director defendant in the manner contemplated hereby is prohibited by applicable law. (c) In the event the Surviving Corporation or any of its successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation or entity of such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any Person, then, and in each such case, proper provisions shall be made so that the successors and assigns of the Surviving Corporation shall assume its obligations set forth in this SECTION 6.7. 6.8 NOTICES OF CERTAIN EVENTS. Each of the Company and Sub shall promptly notify the other of: (a) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement; (b) any notice or other communication from any governmental or regulatory agency or authority in connection with the transactions contemplated by this Agreement; and (c) any Actions commenced or, to its knowledge, threatened, against the Company or any of its Subsidiaries which, if pending on the date of this Agreement, would have been required to have been disclosed pursuant to SECTION 4.11 or against the Company or any of its Subsidiaries or Sub which relate to the consummation of the transactions contemplated by this Agreement. 6.9 SUB NOTICE. Sub shall promptly advise the Company of any Material Adverse Change with respect to Sub. 6.10 RESIGNATION OF DIRECTORS. At the Closing, the Company shall deliver to Sub the resignation of all directors of the Company, effective at the Effective Time. 37 6.11 FINANCIAL STATEMENTS, ETC. Within 30 days after the end of each calendar month, the Company and its Subsidiaries shall provide Sub with the following interim financial statements covering: (a) such calendar month, (b) the prior calendar month, (c) the year to date and (d) a month to month comparison from the prior fiscal year. Such interim financial statements shall include a balance sheet, statement of operations and a statement of cash flows and (i) be in accordance with the books and records of the Company and its Subsidiaries and (ii) be prepared in accordance with GAAP consistently applied throughout the periods covered thereby (except for the absence of footnotes). 6.12 EXCHANGE OF COMPANY COMMON SHARES. Prior to the Effective Time, the Company shall (i) designate 300,000 Preferred Shares of the Company as the Series A Shares having rights, preferences and designations set forth on SCHEDULE 6.1(C) and (ii) take all such actions as may be necessary to exchange each Company Common Share held by the Persons listed on SCHEDULE A that is set forth opposite their respective names in SCHEDULE A (as such schedule may be amended by the mutual consent of Sub and the Company (such consent not to be unreasonably withheld by Sub or the Company) from time to time prior to the Effective Time; it being understood that it is contemplated that additional employees of the Company and its Subsidiaries may be added to such schedule and the number of Preferred Shares set forth opposite the name of any Person set forth on such schedule may be modified as agreed with such Person), for one Series A Share and complete such exchange, in each case, pursuant to documentation reasonably acceptable in form and substance to Sub, which documentation shall provide, in any event, for adoption of this Agreement by each such Person to the extent required by, and in accordance with, the OCL. 6.13 BENEFIT ARRANGEMENTS. For a period of one year following the Effective Time, Sub shall cause the Surviving Corporation (or in the case of transfer of all the assets and business of the Surviving Corporation, its successors and assigns) to maintain employee benefit plans (except stock option, restricted stock, stock purchase or other equity based programs, plans and arrangements) that are no less favorable in the aggregate than the Benefit Arrangements, Pension Plans, Multiemployer Plans and Welfare Plans (except stock option, restricted stock, stock purchase or other equity based programs, plans and arrangements) in effect on the date of this Agreement. ARTICLE VII. CONDITIONS TO THE MERGER 7.1 CONDITIONS TO THE OBLIGATIONS OF EACH PARTY. The obligations of the Company and Sub to consummate the transactions contemplated hereby on the Closing Date are subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions: (a) This Agreement shall have been adopted by the Shareholders and the holders of outstanding Series A Shares in accordance with the OCL; (b) All consents, approvals and licenses of any governmental or other regulatory body required in connection with the execution, delivery and performance of this Agreement and for the Surviving Corporation to conduct the business of the Company in substantially the manner 38 now conducted, shall have been obtained, unless the failure to obtain such consents, approvals and licenses would not, individually or in the aggregate, have a Material Adverse Effect on the Company after giving effect to the transactions contemplated by this Agreement. (c) Any applicable waiting period under the HSR Act relating to the Merger shall have expired or been terminated; (d) No provision of any Applicable Law and no judgment, order, decree or injunction of any court of competent jurisdiction shall prohibit or restrain the consummation of the Merger or make such consummation illegal. 7.2 CONDITIONS TO THE OBLIGATIONS OF THE COMPANY. The obligations of the Company to consummate the transactions contemplated hereby on the Closing Date are subject to the satisfaction, on or prior to the Closing Date, of the following conditions, which may be waived by the Company in accordance with SECTION 8.4: (a) all representations and warranties of Sub contained in this Agreement shall be true and correct in all material respects at and as of the Closing Date, as if such representations and warranties were made at and as of the Closing Date (except to the extent that any such representations and warranties were made as of a specified date, which representations and warranties shall continue on the Closing Date to be true as of such specified date), (b) Sub shall have performed in all material respects all obligations arising under the agreements and covenants required hereby to be performed by it prior to or on the Closing Date, (c) the Company shall have received, at or prior to the Closing, a certificate executed by the President of Sub certifying that, as of the Closing Date, the conditions set forth in SECTION 7.2(A) and (B) have been satisfied and (d) the Company shall have received a copy of the solvency letter (which letter shall be addressed to the Board of Directors of the Company) delivered to the senior lenders in connection with the Financing; PROVIDED that in the event that the senior lenders elect not to receive a solvency letter, the Company in any event shall have received a customary solvency letter (which letter shall be addressed to the Board of Directors of the Company). 7.3 CONDITIONS TO THE OBLIGATIONS OF SUB. The obligations of Sub to consummate the transactions contemplated hereby on the Closing Date are subject to the satisfaction, on or prior to the Closing Date, of each of the following conditions, any of which may be waived by Sub in accordance with SECTION 8.4: (a) Representations, Warranties and Covenants. ----------------------------------------- (i) Each of the representations and warranties of the Company contained in this Agreement that is qualified as to materiality or Material Adverse Effect shall have been true and correct when made and as of the Closing Date as if made on such date, and each of the other representations and warranties of the Company contained in this Agreement shall be true and correct in all material respects when made and as of the Closing Date as if made on such date, except in each case to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties qualified as to materiality or Material Adverse Effect shall be true and correct, and those not so qualified shall be true and correct in all material respects, on and as of such earlier date); 39 (ii) The Company shall have performed in all material respects all obligations arising under the agreements and covenants required hereby to be performed by it prior to or on the Closing Date. (iii) Sub shall have received, at or prior to the Closing, a certificate executed by the President and the Chief Financial Officer of the Company certifying that, to the best of their knowledge as of the Closing Date, the conditions set forth in SECTIONS 7.3(A) and (B) have been satisfied. (b) NO PROCEEDINGS OR LITIGATION. There shall not be (a) any pending or threatened Actions by any governmental entity or (b) any pending Actions by any other Person that have a reasonable likelihood of success, in either case (i) seeking to prohibit the consummation of the Merger or make such consummation illegal, (ii) seeking to prohibit or limit the ownership or operation by Sub (or the Surviving Corporation) of any material portion of the business or Assets of the Company and its Subsidiaries, taken as a whole, or (iii) seeking to obtain from Sub or the Company in connection with the consummation of the Merger any damages that are material in relation to the Company and its Subsidiaries, taken as a whole. (c) CONSENTS. All consents listed in SECTION 7.3(C) of the Disclosure Letter shall have been obtained. (d) FINANCING. The funding contemplated by the Financing Letters shall have been obtained on substantially the same terms as contemplated by the Financing Letters. (e) Exchange Complete; Trust Preferred. ---------------------------------- (i) The exchange contemplated by SECTION 6.12 hereof shall have been completed in accordance with SECTION 6.12. (ii) The Company shall have liquidated Dayton Superior Capital Trust, a Delaware business trust (the "Trust"), or otherwise caused the Trust to cease to exist, such that the holders of the 10% Convertible Trust Preferred Securities issued by the Trust (the "TRUST PREFERRED SECURITIES") shall cease to hold such securities and shall hold the Debentures directly. (f) INDEBTEDNESS. Total indebtedness for borrowed money (long and short term) of the Company and its Subsidiaries as of the Effective Time shall not exceed the amount determined in accordance with Schedule 7.3(f). ARTICLE VIII. MISCELLANEOUS 8.1 Termination. ----------- (a) TERMINATION. This Agreement may be terminated prior to the Effective Time as follows (notwithstanding any approval of the Merger by the shareholders of the Company): (i) by mutual written consent of Sub and the Company at any time; 40 (ii) by Sub or the Company if the Closing shall not have occurred on or before July 14, 2000, provided that the party seeking to exercise such right is not then in breach in any material respect of any of its obligations under this Agreement; (iii) by either the Company or Sub, if any of the conditions to such party's obligation to consummate the transactions contemplated in this Agreement shall have become impossible to satisfy; PROVIDED that such party wishing to terminate this Agreement has not caused such impossibility by breaching in any material respect any of its obligations under this Agreement; (iv) by either the Company or Sub, if there shall be any law or regulation that makes consummation of the Merger illegal or otherwise prohibited or if any judgment, injunction, order or decree enjoining Sub or the Company from consummating the Merger is entered and such judgment, injunction, order or decree shall become final and non-appealable; (v) by Sub if the Board of Directors of the Company shall have (A) withdrawn or amended or modified (including, without limitation, by failing to recommend the rejection of an Acquisition Proposal made by a Third Party promptly following the period during which it is undertaking its good faith consideration of such Acquisition Proposal), in a manner adverse to Sub, its approval or recommendation of this Agreement and the Merger or its recommendation that shareholders of the Company adopt and approve this Agreement and the Merger or (B) approved, recommended or endorsed an Acquisition Proposal (including a tender or exchange offer for Company Common Shares); (vi) by the Company if prior to the Effective Time a bona fide Acquisition Proposal has been received by the Board of Directors of the Company and the Board of Directors has concluded in good faith, after consultation with outside counsel and its financial advisor, that such Acquisition Proposal, if accepted, is reasonably likely to be consummated, taking into account all legal, financial and regulatory aspects of the proposal and the Person or group making the proposal and would, if consummated, result in a more favorable transaction than the transaction contemplated by this Agreement (a "SUPERIOR PROPOSAL") and the Board of Directors has concluded in good faith, after consultation with outside counsel, that such action is required to prevent the Board of Directors from breaching its fiduciary duty, the Board of Directors of the Company shall have withdrawn or modified or amended, in a manner adverse to Sub, its approval or recommendation of this Agreement and the Merger or its recommendation that shareholders of the Company adopt and approve this Agreement and the Merger in order to permit the Company to execute a definitive agreement with respect to such Superior Proposal; PROVIDED that the Company shall be in compliance with SECTION 6.4; or (vii) by either the Company or Sub if, at a duly held shareholders meeting of the Company or any adjournment thereof at which this Agreement and the Merger is voted upon, the requisite shareholder adoption and approval shall not have been obtained. The party desiring to terminate this Agreement pursuant to SECTIONS 8.1(A)(II)-(VII) shall give written notice of such termination to the other party in accordance with SECTION 8.3. 41 (b) EFFECT OF TERMINATION. If this Agreement is terminated pursuant to SECTION 8.1, this Agreement shall become void and of no effect with no liability on the part of any party hereto or such party's officers, directors, employees or representatives, except (i) that the agreements contained in SECTIONS 6.4(B) and (C), 8.1(C), 8.8 and 8.13 hereof shall survive the termination hereof and (ii) nothing herein shall relieve any party from liability for any breach of this Agreement. (c) PROCEDURE UPON TERMINATION. In the event of termination of this Agreement pursuant to SECTION 8.1: (i) Each party shall redeliver all documents, work papers and other material of any other party and any and all copies thereof relating to the transactions contemplated hereby, whether obtained before or after the execution hereof, to the party furnishing the same; (ii) No confidential information received by any party with respect to the business of any other party or its Affiliates shall be disclosed to any third party, unless required by law; and (iii) The Confidentiality Letter shall survive in accordance with its terms. 8.2 ASSIGNMENT. Neither this Agreement nor any of the rights or obligations hereunder may be assigned, in whole or in part, by operation of law or otherwise by any party without the prior written consent of all other parties to this Agreement. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns, and, with respect to the provisions of SECTION 6.8 hereof, shall inure to the benefit of the persons or entities benefiting from the provisions thereof who are intended to be third-party beneficiaries thereof, `and no other Person shall have any right, benefit or obligation hereunder. 8.3 NOTICES. All notices, requests, demands and other communications which are required or may be given under this Agreement shall be in writing and shall be deemed to have been duly given when received, if personally delivered; when transmitted, if transmitted by telecopy, upon receipt of telephonic or electronic confirmation; the day after it is sent, if sent for next day delivery to a domestic address by recognized overnight delivery service (E.G., Federal Express); and upon receipt, if sent by certified or registered mail, return receipt requested. In each case notice shall be sent to: If to the Company, addressed to: Dayton Superior Corporation 7777 Washington Village Drive, Suite 130 Dayton, Ohio 45459 Attention: President Facsimile: (937) 428-9115 42 With a copy to: Cravath, Swaine & Moore Worldwide Plaza 825 Eighth Avenue New York, New York 10019 Attention: Peter S. Wilson, Esq. Facsimile: (212) 474-3700 and a copy to: Thompson, Hine & Flory LLP 2000 Couthouse Plaza N.E. P.O. Box 8801 Dayton, Ohio 45401 Attention: David Neuhardt, Esq. Facsimile: (937) 443-6635 If to Sub, addressed to: Stone Acquisition Corp. c/o Odyssey Investment Partners, LLC 280 Park Avenue, 38th Floor New York, NY 10017 Attention: Bill Hopkins Facsimile: (212) 351-7925 With a copy to: Latham & Watkins 885 Third Avenue Suite 1000 New York, NY 10022 Attention: Richard Trobman, Esq. Facsimile: (212) 751-4864 or to such other place and with such other copies as either party may designate as to itself by written notice to the others. 8.4 ENTIRE AGREEMENT; WAIVERS. This Agreement, together with all exhibits and schedules hereto (including, without limitation, the Disclosure Letter), and the other agreements referred to herein, constitute the entire agreement among the parties pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations and discussions, whether oral or written, of the parties, other than the Confidentiality Letter. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver 43 unless otherwise expressly provided. The Confidentiality Letter shall terminate at the Effective Time. 8.5 MULTIPLE COUNTERPARTS. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 8.6 INVALIDITY. In the event that any one or more of the provisions contained in this Agreement or in any other instrument referred to herein, shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by law, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement or any other such instrument. 8.7 TITLES. The titles, captions or headings of the Articles and Sections herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement. 8.8 FEES AND EXPENSES. Except as provided in SECTION 6.4 hereof, all costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense. Notwithstanding the foregoing, a party in breach of this Agreement shall, on demand, indemnify and hold harmless the other party for and against all reasonable out-of-pocket expenses, including legal fees, incurred by such other party by reason of the enforcement and protection of its rights under this Agreement. The payment of such expenses is in addition to any other relief to which such other party may be entitled. 8.9 CUMULATIVE REMEDIES. All rights and remedies of either party hereto are cumulative of each other and of every other right or remedy such party may otherwise have at law or in equity, and the exercise of one or more rights or remedies shall not prejudice or impair the concurrent or subsequent exercise of other rights or remedies. 8.10 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF OHIO, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF LAWS. 8.11 AMENDMENT. This Agreement may be amended by the parties hereto at any time before or after approval of matters presented in connection with the Merger by the shareholders of the Company, but after any such shareholder approval, no amendment shall be made which by law requires the further approval of shareholders without obtaining such further approval. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the parties hereto. 8.12 PUBLIC ANNOUNCEMENTS. Neither Sub or its Affiliates, on the one hand, nor the Company, on the other hand, will issue any press release or public statement with respect to the transactions contemplated by this Agreement, including the Merger, without the other party's prior consent (such consent not to be unreasonably withheld), except as may be required by Applicable Law, court process or the requirements of the NYSE. In addition to the foregoing, 44 Sub or its Affiliates and the Company will consult with each other before issuing, and provide each other the opportunity to review and comment upon, any such press release or other public statements with respect to such transactions. The parties agree that the initial press release or releases to be issued with respect to the transactions contemplated by this Agreement shall be mutually agreed upon prior to the issuance thereof. 8.13 ENFORCEMENT OF AGREEMENT. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement was not performed in accordance with its specific terms or was otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof, this being in addition to any other remedy to which they are entitled at law or in equity. 8.14 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES. The representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall terminate at the Effective Time. 8.15 Interpretive Provisions. ----------------------- (a) The words "hereof," "herein," "hereby" and "hereunder" and words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision hereof. (b) Accounting terms used but not otherwise defined herein shall have the meanings given to such terms under GAAP. [Signature Page Follows] 45 IN WITNESS WHEREOF, the parties hereto have caused this Agreement and Plan of Merger to be duly executed on their respective behalf, by their respective officers thereunto duly authorized, all as of the day and year first above written. DAYTON SUPERIOR CORPORATION, an Ohio corporation By: /s/ JOHN A. CICCARELLI ------------------------------ Name: John A. Ciccarelli Title: President and Chief Executive Officer STONE ACQUISITION CORP., an Ohio corporation By: /s/ WILLIAM HOPKINS ------------------------------ Name: William Hopkins Title: President SCHEDULE A PREFERRED SHAREHOLDERS - --------------------------------------------------------------------- NAME TOTAL SHARES - --------------------------------------------------------------------- John A. Ciccarelli 37,038 - --------------------------------------------------------------------- Alan F. McIlroy 9,608 - --------------------------------------------------------------------- Michael C. Deis 13,939 - --------------------------------------------------------------------- James C. Stewart 13,800 - --------------------------------------------------------------------- Mark K. Kaler 11,881 - --------------------------------------------------------------------- William C. Mongole 25,300 - --------------------------------------------------------------------- Raymond E. Bartholomae 2,472 - --------------------------------------------------------------------- James W. Fennessy 5,983 - --------------------------------------------------------------------- Total 120,021 - --------------------------------------------------------------------- SCHEDULE 3.3 OPtion RETENTION - --------------------------------------------------------------------- NAME NET VALUE - --------------------------------------------------------------------- John A. Ciccarelli $ 0 - --------------------------------------------------------------------- Alan F. McIlroy 298,513 - --------------------------------------------------------------------- Michael C. Deis 318,663 - --------------------------------------------------------------------- James C. Stewart 308,765 - --------------------------------------------------------------------- Mark K. Kaler 402,234 - --------------------------------------------------------------------- William C. Mongole 0 - --------------------------------------------------------------------- Raymond E. Bartholomae 91,504 - --------------------------------------------------------------------- James W. Fennessy 27,568 - --------------------------------------------------------------------- Total $1,447,247 - --------------------------------------------------------------------- SCHEDULE 6.1(C) PREFERRED SHARE DESIGNATION C. Series a Preferred Shares. ------------------------- 1. DESIGNATION. A total of 300,000 of the Corporation's authorized and unissued Preferred Shares shall be designated as a series known as Series A Preferred Shares, without par value (the "Series A Preferred Shares"). The express terms of the Series A Preferred Shares shall be as follows: 2. VOTING. Except as otherwise provided by law, the holders of Series A Preferred Shares shall have no voting rights. 3. DIVIDENDS. The holders of Series A Preferred Shares shall be entitled to receive dividends out of funds legally available therefor at such times and in such amounts as the directors may determine in their sole discretion; provided, however, that no such dividend may be declared or paid on any Series A Preferred Share unless at the same time a dividend is declared or paid on all outstanding Common Shares and vice versa, with holders of Series A Preferred Shares and Common Shares sharing in any such dividends as if they constituted a single class of stock. Each Series A Preferred Share shall entitle the holder thereof to receive dividends equal to the dividends payable with respect to one Common Share. The right to dividends on the Series A Preferred Shares shall not be cumulative, and no right shall accrue to holders of Series A Preferred Shares by reason of the fact that dividends on said shares are not declared in any prior period. 4. LIQUIDATION PREFERENCE. Upon any liquidation, dissolution or winding up of the Corporation and its subsidiaries, whether voluntary or involuntary (a "Liquidation Event"), each holder of an outstanding Series A Preferred Share shall be entitled to be paid out of the assets of the Corporation available for distribution to shareholders, whether such assets are capital, surplus or earnings, and before any amount shall be paid or distributed to the holders of Common Shares or of any other shares ranking on liquidation junior to the Series A Preferred Shares, an amount in cash equal to any declared but unpaid dividends to which such holder of outstanding Series A Preferred Shares is then entitled pursuant to Section 3 (the "Liquidation Preference Amount"); provided, however, that if, upon any Liquidation Event, the amounts payable with respect to the Liquidation Preference Amount are not paid in full, the holders of the Series A Preferred Shares shall share ratably in any distribution of assets in proportion to the full respective preferential amounts to which they are entitled. 5. NO REISSUANCE OF SERIES A PREFERRED SHARES. No Series A Preferred Shares acquired by the Corporation for or by any reason shall be reissued, and all such shares shall be canceled, retired and eliminated from the Preferred Shares which the Corporation shall be authorized to issue. 6. CONTRACTUAL RIGHTS OF HOLDERS. The various provisions set forth herein for the benefit of the holders of the Series A Preferred Shares shall be deemed contract rights enforceable by them, including without limitation, one or more actions for specific performance. 7. NO PRE-EMPTIVE RIGHTS. The holders of Series A Preferred Shares shall not have any preemptive rights. 8. CONVERSION. Upon the filing of the certificate of merger, or such later time as specified therein, as contemplated by the Agreement and Plan of Merger between Dayton Superior Corporation and Stone Acquisition Corp., dated as of January 19, 2000 (the "Merger Agreement"), each Series A Preferred Share shall by virtue of the merger contemplated by the Merger Agreement (the "Merger") and without any action on the part of the holder thereof, automatically be cancelled and converted into the right to receive one common share, without par value, of the Company (as in existence immediately following the Merger) upon surrender of the certificate formerly representing the Series A Preferred Share. 2 SCHEDULE 7.3(F) INDEBTEDNESS Total indebtedness for borrowed money (long and short term) of the Company and its Subsidiaries as of the Effective Time shall not exceed: (1)......$149.5 million, less (2) the aggregate amount of all prepayment penalties and fees associated with the repayment of the Company's existing credit facilities, less (3) an amount equal to $21,250,000 minus the aggregate principal amount of Debentures outstanding and held by Persons other than the Company and its Affiliates as of the Effective Time, less (4) the aggregate amount to which the holders of the Debentures would be entitled to receive following the Effective Time upon conversion thereof (assuming for the purposes of this clause that the aggregate principal amount of Debentures outstanding immediately following the Effective Time is $21,250,000 and that all such Debentures are converted immediately following the Effective Time) minus $21,250,000; plus (5) to the extent that in connection with the EFCO V. SYMONS ET. AL matter, Symons Corporation is required to pay damages in excess of $1.0 million, an amount equal to the lesser of (a) the amount of damages Symons Corporation is required to pay minus $1.0 million and (b) $14.0 million; PROVIDED that if the Company and its Subsidiaries have not complied in all respects with Section 6.3(f) of the Agreement, this clause (3) shall be of no force or effect and the amount for purposes of Section 7.3(g) of the Agreement and this Schedule 7.3(g) shall be equal to the amount determined pursuant to clauses (1), (2), (3) and (4) of this Schedule 7.3(g). EX-10.19 11 ex-10_19.txt EXHIBIT 10.19 Exhibit 10.19 EMPLOYMENT AGREEMENT This Employment Agreement dated as of January 19, 2000 and effective as of the Effective Date (as defined below), is made by and between Dayton Superior Corporation, an Ohio corporation (together with any successor thereto, the "Company"), and William C. Mongole (the "Executive"). RECITALS WHEREAS, the Executive has prior to the date hereof been employed by the Company (or one of its subsidiaries) as Vice President and General Manager, Dur-O-Wal; and WHEREAS, it is the desire of the Company to assure itself of the continuity of the management services of the Executive following the consummation of the merger contemplated by the Agreement and Plan of Merger by and between the Company and Stone Acquisition Corp. dated as of January 19, 2000 (the "Merger Agreement"); and WHEREAS, it is the desire of the Company to assure itself of the services of the Executive by engaging the Executive to perform such services under the terms hereof, and the Executive desires to commit himself to serve the Company on the terms herein provided; and WHEREAS, the Company and the Executive intend this Agreement to be effective as of the consummation of the merger contemplated in the Merger Agreement (the "Effective Date"); and WHEREAS, the Company and the Executive intend that if the merger contemplated in the Merger Agreement is not consummated, this Employment Agreement shall be of no force or effect. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements set forth below the parties hereto agree as follows: 1. Certain Definitions. ------------------- (a) "Annual Base Salary" shall have the meaning set forth in SECTION 4. (b) "Board" shall mean the Board of Directors of the Company. (c) The Company shall have "Cause" to terminate the Executive's employment hereunder upon the Executive's: (i) willful or gross misconduct or material failure in the performance of his duties and responsibilities hereunder, other than any such failure resulting from the Executive's Disability, which misconduct or failure continues beyond 14 days after the Company notifies the Executive, in writing, of the Company's finding of such misconduct or failure; or (ii) conviction of or plea of guilty or NOLO CONTENDRE to, a felony, or a crime involving moral turpitude; or (iii) fraud or personal dishonesty involving the Company's assets. (d) "Common Stock" shall mean the common stock of the Company, $0.01 par value per share. (e) "Company" shall have the meaning set forth in the preamble hereto. (f) "Date of Termination" shall mean (i) if the Executive's employment is terminated by his death, the date of his death, or, (ii) if the Executive's employment is terminated pursuant to SECTION 5(A)(II) - (V), the date specified in the Notice of Termination. (g) "Disability" shall mean the absence of the Executive from the Executive's duties to the Company on a full-time basis for a total of 180 days during any twelve month period as a result of physical, mental or emotional incapacity due to illness, injury or disease. (h) "Effective Date" shall have the meaning set forth in the recitals hereto. (i) "Executive" shall have the meaning set forth in the preamble hereto. (j) "Management Stockholders' Agreement" shall mean that certain Management Stockholders' Agreement to be entered into by and among the Company, Odyssey Investment Partners Fund, LP, the Executive and the other stockholders party thereto effective as of the Effective Date, the terms of which have previously been accepted by Executive pursuant to that certain letter agreement and Management Compensation and Equity Term Sheet dated as of the date hereof and attached hereto. (k) "Merger Agreement" shall have the meaning set forth in the recitals hereto. (l) "Notice of Termination" shall have the meaning set forth in SECTION 5(B). (m) "Option Agreements" shall mean the written agreements between the Company and the Executive pursuant to which the Executive holds or is granted options to purchase Common Stock, including, without limitation, agreements evidencing options granted under the Option Plan and agreements governing the terms of "Roll-Over Options" (as defined in the Management Stockholders' Agreement). (n) "Option Plan" shall mean the 2000 Stock Option Plan of Dayton Superior Corporation, as amended from time to time. 2 (o) "Options" as of any date of determination shall mean options held by the Executive as of such date to purchase Common Stock of the Company. (p) "Stock Option Agreement" shall have the meaning set forth in SECTION 4(C). (q) "Prohibited Competition" shall have the meaning set forth in SECTION 9(B). (r) "Term" shall have the meaning set forth in SECTION 2(B). 2. Employment. ---------- (a) The Company shall employ the Executive, and the Executive shall continue in the employ of the Company, for the period set forth in this SECTION 2, in the positions set forth in SECTION 3 and upon the other terms and conditions herein provided. The initial term of employment under this Agreement (the "Initial Term") shall be for the period of 3 years beginning on the Effective Date, unless earlier terminated as provided in SECTION 5. (b) The employment term hereunder shall automatically be extended for successive one (1) year periods ("Extension Terms" and, collectively with the Initial Term, the "Term") unless either party gives notice of non-extension to the other no later than 90 days prior to the expiration of the then-applicable Term. 3. POSITION AND DUTIES. The Executive shall serve as Vice President and General Manager, Dur-O-Wal with such responsibilities, duties and authority as are customary for someone serving in such position at companies similar in size to the Company, together with such other duties and responsibilities as may from time to time be assigned to the Executive by the Board and the Chief Executive Officer of the Company, consistent with his position. The Executive shall devote substantially all his working time and efforts to the business and affairs of the Company; provided that it shall not be considered a violation of the foregoing for the Executive to (i) with the prior consent of the Board (which consent shall not unreasonably be withheld), serve on corporate, industry, civic or charitable boards or committees, and (ii) manage his personal investments, so long as none of such activities significantly interferes with the Executive's duties hereunder. 4. Compensation and Related Matters. -------------------------------- (a) ANNUAL BASE SALARY. During the Term, the Executive shall receive a base salary at a rate of $132,000 per annum ("Annual Base Salary"), payable in accordance with the Company's standard payroll procedures. The rate of Annual Base Salary shall be subject to increase as determined by the Board in its discretion. (b) BONUS. During the Term, the Executive shall be eligible to participate in the Company's executive annual bonus plan as in effect from time to time. (c) STOCK OPTIONS. Effective as of the Effective Date, the Executive shall be awarded options to purchase shares of Common Stock pursuant to the Option Plan and one or more 3 written Stock Option Agreements to be entered into by and between the Company and the Executive. (d) BENEFITS. During the Term, the Executive shall be entitled to participate in the employee benefit plans, programs and arrangements of the Company (including vacation) in effect as of the date hereof (or, to the extent determined by the Board, in effect hereafter) which are applicable to the senior officers of the Company, subject to and on a basis consistent with the terms, conditions and overall administration generally thereof. Furthermore, during the first 12 months of the Term following the Effective Date, the benefits provided under such employee benefit plans, programs and arrangements (other than any stock option, restricted stock or other equity based plan) shall, in the aggregate, be substantially equivalent to the benefits provided by the Company as of the Effective Date (other than any stock option, restricted stock or other equity based plan). (e) EXPENSES. The Company shall reimburse the Executive for all reasonable travel and other business expenses properly incurred by him in the performance of his duties to the Company, in accordance with the Company's documentation and other policies with respect thereto. 5. Termination. ----------- The Executive's employment hereunder may be terminated by the Company or the Executive, as applicable, without any breach of this Agreement only under the following circumstances: (a) Circumstances. ------------- (i) DEATH. The Executive's employment hereunder shall terminate upon his death. (ii) DISABILITY. If the Company determines in good faith that the Executive has incurred a Disability, the Company may give the Executive written notice of its intention to terminate the Executive's employment. In such event, the Executive's employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive, provided that within the 30 days after such receipt, the Executive shall not have returned to full-time performance of his duties. The Executive shall continue to receive his Annual Base Salary until the Date of Termination. (iii) TERMINATION FOR CAUSE. The Company may terminate the Executive's employment hereunder for Cause at any time. (iv) TERMINATION WITHOUT CAUSE. The Company may terminate the Executive's employment hereunder without Cause at any time. (v) RESIGNATION. The Executive may resign his employment upon 30 days written notice to the Company. 4 (b) NOTICE OF TERMINATION. Any termination of the Executive's employment by the Company or by the Executive under this SECTION 5 (other than termination pursuant to paragraph (a)(i)) shall be communicated by a written notice to the other party hereto indicating the specific termination provision in this Agreement relied upon, setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated, and specifying a Date of Termination (a "Notice of Termination"). For purposes of this Agreement, the "Date of Termination" shall be (i) with respect to any termination by reason of Executive's Disability, 30 days following the receipt of the notice described in SECTION 5(A)(II), (ii) with respect to Executive's termination for Cause, the date of the Notice of Termination, and (iii) with respect to the Executive's termination for any other reason, at least 30 days following the date of the Notice of Termination. 6. Severance Payments. ------------------ (a) TERMINATION FOR ANY REASON. In the event the Executive's employment with the Company is terminated for any reason, the Company shall pay the Executive (or his beneficiary in the event of his death) any unpaid Annual Base Salary that has accrued as of the Date of Termination, any unreimbursed expenses due to the Executive and an amount for accrued but unused sick days and vacation days. The Executive shall also be entitled to accrued, vested benefits under the Company's applicable employee benefit plans, programs and arrangements as provided therein. The Executive shall be entitled to the additional payments and benefits described below only as set forth herein. (b) TERMINATION WITHOUT CAUSE. If the Executive's employment shall terminate without Cause (pursuant to SECTION 5(A)(IV)), the Company shall: (i) subject to the Executive's compliance with SECTIONS 9 AND 10, pay to the Executive, for the twenty-four month period following the Date of Termination, in accordance with its regular payroll practice, his Annual Base Salary as in effect on the Date of Termination; and (ii) for the year in which the termination occurs, pay to the Executive a pro-rated amount of bonus based on the Company's executive annual bonus plan as in effect at that time; and (iii) continue for one year the Executive's coverage under the Company medical and dental plans and programs in which the Executive was entitled to participate immediately prior to the Date of Termination (or, if the Company amends, replaces or terminates any such plan or program following such Date of Termination, the Company medical and dental plans provided to employees similarly situated to Executive), as if the Executive were an active employee during such time, subject to standard employee contributions by the Executive as are required under such plans, and further subject to the Executive's election of "COBRA" continuation coverage during such period. All post-employment coverage under such plans shall be co-extensive with COBRA continuation coverage required by federal (and where applicable by state) law, and shall cease if the Executive becomes eligible for coverage under another employer's plans. 5 (c) TERMINATION BY REASON OF DEATH OR DISABILITY. If the Executive's employment shall terminate by reason of his death or Disability (pursuant to SECTION 5(A)(I) OR (II)), the Company shall: (i) subject to the Executive's compliance with SECTIONS 9 AND 10, pay to the Executive (or to his estate or beneficiaries in the event of his death), for the twenty-four month period following the Date of Termination, in accordance with its regular payroll practice, the excess of his Annual Base Salary as in effect on the Date of Termination over the aggregate amount of any payments made to or on behalf of the Executive during such 24-month period under any life insurance, disability insurance or death benefit program maintained by the Company; and (ii) for the year in which the termination occurs, pay to the Executive a pro-rated amount of bonus based on the Company's executive annual bonus plan as in effect at that time. 7. SURVIVAL. The expiration or termination of the Term shall not impair the rights or obligations of any party hereto which shall have accrued hereunder prior to such expiration. 8. Intentionally Left Blank 9. Competition. ----------- (a) The Executive shall not engage in any Prohibited Competition (as defined below in SECTION 9(B)) at any time during the Term and for a period of two years thereafter. (b) For purposes of this Agreement, the Executive shall be considered to engage in prohibited competition ("Prohibited Competition") if the Executive shall: directly or indirectly, engage in or own, manage, join, operate or control, or participate in the ownership, management, operation or control of, or be connected as a director, officer, employee, partner, consultant or otherwise with, or permit his name to be used by or in connection with, any business or organization which produces, designs, conducts research on, provides, sells, leases, distributes or markets accessories, chemicals, forming and related products used in concrete and masonry construction (the "Business") which, directly or indirectly, competes with the Business conducted by Company and its subsidiaries in North America, South America and Europe, it being understood that the foregoing shall not limit the Executive from making passive investments of less than 5% of the outstanding equity securities in any entity listed for trading on a national stock exchange or quoted on any recognized automatic quotation system. (c) In the event any the terms of this SECTION 9 shall be determined by any court of competent jurisdiction to be unenforceable by reason of extending for too great a period of time or over too great a geographical area or by reason of being too extensive in any other respect, it will be interpreted to extend only over the maximum period of time for which it may be enforceable, and/or over the maximum geographical area as to which it may be enforceable and/or to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action. 6 10. Nondisclosure of Proprietary Information. ---------------------------------------- (a) Except as required in the faithful performance of the Executive's duties hereunder or pursuant to subsection (c), the Executive shall, in perpetuity, maintain in confidence and shall not directly, indirectly or otherwise, use, disseminate, disclose or publish, or use for his benefit or the benefit of any person, firm, corporation or other entity any confidential or proprietary information or trade secrets, and any other information that would be protected under the Uniform Trade Secrets Act in Ohio, of or relating to the Company, including, without limitation, information with respect to the Company's operations, processes, products, inventions, business practices, business strategy, business development, finances, principals, vendors, distributors, suppliers, customers, potential customers, manufacturing methods, sales methods, marketing methods, costs, prices, contractual relationships, information systems, regulatory status, compensation paid to employees or other terms of employment, or deliver to any person, firm, corporation or other entity any document, record, notebook, computer program or similar repository of or containing any such confidential or proprietary information or trade secrets. The parties hereby stipulate and agree that as between them the foregoing matters are important, material and confidential proprietary information and trade secrets and affect the successful conduct of the businesses of the Company (and any successor or assignee of the Company). The parties hereto agree that "confidential or proprietary information" shall not include information that (i) is a matter of public knowledge (other than by act of the Executive in violation hereof); (ii) was provided to the Executive (without breach of any obligation of confidence owed to the Company) by a third party which is not an affiliate of the Company or (iii) is required to be disclosed by law or judicial or administrative process. (b) Upon termination of the Executive's employment with Company for any reason and upon the Company's request, the Executive will promptly deliver to the Company all correspondence, drawings, manuals, letters, notes, notebooks, reports, programs, plans, proposals, financial documents, or any other documents concerning, without limitation, the Company's operations, processes, products, inventions, business practices, business strategy, business development, finances, principals, vendors, distributors, suppliers, customers, potential customers, manufacturing methods, sales methods, marketing methods, costs, prices, contractual relationships, information systems, regulatory status, compensation paid to employees or other terms of employment and/or which contain proprietary information or trade secrets. (c) The Executive may respond to a lawful and valid subpoena or other legal process but shall give the Company the earliest possible notice thereof, shall, as much in advance of the return date as possible, make available to the Company and its counsel the documents and other information sought and shall assist such counsel in resisting or otherwise responding to such process. 11. INJUNCTIVE RELIEF. It is recognized and acknowledged by the Executive that a breach of the covenants contained in SECTIONS 9 AND 10 will cause irreparable damage to Company and its goodwill, the exact amount of which will be difficult or impossible to ascertain, and that the remedies at law for any such breach will be inadequate. Accordingly, the Executive agrees that in the event of a breach of any of the covenants contained in SECTIONS 9 AND 10, in addition to any 7 other remedy which may be available at law or in equity, the Company will be entitled to specific performance and injunctive relief. 12. BINDING ON SUCCESSORS. This Agreement shall be binding upon and inure to the benefit of the Company, the Executive and their respective successors, assigns, personnel and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable. 13. GOVERNING LAW. This Agreement shall be governed, construed, interpreted and enforced in accordance with the substantive laws of the State of Ohio. 14. VALIDITY. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 15. NOTICES. Any notice, request, claim, demand, document and other communication hereunder to any party shall be effective upon receipt (or refusal of receipt) and shall be in writing and delivered personally or sent by telex, telecopy, or certified or registered mail, postage prepaid, as follows: (a) If to the Company: Dayton Superior Corporation 7777 Washington Village Dr., Suite 130 Dayton, OH 45459 Attn: General Counsel Phone: (937) 428-6360 Fax: (937) 428-9115 With copies to: Odyssey Investment Partners Fund, LP 280 Park Avenue West Tower, 38th Floor New York, New York 10017 Attn: William Hopkins Phone: (212) 351-7900 Fax: (212) 351-7925 and Latham & Watkins 885 Third Avenue, Suite 1000 New York, New York 10022 Attn: Maureen A. Riley Phone: (212) 906-1200 Fax: (212) 751-4864 8 (b) If to the Executive, to him at the address set forth below under his signature; with a copy to: Squire, Sanders & Dempsey L.L.P. 4900 Key Tower 127 Public Square Cleveland, OH 44144-1304 Attn: Mary Ann Jorgenson Phone: (216) 479-8654 Fax: (216) 479-8776 or at any other address as any party shall have specified by notice in writing to the other parties. 16. COUNTERPARTS. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement. 17. ENTIRE AGREEMENT. The terms of this Agreement are intended by the parties to be the final expression of their agreement with respect to the employment of the Executive by the Company and may not be contradicted by evidence of any prior or contemporaneous agreement. The parties further intend that this Agreement shall constitute the complete and exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement. 18. AMENDMENTS; WAIVERS. This Agreement may not be modified, amended, or terminated except by an instrument in writing, signed by the Executive and the Chairman of the Board. By an instrument in writing similarly executed, the Executive or the Company may waive compliance by the other party or parties with any provision of this Agreement that such other party was or is obligated to comply with or perform, provided, however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure. No failure to exercise and no delay in exercising any right, remedy, or power hereunder preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity. 19. NO INCONSISTENT ACTIONS. The parties hereto shall not voluntarily undertake or fail to undertake any action or course of action inconsistent with the provisions or essential intent of this Agreement. Furthermore, it is the intent of the parties hereto to act in a fair and reasonable manner with respect to the interpretation and application of the provisions of this Agreement. 20. ARBITRATION. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted before a panel of three arbitrators in Cleveland, Ohio in accordance with the rules of the American Arbitration 9 Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction; provided, however, that the Company shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction to prevent any continuation of any violation of the provisions of SECTIONS 9 OR 10 of this Agreement and the Executive hereby consents that such restraining order or injunction may be granted without the necessity of the Company's posting any bond. Each of the parties hereto shall bear its share of the fees and expenses of any arbitration hereunder. IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written. THE COMPANY DAYTON SUPERIOR CORPORATION By: /s/ JOHN A. CICCARELLI ---------------------------------------- Name: John A. Ciccarelli Title: President and Chief Executive Officer THE EXECUTIVE /s/ WILLIAM C. MONGOLE ------------------------------------------- William C. Mongole Address: 2123 Granok Inverness, IL 60067 EX-10.20 12 ex-10_20.txt EXHIBIT 10.20 Exhibit 10.20 EMPLOYMENT AGREEMENT This Employment Agreement dated as of January 19, 2000 and effective as of the Effective Date (as defined below), is made by and between Dayton Superior Corporation, an Ohio corporation (together with any successor thereto, the "Company"), and Mark K. Kaler (the "Executive"). RECITALS WHEREAS, the Executive has prior to the date hereof been employed by the Company (or one of its subsidiaries) as Vice President and American Highway Technology; and WHEREAS, it is the desire of the Company to assure itself of the continuity of the management services of the Executive following the consummation of the merger contemplated by the Agreement and Plan of Merger by and between the Company and Stone Acquisition Corp. dated as of January 19, 2000 (the "Merger Agreement"); and WHEREAS, it is the desire of the Company to assure itself of the services of the Executive by engaging the Executive to perform such services under the terms hereof, and the Executive desires to commit himself to serve the Company on the terms herein provided; and WHEREAS, the Company and the Executive intend this Agreement to be effective as of the consummation of the merger contemplated in the Merger Agreement (the "Effective Date"); and WHEREAS, the Company and the Executive intend that if the merger contemplated in the Merger Agreement is not consummated, this Employment Agreement shall be of no force or effect. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements set forth below the parties hereto agree as follows: 1. Certain Definitions. ------------------- (a) "Annual Base Salary" shall have the meaning set forth in SECTION 4. (b) "Board" shall mean the Board of Directors of the Company. (c) The Company shall have "Cause" to terminate the Executive's employment hereunder upon the Executive's: (i) willful or gross misconduct or material failure in the performance of his duties and responsibilities hereunder, other than any such failure resulting from the Executive's Disability, which misconduct or failure continues beyond 14 days after the Company notifies the Executive, in writing, of the Company's finding of such misconduct or failure; or (ii) conviction of or plea of guilty or NOLO CONTENDRE to, a felony, or a crime involving moral turpitude; or (iii) fraud or personal dishonesty involving the Company's assets. (d) "Common Stock" shall mean the common stock of the Company, $0.01 par value per share. (e) "Company" shall have the meaning set forth in the preamble hereto. (f) "Date of Termination" shall mean (i) if the Executive's employment is terminated by his death, the date of his death, or, (ii) if the Executive's employment is terminated pursuant to SECTION 5(A)(II) - (V), the date specified in the Notice of Termination. (g) "Disability" shall mean the absence of the Executive from the Executive's duties to the Company on a full-time basis for a total of 180 days during any twelve month period as a result of physical, mental or emotional incapacity due to illness, injury or disease. (h) "Effective Date" shall have the meaning set forth in the recitals hereto. (i) "Executive" shall have the meaning set forth in the preamble hereto. (j) "Management Stockholders' Agreement" shall mean that certain Management Stockholders' Agreement to be entered into by and among the Company, Odyssey Investment Partners Fund, LP, the Executive and the other stockholders party thereto effective as of the Effective Date, the terms of which have previously been accepted by Executive pursuant to that certain letter agreement and Management Compensation and Equity Term Sheet dated as of the date hereof and attached hereto. (k) "Merger Agreement" shall have the meaning set forth in the recitals hereto. (l) "Notice of Termination" shall have the meaning set forth in SECTION 5(B). (m) "Option Agreements" shall mean the written agreements between the Company and the Executive pursuant to which the Executive holds or is granted options to purchase Common Stock, including, without limitation, agreements evidencing options granted under the Option Plan and agreements governing the terms of "Roll-Over Options" (as defined in the Management Stockholders' Agreement). (n) "Option Plan" shall mean the 2000 Stock Option Plan of Dayton Superior Corporation, as amended from time to time. 2 (o) "Options" as of any date of determination shall mean options held by the Executive as of such date to purchase Common Stock of the Company. (p) "Stock Option Agreement" shall have the meaning set forth in SECTION 4(C). (q) "Prohibited Competition" shall have the meaning set forth in SECTION 9(B). (r) "Term" shall have the meaning set forth in SECTION 2(B). 2. Employment. ---------- (a) The Company shall employ the Executive, and the Executive shall continue in the employ of the Company, for the period set forth in this SECTION 2, in the positions set forth in SECTION 3 and upon the other terms and conditions herein provided. The initial term of employment under this Agreement (the "Initial Term") shall be for the period of 3 years beginning on the Effective Date, unless earlier terminated as provided in SECTION 5. (b) The employment term hereunder shall automatically be extended for successive one (1) year periods ("Extension Terms" and, collectively with the Initial Term, the "Term") unless either party gives notice of non-extension to the other no later than 90 days prior to the expiration of the then-applicable Term. 3. POSITION AND DUTIES. The Executive shall serve as Vice President and General Manager, Dur-O-Wal with such responsibilities, duties and authority as are customary for someone serving in such position at companies similar in size to the Company, together with such other duties and responsibilities as may from time to time be assigned to the Executive by the Board and the Chief Executive Officer of the Company, consistent with his position. The Executive shall devote substantially all his working time and efforts to the business and affairs of the Company; provided that it shall not be considered a violation of the foregoing for the Executive to (i) with the prior consent of the Board (which consent shall not unreasonably be withheld), serve on corporate, industry, civic or charitable boards or committees, and (ii) manage his personal investments, so long as none of such activities significantly interferes with the Executive's duties hereunder. 4. Compensation and Related Matters. -------------------------------- (a) ANNUAL BASE SALARY. During the Term, the Executive shall receive a base salary at a rate of $130,000 per annum ("Annual Base Salary"), payable in accordance with the Company's standard payroll procedures. The rate of Annual Base Salary shall be subject to increase as determined by the Board in its discretion. (b) BONUS. During the Term, the Executive shall be eligible to participate in the Company's executive annual bonus plan as in effect from time to time. (c) STOCK OPTIONS. Effective as of the Effective Date, the Executive shall be awarded options to purchase shares of Common Stock pursuant to the Option Plan and one or more 3 written Stock Option Agreements to be entered into by and between the Company and the Executive. (d) BENEFITS. During the Term, the Executive shall be entitled to participate in the employee benefit plans, programs and arrangements of the Company (including vacation) in effect as of the date hereof (or, to the extent determined by the Board, in effect hereafter) which are applicable to the senior officers of the Company, subject to and on a basis consistent with the terms, conditions and overall administration generally thereof. Furthermore, during the first 12 months of the Term following the Effective Date, the benefits provided under such employee benefit plans, programs and arrangements (other than any stock option, restricted stock or other equity based plan) shall, in the aggregate, be substantially equivalent to the benefits provided by the Company as of the Effective Date (other than any stock option, restricted stock or other equity based plan). (e) EXPENSES. The Company shall reimburse the Executive for all reasonable travel and other business expenses properly incurred by him in the performance of his duties to the Company, in accordance with the Company's documentation and other policies with respect thereto. 5. Termination. ----------- The Executive's employment hereunder may be terminated by the Company or the Executive, as applicable, without any breach of this Agreement only under the following circumstances: (a) Circumstances. ------------- (i) DEATH. The Executive's employment hereunder shall terminate upon his death. (ii) DISABILITY. If the Company determines in good faith that the Executive has incurred a Disability, the Company may give the Executive written notice of its intention to terminate the Executive's employment. In such event, the Executive's employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive, provided that within the 30 days after such receipt, the Executive shall not have returned to full-time performance of his duties. The Executive shall continue to receive his Annual Base Salary until the Date of Termination. (iii) TERMINATION FOR CAUSE. The Company may terminate the Executive's employment hereunder for Cause at any time. (iv) TERMINATION WITHOUT CAUSE. The Company may terminate the Executive's employment hereunder without Cause at any time. (v) RESIGNATION. The Executive may resign his employment upon 30 days written notice to the Company. 4 (b) NOTICE OF TERMINATION. Any termination of the Executive's employment by the Company or by the Executive under this SECTION 5 (other than termination pursuant to paragraph (a)(i)) shall be communicated by a written notice to the other party hereto indicating the specific termination provision in this Agreement relied upon, setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated, and specifying a Date of Termination (a "Notice of Termination"). For purposes of this Agreement, the "Date of Termination" shall be (i) with respect to any termination by reason of Executive's Disability, 30 days following the receipt of the notice described in SECTION 5(A)(II), (ii) with respect to Executive's termination for Cause, the date of the Notice of Termination, and (iii) with respect to the Executive's termination for any other reason, at least 30 days following the date of the Notice of Termination. 6. Severance Payments. ------------------ (a) TERMINATION FOR ANY REASON. In the event the Executive's employment with the Company is terminated for any reason, the Company shall pay the Executive (or his beneficiary in the event of his death) any unpaid Annual Base Salary that has accrued as of the Date of Termination, any unreimbursed expenses due to the Executive and an amount for accrued but unused sick days and vacation days. The Executive shall also be entitled to accrued, vested benefits under the Company's applicable employee benefit plans, programs and arrangements as provided therein. The Executive shall be entitled to the additional payments and benefits described below only as set forth herein. (b) TERMINATION WITHOUT CAUSE. If the Executive's employment shall terminate without Cause (pursuant to SECTION 5(A)(IV)), the Company shall: (i) subject to the Executive's compliance with SECTIONS 9 AND 10, pay to the Executive, for the twenty-four month period following the Date of Termination, in accordance with its regular payroll practice, his Annual Base Salary as in effect on the Date of Termination; and (ii) for the year in which the termination occurs, pay to the Executive a pro-rated amount of bonus based on the Company's executive annual bonus plan as in effect at that time; and (iii) continue for one year the Executive's coverage under the Company medical and dental plans and programs in which the Executive was entitled to participate immediately prior to the Date of Termination (or, if the Company amends, replaces or terminates any such plan or program following such Date of Termination, the Company medical and dental plans provided to employees similarly situated to Executive), as if the Executive were an active employee during such time, subject to standard employee contributions by the Executive as are required under such plans, and further subject to the Executive's election of "COBRA" continuation coverage during such period. All post-employment coverage under such plans shall be co-extensive with COBRA continuation coverage required by federal (and where applicable by state) law, and shall cease if the Executive becomes eligible for coverage under another employer's plans. 5 (c) TERMINATION BY REASON OF DEATH OR DISABILITY. If the Executive's employment shall terminate by reason of his death or Disability (pursuant to SECTION 5(A)(I) OR (II)), the Company shall: (i) subject to the Executive's compliance with SECTIONS 9 AND 10, pay to the Executive (or to his estate or beneficiaries in the event of his death), for the twenty-four month period following the Date of Termination, in accordance with its regular payroll practice, the excess of his Annual Base Salary as in effect on the Date of Termination over the aggregate amount of any payments made to or on behalf of the Executive during such 24-month period under any life insurance, disability insurance or death benefit program maintained by the Company; and (ii) for the year in which the termination occurs, pay to the Executive a pro-rated amount of bonus based on the Company's executive annual bonus plan as in effect at that time. 7. SURVIVAL. The expiration or termination of the Term shall not impair the rights or obligations of any party hereto which shall have accrued hereunder prior to such expiration. 8. Intentionally Left Blank 9. Competition. ----------- (a) The Executive shall not engage in any Prohibited Competition (as defined below in SECTION 9(B)) at any time during the Term and for a period of two years thereafter. (b) For purposes of this Agreement, the Executive shall be considered to engage in prohibited competition ("Prohibited Competition") if the Executive shall: directly or indirectly, engage in or own, manage, join, operate or control, or participate in the ownership, management, operation or control of, or be connected as a director, officer, employee, partner, consultant or otherwise with, or permit his name to be used by or in connection with, any business or organization which produces, designs, conducts research on, provides, sells, leases, distributes or markets accessories, chemicals, forming and related products used in concrete and masonry construction (the "Business") which, directly or indirectly, competes with the Business conducted by Company and its subsidiaries in North America, South America and Europe, it being understood that the foregoing shall not limit the Executive from making passive investments of less than 5% of the outstanding equity securities in any entity listed for trading on a national stock exchange or quoted on any recognized automatic quotation system. (c) In the event any the terms of this SECTION 9 shall be determined by any court of competent jurisdiction to be unenforceable by reason of extending for too great a period of time or over too great a geographical area or by reason of being too extensive in any other respect, it will be interpreted to extend only over the maximum period of time for which it may be enforceable, and/or over the maximum geographical area as to which it may be enforceable and/or to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action. 6 10. Nondisclosure of Proprietary Information. ---------------------------------------- (a) Except as required in the faithful performance of the Executive's duties hereunder or pursuant to subsection (c), the Executive shall, in perpetuity, maintain in confidence and shall not directly, indirectly or otherwise, use, disseminate, disclose or publish, or use for his benefit or the benefit of any person, firm, corporation or other entity any confidential or proprietary information or trade secrets, and any other information that would be protected under the Uniform Trade Secrets Act in Ohio, of or relating to the Company, including, without limitation, information with respect to the Company's operations, processes, products, inventions, business practices, business strategy, business development, finances, principals, vendors, distributors, suppliers, customers, potential customers, manufacturing methods, sales methods, marketing methods, costs, prices, contractual relationships, information systems, regulatory status, compensation paid to employees or other terms of employment, or deliver to any person, firm, corporation or other entity any document, record, notebook, computer program or similar repository of or containing any such confidential or proprietary information or trade secrets. The parties hereby stipulate and agree that as between them the foregoing matters are important, material and confidential proprietary information and trade secrets and affect the successful conduct of the businesses of the Company (and any successor or assignee of the Company). The parties hereto agree that "confidential or proprietary information" shall not include information that (i) is a matter of public knowledge (other than by act of the Executive in violation hereof); (ii) was provided to the Executive (without breach of any obligation of confidence owed to the Company) by a third party which is not an affiliate of the Company or (iii) is required to be disclosed by law or judicial or administrative process. (b) Upon termination of the Executive's employment with Company for any reason and upon the Company's request, the Executive will promptly deliver to the Company all correspondence, drawings, manuals, letters, notes, notebooks, reports, programs, plans, proposals, financial documents, or any other documents concerning, without limitation, the Company's operations, processes, products, inventions, business practices, business strategy, business development, finances, principals, vendors, distributors, suppliers, customers, potential customers, manufacturing methods, sales methods, marketing methods, costs, prices, contractual relationships, information systems, regulatory status, compensation paid to employees or other terms of employment and/or which contain proprietary information or trade secrets. (c) The Executive may respond to a lawful and valid subpoena or other legal process but shall give the Company the earliest possible notice thereof, shall, as much in advance of the return date as possible, make available to the Company and its counsel the documents and other information sought and shall assist such counsel in resisting or otherwise responding to such process. 11. INJUNCTIVE RELIEF. It is recognized and acknowledged by the Executive that a breach of the covenants contained in SECTIONS 9 AND 10 will cause irreparable damage to Company and its goodwill, the exact amount of which will be difficult or impossible to ascertain, and that the remedies at law for any such breach will be inadequate. Accordingly, the Executive agrees that in the event of a breach of any of the covenants contained in SECTIONS 9 AND 10, in addition to any 7 other remedy which may be available at law or in equity, the Company will be entitled to specific performance and injunctive relief. 12. BINDING ON SUCCESSORS. This Agreement shall be binding upon and inure to the benefit of the Company, the Executive and their respective successors, assigns, personnel and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable. 13. GOVERNING LAW. This Agreement shall be governed, construed, interpreted and enforced in accordance with the substantive laws of the State of Ohio. 14. VALIDITY. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 15. NOTICES. Any notice, request, claim, demand, document and other communication hereunder to any party shall be effective upon receipt (or refusal of receipt) and shall be in writing and delivered personally or sent by telex, telecopy, or certified or registered mail, postage prepaid, as follows: (a) If to the Company: Dayton Superior Corporation 7777 Washington Village Dr., Suite 130 Dayton, OH 45459 Attn: General Counsel Phone: (937) 428-6360 Fax: (937) 428-9115 With copies to: Odyssey Investment Partners Fund, LP 280 Park Avenue West Tower, 38th Floor New York, New York 10017 Attn: William Hopkins Phone: (212) 351-7900 Fax: (212) 351-7925 and Latham & Watkins 885 Third Avenue, Suite 1000 New York, New York 10022 Attn: Maureen A. Riley Phone: (212) 906-1200 Fax: (212) 751-4864 8 (b) If to the Executive, to him at the address set forth below under his signature; with a copy to: Squire, Sanders & Dempsey L.L.P. 4900 Key Tower 127 Public Square Cleveland, OH 44144-1304 Attn: Mary Ann Jorgenson Phone: (216) 479-8654 Fax: (216) 479-8776 or at any other address as any party shall have specified by notice in writing to the other parties. 16. COUNTERPARTS. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement. 17. ENTIRE AGREEMENT. The terms of this Agreement are intended by the parties to be the final expression of their agreement with respect to the employment of the Executive by the Company and may not be contradicted by evidence of any prior or contemporaneous agreement. The parties further intend that this Agreement shall constitute the complete and exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement. 18. AMENDMENTS; WAIVERS. This Agreement may not be modified, amended, or terminated except by an instrument in writing, signed by the Executive and the Chairman of the Board. By an instrument in writing similarly executed, the Executive or the Company may waive compliance by the other party or parties with any provision of this Agreement that such other party was or is obligated to comply with or perform, provided, however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure. No failure to exercise and no delay in exercising any right, remedy, or power hereunder preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity. 19. NO INCONSISTENT ACTIONS. The parties hereto shall not voluntarily undertake or fail to undertake any action or course of action inconsistent with the provisions or essential intent of this Agreement. Furthermore, it is the intent of the parties hereto to act in a fair and reasonable manner with respect to the interpretation and application of the provisions of this Agreement. 20. ARBITRATION. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted before a panel of three arbitrators in Cleveland, Ohio in accordance with the rules of the American Arbitration 9 Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction; provided, however, that the Company shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction to prevent any continuation of any violation of the provisions of SECTIONS 9 OR 10 of this Agreement and the Executive hereby consents that such restraining order or injunction may be granted without the necessity of the Company's posting any bond. Each of the parties hereto shall bear its share of the fees and expenses of any arbitration hereunder. IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written. THE COMPANY DAYTON SUPERIOR CORPORATION By: /s/ JOHN A. CICCARELLI ---------------------------------------- Name: John A. Ciccarelli Title: President and Chief Executive Officer THE EXECUTIVE /s/ Mark K. Kaler ------------------------------------------- Mark K. Kaler Address: 10498 Williamsburg Frankfort, IL 60423 EX-10.21 13 ex-10_21.txt EXHIBIT 10.21 Exhibit 10.21 EMPLOYMENT AGREEMENT This Employment Agreement dated as of January 19, 2000 and effective as of the Effective Date (as defined below), is made by and between Dayton Superior Corporation, an Ohio corporation (together with any successor thereto, the "Company"), and James W. Fennessy (the "Executive"). RECITALS WHEREAS, the Executive has prior to the date hereof been employed by the Company (or one of its subsidiaries) as Vice President and General Manager, Dayton Superior Canada and WHEREAS, it is the desire of the Company to assure itself of the continuity of the management services of the Executive following the consummation of the merger contemplated by the Agreement and Plan of Merger by and between the Company and Stone Acquisition Corp. dated as of January 19, 2000 (the "Merger Agreement"); and WHEREAS, it is the desire of the Company to assure itself of the services of the Executive by engaging the Executive to perform such services under the terms hereof, and the Executive desires to commit himself to serve the Company on the terms herein provided; and WHEREAS, the Company and the Executive intend this Agreement to be effective as of the consummation of the merger contemplated in the Merger Agreement (the "Effective Date"); and WHEREAS, the Company and the Executive intend that if the merger contemplated in the Merger Agreement is not consummated, this Employment Agreement shall be of no force or effect. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements set forth below the parties hereto agree as follows: 1. Certain Definitions. ------------------- (a) "Annual Base Salary" shall have the meaning set forth in SECTION 4. (b) "Board" shall mean the Board of Directors of the Company. (c) The Company shall have "Cause" to terminate the Executive's employment hereunder upon the Executive's: (i) willful or gross misconduct or material failure in the performance of his duties and responsibilities hereunder, other than any such failure resulting from the Executive's Disability, which misconduct or failure continues beyond 14 days after the Company notifies the Executive, in writing, of the Company's finding of such misconduct or failure; or (ii) conviction of or plea of guilty or NOLO CONTENDRE to, a felony, or a crime involving moral turpitude; or (iii) fraud or personal dishonesty involving the Company's assets. (d) "Common Stock" shall mean the common stock of the Company, $0.01 par value per share. (e) "Company" shall have the meaning set forth in the preamble hereto. (f) "Date of Termination" shall mean (i) if the Executive's employment is terminated by his death, the date of his death, or, (ii) if the Executive's employment is terminated pursuant to SECTION 5(A)(II) - (V), the date specified in the Notice of Termination. (g) "Disability" shall mean the absence of the Executive from the Executive's duties to the Company on a full-time basis for a total of 180 days during any twelve month period as a result of physical, mental or emotional incapacity due to illness, injury or disease. (h) "Effective Date" shall have the meaning set forth in the recitals hereto. (i) "Executive" shall have the meaning set forth in the preamble hereto. (j) "Management Stockholders' Agreement" shall mean that certain Management Stockholders' Agreement to be entered into by and among the Company, Odyssey Investment Partners Fund, LP, the Executive and the other stockholders party thereto effective as of the Effective Date, the terms of which have previously been accepted by Executive pursuant to that certain letter agreement and Management Compensation and Equity Term Sheet dated as of the date hereof and attached hereto. (k) "Merger Agreement" shall have the meaning set forth in the recitals hereto. (l) "Notice of Termination" shall have the meaning set forth in SECTION 5(B). (m) "Option Agreements" shall mean the written agreements between the Company and the Executive pursuant to which the Executive holds or is granted options to purchase Common Stock, including, without limitation, agreements evidencing options granted under the Option Plan and agreements governing the terms of "Roll-Over Options" (as defined in the Management Stockholders' Agreement). (n) "Option Plan" shall mean the 2000 Stock Option Plan of Dayton Superior Corporation, as amended from time to time. 2 (o) "Options" as of any date of determination shall mean options held by the Executive as of such date to purchase Common Stock of the Company. (p) "Stock Option Agreement" shall have the meaning set forth in SECTION 4(C). (q) "Prohibited Competition" shall have the meaning set forth in SECTION 9(B). (r) "Term" shall have the meaning set forth in SECTION 2(B). 2. Employment. ---------- (a) The Company shall employ the Executive, and the Executive shall continue in the employ of the Company, for the period set forth in this SECTION 2, in the positions set forth in SECTION 3 and upon the other terms and conditions herein provided. The initial term of employment under this Agreement (the "Initial Term") shall be for the period of 3 years beginning on the Effective Date, unless earlier terminated as provided in SECTION 5. (b) The employment term hereunder shall automatically be extended for successive one (1) year periods ("Extension Terms" and, collectively with the Initial Term, the "Term") unless either party gives notice of non-extension to the other no later than 90 days prior to the expiration of the then-applicable Term. 3. POSITION AND DUTIES. The Executive shall serve as Vice President and General Manager, Dayton Superior Canada with such responsibilities, duties and authority as are customary for someone serving in such position at companies similar in size to the Company, together with such other duties and responsibilities as may from time to time be assigned to the Executive by the Board and the Chief Executive Officer of the Company, consistent with his position. The Executive shall devote substantially all his working time and efforts to the business and affairs of the Company; provided that it shall not be considered a violation of the foregoing for the Executive to (i) with the prior consent of the Board (which consent shall not unreasonably be withheld), serve on corporate, industry, civic or charitable boards or committees, and (ii) manage his personal investments, so long as none of such activities significantly interferes with the Executive's duties hereunder. 4. Compensation and Related Matters. -------------------------------- (a) ANNUAL BASE SALARY. During the Term, the Executive shall receive a base salary at a rate of $106,000 per annum ("Annual Base Salary"), payable in accordance with the Company's standard payroll procedures. The rate of Annual Base Salary shall be subject to increase as determined by the Board in its discretion. (b) BONUS. During the Term, the Executive shall be eligible to participate in the Company's executive annual bonus plan as in effect from time to time. (c) STOCK OPTIONS. Effective as of the Effective Date, the Executive shall be awarded options to purchase shares of Common Stock pursuant to the Option Plan and one or more 3 written Stock Option Agreements to be entered into by and between the Company and the Executive. (d) BENEFITS. During the Term, the Executive shall be entitled to participate in the employee benefit plans, programs and arrangements of the Company (including vacation) in effect as of the date hereof (or, to the extent determined by the Board, in effect hereafter) which are applicable to the senior officers of the Company, subject to and on a basis consistent with the terms, conditions and overall administration generally thereof. Furthermore, during the first 12 months of the Term following the Effective Date, the benefits provided under such employee benefit plans, programs and arrangements (other than any stock option, restricted stock or other equity based plan) shall, in the aggregate, be substantially equivalent to the benefits provided by the Company as of the Effective Date (other than any stock option, restricted stock or other equity based plan). (e) EXPENSES. The Company shall reimburse the Executive for all reasonable travel and other business expenses properly incurred by him in the performance of his duties to the Company, in accordance with the Company's documentation and other policies with respect thereto. 5. Termination. ----------- The Executive's employment hereunder may be terminated by the Company or the Executive, as applicable, without any breach of this Agreement only under the following circumstances: (a) Circumstances. ------------- (i) DEATH. The Executive's employment hereunder shall terminate upon his death. (ii) DISABILITY. If the Company determines in good faith that the Executive has incurred a Disability, the Company may give the Executive written notice of its intention to terminate the Executive's employment. In such event, the Executive's employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive, provided that within the 30 days after such receipt, the Executive shall not have returned to full-time performance of his duties. The Executive shall continue to receive his Annual Base Salary until the Date of Termination. (iii) TERMINATION FOR CAUSE. The Company may terminate the Executive's employment hereunder for Cause at any time. (iv) TERMINATION WITHOUT CAUSE. The Company may terminate the Executive's employment hereunder without Cause at any time. (v) RESIGNATION. The Executive may resign his employment upon 30 days written notice to the Company. 4 (b) NOTICE OF TERMINATION. Any termination of the Executive's employment by the Company or by the Executive under this SECTION 5 (other than termination pursuant to paragraph (a)(i)) shall be communicated by a written notice to the other party hereto indicating the specific termination provision in this Agreement relied upon, setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated, and specifying a Date of Termination (a "Notice of Termination"). For purposes of this Agreement, the "Date of Termination" shall be (i) with respect to any termination by reason of Executive's Disability, 30 days following the receipt of the notice described in SECTION 5(A)(II), (ii) with respect to Executive's termination for Cause, the date of the Notice of Termination, and (iii) with respect to the Executive's termination for any other reason, at least 30 days following the date of the Notice of Termination. 6. Severance Payments. ------------------ (a) TERMINATION FOR ANY REASON. In the event the Executive's employment with the Company is terminated for any reason, the Company shall pay the Executive (or his beneficiary in the event of his death) any unpaid Annual Base Salary that has accrued as of the Date of Termination, any unreimbursed expenses due to the Executive and an amount for accrued but unused sick days and vacation days. The Executive shall also be entitled to accrued, vested benefits under the Company's applicable employee benefit plans, programs and arrangements as provided therein. The Executive shall be entitled to the additional payments and benefits described below only as set forth herein. (b) TERMINATION WITHOUT CAUSE. If the Executive's employment shall terminate without Cause (pursuant to SECTION 5(A)(IV)), the Company shall: (i) subject to the Executive's compliance with SECTIONS 9 AND 10, pay to the Executive, for the twenty-four month period following the Date of Termination, in accordance with its regular payroll practice, his Annual Base Salary as in effect on the Date of Termination; and (ii) for the year in which the termination occurs, pay to the Executive a pro-rated amount of bonus based on the Company's executive annual bonus plan as in effect at that time; and (iii) continue for one year the Executive's coverage under the Company medical and dental plans and programs in which the Executive was entitled to participate immediately prior to the Date of Termination (or, if the Company amends, replaces or terminates any such plan or program following such Date of Termination, the Company medical and dental plans provided to employees similarly situated to Executive), as if the Executive were an active employee during such time, subject to standard employee contributions by the Executive as are required under such plans, and further subject to the Executive's election of "COBRA" continuation coverage during such period. All post-employment coverage under such plans shall be co-extensive with COBRA continuation coverage required by federal (and where applicable by state) law, and shall cease if the Executive becomes eligible for coverage under another employer's plans. 5 (c) TERMINATION BY REASON OF DEATH OR DISABILITY. If the Executive's employment shall terminate by reason of his death or Disability (pursuant to SECTION 5(A)(I) OR (II)), the Company shall: (i) subject to the Executive's compliance with SECTIONS 9 AND 10, pay to the Executive (or to his estate or beneficiaries in the event of his death), for the twenty-four month period following the Date of Termination, in accordance with its regular payroll practice, the excess of his Annual Base Salary as in effect on the Date of Termination over the aggregate amount of any payments made to or on behalf of the Executive during such 24-month period under any life insurance, disability insurance or death benefit program maintained by the Company; and (ii) for the year in which the termination occurs, pay to the Executive a pro-rated amount of bonus based on the Company's executive annual bonus plan as in effect at that time. 7. SURVIVAL. The expiration or termination of the Term shall not impair the rights or obligations of any party hereto which shall have accrued hereunder prior to such expiration. 8. Intentionally Left Blank 9. Competition. ----------- (a) The Executive shall not engage in any Prohibited Competition (as defined below in SECTION 9(B)) at any time during the Term and for a period of two years thereafter. (b) For purposes of this Agreement, the Executive shall be considered to engage in prohibited competition ("Prohibited Competition") if the Executive shall: directly or indirectly, engage in or own, manage, join, operate or control, or participate in the ownership, management, operation or control of, or be connected as a director, officer, employee, partner, consultant or otherwise with, or permit his name to be used by or in connection with, any business or organization which produces, designs, conducts research on, provides, sells, leases, distributes or markets accessories, chemicals, forming and related products used in concrete and masonry construction (the "Business") which, directly or indirectly, competes with the Business conducted by Company and its subsidiaries in North America, South America and Europe, it being understood that the foregoing shall not limit the Executive from making passive investments of less than 5% of the outstanding equity securities in any entity listed for trading on a national stock exchange or quoted on any recognized automatic quotation system. (c) In the event any the terms of this SECTION 9 shall be determined by any court of competent jurisdiction to be unenforceable by reason of extending for too great a period of time or over too great a geographical area or by reason of being too extensive in any other respect, it will be interpreted to extend only over the maximum period of time for which it may be enforceable, and/or over the maximum geographical area as to which it may be enforceable and/or to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action. 6 10. Nondisclosure of Proprietary Information. ---------------------------------------- (a) Except as required in the faithful performance of the Executive's duties hereunder or pursuant to subsection (c), the Executive shall, in perpetuity, maintain in confidence and shall not directly, indirectly or otherwise, use, disseminate, disclose or publish, or use for his benefit or the benefit of any person, firm, corporation or other entity any confidential or proprietary information or trade secrets, and any other information that would be protected under the Uniform Trade Secrets Act in Ohio, of or relating to the Company, including, without limitation, information with respect to the Company's operations, processes, products, inventions, business practices, business strategy, business development, finances, principals, vendors, distributors, suppliers, customers, potential customers, manufacturing methods, sales methods, marketing methods, costs, prices, contractual relationships, information systems, regulatory status, compensation paid to employees or other terms of employment, or deliver to any person, firm, corporation or other entity any document, record, notebook, computer program or similar repository of or containing any such confidential or proprietary information or trade secrets. The parties hereby stipulate and agree that as between them the foregoing matters are important, material and confidential proprietary information and trade secrets and affect the successful conduct of the businesses of the Company (and any successor or assignee of the Company). The parties hereto agree that "confidential or proprietary information" shall not include information that (i) is a matter of public knowledge (other than by act of the Executive in violation hereof); (ii) was provided to the Executive (without breach of any obligation of confidence owed to the Company) by a third party which is not an affiliate of the Company or (iii) is required to be disclosed by law or judicial or administrative process. (b) Upon termination of the Executive's employment with Company for any reason and upon the Company's request, the Executive will promptly deliver to the Company all correspondence, drawings, manuals, letters, notes, notebooks, reports, programs, plans, proposals, financial documents, or any other documents concerning, without limitation, the Company's operations, processes, products, inventions, business practices, business strategy, business development, finances, principals, vendors, distributors, suppliers, customers, potential customers, manufacturing methods, sales methods, marketing methods, costs, prices, contractual relationships, information systems, regulatory status, compensation paid to employees or other terms of employment and/or which contain proprietary information or trade secrets. (c) The Executive may respond to a lawful and valid subpoena or other legal process but shall give the Company the earliest possible notice thereof, shall, as much in advance of the return date as possible, make available to the Company and its counsel the documents and other information sought and shall assist such counsel in resisting or otherwise responding to such process. 11. INJUNCTIVE RELIEF. It is recognized and acknowledged by the Executive that a breach of the covenants contained in SECTIONS 9 AND 10 will cause irreparable damage to Company and its goodwill, the exact amount of which will be difficult or impossible to ascertain, and that the remedies at law for any such breach will be inadequate. Accordingly, the Executive agrees that in the event of a breach of any of the covenants contained in SECTIONS 9 AND 10, in addition to any 7 other remedy which may be available at law or in equity, the Company will be entitled to specific performance and injunctive relief. 12. BINDING ON SUCCESSORS. This Agreement shall be binding upon and inure to the benefit of the Company, the Executive and their respective successors, assigns, personnel and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable. 13. GOVERNING LAW. This Agreement shall be governed, construed, interpreted and enforced in accordance with the substantive laws of the State of Ohio. 14. VALIDITY. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 15. NOTICES. Any notice, request, claim, demand, document and other communication hereunder to any party shall be effective upon receipt (or refusal of receipt) and shall be in writing and delivered personally or sent by telex, telecopy, or certified or registered mail, postage prepaid, as follows: (a) If to the Company: Dayton Superior Corporation 7777 Washington Village Dr., Suite 130 Dayton, OH 45459 Attn: General Counsel Phone: (937) 428-6360 Fax: (937) 428-9115 With copies to: Odyssey Investment Partners Fund, LP 280 Park Avenue West Tower, 38th Floor New York, New York 10017 Attn: William Hopkins Phone: (212) 351-7900 Fax: (212) 351-7925 and Latham & Watkins 885 Third Avenue, Suite 1000 New York, New York 10022 Attn: Maureen A. Riley Phone: (212) 906-1200 Fax: (212) 751-4864 8 (b) If to the Executive, to him at the address set forth below under his signature; with a copy to: Squire, Sanders & Dempsey L.L.P. 4900 Key Tower 127 Public Square Cleveland, OH 44144-1304 Attn: Mary Ann Jorgenson Phone: (216) 479-8654 Fax: (216) 479-8776 or at any other address as any party shall have specified by notice in writing to the other parties. 16. COUNTERPARTS. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement. 17. ENTIRE AGREEMENT. The terms of this Agreement are intended by the parties to be the final expression of their agreement with respect to the employment of the Executive by the Company and may not be contradicted by evidence of any prior or contemporaneous agreement. The parties further intend that this Agreement shall constitute the complete and exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement. 18. AMENDMENTS; WAIVERS. This Agreement may not be modified, amended, or terminated except by an instrument in writing, signed by the Executive and the Chairman of the Board. By an instrument in writing similarly executed, the Executive or the Company may waive compliance by the other party or parties with any provision of this Agreement that such other party was or is obligated to comply with or perform, provided, however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure. No failure to exercise and no delay in exercising any right, remedy, or power hereunder preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity. 19. NO INCONSISTENT ACTIONS. The parties hereto shall not voluntarily undertake or fail to undertake any action or course of action inconsistent with the provisions or essential intent of this Agreement. Furthermore, it is the intent of the parties hereto to act in a fair and reasonable manner with respect to the interpretation and application of the provisions of this Agreement. 20. ARBITRATION. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted before a panel of three arbitrators in Cleveland, Ohio in accordance with the rules of the American Arbitration 9 Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction; provided, however, that the Company shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction to prevent any continuation of any violation of the provisions of SECTIONS 9 OR 10 of this Agreement and the Executive hereby consents that such restraining order or injunction may be granted without the necessity of the Company's posting any bond. Each of the parties hereto shall bear its share of the fees and expenses of any arbitration hereunder. IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written. THE COMPANY DAYTON SUPERIOR CORPORATION By: /s/ JOHN A. CICCARELLI ---------------------------------------- Name: John A. Ciccarelli Title: President and Chief Executive Officer THE EXECUTIVE /s/ James W. Fennessy ------------------------------------------- James W. Fennessy Address: P.O. Box 495 (104 Dina Rd.) Maple ON LGA 163 EX-10.22 14 ex-10_22.txt EXHIBIT 10.22 Exhibit 10.22 EMPLOYMENT AGREEMENT This Employment Agreement dated as of January 19, 2000 and effective as of the Effective Date (as defined below), is made by and between Dayton Superior Corporation, an Ohio corporation (together with any successor thereto, the "Company"), and Jaime Taronji, Jr. (the "Executive"). RECITALS WHEREAS, the Executive has prior to the date hereof been employed by the Company (or one of its subsidiaries) as Vice President and General Counsel and Secretary; and WHEREAS, it is the desire of the Company to assure itself of the continuity of the management services of the Executive following the consummation of the merger contemplated by the Agreement and Plan of Merger by and between the Company and Stone Acquisition Corp. dated as of January 19, 2000 (the "Merger Agreement"); and WHEREAS, it is the desire of the Company to assure itself of the services of the Executive by engaging the Executive to perform such services under the terms hereof, and the Executive desires to commit himself to serve the Company on the terms herein provided; and WHEREAS, the Company and the Executive intend this Agreement to be effective as of the consummation of the merger contemplated in the Merger Agreement (the "Effective Date"); and WHEREAS, the Company and the Executive intend that if the merger contemplated in the Merger Agreement is not consummated, this Employment Agreement shall be of no force or effect. AGREEMENT NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements set forth below the parties hereto agree as follows: 1. Certain Definitions. ------------------- (a) "Annual Base Salary" shall have the meaning set forth in SECTION 4. (b) "Board" shall mean the Board of Directors of the Company. (c) The Company shall have "Cause" to terminate the Executive's employment hereunder upon the Executive's: (i) willful or gross misconduct or material failure in the performance of his duties and responsibilities hereunder, other than any such failure resulting from the Executive's Disability, which misconduct or failure continues beyond 14 days after the Company notifies the Executive, in writing, of the Company's finding of such misconduct or failure; or (ii) conviction of or plea of guilty or NOLO CONTENDRE to, a felony, or a crime involving moral turpitude; or (iii) fraud or personal dishonesty involving the Company's assets. (d) "Common Stock" shall mean the common stock of the Company, $0.01 par value per share. (e) "Company" shall have the meaning set forth in the preamble hereto. (f) "Date of Termination" shall mean (i) if the Executive's employment is terminated by his death, the date of his death, or, (ii) if the Executive's employment is terminated pursuant to SECTION 5(A)(II) - (V), the date specified in the Notice of Termination. (g) "Disability" shall mean the absence of the Executive from the Executive's duties to the Company on a full-time basis for a total of 180 days during any twelve month period as a result of physical, mental or emotional incapacity due to illness, injury or disease. (h) "Effective Date" shall have the meaning set forth in the recitals hereto. (i) "Executive" shall have the meaning set forth in the preamble hereto. (j) "Management Stockholders' Agreement" shall mean that certain Management Stockholders' Agreement to be entered into by and among the Company, Odyssey Investment Partners Fund, LP, the Executive and the other stockholders party thereto effective as of the Effective Date, the terms of which have previously been accepted by Executive pursuant to that certain letter agreement and Management Compensation and Equity Term Sheet dated as of the date hereof and attached hereto. (k) "Merger Agreement" shall have the meaning set forth in the recitals hereto. (l) "Notice of Termination" shall have the meaning set forth in SECTION 5(B). (m) "Option Agreements" shall mean the written agreements between the Company and the Executive pursuant to which the Executive holds or is granted options to purchase Common Stock, including, without limitation, agreements evidencing options granted under the Option Plan and agreements governing the terms of "Roll-Over Options" (as defined in the Management Stockholders' Agreement). (n) "Option Plan" shall mean the 2000 Stock Option Plan of Dayton Superior Corporation, as amended from time to time. 2 (o) "Options" as of any date of determination shall mean options held by the Executive as of such date to purchase Common Stock of the Company. (p) "Stock Option Agreement" shall have the meaning set forth in SECTION 4(C). (q) "Prohibited Competition" shall have the meaning set forth in SECTION 9(B). (r) "Term" shall have the meaning set forth in SECTION 2(B). 2. Employment. ---------- (a) The Company shall employ the Executive, and the Executive shall continue in the employ of the Company, for the period set forth in this SECTION 2, in the positions set forth in SECTION 3 and upon the other terms and conditions herein provided. The initial term of employment under this Agreement (the "Initial Term") shall be for the period of 3 years beginning on the Effective Date, unless earlier terminated as provided in SECTION 5. (b) The employment term hereunder shall automatically be extended for successive one (1) year periods ("Extension Terms" and, collectively with the Initial Term, the "Term") unless either party gives notice of non-extension to the other no later than 90 days prior to the expiration of the then-applicable Term. 3. POSITION AND DUTIES. The Executive shall serve as Vice President and Counsel Secretary of the Company with such responsibilities, duties and authority as are customary for someone serving in such position at companies similar in size to the Company, together with such other duties and responsibilities as may from time to time be assigned to the Executive by the Board and the Chief Executive Officer of the Company, consistent with his position. The Executive shall devote substantially all his working time and efforts to the business and affairs of the Company; provided that it shall not be considered a violation of the foregoing for the Executive to (i) with the prior consent of the Board (which consent shall not unreasonably be withheld), serve on corporate, industry, civic or charitable boards or committees, and (ii) manage his personal investments, so long as none of such activities significantly interferes with the Executive's duties hereunder. 4. Compensation and Related Matters. -------------------------------- (a) ANNUAL BASE SALARY. During the Term, the Executive shall receive a base salary at a rate of $176,000 per annum ("Annual Base Salary"), payable in accordance with the Company's standard payroll procedures. The rate of Annual Base Salary shall be subject to increase as determined by the Board in its discretion. (b) BONUS. During the Term, the Executive shall be eligible to participate in the Company's executive annual bonus plan as in effect from time to time. (c) STOCK OPTIONS. Effective as of the Effective Date, the Executive shall be awarded options to purchase shares of Common Stock pursuant to the Option Plan and one or more 3 written Stock Option Agreements to be entered into by and between the Company and the Executive. (d) BENEFITS. During the Term, the Executive shall be entitled to participate in the employee benefit plans, programs and arrangements of the Company (including vacation) in effect as of the date hereof (or, to the extent determined by the Board, in effect hereafter) which are applicable to the senior officers of the Company, subject to and on a basis consistent with the terms, conditions and overall administration generally thereof. Furthermore, during the first 12 months of the Term following the Effective Date, the benefits provided under such employee benefit plans, programs and arrangements (other than any stock option, restricted stock or other equity based plan) shall, in the aggregate, be substantially equivalent to the benefits provided by the Company as of the Effective Date (other than any stock option, restricted stock or other equity based plan). (e) EXPENSES. The Company shall reimburse the Executive for all reasonable travel and other business expenses properly incurred by him in the performance of his duties to the Company, in accordance with the Company's documentation and other policies with respect thereto. 5. Termination. ----------- The Executive's employment hereunder may be terminated by the Company or the Executive, as applicable, without any breach of this Agreement only under the following circumstances: (a) Circumstances. ------------- (i) DEATH. The Executive's employment hereunder shall terminate upon his death. (ii) DISABILITY. If the Company determines in good faith that the Executive has incurred a Disability, the Company may give the Executive written notice of its intention to terminate the Executive's employment. In such event, the Executive's employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Executive, provided that within the 30 days after such receipt, the Executive shall not have returned to full-time performance of his duties. The Executive shall continue to receive his Annual Base Salary until the Date of Termination. (iii) TERMINATION FOR CAUSE. The Company may terminate the Executive's employment hereunder for Cause at any time. (iv) TERMINATION WITHOUT CAUSE. The Company may terminate the Executive's employment hereunder without Cause at any time. (v) RESIGNATION. The Executive may resign his employment upon 30 days written notice to the Company. 4 (b) NOTICE OF TERMINATION. Any termination of the Executive's employment by the Company or by the Executive under this SECTION 5 (other than termination pursuant to paragraph (a)(i)) shall be communicated by a written notice to the other party hereto indicating the specific termination provision in this Agreement relied upon, setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated, and specifying a Date of Termination (a "Notice of Termination"). For purposes of this Agreement, the "Date of Termination" shall be (i) with respect to any termination by reason of Executive's Disability, 30 days following the receipt of the notice described in SECTION 5(A)(II), (ii) with respect to Executive's termination for Cause, the date of the Notice of Termination, and (iii) with respect to the Executive's termination for any other reason, at least 30 days following the date of the Notice of Termination. 6. Severance Payments. ------------------ (a) TERMINATION FOR ANY REASON. In the event the Executive's employment with the Company is terminated for any reason, the Company shall pay the Executive (or his beneficiary in the event of his death) any unpaid Annual Base Salary that has accrued as of the Date of Termination, any unreimbursed expenses due to the Executive and an amount for accrued but unused sick days and vacation days. The Executive shall also be entitled to accrued, vested benefits under the Company's applicable employee benefit plans, programs and arrangements as provided therein. The Executive shall be entitled to the additional payments and benefits described below only as set forth herein. (b) TERMINATION WITHOUT CAUSE. If the Executive's employment shall terminate without Cause (pursuant to SECTION 5(A)(IV)), the Company shall: (i) subject to the Executive's compliance with SECTIONS 9 AND 10, pay to the Executive, for the twenty-four month period following the Date of Termination, in accordance with its regular payroll practice, his Annual Base Salary as in effect on the Date of Termination; and (ii) for the year in which the termination occurs, pay to the Executive a pro-rated amount of bonus based on the Company's executive annual bonus plan as in effect at that time; and (iii) continue for one year the Executive's coverage under the Company medical and dental plans and programs in which the Executive was entitled to participate immediately prior to the Date of Termination (or, if the Company amends, replaces or terminates any such plan or program following such Date of Termination, the Company medical and dental plans provided to employees similarly situated to Executive), as if the Executive were an active employee during such time, subject to standard employee contributions by the Executive as are required under such plans, and further subject to the Executive's election of "COBRA" continuation coverage during such period. All post-employment coverage under such plans shall be co-extensive with COBRA continuation coverage required by federal (and where applicable by state) law, and shall cease if the Executive becomes eligible for coverage under another employer's plans. 5 (c) TERMINATION BY REASON OF DEATH OR DISABILITY. If the Executive's employment shall terminate by reason of his death or Disability (pursuant to SECTION 5(A)(I) OR (II)), the Company shall: (i) subject to the Executive's compliance with SECTIONS 9 AND 10, pay to the Executive (or to his estate or beneficiaries in the event of his death), for the twenty-four month period following the Date of Termination, in accordance with its regular payroll practice, the excess of his Annual Base Salary as in effect on the Date of Termination over the aggregate amount of any payments made to or on behalf of the Executive during such 24-month period under any life insurance, disability insurance or death benefit program maintained by the Company; and (ii) for the year in which the termination occurs, pay to the Executive a pro-rated amount of bonus based on the Company's executive annual bonus plan as in effect at that time. 7. SURVIVAL. The expiration or termination of the Term shall not impair the rights or obligations of any party hereto which shall have accrued hereunder prior to such expiration. 8. Intentionally Left Blank 9. Competition. ----------- (a) The Executive shall not engage in any Prohibited Competition (as defined below in SECTION 9(B)) at any time during the Term and for a period of two years thereafter. (b) For purposes of this Agreement, the Executive shall be considered to engage in prohibited competition ("Prohibited Competition") if the Executive shall: directly or indirectly, engage in or own, manage, join, operate or control, or participate in the ownership, management, operation or control of, or be connected as a director, officer, employee, partner, consultant or otherwise with, or permit his name to be used by or in connection with, any business or organization which produces, designs, conducts research on, provides, sells, leases, distributes or markets accessories, chemicals, forming and related products used in concrete and masonry construction (the "Business") which, directly or indirectly, competes with the Business conducted by Company and its subsidiaries in North America, South America and Europe, it being understood that the foregoing shall not limit the Executive from making passive investments of less than 5% of the outstanding equity securities in any entity listed for trading on a national stock exchange or quoted on any recognized automatic quotation system. (c) In the event any the terms of this SECTION 9 shall be determined by any court of competent jurisdiction to be unenforceable by reason of extending for too great a period of time or over too great a geographical area or by reason of being too extensive in any other respect, it will be interpreted to extend only over the maximum period of time for which it may be enforceable, and/or over the maximum geographical area as to which it may be enforceable and/or to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action. 6 10. Nondisclosure of Proprietary Information. ---------------------------------------- (a) Except as required in the faithful performance of the Executive's duties hereunder or pursuant to subsection (c), the Executive shall, in perpetuity, maintain in confidence and shall not directly, indirectly or otherwise, use, disseminate, disclose or publish, or use for his benefit or the benefit of any person, firm, corporation or other entity any confidential or proprietary information or trade secrets, and any other information that would be protected under the Uniform Trade Secrets Act in Ohio, of or relating to the Company, including, without limitation, information with respect to the Company's operations, processes, products, inventions, business practices, business strategy, business development, finances, principals, vendors, distributors, suppliers, customers, potential customers, manufacturing methods, sales methods, marketing methods, costs, prices, contractual relationships, information systems, regulatory status, compensation paid to employees or other terms of employment, or deliver to any person, firm, corporation or other entity any document, record, notebook, computer program or similar repository of or containing any such confidential or proprietary information or trade secrets. The parties hereby stipulate and agree that as between them the foregoing matters are important, material and confidential proprietary information and trade secrets and affect the successful conduct of the businesses of the Company (and any successor or assignee of the Company). The parties hereto agree that "confidential or proprietary information" shall not include information that (i) is a matter of public knowledge (other than by act of the Executive in violation hereof); (ii) was provided to the Executive (without breach of any obligation of confidence owed to the Company) by a third party which is not an affiliate of the Company or (iii) is required to be disclosed by law or judicial or administrative process. (b) Upon termination of the Executive's employment with Company for any reason and upon the Company's request, the Executive will promptly deliver to the Company all correspondence, drawings, manuals, letters, notes, notebooks, reports, programs, plans, proposals, financial documents, or any other documents concerning, without limitation, the Company's operations, processes, products, inventions, business practices, business strategy, business development, finances, principals, vendors, distributors, suppliers, customers, potential customers, manufacturing methods, sales methods, marketing methods, costs, prices, contractual relationships, information systems, regulatory status, compensation paid to employees or other terms of employment and/or which contain proprietary information or trade secrets. (c) The Executive may respond to a lawful and valid subpoena or other legal process but shall give the Company the earliest possible notice thereof, shall, as much in advance of the return date as possible, make available to the Company and its counsel the documents and other information sought and shall assist such counsel in resisting or otherwise responding to such process. 11. INJUNCTIVE RELIEF. It is recognized and acknowledged by the Executive that a breach of the covenants contained in SECTIONS 9 AND 10 will cause irreparable damage to Company and its goodwill, the exact amount of which will be difficult or impossible to ascertain, and that the remedies at law for any such breach will be inadequate. Accordingly, the Executive agrees that in the event of a breach of any of the covenants contained in SECTIONS 9 AND 10, in addition to any 7 other remedy which may be available at law or in equity, the Company will be entitled to specific performance and injunctive relief. 12. BINDING ON SUCCESSORS. This Agreement shall be binding upon and inure to the benefit of the Company, the Executive and their respective successors, assigns, personnel and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable. 13. GOVERNING LAW. This Agreement shall be governed, construed, interpreted and enforced in accordance with the substantive laws of the State of Ohio. 14. VALIDITY. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 15. NOTICES. Any notice, request, claim, demand, document and other communication hereunder to any party shall be effective upon receipt (or refusal of receipt) and shall be in writing and delivered personally or sent by telex, telecopy, or certified or registered mail, postage prepaid, as follows: (a) If to the Company: Dayton Superior Corporation 7777 Washington Village Dr., Suite 130 Dayton, OH 45459 Attn: General Counsel Phone: (937) 428-6360 Fax: (937) 428-9115 With copies to: Odyssey Investment Partners Fund, LP 280 Park Avenue West Tower, 38th Floor New York, New York 10017 Attn: William Hopkins Phone: (212) 351-7900 Fax: (212) 351-7925 and Latham & Watkins 885 Third Avenue, Suite 1000 New York, New York 10022 Attn: Maureen A. Riley Phone: (212) 906-1200 Fax: (212) 751-4864 8 (b) If to the Executive, to him at the address set forth below under his signature; with a copy to: Squire, Sanders & Dempsey L.L.P. 4900 Key Tower 127 Public Square Cleveland, OH 44144-1304 Attn: Mary Ann Jorgenson Phone: (216) 479-8654 Fax: (216) 479-8776 or at any other address as any party shall have specified by notice in writing to the other parties. 16. COUNTERPARTS. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement. 17. ENTIRE AGREEMENT. The terms of this Agreement are intended by the parties to be the final expression of their agreement with respect to the employment of the Executive by the Company and may not be contradicted by evidence of any prior or contemporaneous agreement. The parties further intend that this Agreement shall constitute the complete and exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement. 18. AMENDMENTS; WAIVERS. This Agreement may not be modified, amended, or terminated except by an instrument in writing, signed by the Executive and the Chairman of the Board. By an instrument in writing similarly executed, the Executive or the Company may waive compliance by the other party or parties with any provision of this Agreement that such other party was or is obligated to comply with or perform, provided, however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure. No failure to exercise and no delay in exercising any right, remedy, or power hereunder preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity. 19. NO INCONSISTENT ACTIONS. The parties hereto shall not voluntarily undertake or fail to undertake any action or course of action inconsistent with the provisions or essential intent of this Agreement. Furthermore, it is the intent of the parties hereto to act in a fair and reasonable manner with respect to the interpretation and application of the provisions of this Agreement. 20. ARBITRATION. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration, conducted before a panel of three arbitrators in Cleveland, Ohio in accordance with the rules of the American Arbitration 9 Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction; provided, however, that the Company shall be entitled to seek a restraining order or injunction in any court of competent jurisdiction to prevent any continuation of any violation of the provisions of SECTIONS 9 OR 10 of this Agreement and the Executive hereby consents that such restraining order or injunction may be granted without the necessity of the Company's posting any bond. Each of the parties hereto shall bear its share of the fees and expenses of any arbitration hereunder. IN WITNESS WHEREOF, the parties have executed this Agreement on the date and year first above written. THE COMPANY DAYTON SUPERIOR CORPORATION By: /s/ JOHN A. CICCARELLI ---------------------------------------- Name: John A. Ciccarelli Title: President and Chief Executive Officer THE EXECUTIVE /s/ Jaime Taronji, Jr. ------------------------------------------- Jaime Taronji, Jr. Address: 5 Grandon Road Dayton, OH 45419 EX-10.24 15 ex-10_24.txt EXHIBIT 10.24 Exhibit 10.24 [CONFORMED COPY WITH EXHIBITS H, I, & J CONFORMED AS EXECUTED] ================================================================================ CREDIT AGREEMENT among DAYTON SUPERIOR CORPORATION, VARIOUS LENDING INSTITUTIONS, and BANKERS TRUST COMPANY, as ADMINISTRATIVE AGENT -------------------------------- Dated as of June 16, 2000 -------------------------------- DEUTSCHE BANK SECURITIES, INC., as LEAD ARRANGER and BOOK MANAGER, and MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as SYNDICATION AGENT and CO-ARRANGER ================================================================================ TABLE OF CONTENTS
PAGE SECTION 1. Amountand Terms of Credit........................................................1 1.01 Commitments.......................................................................1 1.02 Minimum Borrowing Amounts, etc....................................................5 1.03 Notice of Borrowing...............................................................5 1.04 Disbursement of Funds.............................................................6 1.05 Notes.............................................................................7 1.06 Conversions.......................................................................9 1.07 Pro Rata Borrowings..............................................................10 1.08 Interest.........................................................................10 1.09 Interest Periods.................................................................11 1.10 Increased Costs; Illegality; etc.................................................13 1.11 Compensation.....................................................................15 1.12 Change of Lending Office.........................................................15 1.13 Replacement of Lenders...........................................................15 1.14 Limitation on Additional Amounts, etc............................................17 1.15 Incremental Term Loan Commitments................................................17 SECTION 2. Lettersof Credit................................................................20 2.01 Letters of Credit................................................................20 2.02 Letter of Credit Requests........................................................21 2.03 Letter of Credit Participations..................................................21 2.04 Agreement to Repay Letter of Credit Drawings.....................................24 2.05 Increased Costs..................................................................25 SECTION 3. Fees;Commitments................................................................25 3.01 Fees.............................................................................25 3.02 Voluntary Termination or Reduction of Unutilized Commitments.....................27 3.03 Mandatory Reduction of Commitments...............................................28 SECTION 4. Payments........................................................................29 4.01 Voluntary Prepayments............................................................29 4.02 Mandatory Repayments and Commitment Reductions...................................31 4.03 Method and Place of Payment......................................................38 4.04 Net Payments.....................................................................38 SECTION 5A. Conditions Precedent to the Initial Borrowing Date.............................40 5A.01 Execution of Agreement; Notes...................................................40 (i) 5A.02 Officer's Certificate...........................................................41 5A.03 Opinions of Counsel.............................................................41 5A.04 Corporate Documents; Proceedings................................................41 5A.05 Adverse Change, etc.............................................................41 5A.06 Litigation......................................................................42 5A.07 Approvals.......................................................................42 5A.08 Consummation of the Recapitalization............................................42 5A.09 Refinancing; etc................................................................42 5A.10 Consummation of the Equity Financing; Senior Subordinated Notes Issuance; etc.............................................................43 5A.11 Pledge Agreement; Security Agreement; etc.......................................44 5A.12 Subsidiaries Guaranty...........................................................45 5A.13 Employee Benefit Plans; Shareholders'Agreements; Management Agreements; Employment Agreements; Collective Bargaining Agreements; Existing Indebtedness Agreements; Tax Allocation Agreements..............................45 5A.14 Solvency Opinion; Insurance Certificates; Financial Statements; Budgets; Landlord Waivers................................................................46 5A.15 Payment of Fees.................................................................47 SECTION 5B. Conditions Precedent to the Conspec Acquisition................................47 5B.02 Officer's Certificate...........................................................47 5B.03 Corporate Documents; Proceedings................................................47 5B.04 Adverse Change, etc.............................................................48 5B.05 Approvals.......................................................................48 5B.06 Consummation of the Conspec Acquisition.........................................48 5B.07 Refinancing; etc................................................................48 5B.08 Pledge Agreement; Security Agreement; etc.......................................49 5B.09 Subsidiaries Guaranty...........................................................49 5B.10 Insurance Certificates..........................................................49 5B.11 Payment of Fees.................................................................49 SECTION 6. ConditionsPrecedent to All Credit Events........................................49 6.01 No Default; Representations and Warranties.......................................49 6.02 Notice of Borrowing; Letter of Credit Request....................................49 SECTION 7. Representations,Warranties and Agreements.......................................50 7.01 Organizational Status............................................................50 7.02 Power and Authority..............................................................50 7.03 No Violation.....................................................................51 7.04 Litigation.......................................................................51 7.05 Use of Proceeds; Margin Regulations..............................................51 7.06 Governmental Approvals...........................................................52 7.07 Investment Company Act...........................................................52 7.08 Public Utility Holding Company Act...............................................52 (ii) 7.09 True and Complete Disclosure.....................................................52 7.10 Financial Condition; Financial Statements........................................53 7.11 Security Interests...............................................................54 7.12 Transaction......................................................................54 7.13 Compliance with ERISA............................................................54 7.14 Capitalization...................................................................56 7.15 Subsidiaries.....................................................................56 7.16 Intellectual Property, etc.......................................................56 7.17 Compliance with Statutes, etc....................................................56 7.18 Environmental Matters............................................................57 7.19 Properties.......................................................................57 7.20 Labor Relations..................................................................57 7.21 Tax Returns and Payments.........................................................58 7.22 Existing Indebtedness............................................................58 7.23 Insurance........................................................................58 7.24 Representations and Warranties in Other Documents................................58 7.25 Subordinated Notes; etc..........................................................59 SECTION 8. AffirmativeCovenants............................................................59 8.01 Information Covenants............................................................59 8.02 Books, Records and Inspections; Annual Meeting with Lenders......................62 8.03 Insurance........................................................................63 8.04 Payment of Taxes.................................................................63 8.05 Existences and Franchises........................................................63 8.06 Compliance with Statutes; etc....................................................64 8.07 Compliance with Environmental Laws...............................................64 8.08 ERISA............................................................................65 8.09 Good Repair......................................................................66 8.10 End of Fiscal Years; Fiscal Quarters.............................................67 8.11 Additional Security; Further Assurances..........................................67 8.12 Foreign Subsidiaries Security....................................................67 8.13 Ownership of Subsidiaries........................................................68 8.14 Permitted Acquisitions...........................................................68 8.15 Maintenance of Corporate Separateness............................................71 8.16 Performance of Obligations.......................................................71 8.17 Use of Proceeds..................................................................71 SECTION 9. NegativeCovenants...............................................................71 9.01 Changes in Business..............................................................71 9.02 Consolidation; Merger; Sale or Purchase of Assets; etc...........................71 9.03 Liens............................................................................73 9.04 Indebtedness.....................................................................76 9.05 Advances; Investments; Loans.....................................................78 9.06 Dividends; etc...................................................................79 (iii) 9.07 Transactions with Affiliates.....................................................81 9.08 Capital Expenditures.............................................................81 9.09 Minimum Consolidated EBITDA......................................................83 9.10 Consolidated Interest Coverage Ratio.............................................84 9.11 Total Leverage Ratio.............................................................85 9.12 Limitation on Voluntary Payments and Modifications of Indebtedness; Modifica- tions of Certificate of Incorporation, By-Laws and Certain Other Agreements etc..85 9.13 Limitation on Issuance of Capital Stock..........................................86 9.14 Limitation on Certain Restrictions on Subsidiaries...............................87 9.15 Limitation on the Creation of Subsidiaries and Joint Ventures....................87 SECTION 10. Eventsof Default...............................................................88 10.01 Payments........................................................................88 10.02 Representations, etc............................................................88 10.03 Covenants.......................................................................88 10.04 Default Under Other Agreements..................................................88 10.05 Bankruptcy, etc.................................................................89 10.06 ERISA...........................................................................89 10.07 Security Documents..............................................................90 10.08 Subsidiaries Guaranty...........................................................90 10.09 Judgments.......................................................................90 10.10 Change of Control...............................................................90 SECTION 11. Definitions....................................................................91 SECTION 12. TheAdministrative Agent........................................................120 12.01 Appointment.....................................................................120 12.02 Delegation of Duties............................................................121 12.03 Exculpatory Provisions..........................................................121 12.04 Reliance by Administrative Agent................................................122 12.05 Notice of Default...............................................................122 12.06 Nonreliance on Administrative Agent and Other Lenders...........................122 12.07 Indemnification.................................................................123 12.08 Administrative Agent in its Individual Capacity.................................123 12.09 Holders.........................................................................123 12.10 Resignation of the Administrative Agent.........................................124 SECTION 13. Miscellaneous.................................................................124 13.01 Payment of Expenses, etc.......................................................124 13.02 Right of Setoff................................................................125 13.03 Notices........................................................................126 13.04 Benefit of Agreement...........................................................126 13.05 No Waiver; Remedies Cumulative.................................................128 13.06 Payments Pro Rata..............................................................128 (iv) 13.07 Calculations; Computations.....................................................129 13.08 Governing Law; Submission to Jurisdiction; Venue...............................129 13.09 Counterparts...................................................................130 13.10 Effectiveness..................................................................130 13.11 Headings Descriptive...........................................................130 13.12 Amendment or Waiver; etc.......................................................130 13.13 Survival.......................................................................132 13.14 Domicile of Loans and Commitments..............................................132 13.15 Confidentiality................................................................132 13.16 Waiver of Jury Trial...........................................................133 13.17 Register.......................................................................133
ANNEX I List of Lenders and Commitments ANNEX II Lender Addresses ANNEX III Plans ANNEX IV Subsidiaries ANNEX V Real Property ANNEX VI Existing Indebtedness ANNEX VII Insurance ANNEX VIII Existing Liens ANNEX IX Existing Investments ANNEX X Indebtedness to be Refinanced EXHIBIT A-1 -- Form of Notice of Borrowing EXHIBIT A-2 -- Form of Notice of Conversion/Continuation EXHIBIT B-1 -- Form of A Term Note EXHIBIT B-2 -- Form of B Term Note EXHIBIT B-3 -- Form of Revolving Note EXHIBIT B-4 -- Form of Swingline Note EXHIBIT B-5 -- Form of Acquisition Note EXHIBIT C -- Form of Incremental Term Loan Commitment Agreement EXHIBIT D -- Form of Letter of Credit Request EXHIBIT E -- Form of Section 4.04(b)(ii) Certificate EXHIBIT F-1 -- Form of Opinion of Latham & Watkins EXHIBIT F-2 -- Form of Opinion of Thompson, Hine & Flory LLP EXHIBIT G -- Form of Officers' Certificate EXHIBIT H -- Form of Pledge Agreement EXHIBIT I -- Form of Security Agreement EXHIBIT J -- Form of Subsidiaries Guaranty EXHIBIT K -- Form of Assignment and Assumption Agreement EXHIBIT L -- Form of Intercompany Note EXHIBIT M -- Form of Shareholder Subordinated Note (v) CREDIT AGREEMENT, dated as of June 16, 2000, among DAYTON SUPERIOR CORPORATION, an Ohio corporation (the "Borrower"), the lenders from time to time party hereto (each, a "Lender" and, collectively, the "Lenders"), and BANKERS TRUST COMPANY, as Administrative Agent (in such capacity, the "Administrative Agent"). Unless otherwise defined herein, all capitalized terms used herein and defined in Section 11 are used herein as so defined. W I T N E S S E T H: WHEREAS, subject to and upon the terms and conditions herein set forth, the Lenders are willing to make available to the Borrower the credit facilities provided for herein; NOW, THEREFORE, IT IS AGREED: SECTION 1. AMOUNT AND TERMS OF CREDIT. 1.01 COMMITMENTS. (a) Subject to and upon the terms and conditions set forth herein, each Lender with an Initial A Term Loan Commitment severally agrees to make a term loan or term loans (each, an "Initial A Term Loan" and, collectively, the "Initial A Term Loans") to the Borrower, which Initial A Term Loans: (i) only may be incurred on each Initial A Term Loan Borrowing Date occurring prior to the A Term Loan Maturity Date; (ii) shall be denominated in U.S. Dollars; (iii) except as hereafter 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 (x) all Initial A Term Loans made as part of the same Borrowing shall, unless otherwise specifically provided herein, consist of Initial A Term Loans of the same Type and (y) unless the Syndication Date has occurred (at which time this clause (y) shall no longer be applicable), no more than three Borrowings of Initial A Term Loans to be maintained as Eurodollar Loans may be incurred prior to the 90th day after the Initial Borrowing Date (each of which Borrowings shall begin and end on the same day as any Borrowing of Initial B Term Loans that is maintained as Eurodollar Loans); and (iv) shall not exceed for any such Lender at the time of incurrence thereof on any Initial A Term Loan Borrowing Date that aggregate principal amount which equals the Initial A Term Loan Commitment of such Lender as in effect on such Initial A Term Loan Borrowing Date (before giving effect to any reduction thereof on such date pursuant to Section 3.03(b)). Once repaid, Initial 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 U.S. Dollars; (iii) except as hereafter 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 (x) all Initial B Term Loans made as part of the same Borrowing shall, unless otherwise specifically provided herein, consist of Initial B Term Loans of the same Type and (y) unless the Syndication Date has occurred (at which time this clause (y) shall no longer be applicable), no more than three Borrowings of Initial B Term Loans to be maintained as Eurodollar Loans may be incurred prior to the 90th day after the Initial Borrowing Date (each of which Borrowings of Eurodollar Loans may only have an Interest Period of one month, and the first of which Borrowings may only be made on the Initial Borrowing Date or on or prior to the sixth Business Day after the Initial Borrowing Date and with each such Borrowing made thereafter to be made only on the last day of the Interest Period of the immediately preceding Borrowing of Eurodollar Loans); and (iv) shall not exceed for any such Lender at the time of incurrence thereof on the Initial Borrowing Date that aggregate principal amount as is equal to the Initial B Term Loan Commitment of such Lender as in effect on the Initial Borrowing Date (before giving effect to the termination thereof on such date pursuant to Section 3.03(c)). Once repaid, Initial B Term Loans incurred hereunder may not be reborrowed. (c) Subject to Section 1.15 and the other terms and conditions set forth herein, each Lender with an Incremental A Term Loan Commitment severally agrees to make a term loan or term loans (each, an "Incremental A Term Loan" and, collectively, the "Incremental A Term Loans") to the Borrower, which Incremental A Term Loans: (i) only may be incurred pursuant to a single drawing on the respective Incremental A Term Loan Borrowing Date (which date, in any event, shall be the date of the effectiveness of the applicable Incremental Term Loan Commitment Agreement pursuant to which such Incremental A Term Loans are to be made and shall not be later than the Incremental Term Loan Commitment Termination Date); (ii) shall be denominated in U.S. Dollars; (iii) except as hereafter 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 (x) all Incremental A Term Loans made as part of the same Borrowing shall, unless otherwise specifically provided herein, consist of Incremental A Term Loans of the same Type and (y) unless the Syndication Date has occurred (at which time this clause (y) shall no longer be applicable), no more than three Borrowings of Incremental A Term Loans to be maintained as Eurodollar Loans may be incurred prior to the 90th day after the Initial Borrowing Date (each of which Borrowings of Eurodollar Loans shall begin and end on the same day as any Borrowing of Initial B Term Loans that is maintained as Eurodollar Loans); and (iv) shall be made by each such Lender in that aggregate principal amount which does not exceed the Incremental A Term Loan Commitment of such Lender on any such Incremental A Term Loan Borrowing Date (before giving effect to the termination thereof on such date pursuant to Section 3.03(d)). Once repaid, Incremental A Term Loans incurred hereunder may not be reborrowed. (d) Subject to Section 1.15 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) only may be incurred pursuant to a single drawing on the respective Incremental B Term Loan Borrowing Date (which date, in any event, shall be the date of the effectiveness of the applicable Incremental Term Loan Commitment Agreement pursuant to which such Incremental B Term Loans are to be made and shall not be later than the Incremental Term Loan Commitment Termination Date); (ii) shall be denominated in U.S. Dollars; (iii) except as hereafter provided, shall, at the option of the Borrower, be incurred and maintained as, and/or converted into, Base Rate Loans or Eurodollar -2- Loans, PROVIDED that (x) all Incremental B Term Loans made as part of the same Borrowing shall, unless otherwise specifically provided herein, consist of Incremental B Term Loans of the same Type and (y) unless the Syndication Date has occurred (at which time this clause (y) shall no longer be applicable), no more than three Borrowings of Incremental B Term Loans to be maintained as Eurodollar Loans may be incurred prior to the 90th day after the Initial Borrowing Date (each of which Borrowings of Eurodollar Loans shall begin and end on the same day as any Borrowing of Initial B Term Loans that is maintained as Eurodollar Loans); 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 each such Incremental B Term Loan Borrowing Date (before giving effect to the termination thereof on such date pursuant to Section 3.03(e)). Once repaid, Incremental B Term Loans incurred hereunder may not be reborrowed. (e) Subject to and upon the terms and conditions set forth herein, each RL Lender severally agrees, at any time and from time to time on and after the Initial Borrowing Date and prior to the Revolving Loan Maturity Date, to make a revolving loan or revolving loans (each, a "Revolving Loan" and, collectively, the "Revolving Loans") to the Borrower, which Revolving Loans: (i) shall be denominated in U.S. Dollars; (ii) 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 (x) all Revolving Loans made as part of the same Borrowing shall, unless otherwise specifically provided herein, consist of Revolving Loans of the same Type and (y) unless the Syndication Date has occurred (at which time this clause (y) shall no longer be applicable), no more than three Borrowings of Revolving Loans to be maintained as Eurodollar Loans may be incurred prior to the 90th day after the Initial Borrowing Date (each of which Borrowings of Eurodollar Loans shall begin and end on the same day as any Borrowing of Initial B Term Loans that is maintained as Eurodollar Loans); (iii) may be repaid and reborrowed in accordance with the provisions hereof; and (iv) shall not exceed for any such RL Lender at any time outstanding that aggregate principal amount which, when combined with such RL Lender's Percentage of the Swingline Loans then outstanding and the Letter of Credit Outstandings (exclusive of Unpaid Drawings relating to Letters of Credit which are repaid with the proceeds of, and simultaneously with the incurrence of, the respective incurrence of Revolving Loans) at such time, equals the Revolving Loan Commitment of such RL Lender at such time. (f) Subject to and upon the terms and conditions set forth herein, the Swingline Lender in its individual capacity agrees to make at any time and from time to time on and after the Initial Borrowing Date and prior to the Swingline Expiry Date, a revolving loan or revolving loans to the Borrower (each, a "Swingline Loan" and, collectively, the "Swingline Loans"), which Swingline Loans: (i) shall be made and maintained as Base Rate Loans; (ii) shall be denominated in U.S. 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 Letter of Credit Outstandings (exclusive of Unpaid Drawings relating to Letters of Credit which are repaid with the proceeds of, and simultaneously with the incurrence of, the respective incurrence of Revolving Loans) at such time, an amount equal to the Total Revolving Loan Commitment then in effect; and (v) shall not exceed in aggregate principal amount at any time -3- outstanding the Maximum Swingline Amount. The Swingline Lender shall not be obligated to make any Swingline Loans at a time when a Lender Default exists 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' Percentage of the outstanding Swingline Loans. The Swingline Lender will not make a Swingline Loan after it has received written notice from the Borrower, any other Credit Party or the Required Lenders stating that a Default or an Event of Default exists until such time as the Swingline Lender shall have received a written notice of (i) rescission of such notice from the party or parties originally delivering the same or (ii) a waiver of such Default or Event of Default from the Required Lenders. (g) On any Business Day, the Swingline Lender may, in its sole discretion, give notice to the RL Lenders that its outstanding Swingline Loans shall be funded with a Borrowing of Revolving Loans (PROVIDED that each 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 a Borrowing of 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 RL Lender's RL Percentage, and the proceeds thereof shall be applied directly to repay the Swingline Lender for such outstanding Swingline Loans. Each RL Lender hereby irrevocably agrees to make Base Rate 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) that the amount of the Mandatory Borrowing may not comply with the Minimum Borrowing Amount otherwise required hereunder, (ii) whether any conditions specified in Section 5 or 6 are then satisfied, (iii) whether a Default or an Event of Default has occurred and is continuing, (iv) the date of such Mandatory Borrowing and (v) the amount of the Total 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 in respect of the Borrower), each RL Lender hereby agrees that it shall forthwith purchase from the Swingline Lender (without recourse or warranty) such assignment of 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 the respective assignment is purchased and, to the extent attributable to the purchased assignment, shall be payable to the RL Lender purchasing same from and after such date of purchase and (y) at the time any purchase of assignments 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 the assignment so 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 assignment, at the overnight Federal Funds Rate for the first three days and at -4- the rate otherwise applicable to Revolving Loans maintained as Base Rate Loans hereunder for each day thereafter. (h) Subject to and upon the terms and conditions set forth herein, each Lender with an Acquisition Loan Commitment severally agrees to make a revolving loan or revolving loans (each, an "Acquisition Revolving Loan" and, collectively, the "Acquisition Revolving Loans") to the Borrower, which Acquisition Revolving Loans: (i) may only be incurred on each Acquisition Loan Borrowing Date prior to the Conversion Date; (ii) shall be denominated in U.S. 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 (x) all Acquisition Revolving Loans made as part of the same Borrowing shall, unless otherwise specifically provided herein, consist of Acquisition Revolving Loans of the same Type and (y) unless the Syndication Date has occurred (at which time this clause (y) shall no longer be applicable), no more than three Borrowings of Acquisition Revolving Loans to be maintained as Eurodollar Loans may be incurred prior to the 90th day after the Initial Borrowing Date (each of which Borrowings of Eurodollar Loans shall begin and end on the same day as any Borrowing of Initial B Term Loans that is maintained as Eurodollar Loans); (iv) may be repaid and reborrowed at any time prior to the Conversion Date in accordance with the provisions hereof; and (v) shall not exceed for any such Lender at any time outstanding that aggregate principal amount which equals the Acquisition Loan Commitment of such Lender at such time. (i) Subject to and upon the terms and conditions set forth herein, the Borrower and each AL Lender agree that, at 9:00 A.M. (New York time) on the Conversion Date, the aggregate principal amount of all Acquisition Revolving Loans owing to each AL Lender and outstanding at such time shall (unless such Acquisition Revolving Loans have been declared (or have become) due and payable pursuant to this Agreement), without any notice or action by any party hereto, automatically convert to and thereafter constitute term loans (each, an "Acquisition Term Loan" and, collectively, the "Acquisition Term Loans") owing to each such AL Lender hereunder. The Acquisition Term Loans shall, subject to the provisions of Section 1.02, initially be continued as one or more Borrowings of Base Rate Loans or Eurodollar Loans in accordance with the designation of such Borrowings immediately prior to giving effect to such conversion, with any Interest Periods applicable thereto to continue in effect until the expiration thereof, PROVIDED that, except as otherwise specifically provided herein, all Acquisition Term Loans comprising the same Borrowing shall at all times be of the same Type. Once repaid, Acquisition Term Loans incurred hereunder may not be reborrowed. 1.02 MINIMUM BORROWING AMOUNTS, ETC. The aggregate principal amount of each Borrowing of Loans shall not be less than the Minimum Borrowing Amount applicable to such Loans, PROVIDED that Mandatory Borrowings shall be made in the amounts required by Section 1.01(g). More than one Borrowing may be incurred on any day, but at no time shall there be outstanding more than thirteen Borrowings of Eurodollar Loans in the aggregate for all Tranches of Loans; PROVIDED, HOWEVER, for every $10,000,000 of Incremental Term Loan Commitments that the Borrower has obtained pursuant to Section 1.15, the Borrower shall be entitled to one additional Borrowing of Eurodollar Loans hereunder. -5- 1.03 NOTICE OF BORROWING. (a) Whenever the Borrower desires to incur Loans hereunder (excluding Swingline Loans, Revolving Loans incurred pursuant to a Mandatory Borrowing and Acquisition Term Loans), the Borrower shall give the Administrative Agent at the Notice Office, prior to 12:00 Noon (New York time), at least three Business Days' prior written notice (or telephonic notice promptly confirmed in writing) of each Borrowing of Eurodollar Loans and at least one Business Day's prior written notice (or telephonic notice promptly confirmed in writing) of each Borrowing of Base Rate Loans to be made hereunder. Each such notice (each, a "Notice of Borrowing") shall, except as otherwise expressly provided in Section 1.10, be irrevocable, and, in the case of each written notice and each confirmation of telephonic notice, shall be in the form of Exhibit A-1, appropriately completed to specify: (i) the aggregate principal amount of the Loans to be made pursuant to such Borrowing; (ii) the date of such Borrowing (which shall be a Business Day); (iii) whether the respective Borrowing shall consist of Initial A Term Loans, Initial B Term Loans, Incremental A Term Loans, Incremental B Term Loans, Revolving Loans or Acquisition Revolving Loans; (iv) whether the respective Borrowing shall consist of Base Rate Loans or, to the extent permitted hereunder, Eurodollar Loans and, if Eurodollar Loans, the Interest Period to be initially applicable thereto; and (v) in the case of a Borrowing of Revolving Loans or Acquisition 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 after giving effect to such Borrowing (which amount shall be sufficient to satisfy the requirements of Section 8.14(a)). The Administrative Agent shall promptly give each Lender which is required to make Loans of the Tranche specified in the respective Notice of Borrowing, written notice (or telephonic notice promptly confirmed in writing) of each 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) Whenever the Borrower desires to incur Swingline Loans hereunder, the Borrower shall give the Swingline Lender not later than 12:00 Noon (New York time) on the day such Swingline Loan is to be incurred, written notice (or telephonic notice promptly confirmed in writing) of each Swingline Loan to be made hereunder. Each such notice shall be irrevocable and shall specify in each case (x) the date of such Borrowing (which shall be a Business Day), (y) the aggregate principal amount of the Swingline Loan to be made pursuant to such Borrowing and (z) in the case of a Borrowing of Swingline 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 after giving effect to such Borrowing (which amount shall be sufficient to satisfy the requirements of Section 8.14(a)). Mandatory Borrowings shall be made upon the notice specified in Section 1.01(g), with the Borrower irrevocably agreeing, by its incurrence of any Swingline Loan, to the making of Mandatory Borrowings as set forth in such Section 1.01(g). (c) Without in any way limiting the obligation of the Borrower to confirm in writing any telephonic notice permitted to be given hereunder, the Administrative Agent or the Swingline Lender (in the case of a Borrowing of Swingline Loans) or the Letter of Credit Issuer (in the case of the issuance of Letters of Credit), as the case may be, may prior to receipt of written confirmation act without liability upon the basis of such telephonic notice, believed by -6- the Administrative Agent, the Swingline Lender or the Letter of Credit Issuer, as the case may be, in good faith to be from an Authorized Officer of the Borrower. In each such case, the Borrower hereby waives the right to dispute the Administrative Agent's, the Swingline Lender's or the Letter of Credit Issuer's record of the terms of such telephonic notice. 1.04 DISBURSEMENT OF FUNDS. (a) Not later than 1:00 P.M. (New York time) on the date specified in each Notice of Borrowing (or (x) in the case of Swingline Loans, not later than 2:00 P.M. (New York time) on the date specified in Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, not later than 12:00 Noon (New York time) on the date specified in Section 1.01(g)), each Lender with a Commitment of the respective Tranche will make available its PRO RATA share, if any, of each Borrowing requested to be made on such date (or in the case of Swingline Loans, the Swingline Lender shall make available the full amount thereof) in the manner provided below. All amounts shall be made available to the Administrative Agent in U.S. Dollars and in immediately available funds at the Payment Office and, except for Revolving Loans made pursuant to a Mandatory Borrowing, the Administrative Agent promptly will make available to the Borrower by depositing to its account at the Payment Office the aggregate of the amounts so made available in the type of funds received. 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 its portion of the Borrowing or Borrowings 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, in reliance upon such assumption, may (in its sole discretion and without any obligation to do so) 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 and the Administrative Agent has made available same to the Borrower, 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 shall also 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 to the date such corresponding amount is recovered by the Administrative Agent, at a rate per annum equal to (x) if paid by such Lender, the overnight Federal Funds Rate for the first three days and at the interest rate otherwise applicable to such Loans for each day thereafter and (y) if paid by the Borrower, the then applicable rate of interest for such Loans, calculated in accordance with Section 1.08. (b) Nothing in this Agreement shall be deemed to relieve any Lender from its obligation to fulfill its commitments hereunder or to prejudice any rights which the Borrower may have against any Lender as a result of any default by such Lender hereunder. 1.05 NOTES. (a) The Borrower's obligation to pay the principal of, and interest on, all the Loans made to it by each Lender shall be evidenced in the Register maintained by the Administrative Agent pursuant to Section 13.17 and shall, if requested by such Lender, also be -7- evidenced (i) if A Term Loans, by a promissory note 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 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 substantially in the form of Exhibit B-3 with blanks appropriately completed in conformity herewith (each, a "Revolving Note" and, collectively, the "Revolving Notes"), (iv) if Swingline Loans, by a promissory note substantially in the form of Exhibit B-4 with blanks appropriately completed in conformity herewith (the "Swingline Note"), and (v) if Acquisition Loans, by a promissory note duly executed and delivered by the Borrower substantially in the form of Exhibit B-5 with blanks appropriately completed in conformity herewith (each, an "Acquisition Note" and, collectively, the "Acquisition Notes"). (b) The A Term Note issued to each Lender with an A Term Loan Commitment or with 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 the issuance thereof), (iii) be in a stated principal amount equal to the A Term Loans made by such Lender on the Initial Borrowing Date (or, if issued after the Initial Borrowing Date, be in a stated principal amount equal to the outstanding principal amount of A Term Loans of such Lender at such time) 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 repayment 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 with a B Term Loan Commitment or with 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 the issuance thereof), (iii) be in a stated principal amount equal to the B Term Loans made by such Lender on the Initial Borrowing Date (or, if issued after the Initial Borrowing Date, be in a stated principal amount equal to the outstanding principal amount of B Term Loans of such Lender at such time) 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 repayment 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 with a Revolving Loan Commitment or with 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 -8- stated principal amount equal to the Revolving Loan Commitment of such Lender (or, if issued after the termination of the Total Revolving Loan Commitment, be in a stated principal amount equal to the outstanding principal amount of Revolving Loans of such Lender at such time) and be payable in the outstanding principal amount of Revolving Loans evidenced thereby, (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 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. (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 equal to the Maximum Swingline Amount and be payable in the outstanding principal amount of Swingline Loans evidenced thereby, (iv) mature on the Swingline Expiry Date, (v) bear interest as provided in 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) The Acquisition Note issued to each Lender with an Acquisition Loan Commitment or with outstanding Acquisition Loans shall (i) be executed by the Borrower, (ii) be payable to such Lender 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 equal to the Acquisition Loan Commitment of such Lender (or, if issued after the termination of the Total Acquisition Loan Commitment, be in a stated principal amount equal to the outstanding principal amount of Acquisition Loans of such Lender at such time) and be payable in the outstanding principal amount of Acquisition Loans evidenced thereby, (iv) mature on the Acquisition 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. (g) 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. 1.06 CONVERSIONS. The Borrower shall have the option to convert on any Business Day occurring on or after the Initial Borrowing Date, all or a portion at least equal to the applicable Minimum Borrowing Amount of the outstanding principal amount of Loans (other than Swingline Loans which shall at all times be maintained as Base Rate Loans) made pursuant to one or more Borrowings of one or more Types of Loans under a single Tranche into a Borrowing or Borrowings of another Type of Loan under such Tranche; PROVIDED that (i) except as -9- 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 partial conversion of a Borrowing of Eurodollar Loans shall reduce the outstanding principal amount of the Eurodollar Loans made pursuant to such Borrowing to less than the Minimum Borrowing Amount applicable thereto, (ii) unless the Required Lenders otherwise agree, Base Rate Loans may only be converted into Eurodollar Loans if no Default or Event of Default is in existence on the date of the conversion, (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 after the Initial Borrowing Date, conversions of Base Rate Loans into Eurodollar Loans may only be made if any such conversion is effective on the first day of the first, second or third Interest Period referred to in clause (y) of the proviso in each of Sections 1.01(a)(iii), 1.01(b)(iii), 1.01(c)(iii), 1.01(d)(iii), 1.01(e)(ii) and 1.01(h)(iii) and so long as such conversion does not result in a greater number of Borrowings of Eurodollar Loans prior to the 90th day after the Initial Borrowing Date as are permitted under such Sections, and (iv) Borrowings of Eurodollar Loans resulting from this Section 1.06 shall be limited in number as provided in 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' (or one Business Day's in the case of a conversion into Base Rate Loans) prior written notice (or telephonic notice promptly confirmed in writing) (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(s) pursuant to which the Loans were made and, if to be converted into a Borrowing of 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 Initial A Term Loans, Initial B Term Loans, Incremental A Term Loans, Incremental B Term Loans, Revolving Loans and Acquisition Revolving Loans under this Agreement shall be incurred by the Borrower from the Lenders PRO RATA on the basis of their Initial A Term Loan Commitments, Initial B Term Loan Commitments, Incremental A Term Loan Commitments, Incremental B Term Loan Commitments, Revolving Loan Commitments or Acquisition Loan Commitments, as the case may be; PROVIDED that all Borrowings of Revolving Loans made pursuant to a Mandatory Borrowing shall be incurred from the Lenders PRO RATA on the basis on their RL Percentages. 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 to be made by it hereunder, regardless of the failure of any other Lender to fulfill its commitments hereunder. 1.08 INTEREST. (a) The unpaid principal amount of each Base Rate Loan shall bear interest from the date of the Borrowing thereof until the earlier of (i) the maturity (whether by acceleration or otherwise) of such Base Rate Loan and (ii) the conversion of such Base Rate Loan to a Eurodollar Loan pursuant to Section 1.06, at a rate per annum which shall at all times be the Base Rate plus the Applicable Margin each as in effect from time to time. -10- (b) The unpaid principal amount of each Eurodollar Loan shall bear interest from the date of the Borrowing thereof until the earlier of (i) the maturity (whether by acceleration or otherwise) of such Eurodollar Loan and (ii) the conversion of such Eurodollar Loan to a Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10(b), as applicable, at a rate per annum which shall at all times be the Applicable Margin plus the Eurodollar Rate for such Interest Period. (c) Overdue principal and, to the extent permitted by law, overdue interest in respect of each Loan shall, in each case, bear interest at a rate per annum equal to the greater of (x) the rate which is 2% in excess of the rate then borne by the respective 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 all other overdue amounts payable hereunder and under any other Credit Document shall bear interest at the rate per annum equal to the rate which is 2% in excess of the rate applicable to Revolving Loans that are maintained as Base Rate Loans from time to time. Interest which accrues under this Section 1.08(c) shall be payable on demand. (d) Interest shall accrue from and including the date of any Borrowing to but excluding the date of any repayment thereof and shall be payable (i) in respect of each Base Rate Loan, (x) quarterly in arrears on each Quarterly Payment Date and (y) in the case of a repayment or prepayment in full of all outstanding Base Rate Loans of a given Tranche, on the date of such repayment or prepayment (but only if the Commitment for such Tranche of Loans being repaid or required to be repaid has theretofore been terminated (or is being terminated (or required to be terminated) concurrently with such repayment or prepayment)), (ii) in respect of each Eurodollar Loan, on (x) the date of any prepayment or repayment thereof (on the amount prepaid or repaid), (y) the date of any conversion into a Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10(b), as applicable (on the amount converted) and (z) 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 (iii) in respect of each Loan, at maturity (whether by acceleration or otherwise) and, after such maturity, on demand. (e) All computations of interest hereunder shall be made in accordance with Section 13.07(b). (f) Upon each Interest Determination Date, the Administrative Agent shall determine the Eurodollar Rate for the respective Interest Period or Interest Periods 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 a Notice of Borrowing or Notice of Conversion/Continuation in respect of the making of, or conversion into, a Borrowing of Eurodollar Loans (in the case of the initial Interest Period applicable thereto) or prior to 12:00 Noon (New York time) on the third Business Day prior to the expiration of an Interest Period applicable to a Borrowing of Eurodollar Loans (in the case of any subsequent Interest Period), the Borrower shall have the right to elect by giving the Administrative Agent a Notice of Conversion/Continuation (appropriately completed) (or telephonic notice promptly confirmed in -11- writing) of the Interest Period applicable to such Borrowing, which Interest Period shall, at the option of the Borrower (but otherwise subject to clause (y) of the proviso to each of Sections 1.01(a)(iii), 1.01(b)(iii), 1.01(c)(iii), 1.01(d)(iii), 1.01(e)(ii) and 1.01(h)(iii) and to clause (iii) of the proviso to Section 1.06), be a one, two, three or six month period. Notwithstanding anything to the contrary contained above: (i) all Eurodollar Loans comprising a Borrowing shall at all times have the same Interest Period; (ii) the initial Interest Period for any Borrowing of Eurodollar Loans shall commence on the date of such Borrowing (including the date of any conversion from a Borrowing of Base Rate Loans) and each Interest Period occurring thereafter in respect of such Borrowing shall commence on the day on which the next preceding Interest Period applicable thereto expires; (iii) if any Interest Period for any Borrowing of Eurodollar Loans 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 would otherwise expire on a day which is not a Business Day, such Interest Period shall expire on the next succeeding Business Day, PROVIDED that if any Interest Period for any Borrowing of Eurodollar Loans 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) no Interest Period for a Borrowing under a Tranche of Loans shall be elected which would extend beyond the respective Maturity Date for such Tranche; (vi) unless the Required Lenders otherwise agree, no Interest Period may be elected at any time when a Default or an Event of Default is then in existence; (vii) no Interest Period in respect of any Borrowing of A Term Loans shall be elected which extends beyond any date upon which a Tranche A Scheduled Repayment will be required to be made under Section 4.02(b) if, after giving effect to the election of such Interest Period, the aggregate principal amount of such A Term Loans which have Interest Periods which will expire after such date will be in excess of the aggregate principal amount of A Term Loans then outstanding less the aggregate amount of such required Tranche A Scheduled Repayment; (viii) no Interest Period in respect of any Borrowing of B Term Loans shall be elected which extends beyond any date upon which a Tranche B Scheduled Repayment will be required to be made under Section 4.02(c) if, after giving effect to the election of such Interest Period, the aggregate principal amount of such B Term Loans which have Interest Periods which will expire after such date will be in excess of the aggregate principal -12- amount of B Term Loans then outstanding less the aggregate amount of such required Tranche B Scheduled Repayment; and (ix) no Interest Period in respect of any Borrowing of Acquisition Loans shall be elected which extends beyond any date upon which an Acquisition Loan Scheduled Repayment will be required to be made under Section 4.02(d) if, after giving effect to the election of such Interest Period, the aggregate principal amount of such Acquisition Loans which have Interest Periods which will expire after such date will be in excess of the aggregate principal amount of Acquisition Loans then outstanding less the aggregate amount of such required Acquisition Loan Scheduled Repayment. If upon the expiration of any Interest Period applicable to a Borrowing of Eurodollar Loans, the Borrower has failed to elect, or is not permitted to elect, a new Interest Period to be applicable to the respective Borrowing of Eurodollar Loans as provided above, the Borrower shall be deemed to have elected to convert such Borrowing into a Borrowing of Base Rate Loans effective as of the expiration date of such current Interest Period. 1.10 INCREASED COSTS; ILLEGALITY; ETC. (a) In the event that (x) in the case of clause (i) below, the Administrative Agent or (y) in the case of clauses (ii) and (iii) below, any Lender, shall have determined (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto): (i) on any Interest Determination Date, that, by reason of any changes arising after the date of this Agreement affecting the interbank Eurodollar market, adequate and fair means do not exist for ascertaining the applicable interest rate on the basis provided for in the definition of Eurodollar 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 Eurodollar Loans because of (x) any change since the date of this Agreement in any applicable law, governmental rule, regulation, guideline, order 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, guideline, order or request (such as, for example, but not limited to, (A) without duplication of any amounts payable under Section 4.04(a), a change in the basis of taxation or payment to any Lender of the principal of or interest on such Eurodollar Loans or any other amounts payable hereunder (except for changes with respect to any tax imposed on, or determined by reference to, the net income or net profits of such Lender pursuant to the laws of the jurisdiction in which such Lender is organized or in which such Lender's 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 affecting the interbank Eurodollar market or the position of such Lender in such market; or (iii) at any time since the date of this Agreement, that the making or continuance of any Eurodollar Loan has become unlawful by compliance by such Lender with any law, -13- governmental rule, regulation, guideline or order (or would conflict with any governmental rule, regulation, guideline, request or order not having the force of law but with which such Lender customarily complies even though the failure to comply therewith would not be unlawful), or has become impracticable as a result of a contingency occurring after the date of this Agreement which materially and adversely affects the interbank Eurodollar market; then, and in any such event, such Lender (or the Administrative Agent in the case of clause (i) above) shall promptly give notice (by telephone confirmed in writing) to the Borrower and (except in the case of clause (i)) to the Administrative Agent of such determination (which notice the Administrative Agent shall promptly transmit to each of the other Lenders). Thereafter, (x) in the case of clause (i) above, 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, (y) in the case of clause (ii) above, the Borrower agrees, subject to Section 1.14, to pay to such Lender, upon written demand 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 the basis for the calculation thereof, submitted to the Borrower by such Lender shall, absent manifest error, be final and conclusive and binding upon all parties hereto, although the failure to give any such notice shall not release or diminish any of the Borrower's obligations to pay additional amounts pursuant to this Section 1.10(a) upon the subsequent receipt of such notice) and (z) 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. (b) At any time that any Eurodollar Loan is affected by the circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and in the case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii) the Borrower shall) either (i) if the affected Eurodollar Loan is then being made pursuant to a Borrowing, cancel said Borrowing by giving the Administrative Agent telephonic notice (confirmed promptly in writing) thereof on the same date that the Borrower was notified by a Lender pursuant to Section 1.10(a)(ii) or (iii)), or (ii) if the affected Eurodollar Loan is then outstanding, upon at least three Business Days' notice to the Administrative Agent, require the affected Lender to convert each such Eurodollar Loan into a Base Rate Loan; PROVIDED that 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 shall have determined that the adoption or effectiveness after the date hereof of any applicable law, rule or regulation regarding capital adequacy, or any change therein after the date hereof, or any change after the date hereof in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by such Lender or any -14- corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency adopted or effective after the date hereof, has or would have the effect of reducing the rate of return on such Lender's or such other corporation's capital or assets as a consequence of such Lender's Commitment or Commitments hereunder or its obligations hereunder to a level below that which such Lender or such other corporation could have achieved but for such adoption, effectiveness, change or compliance (taking into consideration such Lender's or such other corporation's policies with respect to capital adequacy), then from time to time, upon written demand by such Lender (with a copy to the Administrative Agent), accompanied by the notice referred to in the last sentence of this clause (c), the Borrower shall, subject to Section 1.14, pay to such Lender such additional amount or amounts as will compensate such Lender or such other corporation for such reduction. Each Lender, upon determining in good faith that any additional amounts will be payable pursuant to this Section 1.10(c), will give prompt written notice thereof to the Borrower (a copy of which shall be sent by such Lender to the Administrative Agent), which notice shall set forth the basis of the calculation of such additional amounts, although the failure to give any such notice shall not release or diminish the Borrower's obligations to pay additional amounts pursuant to this Section 1.10(c) upon the subsequent receipt of such notice. A Lender's reasonable good faith 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. 1.11 COMPENSATION. The Borrower shall, subject to Section 1.14, compensate each Lender, promptly upon its written request (which request shall set forth 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 Eurodollar Loans) 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, Eurodollar 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 repayment (including any repayment made pursuant to Section 4.01 or 4.02 or as a result of an acceleration of the Loans pursuant to Section 10 or as a result of the replacement of a Lender pursuant to Section 1.13 or 13.12(b)) or conversion of any Eurodollar Loans occurs on a date which is not the last day of an Interest Period applicable thereto; (iii) if any prepayment of any Eurodollar 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 its Eurodollar Loans when required by the terms of this Agreement or (y) an election made pursuant to Section 1.10(b). A Lender's basis for requesting compensation pursuant to this Section 1.11 and a Lender's calculation of the amount thereof, shall, absent manifest error, be final and conclusive and binding on all parties hereto. 1.12 CHANGE OF LENDING OFFICE. Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or (iii), 1.10(c), 2.05 or 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 -15- or Letters of Credit affected by such event; PROVIDED that such designation is made on such terms that, in the sole judgment of such Lender, such Lender and its lending office suffer no economic, legal or regulatory disadvantage, with the object of avoiding the consequences of the event giving rise to the operation of any 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 Section 1.10, 2.05 or 4.04. 1.13 REPLACEMENT OF LENDERS. (x) If any Lender becomes a Defaulting Lender, (y) upon the occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.05 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 to consent to a proposed change, waiver, discharge or termination with respect to this Agreement which has been approved by the Required Lenders as (and to the extent) provided in Section 13.12(b), the Borrower shall have the right, in accordance with Section 13.04(b), 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") with one or more other Eligible Transferee or Transferees, none of whom shall constitute a Defaulting Lender at the time of such replacement (collectively, the "Replacement Lender") and each of whom shall be reasonably acceptable to the Administrative Agent or, at the option of the Borrower, to replace only (a) the Revolving Loan Commitment (and outstandings pursuant thereto) of the Replaced Lender with an identical Revolving Loan Commitment provided by the Replacement Lender, (b) the Acquisition Loan Commitment (and outstandings pursuant thereto) of the Replaced Lender with an identical Acquisition Loan Commitment provided by the Replacement Lender or (c) in the case of a replacement as provided in Section 13.12(b) where the consent of the respective Lender is required with respect to less than all Tranches of its Loans or Commitments, the Commitments and/or outstanding Loans of such Lender in respect of each Tranche where the consent of such Lender would otherwise be individually required, with identical Commitments and/or Loans of the respective Tranche provided by the Replacement Lender; PROVIDED that: (i) at the time of any replacement 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 (A) an amount equal to the principal of, and all accrued interest on, all outstanding Loans of the Replaced Lender, (B) 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 (C) an amount equal to all accrued, but theretofore unpaid, Fees owing to the Replaced Lender (but only with respect to the relevant Tranche, in the case of the replacement of less than all Tranches of Loans then held by the respective Replaced Lender) pursuant to Section 3.01, (y) each Letter of Credit Issuer an amount equal to such Replaced Lender's RL Percentage of any Unpaid Drawing relating to -16- Letters of Credit issued by such Letter of Credit Issuer (which at such time remains an Unpaid Drawing) to the extent such amount was not theretofore funded by such Replaced Lender to the Letter of Credit Issuer 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; and (ii) all Obligations of the Borrower then owing to the Replaced Lender (other than those (a) specifically described in clause (i) above in respect of which the assignment purchase price has been, or is concurrently being, paid, but, in any event, including all amounts, if any, owing under Section 1.11 or (b) relating to any Tranche of Loans and/or Commitments of the respective Replaced Lender which will remain outstanding after giving effect to the respective replacement) shall be paid in full to such Replaced Lender concurrently with such replacement. Upon the execution of the respective Assignment and Assumption Agreements, the payment of amounts referred to in clauses (i) and (ii) above, recordation of the assignment on the Register by the Administrative Agent pursuant to Section 13.17 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 shall become a Lender hereunder and, unless the respective Replaced Lender continues to have outstanding Term Loans, an Initial A Term Loan Commitment, a Revolving Loan Commitment or an Acquisition Loan Commitment hereunder, the Replaced Lender shall cease to constitute a Lender hereunder, except with respect to indemnification provisions under this Agreement (including, without limitation, Sections 1.10, 1.11, 2.05, 4.04, 13.01 and 13.06), which shall survive as to such Replaced Lender. 1.14 LIMITATION ON ADDITIONAL AMOUNTS, ETC. Notwithstanding anything to the contrary contained in Sections 1.10, 1.11, 2.05 or 4.04, unless a Lender gives notice to the Borrower that the Borrower is obligated to pay an amount under any such Section within 180 days after the later of (x) the date such Lender incurs the respective increased costs, Taxes, loss, expense or liability, reduction in amounts received or receivable or reduction in return on capital or (y) the date such Lender has actual knowledge of its incurrence of the respective increased costs, Taxes, loss, expense or liability, reductions in amounts received or receivable or reduction in return on capital, then such Lender shall only be entitled to be compensated for such amount by the Borrower pursuant to said Section 1.10, 1.11, 2.05 or 4.04, as the case may be, to the extent the costs, Taxes, loss, expense or liability, reduction in amounts received or receivable or reduction in return on capital are incurred or suffered on or after the date which occurs 180 days prior to such Lender giving notice to the Borrower that the Borrower is obligated to pay the respective amounts pursuant to said Section 1.10, 1.11, 2.05 or 4.04, as the case may be. This Section 1.14 shall have no applicability to any Section of this Agreement or any other Credit Document other than said Sections 1.10, 1.11, 2.05 and 4.04. 1.15 INCREMENTAL TERM LOAN COMMITMENTS. (a) So long as no Default or Event of Default then exists or would result therefrom, the Borrower shall, in consultation with the Administrative Agent, have the right to request on one or more occasions on and after the Initial Borrowing Date and prior to the Incremental Term Loan Commitment Termination Date that one -17- or more Lenders (and/or one or more other Persons which will become Lenders as provided below) provide Incremental A Term Loan Commitments and/or Incremental B Term Loan Commitments and, subject to the terms and conditions contained in this Agreement, make Incremental A Term Loans and/or Incremental B Term Loans pursuant thereto, as the case may be, it being understood and agreed, however, that (i) except as otherwise expressly agreed to in writing by any Lenders with the Borrower prior to the Initial Borrowing Date with respect to the Conspec Acquisition, no Lender shall be obligated to provide an Incremental 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 Term Loan Commitment and executed and delivered to the Administrative Agent an Incremental Term Loan Commitment Agreement as provided in clause (b) of this Section 1.15, such Lender shall not be obligated to fund any Incremental A Term Loans and/or Incremental B Term Loans, as the case may be, (ii) any Lender (or, in the circumstances contemplated by clause (vi) below, any other Person which will qualify as an Eligible Transferee) may so provide an Incremental Term Loan Commitment without the consent of any other Lender, (iii) each provision of Incremental Term Loan Commitments pursuant to this Section 1.15 on a given date shall be in a minimum aggregate amount (for all Lenders (including in the circumstances contemplated by clause (vi) below, Eligible Transferees who will become Lenders)) of at least $5,000,000, (iv) the aggregate amount of all Incremental Term Loan Commitments permitted to be provided pursuant to this Section 1.15 and the aggregate principal amount of all Incremental Term Loans permitted to be made pursuant to Sections 1.01(c) and (d) shall not, in either case, exceed $50,000,000 (PROVIDED that if the Conspec Acquisition is consummated on or prior to the Conspec Acquisition Termination Date and in accordance with the provisions of Section 8.14(b), such amount shall be increased by the principal amount of Incremental B Term Loans used to consummate the Conspec Acquisition and to pay the fees and expenses incurred in connection therewith (which amount, however, shall not exceed $23,500,000)), (v) the relevant Incremental Term Loan Commitment Agreements shall specifically set forth whether the Incremental Term Loan Commitments in respect thereof shall constitute either Incremental A Term Loan Commitments or Incremental B Term Loan Commitments, (vi) if, within 10 Business Days after the Borrower has requested the then existing Lenders (other than Defaulting Lenders) to provide Incremental Term Loan Commitments pursuant to this Section 1.15 the Borrower has not received Incremental Term Loan Commitments in an aggregate amount equal to that amount of Incremental 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, with the consent of the Administrative Agent (which consent shall not be unreasonably withheld or delayed), request Incremental Term Loan Commitments from Persons which would qualify as Eligible Transferees hereunder in an aggregate amount equal to such deficiency (and with the fees to be paid to such Eligible Transferee to be no greater than that to be paid to the then existing Lenders providing Incremental Term Loan Commitments), (vii) to the extent that any Incremental Term Loans are to be incurred on or prior to the Conspec Acquisition Termination Date to finance the Conspec Acquisition, such Incremental Term Loans shall be Incremental B Term Loans, (viii) prior to any Incremental A Term Loan Borrowing Date or any Incremental B Term Loan Borrowing Date, the Borrower shall have certified to the Administrative Agent that the aggregate principal amount of any Incremental Term Loan being incurred is permitted to be incurred under, and in accordance with, the Senior Subordinated Note -18- Indenture (including, without limitation, by providing to the Administrative Agent (x) an officer's certificate of the Borrower's chief financial officer or other Authorized Financial Officer demonstrating (in reasonable detail) that the incurrence of the Incremental Term Loans on any such Incremental Term Loan Borrowing Date 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 4.09 of the Senior Subordinated Note Indenture) and (y) the officers' certificate referred to in clause (vi) of the definition of "Senior Debt" set forth in the Senior Subordinated Note Indenture), although the provisions of this clause (viii) shall not apply to any Incremental B Terms Loans incurred on or prior to the Conspec Acquisition Termination Date to finance the Conspec Acquisition, (ix) the proceeds of all Incremental Term Loans shall be used to finance Permitted Acquisitions and to pay the fees and expenses incurred in connection therewith, and (x) all actions taken by the Borrower pursuant to this Section 1.15 shall be done in coordination with the Administrative Agent. (b) At the time of any provision of Incremental Term Loan Commitments pursuant to this Section 1.15, (i) the Borrower, the Administrative Agent and each such Lender or other Eligible Transferee (each an "Incremental Term Loan Lender") which agrees to provide an Incremental Term Loan Commitment shall execute and deliver to the Administrative Agent an Incremental Term Loan Commitment Agreement substantially in the form of Exhibit C (appropriately completed), with the effectiveness of such Incremental Term Loan Lender's Incremental Term Loan Commitment to occur upon delivery of such Incremental Term Loan Commitment Agreement to the Administrative Agent, the payment of any fees (including, without limitation, any fees payable pursuant to clause (ii) below) required in connection therewith and the consummation of the Permitted Acquisition to the financed with respective Incremental Term Loans, (ii) the Administrative Agent shall receive from the Borrower (or, to the extent agreed to by the Borrower and the respective Incremental Term Loan Lender, from such respective Incremental Term Loan 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, 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 5A.03 as may be reasonably requested by the Administrative Agent, and such other matters as the Administrative Agent may reasonably request, although the provisions of this clause (iii) shall not apply to any Incremental B Term Loans incurred on or prior to the Conspec Acquisition Termination Date to finance the Conspec Acquisition. The Administrative Agent shall promptly notify each Lender as to the effectiveness of each Incremental Term Loan Commitment Agreement, and (i) at such time Annex I shall be deemed modified to reflect the Incremental A Term Loan Commitments and/or Incremental B Term Loan Commitments, as the case may be, of such Incremental Term Loan Lenders and (ii) to the extent requested by such Incremental Term Loan Lenders, A Term Notes and/or B Term Notes will be issued, at the Borrower's expense, to such Incremental Term Loan Lenders, to be in conformity with the requirements of Section 1.05 (with appropriate modifications) to the extent needed to reflect the new Incremental Term Loans made by such Incremental Term Loan Lenders. -19- (c) In connection with each incurrence of Incremental A Term Loans pursuant to Section 1.01(c) or Incremental B Term Loans pursuant to Section 1.01(d), 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 A Term Loans and B Term Loans, as the case may be, continue to participate in each Borrowing of outstanding A Term Loans and B Term Loans (after giving effect to the incurrence of Incremental A Term Loans or Incremental B Term Loans pursuant to Section 1.01(c) or (d), as the case may be) on a PRO RATA basis, including by adding the Incremental A Term Loans or the Incremental B Term Loans to be so incurred to the then outstanding Borrowings of A Term Loans or B Term Loans, as the case may be, on a PRO RATA basis even though as a result thereof such new Incremental A Term Loan or Incremental B Term Loan, as the case may be (to the extent required to be maintained as Eurodollar Loans), may effectively have a shorter Interest Period than the then outstanding Borrowings of A Term Loans or B Term Loans, as the case may be, and it is hereby agreed that (x) to the extent any then outstanding Borrowings of A Term Loans or 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 or (y) to the extent the Incremental A Term Loans and Incremental B Term Loans to be so incurred are added to the then outstanding Borrowings of A Term Loans or B Term Loans, as the case may be, which are maintained as Eurodollar Loans, the Lenders that have made such additional Incremental A Term Loans or Incremental B Term Loans, as the case may be, shall be entitled to receive an effective interest rate on such additional Incremental A Term Loans or Incremental B Term Loans, as the case may be, as is equal to the Eurodollar Rate as in effect two Business Days prior to the incurrence of such additional Incremental A Term Loans or Incremental B Term Loans, as the case may be, plus the then Applicable Eurodollar Rate Margin for such Tranche of Term Loans until the end of the respective Interest Period or Interest Periods with respect thereto. 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 a Letter of Credit Issuer at any time and from time to time on or after the Initial Borrowing Date and prior to the tenth Business Day (or the 30th day in the case of trade Letters of Credit) preceding the Revolving Loan Maturity Date to issue, for the account of the Borrower and in support of (x) trade obligations of the Borrower or any of its Subsidiaries that arise in the ordinary course of business and/or (y) on a standby basis, L/C Supportable Obligations of the Borrower or any of its Subsidiaries to any other Person, irrevocable sight letters of credit in such form as may be approved by such Letter of Credit Issuer (each such letter of credit, a "Letter of Credit" and, collectively, the "Letters of Credit"). Notwithstanding the foregoing, no Letter of Credit Issuer shall be under any obligation to issue any Letter of Credit 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 such Letter of Credit Issuer from issuing such Letter of Credit or any requirement of law applicable to such Letter of Credit Issuer or any request or directive (whether or not having the force of law) from any governmental -20- authority with jurisdiction over such Letter of Credit Issuer shall prohibit, or request that such Letter of Credit Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such Letter of Credit Issuer with respect to such Letter of Credit any restriction or reserve or capital requirement (for which such Letter of Credit Issuer is not otherwise compensated) not in effect on the date hereof, or any unreimbursed loss, cost or expense which was not applicable, in effect or known to such Letter of Credit Issuer as of the date hereof and which such Letter of Credit Issuer in good faith deems material to it; or (ii) such Letter of Credit Issuer shall have received notice from the Borrower, any other Credit Party or the Required Lenders prior to the issuance of such Letter of Credit of the type described in clause (v) of Section 2.01(b). (b) Notwithstanding the foregoing, (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) $15,000,000 or (y) when added to the aggregate principal amount of all Revolving Loans and Swingline Loans then outstanding, the Total Revolving Loan Commitment at such time; (ii) (x) each standby Letter of Credit shall have an expiry date occurring not later than one year after such Letter of Credit's date of issuance, PROVIDED that any such standby Letter of Credit may be extendable for successive periods of up to one year, but not beyond the tenth Business Day preceding the Revolving Loan Maturity Date, on terms acceptable to the Letter of Credit Issuer and (y) each trade Letter of Credit shall have an expiry date occurring not later than 180 days after such Letter of Credit's date of issuance; (iii) (x) no standby Letter of Credit shall have an expiry date occurring later than the tenth Business Day preceding the Revolving Loan Maturity Date and (y) no trade Letter of Credit shall have an expiry date occurring later than 30 days prior to the Revolving Loan Maturity Date; (iv) each Letter of Credit shall be denominated in U.S. Dollars; and (v) no Letter of Credit Issuer will issue any Letter of Credit after it has received written notice from the Borrower, any other Credit Party or the Required Lenders stating that a Default or an Event of Default exists until such time as such Letter of Credit Issuer shall have received a written notice of (x) rescission of such notice from the party or parties originally delivering the same or (y) a waiver of such Default or Event of Default by the Required Lenders. (c) Notwithstanding the foregoing, in the event a Lender Default exists, no Letter of Credit Issuer shall be required to issue any Letter of Credit unless the respective Letter of Credit Issuer has entered into arrangements satisfactory to it and the Borrower to eliminate such Letter of Credit Issuer's risk with respect to the participation in Letters of Credit of the Defaulting Lender or Lenders, including by cash collateralizing such Defaulting Lender's or Lenders' Percentage of the Letter of Credit Outstandings, as the case may be. 2.02 LETTER OF CREDIT REQUESTS. (a) Whenever the Borrower desires that a Letter of Credit be issued, the Borrower shall give the Administrative Agent and the respective Letter of Credit Issuer written notice (including by way of facsimile transmission to the Administrative Agent) thereof prior to 12:00 Noon (New York time) at least five Business Days (or such shorter -21- period as may be acceptable to the respective Letter of Credit Issuer) prior to the proposed date of issuance (which shall be a Business Day), which written notice shall be in the form of Exhibit D (appropriately completed) (each, a "Letter of Credit Request"). Each Letter of Credit Request shall include any other documents as such Letter of Credit Issuer customarily requires in connection therewith. (b) The making of each Letter of Credit Request shall be deemed to be a representation and warranty by the Borrower that such Letter of Credit may be issued in accordance with, and it will not violate the requirements of, Section 2.01(a). Unless the respective Letter of Credit Issuer has received notice from the Required Lenders before it issues a Letter of Credit that one or more of the applicable conditions specified in Section 5 or 6, as the case may be, are not then satisfied, or that the issuance of such Letter of Credit would violate Section 2.01(a), then such Letter of Credit Issuer may issue the requested Letter of Credit for the account of the Borrower in accordance with such Letter of Credit Issuer's usual and customary practice. 2.03 LETTER OF CREDIT PARTICIPATIONS. (a) Immediately upon the issuance by a Letter of Credit Issuer of any Letter of Credit, such Letter of Credit Issuer shall be deemed to have sold and transferred to each RL Lender (other than such Letter of Credit Issuer in its capacity, if any, as an RL Lender), and each such RL Lender (each, a "Participant") shall be deemed irrevocably and unconditionally to have purchased and received from such Letter of Credit Issuer, without recourse or warranty, an undivided interest and participation, to the extent of such Participant's RL Percentage, in such Letter of Credit, each drawing made thereunder and the obligations of the Borrower under this Agreement with respect thereto (although Letter of Credit Fees shall be payable directly to the Administrative Agent for the account of the RL Lenders as provided in Section 3.01(b) and the Participants shall have no right to receive any portion of any Facing Fees with respect to such Letters of Credit) and any security therefore or guaranty pertaining thereto. Upon any change in the Revolving Loan Commitments or RL Percentages of the RL Lenders pursuant to Section 1.13 or 13.04(b), it is hereby agreed that, with respect to all outstanding Letters of Credit and Unpaid Drawings with respect thereto, there shall be an automatic adjustment to the participations pursuant to this Section 2.03 to reflect the new RL Percentages of the assigning and assignee Lender. (b) In determining whether to pay under any Letter of Credit, no Letter of Credit Issuer shall have any obligation relative to the Participants other than to determine that any documents required to be delivered under such Letter of Credit 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 any Letter of Credit Issuer under or in connection with any Letter of Credit issued by it shall not create for such Letter of Credit Issuer any resulting liability to the Borrower, any 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 any Letter of Credit Issuer makes any payment under any Letter of Credit issued by it and the Borrower shall not have reimbursed such amount in full to -22- the Letter of Credit Issuer pursuant to Section 2.04(a), such Letter of Credit Issuer shall promptly notify the Administrative Agent, and the Administrative Agent shall promptly notify each Participant of such failure, and each such Participant shall promptly and unconditionally pay to the Administrative Agent for the account of such Letter of Credit Issuer, the amount of such Participant's RL Percentage of such payment in U.S. Dollars and in same day funds. If the Administrative Agent so notifies any Participant required to fund a payment under a Letter of Credit prior to 11:00 A.M. (New York time) on any Business Day, such Participant shall make available to the Administrative Agent at the Payment Office for the account of the respective Letter of Credit Issuer such Participant's RL Percentage of the amount of such payment on such Business Day in same day funds (and, to the extent such notice is given after 11:00 A.M. (New York time) on any Business Day, such Participant shall make such payment on the immediately following Business Day). If and to the extent such Participant shall not have so made its RL Percentage of the amount of such payment available to the Administrative Agent for the account of the respective Letter of Credit Issuer, such Participant agrees to pay to the Administrative Agent for the account of such Letter of Credit Issuer, forthwith on demand such amount, together with interest thereon, for each day from such date until the date such amount is paid to the Administrative Agent for the account of the Letter of Credit Issuer at the overnight Federal Funds Rate 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 Administrative Agent for the account of the respective Letter of Credit Issuer its RL Percentage of any payment under any Letter of Credit issued by it shall not relieve any other Participant of its obligation hereunder to make available to the Administrative Agent for the account of such Letter of Credit Issuer its applicable RL Percentage of any payment under any such 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 Administrative Agent for the account of such Letter of Credit Issuer such other Participant's RL Percentage of any such payment. (d) Whenever any Letter of Credit Issuer receives a payment of a reimbursement obligation as to which the Administrative Agent has received for the account of such Letter of Credit Issuer any payments from the Participants pursuant to clause (c) above, such Letter of Credit Issuer shall pay to the Administrative Agent and the Administrative Agent shall promptly pay to each Participant which has paid its RL Percentage thereof, in U.S. Dollars and in same day funds, an amount equal to such Participant's RL Percentage of the principal amount thereof and interest thereon accruing after the purchase of the respective participations. (e) Each Letter of Credit Issuer shall, promptly after each issuance of, or amendment or modification to, a standby Letter of Credit issued by it, give the Administrative Agent and the Borrower written notice of the issuance of, or amendment or modification to, such standby Letter of Credit, which notice shall be accompanied by a copy of such issuance, amendment or modification. Promptly upon receipt of each such notice, the Administrative Agent shall notify each Participant of such issuance, amendment or modification and should any Participant so request, the Administrative Agent shall provide such Participant with copies of any such issuance, amendment or modification. -23- (f) Each Letter of Credit Issuer (other than BTCo) shall deliver to the Administrative Agent, promptly on the first Business Day of each week, by facsimile transmission, the daily aggregate Stated Amount available to be drawn under the outstanding Letters of Credit issued by such Letter of Credit Issuer for the previous week. (g) The obligations of the Participants to make payments to the Administrative Agent for the account of the respective Letter of Credit Issuer with respect to Letters of Credit issued by it shall be irrevocable and not subject to counterclaim, set-off or other defense or any other 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, set-off, 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 Letter of Credit Issuer, any Lender, or 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 of its Subsidiaries and the beneficiary named in any such Letter of Credit); (iii) any draft, certificate or other document presented under the 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. 2.04 AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS. (a) The Borrower hereby agrees to reimburse each Letter of Credit Issuer, by making payment to the Administrative Agent in immediately available funds at the Payment Office, for any payment or disbursement made by such Letter of Credit Issuer under any Letter of Credit issued by it (each such amount so paid or disbursed until reimbursed, an "Unpaid Drawing") no later than one Business Day following the date of such payment or disbursement, with interest on the amount so paid or disbursed by such Letter of Credit Issuer, to the extent not reimbursed prior to 1:00 P.M. (New York time) on the date of such payment or disbursement, from and including the date paid or disbursed to but not including the date such Letter of Credit Issuer is reimbursed therefor at a rate per annum which shall be the Base Rate plus the Applicable Margin for Revolving Loans that are maintained as Base Rate Loans as in effect from time to time (plus an additional 2% per annum if not reimbursed by the third Business Day after the date of such payment or disbursement), such interest also to be payable on demand; PROVIDED that it is understood and agreed, however, that -24- the notices referred to below in this clause (a) shall not 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 Drawings shall be due and payable immediately without presentment, demand, protest or notice of any kind (all of which are hereby waived by each Credit Party) and shall bear interest at a rate per annum which shall be the Base Rate plus the Applicable Margin for Revolving Loans that are maintained as Base Rate Loans as in effect from time to time plus 2% on and after the third Business Day following the respective Drawing). Each Letter of Credit Issuer shall provide the Borrower prompt notice of any payment or disbursement made by it under any Letter of Credit issued by it, although the failure of, or delay in, giving any such notice shall not release or diminish the obligations of the Borrower under this Section 2.04(a) or under any other Section of this Agreement. (b) The Borrower's obligation under this Section 2.04 to reimburse the respective Letter of Credit Issuer with respect to Unpaid Drawings (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 of its Subsidiaries may have or have had against such Letter of Credit Issuer, the Administrative Agent or any Lender, including, without limitation, any defense based upon the failure of any drawing under a Letter of Credit issued by it to substantially 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 such Letter of Credit Issuer for any wrongful payment made by such Letter of Credit Issuer 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 such Letter of Credit Issuer (as determined by a court of competent jurisdiction in a final and non-appealable decision). 2.05 INCREASED COSTS. If the adoption or effectiveness after the date hereof of any applicable law, rule or regulation, order, guideline or request or any change therein after the date hereof, or any change adopted or effective after the date hereof in the interpretation or administration thereof by any governmental authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any Letter of -25- Credit Issuer or any Participant with any request or directive (whether or not having the force of law) by any such authority, central bank or comparable agency adopted or effective after the date hereof shall either (i) impose, modify or make applicable any reserve, deposit, capital adequacy or similar requirement against Letters of Credit issued by such Letter of Credit Issuer or such Participant's participation therein, or (ii) impose on any Letter of Credit Issuer or any Participant any other conditions directly or indirectly affecting this Agreement, any Letter of Credit or such Participant's participation therein; and the result of any of the foregoing is to increase the cost to such Letter of Credit Issuer or such Participant of issuing, maintaining or participating in any Letter of Credit, or to reduce the amount of any sum received or receivable by such Letter of Credit Issuer or such Participant hereunder or reduce the rate of return on its capital with respect to Letters of Credit, then, upon written demand to the Borrower by such Letter of Credit Issuer or such Participant (a copy of which notice shall be sent by such Letter of Credit Issuer or such Participant to the Administrative Agent), accompanied by the certificate described in the last sentence of this Section 2.05, the Borrower shall, subject to Section 1.14, pay to such Letter of Credit Issuer or such Participant such additional amount or amounts as will compensate such Letter of Credit Issuer or such Participant for such increased cost or reduction. A certificate submitted to the Borrower by such Letter of Credit Issuer or such Participant, as the case may be (a copy of which certificate shall be sent by such Letter of Credit Issuer or such Participant to the Administrative Agent), setting forth the basis for the determination of such additional amount or amounts necessary to compensate such Letter of Credit Issuer or such Participant as aforesaid shall be final and conclusive and binding on the Borrower absent manifest error, although the failure to deliver any such certificate shall not release or diminish the Borrower's obligations to pay additional amounts pursuant to this Section 2.05 upon subsequent receipt of such certificate. SECTION 3. FEES; COMMITMENTS. 3.01 FEES. (a) (i) The Borrower shall pay to the Administrative Agent, for distribution to each Non-Defaulting Lender with an Initial A Term Loan Commitment, a commitment fee (the "A TL Commitment Fee") (x) for the period from and including the Effective Date through and including the 90th day after the Initial Borrowing Date (or such earlier date as the Total Initial A Term Loan Commitment shall have been terminated), equal to 1/2 of 1% per annum on the daily Initial A Term Loan Commitment of such Non-Defaulting Lender, (y) for the period thereafter through and including the 180th day after the Initial Borrowing Date (or such earlier date as the Total Initial A Term Loan Commitment shall have been terminated), equal to 3/4 of 1% per annum on the daily Initial A Term Loan Commitment of such Non-Defaulting Lender, and (z) for the period thereafter to, but excluding, the Initial A Term Loan Commitment Termination Date (or such earlier date as the Total Initial A Term Loan Commitment shall have been terminated), equal to 1% per annum on the daily Initial A Term Loan Commitment of such Non-Defaulting Lender. Accrued A TL Commitment Fees shall be due and payable quarterly in arrears on each Quarterly Payment Date and on the date on which the Total Initial A Term Loan Commitment shall have been terminated. (ii) The Borrower shall pay to the Administrative Agent, for distribution to each Non-Defaulting Lender with a Revolving Loan Commitment, a commitment fee (the "RL Commitment Fee") for the period from the Effective Date to but not including the Revolving Loan Maturity Date (or such earlier date as the Total Revolving Loan Commitment shall have been terminated), computed at a rate per annum of 1/2 of 1% on the daily average Unutilized Revolving Loan Commitment of such Non-Defaulting Lender. Accrued RL Commitment Fees shall be due and payable quarterly in arrears on each Quarterly Payment Date and on the Revolving Loan Maturity Date (or such earlier date upon which the Total Revolving Loan Commitment shall have been terminated). (iii) The Borrower shall pay to the Administrative Agent, for distribution to each Non-Defaulting Lender with an Acquisition Loan Commitment, a commitment fee (the "AL Commitment Fee") for the period from the Effective Date to but not including the Conversion Date (or such earlier date as the Total Acquisition Loan Commitment shall have been terminated), computed at a rate per annum of 1/2 of 1% on the daily average Unutilized Acquisition Loan Commitment of such Non-Defaulting Lender. Accrued AL Commitment Fees shall be due and payable quarterly in arrears on each Quarterly Payment Date and on the -26- Conversion Date (or such earlier date upon which the Total Acquisition Loan Commitment shall have been terminated). (b) The Borrower shall pay to the Administrative Agent for PRO RATA distribution to each RL Lender (based on their respective RL Percentages), a fee in respect of each Letter of Credit (the "Letter of Credit Fee") computed at a rate per annum equal to the Applicable Margin in effect from time to time for Revolving Loans that are maintained as Eurodollar Loans on the daily Stated Amount of such Letter of Credit. Accrued Letter of Credit 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. (c) The Borrower shall pay to each Letter of Credit Issuer a fee in respect of each Letter of Credit issued by such Letter of Credit Issuer (the "Facing Fee") computed at a rate per annum of 1/4 of 1% on the daily Stated Amount of such Letter of Credit; PROVIDED that in no event shall the annual Facing Fee with respect to each Letter of Credit be less than $500; it being agreed that (x) on the date of issuance of any Letter of Credit and on each anniversary thereof prior to the termination 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 12-month period, the full $500 shall be payable on the date of issuance of such Letter of Credit and on each such anniversary thereof prior to the termination of such Letter of Credit and (y) if on the date of the termination of any Letter of Credit, $500 actually exceeds the amount of Facing Fees paid or payable with respect to such Letter of Credit for the period beginning on the date of the issuance thereof (or if the respective Letter of Credit has been outstanding for more than one year, the date of the last anniversary of the issuance thereof occurring prior to the termination of such Letter of Credit) and ending on the date of the termination thereof, an amount equal to such excess shall be paid as additional Facing Fees with respect to such Letter of Credit on the next date upon which Facing Fees are payable in accordance with the immediately succeeding sentence. Except as provided in 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 shall pay directly to each Letter of Credit Issuer upon each issuance of, payment under, and/or amendment of, a Letter of Credit issued by such Letter of Credit Issuer such amount as shall at the time of such issuance, payment or amendment be the administrative charge which such Letter of Credit Issuer is customarily charging for issuances of, payments under or amendments of, letters of credit issued by it, plus any expenses relating to such transactions. (e) The Borrower shall pay to the Agents, for their own account, such fees as may be agreed to in writing from time to time between the Borrower and the Agents, when and as due. -27- (f) All computations of Fees shall be made in accordance with Section 13.07(b). 3.02 VOLUNTARY TERMINATION OR REDUCTION OF UNUTILIZED COMMITMENTS. (a) With the prior written consent of the Administrative Agent (although such consent shall not be required in the event of a termination of the Total Commitment and the repayment in full of all Obligations) and upon at least three Business Days' prior 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, without premium or penalty, to terminate or partially reduce the Total Initial A Term Loan Commitment, PROVIDED that (x) any such termination or partial reduction shall apply to proportionately and permanently reduce the Initial A Term Loan Commitment of each of the Lenders with such a Commitment and (y) any partial reduction pursuant to this Section 3.02(a) shall be in integral multiples of $500,000. (b) Upon at least three Business Days' prior 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, without premium or penalty, to terminate or partially reduce the Total Unutilized Revolving Loan Commitment, PROVIDED that (x) any such termination or partial reduction shall apply to proportionately and permanently reduce the Revolving Loan Commitment of each of the RL Lenders, (y) any partial reduction pursuant to this Section 3.02(b) shall be in integral multiples of $500,000 and (z) the reduction to the Total Unutilized Revolving Loan Commitment shall in no case be in an amount which would cause the Revolving Loan Commitment of any RL Lender to be reduced (as required by the preceding clause (x)) by an amount which exceeds the remainder of (A) the Unutilized Revolving Loan Commitment of such RL Lender as in effect immediately before giving effect to such reduction minus (B) such RL Lender's RL Percentage of the aggregate principal amount of Swingline Loans then outstanding. (c) Upon at least three Business Days' prior 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, without premium or penalty, to terminate or partially reduce the Total Unutilized Acquisition Loan Commitment, PROVIDED that (x) any such termination or partial reduction shall apply to proportionately and permanently reduce the Acquisition Loan Commitment of each of the AL Lenders and (y) any partial reduction pursuant to this Section 3.02(c) shall be in integral multiples of $500,000. (d) In the event of certain refusals 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 shall have the right, subject to obtaining the consents required by 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), to terminate the entire Revolving Loan Commitment and Acquisition Loan Commitment of such Lender, so long as all Loans, together with accrued and unpaid interest, Fees and all other amounts, owing to such Lender (including all amounts, if any, owing pursuant to Section 1.11, but excluding -28- amounts owing in respect of Term Loans maintained by such Lender, if such Term Loans are not being repaid pursuant to Section 13.12(b)) are repaid concurrently with the effectiveness of such termination (at which time Annex I shall be deemed modified to reflect such changed amounts) and at such time, unless the respective Lender continues to have outstanding Term Loans hereunder, such Lender shall no longer constitute a "Lender" for purposes of this Agreement, except with respect to indemnifications under this Agreement (including, without limitation, Sections 1.10, 1.11, 2.05, 4.04, 13.01 and 13.06), which shall survive as to such repaid Lender. 3.03 MANDATORY REDUCTION OF COMMITMENTS. (a) The Total Commitment shall terminate in its entirety on July 14, 2000 (or such earlier date as Odyssey or the Borrower shall have notified the Administrative Agent in writing that it has terminated discussions regarding the Recapitalization) unless the Initial Borrowing Date has occurred on or before such date. (b) In addition to any other mandatory commitment reductions pursuant to this Section 3.03, the Total Initial A Term Loan Commitment shall (i) be reduced (x) on each Initial A Term Loan Borrowing Date in an amount equal to the aggregate principal amount of Initial A Term Loans incurred on each such date, (ii) terminate in its entirety (to the extent not theretofore terminated) on the earlier of (x) the Initial A Term Loan Commitment Termination Date (after giving effect to any Initial A Term Loans to be made on such date) and (y) unless the Required Lenders otherwise agree, on the date on which a Change of Control occurs, and (iii) prior to the termination of the Total Initial A Term Loan Commitment, be permanently reduced from time to time to the extent required by Section 4.02(j). (c) In addition to any other mandatory commitment reductions pursuant to this Section 3.03, the Total Initial B Term Loan Commitment shall terminate in its entirety on the Initial Borrowing Date (after giving effect to the incurrence of Initial B Term Loans on such date). (d) In addition to any other mandatory commitment reductions pursuant to this Section 3.03, the Incremental A Term Loan Commitment of each Lender provided pursuant to a particular Incremental Term Loan Commitment Agreement shall terminate in its entirety on the respective Incremental A Term Loan Borrowing Date for such Incremental Term Loan Commitment Agreement (after giving effect to the incurrence of the Incremental A Term Loans on each such date). (e) In addition to any other mandatory commitment reductions pursuant to this Section 3.03, the Incremental B Term Loan Commitment of each Lender provided pursuant to a particular Incremental Term Loan Commitment Agreement shall terminate in its entirety on the respective Incremental B Term Loan Borrowing Date for such Incremental Term Loan Commitment Agreement (after giving effect to the incurrence of the Incremental B Term Loans on each such date). (f) In addition to any other mandatory commitment reductions pursuant to this Section 3.03, the Total Revolving Loan Commitment shall (i) terminate in its entirety on the earlier of (x) the Revolving Loan Maturity Date and (y) unless the Required Lenders otherwise -29- agree, the date on which a Change of Control occurs, and (ii) be permanently reduced from time to time in accordance with the requirements of Section 4.02(j). (g) In addition to any other mandatory commitment reductions pursuant to this Section 3.03, the Total Acquisition Loan Commitment shall (i) terminate in its entirety on the earlier of (x) the Conversion Date and (y) unless the Required Lenders otherwise agree, the date on which a Change of Control occurs, and (ii) be permanently reduced from time to time in accordance with the requirements of Section 4.02(j). (h) Each reduction and/or termination of the Total Initial A Term Loan Commitment, the Total Initial B Term Loan Commitment, the Total Incremental A Term Loan Commitment, the Total Incremental B Term Loan Commitment, the Total Revolving Loan Commitment and the Total Acquisition Loan Commitment pursuant to this Section 3.03 shall be applied to proportionately and permanently reduce and/or terminate the Initial A Term Loan Commitment, the Initial B Term Loan Commitment, the Incremental A Term Loan Commitment, the Incremental B Term Loan Commitment, the Revolving Loan Commitment and the Acquisition Loan Commitment, as the case may be, of each Lender with such a Commitment. SECTION 4. PAYMENTS. 4.01 VOLUNTARY PREPAYMENTS. (a) The Borrower shall have the right to prepay the Loans, and the right to allocate such prepayments to Revolving Loans, Swingline Loans, Acquisition Revolving Loans and/or Term Loans as the Borrower elects, in whole or in part, without premium or penalty except as otherwise provided in Section 1.11, 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) of its intent to prepay the Loans, whether such Loans are A Term Loans, B Term Loans, Revolving Loans, Swingline Loans or Acquisition Loans, the amount of such prepayment, the Type of Loans to be repaid and (in the case of Eurodollar Loans) the specific Borrowing(s) pursuant to which made, which notice shall be given by the Borrower prior to 12:00 Noon (New York time) (x) at least one Business Day prior to the date of such prepayment in the case of Base Rate Loans, (y) on or prior to the date of such prepayment in the case of Swingline Loans and (z) at least three Business Days prior to the date of such prepayment in the case of Eurodollar Loans, which notice shall, except in the case of Swingline Loans, promptly be transmitted by the Administrative Agent to each of the Lenders; (ii) each prepayment (other than prepayments in full of (x) all outstanding Base Rate Loans or (y) any outstanding Borrowing of Eurodollar Loans) shall be in an aggregate principal amount of at least (x) $500,000, in the case of Term Loans, Revolving Loans and Acquisition Revolving Loans, and (y) $100,000, in the case of Swingline Loans, PROVIDED that no partial prepayment of Eurodollar Loans made pursuant to a Borrowing shall reduce the aggregate principal amount of the Eurodollar Loans -30- outstanding pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount applicable thereto; (iii) each voluntary prepayment of Term Loans pursuant to this Section 4.01(a) shall be applied to the A Term Loans, Acquisition Term Loans and, subject to the provisions of Section 4.02(m), B Term Loans on a PRO RATA basis (based upon the then outstanding principal amount of A Term Loans, Acquisition Term Loans and B Term Loans); (iv) each prepayment 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 or Acquisition 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 Loans or Acquisition Revolving Loans of a Defaulting Lender; and (v) each prepayment of principal of any Tranche of Term Loans pursuant to this Section 4.01(a) shall be applied to reduce the then remaining Scheduled Repayments of such Tranche on a PRO RATA basis (based upon the then remaining amount of each such Scheduled Repayment after giving affect to all prior reductions thereto). (b) In the event of certain refusals 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 shall have the right, 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), to repay all Loans of such Lender (including all amounts, if any, owing pursuant to Section 1.11), together with accrued and unpaid interest, Fees and all other amounts then owing to such Lender (or owing to such Lender with respect to the Tranche which gave rise to the need to obtain such Lender's individual consent) in accordance with said Section 13.12(b), so long as (A) in the case of the repayment of Revolving Loans and/or Acquisition Revolving Loans of any Lender pursuant to this clause (b), the Revolving Loan Commitment and/or Acquisition Loan Commitment of such Lender is terminated concurrently with such repayment pursuant to Section 3.02(d) (at which time Annex I shall be deemed modified to reflect the changed Revolving Loan Commitments and/or Acquisition Loan Commitments), and (B) the consents required by Section 13.12(b) in connection with the repayment pursuant to this clause (b) shall have been obtained. 4.02 MANDATORY REPAYMENTS AND COMMITMENT REDUCTIONS. (a) If on any date the sum of (i) the aggregate outstanding principal amount of Revolving Loans and Swingline Loans (after giving effect to all other repayments thereof on such date) and (ii) the Letter of Credit Outstandings on such date (after giving effect to all other repayments thereof on such date) exceeds the Total Revolving Loan Commitment as then in effect, the Borrower shall repay on such date the principal of Swingline Loans, and if no Swingline Loans are or remain outstanding, Revolving Loans in an aggregate amount equal to such excess. If, after giving effect to the prepayment of all outstanding Swingline Loans and Revolving Loans, the aggregate -31- amount of Letter of Credit Outstandings exceeds the Total Revolving Loan Commitment as then in effect, the Borrower shall pay to the Administrative Agent on such date an amount in cash and/or Cash Equivalents equal to such excess (up to the aggregate amount of Letter of Credit Outstandings at such time) and the Administrative Agent, for the benefit of the RL Lenders, shall hold such payment as security for the obligations of the Borrower hereunder pursuant to a cash collateral agreement to be entered into in form and substance satisfactory to 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 equal to the product of (I) the aggregate principal amount of all A Term Loans outstanding on March 1, 2002 (before giving effect to any Initial A Term Loans incurred on such date) and (II) the respective percentage set forth opposite each such date below (each such repayment, as the same may be reduced as provided in Sections 4.01(a) and 4.02(j), a "Tranche A Scheduled Repayment"):
TRANCHE A SCHEDULED REPAYMENT DATE PERCENTAGE March 1, 2002 2.500% June 1, 2002 2.500% September 1, 2002 3.750% December 1, 2002 3.750% March 1, 2003 3.750% June 1, 2003 3.750% September 1, 2003 5.625% December 1, 2003 5.625% March 1, 2004 5.625% June 1, 2004 5.625% September 1, 2004 6.875% December 1, 2004 6.875% March 1, 2005 6.875% June 1, 2005 6.875% September 1, 2005 7.500% December 1, 2005 7.500% March 1, 2006 7.500% A Term Loan Maturity Date 7.500%
In addition to the foregoing, in the event that any Initial A Term Loans are incurred on or after the first Tranche A Scheduled Repayment set forth in the table above, each of such Initial A Term Loans shall thereafter amortize on each Tranche A Scheduled Repayment Date occurring after the incurrence thereof on a percentage basis determined based upon the relative percentages set forth above for the remaining Tranche A Scheduled Repayments thereafter through and including the A Term Loan Maturity Date. -32- (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 equal to the product of (I) the aggregate principal amount of all B Term Loans outstanding on March 1, 2002 and (II) the respective percentage set forth opposite each such date below (each such repayment, as the same may be reduced as provided in Sections 4.01(a) and 4.02(j), a "Tranche B Scheduled Repayment"):
TRANCHE B SCHEDULED REPAYMENT DATE PERCENTAGE March 1, 2002 0.250% June 1, 2002 0.250% September 1, 2002 0.250% December 1, 2002 0.250% March 1, 2003 0.250% June 1, 2003 0.250% September 1, 2003 0.250% December 1, 2003 0.250% March 1, 2004 0.250% June 1, 2004 0.250% September 1, 2004 0.250% December 1, 2004 0.250% March 1, 2005 0.250% June 1, 2005 0.250% September 1, 2005 0.250% December 1, 2005 0.250% March 1, 2006 0.250% June 1, 2006 0.250% September 1, 2006 8.000% December 1, 2006 8.000% March 1, 2007 8.000% June 1, 2007 8.000% September 1, 2007 15.875% December 1, 2007 15.875% March 1, 2008 15.875% B Term Loan Maturity Date 15.875%
(d) In addition to any other mandatory repayments pursuant to this Section 4.02, (i) if on any date the aggregate outstanding principal amount of Acquisition Revolving Loans (after giving effect to all other repayments thereof on such date) exceeds the Total Acquisition Loan Commitment as in effect on such date (determined, in the case of the Conversion Date, immediately prior to giving effect to the termination of the Total Acquisition Loan Commitment on such date), the Borrower shall repay on such date Acquisition Revolving Loans in an aggregate amount equal to such excess, and (ii) on each date set forth below, the Borrower shall be required to repay that principal amount of Acquisition Term Loans, to the extent then outstanding, as is equal to the product of (I) the aggregate principal amount of all -33- Acquisition Term Loans outstanding on the Conversion Date (after giving effect to the termination of the Total Acquisition Loan Commitment on such date) and (II) the respective percentage set forth opposite each such date below (each such repayment, as the same may be reduced as provided in Sections 4.01(a) and 4.02(j), an "Acquisition Loan Scheduled Repayment":
ACQUISITION LOAN SCHEDULED REPAYMENT DATE PERCENTAGE June 1, 2004 11.11% September 1, 2004 11.11% December 1, 2004 11.11% March 1, 2005 11.11% June 1, 2005 11.11% September 1, 2005 11.11% December 1, 2005 11.11% March 1, 2006 11.11% Acquisition Loan Maturity Date 11.12%
(e) In addition to any other mandatory repayments or commitment reductions pursuant to this Section 4.02, on each date on or after the Initial Borrowing Date on which the Borrower or any of its Subsidiaries receives Net Sale Proceeds from any Asset Sale, an amount equal to 100% of the Net Sale Proceeds from such Asset Sale shall be applied as a mandatory repayment and/or commitment reduction in accordance with the requirements of Sections 4.02(j) and (k); PROVIDED that (i) during any fiscal year of the Borrower, up to $3,000,000 in aggregate Net Sale Proceeds received during such fiscal year may be retained by the Borrower and its Subsidiaries without giving rise to a mandatory repayment and/or commitment reduction pursuant to this Section 4.02(e) so long as no Specified Default exists at the time such Net Sale Proceeds are received and such Net Sale Proceeds shall be used to purchase assets used or to be used in the businesses permitted pursuant to Section 9.01 (including, without limitation (but only to the extent permitted by Section 9.02), the purchase of the capital stock of a Person engaged in such businesses) within 360 days following the date of receipt of such Net Sale Proceeds from such Asset Sale and (ii) if all or any portion of such Net Sale Proceeds not required to be so applied are not so used within such 360 day period, such remaining portion shall be applied on the last day of such period (or such earlier date, if any, as the Board of Directors of the Borrower or such Subsidiary, as the case may be, determines not to reinvest the Net Sale Proceeds relating to such Asset Sale as set forth above) as a mandatory repayment and/or commitment reduction in accordance with the requirements of Sections 4.02(j) and (k). (f) In addition to any other mandatory repayments or commitment reductions pursuant to this Section 4.02, on each date on or after the Initial Borrowing Date on which the Borrower or any of its Subsidiaries receives any cash proceeds from any incurrence of Indebted- -34- ness (other than Indebtedness permitted to be incurred pursuant to Section 9.04 as in effect on the Effective Date) by the Borrower or any of its Subsidiaries, an amount equal to 100% of the cash proceeds (net of all underwriting discounts, fees and commissions and other costs and expenses associated therewith) of the respective incurrence of Indebtedness shall be applied as a mandatory repayment and/or commitment reduction in accordance with the requirements of Sections 4.02(j) and (k). (g) In addition to any other mandatory repayments or commitment reductions pursuant to this Section 4.02, on each date on or after the Initial Borrowing Date on which the Borrower or any of its Subsidiaries receives any cash proceeds from any sale or issuance of preferred or common equity (including from the sale or issuance of options, warrants or rights to purchase any such equity) of (or cash capital contributions to) the Borrower or any of its Subsidiaries (other than proceeds received from (i) the Equity Financing, (ii) equity contributions to any Subsidiary of the Borrower made by the Borrower or any Subsidiary of the Borrower, (iii) the sale or issuance by the Borrower of shares of its common stock or Qualified Preferred Stock (including as a result of the exercise of any options or warrants with regard thereto), or options or warrants to purchase shares of its common stock or Qualified Preferred Stock, to any employee, officer or director of the Borrower or any of its Subsidiaries in an aggregate amount not to exceed $1,000,000 in any fiscal year of the Borrower (exclusive of interest payments made on any Employee Carry Loans during such fiscal year), (iv) private equity issuances to, and/or private capital contributions from, Odyssey and its Affiliates, management shareholders of the Borrower and other shareholders of the Borrower (or from Persons who, as a result of any such private investment, shall become shareholders of the Borrower), the proceeds of which (in the case of this clause (iv)) are used to fund all or a portion of the purchase price for a Permitted Acquisition, and (v) equity issuances made within 120 days after the Initial Borrowing Date to Odyssey's or its Affiliate's limited partners and co-investors to the extent not giving rise to an Event of Default under Section 10.10), an amount equal to 100% of such cash proceeds (net of all underwriting discounts, fees and commissions and other costs and expenses associated therewith) of the respective equity issuance or capital contribution shall be applied as a mandatory repayment and/or commitment reduction in accordance with the requirements of Sections 4.02(j) and (k); PROVIDED, HOWEVER, if at the time of such equity issuance or capital contribution no Specified Default then exists and the Total Leverage Ratio at such time (determined before giving effect to any payment required on such date pursuant to this Section 4.02(g)) is less than 4.25:1:00, then only 65% of such net cash proceeds shall be applied as a mandatory repayment and/or commitment reduction in accordance with the requirements of Sections 4.02(j) and (k). (h) In addition to any other mandatory repayments or commitment reductions pursuant to this Section 4.02, within 10 days following each date on or after the Initial Borrowing Date on which the Borrower or any of its Subsidiaries receives any cash proceeds from any Recovery Event (other than cash proceeds from Recovery Events in an amount less than $100,000 per Recovery Event), an amount equal to 100% of the cash proceeds from such Recovery Event (net of reasonable costs including, without limitation, legal costs and expenses, and taxes incurred in connection with such Recovery Event) shall be applied as a mandatory repayment in accordance with the requirements of Sections 4.02(j) and (k); PROVIDED that (x) so -35- long as no Specified Default then exists and such proceeds do not exceed $2,500,000, such proceeds shall not be required to be so applied on such date to the extent that an Authorized Officer of the Borrower has delivered a certificate to the Administrative Agent on or prior to such date stating that such proceeds shall be used or shall be committed to be used to replace or restore any properties or assets in respect of which such proceeds were paid within one year following the date of such Recovery Event (which certificate shall set forth the estimates of the proceeds to be so expended) and (y) so long as no Specified Default then exists and if (i) the amount of such proceeds exceeds $2,500,000, (ii) the amount of such 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 pursuant to Sections 9.08(a) and (b), equals at least 100% of the cost of replacement or restoration of the properties or assets in respect of which such proceeds were paid as determined by the Borrower and as supported by such estimates or bids from contractors or subcontractors or such other supporting information as the Administrative Agent may reasonably request, (iii) an Authorized Officer of the Borrower has delivered to the Administrative Agent a certificate on or prior to the date the application would otherwise be required pursuant to this Section 4.02(h) in the form described in clause (x) above and also certifying its determination as required by preceding clause (ii) and certifying the sufficiency of business interruption insurance and other funds from operations as required by succeeding clause (iv), and (iv) an Authorized Officer of the Borrower has delivered to the Administrative Agent such evidence as the Administrative Agent may reasonably request in form and substance reasonably satisfactory to the Administrative Agent establishing that the Borrower has sufficient business interruption insurance and that the Borrower will receive payment thereunder, as well as will have sufficient cash flow from operations, in such amounts and at such times as are necessary to satisfy all obligations and expenses of the Borrower (including, without limitation, all debt service requirements, including pursuant to this Agreement), without any delay or extension thereof, for the period from the date of the respective casualty, condemnation or other event giving rise to the Recovery Event and continuing through the completion of the replacement or restoration of respective properties or assets, then the entire amount of the proceeds of such Recovery Event and not just the portion in excess of $2,500,000 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 actual costs incurred by it or its applicable Subsidiary 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), PROVIDED further, that at any time while an Event of Default has occurred and is continuing, the Required Lenders may direct the Administrative Agent (in which case the Administrative 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 Obligations hereunder, and PROVIDED FURTHER, that if all or any portion of such proceeds not required to be applied as a mandatory repayment and/or commitment reduction pursuant to the second preceding proviso (whether pursuant to clause (x) or (y) thereof) are either (A) not so used or committed to be so used within one year after the date of the respective Recovery Event or (B) if committed to be used within one year after the date of receipt of such net proceeds and not so used within 18 months after the date of respective Recovery Event then, in either such case, such remaining portion not used or committed to be used in the -36- case of preceding clause (A) and not used in the case of preceding clause (B) shall be applied on the date which is the first anniversary of the date of the respective Recovery Event in the case of clause (A) above or the date occurring 18 months after the date of the respective Recovery Event in the case of clause (B) above (or, in either case, such earlier date, if any, as the Board of Directors of the Borrower or such Subsidiary, as the case may be, determines not to reinvest the net proceeds relating to such Recovery Event as set forth above) as a mandatory repayment and/or commitment reduction in accordance with the requirements of Sections 4.02(j) and (k). (i) In addition to any other mandatory repayments or commitment reductions pursuant to this Section 4.02, on each Excess Cash Flow Payment Date, an amount equal to 50% of the Excess Cash Flow for the relevant Excess Cash Flow Payment Period shall be applied as a mandatory repayment and/or commitment reduction in accordance with the requirements of Sections 4.02(j) and (k); PROVIDED, HOWEVER, that if the Total Leverage Ratio on the respective Excess Cash Flow Payment Date (determined before giving effect to any payment required on such date pursuant to this Section 4.02(i)) is 5.25:1.00 or greater, such percentage of the Excess Cash Flow required to be applied on such date pursuant to this Section 4.02(i) shall be increased to 75%. (j) Each amount required to be applied pursuant to Sections 4.02(e) through (i), inclusive, in accordance with the requirements of this Section 4.02(j), shall be applied (i) first, 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, the B Term Loans to be allocated the B Term Loan Percentage of the amount of such repayment, and the Acquisition Term Loans to be allocated the Acquisition Term Loan Percentage of the amount of such repayment, (ii) second, to the extent in excess of the amounts required to be applied pursuant to the preceding clause (i), to permanently reduce the Total Acquisition Loan Commitment, (iii) third, to the extent in excess of the amounts required to be applied pursuant to the preceding clauses (i) and (ii), to permanently reduce the Total Initial A Term Loan Commitment, and (iv) fourth, to the extent in excess of the amounts required to be applied pursuant to the preceding clauses (i), (ii) and (iii), to permanently reduce the Total Revolving Loan Commitment. The amount of each principal repayment of each Tranche of outstanding Term Loans made as required by this Section 4.02(j) shall be applied to reduce the then remaining Scheduled Repayments of such Tranche of Term Loans 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). (k) 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 Eurodollar Loans, the specific Borrowing or Borrowings of the respective Tranche pursuant to which made, PROVIDED that: (i) repayments of Eurodollar Loans pursuant to this Section 4.02 may only be made on the last day of an Interest Period applicable thereto unless all Eurodollar 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 Eurodollar Loans made pursuant to a single Borrowing shall reduce the outstanding Eurodollar Loans made pursuant to such Borrowing to an amount less than the -37- Minimum Borrowing Amount applicable thereto, such Borrowing shall be converted at the end of the then current Interest Period into a Borrowing of Base Rate Loans; and (iii) each repayment of any Tranche of Loans made pursuant to a Borrowing shall be applied PRO RATA among such Tranche of 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 with a view, but no obligation, to minimize breakage costs owing under Section 1.11. (l) Notwithstanding anything to the contrary contained elsewhere in this Agreement, (i) all then outstanding Loans shall be repaid in full on the respective Maturity Date for such Loans and (ii) unless the Required Lenders otherwise agree, all outstanding Loans shall be repaid in full upon the occurrence of a Change of Control. (m) Notwithstanding anything to the contrary contained in Section 4.01(a) or above in this Section 4.02, at any time and to the extent that (x) A Term Loans and/or (y) Acquisition Term Loans remain outstanding, with respect to any mandatory repayments of B Term Loans (excluding Tranche B Scheduled Repayments and repayments pursuant to Section 4.02(l)) otherwise required above pursuant to this Section 4.02, and with respect to that portion of any voluntary prepayment of Term Loans pursuant to Section 4.01(a) which, in accordance with the provisions of clause (iv) thereof is required to be applied to B Term Loans, if on or prior to the date the respective mandatory repayment is otherwise required to be made pursuant to this Section 4.02 or on or prior to the date of the respective voluntary prepayment pursuant to Section 4.01(a), the Borrower has given the Administrative Agent written notification that the Borrower has elected to give each Lender with a B Term Loan the right to waive such Lender's right to receive such repayment or prepayment (the "Waivable Repayment"), the Administrative Agent shall notify such Lenders of such receipt and the amount of the repayment or prepayment to be applied to each such Lender's B Term Loans. In the event any such Lender with a B Term Loan desires to waive such Lender's right to receive any such Waivable Repayment in whole or in part, such Lender shall so advise the Administrative Agent no later than 5:00 P.M. (New York time) three Business Days after the date of such notice from the Administrative Agent which notice shall also include the amount such Lender desires to receive. If any such Lender does not reply to the Administrative Agent within such three Business Day period, it will be deemed acceptance of the total payment. If any such Lender does not specify an amount it wishes to receive, it will be deemed acceptance of 100% of the total payment. In the event that any such Lender waives such Lender's right to any such Waivable Repayment, the Administrative Agent shall apply 100% of the amount so waived by such Lenders (x) to prepay the A Term Loans and Acquisition Term Loans (i) in the case of a prepayment pursuant to Section 4.01(a), PRO RATA in accordance with Section 4.01(a) (determined as if no B Term Loans are outstanding) or (ii) in the case of a repayment pursuant to Section 4.02, PRO RATA in accordance with Section 4.02(j) (determined as if no B Term Loans are outstanding). If the Borrower elects to give the notice described above in this Section 4.02(m) with respect to any voluntary prepayment or mandatory repayment, the amount of the respective Waivable Repayment shall be deposited with the Administrative Agent on the date the voluntary prepayment is otherwise made pursuant to Section 4.01(a) or the date the mandatory repayment would otherwise be required pursuant to the relevant provisions of this Section 4.02, as the case may be (and held by the Administrative Agent as cash collateral for the B Term Loans and, but only to the extent Lenders with B Term -38- Loans waive their right to receive their share of the Waivable Repayment, for the A Term Loans and Acquisition Term Loans in a cash collateral account which shall permit the investment thereof in Cash Equivalents reasonably satisfactory to the Administrative Agent until the proceeds are applied to the applicable Loans) and the respective repayment shall not be required to be made until the fifth Business Day occurring after the date the respective repayment would otherwise have been required to be made. Notwithstanding anything to the contrary contained above in this Section 4.02(m), (i) if one or more Lenders waives its right to receive all or any part of any Waivable Repayment, but less than all the Lenders holding B Term Loans waive in full their right to receive 100% of the total payment otherwise required with respect to the Tranche B Term Loans, then of the amount actually applied to the repayment of B Term Loans of Lenders which have waived in part, but not in full, 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 Lender holding B Term Loans shall, after giving effect to the application of the respective repayment, maintain the same percentage (as determined for such Lender, but not the same percentage as the other Lenders hold and not the same percentage held by such Lender prior to repayment) of each Borrowing of B Term Loans which remains outstanding after giving effect to such application) and (ii) the Borrower's option pursuant to this Section 4.02(m) with respect to any repayment shall only be applicable so long as, and to the extent that, any A Term Loans or Acquisition Term Loans are outstanding. 4.03 METHOD AND PLACE OF PAYMENT. Except as otherwise specifically provided herein, all payments under this Agreement or under any Note shall be made to the Administrative Agent for the ratable account of the Lender or Lenders entitled thereto not later than 12:00 Noon (New York time) on the date when due and shall be made in immediately available funds and in U.S. Dollars at the Payment Office. Any payments under this Agreement or under any Note which are made later than 12:00 Noon (New York time) shall be deemed to have been made on the next succeeding Business Day. 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 during such extension at the applicable rate in effect immediately prior to such extension. 4.04 NET PAYMENTS. (a) All payments made by the Borrower hereunder or under any Note will be made without setoff, counterclaim or other defense. Except as provided in Section 4.04(b), all such payments will be made free and clear of, and 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 pursuant to the laws of the jurisdiction in which it is organized or the jurisdiction in which the principal office or applicable lending office of such Lender 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 nonexcluded taxes, levies, imposts, duties, fees, assessments or other charges being referred to collectively as "Taxes"). If any Taxes are so levied or imposed, the Borrower agrees, subject to -39- Section 1.14, to pay the full amount of such Taxes, and such additional amounts as may be necessary so that every payment of all amounts due under this Agreement or 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, the Borrower agrees, subject to Section 1.14, to reimburse each Lender, upon the written request of such Lender, for taxes imposed on or measured by the net income or net profits of such Lender pursuant to the laws of the jurisdiction in which such Lender is organized or in which the principal office or applicable lending office of such Lender is located or under the laws of any political subdivision or taxing authority of any such jurisdiction in which such Lender is organized or in which the principal office or applicable lending office of such Lender is located and for any withholding of taxes as such Lender shall determine are payable by, or withheld from, such Lender in respect of such amounts so paid to or on behalf of such Lender pursuant to the preceding sentence and in respect of any amounts paid to or on behalf of such 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 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. (b) Each 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 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 that is an assignee or transferee of an interest under this Agreement pursuant to Section 1.13 or 13.04(b) (unless the respective Lender was already a Lender hereunder immediately prior to such assignment or transfer), on the date of such assignment or transfer to such Lender, (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 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 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 successor forms) pursuant to clause (i) above, (x) a certificate substantially in the form of Exhibit E (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 (or successor form) (with respect to the portfolio interest exemption) certifying to such 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 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 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 to a continued exemption from or -40- reduction in United States withholding tax with respect to payments under this Agreement and any Note, or it shall immediately notify the Borrower and the Administrative Agent of its inability to deliver any such Form or Certificate, in which case such 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 Section 13.04(b) 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 to the extent that such Lender 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 obligated pursuant to Section 4.04(a) hereof to gross-up payments to be made to a Lender in respect of income or similar taxes imposed by the United States (or any political subdivision or taxing authority thereof or therein) if (I) such 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, 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 Section 13.04(b), the Borrower agrees to pay any additional amounts and to indemnify each 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 Taxes 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 (or, if later, the date such Lender became party to this Agreement). SECTION 5A. CONDITIONS PRECEDENT TO THE INITIAL BORROWING DATE. The obligation of each Lender to make each Loan to the Borrower hereunder, and the obligation of the Letter of Credit Issuer to issue each Letter of Credit hereunder, in either case 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: 5A.01 EXECUTION OF AGREEMENT; 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 Lender that has requested same the appropriate A Term Note, B Term Note, Acquisition Note and/or Revolving Note and to BTCo, to the extent that BTCo has requested same, the Swingline Note, in each case executed by the Borrower and in the amount, maturity and as otherwise provided herein. 5A.02 OFFICER'S CERTIFICATE. On the Initial Borrowing Date, the Administrative Agent shall have received a certificate dated such date signed by an Authorized Officer of the Borrower stating that all of the applicable conditions set forth in Sections 5A.05 through 5A.10, inclusive, and Section 6.01 have been satisfied on such date. -41- 5A.03 OPINIONS OF COUNSEL. On the Initial Borrowing Date, the Administrative Agent shall have received (i) an opinion, addressed to the Administrative Agent, the Collateral Agent and each of the Lenders and dated the Initial Borrowing Date, from Latham & Watkins, special counsel to the Credit Parties, which opinion shall cover the matters contained in Exhibit F-1 and such other matters incident to the transactions contemplated herein as the Agents may reasonably request, and (ii) an opinion, addressed to the Administrative Agent, the Collateral Agent and each of the Lenders dated the Initial Borrowing Date, from Thompson Hine & Flory LLP, special counsel to the Credit Parties, which opinion shall cover the matters contained in Exhibit F-2 and such other matters incident to the transactions contemplated herein as the Agents may reasonably request. 5A.04 CORPORATE DOCUMENTS; PROCEEDINGS. (a) On the Initial Borrowing Date, the Administrative Agent shall have received from each Credit Party a certificate, dated the Initial Borrowing Date, signed by the chairman, a vice-chairman, 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 G with appropriate insertions, together with copies of the certificate of incorporation and by-laws of such Credit Party (or equivalent organizational documents) and the resolutions of such Credit Party referred to in such certificate and all of the foregoing (including each such certificate of incorporation and by-laws (or equivalent organizational documents)) shall be reasonably satisfactory to the Agents. (b) On the Initial Borrowing Date, all corporate, partnership, limited liability company and legal proceedings and all instruments and agreements in connection with the transactions contemplated by this Agreement and the other Transaction Documents shall be reasonably satisfactory in form and substance to the Agents, and the Administrative Agent shall have received all information and copies of all certificates, documents and papers, including good standing certificates, bring-down certificates and any other records of corporate proceedings and governmental approvals, if any, which the Agents reasonably may have requested in connection therewith, such documents and papers, where appropriate, to be certified by proper corporate or governmental authorities. (c) On the Initial Borrowing Date and after giving effect to the Transaction, the corporate and capital structure (including, without limitation, the terms of any capital stock, options, warrants or other securities issued by the Borrower or any of its Subsidiaries) of the Borrower and each of its Subsidiaries shall be in form and substance reasonably satisfactory to the Agents. 5A.05 ADVERSE CHANGE, ETC. On or prior to the Initial Borrowing Date, nothing shall have occurred since December 31, 1999 (and neither the Lenders nor the Agents shall have become aware of any facts or conditions not previously known) which the Required Lenders or the Agents shall determine has had, or could reasonably be expected to have, (i) a Material Adverse Effect or (ii) a material adverse effect on the Transaction. 5A.06 LITIGATION. On the Initial Borrowing Date, there shall be no actions, suits, proceedings or investigations pending or threatened which the Agents or the Required Lenders -42- shall determine could reasonably be expected to (i) have a Material Adverse Effect or (ii) have a material adverse effect on the Transaction; it being understood that, for the purpose of this Section 5A.06, the settlement of, or entry or payment of a judgment for, the EFCO Litigation in an aggregate amount not to exceed $15,000,000 (exclusive of post-judgment interest) will not, in and of itself, have a Material Adverse Effect or a material adverse effect on the Transaction. 5A.07 APPROVALS. On or prior to the Initial Borrowing Date, (i) all necessary governmental (domestic and foreign), regulatory and material third party approvals and/or consents in connection with the Credit Documents, the other Transaction Documents, the Transaction and otherwise referred to herein or therein shall have been obtained and remain in full force and effect and (ii) all applicable waiting periods shall have expired without any action being taken by any competent authority which restrains, prevents or imposes materially adverse conditions upon the consummation of the Transaction, the making of the Loans, the issuance of Letters of Credit and the transactions contemplated by the Transaction Documents or otherwise referred to herein or therein. Additionally, 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, or materially delaying, or making economically unfeasible, the consummation of the Transaction or the making of the Loans, the issuance of Letters of Credit or the transactions contemplated by the Transaction Documents. 5A.08 CONSUMMATION OF THE RECAPITALIZATION. (a) On or prior to the Initial Borrowing Date, there shall have been delivered to the Administrative Agent true and correct copies of the Recapitalization Documents, with those Recapitalization Documents which were executed on January 19, 2000 to be in the form so executed with any changes thereto or waivers of the terms therein to be reasonably satisfactory to the Agents and the Required Lenders, and with all other Recapitalization Documents to be in form and substance reasonably satisfactory to the Agents and the Required Lenders. All conditions precedent to the consummation of the Recapitalization as set forth in the Recapitalization Documents shall have been satisfied, and not waived unless consented to by the Agents and the Required Lenders (which consent shall not be unreasonably withheld or delayed), to the reasonable satisfaction of the Agents and the Required Lenders. The Recapitalization shall have been consummated in all material respects in accordance with the terms and conditions of the Recapitalization Documents and all applicable laws. (b) John A. Ciccarelli shall continue to be the chief executive officer of the Borrower pursuant to employment arrangements reasonably satisfactory to the Agents. 5A.09 REFINANCING; ETC. (a) On the Initial Borrowing Date, the commitments (if any) under the Indebtedness to be Refinanced shall have been terminated, all loans outstanding thereunder shall have been repaid in full, together with all accrued and unpaid interest thereon, all accrued and unpaid fees thereon shall have been paid in full, all letters of credit issued thereunder shall have been terminated and all other amounts owing pursuant to the Indebtedness to be Refinanced shall have been repaid in full. -43- (b) On the Initial Borrowing Date, all security interests in respect of, and Liens securing, obligations under the Indebtedness to be Refinanced shall have been terminated and released to the satisfaction of the Agents, and the Administrative Agent shall have received all such releases as may have been requested by the Agents, which releases shall be in form and substance reasonably satisfactory to the Agents. 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 of each jurisdiction where a financing statement Form UCC-1 or equivalent was filed with respect to the Borrower or any of its Subsidiaries in connection with the security interests created pursuant to the Indebtedness to be Refinanced and the documentation related thereto, (ii) termination or reassignment of any security interest in, or Lien on, any patents, trademarks, copyrights or similar interests of the Borrower or any of its Subsidiaries on which filings have been made to secure obligations under the Indebtedness to be Refinanced and (iii) terminations of all mortgages, leasehold mortgages and deeds of trusts created with respect to property of the Borrower or any of its Subsidiaries to secure the obligations under the Indebtedness to be Refinanced, all of which shall be in form and substance reasonably satisfactory to the Agents. (c) On or prior to the Initial Borrowing Date, the Dayton Trust shall have been dissolved (and all Trust Preferred Stock shall have been cancelled) and any Subordinated Debentures that remain outstanding after giving effect to the Transaction shall have been distributed directly to the holders of the Trust Preferred Stock in accordance with the terms of the Subordinated Debenture Indenture and the Trust Agreement. 5A.10 CONSUMMATION OF THE EQUITY FINANCING; SENIOR SUBORDINATED NOTES ISSUANCE; ETC. (a) On the Initial Borrowing Date, (i) the Borrower shall have received gross cash proceeds of at least $100,000,000 in connection with the Equity Financing (less that amount consisting of roll-over equity as provided in clause (ii) below), (ii) certain existing shareholders of the Borrower shall have rolled-over and retained their equity (including options) in the Borrower with an aggregate value of no more than $6,240,000 (it being understood that the sum of the amounts referred to in preceding clause (i) and in this clause (ii) shall be at least $100,000,000) and (iii) the Borrower shall have used the entire amount of such gross cash proceeds to make payments owing in connection with the Transaction prior to utilizing any proceeds of Loans for such purpose. The terms and conditions of the Equity Financing Documents shall not provide for any mandatory repayments, redemptions, repurchases, sinking fund payments or dividends that are not permitted under the terms of this Agreement (unless the Total Commitment has been terminated, all Loans have been repaid in full, all Letters of Credit have been terminated and all other Obligations have been paid in full), and all conditions precedent to the consummation of the Equity Financing as set forth in the Equity Financing Documents shall have been satisfied (and not waived, unless consented to by the Agents and the Required Lenders (which consent shall not be unreasonably withheld or delayed)), to the reasonable satisfaction of the Agents and the Required Lenders. The Equity Financing shall have been consummated in all material respects in accordance with the terms and conditions of the Equity Financing Documents and all applicable laws. -44- (b) On the Initial Borrowing Date, (i) the Borrower shall have received gross cash proceeds of $165,645,280 from the issuance by it of the Senior Subordinated Notes and (ii) the Borrower shall have used the entire amount of such cash proceeds to make payments owing in connection with the Transaction prior to utilizing any proceeds of Loans for such purpose. All of the terms and conditions of the Senior Subordinated Note Documents shall be reasonably satisfactory to the Agents and the Required Lenders, and all 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 Agents and the Required Lenders (which consent shall not be unreasonably withheld or delayed)), to the reasonable satisfaction of the Agents and the Required Lenders. The issuance of the Senior Subordinated Notes shall have been consummated in all material respects in accordance with the terms and conditions of the Senior Subordinated Note Documents and all applicable laws. 5A.11 PLEDGE AGREEMENT; SECURITY AGREEMENT; ETC. (a) On the Initial Borrowing Date, each Credit Party shall have duly authorized, executed and delivered the Pledge Agreement in the form of Exhibit H (as amended, modified or supplemented from time to time in accordance with the terms thereof and hereof, the "Pledge Agreement") and shall have delivered to the Collateral Agent, as pledgee thereunder, all of the Securities referred to (and as defined) therein, endorsed in blank in the case of promissory notes or accompanied by executed and undated stock powers in the case of capital stock, 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. (b) On the Initial Borrowing Date, each Credit Party shall have duly authorized, executed and delivered the Security Agreement in the form of Exhibit I (as amended, modified or supplemented from time to time in accordance with the terms thereof and hereof, the "Security Agreement") covering all of the Security Agreement Collateral of such Credit Party, together with: (i) executed copies of Financing Statements (Form UCC-1) or appropriate local equivalent in appropriate form for filing under the UCC or appropriate local equivalent 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, each of a recent date listing all effective financing statements that name the Borrower or any of its Subsidiaries as debtor and that are filed in the jurisdictions referred to in clause (i) above, together with copies of such financing statements that name the Borrower or any of its Subsidiaries as debtor (none of which shall cover the Collateral except (x) those with respect to which appropriate termination statements executed by the secured lender thereunder have been delivered to the Administrative Agent or (y) to the extent evidencing Permitted Liens); -45- (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 purported 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 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. 5A.12 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 J (as amended, modified or supplemented from time to time in accordance with the terms thereof and hereof, the "Subsidiaries Guaranty"), and the Subsidiaries Guaranty shall be in full force and effect. 5A.13 EMPLOYEE BENEFIT PLANS; SHAREHOLDERS' AGREEMENTS; MANAGEMENT AGREEMENTS; EMPLOYMENT AGREEMENTS; COLLECTIVE BARGAINING AGREEMENTS; EXISTING INDEBTEDNESS AGREEMENTS; TAX ALLOCATION AGREEMENTS. On or prior to the Initial Borrowing Date, there shall have been delivered to the Administrative Agent upon the Administrative Agent's request, true and correct copies, certified as true and complete by an Authorized Officer of the Borrower of: (i) all Plans and Multiemployer Plans (and for each Plan or Multiemployer Plan that is required to file an annual report on Internal Revenue Service Form 5500, a copy of the most recent such report (including, to the extent required, the related financial and actuarial statements and opinions and other supporting statements, certifications, schedules and information), and for each Plan that is a "single-employer plan," as defined in Section 4001(a)(15) of ERISA, the most recently prepared actuarial valuation therefor) and any other "employee benefit plans," as defined in Section 3(3) of ERISA, and any other material agreements, plans or arrangements, with or for the benefit of current or former employees of the Borrower or any of its Subsidiaries or any ERISA Affiliate (provided that the foregoing shall apply in the case of any Multiemployer Plan only to the extent that any document described therein is in the possession of the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate or reasonably available thereto from the sponsor or trustee of any such plan) (collectively, the "Employee Benefit Plans"); (ii) all agreements (including, without limitation, shareholders' agreements, stockholders' agreements, subscription agreements and registration rights agreements) entered into by the Borrower or any of its Subsidiaries governing the terms and relative rights of its capital stock and any agreements entered into by shareholders relating to any such entity with respect to its capital stock, in each case, that are to remain in effect after giving effect to the consummation of the Transaction (collectively, the "Shareholders' Agreements"); -46- (iii) all material agreements with members of, or with respect to, the management of the Borrower or any of its Subsidiaries (other than Employment Agreements) that are to remain in effect after giving effect to the consummation of the Transaction (collectively, the "Management Agreements"); (iv) all material employment agreements entered into by the Borrower or any of its Subsidiaries (collectively, the "Employment Agreements"); (v) all collective bargaining agreements applying or relating to any employee of the Borrower or any of its Subsidiaries that are to remain in effect after giving effect to the consummation of the Transaction (collectively, the "Collective Bargaining Agreements"); (vi) all agreements evidencing or relating to Existing Indebtedness of the Borrower that are to remain in effect after giving effect to the consummation of the Transaction (collectively, the "Existing Indebtedness Agreements"); and (vii) any tax sharing, tax allocation or similar agreements entered into by the Borrower or any of its Subsidiaries (collectively, the "Tax Allocation Agreements"); all of which Employee Benefit Plans, Shareholders' Agreements, Management Agreements, Employment Agreements, Collective Bargaining Agreements, Existing Indebtedness Agreements and Tax Allocation Agreements shall be in form and substance reasonably satisfactory to the Agents. 5A.14 SOLVENCY OPINION; INSURANCE CERTIFICATES; FINANCIAL STATEMENTS; BUDGETS; LANDLORD Waivers. On or before the Initial Borrowing Date, the Administrative Agent shall have received: (i) a solvency opinion from Valuation Research Corporation, addressed to the Administrative Agent and each of the Lenders and dated the Initial Borrowing Date, in form and substance reasonably acceptable to the Agents, setting forth the conclusions that, after giving effect to the Transaction and the incurrence of all the financings contemplated herein, the Borrower and its Subsidiaries (taken as a whole) are not insolvent and will not be rendered insolvent by the indebtedness incurred in connection therewith, will not be left with unreasonably small capital with which to engage in their respective businesses and will not have incurred debts beyond their ability to pay such debts as they mature; (ii) evidence of insurance complying with the requirements of Section 8.03 for the business and properties of the Borrower and its Subsidiaries, in scope, form and substance reasonably satisfactory to the Agents and naming the Collateral Agent as an additional insured and/or loss payee, and stating that such insurance shall not be canceled or revised without at least 30 days' prior written notice by the insurer to the Collateral Agent; -47- (iii) true and correct copies of the historical financial statements, the PRO FORMA financial statements and the Projections referred to in Sections 7.10(b) and (e), which historical financial statements, PRO FORMA financial statements and Projections shall be consistent with the financial information set forth in the Confidential Information Memorandum dated April 2000 and delivered to the Lenders as part of the Transaction; (iv) a budget of the Borrower and its Subsidiaries in reasonable detail for each of the twelve months of the Borrower's current fiscal year; and (v) the Borrower and its Subsidiaries shall have used their reasonable best efforts to obtain, and shall, to the extent so obtained, have delivered to the Administrative Agent fully executed counterparts of landlord waivers, in form and substance reasonably satisfactory to the Agents, with respect to those Leaseholds of the Borrower and the Subsidiary Guarantors as are designated on Annex V. 5A.15 PAYMENT OF FEES. On the Initial Borrowing Date, all costs, fees and expenses, and all other compensation due to the Agents or the Lenders (including, without limitation, legal fees and expenses) shall have been paid to the extent due. SECTION 5B. CONDITIONS PRECEDENT TO THE CONSPEC ACQUISITION TO THE EXTENT CONSUMMATED ON OR PRIOR TO THE CONSPEC ACQUISITION TERMINATION DATE. The obligation of each Lender to make each Loan to the Borrower hereunder to finance the Conspec Acquisition (to the extent that same is consummated on or prior to the Conspec Acquisition Termination Date) is subject, at the time of the making of such Loans, to the satisfaction of the following conditions: 5B.01. INITIAL BORROWING DATE. On or prior to the Conspec Acquisition Date, the Initial Borrowing Date shall have occurred. 5B.02 OFFICER'S CERTIFICATE. On the Conspec Acquisition Date, the Administrative Agent shall have received a certificate dated such date signed by an Authorized Officer of the Borrower stating that all of the applicable conditions set forth in Sections 5B.04 through 5B.07, inclusive, and Section 6.01 have been satisfied on such date. 5B.03 CORPORATE DOCUMENTS; PROCEEDINGS. (a) On the Conspec Acquisition Date, the Administrative Agent shall have received from each Conspec Entity a certificate, dated the Conspec Acquisition Date, signed by the chairman, a vice-chairman, the president or any vice-president of such Conspec Entity, and attested to by the secretary or any assistant secretary of such Conspec Entity, in the form of Exhibit G with appropriate insertions, together with copies of the certificate of incorporation and by-laws of such Conspec Entity (or equivalent organizational documents) and the resolutions of such Conspec Entity referred to in such certificate and all of the foregoing (including each such certificate of incorporation and by-laws (or equivalent organizational documents)) shall be reasonably satisfactory to the Agents. (b) On the Conspec Acquisition Date, all corporate, partnership, limited liability company and legal proceedings and all instruments and agreements in connection with the transactions contemplated by this Agreement and the Conspec Acquisition shall be reason- -48- ably satisfactory in form and substance to the Administrative Agent, and the Administrative Agent shall have received all information and copies of all certificates, documents and papers, including good standing certificates, bring-down certificates and any other records of corporate proceedings and governmental approvals, 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 or governmental authorities. 5B.04 ADVERSE CHANGE, ETC. Except as disclosed in the Schedules to the Conspec Share Purchase Agreement as in effect on May 23, 2000 or as approved pursuant to Section 5B.06, there shall have been no change in the financial condition, results of operations, business, properties or prospects of the Conspec Entities since June 30, 1999 that (when aggregated with all such changes) (x) would have a Conspec Material Adverse Effect on the Conspec Entities (which, for purposes of this Section 5B.04, shall mean a "Material Adverse Effect" as defined in the Conspec Share Purchase Agreement as in effect on the date hereof), or (y) would have a material adverse effect on the ability of the shareholders of the Conspec Entities to consummate the transactions contemplated by the Conspec Share Purchase Agreement. 5B.05 APPROVALS. On or prior to the Conspec Acquisition Date, all necessary governmental (domestic and foreign) approvals required in connection with the Conspec Acquisition and the related incurrence of Loans to finance the same shall have been obtained and remain in effect, and all applicable waiting periods shall have expired without any action being taken by any competent authority which, in the reasonable judgment of the Agents, restrains, prevents or imposes materially adverse conditions upon the Conspec Acquisition and the related incurrence of Loans to finance the same. Additionally, there shall not exist any judgment, order, injunction or other restraint prohibiting or imposing materially adverse conditions upon the Conspec Acquisition or the related incurrence of Loans to finance the same. 5B.06 CONSUMMATION OF THE CONSPEC ACQUISITION. On or prior to the Conspec Acquisition Date, there shall have been delivered to the Administrative Agent a true and correct copy of the Conspec Share Purchase Agreement, with any changes thereto or waivers of the terms therein made after May 23, 2000 (including, without limitation, waivers of conditions precedent) to be reasonably satisfactory to Administrative Agent (other than with respect to immaterial amounts or waivers). The Conspec Acquisition shall have been consummated in all material respects in accordance with the terms and conditions of the Conspec Share Purchase Agreement and all applicable laws. 5B.07 REFINANCING; ETC. (a) On or prior to the Conspec Acquisition Date, all Indebtedness for borrowed money of the Conspec Entities shall have been terminated and repaid in full, together with all accrued and unpaid interest and fees thereon and all other amounts owing pursuant thereto. (b) On or prior to the Conspec Acquisition Date, all security interests in respect of, and Liens securing, obligations under all Indebtedness for borrowed money of the Conspec Entities shall have been terminated and released to the satisfaction of the Administrative Agent, and the Administrative Agent shall have received all such releases as may have been -49- requested by the Administrative Agent, which releases shall be in form and substance reasonably satisfactory to the 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 of each jurisdiction where a financing statement Form UCC-1 or equivalent was filed with respect to the Conspec Entities in connection with the security interests created pursuant to the Indebtedness for borrowed money of the Conspec Entities and the documentation related thereto, (ii) termination or reassignment of any security interest in, or Lien on, any patents, trademarks, copyrights or similar interests of the Conspec Entities on which filings have been made to secure obligations under such Indebtedness and (iii) terminations of all mortgages, leasehold mortgages and deeds of trusts created with respect to property of the Conspec Entities to secure the obligations under such Indebtedness, all of which shall be in form and substance reasonably satisfactory to the Administrative Agent. 5B.08 PLEDGE AGREEMENT; SECURITY AGREEMENT; ETC. (a) On the Conspec Acquisition Date, all requirements of clauses (c) and (d) of Section 8.14 required by their terms to have been satisfied at the time of the Conspec Acquisition shall have been satisfied. 5B.09 SUBSIDIARIES GUARANTY. On the Conspec Acquisition Date, each Conspec Entity shall have duly authorized, executed and delivered the Subsidiaries Guaranty. 5B.10 INSURANCE CERTIFICATES. On or before the Conspec Acquisition Date, the Administrative Agent shall have received evidence of insurance complying with the requirements of Section 8.03 for the business and properties of the Conspec Entities, in scope, form and substance reasonably satisfactory to the Administrative Agent and naming the Collateral Agent as an additional insured and/or loss payee, and stating that such insurance shall not be canceled or revised without at least 30 days' prior written notice by the insurer to the Collateral Agent. 5B.11 PAYMENT OF FEES. On the Conspec Acquisition Date, all costs, fees and expenses, and all other compensation due to the Administrative Agent or the Lenders (including, without limitation, legal fees and expenses) shall have been paid to the extent 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 but excluding Mandatory Borrowings made thereafter, which shall be made as provided in Section 1.01(g)), and the obligation of a Letter of Credit Issuer to issue any Letter of Credit, 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 each other Credit Document 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 the making of such Credit Event (it being understood and agreed that any representation or warranty which by its terms is made as of -50- a specified date shall be required to be true and correct in all material respects only as of such specified date). 6.02 NOTICE OF BORROWING; LETTER OF CREDIT REQUEST. (a) Prior to the making of each Loan (excluding Swingline Loans and Mandatory Borrowings), the Administrative Agent shall have received a Notice of Borrowing meeting the requirements of Section 1.03(a). Prior to the making of any Swingline Loan, the Swingline Lender shall have received the notice required by Section 1.03(b)(i). (b) Prior to the issuance of each Letter of Credit, the Administrative Agent and the respective Letter of Credit Issuer shall have received a Letter of Credit Request meeting the requirements of Section 2.02(a). The occurrence of the Initial Borrowing Date and the acceptance of the benefits or proceeds 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 5A (with respect to Credit Events on the Initial Borrowing Date) and in Section 5B 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 Sections 5A and 5B 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 satisfactory to the Agents 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 and/or participate in the Letters of Credit provided for herein, the Borrower makes the following representations, warranties and agreements with the Lenders, in each case after giving effect to the Transaction, all of which shall survive the execution and delivery of this Agreement, the making of the Loans and the issuance of the Letters of Credit (with the occurrence of each Credit Event 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 date of each such Credit Event, 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): 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 all jurisdictions where it is required to be so qualified and where the failure to be so qualified, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. -51- 7.02 POWER AND AUTHORITY. Each Credit Party has the corporate, partnership or limited liability company power and authority, as the case may be, to execute, deliver and carry out the terms and provisions of the Transaction Documents to which it is a 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 of the Transaction Documents to which it is a party. Each Credit Party has duly executed and delivered each Transaction Document to which it is a party and each such Transaction Document constitutes the legal, valid and binding obligation of such Credit Party enforceable in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or 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 of the Transaction Documents to which it is a party, nor compliance by any Credit Party with the terms and provisions thereof, nor the consummation of the transactions contemplated herein or therein, (i) will contravene any applicable provision of any law, statute, rule or regulation, or any order, writ, injunction or decree of any court or governmental instrumentality, (ii) will conflict or be inconsistent with or result in any breach of, any of the terms, covenants, conditions or provisions of, or constitute a default under, or (other than pursuant to the Security Documents) result in the creation or imposition of (or the obligation to create or impose) any Lien 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, loan agreement, credit agreement or any other material agreement or instrument to which the Borrower or any of its Subsidiaries is a party or by which it or any of its property or assets are bound or to which it may be subject (including, without limitation, the Existing Indebtedness) or (iii) will violate any provision of the certificate of incorporation or by-laws (or equivalent organizational documents) of the Borrower or any of its Subsidiaries. 7.04 LITIGATION. There are no actions, suits, proceedings or investigations pending or, to the best knowledge of the Borrower, threatened with respect to the Borrower or any of its Subsidiaries that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect; PROVIDED that, for the purpose of this Section 7.04, the settlement of, or entry or payment of a judgment for, the EFCO Litigation in an aggregate amount not to exceed $25,000,000 (exclusive of post-judgment interest) will not, in and of itself, have a Material Adverse Effect (it being understood that this proviso shall not be deemed to imply that the settlement of, or entry or payment of a judgment for, the EFCO Litigation in an aggregate amount exceeding $25,000,000 (exclusive of post-judgment interest) shall necessarily constitute, in and of itself, a Material Adverse Effect). Additionally, there does not exist any judgment, order or injunction prohibiting or imposing material adverse conditions upon the occurrence of any Credit Event. 7.05 USE OF PROCEEDS; MARGIN REGULATIONS. (a) The proceeds of all Initial A Term Loans shall be utilized to (i) make cash payments to the holders of the Trust Preferred Stock and/or Subordinated Debentures who have elected to convert same into the right to receive cash in accordance with the terms of the Trust Agreement, the Subordinated Debenture Indenture -52- and the Merger Agreement or (ii) to reimburse the Borrower for payments theretofore paid for the purposes described in clause (i) of this Section 7.05(a). (b) The proceeds of all Initial B Term Loans shall be utilized to finance, in part, the Transaction (other than for the purposes described in clause (a) of this Section 7.05) and to pay the fees and expenses incurred in connection therewith. (c) The proceeds of all Revolving Loans and Swingline Loans shall be utilized for the general corporate and working capital purposes of the Borrower and its Subsidiaries (including to effect Permitted Acquisitions and make Capital Expenditures, in each case to the extent permitted by this Agreement); PROVIDED that no more than $7,500,000 of Revolving Loans and Swingline Loans in the aggregate may be utilized on the Initial Borrowing Date to finance the Transaction (other than for the purposes described in clause (a) of this Section 7.05) and to pay the fees and expenses incurred in connection therewith. (d) The proceeds of all Incremental Term Loans shall be utilized to finance Permitted Acquisitions and to pay the fees and expenses incurred in connection therewith. (e) The proceeds of all Acquisition Revolving Loans shall be used to finance Permitted Acquisitions and to pay the fees and expenses incurred in connection therewith. (f) 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 and 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. 7.06 GOVERNMENTAL APPROVALS. Except as may have 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), no order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by, any foreign or domestic governmental or public body or authority, or any subdivision thereof, is required to authorize or is required in connection with (i) the execution, delivery and performance of any Transaction Document or (ii) the legality, validity, binding effect or enforceability of any Transaction Document. 7.07 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. 7.08 PUBLIC UTILITY HOLDING 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 Holding Company Act of 1935, as amended. 7.09 TRUE AND COMPLETE DISCLOSURE. All factual information (excluding the Projections, which are subject to Section 7.10(e)) (taken as a whole) heretofore or contempor- -53- aneously furnished by or on behalf of the Borrower or any of its Subsidiaries in writing to the Administrative Agent or any Lender (including, without limitation, all information contained in the Transaction Documents) for purposes of or in connection with this Agreement 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 any such Persons 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 material fact necessary to make such information (taken as a whole) not misleading at such time in light of the circumstances under which such information was provided. 7.10 FINANCIAL CONDITION; FINANCIAL STATEMENTS. (a) On and as of the Initial Borrowing Date, on a PRO FORMA basis after giving effect to the Transaction and all other transactions contemplated by the Transaction Documents and to all Indebtedness incurred, and to be incurred, and Liens created, and to be created, by each Credit Party in connection therewith, (x) the sum of the assets (including capital stock and promissory notes), at a fair valuation, of each of the Borrower (on a stand-alone basis) and the Borrower and its Subsidiaries (taken as a whole) will exceed its debts, (y) it has not incurred nor intended to, nor believes that it will, incur debts beyond its ability to pay such debts as such debts mature and (z) it will have sufficient capital with which to conduct its business. For purposes of this Section 7.10(a), "debt" means any liability on a claim, and "claim" means (i) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (ii) right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured. (b) (i) The consolidated balance sheets of the Borrower and its Subsidiaries for the fiscal years ended December 31, 1999, 1998 and 1997, respectively, and for the fiscal quarter ended March 31, 2000, and the related consolidated statements of income, cash flows and shareholders' equity of the Borrower and its Subsidiaries for the fiscal years and fiscal quarter ended on such dates, copies of which have been furnished to the Lenders prior to the Initial Borrowing Date, present fairly in all material respects the consolidated financial position of the Borrower and its Subsidiaries at the date of such balance sheets and the consolidated results of the operations of the Borrower and its Subsidiaries for the periods covered thereby. All of the foregoing historical financial statements have been prepared in accordance with GAAP consistently applied except as disclosed in the notes thereto. (ii) The PRO FORMA consolidated financial statements of the Borrower and its Subsidiaries at December 31, 1999 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 and its Subsidiaries as of December 31, 1999 and the PRO FORMA consolidated results of operations of the Borrower and its Subsidiaries for the twelve-month period ended on December 31, 1999. Such PRO FORMA financial statements have been prepared on a basis consistent with the historical financial statements set forth in clause (i) of this Section 7.10(b). -54- (c) Since December 31, 1999 (but after giving effect to the Transaction as if same had occurred prior thereto), nothing has occurred that has had, or could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. (d) Except as fully reflected in the financial statements described in Section 7.10(b) and the Indebtedness incurred under the Transaction Documents, (i) there were as of the Initial Borrowing Date (and after giving effect to any Loans made on such date), no liabilities or obligations (excluding current obligations incurred in the ordinary course of business) with respect to the Borrower or any of its Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether or not due) and (ii) the Borrower does not know of any basis for the assertion against the Borrower or any of its Subsidiaries of any such liability or obligation which as to clauses (i) and (ii) above, either individually or in the aggregate, has had, or could be reasonably likely to have, a Material Adverse Effect. (e) The Projections have been prepared on a basis consistent with the financial statements referred to in Section 7.10(b) (except as may otherwise be indicated in the Projections), and are based on good faith estimates and assumptions made by the management of the Borrower. On the Initial Borrowing Date (i) such management believed that the Projections were reasonable and attainable and (ii) there is no fact known to the Borrower or any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect which has not been disclosed herein or in such other documents, certificates and statements furnished to the Lenders for use in connection with the transactions contemplated hereby. 7.11 SECURITY INTERESTS. On and after the Initial Borrowing Date, each of the Security Documents creates (or after the execution and delivery thereof will create), as security for the Obligations, a valid and enforceable perfected security interest in and Lien on all of the Collateral subject thereto, superior to and prior to the rights of all third Persons, and subject to no other Liens (other than Permitted Liens), in favor of the Collateral Agent. No filings or recordings are required in order to perfect the security interests created under any Security Document except for filings or recordings which shall have been made on or prior to the tenth day after the Initial Borrowing Date as contemplated by Section 5A.11(b) or on or prior to the execution and delivery thereof as contemplated by Sections 8.11, 8.12 and 9.15. 7.12 TRANSACTION. At the time of consummation thereof, the Transaction shall have been consummated in all material respects in accordance with the terms of the respective Transaction Documents and all applicable laws. At the time of consummation thereof, all necessary and material consents and approvals of, and filings and registrations with, and all other actions in respect of, all governmental agencies, authorities or instrumentalities required to make or consummate the Transaction have been obtained, given, filed or taken or waived and are or will be in full force and effect (or effective judicial relief with respect thereto has been obtained). All applicable waiting periods with respect thereto have or, prior to the time when required, will have, expired without, in all such cases, any action being taken by any competent authority which restrains, prevents, or imposes material adverse conditions upon the Transaction. Additionally, there does not exist any judgment, order or injunction prohibiting or imposing material adverse conditions upon the Transaction, or the occurrence of any Credit Event or the -55- performance by the Borrower and its Subsidiaries of their respective obligations under the Transaction Documents and all applicable laws. The Transaction has been consummated in all material respects in accordance with the respective Transaction Documents and all applicable laws. 7.13 COMPLIANCE WITH ERISA. (a) Annex III sets forth, as of the Initial Borrowing Date, each Plan and each Multiemployer Plan. Each Plan (and each related trust, insurance contract or fund) is in material compliance with its terms and with all applicable laws, including, without limitation, ERISA and the Code; each Plan (and each related trust, if any) which is intended to be qualified under Section 401(a) of the Code has received a determination letter from the Internal Revenue Service to the effect that it meets the requirements of Sections 401(a) and 501(a) of the Code; no Reportable Event has occurred which could reasonably be expected to result in a material liability; to the knowledge of the Borrower, no Multiemployer Plan is insolvent or in reorganization; no Plan has an Unfunded Current Liability which, when added to the aggregate amount of Unfunded Current Liabilities with respect to all other Plans and the amounts described in the last sentence of Section 7.13(b) with respect to Foreign Plans, would be material to the Borrower and its Subsidiaries; 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 and a Multiemployer 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 or a Multiemployer 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 or a Multiemployer 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 or a Multiemployer Plan pursuant to the foregoing provisions of ERISA and the Code; except for the standard termination of the Dayton Superior Corporation Employees Retirement Plan, no proceedings have been instituted to terminate or appoint a trustee to administer any Plan which is subject to Title IV or ERISA; the PBGC has not requested orally or in writing that the Borrower or any Subsidiary or any ERISA Affiliate post a bond or furnish security or make additional contributions to a Plan on account of a Reportable Event which has occurred with respect to a Plan; the PBGC has not notified the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate orally or in writing that the PBGC intends to take any action as a result of a Reportable Event that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect; 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, to the knowledge of the Borrower, 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 Multiemployer Plans in the event of a complete withdrawal therefrom, as of the close of the most recent fiscal year of each such Multiemployer Plan ended -56- prior to the date of the most recent Credit Event, could not reasonable be expected to have a Material Adverse Effect; 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 material compliance with the provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the Code; 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 or Multiemployer 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 liability which could reasonably be expected to have a Material Adverse Effect. (b) Each Foreign Pension Plan, if any, has been maintained in material compliance with its terms and 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, if any, have been timely made. Neither the Borrower nor any of its Subsidiaries 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, when added to the aggregate amount of Unfunded Current Liabilities with respect to all other Plans determined as of the end of the Borrower's most recently completed fiscal year, did not materially exceed the current value of the assets of such Foreign Pension Plan allocable to such benefit liabilities. 7.14 CAPITALIZATION. (a) On the Initial Borrowing Date and after giving effect to the Transaction and the other transactions contemplated hereby, the authorized capital stock of the Borrower shall consist of 5,000,000 shares of common stock, no par value. All outstanding shares of capital stock of the Borrower have been duly and validly issued and are fully paid and nonassessable. The Borrower does not have outstanding any securities convertible into or exchangeable for its capital stock or outstanding 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 or rights that have been or may be issued from time to time to purchase shares of the Borrower's common stock or Qualified Preferred Stock. (b) All outstanding shares of capital stock or other equity interests of each Subsidiary of the Borrower have been duly and validly issued, are fully paid and non-assessable and have been issued free of preemptive rights. No Subsidiary of the Borrower has outstanding any securities convertible into or exchangeable for its capital stock or other equity interests or outstanding any right to subscribe for or to purchase, or any options or warrants 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 or other equity interests or any stock appreciation or similar rights. -57- 7.15 SUBSIDIARIES. On and as of the Initial Borrowing Date and after giving effect to the consummation of the Transaction, the Borrower has no Subsidiaries other than those Subsidiaries listed on Annex IV. Annex IV correctly sets forth, as of the Initial Borrowing Date and after giving effect to the Transaction, the percentage ownership (direct and indirect) of the Borrower in each class of capital stock or other equity interests of each of its Subsidiaries and also identifies the direct owner thereof. 7.16 INTELLECTUAL PROPERTY, ETC. Each of the Borrower and each of its Subsidiaries owns all patents, trademarks, permits, service marks, trade names, technology, proprietary information, copyrights, licenses, franchises and formulas, or other rights with respect to the foregoing, and has obtained assignments of all leases, licenses and other rights of whatever nature, and has in full force and effect all accreditations and certifications, reasonably necessary for the 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, either individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. 7.17 COMPLIANCE WITH STATUTES, ETC. Each of the Borrower and each of its Subsidiaries is in compliance with all applicable statutes, regulations, rules 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, except such non-compliance as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 7.18 ENVIRONMENTAL MATTERS. (a) Each of the Borrower and each of its Subsidiaries has complied with, and on the date of each Credit Event is in compliance with, all applicable Environmental Laws and the requirements of any permits issued under such Environmental Laws and neither the Borrower nor any of its Subsidiaries is liable for any penalties, fines or forfeitures for failure to comply with any of the foregoing. There are no pending or, to the best knowledge of the Borrower, threatened Environmental Claims against the Borrower or any of its Subsidiaries or any Real Property at any time owned, leased or operated by the Borrower or any of its Subsidiaries or, to the best knowledge of the Borrower, on any property adjoining or in the vicinity of any such Real Property that could reasonably be expected (i) to form the basis of an Environmental Claim against the Borrower or any of its Subsidiaries or any such Real Property or (ii) to cause any such Real Property to be subject to any restrictions on the ownership, occupancy, use 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, any Real Property at any time owned, leased or operated by the Borrower or any of its Subsidiaries except in compliance with all applicable Environmental Laws and as reasonably required in connection with the operation, use and maintenance of such Real Property by the Borrower's or such Subsidiary's business. Hazardous Materials have not at any time been Released on or from any Real Property at any time owned, leased or operated by the Borrower or any of its Subsidiaries. There are not now any underground storage tanks -58- located on any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries. (c) Notwithstanding anything to the contrary in this Section 7.18, the representations and warranties made in this Section 7.18 shall only be untrue if the effect of any or all conditions, failures, noncompliances, Environmental Claims, Releases and presence of underground storage tanks, in each case of the types described above, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. 7.19 PROPERTIES. All Real Property owned by the Borrower and its Subsidiaries and all Leaseholds leased by the Borrower and its Subsidiaries, in each case as of the Initial Borrowing Date and after giving effect to the Transaction, and the nature of the interest therein, is correctly set forth in Annex V. Each of the Borrower and each of its Subsidiaries has good and marketable title to, or a validly subsisting leasehold interest in, all material properties owned or leased by it, including all Real Property reflected in Annex V or in the financial statements referred to in Section 7.10(b), free and clear of all Liens, other than Permitted Liens. 7.20 LABOR RELATIONS. Neither the Borrower nor any of its Subsidiaries is engaged in any unfair labor practice that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. There is (i) no unfair labor practice complaint pending against the Borrower or any of its Subsidiaries or threatened against any of them, before the National Labor Relations Board, 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 threatened against any of them, (ii) no strike, labor dispute, slowdown or stoppage pending against the Borrower or any of its Subsidiaries or threatened against the Borrower or any of its Subsidiaries and (iii) no union representation question existing with respect to the employees of the Borrower or any of its Subsidiaries and no union organizing activities are taking place, except as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 7.21 TAX RETURNS AND PAYMENTS. Each of the Borrower and each of its Subsidiaries has filed all federal income tax returns and all other material tax returns, domestic and foreign, required to be filed by it and has paid all material taxes and assessments payable by it which have become due, except for those contested in good faith and adequately disclosed and fully provided for on the financial statements of the Borrower and its Subsidiaries in accordance with GAAP. Each of the Borrower and each of its Subsidiaries has at all times paid, or has provided adequate reserves (in the good faith judgment of the management of the Borrower) for the payment of, all federal, state and foreign income taxes applicable for all prior fiscal years and for the current fiscal year to date. There is no action, suit, proceeding, investigation, audit, or claim now pending or, to the knowledge of the Borrower, threatened by any authority regarding any taxes relating to the Borrower or any of its Subsidiaries which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. As of the Initial Borrowing Date, 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, -59- 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. 7.22 EXISTING INDEBTEDNESS. Annex VI sets forth a true and complete list of all Indebtedness 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 Obligations and the Senior Subordinated Notes, the "Existing Indebtedness"), in each case showing the aggregate principal amount thereof and the name of the respective borrower and any other entity which directly or indirectly guaranteed such debt. 7.23 INSURANCE. Annex VII sets forth a true, correct and complete summary of all insurance carried (including amounts thereof) by the Borrower and its Subsidiaries on and as of the Initial Borrowing Date. 7.24 REPRESENTATIONS AND WARRANTIES IN OTHER DOCUMENTS. All representations and warranties set forth in the other Transaction 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, unless stated to relate to a specific earlier date, in which case such representations or warranties shall be true and correct in all material respects as of such earlier date. 7.25 SUBORDINATED NOTES; ETC. (a) The subordination provisions contained in the Senior Subordinated Notes and in the other Senior Subordinated Note Documents are enforceable against the respective Credit Parties party thereto and the holders of the Senior Subordinated Notes, and all Obligations and Guaranteed Obligations (as defined in the Subsidiaries Guaranty) are within the definition of "Senior Debt" included in such subordination provisions. (b) The subordination provisions contained in the Subordinated Debentures are enforceable against the Borrower and the holders of the Subordinated Debentures, and all Obligations consisting of principal and interest are within the definition of "Senior Debt" included in such subordination provisions. (c) After the issuance thereof, the subordination provisions contained in any Additional Subordinated Debt will be enforceable against the respective Credit Parties obligated thereunder and the holders of the Additional Subordinated Debt, and all Obligations and Guaranteed Obligations (as defined in the Subsidiaries Guaranty) will be within the definition of "Senior Debt" included in such subordinated provisions. (d) After the issuance thereof, the subordination provisions contained in any Shareholder Subordinated Note will be enforceable against the Borrower and the holders of such Shareholder Subordinated Note, and all Obligations will be within the definition of "Senior Indebtedness" included in such subordinated provisions. -60- SECTION 8. AFFIRMATIVE COVENANTS. The Borrower hereby covenants and agrees that as of the Effective Date and thereafter for so long as this Agreement is in effect and until the Total Commitment has terminated, no Letters of Credit or Notes are outstanding and the Loans and Unpaid Drawings, together with interest, Fees and all other Obligations (other than any indemnities described in Section 13.13 which are not then due and payable) incurred hereunder, are paid in full: 8.01 INFORMATION COVENANTS. The Borrower will furnish, or will cause to be furnished, to each Lender: (a) MONTHLY REPORTS. Within 30 days after the end of each fiscal month of the Borrower, the consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal month and the related consolidated statements of income for such fiscal month and for the elapsed portion of the fiscal year ended with the last day of such fiscal month, in each case setting forth comparative figures for the corresponding fiscal month in the prior fiscal year and comparable budgeted figures for such fiscal month 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 other Authorized Officer of the Borrower that they fairly present in all material respects on a basis consistent with GAAP the financial condition of the Borrower and its Subsidiaries as of the dates indicated and the results of their operations and changes in their cash flows for the periods indicated, subject to normal year-end audit adjustments and the absence of footnotes. (b) QUARTERLY FINANCIAL STATEMENTS. Within 45 days after the close of the first three quarterly accounting periods in each fiscal year of the Borrower, (i) the consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such quarterly accounting period and the related consolidated statements of income and retained earnings and 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) and (ii) management's discussion and analysis of the important operational and financial developments during such quarterly accounting period, all of which shall be in reasonable detail and certified by the chief financial officer or other Authorized Officer of the Borrower that they fairly present in all material respects in accordance with GAAP the financial condition of the Borrower and its Subsidiaries as of the dates indicated and the results of their operations and changes in their cash flows for the periods indicated, subject to normal year-end audit adjustments and the absence of footnotes. (c) ANNUAL FINANCIAL STATEMENTS. Within 90 days after the close of each fiscal year of the Borrower, the consolidated balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal year and the related consolidated statements of income and retained earnings and cash flows for such fiscal year and setting forth comparative consolidated figures for the preceding fiscal year and comparable budgeted figures for such fiscal year as set forth in the respective budget delivered pursuant to Section 8.01(d) and (except for such comparable budgeted figures) certified by Arthur Andersen LLP or such other independent certified public -61- accountants of recognized national standing as shall be reasonably acceptable to the Administrative Agent, in each case to the effect that such statements fairly present in all material respects the financial condition of the Borrower and its Subsidiaries as of the dates indicated and the results of their operations and changes in its financial position for the periods indicated in conformity with GAAP applied on a basis consistent with prior years, together with a certificate of such accounting firm stating that in the course of its regular audit of the business of the Borrower and its Subsidiaries, which audit was conducted in accordance with generally accepted auditing standards, no Default or Event of Default relating to financial or accounting matters which has occurred and is continuing has come to their attention or, if such a Default or an Event of Default has come to their attention, a statement as to the nature thereof (it being understood that such accounting firm shall not have any liability for failure to obtain knowledge of any such Default or Event of Default). (d) BUDGETS, ETC. As soon as available but not more than 45 days after the commencement of each fiscal year of the Borrower, a budget of the Borrower and its Subsidiaries (x) in reasonable detail for each of the twelve months and four fiscal quarters of such fiscal year and (y) in summary form for each of the four fiscal years immediately following such fiscal year, in each case as customarily prepared by management for its internal use setting forth, with appropriate discussion, the principal assumptions upon which such budgets are based. Together with each delivery of financial statements pursuant to Sections 8.01(a), (b) and (c), a comparison of the current year to date financial results (other than in respect of the balance sheets included therein) against the budgets required to be submitted pursuant to this clause (d) also shall be presented. (e) OFFICER'S CERTIFICATES. At the time of the delivery of the financial statements provided for in Sections 8.01(a), (b) and (c), a certificate of the chief financial officer or other Authorized Officer of the Borrower to the effect that no Default or Event of Default exists or, if any Default or Event of Default does exist, specifying the nature and extent thereof, which certificate shall, if delivered in connection with the financial statements in respect of a period ending on the last day of a fiscal quarter or fiscal year of the Borrower, set forth (in reasonable detail) the calculations required to establish (x) whether the Borrower and its Subsidiaries were in compliance with the provisions of Sections 4.02(e), 4.02(f), 4.02(g), 4.02(h), 4.02(i), 8.14, 9.02, 9.04, 9.05, 9.06(ii) and 9.08 through and including 9.11, as at the end of such fiscal quarter or year, as the case may be, and (y) the Total Leverage Ratio as at the end of such fiscal quarter or year, as the case may be. In addition, at the time of the delivery of the financial statements provided for in Section 8.01(c), a certificate of the chief financial officer or other Authorized Officer of the Borrower setting forth (in reasonable detail) the amount of, and calculations required to establish the amount of, Excess Cash Flow for the Excess Cash Flow Payment Period ending on the last day of the respective fiscal year. (f) NOTICE OF DEFAULT OR LITIGATION. Promptly, and in any event within three Business Days after an 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, which notice shall specify the nature and period of existence thereof and what action the Borrower proposes to take with respect thereto, (ii) any litigation or proceeding pending or -62- threatened (x) against the Borrower or any of its Subsidiaries which could reasonably be expected to have a Material Adverse Effect, (y) with respect to any material Indebtedness of the Borrower or any of its Subsidiaries or (z) with respect to any Transaction Document, (iii) any material governmental investigation pending or threatened against the Borrower or any of its Subsidiaries and (iv) any other event which could reasonably be expected to have a Material Adverse Effect. (g) AUDITORS' REPORTS. Promptly upon receipt thereof, a copy of each report or "management letter" submitted to the Borrower or any of its Subsidiaries by its independent accountants in connection with any annual, interim or special audit made by them of the books of the Borrower or any of its Subsidiaries and the management's non-privileged responses thereto. (h) ENVIRONMENTAL MATTERS. Promptly after obtaining knowledge of any of the following (but only to the extent that any of the following, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect), written notice of: (i) any pending or threatened Environmental Claim against the Borrower or any of its Subsidiaries or any Real Property at any time owned, leased or operated by the Borrower or any of its Subsidiaries; (ii) any condition or occurrence on any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries that (x) results in noncompliance by the Borrower or any of its Subsidiaries with any applicable Environmental Law or (y) could reasonably be anticipated 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 at any time owned, leased or operated by the Borrower or any of its Subsidiaries that could reasonably be anticipated to cause such Real Property to be subject to any restrictions on the ownership, occupancy, use or transferability by the Borrower or its Subsidiary, as the case may be, of its interest in 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. All such notices referred to above in this Section 8.01(h) shall describe in reasonable detail the nature of the claim, investigation, condition, occurrence or removal or remedial action and the Borrower's response or proposed response thereto. In addition, the Borrower agrees to provide the Lenders with copies of all material communications by the Borrower or any of its Subsidiaries with any Person, government or governmental agency relating to any of the matters set forth in clauses (i)-(iv) above, and such detailed reports relating to any of the matters set forth in clauses (i)-(iv) above as may reasonably be requested by the Administrative Agent or the Required Lenders. -63- (i) OTHER INFORMATION. Promptly upon transmission thereof, copies of any filings and registrations with, and reports to, the SEC by the Borrower or any of its Subsidiaries and copies of all financial statements, proxy statements, notices and reports as the Borrower or any of its Subsidiaries shall send generally to analysts and the holders of their capital stock in their capacity as such holders (to the extent not theretofore delivered to the Lenders pursuant to this Agreement) and, with reasonable promptness, such other information or documents (financial or otherwise) as the Administrative Agent on its own behalf or on behalf of the Required Lenders may reasonably request from time to time. 8.02 BOOKS, RECORDS AND INSPECTIONS; ANNUAL MEETING WITH LENDERS. (a) The Borrower will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries in conformity with GAAP 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, upon notice to the chief financial officer or other Authorized Officer of the Borrower, officers and designated representatives of the Administrative Agent or the Required Lenders to visit and inspect any of the properties or assets of the Borrower and any of its Subsidiaries in whomsoever's possession, and to examine the books of account of the Borrower and any of its Subsidiaries and discuss the affairs, finances and accounts of the Borrower and of any of its Subsidiaries with, and be advised as to the same by, their officers and independent accountants, all at such reasonable times and intervals and to such reasonable extent as the Administrative Agent or the Required Lenders may desire. (b) At the request of the Administrative Agent, the Borrower will within 120 days after the close of each of its fiscal years, hold a meeting (at a mutually agreeable location and time) with all of the Lenders at which meeting shall be reviewed the financial results of the previous fiscal year and the financial condition of the Borrower and its Subsidiaries and the budgets presented for the current fiscal year of the Borrower and its Subsidiaries. 8.03 INSURANCE. (a) The Borrower will, and will cause each of its Subsidiaries to, (i) maintain, with financially sound and reputable insurance companies, insurance on all its property in at least such amounts and against at least such risks as is consistent and in accordance with industry practice and (ii) furnish to the Administrative Agent and each of the Lenders, upon request, full information as to the insurance carried. In addition to the requirements of the immediately preceding sentence, the Borrower will at all times cause insurance of the types described in Annex VII to be maintained (with the same scope of coverage as that described in Annex VII) at levels which are at least as great as the respective amount described opposite the respective type of insurance on Annex VII. Such insurance shall include physical damage insurance on all real and personal property (whether now owned or hereafter acquired) on an all risk basis, covering the full repair and replacement costs of all such property and business interruption insurance for the actual loss sustained. The provisions of this Section 8.03 shall be deemed supplemental to, but not duplicative of, the provisions of any Security Documents that require the maintenance of insurance. -64- (b) The Borrower will, and will cause each of its Subsidiaries to, at all times keep the respective property of the Borrower and its Subsidiaries insured in favor of the Collateral Agent, and all policies or certificates with respect to such insurance (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 certificate holder and loss payee with respect to all property (real and personal), additional insured with respect to general liability and umbrella liability coverage and certificate holder with respect to workers' compensation insurance), (ii) shall state that such insurance policies shall not be canceled or materially changed without at least 30 days' prior written notice thereof by the respective insurer to the Collateral Agent and (iii) shall be deposited with the Collateral Agent. (c) If the Borrower or any of its Subsidiaries shall fail to maintain any insurance in accordance with this Section 8.03, or if the Borrower or any of its Subsidiaries shall fail to so name the Collateral Agent as an additional insured or loss payee, as the case may be, or so deposit all certificates with respect thereto, the Administrative Agent and/or the Collateral Agent shall have the right (but shall be under no obligation) to procure such insurance, and the Borrower agrees to reimburse the Administrative Agent or the Collateral Agent, as the case may be, for all costs and expenses of procuring such insurance. 8.04 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, prior to the date on which penalties attach thereto, and all lawful claims for sums that have become due and payable which, if unpaid, might become a Lien not otherwise permitted under Section 9.03; PROVIDED that neither the Borrower nor any of its Subsidiaries shall be 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 GAAP. 8.05 EXISTENCES AND FRANCHISES. The Borrower will do, 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, authority to do business, licenses, certifications, accreditations, trademarks, copyrights and patents; PROVIDED, HOWEVER, that (i) any transaction permitted by Section 9.02 will not constitute a breach of this Section 8.05 and (ii) nothing in this Section 8.05 shall prevent (x) the loss by the Borrower or any of its Subsidiaries of its qualification as a foreign corporation, partnership or limited liability company in any jurisdiction or (y) the loss by the Borrower or any of its Subsidiaries of any of their respective franchises, licenses, certifications, accreditations, trademarks, copyrights or patents, to the extent that the effect of any such losses of the type described in clause (x) above and this clause (y) could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 8.06 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 -65- of its business and the ownership of its property except for such noncompliance as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. 8.07 COMPLIANCE WITH ENVIRONMENTAL LAWS. (a) (i) The Borrower will comply, and will cause each of its Subsidiaries to comply, with all Environmental Laws applicable to the ownership or use of its Real Property now or hereafter owned, leased or operated by the Borrower or any of its Subsidiaries, 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 and (ii) 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 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, unless the failure to comply with the requirements specified in clause (i) or (ii) above, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. If the Borrower or any of its Subsidiaries, or any tenant or occupant of any Real Property owned, leased or operated by the Borrower or any of its Subsidiaries, cause or permit any intentional or unintentional act or omission resulting in the presence or Release of any Hazardous Material (except in compliance with applicable Environmental Laws), the Borrower agrees to undertake, and/or to cause any of its Subsidiaries, tenants or occupants to undertake, at their sole expense, any clean up, removal, remedial or other action required pursuant to Environmental Laws to remove and clean up any Hazardous Materials from any Real Property except where the failure to do so, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect; PROVIDED that neither the Borrower nor any of its Subsidiaries shall be required to comply with any such order or directive which is being contested in good faith and by proper proceedings so long as it has maintained adequate reserves with respect to such compliance to the extent required in accordance with GAAP. (b) At the written request of the Administrative Agent or the Required Lenders, which request shall specify in reasonable detail the basis therefor, at any time and from time to time, the Borrower will provide, at its sole cost and expense, an environmental site assessment report concerning any Real Property now or hereafter owned, leased or operated by the Borrower or any of its Subsidiaries, prepared by an environmental consulting firm approved by the Administrative Agent, which approval shall not be unreasonably withheld, addressing the matters in clause (i), (ii) or (iii) below which gives rise to such request (or, in the case of a request pursuant to following clause (i), addressing such matter as may be requested by the Administrative Agent or the Required Lenders) and estimating the range of the potential costs of any removal, remedial or other corrective action in connection with any such matter, provided that in no event shall such request be made unless (i) an Event of Default has occurred and is continuing, (ii) the Lenders receive notice under Section 8.01(h) for any event for which notice is required to be delivered for any such Real Property or (iii) the Administrative Agent or the Required Lenders reasonably believe that there was a breach of any representation, warranty or covenant contained in Section 7.18 or 8.07(a). If the Borrower fails to provide the same within 60 days after such request was made, the Administrative Agent may order the same, and the Borrower shall grant and hereby grants, to the Administrative Agent and the Lenders and their -66- agents access to such Real Property and specifically grants, the Administrative Agent and the Lenders and their agents an irrevocable non-exclusive license, subject to the rights of tenants, to undertake such an assessment, all at the Borrower's expense. 8.08 ERISA. (a) 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 other Authorized Officer of the Borrower setting forth in reasonable detail information 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 to 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 or Multiemployer Plan participant, and any notices received by the Borrower, such Subsidiary or such ERISA Affiliate from the PBGC or other governmental agency or a Plan or Multiemployer Plan participant or the Plan administrator 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 is reasonably likely to 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 by the Borrower or any Subsidiary of the Borrower with respect to a Plan or Multiemployer Plan or Foreign Pension Plan has not been timely made; that a Plan or Multiemployer Plan has been or is reasonably likely to be terminated, reorganized, partitioned or declared insolvent under Title IV of ERISA; that the PBGC has requested orally or in writing that the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate post a bond or furnish security to the PBGC or make additional contributions to a Plan on account of a Reportable Event which has occurred with respect to a Plan; or the PBGC has notified the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate orally or in writing that the PBGC intends to take any action as a result of a Reportable Event that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect; that a Plan has an Unfunded Current Liability which, when added to the aggregate amount of Unfunded Current Liabilities with respect to all other Plans, exceeds the aggregate amount of such Unfunded Current Liabilities that existed on the Initial Borrowing Date by $1,000,000; that proceedings are reasonably likely to 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 or Multiemployer Plan; that the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate will or is reasonably likely to incur any material liability (including any indirect, contingent, or secondary liability) to or on account of the termination of -67- or withdrawal from a Plan or Multiemployer plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate will incur any material liability with respect to a Plan or Multiemployer Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or 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 is reasonably likely to incur any material liability 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 Section 601 of ERISA) or any Plan or any Foreign Pension Plan in addition to the liabilities that existed on the Initial Borrowing Date pursuant to any such plan or plans. (b) 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. Upon the request of the Administrative Agent, the Borrower will also deliver to each of the Lenders 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, notices, annual reports and other information delivered to the Lenders pursuant to the first and second sentences of this paragraph, any material notices received by the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate with respect to any Plan, Multiemployer Plan or Foreign Pension Plan from any government agency or plan administrator or sponsor or trustee, shall be delivered to the Lenders no later than ten (10) days after such records, documents or information is furnished to the PBGC or such notice has been received by the Borrower, such Subsidiary or such ERISA Affiliate, as applicable. The Borrower and each of its applicable Subsidiaries shall insure 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. 8.09 GOOD REPAIR. The Borrower will, and will cause each of its Subsidiaries to, ensure that its material properties and equipment used in its business are kept in good repair, working order and condition, and that from time to time there are made in such properties and equipment all needful and proper repairs, renewals, replacements, extensions, additions, betterments and improvements thereto, to the extent and in the manner customary for companies in similar businesses. 8.10 END OF FISCAL YEARS; FISCAL QUARTERS. The Borrower will, for financial reporting purposes, cause (i) each of its, and each of its Subsidiaries', fiscal years to end on December 31 of each year and (ii) each of its and its Subsidiaries' fiscal quarters to end on dates which are consistent with a fiscal year end as provided above and the Borrower's practice as in effect on the Initial Borrowing Date. -68- 8.11 ADDITIONAL SECURITY; FURTHER ASSURANCES. (a) The Borrower will, and will cause each of its Domestic Subsidiaries (and, to the extent Section 8.12 is operative, each of its Foreign Subsidiaries) to, grant to the Collateral Agent security interests in such personal property of the Borrower and its Subsidiaries as are not covered by the original Security Documents, and as may be requested from time to time by the Administrative Agent or the Required Lenders (collectively, the "Additional Security Documents"). All such security interests shall be granted pursuant to documentation reasonably satisfactory in form and substance to the Administrative Agent, in each case constituting valid and enforceable perfected security interests 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 Domestic Subsidiaries (and, to the extent Section 8.12 is operative, each of its Foreign 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 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. Furthermore, the Borrower will cause to be delivered to the Collateral Agent such opinions of counsel and other related documents as may be reasonably requested by the Administrative Agent to assure themselves that this Section 8.11 has been complied with. (c) Each of the Credit Parties agrees that each action required above by this Section 8.11 shall be completed as soon as reasonably possible, but in no event later than 90 days after such action is requested to be taken by the Administrative Agent, the Required Lenders or the Collateral Agent. 8.12 FOREIGN SUBSIDIARIES SECURITY. If following a change in the relevant sections of the Code or the regulations, rules, rulings, notices or other official pronouncements issued or promulgated thereunder, counsel for the Borrower reasonably acceptable to the Administrative Agent does not within 30 days after a request from the Administrative Agent or the Required Lenders deliver evidence, in form and substance mutually satisfactory to the Administrative Agent and the Borrower, 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 -69- Federal income tax consequences to the Credit Parties having a Material Adverse Effect, 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 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 execute and deliver the Security Agreement and Pledge Agreement (or another security agreement or pledge agreement in substantially similar form, if needed), granting 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 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 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, in each case to the extent that the entering into such Security Agreement or Subsidiaries Guaranty is permitted by the laws of the respective foreign jurisdiction and with all documents delivered pursuant to this Section 8.12 to be in form and substance reasonably satisfactory to the Administrative Agent. 8.13 OWNERSHIP OF SUBSIDIARIES. Except to the extent otherwise expressly consented in writing by the Required Lenders or as otherwise permitted by Section 9.05(xv) and the definition of Permitted Acquisition, each Credit Party shall directly or indirectly own 100% of the capital stock or other equity interests of each of its respective Subsidiaries. 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 the Subsidiary Guarantors 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 be in existence at the time of the consummation of the proposed Permitted Acquisition or immediately after giving effect thereto; (ii) the Borrower shall have given the Administrative Agent and the Lenders at least 10 Business Days' prior written notice of any Permitted Acquisition; (iii) calculations are made by the Borrower of compliance with the covenants contained in Sections 9.09, 9.10 and 9.11 for the Test Period (taken as one accounting period) most recently ended prior to the date of such Permitted Acquisition for which financial statements are available (each, a "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; (iv) the Borrower shall certify, and the Administrative Agent shall have been satisfied in its reasonable discretion, that the proposed Permitted Acquisition could not reasonably be expected to result in increased tax, ERISA, environmental or other contingent liabilities with respect to the Borrower or any of its Subsidi- -70- aries that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect; (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 Borrower provides to the Administrative Agent and the Lenders a copy of any executed purchase agreement or similar agreement with respect to such Permitted Acquisition; (vii) the aggregate consideration (including, without limitation, (I) the aggregate principal amount of any Indebtedness assumed, 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 (provided that no Default or Event of Default under Section 10.10 would result therefrom) and (III) the aggregate amount paid and reasonably expected to be paid pursuant to any earn-out, non-compete or deferred compensation or purchase price arrangements in connection therewith) paid in respect of all Permitted Acquisitions shall not exceed $125,000,000, of which up to, but no more than, $40,000,000 may be used to make Permitted Acquisitions of Persons that, upon the consummation of such Permitted Acquisition, will become direct Wholly-Owned Foreign Subsidiaries of the Borrower; (viii) in respect of any Permitted Acquisition consummated (I) on or prior to June 16, 2001, (A) at least 25% of the aggregate consideration paid therefor shall consist of or shall be funded with new cash equity received by the Borrower and/or common stock and/or Qualified Preferred Stock issued by the Borrower and (B) the Total Leverage Ratio as of the last day of the respective Calculation Period, calculated 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, shall be less than or equal to the Borrower's Total Leverage Ratio as in effect immediately prior to such Permitted Acquisition or (II) after June 16, 2001, if the Total Leverage Ratio as in effect immediately prior to such Permitted Acquisition is (x) greater than or equal to 4.00:1.00, then the Total Leverage Ratio as of the last day of the respective Calculation Period, calculated 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, shall be less than or equal to the Total Leverage Ratio as in effect immediately prior to such Permitted Acquisition, or (y) less than 4.00:1.00, then the Borrower's Total Leverage Ratio as of the last day of the respective Calculation Period, calculated 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, shall be equal to or less than the lesser of (A) 4.00:1.00 and (B) the maximum Total Leverage Ratio required at such time so that no Event of Default then would exist under Section 9.11; (ix) if any proceeds of Revolving Loans and/or Swingline Loans are used to pay any part of the purchase price for such Permitted Acquisition or any fees or expenses incurred in connection therewith, after giving effect to such Permitted Acquisition (and all payments to be made in connection therewith), the Total Unutilized Revolving Loan Commitment shall equal or exceed (I) $20,000,000, if such Permitted Acquisition is consummated between December 1 of any year and January 31 of the following year, (II) -71- $15,000,000, if such Permitted Acquisition is consummated between either October 1 and November 31 of any year or February 1 and March 31 of any year, or (III) $10,000,000, if such Permitted Acquisition is consummated between April 1 and September 30 of any year; (x) the Borrower shall have delivered to the Administrative Agent an officer's certificate executed by an Authorized Officer of the Borrower, certifying to the best of such officer's knowledge, compliance with the requirements of preceding clauses (i) through (v), inclusive, (vii), (viii) and (ix), and containing the calculations (in reasonable detail) (A) required by the preceding clauses (iii), (vii), (viii) and (ix) 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, which calculations shall be reasonably approved by the Administrative Agent; and (xi) if the aggregate consideration paid in respect of any Permitted Acquisition is greater than or equal to $35,000,000, the Borrower shall provide to the Administrative Agent and the Lenders at least 10 Business Days prior to the consummation of any such Permitted Acquisition an audited consolidated balance sheet, together with the related audited consolidated statements of income, cash flows and shareholders' equity for the respective Acquired Entity or Business for either the most recently ended fiscal year or latest twelve months of such Acquired Entity or Business for which financial statements are available, which financial statements shall have been certified by independent certified public accountants of recognized standing. (b) In addition to the Permitted Acquisitions permitted pursuant to Section 8.14(a), the Borrower or a Subsidiary Guarantor may consummate the Conspec Acquisition on or prior to the Conspec Acquisition Termination Date on the terms and conditions set forth in the Conspec Share Purchase Agreement and Section 5B (it being agreed that, in any event, the aggregate purchase price for the Conspec Acquisition (including any and all fees and expenses incurred after May 23, 2000 in connection therewith) shall not exceed $23,500,000 (plus up to a $3,500,000 post-closing working capital adjustment as provided in the Conspec Share Purchase Agreement)), provided that the Borrower shall nevertheless be required to satisfy each of the requirements of clauses (a)(i) and (a)(v) of this Section 8.14 with respect to the Conspec Acquisition and, to the extent that the Conspec Acquisition is consummated after August 16, 2000, also the requirements in clauses (a)(iii) and (with respect to matters referred to in such clause (a)(iii)) (a)(x)(A) (it being understood and agreed, however, that if the Conspec Acquisition is not consummated on or before the Conspec Acquisition Termination Date, the Conspec Acquisition may thereafter be consummated only if same can then be consummated as a Permitted Acquisition satisfying all of the requirements under Section 8.14(a)). (c) At the time of each Permitted Acquisition involving the creation or acquisition of a Subsidiary, or the acquisition of capital stock or other equity interests of any Person, all 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. (d) The Borrower shall cause each Domestic Subsidiary (and, to the extent Section 8.12 is operative, each Foreign 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 -72- documentation required by, Sections 8.11 and 9.15, to the satisfaction of the Administrative Agent. (e) The consummation of each Permitted Acquisition shall be deemed to be a representation and warranty by the Borrower that the certifications by the Borrower (or by one or more of its Authorized Officers) pursuant to Sections 8.14(a) and/or (b) 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 6 and 10. 8.15 MAINTENANCE OF CORPORATE SEPARATENESS. The Borrower will, and will cause each of its Subsidiaries to, satisfy customary corporate formalities, including the holding of regular board of directors' and shareholders' meetings or action by directors or shareholders without a meeting and the maintenance of corporate offices and records. Neither the Borrower nor any of its Subsidiaries shall take any action, or conduct its affairs in a manner, which is likely to result in the corporate existence of the Borrower or any of its Subsidiaries being ignored, or in the assets and liabilities of the Borrower or any of its Subsidiaries being substantively consolidated with those of any other such Person in a bankruptcy, reorganization or other insolvency proceeding. 8.16 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, deed of trust, indenture, 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. 8.17 USE OF PROCEEDS. All proceeds of the Loans shall be used as provided in Section 7.05. SECTION 9. NEGATIVE COVENANTS. The Borrower hereby covenants and agrees that as of the Effective Date and thereafter for so long as this Agreement is in effect and until the Total Commitment has terminated, no Letters of Credit or Notes are outstanding and the Loans, together with interest, Fees and all other Obligations (other than any indemnities described in Section 13.13 which are not then due and payable) incurred hereunder, are paid in full: 9.01 CHANGES IN BUSINESS. The Borrower and its Subsidiaries will not engage in any business other than the businesses in which they are engaged in as of the Effective Date and activities directly related thereto, and similar or related businesses. 9.02 CONSOLIDATION; MERGER; SALE OR PURCHASE 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 -73- (other than sales of inventory in the ordinary course of business and sales, leases and rentals of Rental Equipment in the ordinary course of business), or enter into any partnerships, joint ventures or 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 the following shall be permitted: (i) the Borrower and its Subsidiaries may, as lessee, enter into operating leases in the ordinary course of business with respect to real or personal property; (ii) Capital Expenditures by the Borrower and its Subsidiaries to the extent not in violation of Section 9.08; (iii) Investments permitted pursuant to Section 9.05; (iv) the Borrower and its Subsidiaries may, in the ordinary course of business, sell or otherwise dispose of assets (excluding capital stock and other equity interests of Subsidiaries) which, in the reasonable opinion of such Person, are obsolete, uneconomic or worn-out; (v) the Borrower and its Subsidiaries may sell assets (other than the capital stock and other equity interests of any Subsidiary), 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 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 $3,000,000 in any fiscal year of the Borrower; (vi) 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; (vii) the Borrower and its Subsidiaries may grant leases or subleases to other Persons not materially interfering with the conduct of the business of the Borrower or any of its Subsidiaries; (viii) 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, 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); (ix) 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 -74- 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); (x) any Foreign Subsidiary of the Borrower may transfer assets to any Wholly-Owned Foreign Subsidiary of the Borrower; (xi) any Foreign Subsidiary of the Borrower may be merged with and into any Wholly-Owned Foreign Subsidiary of the Borrower so long as the surviving corporation of such merger is a Wholly-Owned Foreign Subsidiary of the Borrower; (xii) the Borrower and its Subsidiaries may sell or exchange specific items of equipment, so long as the purpose of each such sale or exchange is to acquire (and results within 90 days of such sale or exchange in the acquisition of) replacement items of equipment which are the functional equivalent of the item of equipment so sold or exchanged; (xiii) the Borrower and the Subsidiary Guarantors shall be permitted to make Permitted Acquisitions in accordance with the applicable requirements of Section 8.14; and (xiv) the Recapitalization shall be permitted. To the extent the Required Lenders waive the provisions of this Section 9.02 with respect to the sale or other disposition of any Collateral, or any Collateral is sold or otherwise disposed of as permitted by this Section 9.02, such Collateral (unless transferred to the Borrower or a Subsidiary thereof) shall be sold or otherwise disposed of free and clear of the Liens created by the Security Documents and the Administrative Agent shall take such actions (including, without limitation, directing the Collateral Agent to take such actions) as are appropriate in connection therewith. 9.03 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 of any kind (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 or notes with recourse to the Borrower or any of its Subsidiaries) or assign any right to receive income, except for the following (collectively, the "Permitted Liens"): -75- (i) inchoate Liens for taxes, assessments or governmental charges or levies not yet due and payable 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 GAAP; (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 which have not arisen to secure Indebtedness for borrowed money, such as carriers', warehousemen's and mechanics' Liens, statutory landlord's Liens, and other similar Liens arising in the ordinary course of business, and which either (x) do not in the aggregate materially detract from the value of such property or assets or materially impair the use thereof in the operation of the business of the Borrower or any of its Subsidiaries or (y) are being contested in good faith by appropriate proceedings, which proceedings have the effect of preventing the forfeiture or sale of the property or asset subject to such Lien; (iii) Liens created by or pursuant to this Agreement and the Security Documents; (iv) Liens in existence on the Initial Borrowing Date which are listed, and the property subject thereto described, in Annex VIII, without giving effect to any extensions or renewals thereof except to the extent expressly permitted by Annex 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; (v) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section 10.09, PROVIDED that no cash or other property shall be pledged by the Borrower or any of its Subsidiaries as security therefor; (vi) Liens (other than any Lien imposed by ERISA) (x) incurred or deposits made in the ordinary course of business of the Borrower and its Subsidiaries in connection with workers' compensation, unemployment insurance and other types of social security, (y) to secure the performance by the Borrower and its Subsidiaries of tenders, statutory obligations (other than excise taxes), surety, stay and customs bonds, statutory bonds, bids, leases, government contracts, trade contracts, performance and return of money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money) or (z) to secure the performance by the Borrower and its Subsidiaries of leases of Real Property, to the extent incurred or made in the ordinary course of business consistent with past practices, PROVIDED that the aggregate amount of deposits at any time pursuant to preceding sub-clause (y) and sub-clause (z) shall not exceed $2,500,000 in the aggregate; (vii) licenses, leases or subleases granted to third Persons in the ordinary course of business not interfering in any material respect with the business of the Borrower or any of its Subsidiaries; -76- (viii) easements, rights-of-way, restrictions (including zoning restrictions), minor defects or irregularities in title and other similar charges or encumbrances, in each case not securing Indebtedness and not interfering in any material respect with the ordinary conduct of the business of the Borrower or any of its Subsidiaries; (ix) Liens arising from precautionary UCC financing statements regarding operating leases; (x) Liens created pursuant to Capital Leases permitted pursuant to 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 of its Subsidiaries; (xi) Liens arising pursuant to purchase money mortgages or security interests securing Indebtedness representing the purchase price (or financing of the purchase price within 30 days after the respective purchase) of assets acquired after the Initial Borrowing Date, PROVIDED that (i) any such Liens attach only to the assets so purchased, (ii) the Indebtedness secured by any such Lien does not exceed 100%, nor is less than 80%, of the lesser of the fair market value or the purchase price of the property being purchased at the time of the incurrence of such Indebtedness and (iii) the Indebtedness secured thereby is permitted to be incurred pursuant to Section 9.04(iv); (xii) 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 (i) any Indebtedness that is secured by such Liens is permitted to exist under Section 9.04(vi), and (ii) 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; (xiii) restrictions imposed in the ordinary course of business and consistent with past practices on the sale or distribution of designated inventory pursuant to agreements with customers under which such inventory is consigned by the customer or such inventory is designated for sale to one or more customers; (xiv) 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; (xv) Liens on the assets of a Foreign Subsidiary which is not a Subsidiary Guarantor securing Indebtedness incurred by such Foreign Subsidiary in accordance with the terms of Section 9.04; and (xvi) other Liens incidental to the conduct of the business or the ownership of the assets of the Borrower or any Subsidiary of the Borrower that (x) were not incurred in connection with borrowed money, (y) do not encumber any Collateral or any Real -77- Property owned by the Borrower or any Subsidiary of the Borrower and do not in the aggregate materially detract from the value of the assets subject thereto or materially impair the use thereof in the operation of such business and (z) do not secure obligations in excess of $250,000 in the aggregate for all such Liens. 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 Annex VI, without giving effect to any subsequent extension, renewal or refinancing thereof except to the extent expressly permitted by Annex VI, provided that (x) 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 and (y) in no event may the Subordinated Debentures be refinanced; (iii) Indebtedness under Interest Rate Protection Agreements entered into to protect the Borrower against fluctuations in interest rates in respect of Indebtedness otherwise permitted under this Agreement; (iv) Capitalized Lease Obligations and Indebtedness of the Borrower and its Subsidiaries representing purchase money Indebtedness secured by Liens permitted pursuant to Section 9.03(xi), PROVIDED that (i) all such Capitalized Lease Obligations are permitted under Section 9.08 and (ii) the sum of (x) the aggregate Capitalized Lease Obligations outstanding at any time plus (y) the aggregate principal amount of such purchase money Indebtedness outstanding at such time shall not exceed $5,000,000; (v) Indebtedness constituting Intercompany Loans to the extent permitted by Section 9.05(vi); (vi) Indebtedness of a Subsidiary acquired pursuant to a Permitted Acquisition (or Indebtedness assumed at the time of a Permitted Acquisition involving the purchase of an asset or assets securing such Indebtedness), PROVIDED that (i) such Indebtedness was not incurred in connection with, or in anticipation or contemplation of, such Permitted Acquisition and (ii) at the time of such Permitted Acquisition, such Indebtedness does not exceed 10% of the total value of the assets of the Subsidiary so acquired, or of the assets so acquired, as the case may be; (vii) Indebtedness of the Borrower and the Subsidiary Guarantors under the Senior Subordinated Notes and the other Senior Subordinated Note Documents in an aggregate principal amount not to exceed $170,000,000 (as reduced by any repayments of principal thereof); -78- (viii) Indebtedness of the Borrower under Shareholder Subordinated Notes issued pursuant to Section 9.06(ii); (ix) guaranties by the Borrower and the Subsidiary Guarantors of each other's Indebtedness to the extent that such Indebtedness is otherwise permitted under this Section 9.04 (other than Indebtedness (A) permitted under clauses (viii) (which may not be guaranteed by any Subsidiary of the Borrower) and (xiv) (which may only be guaranteed in accordance with the provisions thereof) of this Section 9.04) and (B) in respect of the Subordinated Debentures); (x) 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 three Business Days of the incurrence thereof; (xi) Indebtedness in respect of Other Hedging Agreements to the extent permitted by Section 9.05(xiv); (xii) Indebtedness of the Borrower or any of its Subsidiaries evidenced by completion guarantees, performance bonds and surety bonds incurred in the ordinary course of business for purposes of insuring the performance of the Borrower or such Subsidiary in an aggregate principal amount not to exceed at any time outstanding $2,500,000; (xiii) Indebtedness of the Borrower or any Subsidiary of the Borrower arising from agreements of the Borrower or a Subsidiary of the Borrower providing for indemnification, adjustment of purchase price, earn out or other similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or a Subsidiary of the Borrower permitted under this Agreement, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or Subsidiary for the purpose of financing such acquisition, PROVIDED that the maximum assumable liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Borrower and its Subsidiaries in connection with such disposition; (xiv) so long as no Default or Event of Default then exists or would result therefrom, subordinated Indebtedness of the Borrower issued to finance a Permitted Acquisition to the extent that such subordinated Indebtedness is permitted to be issued at such time pursuant to Section 8.14 (which subordinated Indebtedness, if guaranteed, may only be guaranteed on a subordinated basis by the Subsidiary Guarantors), so long as (i) all of the terms and conditions of, and the documentation for, such subordinated Indebtedness (and any guaranty thereof) is on substantially similar terms and conditions, and evidenced by substantially similar documentation, as the Senior Subordinated Notes and the other Senior Subordinated Note Documents or is otherwise in form and substance reasonably satisfactory to the Administrative Agent and (ii) the aggregate principal amount of all such subordinated Indebtedness outstanding any time does not exceed $75,000,000 (all -79- such subordinated Indebtedness issued pursuant to this clause (xiv) is referred to as "Additional Subordinated Debt"); (xv) unsecured Indebtedness of the Borrower or any of its Subsidiaries in the form of earn-out obligations incurred pursuant to a Permitted Acquisition consummated in accordance with Section 8.14; and (xvi) so long as no Default or Event of Default then exists or would result therefrom, additional Indebtedness of the Borrower and its Subsidiaries not otherwise permitted hereunder not exceeding $7,500,000 in aggregate principal amount at any time outstanding. 9.05 ADVANCES; INVESTMENTS; LOANS. The Borrower will not, and will not permit any of its Subsidiaries to, lend money or extend 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 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: (i) the Borrower and its Subsidiaries may hold or invest in cash and Cash Equivalents; (ii) the Borrower and its Subsidiaries may acquire and hold receivables owing to it, if created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms (including the dating of receivables) of the Borrower or such Subsidiary; (iii) 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 settlement of delinquent obligations of, and other disputes with, customers and suppliers arising in the ordinary course of business; (iv) Interest Rate Protection Agreements entered into in compliance with Section 9.04(iii) shall be permitted; (v) Investments in existence on the Initial Borrowing Date and listed on Annex IX shall be permitted, without giving effect to any additions thereto or replacements thereof; (vi) (x) the Borrower may make intercompany loans and advances to any Subsidiary Guarantor and (y) any Subsidiary Guarantor may make intercompany loans and advances to the Borrower or any other Subsidiary Guarantor (loans pursuant to clauses (x) and (y) of this clause (vi) collectively, "Intercompany Loans"), PROVIDED that (x) each Intercompany Loan shall be evidenced by an Intercompany Note and (y) -80- each such Intercompany Note shall be pledged to the Collateral Agent pursuant to the Pledge Agreement; (vii) loans and advances by the Borrower and its Subsidiaries to officers and employees of the Borrower and its Subsidiaries for moving, travel and similar expenses and for other bonafide business purposes, in each case incurred in the ordinary course of business, in an aggregate outstanding principal amount not to exceed $5,000,000 at any time (determined without regard to any write-downs or write-offs of such loans and advances) shall be permitted; (viii) the Borrower may acquire and hold obligations of one or more officers or other employees of the Borrower or any of its Subsidiaries in connection with such officers' or employees' acquisition of shares of the Borrower's common stock or Qualified Preferred Stock, so long as no cash is actually advanced by the Borrower or any of its Subsidiaries to such officers or employees in connection with the acquisition of any such obligations (collectively, "Employee Carry Loans"); (ix) the Borrower and the Subsidiary Guarantors may make cash equity contributions to their respective Subsidiaries which are Subsidiary Guarantors; (x) the Borrower and the Subsidiary Guarantors may make Permitted Acquisitions in accordance with the relevant requirements of Section 8.14; (xi) the Borrower and its Subsidiaries may own the capital stock or other equity interests of their respective Subsidiaries created or acquired in accordance with the terms of this Agreement; (xii) the Borrower and the Subsidiary Guarantors may make cash Investments in Wholly-Owned Foreign Subsidiaries which are not Subsidiary Guarantors not to exceed $1,000,000 in the aggregate in any fiscal year of the Borrower (determined without giving effect to any write-downs or write-offs thereof), net of any cash repayments to the Borrower or any such Subsidiary Guarantor; (xiii) the Borrower and its Subsidiaries may acquire and hold non-cash consideration issued by the purchaser of assets in connection with a sale of such assets to the extent permitted by Section 9.02(v); (xiv) the Borrower and its Subsidiaries may enter into Other Hedging Agreements in the ordinary course of business providing protection against fluctuations in currency values in connection with the Borrower's or any of its Subsidiaries' operations so long as management of the Borrower or such Subsidiary, as the case may be, has determined in good faith that the entering into of such Other Hedging Agreements are bona fide hedging activities and are not for speculative purposes; and (xv) the Borrower and its Subsidiaries may make Investments not otherwise permitted by clauses (i) through (xiv) of this Section 9.05 in an aggregate amount not to -81- exceed $7,500,000 (determined without regard to any write-downs or write-offs thereof), net of cash payments of principal in the case of loans and cash equity returns (whether as a dividend or redemption) in the case of equity investments. 9.06 DIVIDENDS; ETC. The Borrower will not, and will not permit any of its Subsidiaries to, declare or pay any dividends (other than dividends payable solely in common stock of the Borrower or any such Subsidiary, as the case may be) or return any capital to, its stockholders, partners or other equity holders or authorize or make any other distribution, payment or delivery of property or cash to its stockholders, partners or other equity holders as such, or redeem, retire, purchase or otherwise acquire, directly or indirectly, for a consideration, any shares of any class of its capital stock or other equity interests, now or hereafter outstanding (or any warrants for or options or stock appreciation rights in respect of any of such shares), or set aside any funds for any of the foregoing purposes, and the Borrower will not permit any of its Subsidiaries to purchase or otherwise acquire for consideration any shares of any class of the capital stock or other equity interests of the Borrower or any other Subsidiary, as the case may be, now or hereafter outstanding (or any options or warrants or stock appreciation rights issued by such Person with respect to its capital stock or other equity interests) (all of the foregoing "Dividends"), except that: (i) (x) any Subsidiary of the Borrower may pay Dividends to the Borrower or any Wholly-Owned Subsidiary of the Borrower and (y) 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); (ii) the Borrower may redeem or purchase shares of its common stock or Qualified Preferred Stock or options to purchase its common stock or Qualified Preferred Stock, as the case may be, held by former officers or employees of the Borrower or any of its Subsidiaries (or corporations owned by former officers or employees) following the termination of their employment or pursuant to the repurchase provisions of employee stock option or stock purchase agreements or other agreements to compensate management employees, PROVIDED that (w) the only consideration paid by the Borrower in respect of such redemptions and/or purchases shall be the discharge of Employee Carry Loans, cash and Shareholder Subordinated Notes, (x) the sum of (I) the aggregate amount paid by the Borrower in cash in respect of all such redemptions and/or purchases plus (II) the aggregate amount of all cash payments made on all Shareholder Subordinated Notes shall not exceed $2,500,000 in any fiscal year of the Borrower, PROVIDED that any unused amount thereof may be carried forward and utilized for such purposes in any succeeding fiscal year of the Borrower (although no more than $5,000,000 in the aggregate may be expended in any fiscal year of the Borrower pursuant to the foregoing provisions of this clause (x) and this proviso), and PROVIDED FURTHER that such amount shall be increased by (A) the amount of any net cash proceeds received by the Borrower from the sale after the -82- Initial Borrowing Date of its common stock or Qualified Preferred Stock to management employees of the Borrower and its Subsidiaries not otherwise required to be applied to the payment of Loans pursuant to Section 4.02(g), and (B) by the cash proceeds of any "key-man" life insurance policies that are used to make such redemptions or repurchases, and (y) at the time of any cash payment permitted to be made pursuant to this Section 9.06(ii), including any cash payment under a Shareholder Subordinated Note, no Default or Event of Default shall then exist or result therefrom; (iii) repurchases of capital stock of the Borrower deemed to occur upon the exercise of stock options if such capital stock represents a portion of the exercise price thereof shall be permitted so long as no cash is otherwise paid or distributed by the Borrower or any of its Subsidiaries in connection therewith; (iv) the Borrower may pay Dividends on its Qualified Preferred Stock solely through the issuance of additional shares of Qualified Preferred Stock but not in cash; and (v) the Recapitalization shall be permitted. 9.07 TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will not permit any of its Subsidiaries to, enter into any transaction or series of transactions with any Affiliate other than on terms and conditions substantially as favorable to the Borrower or such Subsidiary as would be reasonably expected to be obtainable by the Borrower or such Subsidiary at the time in a comparable arm's-length transaction with a Person other than an Affiliate; PROVIDED that the following shall in any event be permitted: (i) the Transaction; (ii) transactions by the Borrower and its Subsidiaries to the extent expressly permitted by Sections 9.02, 9.04, 9.05 and 9.06; (iii) Odyssey may be paid an advisory fee in connection with the Transaction on the Initial Borrowing Date in an aggregate amount not to exceed $4,000,000; (iv) customary fees may be paid to non-officer directors of the Borrower; (v) the Borrower and its Subsidiaries may enter into, and may make payments and perform its obligations (including by issuing and purchasing stock, making loans and incurring Indebtedness) under employment agreements, employee benefit plans, indemnification provisions, equity incentive plans and other similar compensatory arrangements with officers and directors of the Borrower and its Subsidiaries in the ordinary course of business, in each case to the extent that such transactions are otherwise permitted by this Agreement; and (vi) the Borrower and its Wholly-Owned Subsidiaries may engage in any transaction among themselves to the extent otherwise permitted under this Agreement. -83- In no event shall any management, consulting or similar fee be paid or payable by the Borrower or any of its Subsidiaries to any Affiliate (other than the Borrower) except as specifically provided in clause (iii) of this Section 9.07. 9.08 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 the Effective Date through and including December 31, 2000, the Borrower and its Subsidiaries may make Capital Expenditures in an aggregate amount not to exceed the product of (I) 5% of the aggregate amount of the Borrower's consolidated net sales from operations for its 1999 fiscal year multiplied by (II) a fraction, the numerator of which is the number of days from the Effective Date through December 31, 2000 and the denominator of which is 365, and (ii) during any fiscal year of the Borrower thereafter (taken as one accounting period), the Borrower and its Subsidiaries may make Capital Expenditures so long as the aggregate amount of such Capital Expenditures does not exceed 5% of the aggregate amount of the Borrower's consolidated net sales from operations for its immediately preceding fiscal year (determined on a Pro Forma Basis for each Permitted Acquisition consummated during such immediately preceding fiscal year as if same had occurred on the first day of such immediately preceding fiscal year). Notwithstanding anything to the contrary contained above in this Section 9.08(a) or in the definition of "Capital Expenditures," for purposes of this Section 9.08(a), Capital Expenditures made by the Borrower and its Subsidiaries in any period shall be calculated net of sales of Rental Equipment by the Borrower and its Subsidiaries during such period. In addition to the foregoing, in each year in which a Permitted Acquisition is consummated the aggregate amount of Capital Expenditures permitted to be made in such year shall be increased by an amount equal to the product of (I) 20% 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 statement are available for such Acquired Entity or Business (as certified in the respective officer's certificate delivered pursuant to clause (x) of Section 8.14(a)) multiplied by (II) a fraction, the numerator of which is the number of days remaining in such fiscal year and the denominator of which is 365. (b) Notwithstanding 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 (before giving effect to any increase in such permitted Capital Expenditure amount pursuant to this clause (b)) is greater than the amount of Capital Expenditures actually made by the Borrower and its Subsidiaries during such fiscal year, such excess amount may be carried forward and utilized to make Capital Expenditures in succeeding fiscal years, PROVIDED that in no event shall the Borrower and its Subsidiaries make aggregate Capital Expenditures in any fiscal year of the Borrower pursuant to clause (a) above and this clause (b) in excess of 150% of the permitted Capital Expenditure amount for such fiscal year as set forth in clause (a) above (without giving effect to any increase in such amount pursuant to this clause (b)). (c) Notwithstanding the foregoing, the Borrower and its Subsidiaries may make additional Capital Expenditures (which Capital Expenditures will not be included in any -84- determination under Section 9.08(a)) with the Net Sale Proceeds of Asset Sales to the extent such proceeds are not required to be applied to repay Term Loans or reduce the Total Revolving Loan Commitment, the Total Initial A Term Loan Commitment or the Total Acquisition Loan Commitment pursuant to Sections 4.02(e) and (j). (d) Notwithstanding the foregoing, the Borrower and its Subsidiaries may make additional Capital Expenditures (which Capital Expenditures will not be included in any determination under Section 9.08(a)) with the proceeds received by the Borrower or any of its Subsidiaries from any Recovery Event in accordance with the reinvestment provisions of Section 4.02(h) to the extent such proceeds are not required to be applied to repay Term Loans or reduce the Total Revolving Loan Commitment, the Total Initial A Term Loan Commitment or the Total Acquisition Loan Commitment pursuant to Sections 4.02(h) and (j). (e) Notwithstanding the foregoing, the Borrower and the Subsidiary Guarantors may make additional Capital Expenditures (which Capital Expenditures will not be included in any determination under Section 9.08(a)) constituting Permitted Acquisitions effected in accordance with the applicable requirements of Section 8.14. 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 Closest to Amount ----------------- ------ September 30, 2000 $48,000,000 December 31, 2000 $48,000,000 March 31, 2001 $48,000,000 June 30, 2001 $48,000,000 September 30, 2001 $48,000,000 December 31, 2001 $50,000,000 March 31, 2002 $50,000,000 June 30, 2002 $50,000,000 September 30, 2002 $50,000,000 December 31, 2002 $52,500,000 March 31, 2003 $52,500,000 June 30, 2003 $52,500,000 -86- Fiscal Quarter Ending Closest to Amount ----------------- ------ September 30, 2003 $52,500,000 December 31, 2003 $56,200,000 March 31, 2004 $56,200,000 June 30, 2004 $56,200,000 September 30, 2004 $56,200,000 December 31, 2004 $61,500,000 March 31, 2005 $61,500,000 June 30, 2005 $61,500,000 -85- Fiscal Quarter Ending Closest to Amount ----------------- ------ September 30, 2005 $61,500,000 December 31, 2005 $67,100,000 March 31, 2006 $67,100,000 June 30, 2006 $67,100,000 September 30, 2006 $67,100,000 December 31, 2006 $72,800,000 March 31, 2007 and the last day of each fiscal quarter of the Borrower thereafter $77,000,000
From and after the consummation of any Permitted Acquisition, each of the amounts set forth above in this Section 9.09 shall be increased by an amount equal to 80% 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 (as certified in the respective officer's certificate delivered pursuant to clause (x) of Section 8.14(a)), PROVIDED that each of the amounts set forth above in this Section 9.09 in respect of each Test Period ending prior to the 12-month anniversary of such Permitted Acquisition shall only be increased by the product of 80% of such Acquired EBITDA multiplied by a fraction the numerator of which is the number of days between the date of the consummation of such Permitted Acquisition and the last day of each such Test Period and the denominator of which is 365. 9.10 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 Closest to Ratio ----------------- ----- September 30, 2000 1.70:1.00 December 31, 2000 1.70:1.00 March 31, 2001 1.70:1.00 June 30, 2001 1.70:1.00 September 30, 2001 1.70:1.00 December 31, 2001 1.75:1.00 March 31, 2002 1.75:1.00 June 30, 2002 1.75:1.00 September 30, 2002 1.75:1.00 December 31, 2002 1.85:1.00 March 31, 2003 1.85:1.00 June 30, 2003 1.85:1.00 -86- Fiscal Quarter Ending Closest to Ratio ----------------- ----- September 30, 2003 1.85:1.00 December 31, 2003 2.10:1.00 March 31, 2004 2.10:1.00 June 30, 2004 2.10:1.00 September 30, 2004 2.10:1.00 December 31, 2004 2.30:1.00 March 31, 2005 2.30:1.00 June 30, 2005 2.30:1.00 September 30, 2005 2.30:1.00 December 31, 2005 2.30:1.00 March 31, 2006 2.30:1.00 June 30, 2006 2.30:1.00 September 30, 2006 2.30:1.00 December 31, 2006 and the last day of each fiscal quarter of the Borrower thereafter 2.50:1.00
9.11 TOTAL LEVERAGE RATIO. The Borrower will not permit the Total Leverage Ratio on the last day of any fiscal quarter of the Borrower set forth below to exceed the respective ratio set forth opposite such fiscal quarter below:
Fiscal Quarter Ending Closest to Ratio ----------------- ----- September 30, 2000 5.25:1.00 December 31, 2000 5.25:1.00 March 31, 2001 5.50:1.00 June 30, 2001 5.50:1.00 September 30, 2001 5.35:1.00 December 31, 2001 5.00:1.00 March 31, 2002 5.50:1.00 June 30, 2002 5.50:1.00 September 30, 2002 5.35:1.00 December 31, 2002 5.00:1.00 March 31, 2003 5.25:1.00 June 30, 2003 5.25:1.00 September 30, 2003 5.10:1.00 December 31, 2003 4.75:1.00 March 31, 2004 5.25:1.00 June 30, 2004 5.25:1.00 September 30, 2004 5.10:1.00 December 31, 2004 4.75:1.00 March 31, 2005 5.00:1.00 June 30, 2005 5.00:1.00 September 30, 2005 4.85:1.00 December 31, 2005 4.50:1.00 March 31, 2006 4.75:1.00 -87- Fiscal Quarter Ending Closest to Ratio ----------------- ----- June 30, 2006 4.75:1.00 September 30, 2006 4.60:1.00 December 31, 2006 and each fiscal quarter of the Borrower thereafter 4.25:1.00
9.12 LIMITATION ON VOLUNTARY PAYMENTS AND MODIFICATIONS OF 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 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, any Additional Subordinated Debt or the Nash Note; (ii) make (or give any notice in respect of) any voluntary, optional or mandatory payment or prepayment on or redemption or acquisition for value of (including, in each case, without limitation, by way of depositing with any Person money or securities before due for the purposes of paying when due), any Shareholder Subordinated Notes or make any other payment in respect thereof (whether for principal, interest or other amounts) except as otherwise expressly permitted by Section 9.06(ii); (iii) amend or modify, or permit the amendment or modification of, any provision of any Senior Subordinated Note Document, any Shareholder Subordinated Note, any Subordinated Debenture Document, the Nash Note or any Additional Subordinated Debt; (iv) amend, modify or change its certificate or articles of incorporation (including, without limitation, by the filing or modification of any certificate or articles of designation) or by-laws (or the equivalent organizational documents) or any agreement entered into by it with respect to its capital stock (including any Shareholders' Agreement), or enter into any new agreement with respect to its capital stock, unless such amendment, modification, change or other action contemplated by this clause (iv) could not reasonably be expected to be adverse to the interests of the Lenders in any material respect; or -88- (v) amend, modify or change any provision of (x) any Management Agreement, unless such amendment, modification or change could not reasonably be expected to be adverse to the interests of the Lenders (although no amendment or change may be made to any monetary term thereof) or (y) any Tax Allocation Agreement or enter into any new tax sharing agreement, tax allocation agreement or similar agreement without the prior written consent of the Administrative Agent. (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, the other Senior Subordinated Note Documents and the Additional Subordinated Debt. 9.13 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 any options, warrants or rights to purchase preferred stock) other than Qualified Preferred Stock of the Borrower or existing preferred stock of a wholly-owned subsidiary of the borrower issued only to the Borrower or (ii) any redeemable common stock (other than common stock that is redeemable at the sole option of the Borrower or such Subsidiary). (b) The Borrower will not permit any of its Subsidiaries to issue any capital stock (including by way of sales of treasury stock) or any options or warrants to purchase, or securities convertible into, capital stock, except (i) for transfers and replacements of then outstanding shares of capital stock, (ii) for stock splits, stock dividends and additional issuances which do not decrease the percentage ownership of the Borrower or any of its Subsidiaries in any class of the capital stock of such Subsidiaries, (iii) to qualify directors to the extent required by applicable law, (iv) Subsidiaries formed after the Initial Borrowing Date pursuant to Section 9.15 may issue capital stock in accordance with the requirements of Section 9.15 and (v) for additional issuances of capital stock as a result of capital contributions made pursuant to Sections 9.05(ix), (xii) and (xv). All capital stock issued in accordance with this Section 9.13(b) shall, to the extent required by the Pledge Agreement, be delivered to the Collateral Agent for pledge pursuant to the Pledge Agreement. 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 (x) 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 a Subsidiary of the Borrower, (y) make loans or advances to the Borrower or any Subsidiary of the Borrower or (z) 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 and the Additional Subordinated Debt, (iv) customary provisions restricting subletting or assignment of any lease governing a leasehold interest of the Borrower or a Subsidiary -89- of the Borrower, (v) customary provisions restricting assignment of any licensing agreement entered into by the Borrower or any Subsidiary of the Borrower in the ordinary course of business and (vi) restrictions on the transfer of any assets subject to a Lien permitted by Sections 9.03(iv), (x), (xi), (xii) and (xv). 9.15 LIMITATION ON THE CREATION OF SUBSIDIARIES AND JOINT VENTURES. (a) Notwithstanding anything to the contrary contained in this Agreement, the Borrower will not, and will not permit any of its Subsidiaries to, establish, create or acquire after the Effective Date any Subsidiary; PROVIDED that the Borrower and its Wholly-Owned Subsidiaries shall be permitted to establish, create and, to the extent permitted by Section 8.14, acquire Wholly-Owned Subsidiaries so long as, in each case, (i) at least 10 Business Days' prior written notice thereof is given to the Administrative Agent, (ii) the capital stock or other equity interests of such new Subsidiary is promptly pledged pursuant to, and to the extent required by, this Agreement and the Pledge Agreement and the certificates, if any, representing such stock or other equity interests, together with stock powers duly executed in blank, are delivered to the Collateral Agent, (iii) such new Subsidiary (other than a Foreign Subsidiary except to the extent otherwise required pursuant to Section 8.12) promptly executes a counterpart of the Subsidiaries Guaranty, the Pledge Agreement and the Security Agreement, and (iv) to the extent requested by the Administrative Agent or the Required Lenders, takes all actions required pursuant to Section 8.11. In addition, each new Subsidiary that is required to execute any Credit Document pursuant to this Section 9.15 shall execute and deliver, or cause to be executed and delivered, all other relevant documentation of the type described in Section 5 as such new Subsidiary would have had to deliver if such new Subsidiary were a Credit Party on the Initial Borrowing Date. (b) The Borrower will not, and will not permit any of its Subsidiaries to, create, establish or acquire any non-Wholly-Owned Subsidiary or otherwise enter into any partnerships (except to the extent that such partnership is a Wholly-Owned Subsidiary of the Borrower) or joint ventures, except (in each case) as otherwise permitted by Section 9.05(xv) or the definition of Permitted Acquisition; PROVIDED that, in the event of any such creation, establishment or acquisition of a Subsidiary (other than a Foreign Subsidiary, except to the extent otherwise required pursuant to Section 8.12) the requirements of clauses (ii), (iii) and (iv) of Section 9.15(a) shall be complied with. SECTION 10. EVENTS OF DEFAULT. Upon the occurrence of any of the following specified events (each, an "Event of Default"): 10.01 PAYMENTS. The Borrower shall (i) default in the payment when due of any principal of the Loans or (ii) default, and such default shall continue for three or more Business Days, in the payment when due of any Unpaid Drawing, any interest on the Loans or Unpaid Drawings 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 statement or certificate delivered pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which made or deemed made; or -90- 10.03 COVENANTS. Any Credit Party shall (a) default in the due performance or observance by it of any term, covenant or agreement contained in Section 8.01(f)(i), 8.10, 8.13, 8.14 or 8.17 or Section 9, or (b) default in the due performance or observance by it of any term, covenant or agreement (other than those referred to in Section 10.01, 10.02 or clause (a) of this Section 10.03) contained in this Agreement and such default shall continue unremedied for a period of at least 30 days after notice to the defaulting party by the Administrative Agent or the Required Lenders; or 10.04 DEFAULT UNDER OTHER AGREEMENTS. (a) The Borrower or any of its Subsidiaries shall (i) default in any payment with respect to any Indebtedness (other than the Obligations and the Nash Note) beyond the period of grace, if any, provided in the instrument or agreement under which Indebtedness was created or (ii) default in the observance or performance of any agreement or condition relating to any such Indebtedness 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, any such Indebtedness to become due prior to its stated maturity or (b) any Indebtedness (other than the Obligations and the Nash Note) of the Borrower or any of its Subsidiaries shall be declared to be due and payable, or shall be required to be prepaid other than by a regularly scheduled required prepayment or as a mandatory prepayment (unless such required prepayment or mandatory prepayment results from a default thereunder or an event of the type that constitutes an Event of Default), prior to the stated maturity thereof; PROVIDED that it shall not constitute an Event of Default pursuant to clause (a) or (b) of this Section 10.04 unless the principal amount of any one issue of such Indebtedness, or the aggregate amount of all such Indebtedness referred to in clauses (a) and (b) above, equals or exceeds $3,000,000 at any one time; 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; 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 action is taken by the Borrower or any of its Subsidiaries for the purpose of effecting any of the foregoing; or -91- 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, the PBGC shall have requested orally or in writing that the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate post a bond or furnish security to the PBGC or make additional contributions to a Plan on account of a Reportable Event which has occurred with respect to a Plan, or the PBGC shall have notified the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate orally or in writing that the PBGC intends to take any action as a result of a Reportable Event, any Plan shall have an Unfunded Current Liability, a contribution required to be made with respect to a Plan or Multiemployer 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 or Multiemployer 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 or Multiemployer 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 or Multiemployer 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, individually and/or in the aggregate, in the reasonable opinion of the Required Lenders, has had, or could reasonably be expected to have, a Material Adverse Effect; or 10.07 SECURITY DOCUMENTS. (a) Except in each case to the extent resulting from the failure of the Collateral Agent to retain possession of the applicable Certificated Securities (as defined in the Pledge Agreement), any Security Document shall cease to be in full force and effect, or shall cease to give the Collateral Agent the Liens, rights, powers and privileges purported to be created thereby in favor of the Collateral Agent, superior to and prior to the rights of all third Persons (except as -92- permitted by Section 9.03), and subject to no other Liens (except as permitted by Section 9.03), (b) any Credit Party shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to Section 3.2, 3.3, 5, 15 or 17 of the Pledge Agreement or Section 2.3, 2.4, 2.5, 2.7, 3.6, 4.2, 4.6, 5.2, 5.6 or 6.1 of the Security Agreement and such default shall continue unremedied for a period of at least 30 days or (c) any Credit Party shall default in the due performance or observance of any other term, covenant or agreement on its part to be performed or observed pursuant to any such Security Document and such default shall continue unremedied for a period of at least 30 days after notice to the defaulting party by the Administrative Agent or the Required Lenders; or 10.08 SUBSIDIARIES GUARANTY. The Subsidiaries Guaranty or any provision thereof shall cease to be in full force and effect, or any Subsidiary Guarantor or any Person acting by or on behalf of such Subsidiary Guarantor shall deny or disaffirm such Subsidiary Guarantor's obligations under the Subsidiaries Guaranty; or 10.09 JUDGMENTS. One or more judgments or decrees shall be entered against the Borrower or any of its Subsidiaries involving a liability (to the extent not paid or not fully covered by a reputable and solvent insurance company) of $3,000,000 or more for all such judgments and decrees and all such judgments or decrees shall not have been vacated, discharged or stayed or bonded pending appeal within 60 days from the entry thereof; or 10.10 CHANGE OF CONTROL. A Change of Control shall have occurred; then, and in any such event, and at any time thereafter, if any Event of Default shall then be continuing, the Administrative Agent shall, upon the written request of the Required Lenders, by written notice to the Borrower, take any or all of the following actions, without prejudice to the rights of the Administrative Agent or any Lender to enforce its claims against any Subsidiary Guarantor or the Borrower, except as otherwise specifically provided for in this Agreement (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 the Commitment of each Lender shall forthwith terminate immediately and any Commitment Fees 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 all Obligations owing hereunder (including Unpaid Drawings) 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 the Borrower; (iii) enforce, as Collateral Agent (or direct the Collateral Agent to enforce), any or all of the Liens and security interests created pursuant to the Security Documents; (iv) terminate any Letter of Credit which may be terminated in accordance with its terms; (v) direct the Borrower to pay (and the Borrower hereby agrees upon receipt of such notice, or upon the occurrence of any Event of Default specified in Section 10.05, to pay) to the Collateral Agent at the Payment Office such additional amounts of cash, to be held as security for the Borrower's reimbursement obligations in respect of Letters of Credit then outstanding, equal to the aggregate Stated Amount of all Letters of Credit then outstanding; and (vi) apply any cash collateral as provided in Section 4.02. -93- SECTION 11. DEFINITIONS. As used herein, the following terms shall have the meanings herein specified unless the context otherwise requires. Defined terms in this Agreement shall include in the singular number the plural and in the plural the singular: "A Term Loan" shall mean, collectively, each Initial A Term Loan and each Incremental A Term Loan. "A Term Loan Commitment" shall mean, for each Lender, such Lender's Initial A Term Loan Commitment or Incremental A Term Loan Commitment, as the case may be. "A Term Loan Maturity Date" shall mean June 1, 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 sum of 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). "A TL Commitment Fee" shall have the meaning provided in Section 3.01(a)(i). "Acquired EBITDA" of any Acquired Entity or Business acquired pursuant to a Permitted Acquisition shall mean the consolidated "EBITDA" of such Acquired Entity or Business calculated on a basis consistent with the calculation of Consolidated EBITDA under this Agreement and reasonably approved by the Administrative Agent. "Acquired Entity or Business" shall have the meaning provided in the definition of "Permitted Acquisition." "Acquisition Loan" shall mean and include each Acquisition Revolving Loan and each Acquisition Term Loan. "Acquisition Loan Borrowing Date" shall mean each date on or after the Initial Borrowing Date and prior to the Conversion Date on which the Borrower or any Subsidiary Guarantor consummates a Permitted Acquisition for which all or a portion of the consideration is to be financed with the proceeds of a Borrowing of Acquisition Revolving Loans to be made on such date. "Acquisition Loan Commitment" shall mean, for each Lender, the amount set forth opposite such Lender's name on Annex I directly below the column entitled "Acquisition Loan Commitment," as the same may be (x) reduced or terminated from time to time pursuant to Sections 3.02, 3.03, 4.02 and/or 10 or (y) adjusted from time to time as a result of assignments to or from such Lender pursuant to Section 1.13 or 13.04(b). "Acquisition Loan Maturity Date" shall mean June 1, 2006. -94- "Acquisition Loan Scheduled Repayment" shall have the meaning provided in Section 4.02(d). "Acquisition Note" shall have the meaning provided in Section 1.05(a). "Acquisition Revolving Loan" shall have the meaning provided in Section 1.01(h). "Acquisition Term Loan" shall have the meaning provided in Section 1.01(i). "Acquisition 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 Acquisition Term Loans outstanding at such time, and the denominator of which is equal to the sum of the aggregate principal amount of all Term Loans outstanding at such time. "Additional Security Documents" shall have the meaning provided in Section 8.11(a). "Additional Subordinated Debt" shall have the meaning provided in Section 9.04(xiv). "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 (exclusive of items reflected in Adjusted Consolidated Working Capital) 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, Cash Equivalents and deferred income taxes to the extent otherwise included therein) less Consolidated Current Liabilities at such time. "Administrative Agent" shall have the meaning provided in the first paragraph of this Agreement and shall include any successor to the Administrative Agent appointed pursuant to Section 12.10. "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; PROVIDED, HOWEVER, that for purposes of Section 9.07, an Affiliate of the Borrower shall include any Person that directly or indirectly owns more than 5% of any class of the capital stock of the Borrower and any officer or director of the Borrower or any such Person. "Agent" shall mean and include the Administrative Agent and the Syndication Agent. -95- "Agreement" shall mean this Credit Agreement, as the same may be from time to time modified, amended and/or supplemented. "AL Commitment Fee" shall have the meaning provided in Section 3.01(a)(iii). "AL Lender" shall mean, at any time, each Lender with an Acquisition Loan Commitment or with outstanding Acquisition Loans. "Applicable Margin" shall mean: with respect to A Term Loans, B Term Loans, Revolving Loans, Swingline Loans and Acquisition Loans, from and after any Start Date to and including the corresponding End Date, the respective percentage per annum set forth below under the respective Type of A Term Loans, B Term Loans, Revolving Loans, Swingline Loans or Acquisition Loans and opposite the respective Level (I.E., Level 1, Level 2, Level 3, Level 4, Level 5, Level 6 or Level 7) indicated to have been achieved on the applicable Test Date for such Start Date (as shown on the respective officer's certificate delivered pursuant to Section 8.01(e) or the first proviso below):
Loans (other Loans (other than B Term than B Term Loans) Loans) B Term Loans B Term Loans maintained as maintained as maintained as maintained as Total Base Rate Eurodollar Base Rate Eurodollar Level Leverage Ratio Loans Loans Loans Loans - ---------- ------------------ --------- --------- ------------- --------- 1 Less than 2.75:1.00 0.50% 1.50% 2.00% 3.00% 2 Greater than or equal to 2.75:1.00 but less than 3.25:1.00 0.75% 1.75% 2.00% 3.00% 3 Greater than or equal to 3.25:1.00 but less than 3.75:1.00 1.00% 2.00% 2.00% 3.00% 4 Greater than or equal to 3.75:1.00 but less than 4.25:1.00 1.25% 2.25% 2.00% 3.00% 5 Greater than or equal to 4.25:1.00 but less than 4.75:1.00 1.50% 2.50% 2.00% 3.00% -96- 6 Greater than or equal to 4.75:1.00 but less than 5.25:1.00 1.75% 2.75% 2.25% 3.25% 7 Greater than or equal to 5.25:1.00 2.00% 3.00% 2.50% 3.50%
; PROVIDED, HOWEVER, that if the Borrower fails to deliver the financial statements required to be delivered pursuant to Section 8.01(b) or (c) (accompanied by the officer's certificate required to be delivered pursuant to Section 8.01(e) showing the applicable Total Leverage Ratio on the relevant Test Date) on or prior to the respective date required by such Sections, then Level 7 pricing 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 other than Level 7 (it being understood that, in the case of any late delivery of the financial statements and officer's certificate as so required, the reduced Applicable Margin, if any, shall apply only from and after the date of the delivery of the complying financial statements and officer's certificate); PROVIDED FURTHER, that Level 7 pricing shall apply at any time when any Specified Default is in existence. Notwithstanding anything to the contrary contained in the immediately preceding sentence, Level 5 pricing shall apply for the period from the Initial Borrowing Date to but not including the date which is the first Start Date after the Borrower's fiscal quarter ending closest to September 30, 2000. "Asset Sale" shall mean any sale, transfer or other disposition by the Borrower or any of its Subsidiaries to any Person other than the Borrower or any Wholly-Owned Subsidiary of the Borrower of any asset (including, without limitation, any capital stock or other securities of another Person, but excluding the sale by such Person of its own capital stock) of the Borrower or such Subsidiary other than (i) sales, transfers or other dispositions of inventory or Rental Equipment made in the ordinary course of business and (ii) sales of assets pursuant to Sections 9.02(iv), (vi), (vii) and (xii). "Assignment and Assumption Agreement" shall mean an Assignment and Assumption Agreement substantially in the form of Exhibit K (appropriately completed). "Authorized Officer" shall mean, with respect to (i) delivering Notices of Borrowing, Notices of Conversion/Continuation, Letter of Credit Requests and similar notices, the treasurer or other financial officer of the Borrower, (ii) delivering financial information and officer's certificates pursuant to this Agreement, the treasurer or other senior financial officer of the Borrower, and (iii) any other matter in connection with this Agreement or any other Credit Document, any officer (or a person or persons so designated by any two officers) of the Borrower reasonably acceptable to the Administrative Agent. "B Term Loan" shall mean, collectively, each Initial B Term Loan and each Incremental B Term Loan. -97- "B Term Loan Commitment" shall mean, for each Lender, such Lender's Initial B Term Loan Commitment or Incremental B Term Loan Commitment, as the case may be. "B Term Loan Maturity Date" shall mean June 1, 2008. "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 Loans outstanding at such time, and the denominator of which is equal to the sum of 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). "Bankruptcy Code" shall have the meaning provided in Section 10.05. "Base Rate" shall mean, at any time, the higher of (x) the rate which is 1/2 of 1% in excess of the Federal Funds Rate and (y) the Prime Lending Rate at such time. "Base Rate Loan" shall mean (i) each Swingline Loan and (ii) each other Loan designated or deemed designated as such by the Borrower at the time of the incurrence thereof or conversion thereto. "Borrower" shall have the meaning provided in the first paragraph of this Agreement. "Borrowing" shall mean and include (i) the borrowing of Swingline Loans from the Swingline Lender on a given date and (ii) the borrowing of one Type of Loan pursuant to a single Tranche by the Borrower from all of the Lenders having Commitments with respect to such Tranche on a PRO RATA basis on a given date (or resulting from conversions on a given date), having in the case of Eurodollar Loans the same Interest Period; PROVIDED that (x) Base Rate Loans incurred pursuant to Section 1.10(b) shall be considered part of any related Borrowing of Eurodollar Loans and (ii) any Incremental A Term Loans or Incremental B Term Loans incurred pursuant to Section 1.01(c) or (d), as the case may be, shall be considered part of the Borrowing of the then outstanding A Term Loans or B Term Loans to which such Incremental A Term Loans or Incremental B Term Loans, as the case may be, are added to pursuant to Section 1.15(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 excluding Saturday, Sunday and any day which shall be in the City of New York a legal holiday or a day on which banking institutions are authorized by law or other governmental actions to close and (ii) with respect to all notices and determinations in connection with, and payments of principal and interest on, Eurodollar Loans, any day which is a Business Day described in clause (i) and which is also a day for trading by and between banks in U.S. dollar deposits in the interbank Eurodollar market. -98- "Calculation Period" shall have the meaning provided in Section 8.14. "Capital Expenditures" shall mean, with respect to any Person, all expenditures by such Person which should be capitalized in accordance with GAAP, including all such expenditures with respect to fixed or capital assets (including, without limitation, expenditures for maintenance and repairs which should be capitalized in accordance with GAAP) and the amount of all Capitalized Lease Obligations incurred by such Person. "Capital Lease" shall mean, as applied to any Person, shall mean any lease of any property (whether real, personal or mixed) by that Person as lessee which, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of that Person. "Capitalized Lease Obligations" shall mean, with respect to any Person, all obligations under Capital Leases of such Person in each case taken at the amount thereof accounted for as liabilities in accordance with GAAP. "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 one year 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 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, (iii) 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 organized under the laws of the United States, any State thereof, the District of Columbia or any foreign jurisdiction having capital, surplus and undivided profits aggregating in excess of $500,000,000 and having a long-term unsecured debt rating of at least "A" or the equivalent thereof from S&P's or "A2" or the equivalent thereof from Moody's, with maturities of not more than one year from the date of acquisition by such Person, (iv) repurchase agreements with a term of not more than 30 days, involving securities of the types described in preceding clause (i), and entered into with commercial banks meeting the requirements of preceding clause (iii), (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 one year after the date of acquisition by such Person, (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 and (vii) demand deposit accounts maintained in the ordinary course of business. "Change of Control" shall mean, at any time and for any reason whatsoever, (i) the Permitted Holders shall cease to own on a fully diluted basis in the aggregate at least 51% of the economic and voting interest in the Borrower's capital stock, or (ii) Odyssey, its Affiliates and the management shareholders of the Borrower shall, collectively, cease to have the ability to elect, and shall have failed to elect, a majority of the Board of Directors of the Borrower, or (iii) -99- a "change of control" or similar event shall occur as provided in the Senior Subordinated Note Documents or any Additional Subordinated Debt. "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 of the Collateral as defined in each of the Security Documents. "Collateral Agent" shall mean the Administrative Agent acting as collateral agent for the Secured Creditors. "Collective Bargaining Agreements" shall have the meaning provided in Section 5A.13. "Commitment" shall mean any of the commitments of any Lender, I.E., whether the Initial A Term Loan Commitment, the Initial B Term Loan Commitment, the Incremental A Term Loan Commitment, the Incremental B Term Loan Commitment, the Revolving Loan Commitment or the Acquisition Loan Commitment. "Commitment Fee" shall mean and include each of the A TL Commitment Fee, the RL Commitment Fee and the AL Commitment Fee. "Consolidated Current Assets" shall mean, at any time, the current assets of the Borrower and its Subsidiaries at such time determined on a consolidated basis. "Consolidated Current Liabilities" shall mean, at any time, the current liabilities of the Borrower and its Subsidiaries at such time determined on a consolidated basis, but excluding deferred income taxes, and the current portion of and accrued but unpaid interest on any Indebtedness under this Agreement and any other long-term Indebtedness which would otherwise be included therein. "Consolidated Debt" shall mean, at any time, the sum of (without duplication) (i) all Indebtedness of the Borrower and its Subsidiaries as would be required to be reflected on the liability side of a balance sheet of such Person in accordance with GAAP as determined on a consolidated basis, (ii) all Indebtedness of the Borrower and its Subsidiaries of the type described in clause (iii) of the definition of Indebtedness and (iii) all Contingent Obligations of the Borrower and its Subsidiaries in respect of Indebtedness of other Persons of the type referred to in preceding clauses (i) and (ii) of this definition; PROVIDED that for purposes of this definition, (x) the amount of Indebtedness in respect of Interest Rate Protection Agreements shall be at any time the unrealized net loss position, if any, of the Borrower and/or its Subsidiaries thereunder on a marked-to-market basis determined no more than one month prior to such time, (y) the unamortized original issue discount at any time on the Senior Subordinated Notes shall be -100- excluded in accordance with GAAP, and (z) the Shareholder Subordinated Notes shall not be treated as Consolidated Debt. "Consolidated EBIT" shall mean, for any period, Consolidated Net Income for such period before Consolidated Interest Expense for such period (to the extent deducted in arriving at Consolidated Net Income) and provision for taxes based on income that were included in arriving at Consolidated Net Income for such period without giving effect (x) to any extraordinary gains or losses and (y) to any gains or losses from sales of assets other than from sales of inventory and Rental Equipment in the ordinary course of business. "Consolidated EBITDA" shall mean, for any period, Consolidated EBIT for such period, adjusted by (x) adding thereto (without duplication) (i) the amount of all amortization and depreciation that were deducted in arriving at Consolidated EBIT for such period, (ii) the amount of all expenses incurred in connection with the Transaction and the Conspec Acquisition before the six-month anniversary of the Initial Borrowing Date to the extent that same were deducted in arriving at Consolidated EBIT for such period, and (iii) the amount of any non-cash charges incurred in such period (including the amount of any non-cash compensation charges incurred in such period) to the extent that such non-cash charges do not give rise to a liability that would be required to be reflected on the consolidated balance sheet of the Borrower (except, in the case of non-cash interest payments otherwise permitted (and made pursuant to Indebtedness otherwise permitted) under the terms of this Agreement, for liabilities which are subordinate to the Obligations on terms reasonably satisfactory to the Administrative Agent and have no maturity earlier than the date which is one year after the B Term Loan Maturity Date) and so long as no cash payments or cash expenses will be associated therewith (whether in the current period or any future period (other than, in the case of non-cash interest payments, periods beyond the date which is one year after the B Term Loan Maturity Date)), in each case to the extent that same were deducted in arriving at Consolidated EBIT for such period, and (y) subtracting therefrom the amount of all cash payments made in such period to the extent that same relate to a non-cash compensation charge incurred in a previous period; it being understood that (x) Consolidated EBITDA for the Borrower's fiscal quarters ended closest to March 31, 2000, December 31, 1999, September 30, 1999 and June 30, 1999, was $7,320,000, $10,565,000, $20,666,000 and $16,844,000, respectively, (y) in determining the Total Leverage Ratio only, 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 Interest Coverage Ratio" shall mean, for any period, the ratio of Consolidated EBITDA to 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 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, and capitalized interest expense, but excluding (i) the amortization of any deferred finan- -101- cing costs or of any costs in respect of any Interest Rate Protection Agreement, (ii) any interest expense on the Shareholder Subordinated Notes, (iii) any non-cash interest expense associated with the original issue discount on the Senior Subordinated Notes, and (iv) any non-cash interest expense on the Subordinated Debentures; PROVIDED, HOWEVER, that in calculating Consolidated Interest Expense for any Test Period ending on or prior to the last day of the fiscal quarter of the Borrower ending on or about March 31, 2001, Consolidated Interest Expense shall be calculated on a PRO FORMA basis giving effect to the Transaction as if the Transaction had occurred on October 1, 1999. "Consolidated Net Income" shall mean, for any period, the net after tax income of the Borrower and its Subsidiaries determined on a consolidated basis for such period (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 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 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 such specified Person or a Subsidiary of such Person in a pooling of interests transaction for any period prior to the date of such acquisition shall be excluded. "Conspec Acquisition" shall mean the Borrower's acquisition of all of the outstanding capital stock of the Conspec Entities, which acquisition is to be consummated in accordance with the Conspec Share Purchase Agreement and the applicable requirements of Sections 5B and 8.14. "Conspec Acquisition Date" shall mean the date on which the Conspec Acquisition is consummated. "Conspec Entities" shall mean, collectively, Conspec Marketing and Manufacturing Co., Inc., a Kansas Corporation, Conspec Performance Products, Inc., a Kansas corporation, and Bristol Investments, Inc., a California corporation. "Conspec Acquisition Termination Date" shall mean September 16, 2000. "Conspec Share Purchase Agreement" shall mean the Share Purchase Agreement, dated as of May 23, 2000, among the Borrower, the Conspec Entities and the shareholders of the Conspec Entities (and the related exhibits and schedules thereto), without giving effect to any amendments or waivers thereto which are not approved by the Administrative Agent (other than immaterial amendments or waivers). "Contingent Obligations" shall mean, as to any Person, any obligation of such Person as a result of such Person being a general partner of the other Person, unless the underlying obligation is expressly made non-recourse as to such general partner, and any obliga- -102- tion of such Person guaranteeing or intended to guarantee any Indebtedness, leases, dividends or other 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, (a) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (b) 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, (c) 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 (d) otherwise to assure or hold harmless the owner 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 or standard contractual indemnities entered into, in each case in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made or, if less, the maximum liability under such Contingent Obligation; and if such amount or liability is 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. "Conversion Date" shall mean June 1, 2004. "Credit Documents" shall mean this Agreement, each Note, the Subsidiaries Guaranty, each Security Document and each Incremental Term Loan Commitment Agreement. "Credit Event" shall mean the making of a Loan (other than (x) a Revolving Loan made pursuant to a Mandatory Borrowing and (y) an Acquisition Term Loan incurred on the Conversion Date pursuant to Section 1.01(i)) or the issuance of a Letter of Credit. "Credit Party" shall mean the Borrower and each Subsidiary Guarantor. "Dayton Trust" shall mean Dayton Superior Capital Trust, a Delaware business trust. "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 have the meaning provided in Section 9.06. "Domestic Subsidiary" shall mean each Subsidiary of the Borrower incorporated or organized in the United States or any State or territory thereof. -103- "EFCO Litigation" shall mean the litigation involving a Subsidiary of the Borrower entitled EFCO v. SYMONS, ET AL. currently on appeal to the United States Court of Appeals for the Eighth Circuit. "Effective Date" shall have the meaning provided in Section 13.10. "Eligible Transferee" shall mean and include a commercial bank, financial institution, an insurance company, a finance company, any fund that invests in loans or any other "accredited investor" (as defined in Regulation D of the Securities Act). "Employee Benefit Plans" shall have the meaning set forth in Section 5A.13. "Employee Carry Loans" shall have the meaning provided in Section 9.05(viii). "Employment Agreements" shall have the meaning provided in Section 5A.13. "End Date" shall mean, for any Margin Reduction Period, the last day of such Margin Reduction Period. "Environmental Claims" shall mean any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, notices of non-compliance or violation, investigations or proceedings relating in any way to any violation (or alleged violation) by the Borrower or any of its Subsidiaries under any Environmental Law (hereafter "Claims") or any permit issued to the Borrower or any of its Subsidiaries under any such law, 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 resulting from Hazardous Materials or arising from alleged injury or threat of injury to health, safety or the environment. "Environmental Law" shall mean any applicable federal, state or local statute, law, rule, regulation, ordinance, code or rule of common law now or hereafter in effect and in each case as amended, and any legally binding judicial or administrative interpretation thereof, including any judicial or administrative order, consent, decree or judgment (for purposes of this definition (collectively, "Laws")), relating to the environment, or Hazardous Materials or health and safety to the extent such health and safety issues relate to the occupational exposure to Hazardous Materials, or any such similar Laws. "Equity Financing" shall mean the issuance by the Borrower of shares of its common stock on the Initial Borrowing Date to Odyssey, its Affiliates and other investors reasonably satisfactory to the Agents. "Equity Financing Documents" shall mean and include all of the agreements governing, or relating to, the Equity Financing. -104- "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 on 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" within the meaning of Section 414(b), (c), (m) or (o) of the Code. "Eurodollar Loans" shall mean each Loan (other than a Swingline Loan) designated as such by the Borrower at the time of the incurrence thereof or conversion thereto. "Eurodollar Rate" shall mean with respect to each Interest Period for a Eurodollar Loan, (i) the offered quotation to first-class banks in the interbank Eurodollar market by BTCo for U.S. dollar deposits of amounts in same day funds comparable to the outstanding principal amount of the Eurodollar Loan of BTCo for which an interest rate is then being determined with maturities comparable to the Interest Period to be applicable to such Eurodollar Loan, determined as of 10:00 A.M. (New York time) on the date which is two Business Days prior to the commencement of such Interest Period divided (and rounded upward to the next whole multiple of 1/16 of 1%) by (ii) a percentage equal to 100% minus the then stated maximum rate of all reserve requirements (including, without limitation, any marginal, emergency, supplemental, special or other reserves) applicable to any member bank of the Federal Reserve System in respect of Eurocurrency liabilities as defined in Regulation D (or any successor category of liabilities under Regulation D). "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 (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 (i) the amount of all Capital Expenditures made by the Borrower and its Subsidiaries on a consolidated basis during such period (except to the extent financed with equity proceeds, insurance proceeds, Asset Sale proceeds or the proceeds of Indebtedness), (ii) the aggregate amount of permanent principal payments of Indebtedness for borrowed money of the Borrower and its Subsidiaries and the permanent repayment of the principal component of Capitalized Lease Obligations of the Borrower and its Subsidiaries during such period (excluding (A) payments to the extent made with equity proceeds, insurance proceeds, Asset Sale proceeds or Indebtedness and (B) payments of Loans or other Obligations, PROVIDED that repayments of Loans shall 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), (c) or (d) or (y) made as a voluntary prepayment pursuant to Section 4.01 with internally generated funds (but in the case of a voluntary prepayment of Revolving Loans, Swingline Loans or Acquisition Revolving Loans, only to the extent accompanied by a voluntary reduction to the Total Revolving Loan Commitment or the Total Acquisition Loan Commitment, as the case may be), and (iii) the increase, if any, in Adjusted Consolidated Working Capital from the first day to the last day of such period. -105- "Excess Cash Flow Payment Date" shall mean the date occurring 90 days after the last day of a fiscal year of the Borrower (beginning with its fiscal year ending on December 31, 2001). "Excess Cash Flow Payment Period" shall mean, with respect to each Excess Cash Payment Date, the immediately preceding fiscal year of the Borrower. "Existing Indebtedness" shall have the meaning provided in Section 7.22. "Existing Indebtedness Agreements" shall have the meaning provided in Section 5A.13. "Facing Fee" shall have the meaning provided in Section 3.01(c). "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 Pension Plan" shall mean any plan, fund (including, without limitation, any superannuation fund) or other similar program established or maintained outside the United States of America 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 of America, which plan, 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 of employment, and which plan is not subject to ERISA or the Code. "Foreign Subsidiary" shall mean each Subsidiary of the Borrower other than a Domestic Subsidiary. "GAAP" shall mean generally accepted accounting principles in the United States of America as in effect from time to time; it being agreed that determinations in accordance with GAAP for purposes of Section 9 and the Applicable Margin, including (in each case) defined terms as used therein, are subject (to the extent provided therein) to Section 13.07(a). "Guaranteed Obligations" shall mean (i) the principal and interest on each Note issued by the Borrower to each Lender, and Loans made, under this Agreement and all reimbursement obligations and Unpaid Drawings with respect to Letters of Credit, together with all the other obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities (including, without limitation, -106- indemnities, fees and interest thereon) of the Borrower to such Lender, the Administrative Agent, each Letter of Credit Issuer and the Collateral Agent now existing or hereafter incurred under, arising out of or in connection with this Agreement and each other Credit Document to which the Borrower is a party and the due performance and compliance by the Borrower with all the terms, conditions and agreements contained in this Agreement and in each such other Credit Document and (ii) all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due) and liabilities of the Borrower or any of its Subsidiaries owing under any Interest Rate Protection Agreement or Other Hedging Agreement entered into by the Borrower or any of its Subsidiaries with any Lender or any affiliate thereof (even if such Lender subsequently ceases to be a Lender under this Agreement for any reason) so long as such Lender or affiliate participate in such Interest Rate Protection Agreement or Other Hedging Agreement, and their subsequent assigns, if any, whether now in existence or hereafter arising, and the due performance and compliance by the Borrower or any of its Subsidiaries with all terms, conditions and agreements contained therein. "Hazardous Materials" shall mean (a) any petrochemical or petroleum products, radioactive materials friable asbestos, urea formaldehyde foam insulation, transformers or other equipment that contain dielectric fluid containing levels of polychlorinated biphenyls, and radon gas; and (b) any chemicals, materials or substances defined as or included in the definition of "hazardous substances," "hazardous wastes," "hazardous materials," "restricted hazardous materials," "extremely hazardous wastes," "restrictive hazardous wastes," "toxic substances," "toxic pollutants," "contaminants" or "pollutants," or words of similar meaning and regulatory effect where the relevant Governmental authority has jurisdiction over the operations of the Borrower or any of its Subsidiaries. "Incremental A Term Loan" shall have the meaning provided in Section 1.01(c). "Incremental A Term Loan Borrowing Date" shall mean each date on which the Borrower or any Subsidiary Guarantor consummates a Permitted Acquisition for which all or a portion of the consideration is to be financed with the proceeds of a Borrowing of Incremental A Term Loans to be made on such date, each of which dates shall be the date of effectiveness of the respective Incremental Term Loan Commitment Agreement pursuant to which such Incremental A Term Loans are to be made; PROVIDED that no such date shall occur after the Incremental Term Loan Commitment Termination Date. "Incremental A Term Loan Commitment" shall mean, for each Incremental Term Loan Lender, the commitment of such Incremental Term Loan Lender to make Incremental A Term Loans pursuant to Section 1.01(c) on a given Incremental A Term Loan Borrowing Date, as such commitment (x) is set forth in the respective Incremental Term Loan Commitment Agreement delivered pursuant to Section 1.15(b) or (y) may be terminated pursuant to Sections 3.03 and/or 10. "Incremental B Term Loan" shall have the meaning provided in Section 1.01(d). "Incremental B Term Loan Borrowing Date" shall mean each date on which the Borrower or any Subsidiary Guarantor consummates a Permitted Acquisition for which all or a -107- part of the consideration is to be financed with a Borrowing of Incremental B Term Loans to be made on such date, each of which dates shall be the date of the effectiveness of the respective Incremental Term Loan Commitment Agreement pursuant to which such Incremental B Term Loans are to be made; PROVIDED that no such date shall occur after the Incremental Term Loan Commitment Termination Date. "Incremental B Term Loan Commitment" shall mean, for each Incremental Term Loan Lender, the commitment of such Incremental Term Loan Lender to make Incremental B Term Loans pursuant to Section 1.01(d) on a given Incremental B Term Loan Borrowing Date, as such commitment (x) is set forth in the respective Incremental Term Loan Commitment Agreement delivered pursuant to Section 1.15(b) or, (y) may be terminated pursuant to Sections 3.03 and/or 10. "Incremental Term Loan" shall mean each Incremental A Term Loan and Incremental B Term Loan. "Incremental Term Loan Commitment" shall mean, for each Incremental Term Loan Lender, such Incremental Term Loan Lender's Incremental A Term Loan Commitment or Incremental B Term Loan Commitment, as the case may be. "Incremental Term Loan Commitment Agreement" shall mean an Incremental Term Loan Commitment Agreement substantially in the form of Exhibit C (appropriately completed). "Incremental Term Loan Commitment Termination Date" shall mean December 16, 2001. "Incremental Term Loan Lender" shall have the meaning provided in Section 1.15(b). "Indebtedness" of any Person shall mean, without duplication, (i) all indebtedness of such Person for borrowed money, (ii) the deferred purchase price of assets or services payable to the sellers thereof or any of such seller's assignees which in accordance with GAAP would be shown on the liability side of the balance sheet of such Person but excluding deferred rent as determined in accordance with GAAP, (iii) the face amount of all letters of credit issued for the account of such Person and, without duplication, all drafts drawn thereunder, (iv) all Indebtedness of a second Person secured by any Lien on any property owned by such first Person, whether or not such Indebtedness has been assumed, (v) all Capitalized Lease Obligations of such Person, (vi) 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, (vii) all obligations under Interest Rate Protection Agreements and Other Hedging Agreements and (viii) all Contingent Obligations of such Person, PROVIDED that Indebtedness shall not include trade payables and accrued expenses, in each case arising in the ordinary course of business. "Indebtedness to be Refinanced" shall mean all Indebtedness set forth on Annex X which is to be repaid in full on the Initial Borrowing Date as part of the Refinancing. -108- "Initial A Term Loan" shall have the meaning provided in Section 1.01(a). "Initial A Term Loan Borrowing Date" shall mean each date on or after the Initial Borrowing Date and prior to the Initial A Term Loan Commitment Termination Date on which either (i) the Borrower is required to make payments as provided in Section 7.05(a), or (ii) the Borrower incurs Initial A Term Loans the proceeds of which are used to reimburse the Borrower for payments theretofore made of the type described in clause (i) of Section 7.05(a). "Initial A Term Loan Commitment" shall mean, for each Lender, the amount set forth opposite such Lender's name Annex I directly below the column entitled "Initial A Term Loan Commitment," as the same may be (x) reduced or terminated from time to time pursuant to Sections 3.02, 3.03, 4.02 and/or 10 or (y) adjusted from time to time as a result of assignments to or from such Lender pursuant to Sections 1.13 and/or 13.04(b). "Initial A Term Loan Commitment Termination Date" shall mean the earlier of (x) the A Term Loan Maturity Date and (y) the date on which all of the outstanding Subordinated Debentures have been converted into the right to receive cash in accordance with the Subordinated Debenture Indenture and the Merger Agreement. "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 Annex I directly below the column entitled "Initial B Term Loan Commitment," as the same may be (x) terminated pursuant to Sections 3.03 and/or 10 or (y) adjusted from time to time as a result of assignments to or from such Lender pursuant to Sections 1.13 and/or 13.04(b). "Initial Borrowing Date" shall mean the date occurring on or after the Effective Date on which the initial Borrowing of Term Loans occurs. "Intercompany Loan" shall have the meaning provided in Section 9.05(vi). "Intercompany Notes" shall mean promissory notes, in the form of Exhibit L, evidencing Intercompany Loans. "Interest Determination Date" shall mean, with respect to any Eurodollar Loan, the second Business Day prior to the commencement of any Interest Period relating to such Eurodollar Loan. "Interest Period" with respect to any Eurodollar Loan, shall mean the interest period applicable thereto, as determined pursuant to Section 1.09. "Interest Rate Protection Agreement" shall mean any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedging agreement or other similar agreement or arrangement. "Investment" shall have the meaning provided in Section 9.05. -109- "L/C Supportable Obligations" shall mean obligations of the Borrower or any of its Wholly-Owned Subsidiaries incurred in the ordinary course of business and otherwise permitted to exist pursuant to the terms of this Agreement (other than obligations in respect of the Senior Subordinated Notes, any Additional Subordinated Debt, the Subordinated Debentures, the Nash Note or any Shareholder Subordinated Notes) . "Leasehold" of any Person shall mean all of 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 have the meaning provided in the first paragraph of this Agreement. "Lender Default" shall mean (i) the refusal (which has not been retracted) 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 2.03 or (ii) a Lender having notified the Administrative Agent and/or the Borrower that it does not intend to comply with the obligations under Section 1.01(e), 1.01(g), 1.01(h) or 2.03, in the case of either clause (i) or (ii) above as a result of the appointment of a receiver or conservator with respect to such Lender at the direction or request of any regulatory agency or authority. "Letter of Credit" shall have the meaning provided in Section 2.01(a). "Letter of Credit Fees" shall have the meaning provided in Section 3.01(b). "Letter of Credit Issuer" shall mean BTCo (and/or an affiliate thereof (including Deutsche Bank AG, New York Branch) which has agreed to issue Letters of Credit hereunder) and any other Lender which, at the request of the Borrower and with the consent of the Administrative Agent, agrees in such Lender's sole discretion to become a Letter of Credit Issuer for purposes of issuing Letters of Credit pursuant to Section 2. The Letter of Credit Issuers on the Initial Borrowing Date are (x) in the case of standby Letters of Credit, BTCo, and (y) in the case of trade Letters of Credit, Deutsche Bank AG, New York Branch. "Letter of Credit Outstandings" shall mean, at any time, the sum of, without duplication, (i) the aggregate 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 2.02(a). "Lien" shall mean any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the UCC or any similar recording or notice statute, and any lease having substantially the same effect as the foregoing). -110- "Loan" shall mean each Initial A Term Loan, each Initial B Term Loan, each Incremental A Term Loan, each Incremental B Term Loan, each Revolving Loan, each Swingline Loan and each Acquisition 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 of the other Tranches under this Agreement were repaid in full and all Commitments with respect thereto were terminated. "Management Agreements" shall have the meaning provided in Section 5A.13. "Mandatory Borrowing" shall have the meaning provided in Section 1.01(g). "Margin Reduction Period" shall mean each period which shall commence on the date occurring after the Initial Borrowing 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(b) or (c), as the case may be) and which shall end on the date of actual delivery of the next officer's certificates pursuant to Section 8.01(e) (together with the related financial statements pursuant to Section 8.01(b) or (c), as the case may be) or the latest date on which such next officer's certificate (and such related financial statements) is required to be so delivered. "Margin Stock" shall have the meaning provided in Regulation U. "Material Adverse Effect" shall mean (i) a material adverse effect on the business, operations, properties, 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 rights or remedies of the Lenders or the Administrative Agent hereunder or under any other Credit Document or (y) 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" with respect to any Tranche of Loans, shall mean the A Term Loan Maturity Date, the B Term Loan Maturity Date, the Revolving Loan Maturity Date, the Swingline Expiry Date or the Acquisition Loan Maturity Date, as the case may be. "Maximum Swingline Amount" shall mean $7,500,000. "Mergeco" shall mean Stone Acquisition Corp., an Ohio corporation established by Odyssey and its Affiliates to effect the Recapitalization. "Merger Agreement" shall mean the Agreement and Plan of Merger dated as of January 19, 2000, by and between Mergeco and the Borrower, as the same may be amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. "Minimum Borrowing Amount" shall mean (i) for Revolving Loans, $1,000,000, (ii) for A Term Loans, $1,000,000, provided that Initial A Term Loans incurred as Base Rate -111- Loans may be in the amount of $100,000, (iii) for B Term Loans, $5,000,000, (iv) for Acquisition Loans, $1,000,000, and (v) for Swingline Loans, $100,000. "Moody's" shall mean Moody's Investors Service, Inc. "Multiemployer Plan" shall mean any multiemployer plan as defined in Section 4001(a)(3) of ERISA, which is maintained or contributed to by (or to which there is an obligation to contribute of) the Borrower or any Subsidiary of the Borrower or an ERISA Affiliate, and each such plan for the five year period immediately following the latest date on which the Borrower or any Subsidiary of the Borrower or an ERISA Affiliate maintained, contributed to or had an obligation to contribute to such plan. "Nash Note" shall mean the Borrower's $5,000,000 senior note due 2004 and which is payable to Merrill L. Nash. "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 Asset Sale, net of reasonable transaction costs (including, without limitation, any underwriting, brokerage or other customary selling commissions and reasonable legal, advisory and other fees and expenses, including title and recording expenses, associated therewith) and payments of unassumed liabilities relating to the assets sold at the time of, or within 30 days after, the date of such Asset Sale, the amount of such gross cash proceeds required to be used to repay any Indebtedness (other than Indebtedness of the Lenders pursuant to this Agreement) which is secured by the respective assets which were sold, and the estimated marginal increase in income and sales taxes which will be payable by the Borrower's consolidated group with respect to the fiscal year in which the sale occurs as a result of such sale; but excluding any portion of any such gross cash proceeds which the Borrower determines in good faith should be reserved for post-closing adjustments (to the extent the Borrower delivers to the Lenders a certificate signed by its chief financial officer or other Authorized Officer as to such determination), it being understood and agreed that on the day that all such post-closing adjustments have been determined (which shall not be later than six months following the date of the respective Asset Sale), the amount (if any) by which the reserved amount in respect of such sale or disposition exceeds the actual post-closing adjustments payable by the Borrower or any of its Subsidiaries shall constitute Net Sale Proceeds on such date received by the Borrower and/or any of its Subsidiaries from such sale, lease, transfer or other disposition. "Non-Defaulting Lender" shall mean each Lender other than a Defaulting Lender. "Note" shall mean each A Term Note, each B Term Note, each Revolving Note, each Acquisition 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. -112- "Notice Office" shall mean the office of the Administrative Agent located at 130 Liberty Street, New York, New York 10006 or such other office as the Administrative Agent may designate to the Borrower and the Lenders from time to time. "Obligations" shall mean all amounts, direct or indirect, contingent or absolute, of every type or description, and at any time existing, owing to the Administrative Agent, the Collateral Agent, any Letter of Credit Issuer or any Lender pursuant to the terms of this Agreement or any other Credit Document. "Odyssey" shall mean Odyssey Investment Partners, L.L.C., a Delaware limited liability company. "Other Hedging Agreements" shall mean any foreign exchange contracts, currency swap agreements or other similar agreements or arrangements designed to protect against fluctuations in currency values. "Participant" shall have the meaning provided in Section 2.03(a). "Payment Office" shall mean the office of the Administrative Agent located at 130 Liberty Street, New York, New York 10006 or such other office as the Administrative Agent may designate to the Borrower and the Lenders from time to time. "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 (including the Conspec Acquisition) by the Borrower or a Subsidiary Guarantor of assets constituting a business, division or product line of any Person not already a Subsidiary of the Borrower or of 100% of the capital stock of any such Person, which Person shall, as a result of such stock acquisition, become a Wholly-Owned Domestic Subsidiary of the Borrower (such assets or Person are referred to as an "Acquired Entity or Business"), PROVIDED that (A) the consideration paid by the Borrower or such Subsidiary Guarantor consists solely of cash (including proceeds of Incremental Term Loans, Revolving Loans, Swingline Loans and Acquisition Revolving Loans), the issuance or incurrence of Indebtedness otherwise permitted by Section 9.04, the issuance by the Borrower of shares of its common stock or Qualified Preferred Stock 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) relating to such Acquired Entity or Business 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, such Person shall own no capital stock of any other Person (other than immaterial amounts) unless either (x) such Person owns 100% of the capital stock of such other Person or (y) (1) such Person and/or its Wholly-Owned Subsidiaries own at least 80% of the consolidated assets of such 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) except to the extent permitted by Section 8.14(a)(vii), substantially all of the business, division or product line acquired pursuant to the respective Permitted Acquisition, or the business of the Person -113- acquired pursuant to the respective Permitted Acquisition and its Subsidiaries taken as a whole, is in the United States, (D) the Acquired Entity or Business acquired is in a business permitted by Section 9.01 and (E) all applicable requirements of Sections 8.14 and 9.02 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 that such acquisition shall constitute a Permitted Acquisition for purposes of this Agreement. "Permitted Holders" shall mean (i) Odyssey and its Affiliates, (ii) management of the Borrower and its Subsidiaries, and (iii) limited partners of Odyssey's Affiliates to the extent such Affiliates are shareholders of the Borrower. "Permitted Liens" shall have the meaning provided in Section 9.03. "Person" shall mean any individual, partnership, joint venture, firm, corporation, limited liability company, association, 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 (other than a Multiemployer Plan), 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, and each such plan (other than a Multiemployer Plan) for the five year period immediately following the latest date on which the Borrower, or 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 5A.11(a). "Prime Lending Rate" shall mean the rate which BTCo 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. BTCo may make commercial loans or other loans at rates of interest at, above or below the Prime Lending Rate. "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 FORMA basis to (x) the incurrence of any Indebtedness (other than revolving Indebtedness, except to the extent same is incurred to finance the Transaction, to refinance other outstanding Indebtedness or to finance Permitted Acquisitions) 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 and (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 -114- the date of the respective Permitted Acquisition then being effected, 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 finance the Transaction, to refinance other outstanding Indebtedness or to finance Permitted Acquisitions) 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 the Transaction and any Permitted Acquisition for the periods described above, taking into account, in the case of any Permitted Acquisition, factually supportable and identifiable cost savings and expenses which would otherwise 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 period; PROVIDED that, notwithstanding anything to the contrary above in this clause (iii), in the event the Conspec Acquisition is consummated on or before the Conspec Acquisition Termination Date in accordance with the provisions of this Agreement, the PRO FORMA addition to Consolidated EBITDA attributable to such acquisition pursuant to this clause (iii) shall be deemed to be $3,700,000 for the applicable Calculation Period. "Projections" shall mean the projections which were prepared by or on behalf of the Borrower in connection with the Transaction and set forth in the Confidential Information Memorandum, dated April 2000, prepared by the Agents in connection with the syndication of the Total Commitment. "Qualified Preferred Stock" shall mean any preferred stock of the Borrower so long as the terms of any such preferred stock (i) do not contain any mandatory put, redemption, repayment, sinking fund or other similar provision prior to June 30, 2011 that are not otherwise permitted under the terms of this Agreement (unless the Total Commitment has been terminated, all Loans have been repaid in full, all Letters of Credit have been terminated and all other Obligations have been paid in full), (ii) do not require the cash payment of dividends at a time -115- when such payment would be prohibited or not permitted under this Agreement, (iii) do not contain any covenants (other than reporting requirements), (iv) do not grant the holders thereof any voting rights except for (x) voting rights required to be granted to such holders under applicable law and (y) 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 (v) are otherwise reasonably satisfactory to the Administrative Agent. "Quarterly Payment Date" shall mean the first Business Day of each March, June, September and December. "Real Property" of any Person shall mean all of the right, title and interest of such Person in and to land, improvements and fixtures, including Leaseholds. "Recapitalization" shall mean the merger of Mergeco with and into the Borrower, with the Borrower emerging as the surviving corporation of such merger, pursuant to and in accordance with the terms of the Recapitalization Documents. "Recapitalization Documents" shall mean and include (i) the Merger Agreement and (ii) all other agreements and documents relating to the Recapitalization. "Recovery Event" shall mean the receipt by the Borrower or any of its Subsidiaries of any insurance or condemnation proceeds payable (i) by reason of theft, physical destruction or damage or any other similar event with respect to any properties or assets of the Borrower or any of its Subsidiaries, (ii) by reason of any condemnation, taking, seizing or similar event with respect to any properties or assets of the Borrower or any of its Subsidiaries and (iii) under any policy of insurance required to be maintained under Section 8.03. "Refinancing" shall mean the refinancing of the Indebtedness to the Refinanced in connection with the Recapitalization in accordance with the requirements of Section 5A.09. "Refinancing Documents" shall mean each of the agreements, documents and instruments entered into in connection with the Refinancing. "Register" shall have the meaning provided in Section 13.17. "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. "Regulation T" shall mean Regulation T of the Board of Governors of the Federal Reserve System as from to time in effect and any successor to all or any 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. -116- "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 any portion thereof. "Release" shall mean the disposing, discharging, injecting, spilling, pumping, leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing, pouring and the like, into or upon any land or water or air, or otherwise entering into the environment. "Rental Equipment" shall mean any capital equipment which is held as rental inventory by the Borrower and its Subsidiaries for the purpose of renting to third party customers in the ordinary course of business. "Replaced 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, or .28 of PBGC Regulation Section 4043. "Required Lenders" shall mean, collectively (and not individually), Non-Defaulting Lenders the sum of whose outstanding Term Loans, Initial A Term Loan Commitments, Revolving Loan Commitments (or, if after the Total Revolving Loan Commitment has been terminated, outstanding Revolving Loans and RL Percentages of (x) outstanding Swingline Loans and (y) Letter of Credit Outstandings) and Acquisition Loan Commitments (or, if after the termination thereof (except to the extent converted to Term Loans), outstanding Acquisition Revolving Loans) constitute at least 50.1% of the sum of (i) the total outstanding Term Loans of Non-Defaulting Lenders, (ii) the Total Revolving Loan Commitment less the aggregate Revolving Loan Commitments of Defaulting Lenders (or, if after the Total Revolving Loan Commitment has been terminated, the sum of the 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), (iii) the Total Initial A Term Loan Commitment less the Initial A Term Loan Commitments of all Defaulting Lenders and (iv) the Total Acquisition Loan Commitment (or, if after the termination thereof (except to the extent converted to Term Loans), the total outstanding Acquisition Revolving Loans of Non-Defaulting Lenders). "Revolving Loan" shall have the meaning provided in Section 1.01(e). "Revolving Loan Commitment" shall mean, with respect to each RL Lender, the amount set forth opposite such RL Lender's name in Annex I directly below the column entitled "Revolving Loan Commitment," as the same may be (i) reduced from time to time pursuant to Sections 3.02, 3.03, 4.02 and/or Section 10 and/or (ii) adjusted from time to time as a result of assignments to or from such Lender pursuant to Sections 1.13 and/or 13.04(b). "Revolving Loan Maturity Date" shall mean June 1, 2006. -117- "Revolving Note" shall have the meaning provided in Section 1.05(a). "RL Commitment Fee" shall have the meaning provided in Section 3.01(a)(ii). "RL Lender" shall mean, at any time, each Lender with a Revolving Loan Commitment or with outstanding Revolving Loans. "RL Percentage" shall mean, at any time for each RL Lender, the percentage obtained by dividing such RL Lender's Revolving Loan Commitment at such time by the Total Revolving Loan Commitment then in effect, PROVIDED that if the Total Revolving Loan Commitment has been terminated, the RL Percentage of each RL Lender shall be determined by dividing such RL Lender's Revolving Loan Commitment as in effect immediately prior to such termination by the Total Revolving Loan Commitment as in effect immediately prior to such termination. "S&P" shall mean Standard & Poor's Ratings Services, a division of McGraw Hill, Inc. "Scheduled Repayments" shall mean and include each Tranche A Scheduled Repayment, each Tranche B Scheduled Repayment and each Acquisition Loan Scheduled Repayment. "SEC" shall mean the Securities and Exchange Commission or any successor thereto. "Section 4.04(b)(ii) Certificate" shall have the meaning provided in Section 4.04(b)(ii). "Secured Creditors" shall have the meaning provided in the Security Documents. "Security Agreement" shall have the meaning provided in Section 5A.11(b). "Security Agreement Collateral" shall mean all "Collateral" as defined in the Security Agreement. "Security Documents" shall mean and include the Security Agreement, the Pledge Agreement and each Additional Security Document, if any. "Senior Subordinated Note Documents" shall mean the Senior Subordinated Note Indenture, the Senior Subordinated Notes, the Senior Subordinated Note Offering Memorandum and each other document or agreement relating to the issuance of the Senior Subordinated Notes. "Senior Subordinated Note Indenture" shall mean the Indenture, dated as of June 16, 2000 by and among the Borrower, the Subsidiary Guarantors and United States Trust Company of New York, as trustee. -118- "Senior Subordinated Note Offering Memorandum" shall mean the Offering Memorandum, dated June 9, 2000, prepared in connection with the issuance of the Senior Subordinated Notes. "Senior Subordinated Notes" shall mean the Borrower's 13% Senior Subordinated Notes due June 15, 2009. "Shareholder Subordinated Note" shall mean an unsecured junior subordinated note issued by the Borrower (and not guaranteed or supported in any way by any of its Subsidiaries), which note shall be in the form of Exhibit M, PROVIDED that additional provisions may be included so long as such provisions do not adversely affect the interests of the Lenders and are not in conflict with the provisions of this Agreement or any other Credit Document. "Shareholders' Agreements" shall have the meaning provided in Section 5A.13. "Specified Default" shall mean and include any Event of Default and any Default pursuant to Section 8.01(b), 8.01(c), 10.01 or 10.5. "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 the maximum amount available to be drawn thereunder (regardless of whether any conditions for drawing could then be met). "Subordinated Debenture Documents" shall mean the Subordinated Debenture Indenture, the Subordinated Debentures and each other document or agreement relating to the Subordinated Debentures. "Subordinated Debenture Indenture" shall mean the Junior Convertible Subordinated Indenture, dated as of October 5, 1999, between the Borrower and FirStar Bank, N.A., as trustee. "Subordinated Debentures" shall mean the Borrower's 10% junior convertible subordinated debentures due September 30, 2029. "Subsidiaries Guaranty" shall have the meaning provided in Section 5A.12. "Subsidiary" of any Person shall mean and include (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 directly or indirectly through Subsidiaries and (ii) any partnership, association, limited liability company, joint venture or other entity (other than a corporation) in which such Person directly or indirectly through Subsidiaries, has more than a 50% equity interest at the time. -119- "Subsidiary Guarantor" shall mean each Domestic Subsidiary of the Borrower and, to the extent provided in Section 8.12, each Foreign Subsidiary of the Borrower. "Supermajority Lenders" of any Tranche shall mean those Non-Defaulting Lenders which would constitute the Required Lenders under, and as defined in, this Agreement if (x) all outstanding Obligations of the other Tranches under this Agreement were repaid in full and all Commitments with respect thereto were terminated and (y) the percentage "50.1%" contained therein were changed to "66-2/3%." "Swingline Expiry Date" shall mean the 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(f). "Swingline Note" shall have the meaning provided in Section 1.05(a). "Syndication Date" shall mean that date upon which the Administrative Agent determines (and notifies the Borrower and the Lenders) that the primary syndication (and resultant addition of Persons as Lenders pursuant to Section 13.04(b)) has been completed. "Tax Allocation Agreements" shall have the meaning provided in Section 5A.13. "Taxes" shall have the meaning provided in Section 4.04(a). "Term Loans" shall mean each Initial A Term Loan, each Initial B Term Loan, each Incremental A Term Loan, each Incremental B Term Loan and each Acquisition Term Loan. "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), subject to the proviso contained in the definition of Consolidated Interest Expense. "Total Acquisition Loan Commitment" shall mean, at any time, the sum of the Acquisition Loan Commitments of each of the Lenders. "Total Commitment" shall mean, at any time, the sum of the Commitments of each of the Lenders at such time. "Total Incremental A Term Loan Commitment" shall mean, at any time, the sum of the Incremental A Term Loan Commitments of each of the Lenders at such time. -120- "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 A Term Loan Commitment" shall mean the sum of the Initial A Term Loan Commitments of each of the Lenders. "Total Initial B Term Loan Commitment" shall mean the sum of the Initial B Term Loan Commitments of each of the Lenders. "Total Leverage Ratio" shall mean, at any time, the ratio of (i) Consolidated Debt at such time to (ii) Consolidated EBITDA for the Test Period then most recently ended. "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 Acquisition Loan Commitment" shall mean, at any time, (i) the Total Acquisition Loan Commitment at such time less (ii) the sum of the aggregate principal amount of all Acquisition Revolving Loans outstanding at such time. "Total Unutilized Revolving Loan Commitment" shall mean, at any time, (i) the Total Revolving Loan Commitment at such time less (ii) the sum of the aggregate principal amount of all Revolving Loans and Swingline Loans outstanding at such time plus the Letter of Credit Outstandings at such time. "Tranche" shall mean the respective facility and commitments utilized in making Loans hereunder, with there being five separate Tranches, I.E., (i) Initial A Term Loans and Incremental A Term Loans taken together as a single Tranche, (ii) Initial B Term Loans and Incremental B Term Loans taken together as a single Tranche, (iii) Revolving Loans, (iv) Swingline Loans and (v) Acquisition Loans. "Tranche A Scheduled Repayment" shall have the meaning provided in Section 4.02(b). "Tranche B Scheduled Repayment" shall have the meaning provided in Section 4.02(c). "Transaction" shall mean, collectively, (i) the Recapitalization, (ii) the Equity Financing, (iii) the Refinancing, (iv) the entering into of the Credit Documents and the incurrence of all Loans and issuance of all Letters of Credit on the Initial Borrowing Date, (v) the issuance of the Senior Subordinated Notes and (vi) the payment of fees and expenses in connection with the foregoing. "Transaction Documents" shall mean the Credit Documents, the Recapitalization Documents, the Equity Financing Documents, the Refinancing Documents and the Senior Subordinated Note Documents. -121- "Trust Agreement" shall mean the Amended and Restated Trust Agreement, dated as of October 5, 1999, among the Borrower, as depositor, FirStar Bank, N.A., as property trustee, Mark A. Ferrucci, as Delaware trustee, and the Administrative Trustees named therein. "Trust Preferred Stock" shall mean Dayton Trust's preferred securities issued pursuant to the Trust Agreement. "Type" shall mean any type of Loan determined with respect to the interest option applicable thereto, I.E., a Base Rate Loan or a Eurodollar Loan. "UCC" shall mean the Uniform Commercial Code as in effect from time to time 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). "Unpaid Drawing" shall have the meaning provided in Section 2.04(a). "Unutilized Acquisition Loan Commitment" with respect to any AL Lender at any time shall mean such AL Lender's Acquisition Loan Commitment at such time less the aggregate outstanding principal amount of all Acquisition Revolving Loans made by such AL Lender. "Unutilized Revolving Loan Commitment" with respect to any RL Lender at any time shall mean such RL 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 RL Lender and (ii) such RL Lender's Percentage of the Letter of Credit Outstandings at such time. "U.S. Dollars" and the sign "$" shall each mean freely transferable lawful money of the United States of America. "Waivable Repayment" shall have the meaning provided in Section 4.02(m). "Wholly-Owned Domestic Subsidiary" shall mean, as to any Person, any Wholly-Owned Subsidiary of such Person which is a Domestic Subsidiary. "Wholly-Owned Foreign Subsidiary" shall mean, as to any Person, any Wholly-Owned Subsidiary of such Person which is a Foreign Subsidiary. "Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any corporation 100% of whose capital stock (other than director's qualifying shares and/or other nominal amounts of shares required to be held other than by such Person under applicable law) is at the time owned by such Person and/or one or more Wholly-Owned Subsidiaries of such Person and (ii) any partnership, association, limited liability company, joint venture or other entity in which -122- such Person and/or one or more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such time. SECTION 12. THE ADMINISTRATIVE AGENT. 12.01 APPOINTMENT. Each Lender hereby irrevocably designates and appoints BTCo as Administrative Agent on behalf of such Lender (such term to include for purposes of this Section 12, BTCo acting as Collateral Agent) to act as specified herein and in the other Credit Documents, and each such Lender hereby irrevocably authorizes BTCo as the Administrative Agent to take such action on its behalf under the provisions of this Agreement and the other Credit Documents and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms of this Agreement and the other Credit Documents, together with such other powers as are reasonably incidental thereto. The Administrative Agent agrees to act as such upon the express conditions contained in this Section 12. Notwithstanding any provision to the contrary elsewhere in this Agreement or in any other Credit Document, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein or in the other Credit Documents, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or otherwise exist against the Administrative Agent. The provisions of this Section 12 are solely for the benefit of the Administrative Agent and the Lenders, and neither the Borrower nor any of its Subsidiaries shall have any rights as a third party beneficiary of any of such provisions. In performing its functions and duties under this Agreement, the Administrative Agent shall act solely as agent of the Lenders and the Administrative Agent does not assume and shall not be deemed to have assumed any obligation or relationship of agency or trust with or for the Borrower or any of its Subsidiaries. 12.02 DELEGATION OF DUTIES. The Administrative Agent may execute any of its duties under this Agreement or any other Credit Document by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of any agents or attorneys-in-fact selected by it with reasonable care. 12.03 EXCULPATORY PROVISIONS. Neither the Administrative Agent nor any of its officers, directors, employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any action lawfully taken or omitted to be taken by it or such Person in its capacity as Administrative Agent under or in connection with this Agreement or the other Credit Documents (except for its or such Person's own gross negligence or willful misconduct (as determined by a count of competent jurisdiction in a final and non-appealable decision)) or (ii) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by the Borrower, any of its Subsidiaries or any of their respective officers contained in this Agreement or in the other Credit Documents, any other Transaction Document or in any certificate, report, statement or other document referred to or provided for in, or received by the Administrative Agent under or in connection with, this Agreement or any other Transaction Document or for any failure of the Borrower or any of its Subsidiaries or any of their respective officers to perform its obligations hereunder or thereunder. The Administrative Agent shall not be under any obligation -123- to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or the other Transaction Documents, or to inspect the properties, books or records of the Borrower or any of its Subsidiaries. The Administrative Agent shall not be responsible to any Lender for the effectiveness, genuineness, validity, enforceability, collectability or sufficiency of this Agreement or any other Transaction Document or for any representations, warranties, recitals or statements made herein or therein or made in any written or oral statement or in any financial or other statements, instruments, reports, certificates or any other documents in connection herewith or therewith furnished or made by the Administrative Agent to the Lenders or by or on behalf of the Borrower or any of its Subsidiaries to the Administrative Agent or any Lender or be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained herein or therein or as to the use of the proceeds of the Loans or of the existence or possible existence of any Default or Event of Default. 12.04 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, facsimile, telex or teletype message, statement, order or other document or conversation reasonably believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Borrower or any of its Subsidiaries), independent accountants and other experts selected by the Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Credit Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, under this Agreement and the other Credit Documents in accordance with a request of the Required Lenders, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders. 12.05 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default unless the Administrative Agent has actually received notice from a Lender or the Borrower referring to this Agreement, describing such Default or Event of Default and stating that such notice is a "notice of default." In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give prompt notice thereof to the Lenders. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders; PROVIDED that, unless and until the Administrative Agent shall have received such directions, the Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of Default as it shall deem advisable in the best interests of the Lenders. 12.06 NONRELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each Lender expressly acknowledges that neither the Administrative Agent nor any of its respective officers, directors, employees, agents, attorneys-in-fact or affiliates have made any representations or war- -124- ranties to it and that no act by the Administrative Agent hereinafter taken, including any review of the affairs of the Borrower or any of its Subsidiaries, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Lender. Each Lender represents to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, assets, operations, property, financial and other condition, prospects and creditworthiness of the Borrower and its Subsidiaries and made its own decision to make its Loans hereunder and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement, and to make such investigation as it deems necessary to inform itself as to the business, assets, operations, property, financial and other condition, prospects and creditworthiness of the Borrower and its Subsidiaries. The Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, assets, property, financial and other condition, prospects or creditworthiness of the Borrower, the Borrower or any of its Subsidiaries which may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates. 12.07 INDEMNIFICATION. The Lenders agree to indemnify the Administrative Agent in its capacity as such ratably according to their respective "percentages" as used in determining the Required Lenders at such time or, if the Commitments have terminated and all Loans have been repaid in full, as determined immediately prior to such termination and repayment (with such "percentages" to be determined as if there are no Defaulting Lenders), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, reasonable expenses or disbursements of any kind whatsoever which may at any time (including, without limitation, at any time following the payment of the Obligations) be imposed on, incurred by or asserted against the Administrative Agent in its capacity as such in any way relating to or arising out of this Agreement or any other Credit Document, or any documents contemplated by or referred to herein or the transactions contemplated hereby or any action taken or omitted to be taken by the Administrative Agent under or in connection with any of the foregoing, but only to the extent that any of the foregoing is not paid by the Borrower or any of its Subsidiaries; PROVIDED that no Lender shall be liable to the Administrative Agent for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements to the extent resulting from the gross negligence or willful misconduct of the Administrative Agent (as determined by a court of competent jurisdiction in a final and non-appealable decision). If any indemnity furnished to the Administrative Agent for any purpose shall, in the opinion of the Administrative Agent be insufficient or become impaired, the Administrative Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished. The agreements in this Section 12.07 shall survive the payment of all Obligations. 12.08 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. The Administrative Agent and its affiliates may make loans to, investments in, accept deposits from and generally -125- engage in any kind of business with the Borrower and its Subsidiaries and Affiliates as though the Administrative Agent were not the Administrative Agent hereunder. With respect to the Loans made by it and all Obligations owing to it, the Administrative Agent shall have the same rights and powers under this Agreement as any Lender and may exercise the same as though it were not the Administrative Agent and the terms "Lender" and "Lenders" shall include the Administrative Agent in its individual capacity. 12.09 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 or entity 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 indorsee, as the case may be, of such Note or of any Note or Notes issued in exchange therefor. 12.10 RESIGNATION OF THE ADMINISTRATIVE AGENT. (a) The Administrative Agent may resign from the performance of all its functions and duties hereunder and/or under the other Credit Documents at any time by giving 20 Business Days' prior written notice to the Borrower and the Lenders. 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, 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. (c) If a successor Administrative Agent shall not have been so appointed within such 20 Business Day period, the Administrative Agent, with the consent of the Borrower (which consent shall not be unreasonably withheld or delayed), 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 20th 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 Lenders appoint a successor Administrative Agent as provided above. 12.11 OTHER AGENTS. No Person listed on the signature pages hereto as Syndication Agent, Documentation Agent or a Co-Agent shall have any obligation under this Agreement solely in its capacity as such an Agent. -126- SECTION 13. MISCELLANEOUS. 13.01 PAYMENT OF EXPENSES, ETC. The Borrower 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 local counsel) in connection with the negotiation, preparation, execution and delivery of the Credit Documents and the documents and instruments referred to therein and any amendment, waiver or consent relating thereto and in connection with the Administrative Agent's syndication efforts with respect to this Agreement; (ii) pay all reasonable out-of-pocket costs and expenses of the Administrative Agent, each Letter of Credit Issuer and each of the Lenders in connection with the enforcement of the Credit Documents and the documents and instruments referred to herein or 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 and, after an Event of Default shall have occurred and be continuing, the protection of the rights of the Administrative Agent, each Letter of Credit Issuer and each of the Lenders thereunder (including, without limitation, in each case the reasonable fees and disbursements of counsel (including in-house counsel) for the Administrative Agent, for each Letter of Credit Issuer and for each of the Lenders, PROVIDED that the Lenders agree, with respect to matters described in this clause (ii), to employ a common outside counsel, selected by the Administrative Agent and reasonably acceptable to the Required Lenders, except and until, in the good faith judgment of the Lenders (or any of them, as the case may be), the interests of such Lenders conflict sufficiently to warrant the employment of separate counsel for such Lenders (or any of them, as the case may be); (iii) pay and hold each of the Lenders harmless from and against any and all present and future stamp and other similar taxes with respect to the foregoing matters and save 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 such Lender) to pay such taxes; and (iv) indemnify the Administrative Agent, the Collateral Agent, each Letter of Credit Issuer and each Lender, their respective officers, directors, employees, representatives and agents (and, to the extent any Lender is a fund, such Lender's trustees and investment advisors) from and hold each of them harmless against any and all losses, liabilities, claims, damages or expenses incurred by any of them (but excluding any such 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)), 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, the Collateral Agent, any Letter of Credit Issuer or any Lender is a party thereto and whether or not any such investigation, litigation or other proceeding is between or among the Administrative Agent, the Collateral Agent, any Letter of Credit Issuer, any Lender, any Credit Party or any third Person or otherwise) related to the entering into and/or performance of this Agreement or any other Transaction Document or the use of the proceeds of any Loans hereunder or the Transaction or the consummation of any other transactions contemplated in any Transaction Document 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 or any Environmental Claim, in each case, -127- including, without limitation, the reasonable fees and disbursements of counsel and independent consultants incurred in connection with any such investigation, litigation or other proceeding. 13.02 RIGHT OF SETOFF. 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 continuation of an Event of Default, the Administrative Agent, the Collateral Agent, each Letter of Credit Issuer 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 the Borrower or any of its Subsidiaries 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, the Collateral Agent, such Letter of Credit Issuer or such Lender (including, without limitation, by branches and agencies of the Administrative Agent, the Collateral Agent, such Letter of Credit Issuer and such Lender wherever located) to or for the credit or the account of any Credit Party against and on account of the Obligations of any Credit Party to the Administrative Agent, the Collateral Agent, such Letter of Credit Issuer or such Lender under this Agreement or under any of the other Credit Documents, including, without limitation, all interests in Obligations of any Credit Party 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 the Administrative Agent, the Collateral Agent, such Letter of Credit Issuer or such Lender shall have made any demand hereunder and although said Obligations shall be contingent or unmatured. Notwithstanding anything to the contrary contained in this Section 13.02, no Lender shall exercise any such right of set-off without the prior consent of the Administrative Agent or the Required Lenders if, and so long as, the Obligations shall be secured by any Real Property located in the State of California, it being understood and agreed, however, that this sentence is for the sole benefit of the Lenders and may be amended, modified or waived in any respect by the Required Lenders without the requirement of prior notice to or consent by any Credit Party and does not constitute a waiver of any rights against any Credit Party or against any Collateral. 13.03 NOTICES. Except as otherwise expressly provided herein, all notices and other communications provided for hereunder shall be in writing (including telegraphic, telex, facsimile 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, as the case may be; if to any Lender, at its address specified for such Lender on Annex II; or, at such other address as shall be designated by any party in a written notice to the other parties hereto. All such notices and communications shall be mailed, telegraphed, telexed, telecopied or cabled or sent by overnight courier, and shall be effective when received. 13.04 BENEFIT OF AGREEMENT. (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 or under any other Credit Document without the prior written consent of the Lenders and, PROVIDED FURTHER, that, although any Lender may transfer, assign or grant participa- -128- tions 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 or Loans hereunder except as provided in Section 13.04(b)) and the transferee, assignee or participant, as the case may be, shall not constitute a "Lender" hereunder and, PROVIDED FURTHER, that 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 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 for purposes of this clause (i)), 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 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 hereunder in which such participant is participating. In the case of any such participation, 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 been terminated, outstanding Obligations) hereunder to (i) its parent company and/or any affiliate of such Lender which is at least 50% owned by such Lender or its parent company or to one or more Lenders 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 $2,000,000 in the aggregate for the assigning -129- Lender or assigning Lenders, of such Revolving Loan Commitments (and related outstanding Obligations hereunder) and/or outstanding principal amount of Term Loans (or, if prior to the Initial Borrowing Date, Term Loan Commitments) to one or more Eligible Transferees (treating any fund that invests in loans and any other fund that invests in loans and is managed or advised by the same investment advisor of such fund or by an Affiliate of such investment adviser as a single Eligible Transferee), each of which assignees shall become a party to this Agreement as a Lender by execution of an Assignment and Assumption Agreement, PROVIDED that (i) at such time Annex 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 surrender of the relevant Notes by the assigning Lender (or the furnishing of a standard indemnity letter from the respective assigning Lender in respect of any lost Notes), new Notes will be issued, at the Borrower's expense and at the request of the respective Lenders, to such new Lender and to the 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 and only with respect to assignments effected after the Syndication Date, the consent of the Borrower shall (in either case) be required in connection with any such assignment pursuant to clause (y) of this Section 13.04(b) (each of which consents shall not be unreasonably withheld or delayed), (iv) the consent of the Swingline Lender and each Letter of Credit Issuer shall be required in connection with any assignment of Revolving Loan Commitments pursuant to clause (y) of this Section 13.04(b) (each of which consents shall not be unreasonably withheld or delayed) and (v) the Administrative Agent shall receive at the time of each assignment, from the assigning or assignee Lender, the payment of a non-refundable assignment fee of $3,500; and, PROVIDED FURTHER, that such transfer or assignment will not be effective until recorded by the Administrative Agent on the Register pursuant to Section 13.17. 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/or 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 provide to the Borrower and the Administrative Agent 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 Commitment 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, 1.11, 2.05 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 shall be obligated to pay any other increased costs of the type described above resulting from changes after the date of the respective assignment). Notwithstanding anything to the contrary contained above, at any time after the termination of the Total Revolving Loan Commitment, if any Revolving Loans or Letters of Credit remain outstanding, assignments may be made as provided above, except that the respective assignment shall be of a portion of the outstanding Revolving Loans of the respective RL Lender and its participation in Letters of Credit and its obligation to make Mandatory Borrowings, although any such assignment effected after the termination of the Total Revolving Loan Commitment shall not release the assigning RL Lender from its obligations as a Participant with respect to outstanding Letters of Credit or to fund its share of any Mandatory Borrowing (although the respective assignee may agree, as between itself and the respective assigning RL Lender, that it shall be responsible for such amounts). (c) 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 pledge all or any portion of its Loans and Notes to its -130- trustee in support of its obligations to its trustee. No pledge pursuant to this clause (c) 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 or any Lender in exercising any right, power or privilege hereunder or under any other Credit Document and no course of dealing between any Credit Party and the Administrative Agent 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 and remedies herein expressly provided are cumulative and not exclusive of any rights or remedies which the Administrative Agent 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 or the Lenders to any other or further action in any circumstances without notice or demand. 13.06 PAYMENTS PRO RATA. (a) The Administrative Agent agrees that promptly after its receipt of each payment from or on behalf of any Credit Party in respect of any Obligations of such Credit Party, it shall, except as otherwise provided in this Agreement, distribute such payment to the Lenders (other than any Lender that has consented in writing to waive its PRO RATA share of 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 or 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 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 of the Lenders in such amount; PROVIDED that if all or any portion of such excess amount is thereafter recovered from such Lender, such purchase shall be rescinded and the purchase price restored to the extent of such recovery, but without interest. 13.07 CALCULATIONS; COMPUTATIONS. (a) The financial statements to be furnished to the Lenders pursuant hereto shall be made and prepared in accordance with GAAP 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, except otherwise specifically provided herein, all computations used in determining compliance with Sections 4.02, 8.14 and 9, including definitions used therein and all computations used in determining the Applicable Margin shall, in each case, utilize accounting principles and policies in effect at the time of the preparation of, and in conformity with those used to prepare, the December 31, 1999 -131- financial statements of the Borrower delivered to the Lenders pursuant to Section 7.10(b); PROVIDED FURTHER, that to the extent expressly required pursuant to the provisions of this Agreement, certain calculations shall be made on a PRO FORMA Basis. (b) All computations of interest and Fees hereunder shall be made on the actual number of days elapsed over a year of 360 days; PROVIDED that all computations of interest on Base Rate Loans determined by reference to the Prime Lending Rate shall be based on the actual number of days elapsed over a year of 365 days (or 366 days, as the case may be). 13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. 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, 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 jurisdiction over such Credit Party, and agrees not to plead or claim, in any legal action or proceeding with respect to this Agreement or any other Credit Document brought in any of the aforesaid courts, that any such court lacks jurisdiction over such Credit Party. The Borrower further irrevocably consents to the service of process in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to such Credit Party, at its address for notices pursuant to Section 13.03, 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 any Credit Party 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. 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 complete set of counterparts executed by all the parties hereto shall be lodged with the Borrower and the Administrative Agent. -132- 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, telex or facsimile 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. 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, 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 thereby in the case of the following clause (i)), (i) extend the final scheduled maturity of any Loan or Note or extend the stated maturity 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, 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 purposes of this clause (i)), (ii) release all or substantially all of the Collateral (except as expressly provided in the Security Documents) under all the Security Documents, (iii) 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, the Initial A Term Loan Commitments, the Revolving Loan Commitments and the Acquisition Loan Commitments on the Effective Date), (iv) 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, the Initial A Term Loan Commitments, Revolving Loan Commitments and the Acquisition Loan Commitments are included on the Effective Date) or (v) 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 (u) 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 in the Commitment of such Lender), (v) without the consent of each Letter of Credit Issuer or the Swingline Lender, as the case may be, amend, modify or waive any provision of Section 2 or alter its rights or obligations with respect to -133- Letters of Credit or Swingline Loans, (w) without the consent of the Administrative Agent, amend, modify or waive any provision of Section 12 as same applies to the Administrative Agent or any other provision as same relates to the rights or obligations of the Administrative Agent, (x) without the consent of the Collateral Agent, amend, modify or waive any provision relating to the rights or obligations of the Collateral Agent, (y) 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, Revolving Loans and Acquisition Revolving Loans pursuant to this Agreement as originally in effect, 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 (or without the consent of the Majority Lenders of each Tranche in the case of an amendment to the definition of Majority Lenders), amend the definition of Majority Lenders or 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 Sections 4.02(b), 4.02(c) and 4.02(d)) (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 (z) without the consent of the Supermajority Lenders of the respective Tranche, reduce the amount of, or extend the date of, any Tranche A Scheduled Repayment, Tranche B Scheduled Repayment or Acquisition Loan Scheduled Repayment, as the case may be, or amend the definition of Supermajority 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 Supermajority Lenders on substantially the same basis as the extensions of Term Loans, Initial A Term Loan Commitments, Revolving Loan Commitments and Acquisition Loan Commitments are included on the Effective Date). (b) If, in connection with any proposed change, waiver, discharge or termination to any of the provisions of this Agreement as contemplated by clauses (i) through (v), 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 whose consent is required is not obtained, then the Borrower shall have the right, so long as all non-consenting Lenders whose individual consent is required are treated as described in either clause (A) or (B) below, to either (A) replace each such non-consenting Lender or Lenders (or, at the option of the Borrower if the respective Lender's consent is required with respect to less than all Tranches of Loans (or related Commitments), to replace only the respective Tranche of Commitments and/or Loans of the respective non-consenting Lender which gave rise to the need to obtain such Lender's individual consent) with one or more Replacement Lenders pursuant to Section 1.13 so long as at the time of such replacement, each such Replacement Lender consents to the proposed change, waiver, discharge or termination or (B) terminate such non-consenting Lender's Commitments (if such Lender's consent is required as a result of its respective Commitment) and/or repay each Tranche of outstanding Loans of such Lender which gave rise to the need to obtain such Lender's consent and/or cash collateralize its applicable RL Percentage of the Letter of Credit of Outstandings, in accordance with Sections 3.02(d) and/or 4.01(b), PROVIDED that, unless the Commitments which are terminated and Loans which are 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 Commit- -134- ments 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 the Borrower shall not have the right to replace a Lender, terminate its Commitments or repay its Loans solely as a result of the exercise of such Lender's rights (and the withholding of any required consent by such Lender) pursuant to the second proviso to Section 13.12(a). 13.13 SURVIVAL. All indemnities set forth herein including, without limitation, in Section 1.10, 1.11, 2.05, 4.04, 12.07 or 13.01, shall survive the execution and delivery of this Agreement and the making and repayment of the Loans. 13.14 DOMICILE OF LOANS AND COMMITMENTS. Each Lender may transfer and carry its Loans and/or Commitments at, to or for the account of any branch office, subsidiary or affiliate of such Lender; PROVIDED that the Borrower shall not be responsible for costs arising under Section 1.10, 1.11, 2.05 or 4.04 resulting from any such transfer (other than a transfer pursuant to Section 1.12) to the extent such costs would not otherwise be applicable to such Lender in the absence of such transfer. 13.15 CONFIDENTIALITY. (a) Each of the Lenders agrees that it will use its reasonable efforts not to disclose without the prior consent of the Borrower (other than to its directors, employees, officers, auditors, counsel or other professional advisors, to affiliates or to another Lender if the Lender or such Lender's holding or parent company in its sole discretion determines that any such party should have access to such information) any information with respect to the Borrower or any of its Subsidiaries which is furnished pursuant to this Agreement and which is designated by the Borrower to the Lenders in writing as confidential; PROVIDED that any Lender may disclose any such information (a) as has become generally available to the public, (b) as may be required or appropriate (x) 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 or (y) in connection with any request or requirement of any such regulatory body, (c) as may be required or appropriate in response to any summons or subpoena or in connection with any litigation, (d) to comply with any law, order, regulation or ruling applicable to such Lender, (e) to the Administrative Agent or the Collateral Agent, (f) to any direct or indirect contractual counterparty in swap agreements or such contractual counterparty's professional advisor (so long as such contractual counterparty or professional advisor to such contractual counterparty agrees to be bound by the provisions of this Section 13.15), (g) to the National Association of Insurance Commissioners or any similar organization or any nationally recognized rating agency that requires access to information about a Lender's investment portfolio in connection with ratings issued with respect to such Lender, and (h) to any prospective transferee in connection with any contemplated transfer of any of the Notes or any interest therein by such Lender; PROVIDED that such prospective transferee agrees to be bound by this Section 13.15 to the same extent as such Lender. -135- (b) The Borrower hereby acknowledges and agrees that each Lender may share with any of its affiliates any information related to the Borrower or any of its Subsidiaries (including, without limitation, any nonpublic customer information regarding the creditworthiness of the Borrower and its Subsidiaries), PROVIDED that such Persons shall be subject to the provisions of this Section 13.15 to the same extent as such Lender. 13.16 WAIVER OF JURY TRIAL. 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. 13.17 REGISTER. The Borrower hereby designates the Administrative Agent to serve as the Borrower's agent, solely for purposes of this Section 13.17, 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 and each repayment in respect of the principal amount of the Loans of each 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. With respect to 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 shall not be effective until such transfer is recorded on the Register maintained by the Administrative Agent with respect to ownership of such Commitment and Loans and prior to such recordation all amounts owing to the transferor with respect to such Commitment and Loans shall remain owing to the transferor. The registration of assignment or transfer of all or part of any Commitment and Loans 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 Section 13.04(b). 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 any Note evidencing such Loan, and thereupon one or more new Notes in the same aggregate principal amount shall be issued to the assigning or transferor Lender and/or the new Lender, in each case upon the request of the respective Lenders. 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 13.17. * * * 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: 7777 Washington Village Drive DAYTON SUPERIOR CORPORATION Suite 130 Dayton, OH 45459 Attention: President By /s/ John A. Ciccarelli Telephone: (937) 428-6368 -------------------------------- Facsimile: (937) 428-9560 Title: President BANKERS TRUST COMPANY, Individually and as Administrative Agent /s/ Susan L. Le Fevre ----------------------------------- Director MERRILL LYNCH CAPITAL CORPORATION, Individually and as Syndication Agent /s/ Christopher Birosak ----------------------------------- Vice President BANK ONE, MICHIGAN Individually and as Documentation Agent /s/ Paul A. Harris ----------------------------------- Managing Director Ohio Large Corporate NATIONAL CITY BANK, Individually and as Co-Agent /s/ Neal R. Ratliff ----------------------------------- Vice President BANK OF AMERICA, N.A., Individually and as Co-Agent /s/ Andrew P. Bucolo ----------------------------------- Vice President TRANSAMERICA BUSINESS CREDIT CORPORATION /s/ Perry Vavoules ----------------------------------- Senior Vice President SUMMIT BANK /s/ Donna Keenan ----------------------------------- Vice President COMERICA BANK /s/ Anthony L. Davis ----------------------------------- Assistant Vice President MICHIGAN NATIONAL BANK /s/ Neran Shaya ----------------------------------- Vice President HUNTINGTON NATIONAL BANK /s/ Kassem K. Matt ----------------------------------- Assistant Vice President PROVIDENT BANK /s/ Timothy Davis ----------------------------------- Vice President KZH SOLEIL LLC /s/ Susan Lee ----------------------------------- Authorized Agent MORGAN STANLEY DEAN WITTER PRIME INCOME TRUST /s/ Sheila A. Finnerty ----------------------------------- Senior Vice President
ANNEX I LIST OF LENDERS AND COMMITMENTS
Lender Initial A Term Loan Initial B Term Loan Revolving Loan Acquisition Loan ------ Commitment Commitment Commitment COMMITMENT ---------- ---------- ---------- ---------- Bankers Trust Company $2,667,874.40 $21,750,000.00 $5,676,328.53 $3,405,797.11 Merrill Lynch Capital Corporation $2,667,874.40 $5,676,328.50 $3,405,797.10 Bank One, Michigan $2,270,531.40 $4,830,917.87 $2,898,550.72 National City Bank $2,270,531.40 $4,830,917.87 $2,898,550.72 Bank of America, N.A. $2,043,478.26 $1,000,000.00 $4,347,826.09 $2,608,695.65 TransAmerica Business Credit Corporation $1,929,951.69 $4,106,280.19 $2,463,768.12 Summit Bank $1,929,951.69 $4,106,280.19 $2,463,768.12 Comerica Bank $1,929,951.69 $4,106,280.19 $2,463,768.12 Michigan National Bank $1,929,951.69 $4,106,280.19 $2,463,768.12 Huntington National Bank $1,929,951.69 $4,106,280.19 $2,463,768.12 Provident Bank $1,929,951.69 $4,106,280.19 $2,463,768.12 KZH Soleil LLC (SunAmerica) $3,625,000.00 Morgan Stanley Dean Witter Prime Income Trust $3,625,000.00 -------------- -------------- -------------- -------------- Total $23,500,000.00 $30,000,000.00 $50,000,000.00 $30,000,000.00 ============== ============== ============== ==============
ANNEX II LENDER ADDRESSES
LENDER ADDRESS Bankers Trust Company 130 Liberty Street New York, New York 10006 Attention: Diane Rolfe Telephone No.: (212) 250-1661 Telecopier No.: (212) 250-7218 Merrill Lynch Capital Corporation World Financial Center North Tower 250 Vesey Street New York, New York 10281 Attention: Bertram Michel Telephone No.: (212) 449-5205 Telecopier No.: (212) 449-9732 Bank One, Michigan c/o Bank One, NA 100 East Broad Street, 7th Floor Columbus, OH 43215 Attention: Paul A. Harris Telephone No.: (614) 248-1780 Telecopier No.: (614) 248-5518 National City Bank 6 North Main Street Dayton, OH 45412-2200 Attention: Neal R. Ratliff Telephone No.: (937) 226-2186 Telecopier No.: (937) 226-2058 Bank of America, N.A. 231 South LaSalle Street Chicago, IL 60697 Attention: Andrew Bucolo Telephone No.: (312) 828-0947 Telecopier No.: (312) 974-2109 TransAmerica International Corporate Center at Rye Business Credit Corporation 555 Theodore Fremd Avenue, Suite C-301 Rye, NY 10580 Attention: Perry Vavoules/Paul Dellova Telephone No.: (914) 925-7218/7219 Telecopier No.: (914) 921-0110 Annex II Page 2 Summit Bank 250 Moore Street Hackensack, NJ 07610 Attention: Bonnie Gershon Telephone No.: (201) 646-5953 Telecopier No.: (201) 488-6185 Comerica Bank One Detroit Center 500 Woodward Avenue, 9th Floor Detroit, MI 48226-3268 Attention: Anthony L. Davis Telephone No.: (313) 222-9452 Telecopier No.: (313) 222-9514 Michigan National Bank 27777 Inster Road P.O. Box 9065 Farmington Hills, MI 48333-9065 Attention: Neran Shaya Telephone No.: (248) 473-4212 Telecopier No.: (248) 473-4345 Huntington National Bank 41 South High Street Columbus, OH 43215 Attention: Kassem K. Matt Telephone No.: (614) 480-5373 Telecopier No.: (614) 480-3698 Provident Bank Courthouse Plaza, Suite 1100 10 West Second Street, 231 S Dayton, OH 45402 Attention: Timothy L. Davis Telephone No.: (937) 223-2840 Telecopier No.: (937) 223-3522 Annex II Page 3 KZH Soleil, LLC c/o The Chase Manhattan Bank SunAmerica 140 East 45th Street 11th Floor New York, NY 10017 Attention: Virginia Conway Telephone No.: (212) 622-9353 Telecopier No.: (212) 622-0123 with a copy to: Weil, Gotshal & Manges LLP 767 5th Avenue, 34th Floor New York, NY 10153 Attention: Shan D. McSweeney Telephone No.: (212) 310-6857 Telecopier No.: (212) 310-8007 Morgan Stanley Dean Witter Two World Trade Center Prime Income Trust New York, NY 10048 Attention: Peter Gewirtz Telephone No.: (212) 392-1600 Telecopier No.: (212) 392-3587
ANNEX III PLANS AND MULTI-EMPLOYER PLANS A. PENSION PLANS 1. Dayton Superior Corporation Savings Plan 2. Dayton Superior Corporation Master Savings Plan 3. Dayton Superior Corporation Master Pension Plan 4. Dayton Superior Corporation Retirement Plan for Hourly-Rated Employees, Parsons, Kansas 5. Dayton Superior Corporation Employees Retirement Plan 6. Dayton Superior Corporation Savings Plan for Collectively Bargained Employees 7. Dayton Superior Corporation Employee Savings Plan 8. Dayton Superior Corporation Pension Plan 9. Dayton Superior Executive Compensation Plan (nonqualified deferred compensation plan for four Dur-O-Wal employees) 10. Senior Executive Incentive Plan (frozen deferred compensation plan for certain senior executives prior to 1989, which was fully accrued for on the most recent balance sheet included in the Financial Statements) 11. Dur-O-Wal, Inc. 401(k) Profit Sharing Plan 12. Symons Corporation Employees Retirement Plan 13. Symons Corporation 401(k) Savings Plan 14. Symons Corporation Employee Retirement Savings Plan 15. Symons Corporation Master Pension Plan Note: Dayton Superior Corporation currently maintains only the following tax-qualified plans: Dayton Superior Corporation Savings Plan; Dayton Superior Corporation Master Savings Plan; and Dayton Superior Corporation Master Pension Plan. The other plans listed above (other than #9 and #10) have been merged into the current plans or have been terminated. B. MULTI-EMPLOYER PLANS 1. Central States H&W & Pension Fund Plan (St. Joseph, Mo - 2 employees) 2. Western Conf. of Teamsters Pension Trust Fund (Santa Fe Springs, Ca - approximately 17 employees; Los Angeles, Ca - approximately 8 employees) 3. National Industrial Group Pension Plan (Tremont, Pa - approximately 99 employees) 4. I.A.M. Pension Fund Plan (Parsons, Ks - approximately 129 employees) 5. Joint Counsel of Teamsters Welfare Trust Fund (Southwest Administrators)(Santa Fe Springs, Ca) Note: Symons Corporation withdrew from the I.A.M. Pension Fund Plan with respect to I.A.M. members at its Des Plaines, Illinois facility on January 1, 1995 and withdrew from the carpenters union Multi-Employer Plan with respect to carpenters union members at its Des Plaines, Illinois facility on June 1, 1999. In both cases, the respective plan informed Symons Corporation that no liability would be assessed on the withdrawal. ANNEX IV SUBSIDIARIES The Subsidiaries of the Borrower are: Symons Corporation Dur-O-Wal, Inc. Dayton Superior Canada Ltd. Dayton Superior FSC Corp. Annex V REAL PROPERTY A. DAYTON SUPERIOR CORPORATION: OWNED REAL PROPERTY: 1900 Wilson Parsons, KS 530 Madison Avenue (Centralia) Junction City, IL 402 South First Street Oregon, IL 721 Richard Street Miamisburg, OH County Road 113 Rushsylvania, OH 5025 Easton Road St. Joseph, MO 298 Keystone Drive Bethlehem, PA 3 Horne Drive, PO Box 409 Folcroft, PA 55 North Pine Street Tremont, PA LEASED REAL PROPERTY 1421 Hildegarde Drive Birmingham, AL 580 Elm Street Helena, AL 1201 Mohave Road Parker, AZ 530 E. Dyer Road Santa Ana, CA 9415 Sorenson Avenue Santa Fe Springs, CA 4975 Pontiac Street Commerce City, CO 6625 N. Washington Street Denver, CO Annex V Page 2 1887 Central Florida Parkway Orlando, FL 9745 NW 80th Avenue Hialeah Gardens, FL 670 Great Southwest Parkway Atlanta, GA 2150B South Route 45-52 Kankakee, IL 30 Manning Road Billercia, MA 7777 Washington Village Drive Dayton, OH 2564 Kohnle Drive Miamisburg, OH 1202 Avenue T Grand Prairie, TX 6417 Toledo Houston, TX 1000 Lofland Drive Waxahachie, TX 500 South Lander Street Seattle, WA 742 Boul. Industriel, Suite 104 Blainville Que, Canada 396 Attwell Drive Rexdale, Ontario Canada B. SYMONS CORPORATION: OWNED REAL PROPERTY: 6665 N. Washington Street Denver, CO 150 Bryan Road Dania, FL 200 East Touhy Avenue Des Plaines, IL 1112 East Airline Highway La Place, LA Annex V Page 3 7053 Brookdale Drive Elkridge, MD 1010 Hutton Drive Carrollton, TX 1989 Peachleaf Houston, TX 1155 Church Hill Drive New Braunfels, TX LEASED REAL PROPERTY: 511 E. Mohave Phoenix, AZ 3447 Investment Blvd., Suite 5 Hayward, CA 722 S. Parriott Place Industry, CA 8280 Utica Rancho Cucamonga, CA 880 Thorpe Road Orlando, FL 2219 Lithonia Industrial Blvd Lithonia, GA 591 River Road Silver Grove, KY 9301 Penn Avenue South Bloomington, MN 6000 Old Pineville Road Charlotte, NC 1550 Highway 70 W Clayton, NC 203 Swing Road Greensboro, NC 509 Gurley's Mill Road Princeton, NC 2049 Corporate Drive Wilmington, NC 400 Max Court Henderson, NV Annex V Page 4 6415 Plaster Mill Road Victor, NY 200 King Manor Drive King of Prussia, PA 4201 Grand Avenue Neville Island, PA 1361 Stockholder Avenue Myrtle Beach, SC 5071 Rivers Avenue North Charleston, SC 8406 Earle Road, Suite A Mechanicsville, VA N11 W 24651 Silvernail Road Pewaukee, WI 70 Golden Drive Coquitlam, British Columbia 5423B Portage Avenue Headingley, Manitoba C. DUR-O-WAL: OWNED REAL PROPERTY: 625 Crane Street Aurora, IL 601 North Point Baltimore, MD LEASED REAL PROPERTY: 829 34th Street North Birmingham, AL 3213-15-17 8th Avenue North Birmingham, AL 213 South Alma School Road Mesa, AZ 4260 Westbrook Drive, Suite 120 Aurora, IL ANNEX VI EXISTING INDEBTEDNESS INDEBTEDNESS NOT TO BE REFINANCED
Agreements Principal Amount Outstanding ---------- as of the Initial Borrowing Date -------------------------------- Junior Convertible Subordinated Indenture $21,250,000* (and debentures issues pursuant thereto) and associated Guarantee by the Company Senior Unsubordinated Redeemable Note of $5,000,000 the Company (Nash Note) Loan Agreement between the City of Parsons, $173,250 Kansas and the Company (secured by a mortgage)
- ---------- * This figure represents the face principal amount of the Junior Convertible Subordinated Notes at time of issuance. All or a portion of these Junior Convertible Subordinated Notes may be converted into the right to receive cash effective on or after the Initial Borrowing Date. ANNEX VII INSURANCE
Coverage Insurer Policy Number Effective Date Limits of Liability - -------- ------- ------------- -------------- ------------------- Workers Compensation - Travelers Insurance Group TC2JUB280K7144TIL99 11-14-99/00 WC-Stat/EL-$1MM All States Workers Compensation - Travelers Insurance Group TDRJUB280K7261TIL99 11-14-99/00 WC-Stat/EL-$1MM AZ, MA, NV, WI Automobile - Travelers Insurance Group TC2JCAP280K7273TIL99 11-14-99/00 $1MM CSL All States Automobile - Travelers Insurance Group TC2ECAP280K7285TCT99 11-14-99/00 $1MM CSL Texas Only Automobile - Travelers Insurance Group 232D2168 11-14-99/00 $1MM CSL Canada General Liability - Travelers Insurance Group 232D217A 11-14-99/00 $1MM Occ./$1MM Agg. Canada Only Foreign Package Policy Kemper Insurance Company QD60125401 10-15-99/00 $1MM Occ./$1MM Agg. General Liability United National Insurance L7128419 10-15-99/01 $1MM Occ./$2MM Agg. Excess Buffer Liability Evanston Insurance Co. XONJ103599 10-15-99/01 $2MM Occ./$2MM Agg. Umbrella Excess Liability American International BE8198063 10-15-99/00 $50,000,000 Occ./Agg. Specialty Commercial Property Gerling American Insurance 3020031IMP 10-31-99/00 $100,000,000 Loss Limit Coverage Boiler and Machinery CNA-Continential Casualty BM1075879099 10-31-99/00 $100,000,000 Loss Limit Inland Marine-Lap Top SecurityIns Co/Firemans CCIMG20096 10-31-99/00 Floater Fund Executive Risk Package Chubb-Federal Insurance 81463783ARMG 11/13/98 to 6/18/02 Fid-$5MM Occ./Agg. Crime-$1MM Occ. Sp Crime-$1MM Primary Directors & Reliance Insurance Company NDA012988598 6-18-98 /02 $5M Occ/$5M Agg Officers Excess D&O Federal Insurance 81463838A 6-18/98/02 $5M Excess of $5M Company Annex VII Page 2 Coverage Insurer Policy Number Effective Date Limits of Liability - -------- ------- ------------- -------------- ------------------- Flex Financial Excess Executive Risk 75212434198 6-18-98/02 $10 M Excess of Underlying D&O, Crime, Fiduciary and Special Crime Group Travel Accident Hartford Life Ins Company 10-ETB-102204 10-15-99/02 Various Limits Appeal Bond Travelers Indemnity 68S103165922BCM 4-15-99/01 EFCO Case Supply Bond Travelers Indemnity 68S103212369BCM 11-19-99/until cancelled $259,446/AHT-Soda Springs Job Notary Bond Travelers Indemnity 103243381 8-28-99/03 Howard Mueller-Symons Notary Bond Travelers Indemnity 103181843 9-12-99/00 Rosemay Gibson-Symons Aon Risk Management Fee 10-15-99/00
ANNEX VIII EXISTING LIENS Mortgage in the favor of City of Parsons, evidencing the Loan Agreement between the City of Parsons, Kansas and the Company.
DEBTOR SECURED PARTY JURISDICTION FILE INFO COLLATERAL ------ ------------- ------------ --------- ---------- 1. Dayton Superior Bank One, N.A., as Jefferson County, AL 9801/5415 Equipment, Corporation Facility Agent* (Birmingham Division) 1/20/98 Inventory, Receivables, Related Contracts, Intellectual Property Collateral, all books, records, etc. relating to the foregoing, products, proceeds ("BANK ONE LIEN") 2. Dayton Superior Bank of America Jefferson County, AL 9607/4651 fixture filing Corporation Illinois (as 6/18/96 Collateral Agent)* 3. Dayton Superior Bank One, N.A., as Shelby County, AL 1998-02070 Bank One lien Corporation Facility Agent* 1/21/98 4. Dayton Superior Bank One, N.A., as AZ SOS 988210 Bank One lien Corporation Facility Agent* 10/9/97 Address of Debtor amended on 10/20/98 5. Dayton Superior Bank One, N.A., as AZ SOS 988211 Equipment owned by Corporation Facility Agent* 10/9/97 Debtor or its wholly owned U.S. subsidiaries; and equipment leased by Debtor or its subs that Debtor is charging rental for ("BANK ONE EQUIPMENT LIEN") Debtor's address amended on 10/20/98 6. Dayton Superior Bank One, N.A., as La Paz County, AZ 97-06699 Bank One lien Corporation Facility Agent* 12/24/97 (exhibit missing) 7. Dayton Superior Bank of America Maricopa County, AZ 96-0907767 fixture filing Corporation Illinois (as 12/31/96 Collateral Agent)* Annex VIII Page 2 DEBTOR SECURED PARTY JURISDICTION FILE INFO COLLATERAL ------ ------------- ------------ --------- ---------- 8. Dayton Superior Bank One, N.A., as CA SOS 9728760095 Bank One lien Corporation Facility Agent* 10/9/97 Debtor's address amended on 10/20/98 9. Dayton Superior Bank One, N.A., as CA SOS 9728760175 Bank One Equipment Corporation Facility Agent* 10/9/97 lien Debtor's address amended on 10/20/98 10. Dayton Superior Bank One, N.A., as Los Angeles County, CA 97-2028908 Bank One lien Corporation Facility Agent* 12/29/97 11. Dayton Superior Bank One, N.A., as CO SOS 19972086916 Bank One lien Corporation Facility Agent* 10/9/97 Debtor's address amended on 10/20/98 12. Dayton Superior Bank One, N.A., as CO SOS 19972086915 Bank One Equipment Corporation Facility Agent* 10/9/97 lien Debtor's address amended on 10/20/98 13. Dayton Superior Bank One, Dayton, CO SOS 19942039158 Accounts, Inventory, Corporation N.A. 5/23/94 Deposit Accounts, all products and (and National Canada proceeds, books and Finance Corp. records ("BANK OF assigned to Bank AMERICA LIEN") One, Dayton, N.A. on 10/23/95)* 14. Dayton Superior Bank of America CO CO187258 Corporation Illinois (as Bk 4777 Pg 0558 Collateral Agent)* 15. Dayton Superior Bank of America Denver County, CO 9700004341 fixture filing Corporation Illinois (as 1/13/97 Collateral Agent)* 16. Dayton Superior Bank of America Denver County, CO 9700004342 fixture filing Corporation Illinois (as 1/13/97 Collateral Agent)* Annex VIII Page 3 DEBTOR SECURED PARTY JURISDICTION FILE INFO COLLATERAL ------ ------------- ------------ --------- ---------- 17. Dayton Superior Bank One, N.A., as DE SOS 9734902 Bank One Equipment Corporation Facility Agent* 10/9/97 lien Debtor's address amended on 10/20/98 18. Dayton Superior Bank One, N.A., as FL SOS 970000229604 Bank One Equipment Corporation Facility Agent* 10/9/97 lien Debtor's address amended on 10/20/98 19. Dayton Superior Bank One, N.A., as FL SOS 970000229605 Bank One lien Corporation Facility Agent* 10/9/97 Debtor's address amended on 10/20/98 20. Dayton Superior Bank One, N.A., as Dade County, FL 97R584507 Bank One lien Corporation Facility Agent* 12/23/97 21. Dayton Superior Bank One, N.A., as Hawaii Bureau of 97-138124 Bank One Equipment Corporation Facility Agent* Conveyance 10/10/97 lien Debtor's address amended on 10/21/98 22. Dayton Superior Bank One, N.A., as IA SOS K865870 Bank One Equipment Corporation Facility Agent* 10/9/97 lien Debtor's address amended on 10/30/98 23. Dayton Superior Bank One, N.A., as IL SOS 3749779 Bank One Equipment Corporation Facility Agent* 10/9/97 Lien Debtor's address amended on 10/21/98 24. Dayton Superior Bank One, N.A., as IL SOS 3779158 Bank One Lien Corporation Facility Agent* 12/26/97 Debtor's address amended on 10/21/98 Annex VIII Page 4 DEBTOR SECURED PARTY JURISDICTION FILE INFO COLLATERAL ------ ------------- ------------ --------- ---------- 25. Dayton Superior Bank One, N.A., as Kankakee County, IL 97-1239 Bank One Lien Corporation Facility Agent* 12/23/97 Debtor's address amended on 10/21/98 26. Dayton Superior Bank of America Ogle County, IL 588595 fixture filing Corporation Illinois (as 6/20/96 Collateral Agent)* 27. Dayton Superior Bank One, N.A., as KS SOS 2394055 Bank One Equipment Corporation Facility Agent* 10/9/97 Lien Debtor's address amended on 10/20/98 28. Dayton Superior Bank One, N.A., as KS SOS 2394056 Bank One lien Corporation Facility Agent* 10/9/97 Debtor's address amended on 10/20/98 29. Dayton Superior Bank One, N.A., as KS SOS 2421412 Bank One lien 1998 Corporation Facility Agent* 1/21/98 30. Dayton Superior Bank One, N.A., as Labette County, KS 54692 Bank One lien Corporation Facility Agent* 12/23/97 Debtor's address amended on 10/20/98 31. Dayton Superior Bank One, N.A., as Labette County, KS 54758 fixture filing Corporation Facility Agent* 1/20/98 32. Dayton Superior Bank One, N.A., as KY SOS 153599 Bank One Equipment Corporation Facility Agent* 10/13/97 lien 33. Dayton Superior Bank of America MA SOS 345020 Bank of America lien Corporation Illinois (as 10/17/95 Collateral Agent) (Assignee) Old SP: Bank One, Dayton, N.A.* 34. Dayton Superior Bank One, N.A., as MA SOS 503379 Bank One lien Corporation Facility Agent* 10/14/97 Debtor's address amended on 10/21/98 35. Dayton Superior Bank One, N.A., as Westfield City, MA 21707 Bank One lien Corporation Facility Agent* 10/14/98 Debtor's address amended on 10/21/98 Annex VIII Page 5 DEBTOR SECURED PARTY JURISDICTION FILE INFO COLLATERAL ------ ------------- ------------ --------- ---------- 36. Dayton Superior Bank One, N.A., as MI SOS D290593 Bank One Equipment Corporation Facility Agent* 10/9/97 lien 37. Dayton Superior Bank One, N.A., as NE SOS 746845 Bank One Equipment Corporation Facility Agent* 10/9/97 lien Debtor's address amended on 10/20/98 38. Dayton Superior Bank One, N.A., as OH SOS AO02445 Bank One Lien Corporation Facility Agent* 10/9/97 Debtor's address amended on 10/20/98 39. Dayton Superior Bank One, N.A., as OH SOS AP0012083 Bank One Equipment Corporation Facility Agent* 12/26/97 lien 40. Dayton Superior Bank One, N.A., as OH SOS AP0019080 mortgage collateral Corporation Facility Agent* 1/20/98 41. Dayton Superior Bank One, N.A., as Logan County, OH 971618 Bank One lien Corporation Facility Agent* 10/9/97 Debtor's address amended on 10/20/98 42. Dayton Superior Bank One, N.A., as Montgomery County, OH F9713317 Bank One lien Corporation Facility Agent* 10/14/97 Debtor's address amended on 10/20/98 43. Dayton Superior Bank One, N.A., as Montgomery County, OH F9716714 Bank One Equipment Corporation Facility Agent* 12/23/97 lien 44. Dayton Superior Bank One, N.A., as Montgomery County, OH F9800615 fixture filing Corporation Facility Agent* 1/13/98 45. Dayton Superior Montgomery County, OH 1995 CV 01337 Lakins, Glen F. vs. Corporation 4/10/95 Dayton Superior Corp. removed to U.S. District Court 46. Dayton Superior Assigned to Bank of Montgomery County, OH F9513329 fixture filing Corporation America Illinois (as 10/16/95 Collateral Agent) (Dur-O-Wal, Inc.) on 6/24/96 Old SP: Bank One, Dayton, N.A.* Annex VIII Page 6 DEBTOR SECURED PARTY JURISDICTION FILE INFO COLLATERAL ------ ------------- ------------ --------- ---------- 47. Dayton Superior Bank of America PA SOS 24770465 Bank of America lien Corporation Illinois (as 10/17/95 Collateral Agent) (Assigned on 7/2/96) Old SP: Bank One, Dayton, N.A.* 48. Dayton Superior Bank One, N.A., as PA SOS 28081533 Bank One lien Corporation Facility Agent* 10/9/97 Debtor's address amended on 10/20/98 49. Dayton Superior Bank One, N.A., as PA SOS 28521152 Improvements, Goods, Corporation Facility Agent* 2/4/98 Intangibles, Leases, Plans, Permits, Contracts, Leases of Furniture, Furnishings and Equipment, Rents, Proceeds, and other property ("BANK ONE LIEN 1998") 50. Dayton Superior Bank of America Prothonotary of 95-202539 Bank of America lien Corporation Illinois (Assignee) Delaware County, PA 10/17/95 Old SP: Bank One, Dayton, N.A.* 51. Dayton Superior Bank One, N.A., as Prothonotary of 97-202873 Bank One lien Corporation Facility Agent* Delaware County, PA 10/10/97 Debtor's address amended on 10/21/98 52. Dayton Superior Bank One, N.A., as Prothonotary of 98-200142 Bank One lien 1998 Corporation Facility Agent* Delaware County, PA 1/16/98 53. Dayton Superior Bank One, N.A., as real estate records 98-200142 fixture filing Corporation Facility Agent* of Delaware County, PA 1/16/98 Annex VIII Page 7 DEBTOR SECURED PARTY JURISDICTION FILE INFO COLLATERAL ------ ------------- ------------ --------- ---------- 54. Dayton Superior Bank One, N.A., as SC SOS 154733A Bank One Equipment Corporation Facility Agent* 10/23/97 lien Debtor's address amended on 10/20/98 55. Dayton Superior Bank One, N.A., as TN SOS 971-521482 Bank One Equipment Corporation Facility Agent* 10/9/97 lien Debtor's address amended on 10/20/98 56. Dayton Superior Bank One, N.A., as TX SOS 208973 Bank One lien Corporation Facility Agent* 10/9/97 Debtor's address amended on 10/20/98 57. Dayton Superior Bank One, N.A., as Dallas County, TX 97007 1816 Bank One lien Corporation Facility Agent* 12/24/97 Debtor's address amended on 10/20/98 58. Dayton Superior The Fifth Third Bank* Dallas County, TX 89038 3482 fixture filing Corporation 2/24/89 59. Dayton Superior Bank One, N.A., as UT SOS 97-581357 Bank One Equipment Corporation Facility Agent* 10/9/97 lien Debtor's address amended on 10/20/98 60. Dayton Superior Bank One, N.A., as WA SOS 97-282-0386 Bank One lien Corporation Facility Agent* 10/9/97 Debtor's address amended on 10/20/98 61. Dayton Superior Bank One, N.A., as WA SOS 97-282-0387 Bank One Equipment Corporation Facility Agent* 10/9/97 lien Debtor's address amended on 10/20/98 62. Dayton Superior Bank of America King County, WA 960618-0524 fixture filing Corporation Illinois (as 6/18/96 Collateral Agent)* Annex VIII Page 8 DEBTOR SECURED PARTY JURISDICTION FILE INFO COLLATERAL ------ ------------- ------------ --------- ---------- 63. Dayton Superior Bank One, N.A., as WV SOS 0480384 Bank One Equipment Corporation Facility Agent* 10/9/97 lien Debtor's address amended on 10/20/98 64. DUR-O-WAL, INC. Bank One, N.A., as Jefferson County, AL 9860/0055 Bank One lien Facility Agent* (Bessemer Division) 1/2/98 65. Dur-O-Wal, Inc. Bank One, N.A., as Jefferson County, AL 9801/5417 Bank One lien Facility Agent* (Birmingham Division) 1/20/98 66. Dur-O-Wal, Inc. Bank One, N.A., as AZ SOS 988209 Bank One lien Facility Agent* 10/9/97 67. Dur-O-Wal, Inc. Bank of America Maricopa County, AZ 96-0907766 fixture filing Illinois (as 12/31/96 Collateral Agent)* 68. Dur-O-Wal, Inc. Bank One, N.A., as Maricopa County, AZ 97-0901326 Bank One lien Facility Agent* 12/24/97 69. Dur-O-Wal, Inc. Bank One, N.A., as IL SOS 3779159 Bank One lien Facility Agent* 12/26/97 70. Dur-O-Wal, Inc. Bank One, N.A., as IL SOS 3788325 Bank One lien 1998 Facility Agent* 1/16/98 71. Dur-O-Wal, Inc. Assigned on 7/11/96 MD SOS 152907025 Bank of America lien to Bank of America 10/17/95 Illinois (as Collateral Agent) Old SP: Bank One, Dayton, N.A.* 72. Dur-O-Wal, Inc. Bank One, N.A., as MD SOS 173538026 Bank One lien Facility Agent* 12/17/97 73. Dur-O-Wal, Inc. Bank One, N.A., as MD SOS 180428345 Bank One lien 1998 Facility Agent* 2/10/98 74. Dur-O-Wal, Inc. Bank One, Baltimore City, MD Liber 4072 Page 150 fixture filing Milwaukee, National 1/27/97 Association* 75. Dur-O-Wal, Inc. Bank of America Baltimore City, MD Liber 5681 Page 236 fixture filing Illinois (as 7/5/96 Collateral Agent)* 76. Dur-O-Wal, Inc. Bank One, N.A., as Baltimore City, MD Liber 7051 Page 355 fixture filing Facility Agent* 77. SYMONS CORPORATION Bank One, N.A., as AZ SOS 988208 Bank One equipment Facility Agent* 10/9/97 lien Annex VIII Page 2 DEBTOR SECURED PARTY JURISDICTION FILE INFO COLLATERAL ------ ------------- ------------ --------- ---------- 9 78. Symons Corporation Bank One, N.A., as AZ SOS 998197 Bank One lien Facility Agent* 12/23/97 79. Symons Corporation Bank One, N.A., as Maricopa County, AZ 97-0901327 Bank One lien Facility Agent* 12/24/97 80. Symons Corporation Congress Financial CA SOS 92113457 blanket lien Corporation 5/26/92 Addtl Debtor: (Western)* Garage Beam System Addtl Debtor GBS, a Joint Venture added on 6/24/92 Partial releases on 5/17/93, 9/16/94, 9/16/94, 6/6/95, 6/26/95 Amended Debtor's addresses on 1/20/95 Continued on 1/7/97 81. Symons Corporation Congress Financial CA SOS 92143131 blanket lien Corporation 7/1/92 (Western)* release on 3/12/93, 5/17/93, 9/16/94, 9/16/94, 6/6/95, 6/26/95 amended on 3/12/93, 5/19/93, 1/20/95 continued on 2/18/97 82. Symons Corporation Bank One, N.A., as CA SOS 9728760199 Bank One Equipment Facility Agent* 10/9/97 lien 83. Symons Corporation Bank One, N.A., as CA SOS 9736560236 Bank One lien Facility Agent* 12/30/97 84. Symons Corporation Bank One, N.A., as Alameda County, CA 97342396 Bank One lien Facility Agent* 12/23/97 85. Symons Corporation Bank One, N.A., as Los Angeles County, CA 97-2028907 Bank One lien Facility Agent* 12/29/97 Annex VIII Page 10 DEBTOR SECURED PARTY JURISDICTION FILE INFO COLLATERAL ------ ------------- ------------ --------- ---------- 86. Symons Corporation Dur-O-Wal Limited* Coquitlam, British 7869922 Accounts Receivable, Columbia, Canada 9/15/98 chattel paper relating to business exp date: 9/15/01 in Canada. Proceeds: Goods, Securities, Instruments, Intangibles, docs, title, chattel paper, and money. 87. Symons Corporation Bank One, N.A., as CO SOS 19972123721 Bank One lien Facility Agent* 12/26/97 88. Symons Corporation Bank One, N.A., as CO SOS 19972086911 Bank One Equipment Facility Agent* 10/9/97 lien 89. Symons Corporation Bank One, N.A., as DE SOS 199734910 Bank One Equipment Facility Agent* 10/9/97 lien 90. Symons Corporation Bank One, N.A., as FL SOS 970000288290 Bank One lien Facility Agent* 12/24/97 91. Symons Corporation Bank One, N.A., as FL SOS 970000229606 Bank One Equipment Facility Agent* 10/9/97 lien 92. Symons Corporation Bank One, N.A., as Broward County, FL 97-671539 Bank One lien Facility Agent* 12/26/97 93. Symons Corporation Bank One, N.A., as Orange County, FL Bk 5387 Pg 1744 Bank One lien Facility Agent* 12/26/97 94. Symons Corporation TRS @ Magnolia Orange County, FL Bk 5959 Pg 108 Claim of Lien (lienor) 3/10/00 $3119.72 unpaid Annex VIII Page 11 DEBTOR SECURED PARTY JURISDICTION FILE INFO COLLATERAL ------ ------------- ------------ --------- ---------- 95. Symons Corporation Circuit Court of the Bk 4778 Pg 918 final judgment of Ninth Judicial 8/5/94 foreclosure Circuit, Orange County, FL Case No. C1 93-7681 Gale Pauley, Plaintiff v. Orange Scaffolding and Shoring, Inc; U.S. Dept of Treasury- IRS; Ford Motor Credit Co.; Ranger Transportation; Nisso American Corp.; SYMONS CORPORATION; State of FL Dept of Revenue; State of FL Dept of Labor and Employment Security; Seminole Walls and Ceilings Corp. Final Judgment of $285,731.72 against Orange Scaffolding and Shoring, Inc 96. Symons Corporation Congress Financial DeKalb County, GA 9204563 blanket lien Corporation 6/24/92 (Western)* Amended on 5/1/95 to continued on 4/8/97 add Debtor's locations; amended on 4/22/97 to add trade names 97. Symons Corporation Bank One, N.A., as DeKalb County, GA 12923 Bank One lien Facility Agent* 12/23/97 98. Symons Corporation Bank One, N.A., as IL SOS 3788236 Bank One lien 1998 Facility Agent* 1/16/98 99. Symons Corporation Bank One, N.A., as IL SOS 3779160 Bank One lien Facility Agent* 12/26/97 100. Symons Corporation Bank One, N.A., as IL SOS 3749780 Bank One Equipment Facility Agent* 10/9/97 lien Annex VIII Page 12 DEBTOR SECURED PARTY JURISDICTION FILE INFO COLLATERAL ------ ------------- ------------ --------- ---------- 101. Symons Corporation Congress Financial IL SOS 2997693 leased equipment Corporation 6/15/92 (Western)* amended on continued on 1/23/97 4/23/97, 1/25/95 partial release on 6/15/95, 9/16/94, 9/18/93, 3/1/93, 102. Symons Corporation Bank One, N.A., as KY SOS 153602 Bank One Equipment Facility Agent* lien 103. Symons Corporation Bank One, N.A., as Saint John the 48-45938 Bank One lien Facility Agent* Baptist Parish, LA 12/23/97 104. Symons Corporation Bank One, N.A., as Billerica Town, MA 1101709-44G Bank One lien Facility Agent* 12/24/97 105. Symons Corporation Bank One, N.A., as MD SOS 173568313 Bank One Equipment Facility Agent* 12/17/97 lien 106. Symons Corporation Bank One, N.A., as MD SOS 173658156 Bank One lien Facility Agent* 12/29/97 107. Symons Corporation Bank One, N.A., as MN SOS 1979264 Bank One Equipment Facility Agent* 10/9/97 lien 108. Symons Corporation Bank One, N.A., as NV SOS 9718644 Bank One Equipment Facility Agent* 11/7/97 lien 109. Symons Corporation Bank One, N.A., as NY SOS 263652 Bank One lien Facility Agent* 12/23/97 110. Symons Corporation Bank One, N.A., as Ontario County, NY 97-4526 Bank One lien Facility Agent* 12/23/97 111. Symons Corporation Bank One, N.A., as PA SOS 28350039 Bank One lien Facility Agent* 12/23/97 112. Symons Corporation Bank One, N.A., as Prothonotary of UCC-97-009896 Bank One lien Facility Agent* Allegheny County, PA 12/23/97 113. Symons Corporation Congress Financial Prothonotary of UCC 97-003084 blanket lien Corporation Allegheny County, PA 4/29/97 (Western)* Annex VIII Page 13 DEBTOR SECURED PARTY JURISDICTION FILE INFO COLLATERAL ------ ------------- ------------ --------- ---------- 114. Symons Corporation Bank One, N.A., as Prothonotary of 272051 Bank One lien Facility Agent* Montgomery County, PA 12/23/97 115. Symons Corporation Bank One, N.A., as SC SOS 154648A Bank One Equipment Facility Agent* 10/23/97 lien 116. Symons Corporation Bank One, N.A., as TX SOS 209893 Bank One Equipment Facility Agent* 10/9/97 lien 117. Symons Corporation Bank One, N.A., as TX SOS 97-258601 Bank One lien Facility Agent* 12/29/97 118. Symons Corporation Bank One, N.A., as TX SOS 009507 Bank One lien 1998 Facility Agent* 1/14/98 119. Symons Corporation Dallas County, TX 975732 city/transit/county 4/28/00 Texas state tax lien: $3,439.45 120. Symons Corporation Bank One, N.A., as Dallas County, TX 97007 1800 Bank One lien Facility Agent* 12/24/97 121. Symons Corporation Security Pacific Dallas County, TX 86242 1923 fixture filing Business Credit, 12/16/86 Inc.* 122. Symons Corporation Associates Dallas County, TX 87083 4759 fixture filing Commercial 4/30/87 Corporation* 123. Symons Corporation Congress Financial VA SOS 9704227822 blanket lien Corporation 4/22/97 (Western)* 124. Symons Corporation Bank One, N.A., as VA SOS 971223 7075 Bank One lien Facility Agent* 12/23/97 125. Symons Corporation Bank One, N.A., as WI SOS 1724577 Bank One lien Facility Agent* 12/26/97 126. Symons Corporation Bank One, N.A., as Waukesha County, WI 773930 Bank One lien Facility Agent* 12/26/97
* Liens to be Released as soon as practicable after the Initial Borrowing Date ANNEX IX EXISTING INVESTMENTS LOANS TO DAYTON SUPERIOR EMPLOYEES*: Raymond Bartholomae Michael C. Deis James W. Fennessy Mark K. Kaler Alan F. McIlroy William C. Mongole John Paine Thomas Roehrig John M. Rutherford James C. Stewart Jaime Taronji, Jr. OTHER INVESTMENTS: Spec Formliner, Inc., a California corporation which manufactures and sells formliner products, of which Dayton Superior Corporation owns 50% of the outstanding shares. - ---------- * Loans were made by Dayton Superior Corporation to these individuals for the purpose of financing: (i) the exercise of options to purchase shares of Dayton Superior Corporation, (ii) the payment of taxes incurred in connection with such option exercises, and/or (iii) to purchase shares of Dayton Superior Corporation from the corporation. ANNEX X INDEBTEDNESS TO BE REFINANCED
Agreement Principal Amount Outstanding --------- as of the Initial Borrowing Date -------------------------------- Credit Agreement dated as of September 29, 1997, as amended, $116,655,545.43 among Dayton Superior Corporation, the various financial institutions as are or may become parties thereto, DLJ Capital Funding, Inc., as syndication agent, Bankers Trust Company, as administrative agent, Bank of America National Trust and Savings Association, as documentation agent, and Bank One, N.A., as facility agent. Junior Convertible Subordinated Indenture (and debentures $21,250,000* issues pursuant thereto) and associated Guarantee by the Company
- ---------- * This figure represents the face principal amount of the Junior Convertible Subordinated Notes at time of issuance. All or a portion of these Junior Convertible Subordinated Notes may be converted into the right to receive cash effective on or after the Initial Borrowing Date. EXHIBIT A-1 FORM OF NOTICE OF BORROWING [Date] Bankers Trust Company, as Administrative Agent for the Lenders party to the Credit Agreement referred to below 130 Liberty Street New York, New York 10006 Attention: ______________ Ladies and Gentlemen: The undersigned, Dayton Superior Corporation (the "Borrower"), refers to the Credit Agreement, dated as of June 16, 2000 (as amended, modified or supplemented from time to time, the "Credit Agreement," the terms defined therein being used herein as therein defined), among the Borrower, the lenders from time to time party thereto (the "Lenders"), and you, as Administrative Agent for such Lenders, and hereby gives you notice, irrevocably, pursuant to Section 1.03(a) of the Credit Agreement, that the undersigned hereby requests a Borrowing under the Credit Agreement, and in that connection sets forth below the information relating to such Borrowing (the "Proposed Borrowing") as required by Section 1.03(a) of the Credit Agreement: (i) The Business Day of the Proposed Borrowing is ____________.(1) (ii) The aggregate principal amount of the Proposed Borrowing is $____________. (iii) The Proposed Borrowing shall consist of [Initial A Term Loans] [Initial B Term Loans] [Incremental A Term Loans] [Incremental B Term Loans] [Revolving Loans] [Acquisition Revolving Loans]. (iv) The Loans to be made pursuant to the Proposed Borrowing shall be initially maintained as [Base Rate Loans] [Eurodollar Loans]. [(v) The initial Interest Period for the Proposed Borrowing is _______ month(s).](2) - -------- 1 Shall be a Business Day at least one Business Day in the case of Base Rate Loans and at least three Business Days in the case of Eurodollar Loans, in each case after the date hereof, 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. 2 To be included for a Proposed Borrowing of Eurodollar Loans. Exhibit A-1 Page 2 [(vi) The Total Unutilized Revolving Loan Commitment after giving effect to the Proposed Borrowing is $__________.](3) The undersigned hereby certifies that the following statements are true on the date hereof, and will be true on the date of the Proposed Borrowing: (A) the representations and warranties contained in the Credit Agreement and in the other Credit Documents are and will be true and correct in all material respects, both before and after giving effect to the Proposed Borrowing and to the application of the proceeds thereof, as though made on such date, unless stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct in all material respects as of such earlier date; and (B) no Default or Event of Default has occurred and is continuing, or would result from such Proposed Borrowing or from the application of the proceeds thereof. Very truly yours, DAYTON SUPERIOR CORPORATION By --------------------------------- Name: Title: - ---------- (...continued) 3 Insert only for a Proposed Borrowing of Revolving Loans the proceeds of which are to be utilized, in whole or in part, for the purchase price of a Permitted Acquisition. EXHIBIT A-2 FORM OF NOTICE OF CONVERSION/CONTINUATION [Date] Bankers Trust Company, as Administrative Agent for the Lenders party to the Credit Agreement referred to below 130 Liberty Street New York, New York 10006 Attention: ______________ Ladies and Gentlemen: The undersigned, Dayton Superior Corporation (the "Borrower"), refers to the Credit Agreement, dated as of June 16, 2000 (as amended, modified or supplemented from time to time, the "Credit Agreement," the terms defined therein being used herein as therein defined), among the Borrower, the lenders from time to time party thereto (the "Lenders") and you, as Administrative Agent for such Lenders, and hereby gives you notice, irrevocably, pursuant to Section [1.06] [1.09] of the Credit Agreement, that the undersigned hereby requests to [convert] [continue] the Borrowing of [A Term Loans] [B Term Loans] [Acquisition Loans] [Revolving Loans] referred to below, and in that connection sets forth below the information relating to such [conversion] [continuation] (the "Proposed [Conversion] [Continuation]") as required by Section [1.06] [1.09] of the Credit Agreement: (i) The Proposed [Conversion] [Continuation] relates to the Borrowing of [A Term Loans] [B Term Loans] [Revolving Loans] [Acquisition Loans] originally made on _____ __, ____ (the "Outstanding Borrowing") in the principal amount of $________ and currently maintained as a Borrowing of [Base Rate Loans] [Eurodollar Loans with an Interest Period ending on [Date]]. (ii) The Business Day of the Proposed [Conversion] [Continuation] is [Date].(1) (iii) The Outstanding Borrowing shall be [continued as a Borrowing of Eurodollar Loans with an Interest Period of _______] [converted into a Borrowing of [Base Rate Loans] [Eurodollar Loans with an Interest Period of ___].(2) - ---------- 1 Shall be a Business Day at least three Business Days (or one Business Day in the case of a conversion into Base Rate Loans) after the date hereof, provided that 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. Exhibit A-2 Page 2 The undersigned hereby certifies that no Default or Event of Default has occurred and is continuing on the date hereof, or will exist on the date of the Proposed [Conversion][Continuation]. Very truly yours, DAYTON SUPERIOR CORPORATION By --------------------------------- Name: Title: - ---------- (...continued) 2 In the event that either (x) only a portion of the Outstanding Borrowing is to be so converted or continued or (y) the Outstanding Borrowing is to be divided into separate Borrowings with different Interest Periods, the Borrower should make appropriate modifications to this clause to reflect same. EXHIBIT B-1 FORM OF A TERM NOTE $________ New York, New York [Date] FOR VALUE RECEIVED, DAYTON SUPERIOR CORPORATION, an Ohio corporation (the "Borrower"), hereby promises to pay to ____________ or its registered assigns (the "Lender"), in lawful money of the United States of America in immediately available funds, at the office of Bankers Trust Company (the "Administrative Agent") located at 130 Liberty Street, New York, New York 10006 on the A Term Loan Maturity Date (as defined in the Credit Agreement referred to below) the principal sum of _____________ DOLLARS ($_____) or, if less, the unpaid principal amount of all A Term Loans (as defined in the Credit Agreement) made by the Lender pursuant to the Credit Agreement. The Borrower promises also to pay interest on the unpaid principal amount hereof in like money at said office from the date hereof until paid at the rates and at the times provided in Section 1.08 of the Credit Agreement. This Note is one of the A Term Notes referred to in the Credit Agreement, dated as of June 16, 2000, among the Borrower, the lenders from time to time party thereto (including the Lender) and the Administrative Agent (as amended, modified or supplemented from time to time, the "Credit Agreement") and is entitled to the benefits thereof and of the other Credit Documents (as defined in the Credit Agreement). This Note is secured by the Security Documents (as defined in the Credit Agreement) and is entitled to the benefits of the Subsidiaries Guaranty (as defined in the Credit Agreement). This Note is subject to voluntary prepayment and mandatory repayment prior to the A Term Loan Maturity Date, in whole or in part, as provided in the Credit Agreement. In case an Event of Default (as defined in the Credit Agreement) shall occur and be continuing, the principal of and accrued interest on this Note may become or be declared to be due and payable in the manner and with the effect provided in the Credit Agreement. The Borrower hereby waives presentment, demand, protest or notice of any kind in connection with this Note. Exhibit B-1 Page 2 THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. DAYTON SUPERIOR CORPORATION By ------------------------------ Name: Title: EXHIBIT B-2 FORM OF B TERM NOTE $__________ New York, New York [Date] FOR VALUE RECEIVED, DAYTON SUPERIOR CORPORATION, an Ohio corporation (the "Borrower"), hereby promises to pay to or its registered assigns (the "Lender"), in lawful money of the United States of America in immediately available funds, at the office of Bankers Trust Company (the "Administrative Agent") located at 130 Liberty Street, New York, New York 10006 on the B Term Loan Maturity Date (as defined in the Credit Agreement referred to below) the principal sum of DOLLARS ($ ) or, if less, the unpaid principal amount of all B Term Loans (as defined in the Credit Agreement) made by the Lender pursuant to the Credit Agreement. The Borrower promises also to pay interest on the unpaid principal amount hereof in like money at said office from the date hereof until paid at the rates and at the times provided in Section 1.08 of the Credit Agreement. This Note is one of the B Term Notes referred to in the Credit Agreement, dated as June 16, 2000, among the Borrower, the lenders from time to time party thereto (including the Lender) and the Administrative Agent (as amended, modified or supplemented from time to time, the "Credit Agreement") and is entitled to the benefits thereof and of the other Credit Documents (as defined in the Credit Agreement). This Note is secured by the Security Documents (as defined in the Credit Agreement) and is entitled to the benefits of the Subsidiaries Guaranty (as defined in the Credit Agreement). This Note is subject to voluntary prepayment and mandatory repayment prior to the B Term Loan Maturity Date, in whole or in part, as provided in the Credit Agreement. In case an Event of Default (as defined in the Credit Agreement) shall occur and be continuing, the principal of and accrued interest on this Note may become or be declared to be due and payable in the manner and with the effect provided in the Credit Agreement. The Borrower hereby waives presentment, demand, protest or notice of any kind in connection with this Note. Exhibit B-2 Page 2 THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. DAYTON SUPERIOR CORPORATION By ----------------------------- Name: Title: EXHIBIT B-3 FORM OF REVOLVING NOTE $__________ New York, New York [Date] FOR VALUE RECEIVED, DAYTON SUPERIOR CORPORATION, an Ohio corporation (the "Borrower"), hereby promises to pay to or its registered assigns (the "Lender"), in lawful money of the United States of America in immediately available funds, at the office of Bankers Trust Company (the "Administrative Agent") located at 130 Liberty Street, New York, New York 10006 on the Revolving Loan Maturity Date (as defined in the Credit Agreement referred to below) the principal sum of _____________ DOLLARS ($________) or, if less, the unpaid principal amount of all Revolving Loans (as defined in the Credit Agreement) made by the Lender pursuant to the Credit Agreement. The Borrower promises also to pay interest on the unpaid principal amount hereof in like money at said office from the date hereof until paid at the rates and at the times provided in Section 1.08 of the Credit Agreement. This Note is one of the Revolving Notes referred to in the Credit Agreement, dated as of June 16, 2000, among the Borrower, the lenders from time to time party thereto (including the Lender) and the Administrative Agent (as amended, modified or supplemented from time to time, the "Credit Agreement") and is entitled to the benefits thereof and of the other Credit Documents (as defined in the Credit Agreement). This Note is secured by the Security Documents (as defined in the Credit Agreement) and is entitled to the benefits of the Subsidiaries Guaranty (as defined in the Credit Agreement). This Note is subject to voluntary prepayment and mandatory repayment prior to the Revolving Loan Maturity Date, in whole or in part, as provided in the Credit Agreement. In case an Event of Default (as defined in the Credit Agreement) shall occur and be continuing, the principal of and accrued interest on this Note may become or be declared to be due and payable in the manner and with the effect provided in the Credit Agreement. The Borrower hereby waives presentment, demand, protest or notice of any kind in connection with this Note. Exhibit B-3 Page 2 THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. DAYTON SUPERIOR CORPORATION By -------------------------------- Name: Title: EXHIBIT B-4 FORM OF SWINGLINE NOTE $________________ New York, New York [Date] FOR VALUE RECEIVED, DAYTON SUPERIOR CORPORATION, an Ohio corporation (the "Borrower"), hereby promises to pay to BANKERS TRUST COMPANY or its registered assigns (the "Lender"), in lawful money of the United States of America in immediately available funds, at the office of Bankers Trust Company (the "Administrative Agent") located at 130 Liberty Street, New York, New York 10006 on the Swingline Expiry Date (as defined in the Credit Agreement referred to below) the principal sum of _____________ DOLLARS ($_________) or, if less, the unpaid principal amount of all Swingline Loans (as defined in the Credit Agreement) made by the Lender pursuant to the Credit Agreement. The Borrower promises also to pay interest on the unpaid principal amount hereof in like money at said office from the date hereof until paid at the rates and at the times provided in Section 1.08 of the Credit Agreement. This Note is the Swingline Note referred to in the Credit Agreement, dated as of June 16, 2000, among the Borrower, the lenders from time to time party thereto (including the Lender) and the Administrative Agent (as amended, modified or supplemented from time to time, the "Credit Agreement") and is entitled to the benefits thereof and of the other Credit Documents (as defined in the Credit Agreement). This Note is secured by the Security Documents (as defined in the Credit Agreement) and is entitled to the benefits of the Subsidiaries Guaranty (as defined in the Credit Agreement). This Note is subject to voluntary prepayment and mandatory repayment prior to the Swingline Expiry Date, in whole or in part, as provided in the Credit Agreement. In case an Event of Default (as defined in the Credit Agreement) shall occur and be continuing, the principal of and accrued interest on this Note may become or be declared to be due and payable in the manner and with the effect provided in the Credit Agreement. The Borrower hereby waives presentment, demand, protest or notice of any kind in connection with this Note. Exhibit B-4 Page 2 THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. DAYTON SUPERIOR CORPORATION By ------------------------------- Name: Title: EXHIBIT B-5 FORM OF ACQUISITION NOTE $________________ New York, New York [Date] FOR VALUE RECEIVED, DAYTON SUPERIOR CORPORATION, an Ohio corporation (the "Borrower"), hereby promises to pay to ______________or its registered assigns (the "Lender"), in lawful money of the United States of America in immediately available funds, at the office of Bankers Trust Company (the "Administrative Agent") located at 130 Liberty Street, New York, New York 10006 on the Acquisition Loan Maturity Date (as defined in the Credit Agreement referred to below) the principal sum of _____________ DOLLARS ($_________) or, if less, the unpaid principal amount of all Acquisition Loans (as defined in the Credit Agreement) made by the Lender pursuant to the Credit Agreement. The Borrower promises also to pay interest on the unpaid principal amount hereof in like money at said office from the date hereof until paid at the rates and at the times provided in Section 1.08 of the Credit Agreement. This Note is one of the Acquisition Notes referred to in the Credit Agreement, dated as of June 16, 2000, among the Borrower, the lenders from time to time party thereto (including the Lender) and the Administrative Agent (as amended, modified or supplemented from time to time, the "Credit Agreement") and is entitled to the benefits thereof and of the other Credit Documents (as defined in the Credit Agreement). This Note is secured by the Security Documents (as defined in the Credit Agreement) and is entitled to the benefits of the Subsidiaries Guaranty (as defined in the Credit Agreement). This Note is subject to voluntary prepayment and mandatory repayment prior to the Acquisition Loan Maturity Date, in whole or in part, as provided in the Credit Agreement. In case an Event of Default (as defined in the Credit Agreement) shall occur and be continuing, the principal of and accrued interest on this Note may become or be declared to be due and payable in the manner and with the effect provided in the Credit Agreement. The Borrower hereby waives presentment, demand, protest or notice of any kind in connection with this Note. Exhibit B-5 Page 2 THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. DAYTON SUPERIOR CORPORATION By ------------------------------ Name: Title: EXHIBIT C FORM OF INCREMENTAL TERM LOAN COMMITMENT AGREEMENT [Names(s) of Lenders(s)] [Date] Dayton Superior Corporation [Insert Address] re INCREMENTAL TERM LOAN COMMITMENT Ladies and Gentlemen: Reference is hereby made to the Credit Agreement, dated as of June 16, 2000 (as amended, modified or supplemented from time to time, the "Credit Agreement"), among Dayton Superior Corporation (the "Borrower" or "you"), the lenders from time to time party thereto (the "Lenders") and Bankers Trust Company, as Administrative Agent (the "Administrative Agent"). Unless otherwise defined herein, capitalized terms used herein shall have the respective meanings set forth in the Credit Agreement. Each Lender (each an "Incremental Term Loan Lender") party to this letter agreement (this "Agreement") hereby severally agrees to provide the Incremental A Term Loan Commitment and/or the Incremental B Term Loan Commitment set forth opposite its name on Annex I attached hereto (for each such Incremental Term Loan Lender, its "Incremental Term Loan Commitment"). Each Incremental Term Loan Commitment provided pursuant to this Agreement shall be subject to the terms and conditions set forth in the Credit Agreement, including Section 1.15 thereof. Each Incremental Term Loan Lender and the Borrower acknowledge and agree that the Incremental Term Loan Commitments provided pursuant to this Agreement shall constitute either Incremental A Term Loan Commitments or Incremental B Term Loan Commitments (as specified in Annex I attached hereto) under, and as defined in, the Credit Agreement. Each Incremental Term Loan Lender and the Borrower further agree that, with respect to the Incremental Term Loan Commitments provided by it pursuant to this Agreement, such Incremental Term Loan Lender shall receive an upfront fee equal to that amount set forth opposite its name on Annex I attached hereto, which upfront fee shall be due and payable to such Incremental Term Loan Lender on the date on which the Incremental Term Loans to be made pursuant to this Agreement are made. Each Incremental Term Loan Lender party to this Agreement (i) confirms that it has received a copy of the Credit Agreement and the other Credit Documents, together with Exhibit C Page 2 copies of the financial statements referred to therein and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement and, to the extent applicable, to become a Lender under the Credit Agreement, (ii) agrees that it will, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement, (iii) appoints and authorizes the Administrative Agent and the Collateral Agent to take such action as agent on its behalf and to exercise such powers under the Credit Agreement and the other Credit Documents as are delegated to the Administrative Agent and the Collateral Agent, as the case may be, by the terms thereof, together with such powers as are reasonably incidental thereto, (iv) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender, and (v) in the case of each lending institution organized under the laws of a jurisdiction outside the United States, attaches the applicable forms described in Section 4.04(b) certifying as to its entitlement to a complete exemption from United States withholding taxes with respect to all payments to be made under the Credit Agreement and the other Credit Documents. Upon the execution of a counterpart of this Agreement by such Incremental Term Loan Lenders, the Administrative Agent and the Borrower, the delivery to the Administrative Agent of a fully executed copy (including by way of counterparts and by facsimile) hereof and the payment of any fees (including, without limitation, the upfront fees payable pursuant to the immediately preceding paragraph and the administrative fee payable to the Administrative Agent pursuant to Section 1.15(b)(ii) of the Credit Agreement) required in connection herewith, each Incremental Term Loan Lender party hereto (i) shall be obligated to make the Incremental Term Loans provided to be made by it as provided in this Agreement on the terms, and subject to the conditions, set forth in the Credit Agreement, and, to the extent applicable, shall become a Lender pursuant to the Credit Agreement and (ii) to the extent provided in this Agreement, shall have the rights and obligations of a Lender thereunder and under the other Credit Documents. The effective date of this Agreement shall be the date on which the Permitted Acquisition to be financed with the proceeds of the Incremental Term Loans to be made hereunder is consummated, which date shall be no later than _____ [insert a date on or prior to the 10th Business Day after the date hereof]. You may accept this Agreement by signing the enclosed copies in the space provided below, and returning one copy of same to us before the close of business on __________ __, _____. If you do not so accept this Agreement by such time, our Incremental Term Loan Commitments set forth in this Agreement shall be deemed cancelled. After the execution and delivery to the Administrative Agent of a fully executed copy of this Agreement (including by way of counterparts and by fax) by the parties hereto, this Agreement may only be changed, modified or varied by written instrument in accordance with the requirements for the modification of Credit Documents pursuant to Section 13.12 of the Credit Agreement. Exhibit C Page 3 THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. Very truly yours, [NAME OF LENDER] By ----------------------------- Name: Title: Agreed and Accepted this ___ day of __________, ____: DAYTON SUPERIOR CORPORATION By: ------------------------------ Name: Title: BANKERS TRUST COMPANY, as Administrative Agent By: ------------------------------ Name: Title: ANNEX I TO EXHIBIT C
Amount of Incremental Amount of Incremental A B Term Loan Name of Lender Term Loan Commitment Commitment Upfront Fee Total __________________ _____________ ___________
EXHIBIT D FORM OF LETTER OF CREDIT REQUEST Dated _____(1)_____ Bankers Trust Company, as Administrative Agent under the Credit Agreement (the "Credit Agreement"), dated as of June 16, 2000, 2000, among Dayton Superior Corporation (the "Borrower"), the lenders from time to time party thereto and Bankers Trust Company, as Administrative Agent 130 Liberty Street New York, New York 10006 Attention: [Name and Address of respective Letter of Credit Issuer] Attention: Dear Sirs: We hereby request that _____________________, in its individual capacity, issue a [standby] [trade] Letter of Credit for the account of the undersigned on ______________(2) (the "Date of Issuance") in the aggregate stated amount of ____________ (3). For purposes of this Letter of Credit Request, unless otherwise defined herein, all capitalized terms used herein and defined in the Credit Agreement shall have the respective meaning provided such terms in the Credit Agreement. The beneficiary of the requested Letter of Credit will be ___________(4), and such Letter of Credit will be in support of ___________(5) and will have a stated expiration date of ____________(6). - --------- 1 Date of Letter of Credit Request 2 Date of Issuance which shall be at least five Business Days from the date hereof (or such shorter period as is acceptable to the respective Letter of Credit Issuer). 3 Aggregate initial Stated Amount of Letter of Credit 4 Insert name and address of beneficiary. 5 Insert a brief description of L/C Supportable Obligations or applicable trade obligations, as the case may be. Exhibit D Page 2 We hereby certify that: (1) the representations and warranties contained in the Credit Agreement and in the other Credit Documents are and will be true and correct in all material respects, both before and after giving effect to the issuance of the Letter of Credit requested hereby, on the Date of Issuance (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); and (2) no Default or Event of Default has occurred and is continuing nor, after giving effect to the issuance of the Letter of Credit requested hereby, would such a Default or an Event of Default occur. Copies of all documentation with respect to the supported transaction are attached hereto. DAYTON SUPERIOR CORPORATION By: ----------------------------- Name: Title: - ---------- (...continued) 6 Insert the last date upon which drafts may be presented which may not be later than (A) in the case of standby Letters of Credit, the earlier of (x) one year after the Date of Issuance and (y) the tenth Business Day prior to the Revolving Loan Maturity Date and (B) in the case of trade Letters of Credit, the earlier of (x) 180 days after the Date of Issuance and (y) 30 days prior to the Revolving Loan Maturity Date. EXHIBIT E FORM OF SECTION 4.04(B)(II) CERTIFICATE Reference is hereby made to the Credit Agreement, dated as of June 16, 2000, 2000, among Datyon Superior Corporation, the lenders from time to time party thereto and Bankers Trust Company, as Administrative Agent (as amended from time to time, the "Credit Agreement"). Pursuant to the provisions of Section 4.04(b)(ii) of the Credit Agreement, the undersigned hereby certifies that it is not a "bank" as such term is used in Section 881(c)(3)(A) of the Internal Revenue Code of 1986, as amended. [NAME OF BANK] By ---------------------------------- Name: Title: Date: _______________, ____ EXHIBIT G FORM OF OFFICERS' CERTIFICATE I, the undersigned, [Chairman of the Board/Vice Chairman of the Board/President/Vice President] of [Name of Credit Party] a corporation organized and existing under the laws of the State of ________ (the "Company"), do hereby certify on behalf of the Company that: 1. This Certificate is furnished pursuant to Section 5A.04(a) of the Credit Agreement, dated as of June 16, 2000, among [Dayton Superior Corporation] [the Company], the lenders from time to time party thereto and Bankers Trust Company, as Administrative Agent (such Credit Agreement, as in effect on the date of this Certificate, being herein called the "Credit Agreement"). Unless otherwise defined herein, capitalized terms used in this Certificate shall have the meanings set forth in the Credit Agreement. 2. The following named individuals are elected officers of the Company, each holds the office of the Company set forth opposite his or her name and has held such office since _________ __, ____.(1) The signature written opposite the name and title of each such officer is his or her genuine signature.
NAME(2) OFFICE SIGNATURE -------------- ----------- ------------- -------------- ----------- ------------- -------------- ----------- -------------
3. Attached hereto as Exhibit A is a certified copy of the Certificate of Incorporation of the Company, as filed in the Office of the Secretary of State of the State of ________ on ___________, ____, together with all amendments thereto adopted through the date hereof. 4. Attached hereto as Exhibit B is a true and correct copy of the By-Laws of the Company which were duly adopted, are in full force and effect on the date hereof, and have been in effect since _____________, ----. - ---------- 1 Insert a date prior to the time of any corporate action relating to the Credit Documents or related documentation. 2 Include name, office and signature of each officer who will sign any Credit Document, including the officer who will sign the certification at the end of this Certificate or related documentation. Exhibit G Page 2 5. Attached hereto as Exhibit C is a true and correct copy of resolutions which were duly adopted on __________, ____ [by unanimous written consent of the Board of Directors of the Company] [by a meeting of the Board of Directors of the Company at which a quorum was present and acting throughout], and said resolutions have not been rescinded, amended or modified. Except as attached hereto as Exhibit C, no resolutions have been adopted by the Board of Directors of the Company which deal with the execution, delivery or performance of any of the Documents to which the Company is party. [6. On the date hereof, all of the applicable conditions set forth in Sections 5A.05, through 5A.10, inclusive, and Section 6.01 of the Credit Agreement have been satisfied. 7. Attached hereto as Exhibit D are true and correct copies of all Recapitalization Documents. 8. Attached hereto as Exhibit E are true and correct copies of all Refinancing Documents. 9. Attached hereto as Exhibit F are true and correct copies of all Equity Financing Documents. 10. Attached hereto as Exhibit G are true and correct copies of all Senior Subordinated Note Documents. 11. Attached hereto as Exhibit H are true and correct copies of all Subordinated Debenture Documents. 12. Attached hereto as Exhibit I are true and correct copies of all Employee Benefit Plans. 13. Attached hereto as Exhibit J are true and correct copies of all Shareholders' Agreements. 14. Attached hereto as Exhibit K are true and correct copies of all Management Agreements. 15. Attached hereto as Exhibit L are true and correct copies of all Employment Agreements. 16. Attached hereto as Exhibit M are true and correct copies of all Collective Bargaining Agreements. 17. Attached hereto as Exhibit N are true and correct copies of all Existing Indebtedness Agreements. Exhibit G Page 3 18. Attached hereto as Exhibit O are true and correct copies of all Tax Allocation Agreements.](3) [6.][19.] On the date hereof, the representations and warranties contained in the Credit Agreement and in the other Credit Documents are true and correct in all material respects with the same effect as though such representations and warranties had been made on the date hereof, both before and after giving effect to the incurrence of Loans on the date hereof and the application of the proceeds thereof, unless stated to relate to a specific earlier date, in which case such representations and warranties were true and correct in all material respects as of such earlier date. [7.][20.] On the date hereof, no Default or Event of Default has occurred and is continuing or would result from the Borrowing to occur on the date hereof or from the application of the proceeds thereof. [8.][21.] There is no proceeding for the dissolution or liquidation of the Company or threatening its existence. IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of June, 2000. [NAME OF CREDIT PARTY] By ---------------------------- Name: Title: - ---------- 3 Insert in Officers' Certificate of the Borrower only. Exhibit G Page 4 I, the undersigned, [Secretary/Assistant Secretary] of the Company, do hereby certify on behalf of the Company that: 1. [Name of Person making above certifications] is the duly elected and qualified [Chairman of the Board/Vice Chairman of the Board/President/Vice President] of the Company and the signature above is his or her genuine signature. 2. The certifications made by [name of Person making above certifications] on behalf of the Company in Items 2, 3, 4, 5 and [8][21] above are true and correct. IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of June, 2000. [NAME OF CREDIT PARTY] By ---------------------------------- Name: Title: EXHIBIT H [CONFORMED AS EXECUTED] FORM OF PLEDGE AGREEMENT PLEDGE AGREEMENT (as amended, modified or supplemented from time to time, this "Agreement"), dated as of June 16, 2000, made by each of the undersigned pledgors (each a "Pledgor" and, together with any other entity that becomes a pledgor hereunder pursuant to Section 25 hereof, the "Pledgors") to BANKERS TRUST COMPANY, as Collateral Agent (together with any successor collateral agent, the "Pledgee"), for the benefit of the Secured Creditors (as defined below). Except as otherwise defined herein, capitalized terms used herein and defined in the Credit Agreement (as defined below) shall be used herein as therein defined. W I T N E S S E T H : WHEREAS, Dayton Superior Corporation (the "Borrower"), the lenders from time to time party thereto (the "Lenders") and Bankers Trust Company, as Administrative Agent (together with any successor administrative agent, the "Administrative Agent"), have entered into a Credit Agreement, dated as of June 16, 2000 (as amended, modified or supplemented from time to time, the "Credit Agreement"), providing for the making of Loans to, and the issuance of Letters of Credit for the account of, the Borrower as contemplated therein (the Lenders, the Administrative Agent, each Letter of Credit Issuer and the Pledgee are herein called the "Lender Creditors"); WHEREAS, the Borrower may at any time and from time to time enter into one or more Interest Rate Protection Agreements or Other Hedging Agreements with one or more Lenders or any affiliate thereof (each such Lender or affiliate, even if the respective Lender subsequently ceases to be a Lender under the Credit Agreement for any reason, together with such Lender's or affiliate's successors and assigns, if any, collectively, the "Other Creditors," and together with the Lender Creditors, the "Secured Creditors"); WHEREAS, pursuant to the Subsidiaries Guaranty, each Subsidiary Guarantor has jointly and severally guaranteed to the Secured Creditors the payment when due of all Guaranteed Obligations as described therein; WHEREAS, it is a condition to the making of Loans to, and the issuance of Letters of Credit for the account of, the Borrower under the Credit Agreement that each Pledgor shall have executed and delivered to the Pledgee this Agreement; and WHEREAS, each Pledgor desires to enter into this Agreement in order to satisfy the condition described in the preceding paragraph; NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to each Pledgor, the receipt and sufficiency of which are hereby acknowledged, each Pledgor hereby makes the following representations and warranties to the Pledgee for the benefit Exhibit H Page 6 of the Secured Creditors and hereby covenants and agrees with the Pledgee for the benefit of the Secured Creditors as follows: 1. SECURITY FOR OBLIGATIONS. This Agreement is made by each Pledgor for the benefit of the Secured Creditors to secure: (i) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations and indebtedness (including, without limitation, indemnities, Fees and interest thereon) of such Pledgor to the Lender Creditors, whether now existing or hereafter incurred under, arising out of, or in connection with the Credit Agreement and the other Credit Documents to which such Pledgor is a party (including, in the case of each Pledgor which is Subsidiary Guarantor, all such obligations and indebtedness of such Pledgor under the Subsidiaries Guaranty) and the due performance and compliance by such Pledgor with all of the terms, conditions and agreements contained in the Credit Agreement and in such other Credit Documents (all such obligations and liabilities under this clause (i), except to the extent consisting of obligations or indebtedness with respect to Interest Rate Protection Agreements or Other Hedging Agreements, being herein collectively called the "Credit Document Obligations"); (ii) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations and liabilities owing by such Pledgor to the Other Creditors under, or with respect to (including in the case of each Pledgor which is Subsidiary Guarantor, by reason of the Subsidiaries Guaranty), any Interest Rate Protection Agreement or Other Hedging Agreement, whether such Interest Rate Protection Agreement or Other Hedging Agreement is now in existence or hereafter arising, and the due performance and compliance by such Pledgor with all of the terms, conditions and agreements contained therein (all such obligations and liabilities described in this clause (ii) being herein collectively called the "Other Obligations"); (iii) any and all sums advanced by the Pledgee in order to preserve the Collateral (as hereinafter defined) or preserve its security interest in the Collateral; (iv) in the event of any proceeding for the collection or enforcement of any indebtedness, obligations or liabilities of such Pledgor referred to in clauses (i), (ii) and (iii) above, after an Event of Default (which term to mean and include any Event of Default under, and as defined in, the Credit Agreement or any payment default by the Borrower under any Interest Rate Protection Agreement or Other Hedging Agreement and shall, in any event, include, without limitation, any payment default on any of the Obligations (as hereinafter defined) shall have occurred and be continuing, the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Pledgee of its rights hereunder, together with reasonable attorneys' fees and court costs; and (v) all amounts paid by any Secured Creditor as to which such Secured Creditor has the right to reimbursement under Section 11 of this Agreement; Exhibit H Page 7 all such obligations, liabilities, sums and expenses set forth in clauses (i) through (v) of this Section 1 being herein collectively called the "Obligations," it being acknowledged and agreed that the "Obligations" shall include extensions of credit of the types described above, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement. 2. DEFINITIONS. (a) Unless otherwise defined herein, all capitalized terms used herein and defined in the Credit Agreement shall be used herein as therein defined. Reference to singular terms shall include the plural and vice versa. (b) The following capitalized terms used herein shall have the definitions specified below: "ADMINISTRATIVE AGENT" has the meaning set forth in the Recitals hereto. "ADVERSE CLAIM" has the meaning given such term in Section 8-102(a)(1) of the UCC. "AGREEMENT" has the meaning set forth in the first paragraph hereof. "CERTIFICATED SECURITY" has the meaning given such term in Section 8-102(a)(4) of the UCC. "CLEARING CORPORATION" has the meaning given such term in Section 8-102(a)(5) of the UCC. "COLLATERAL" has the meaning set forth in Section 3.1 hereof. "COLLATERAL ACCOUNTS" means any and all accounts established and maintained by the Pledgee in the name of any Pledgor to which Collateral may be credited. "CREDIT AGREEMENT" has the meaning set forth in the Recitals hereto. "CREDIT DOCUMENT OBLIGATIONS" has the meaning set forth in Section 1 hereof. "DOMESTIC CORPORATION" has the meaning set forth in the definition of "Stock." "EVENT OF DEFAULT" has the meaning set forth in Section 1 hereof. "FINANCIAL ASSET" has the meaning given such term in Section 8-102(a)(9) of the UCC. "FOREIGN CORPORATION" has the meaning set forth in the definition of "Stock." "INDEMNITEES" has the meaning set forth in Section 11 hereof. "INSTRUMENT" has the meaning given such term in Section 9-105(1)(i) of the UCC. Exhibit H Page 8 "INVESTMENT PROPERTY" has the meaning given such term in Section 9-115(f) of the UCC. "LENDER CREDITORS" has the meaning set forth in the Recitals hereto. "LENDERS" has the meaning set forth in the Recitals hereto. "LIMITED LIABILITY COMPANY ASSETS" means all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all limited liability company capital and interest in other limited liability companies), at any time owned or represented by any Limited Liability Company Interest. "LIMITED LIABILITY COMPANY INTERESTS" means the entire limited liability company membership interest at any time owned by any Pledgor in any limited liability company. "NON-VOTING STOCK" means all capital stock which is not Voting Stock. "NOTES" means (x) all Intercompany Notes at any time issued to each Pledgor and (y) all other promissory notes from time to time issued to, or held by, each Pledgor. "OBLIGATIONS" has the meaning set forth in Section 1 hereof. "OTHER CREDITORS" has the meaning set forth in the Recitals hereto. "OTHER OBLIGATIONS" has the meaning set forth in Section 1 hereof. "PARTNERSHIP ASSETS" means all assets, whether tangible or intangible and whether real, personal or mixed (including, without limitation, all partnership capital and interest in other partnerships), at any time owned or represented by any Partnership Interest. "PARTNERSHIP INTEREST" means the entire general partnership interest or limited partnership interest at any time owned by any Pledgor in any general partnership or limited partnership. "PLEDGED NOTES" has the meaning set forth in Section 3.5 hereof. "PLEDGEE" has the meaning set forth in the first paragraph hereof. "PLEDGOR" has the meaning set forth in the first paragraph hereof. "PROCEEDS" has the meaning given such term in Section 9-306(l) of the UCC. "REQUIRED LENDERS" has the meaning given such term in the Credit Agreement. "SECURED CREDITORS" has the meaning set forth in the Recitals hereto. "SECURED DEBT AGREEMENTS" has the meaning set forth in Section 5 hereof. Exhibit H Page 9 "SECURITIES ACCOUNT" has the meaning given such term in Section 8-501(a) of the UCC. "SECURITIES ACT" means the Securities Act of 1933, as amended, as in effect from time to time. "SECURITY" and "SECURITIES" has the meaning given such term in Section 8-102(a)(15) of the UCC and shall in any event include all Stock and Notes (to the extent same constitute "Securities" under Section 8-102(a)(15)). "SECURITY ENTITLEMENT" has the meaning given such term in Section 8-102(a)(17) of the UCC. "STOCK" means (x) with respect to corporations incorporated under the laws of the United States or any State or territory thereof (each a "Domestic Corporation"), all of the issued and outstanding shares of capital stock of any corporation at any time owned by any Pledgor of any Domestic Corporation and (y) with respect to corporations not Domestic Corporations (each a "Foreign Corporation"), all of the issued and outstanding shares of capital stock at any time owned by any Pledgor of any Foreign Corporation. "TERMINATION DATE" has the meaning set forth in Section 20 hereof. "UCC" means the Uniform Commercial Code as in effect in the State of New York from time to time; PROVIDED that all references herein to specific sections or subsections of the UCC are references to such sections or subsections, as the case may be, of the Uniform Commercial Code as in effect in the State of New York on the date hereof. "UNCERTIFICATED SECURITY" has the meaning given such term in Section 8-102(a)(18) of the UCC. "VOTING STOCK" means all classes of capital stock of any Foreign Corporation entitled to vote. 3. PLEDGE OF SECURITIES, ETC. 3.1 PLEDGE. To secure the Obligations now or hereafter owed or to be performed by such Pledgor, each Pledgor does hereby grant, pledge and assign to the Pledgee for the benefit of the Secured Creditors, and does hereby create a continuing security interest in favor of the Pledgee for the benefit of the Secured Creditors in, all of the right, title and interest in and to the following, whether now existing or hereafter from time to time acquired (collectively, the "Collateral"): (a) each of the Collateral Accounts, including any and all assets of whatever type or kind deposited by such Pledgor in such Collateral Account, whether now owned or hereafter acquired, existing or arising, including, without limitation, all Financial Assets, Investment Property, moneys, checks, drafts, Instruments, Securities or interests Exhibit H Page 10 therein of any type or nature deposited or required by the Credit Agreement or any other Secured Debt Agreement to be deposited in such Collateral Account, and all investments and all certificates and other Instruments (including depository receipts, if any) from time to time representing or evidencing the same, and all dividends, interest, distributions, cash and other property from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing; (b) all Securities of such Pledgor from time to time; (c) all Limited Liability Company Interests of such Pledgor from time to time and all of its right, title and interest in each limited liability company to which each such interest relates, whether now existing or hereafter acquired, including, without limitation: (A) all the capital thereof and its interest in all profits, losses, Limited Liability Company Assets and other distributions to which such Pledgor shall at any time be entitled in respect of such Limited Liability Company Interests; (B) all other payments due or to become due to such Pledgor in respect of Limited Liability Company Interests, whether under any limited liability company agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise; (C) all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any limited liability company agreement or operating agreement, or at law or otherwise in respect of such Limited Liability Company Interests; (D) all present and future claims, if any, of such Pledgor against any such limited liability company for moneys loaned or advanced, for services rendered or otherwise; (E) all of such Pledgor's rights under any limited liability company agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to such Limited Liability Company Interests, including any power to terminate, cancel or modify any limited liability company agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of any of such Pledgor in respect of such Limited Liability Company Interests and any such limited liability company, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Limited Liability Company Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing; and Exhibit H Page 11 (F) all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof; (d) all Partnership Interests of such Pledgor from time to time and all of its right, title and interest in each partnership to which each such interest relates, whether now existing or hereafter acquired, including, without limitation: (A) all the capital thereof and its interest in all profits, losses, Partnership Assets and other distributions to which such Pledgor shall at any time be entitled in respect of such Partnership Interests; (B) all other payments due or to become due to such Pledgor in respect of Partnership Interests, whether under any partnership agreement or otherwise, whether as contractual obligations, damages, insurance proceeds or otherwise; (C) all of its claims, rights, powers, privileges, authority, options, security interests, liens and remedies, if any, under any partnership agreement or operating agreement, or at law or otherwise in respect of such Partnership Interests; (D) all present and future claims, if any, of such Pledgor against any such partnership for moneys loaned or advanced, for services rendered or otherwise; (E) all of such Pledgor's rights under any partnership agreement or operating agreement or at law to exercise and enforce every right, power, remedy, authority, option and privilege of such Pledgor relating to such Partnership Interests, including any power to terminate, cancel or modify any partnership agreement or operating agreement, to execute any instruments and to take any and all other action on behalf of and in the name of any of such Pledgor in respect of such Partnership Interests and any such partnership, to make determinations, to exercise any election (including, but not limited to, election of remedies) or option or to give or receive any notice, consent, amendment, waiver or approval, together with full power and authority to demand, receive, enforce, collect or receipt for any of the foregoing or for any Partnership Asset, to enforce or execute any checks, or other instruments or orders, to file any claims and to take any action in connection with any of the foregoing (with all of the foregoing rights only to be exercisable upon the occurrence and during the continuation of an Event of Default); and (F) all other property hereafter delivered in substitution for or in addition to any of the foregoing, all certificates and instruments representing or evidencing such other property and all cash, securities, interest, dividends, rights Exhibit H Page 12 and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof; (e) all Security Entitlements of such Pledgor from time to time in any and all of the foregoing; (f) all Financial Assets and Investment Property of such Pledgor from time to time; and (g) all Proceeds of any and all of the foregoing. Notwithstanding anything to the contrary contained in this Section 3.1, (x) except as otherwise provided in Section 8.12 of the Credit Agreement, no Pledgor (to the extent that it is the Borrower or a Domestic Subsidiary of the Borrower) shall be required at any time to pledge hereunder more than 65% of the Voting Stock of any Foreign Corporation and (y) each Pledgor shall be required to pledge hereunder 100% of any Non-Voting Stock at any time and from time to time acquired by such Pledgor of any Foreign Corporation. 3.2 PROCEDURES. (a) To the extent that any Pledgor at any time or from time to time owns, acquires or obtains any right, title or interest in any Collateral, such Collateral shall automatically (and without the taking of any action by the respective Pledgor) be pledged pursuant to Section 3.1 of this Agreement and, in addition thereto, such Pledgor shall (to the extent provided below) take the following actions as set forth below (as promptly as practicable and, in any event, within 10 days after it obtains such Collateral) for the benefit of the Pledgee and the Secured Creditors: (i) with respect to a Certificated Security (other than a Certificated Security credited on the books of a Clearing Corporation), the respective Pledgor shall physically deliver such Certificated Security to the Pledgee, indorsed to the Pledgee or indorsed in blank; (ii) with respect to an Uncertificated Security (other than an Uncertificated Security credited on the books of a Clearing Corporation), the respective Pledgor shall cause the issuer of such Uncertificated Security to duly authorize and execute, and deliver to the Pledgee, an agreement for the benefit of the Pledgee and the Secured Creditors substantially in the form of Annex G hereto (appropriately completed to the satisfaction of the Pledgee and with such modifications, if any, as shall be satisfactory to the Pledgee) pursuant to which such issuer agrees to comply with any and all instructions originated by the Pledgee without further consent by the registered owner and not to comply with instructions regarding such Uncertificated Security (and any Partnership Interests and Limited Liability Company Interests issued by such issuer) originated by any other Person other than a court of competent jurisdiction; (iii) with respect to a Certificated Security, Uncertificated Security, Partnership Interest or Limited Liability Company Interest credited on the books of a Clearing Corporation (including a Federal Reserve Bank, Participants Trust Company or The Depository Trust Company), the respective Pledgor shall promptly notify the Pledgee thereof and shall promptly take all actions required (i) to comply with the applicable rules of such Clearing Corporation and (ii) to perfect the security interest of the Pledgee under applicable law (including, in any event, under Sections 9-115(4)(a) and (b), 9-115(1)(e) and 8-106(d) of the UCC). The Pledgor further agrees to take such actions as the Pledgee deems necessary or desirable to effect the foregoing; (iv) with respect to a Partnership Interest or a Limited Liability Company Interest (other than a Partnership Interest or Limited Liability Interest credited on the books of a Clearing Corporation), (1) if such Partnership Interest or Limited Liability Company Interest is represented by a certificate, the procedure set forth in Section 3.2(a)(i) hereof, and (2) if such Partnership Interest or Limited Liability Company Interest is not represented by a certificate, the procedure set forth in Section 3.2(a)(ii) hereof; (v) with respect to any Note, physical delivery of such Note to the Pledgee, indorsed to the Pledgee or indorsed in blank; and (vi) with respect to cash, (i) establishment by the Pledgee of a cash account in the name of such Pledgor over which the Pledgee shall have exclusive and absolute control and dominion (and no withdrawals or transfers may be made therefrom by any Person except with the prior written consent of the Pledgee) and (ii) deposit of such cash in such cash account. (b) In addition to the actions required to be taken pursuant to proceeding Section 3.2(a) hereof, each Pledgor shall take the following additional actions with respect to the Securities and Collateral (as defined below): (i) with respect to all Collateral of such Pledgor with respect to which the Pledgee may obtain "control" thereof within the meaning of Section 8-106 of the UCC (or under any provision of the UCC as same may be amended or supplemented from time to time, or under the laws of any relevant State other than the State of New York), the respective Pledgor shall take all actions as may be requested from time to time by the Pledgee so that "control" of such Collateral is obtained and at all times held by the Pledgee; and (ii) each Pledgor shall from time to time cause appropriate financing statements (on Form UCC-1 or other appropriate form) under the Uniform Commercial Code as in effect in the various relevant States, in form covering all Collateral hereunder (with the form of such financing statements to be satisfactory to the Pledgee), to be filed in the relevant filing offices so that at all times the Pledgee has a security interest in all Investment Property and other Collateral which may be perfected by the filing of such financing statements to the maximum extent perfection by filing may be obtained under the laws of the relevant States, including, without limitation, Section 9-115(4)(b) of the UCC. 3.3 SUBSEQUENTLY ACQUIRED COLLATERAL. If any Pledgor shall acquire (by purchase, stock dividend or otherwise) any additional Collateral at any time or from time to time after the Exhibit H Page 14 date hereof, such Collateral shall automatically (and without any further action being required to be taken) be subject to the pledge and security interests created pursuant to Section 3.1 hereof and, furthermore, the Pledgor will promptly thereafter take (or cause to be taken) all action with respect to such Collateral in accordance with the procedures set forth in Section 3.2 hereof, and will promptly thereafter deliver to the Pledgee (i) a certificate executed by a principal executive officer of such Pledgor describing such Collateral and certifying that the same has been duly pledged in favor of the Pledgee (for the benefit of the Secured Creditors) hereunder and (ii) supplements to Annexes A through F hereto as are necessary to cause such annexes to be complete and accurate at such time. Without limiting the foregoing, each Pledgor shall be required to pledge hereunder any shares of stock at any time and from time to time after the date hereof acquired by such Pledgor of any Foreign Corporation, provided that (x) except as provided in Section 8.12 of the Credit Agreement, no Pledgor (to the extent that it is the Borrower or a Domestic Subsidiary of the Borrower) shall be required at any time to pledge hereunder more than 65% of the Voting Stock of any Foreign Corporation and (y) each Pledgor shall be required to pledge hereunder 100% of any Non-Voting Stock at any time and from time to time acquired by such Pledgor of any Foreign Corporation. 3.4 TRANSFER TAXES. Each pledge of Collateral under Section 3.1 or Section 3.3 hereof shall be accompanied by any transfer tax stamps required in connection with the pledge of such Collateral. 3.5 DEFINITION OF PLEDGED NOTES. All Notes at any time pledged or required to be pledged hereunder are hereinafter called the "Pledged Notes". 3.6 CERTAIN REPRESENTATIONS AND WARRANTIES REGARDING THE COLLATERAL. Each Pledgor represents and warrants that on the date hereof (i) each Subsidiary of such Pledgor, and the direct ownership thereof, is listed in Annex A hereto; (ii) the Stock held by such Pledgor consists of the number and type of shares of the stock of the corporations as described in Annex B hereto; (iii) such Stock constitutes that percentage of the issued and outstanding capital stock of the issuing corporation as is set forth in Annex B hereto; (iv) the Notes held by such Pledgor consist of the promissory notes described in Annex C hereto where such Pledgor is listed as the lender; (v) the Limited Liability Company Interests held by such Pledgor consist of the number and type of interests of the Persons described in Annex D hereto; (vi) each such Limited Liability Company Interest constitutes that percentage of the issued and outstanding equity interest of the issuing Person as set forth in Annex D hereto; (vii) the Partnership Interests held by such Pledgor consist of the number and type of interests of the Persons described in Annex E hereto; (viii) each such Partnership Interest constitutes that percentage or portion of the entire partnership interest of the Partnership as set forth in Annex E hereto; (ix) the Pledgor has complied with the respective procedure set forth in Section 3.2(a) hereof with respect to each item of Collateral described in Annexes A through E hereto; and (x) on the date hereof, such Pledgor owns no other Securities, Limited Liability Company Interests or Partnership Interests. 4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. If and to the extent necessary to enable the Pledgee to perfect its security interest in any of the Collateral or to exercise any of its remedies hereunder, the Pledgee shall have the right to appoint one or more Exhibit H Page 15 sub-agents for the purpose of retaining physical possession of the Collateral, which may be held (in the discretion of the Pledgee) in the name of the relevant Pledgor, endorsed or assigned in blank or in favor of the Pledgee or any nominee or nominees of the Pledgee or a sub-agent appointed by the Pledgee. 5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until there shall have occurred and be continuing an Event of Default, each Pledgor shall be entitled to exercise any and all voting and other consensual rights pertaining to the Collateral owned by it, and to give consents, waivers or ratifications in respect thereof; PROVIDED, that, in each case, no vote shall be cast or any consent, waiver or ratification given or any action taken or omitted to be taken which would violate or be inconsistent with any of the terms of this Agreement, the Credit Agreement, any other Credit Document or any Interest Rate Protection Agreement or Other Hedging Agreement (collectively, the "Secured Debt Agreements"), or which would have the effect of impairing the value of the Collateral or any part thereof or the position or interests of the Pledgee or any other Secured Creditor in the Collateral. All such rights of each Pledgor to vote and to give consents, waivers and ratifications shall cease in case an Event of Default has occurred and is continuing, and Section 7 hereof shall become applicable. 6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until there shall have occurred and be continuing an Event of Default, (i) all cash dividends, cash distributions, cash Proceeds and other cash amounts payable in respect of the Collateral shall be paid to the respective Pledgor. The Pledgee shall be entitled to receive directly, and to retain as part of the Collateral: (i) all other or additional stock, notes, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash dividends other than as set forth above) paid or distributed by way of dividend or otherwise in respect of the Collateral; (ii) all other or additional stock, notes, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash) paid or distributed in respect of the Collateral by way of stock-split, spin-off, split-up, reclassification, combination of shares or similar rearrangement; and (iii) all other or additional stock, notes, limited liability company interests, partnership interests, instruments or other securities or property (including, but not limited to, cash) which may be paid in respect of the Collateral by reason of any consolidation, merger, exchange of stock, conveyance of assets, liquidation or similar corporate reorganization. Nothing contained in this Section 6 shall limit or restrict in any way the Pledgee's right to receive proceeds of the Collateral in any form in accordance with Section 3 of this Agreement. All dividends, distributions or other payments which are received by any Pledgor contrary to the provisions of this Section 6 and Section 7 hereof shall be received in trust for the benefit of the Pledgee, shall be segregated from other property or funds of such Pledgor and shall be forthwith paid over to the Pledgee as Collateral in the same form as so received (with any necessary endorsement). Exhibit H Page 16 7. REMEDIES IN CASE OF DEFAULT OR EVENT OF DEFAULT. If there shall have occurred and be continuing an Event of Default, then and in every such case, the Pledgee shall be entitled to exercise all of the rights, powers and remedies (whether vested in it by this Agreement, any other Secured Debt Agreement or by law) for the protection and enforcement of its rights in respect of the Collateral, and the Pledgee shall be entitled to exercise all the rights and remedies of a secured party under the Uniform Commercial Code as in effect in any relevant jurisdiction and also shall be entitled, without limitation, to exercise the following rights, which each Pledgor hereby agrees to be commercially reasonable: (i) to receive all amounts payable in respect of the Collateral otherwise payable under Section 6 hereof to the respective Pledgor; (ii) to transfer all or any part of the Collateral into the Pledgee's name or the name of its nominee or nominees; (iii) to accelerate any Pledged Note which may be accelerated in accordance with its terms, and take any other lawful action to collect upon any Pledged Note (including, without limitation, to make any demand for payment thereon); (iv) to vote all or any part of the Collateral (whether or not transferred into the name of the Pledgee) and give all consents, waivers and ratifications in respect of the Collateral and otherwise act with respect thereto as though it were the outright owner thereof (each Pledgor hereby irrevocably constituting and appointing the Pledgee the proxy and attorney-in-fact of such Pledgor, with full power of substitution to do so); (v) at any time and from time to time to sell, assign and deliver, or grant options to purchase, all or any part of the Collateral, or any interest therein, at any public or private sale, without demand of performance, advertisement or notice of intention to sell or of the time or place of sale or adjournment thereof or to redeem or otherwise (all of which are hereby waived by each Pledgor), for cash, on credit or for other property, for immediate or future delivery without any assumption of credit risk, and for such price or prices and on such terms as the Pledgee in its absolute discretion may determine, PROVIDED that at least 10 days' written notice of the time and place of any such sale shall be given to the respective Pledgor. The Pledgee shall not be obligated to make any such sale of Collateral regardless of whether any such notice of sale has theretofore been given. Each Pledgor hereby waives and releases to the fullest extent permitted by law any right or equity of redemption with respect to the Collateral, whether before or after sale hereunder, and all rights, if any, of marshalling the Collateral and any other security for the Obligations or otherwise. At any such sale, unless prohibited by applicable law, the Pledgee on behalf of the Secured Creditors may bid for and purchase all or any part of the Collateral so sold free from any such right or equity of redemption. Neither the Pledgee nor any other Secured Creditor shall be liable for failure to collect or realize upon any or all of the Collateral or for any delay in so doing nor shall any of them be under any obligation to take any action whatsoever with regard thereto; and Exhibit H Page 17 (vi) to set-off any and all Collateral against any and all Obligations, and to withdraw any and all cash or other Collateral from any and all Collateral Accounts and to apply such cash and other Collateral to the payment of any and all Obligations. 8. REMEDIES, ETC., CUMULATIVE. Each and every right, power and remedy of the Pledgee provided for in this Agreement or in any other Secured Debt Agreement, or now or hereafter existing at law or in equity or by statute shall be cumulative and concurrent and shall be in addition to every other such right, power or remedy. The exercise or beginning of the exercise by the Pledgee or any other Secured Creditor of any one or more of the rights, powers or remedies provided for in this Agreement or any other Secured Debt Agreement or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by the Pledgee or any other Secured Creditor of all such other rights, powers or remedies, and no failure or delay on the part of the Pledgee or any other Secured Creditor to exercise any such right, power or remedy shall operate as a waiver thereof. No notice to or demand on any Pledgor in any case shall entitle it to any other or further notice or demand in similar or other circumstances or constitute a waiver of any of the rights of the Pledgee or any other Secured Creditor to any other or further action in any circumstances without notice or demand. The Secured Creditors agree that this Agreement may be enforced only by the action of the Administrative Agent or the Pledgee, in each case acting upon the instructions of the Required Lenders (or, after the date on which all Credit Document Obligations have been paid in full, the holders of at least the majority of the outstanding Other Obligations) and that no other Secured Creditor shall have any right individually to seek to enforce or to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Administrative Agent or the Pledgee or the holders of at least a majority of the outstanding Other Obligations, as the case may be, for the benefit of the Secured Creditors upon the terms of this Agreement. 9. APPLICATION OF PROCEEDS. (a) All monies collected by the Pledgee upon any sale or other disposition of the Collateral pursuant to the terms of this Agreement, together with all other monies received by the Pledgee hereunder, shall be applied in the manner provided in the Security Agreement. (b) It is understood and agreed that the Pledgors shall remain jointly and severally liable to the extent of any deficiency between the amount of the proceeds of the Collateral hereunder and the aggregate amount of the Obligations. 10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the Pledgee hereunder (whether by virtue of the power of sale herein granted, pursuant to judicial process or otherwise), the receipt of the Pledgee or the officer making the sale shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold, and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to the Pledgee or such officer or be answerable in any way for the misapplication or nonapplication thereof. Exhibit H Page 18 11. INDEMNITY. Each Pledgor jointly and severally agrees (i) to indemnify and hold harmless the Pledgee in such capacity and each other Secured Creditor and their respective successors, assigns, employees, agents and servants (individually an "Indemnitee," and collectively the "Indemnitees") from and against any and all claims, demands, losses, judgments and liabilities (including liabilities for penalties) of whatsoever kind or nature, and (ii) to reimburse each Indemnitee for all costs and expenses, including reasonable attorneys' fees, in each case growing out of or resulting from this Agreement or the exercise by any Indemnitee of any right or remedy granted to it hereunder or under any other Secured Debt Agreement (but excluding any claims, demands, losses, judgments and liabilities or expenses to the extent incurred by reason of gross negligence or willful misconduct of such Indemnitee (as determined by a court of competent jurisdiction in a final and non-appealable decision)) . In no event shall the Pledgee be liable, in the absence of gross negligence or willful misconduct on its part, for any matter or thing in connection with this Agreement other than to account for monies actually received by it in accordance with the terms hereof. If and to the extent that the obligations of any Pledgor under this Section 11 are unenforceable for any reason, such Pledgor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law. 12. PLEDGEE NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER. (a) Nothing herein shall be construed to make the Pledgee or any other Secured Creditor liable as a member of any limited liability company or as a partner of any partnership and neither the Pledgee nor any other Secured Creditor by virtue of this Agreement or otherwise (except as referred to in the following sentence) shall have any of the duties, obligations or liabilities of a member of any limited liability company or partnership. The parties hereto expressly agree that, unless the Pledgee shall become the absolute owner of Collateral consisting of a Limited Liability Company Interest or Partnership Interest pursuant hereto, this Agreement shall not be construed as creating a partnership or joint venture among the Pledgee, any other Secured Creditor and/or any Pledgor. (b) Except as provided in the last sentence of paragraph (a) of this Section 12, the Pledgee, by accepting this Agreement, did not intend to become a member of any limited liability company or a partner of any partnership or otherwise be deemed to be a co-venturer with respect to any Pledgor or any limited liability company or partnership either before or after an Event of Default shall have occurred. The Pledgee shall have only those powers set forth herein and the Secured Creditors shall assume none of the duties, obligations or liabilities of a member of any limited liability company or as a partner of any partnership or any Pledgor except as provided in the last sentence of paragraph (a) of this Section 12. (c) The Pledgee and the other Secured Creditors shall not be obligated to perform or discharge any obligation of any Pledgor as a result of the pledge hereby effected. (d) The acceptance by the Pledgee of this Agreement, with all the rights, powers, privileges and authority so created, shall not at any time or in any event obligate the Pledgee or any other Secured Creditor to appear in or defend any action or proceeding relating to the Collateral to which it is not a party, or to take any action hereunder or thereunder, or to Exhibit H Page 19 expend any money or incur any expenses or perform or discharge any obligation, duty or liability under the Collateral. 13. FURTHER ASSURANCES; POWER-OF-ATTORNEY. (a) Each Pledgor agrees that it will join with the Pledgee in executing and, at such Pledgor's own expense, file and refile under the Uniform Commercial Code or other applicable law such financing statements, continuation statements and other documents in such offices as the Pledgee may deem necessary and wherever required by law in order to perfect and preserve the Pledgee's security interest in the Collateral and hereby authorizes the Pledgee to file financing statements and amendments thereto relative to all or any part of the Collateral without the signature of such Pledgor where permitted by law, and agrees to do such further acts and things and to execute and deliver to the Pledgee such additional conveyances, assignments, agreements and instruments as the Pledgee may reasonably require or deem necessary to carry into effect the purposes of this Agreement or to further assure and confirm unto the Pledgee its rights, powers and remedies hereunder. (b) Each Pledgor hereby appoints the Pledgee such Pledgor's attorney-in-fact, with full authority in the place and stead of such Pledgor and in the name of such Pledgor or otherwise, to act from time to time solely after the occurrence and during the continuance of an Event of Default in the Pledgee's reasonable discretion to take any action and to execute any instrument which the Pledgee may deem necessary or advisable to accomplish the purposes of this Agreement. 14. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. It is expressly understood and agreed by each Secured Creditor that by accepting the benefits of this Agreement each such Secured Creditor acknowledges and agrees that the obligations of the Pledgee as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement. The Pledgee shall act hereunder on the terms and conditions set forth herein and in Section 12 of the Credit Agreement. 15. TRANSFER BY THE PLEDGORS. No Pledgor will sell or otherwise dispose of, grant any option with respect to, or mortgage, pledge or otherwise encumber any of the Collateral or any interest therein (except as may be permitted in accordance with the terms of the Credit Agreement). 16. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS. (a) Each Pledgor represents, warrants and covenants that: (i) it is the legal, beneficial and record owner of, and has good and marketable title to, all Collateral consisting of one or more Securities and that it has sufficient interest in all Collateral in which a security interest is purported to be created hereunder for such security interest to attach (subject, in each case, to no pledge, lien, mortgage, hypothecation, security interest, charge, option, Adverse Claim or other encumbrance whatsoever, except the liens and security interests created by this Agreement); Exhibit H Page 20 (ii) it has full power, authority and legal right to pledge all the Collateral pledged by it pursuant to this Agreement; (iii) this Agreement has been duly authorized, executed and delivered by such Pledgor and constitutes a legal, valid and binding obligation of such Pledgor enforceable against such Pledgor 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); (iv) except to the extent already obtained or made, no consent of any other party (including, without limitation, any stockholder or creditor of such Pledgor or any of its Subsidiaries) and no consent, license, permit, approval or authorization of, exemption by, notice or report to, or registration, filing or declaration with, any governmental authority is required to be obtained by such Pledgor in connection with (a) the execution, delivery or performance of this Agreement, (b) the validity or enforceability of this Agreement (except as set forth in clause (iii) above), (c) the perfection or enforceability of the Pledgee's security interest in the Collateral or (d) except for compliance with or as may be required by applicable securities laws, the exercise by the Pledgee of any of its rights or remedies provided herein; (v) the execution, delivery and performance of this Agreement will not violate any provision of any applicable law or regulation or of any order, judgment, writ, award or decree of any court, arbitrator or governmental authority, domestic or foreign, applicable to such Pledgor, or of the certificate of incorporation, operating agreement, limited liability company agreement, partnership agreement or by-laws of such Pledgor or of any securities issued by such Pledgor or any of its Subsidiaries, or of any mortgage, deed of trust, indenture, lease, loan agreement, credit agreement or other material contract, agreement or instrument or undertaking to which such Pledgor or any of its Subsidiaries is a party or which purports to be binding upon such Pledgor or any of its Subsidiaries or upon any of their respective assets and will not result in the creation or imposition of (or the obligation to create or impose) any lien or encumbrance on any of the assets of such Pledgor or any of its Subsidiaries except as contemplated by this Agreement; (vi) all of the Collateral (consisting of Securities, Limited Liability Company Interests or Partnership Interests) has been duly and validly issued and acquired, is fully paid and non-assessable and is subject to no options to purchase or similar rights; (vii) each of the Pledged Notes constitutes, or when executed by the obligor thereof will constitute, the legal, valid and binding obligation of such obligor, 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); and Exhibit H Page 21 (viii) the pledge, collateral assignment and delivery to the Pledgee of the Collateral consisting of Certificated Securities pursuant to this Agreement creates a valid and perfected first priority security interest in such Certificated Securities, and the proceeds thereof, subject to no prior Lien or encumbrance or to any agreement purporting to grant to any third party a Lien or encumbrance on the property or assets of such Pledgor which would include the Securities and the Pledgee is entitled to all the rights, priorities and benefits afforded by the UCC or other relevant law as enacted in any relevant jurisdiction to perfect security interests in respect of such Collateral; and (ix) "control" (as defined in Section 8-106 of the UCC) has been obtained by the Pledgee over all Collateral consisting of Securities (including Notes which are Securities) with respect to which such "control" may be obtained pursuant to Section 8-106 of the UCC. (b) Each Pledgor covenants and agrees that it will defend the Pledgee's right, title and security interest in and to the Securities and the proceeds thereof against the claims and demands of all persons whomsoever; and each Pledgor covenants and agrees that it will have like title to and right to pledge any other property at any time hereafter pledged to the Pledgee as Collateral hereunder and will likewise defend the right thereto and security interest therein of the Pledgee and the other Secured Creditors. (c) Each Pledgor covenants and agrees that it will take no action which would violate any of the terms of any Secured Debt Agreement. 17. CHIEF EXECUTIVE OFFICE; RECORDS. The chief executive office of each Pledgor is located at the address specified in Annex F hereto. Each Pledgor will not move its chief executive office except to such new location as such Pledgor may establish in accordance with the last sentence of this Section 17. The originals of all documents in the possession of such Pledgor evidencing all Collateral, including but not limited to all Limited Liability Company Interests and Partnership Interests, and the only original books of account and records of such Pledgor relating thereto are, and will continue to be, kept at such chief executive office as specified in Annex F hereto, or at such new locations as such Pledgor may establish in accordance with the last sentence of this Section 17. All Limited Liability Company Interests and Partnership Interests are, and will continue to be, maintained at, and controlled and directed (including, without limitation, for general accounting purposes) from, such chief executive office as specified in Annex F hereto, or such new locations as such Pledgor may establish in accordance with the last sentence of this Section 17. No Pledgor shall establish a new location for such offices until (i) it shall have given to the Pledgee not less than 30 days' prior written notice of its intention so to do, clearly describing such new location and providing such other information in connection therewith as the Pledgee may reasonably request and (ii) with respect to such new location, it shall have taken all action, satisfactory to the Pledgee, to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. Promptly after establishing a new location for such offices in accordance with the immediately preceding sentence, the respective Pledgor shall Exhibit H Page 22 deliver to the Pledgee a supplement to Annex F hereto so as to cause such Annex F hereto to be complete and accurate. 18. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of each Pledgor under this Agreement shall be absolute and unconditional and shall remain in full force and effect without regard to, and shall not be released, suspended, discharged, terminated or otherwise affected by, any circumstance or occurrence whatsoever, including, without limitation: (i) any renewal, extension, amendment or modification of or addition or supplement to or deletion from any Secured Debt Agreement or any other instrument or agreement referred to therein, or any assignment or transfer of any thereof; (ii) any waiver, consent, extension, indulgence or other action or inaction under or in respect of any such agreement or instrument including, without limitation, this Agreement; (iii) any furnishing of any additional security to the Pledgee or its assignee or any acceptance thereof or any release of any security by the Pledgee or its assignee; (iv) any limitation on any party's liability or obligations under any such instrument or agreement or any invalidity or unenforceability, in whole or in part, of any such instrument or agreement or any term thereof; or (v) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to any Pledgor or any Subsidiary of any Pledgor, or any action taken with respect to this Agreement by any trustee or receiver, or by any court, in any such proceeding, whether or not such Pledgor shall have notice or knowledge of any of the foregoing. 19. REGISTRATION, ETC. (a) If there shall have occurred and be continuing an Event of Default then, and in every such case, upon receipt by any Pledgor from the Pledgee of a written request or requests that such Pledgor cause any registration, qualification or compliance under any Federal or state securities law or laws to be effected with respect to all or any part of the Collateral consisting of Securities, Limited Liability Company Interests or Partnership Interests, such Pledgor as soon as practicable and at its expense will cause such registration to be effected (and be kept effective) and will cause such qualification and compliance to be declared effected (and be kept effective) as may be so requested and as would permit or facilitate the sale and distribution of such Collateral, including, without limitation, registration under the Securities Act, as then in effect (or any similar statute then in effect), appropriate qualifications under applicable blue sky or other state securities laws and appropriate compliance with any other government requirements, PROVIDED, that the Pledgee shall furnish to such Pledgor such information regarding the Pledgee as such Pledgor may reasonably request in writing and as shall be required in connection with any such registration, qualification or compliance. Such Pledgor will cause the Pledgee to be kept advised in writing as to the progress of each such registration, qualification or compliance and as to the completion thereof, will furnish to the Pledgee such number of prospectuses, offering circulars or other documents incident thereto as the Pledgee from time to time may reasonably request, and will indemnify the Pledgee, each other Secured Creditor and all others participating in the distribution of such Collateral against all claims, losses, damages and liabilities caused by any untrue statement (or alleged untrue statement) of a material fact contained therein (or in any related registration statement, notification or the like) or by any omission (or alleged omission) to state therein (or in any related registration statement, notification or the like) a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same Exhibit H Page 23 may have been caused by an untrue statement or omission based upon information furnished in writing to such Pledgor by the Pledgee or such other Secured Creditor expressly for use therein. (b) If at any time when the Pledgee shall determine to exercise its right to sell all or any part of the Collateral consisting of Securities, Limited Liability Company Interests or Partnership Interests pursuant to Section 7 hereof, and the Collateral or the part thereof to be sold shall not, for any reason whatsoever, be effectively registered under the Securities Act, as then in effect, the Pledgee may, in its sole and absolute discretion, sell such Collateral, as the case may be, or part thereof by private sale in such manner and under such circumstances as the Pledgee may deem necessary or advisable in order that such sale may legally be effected without such registration. Without limiting the generality of the foregoing, in any such event the Pledgee, in its sole and absolute discretion (i) may proceed to make such private sale notwithstanding that a registration statement for the purpose of registering such Collateral or part thereof shall have been filed under such Securities Act, (ii) may approach and negotiate with a single possible purchaser to effect such sale, and (iii) may restrict such sale to a purchaser who will represent and agree that such purchaser is purchasing for its own account, for investment, and not with a view to the distribution or sale of such Collateral or part thereof. In the event of any such sale, the Pledgee shall incur no responsibility or liability for selling all or any part of the Collateral at a price which the Pledgee, in its sole and absolute discretion, in good faith deems reasonable under the circumstances, notwithstanding the possibility that a substantially higher price might be realized if the sale were deferred until after registration as aforesaid. 20. TERMINATION; RELEASE. (a) After the Termination Date, this Agreement and the security interest created hereby shall terminate (provided that all indemnities set forth herein including, without limitation, in Section 11 hereof shall survive any such termination), and the Pledgee, at the request and expense of any Pledgor, will execute and deliver to such Pledgor a proper instrument or instruments acknowledging the satisfaction and termination of this Agreement, and will duly assign, transfer and deliver to such Pledgor (without recourse and without any representation or warranty) such of the Collateral as has not theretofore been sold or otherwise applied or released pursuant to this Agreement, together with any monies at the time held by the Pledgee or any of its sub-agents hereunder. As used in this Agreement, "Termination Date" shall mean the date upon which the Total Commitment and all Interest Rate Protection Agreements and Other Hedging Agreements have been terminated, no Note under the Credit Agreement is outstanding (and all Loans have been repaid in full), all Letters of Credit have been terminated and all Obligations then due and payable have been paid in full. (b) In the event that any part of the Collateral is sold in connection with a sale permitted by Section 9.02 of the Credit Agreement (other than a sale to any Pledgor or any Subsidiary thereof) or is otherwise released at the direction of the Required Lenders (or all Lenders if required by Section 13.12 of the Credit Agreement) and the proceeds of such sale or sales or from such release are applied in accordance with the provisions of the Credit Agreement, to the extent required to be so applied, the Pledgee, at the request and expense of any Pledgor, will duly assign, transfer and deliver to such Pledgor (without recourse and without any representation or warranty) such of the Collateral (and releases therefor) as is then being (or has been) so sold or released and has not theretofore been released pursuant to this Agreement. Exhibit H Page 24 (c) At any time that a Pledgor desires that the Pledgee assign, transfer and deliver Collateral (and releases therefor) as provided in Section 20(a) or (b) hereof, it shall deliver to the Pledgee a certificate signed by a principal executive officer of such Pledgor stating that the release of the respective Collateral is permitted pursuant to such Section 20(a) or (b). (d) The Pledgee shall have no liability whatsoever to any other Secured Creditor as the result of any release of Collateral by it in accordance with this Section 20. 21. NOTICES, ETC. All such notices and communications hereunder shall be sent or delivered by mail, telegraph, telex, telecopy, cable or overnight courier service and all such notices and communications shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be effective when delivered to the telegraph company, cable company or overnight courier, as the case may be, or sent by telex or telecopier and when mailed shall be effective three Business Days following deposit in the mail with proper postage, except that notices and communications to the Pledgee shall not be effective until received by the Pledgee. All notices and other communications shall be in writing and addressed as follows: (a) if to any Pledgor, at the address set forth opposite such Pledgor's signature below; (b) if to the Pledgee, at: Bankers Trust Company 130 Liberty Street New York, New York 10006 Attention: Diane Rolfe Telephone No.: (212) 250-1661 Telecopier No.: (212) 250-7218 (c) if to any Lender Creditor, either (x) to the Administrative Agent, at the address of the Administrative Agent specified in the Credit Agreement or (y) at such address as such Lender Creditor shall have specified in the Credit Agreement; (d) if to any Other Creditor at such address as such Other Creditor shall have specified in writing to the Pledgors and the Pledgee; or at such other address as shall have been furnished in writing by any Person described above to the party required to give notice hereunder. 22. WAIVER; AMENDMENT. None of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by each Pledgor directly affected thereby and the Pledgee (with the written consent of either (x) the Required Lenders (or all of the Lenders to the extent required by Section 13.12 of the Credit Agreement) at all times prior to the time on which all Credit Document Obligations have been Exhibit H Page 25 paid in full or (y) the holders of at least a majority of the outstanding Other Obligations at all times after the time on which all Credit Document Obligations have been paid in full); PROVIDED, that any change, waiver, modification or variance affecting the rights and benefits of a single Class (as defined below) of Secured Creditors (and not all Secured Creditors in a like or similar manner) shall also require the written consent of the Requisite Creditors (as defined below) of such affected Class. For the purpose of this Agreement, the term "Class" shall mean each class of Secured Creditors, I.E., whether (i) the Lender Creditors as holders of the Credit Document Obligations or (ii) the Other Creditors as the holders of the Other Obligations. For the purpose of this Agreement, the term "Requisite Creditors" of any Class shall mean each of (i) with respect to the Credit Document Obligations, the Required Lenders and (ii) with respect to the Other Obligations, the holders of at least a majority of all obligations outstanding from time to time under the Interest Rate Protection Agreements and Other Hedging Agreements. 23. MISCELLANEOUS. This Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of and be enforceable by each of the parties hereto and its successors and assigns, provided that no Pledgor may assign any of its rights or obligations under this Agreement without the prior consent of the Collateral Agent. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. EACH PLEDGOR IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. The headings in this Agreement are for purposes of reference only and shall not limit or define the meaning hereof. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one instrument. In the event that any provision of this Agreement shall prove to be invalid or unenforceable, such provision shall be deemed to be severable from the other provisions of this Agreement which shall remain binding on all parties hereto. 24. RECOURSE. This Agreement is made with full recourse to the Pledgors and pursuant to and upon all the representations, warranties, covenants and agreements on the part of the Pledgors contained herein and in the other Secured Debt Agreements and otherwise in writing in connection herewith or therewith. 25. ADDITIONAL PLEDGORS. It is understood and agreed that any Subsidiary of the Borrower that is required to execute a counterpart of this Agreement after the date hereof pursuant to the Credit Agreement shall become a Pledgor hereunder by executing a counterpart hereof and delivering the same to the Pledgee. * * * * Exhibit H Page 26 IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this Agreement to be executed by their duly elected officers duly authorized as of the date first above written. ADDRESS:
7777 Washington Village Drive DAYTON SUPERIOR CORPORATION, Suite 130 as a Pledgor Dayton, OH 45459 Attention: President By /s/ John A. Ciccarelli Telephone: (937) 428-6368 --------------------------------- Telecopier: (973) 428-9560 Title: President 4260 Westbrook Drive DUR-O-WAL, INC., Suite 120 as a Pledgor Aurora, IL 60504 Attention: President Telephone: (630) 851-8400 By /s/ John A. Ciccarelli Telecopier: (630) 854-0500 --------------------------------- Title: President 200 East Touhy Avenue SYMONS CORPORATION, Des Plaines, IL 60018 as a Pledgor Attention: President Telephone: (847) 298-3200 Telecopier: (847) 635-9287 By /s/ John A. Ciccarelli --------------------------------- Title: President Accepted and Agreed to: BANKERS TRUST COMPANY, as Pledgee, Collateral Agent By /s/ Susan L. Le Fevre ------------------------------------- Title: Director ANNEX A to PLEDGE AGREEMENT LIST OF SUBSIDIARIES I. DAYTON SUPERIOR CORPORATION a. Dayton Superior FSC Corp. b. Dur-O-Wal, Inc. c. Symons Corporation d. Dayton Superior Canada, Ltd. II. SYMONS CORPORATION: None III. DUR-O-WAL, INC.: None ANNEX B to PLEDGE AGREEMENT LIST OF STOCK I. DAYTON SUPERIOR CORPORATION Name of Issuing Certificate Type of Number Percentage of Relevant Sub- Corporation Number Shares of Outstanding Clause of ----------- ------ ------ Shares Shares of Section 3.2(a) of ------ Capital Stock Pledge ------------- Agreement --------- Symons Corporation Common 5,000 100% (i) Dur-O-Wal, Inc. Common 9,439.9 100% (i) Dur-O-Wal, Inc. Preferred 5,500 100% (i) Dayton Superior Canada, Ltd. Common 10,000 100% (i) Dayton Superior FSC Corp. Common 1,000 100% (i) Spec Formliner, Inc. 3 and 4 Common 10,000 50% (i)
ANNEX C to PLEDGE AGREEMENT LIST OF NOTES I. DAYTON SUPERIOR CORPORATION
Amount Maturity Date Obligor Relevant Sub-clause of ------ ------------- ------- Section 3.2(a) of Pledge Agreement ------------------- $175,084.00 June 30, 2015 Raymond Bartholomae (iv) $274,995.00 June 30, 2015 Raymond Bartholomae (iv) $290,517.00 June 30, 2015 Michael C. Deis (iv) $95,606.00 June 30, 2015 James W. Fennessy (iv) $244,172.00 June 30, 2015 Mark K. Kaler (iv) $195,108.00 June 30, 2015 Alan F. McIlroy (iv) $51,013.00 June 30, 2015 William C. Mongole (iv) $286,895.00 June 30, 2015 John Paine (iv) $51,013.00 June 30, 2015 Thomas Roehrig (iv) $51,013.00 June 30, 2015 John M. Rutherford (iv) 279,948.00 June 30, 2015 James C. Stewart (iv) $50,004.00 June 30, 2015 Jaime Taronji, Jr. (iv)
ANNEX D to PLEDGE AGREEMENT LIST OF LIMITED LIABILITY COMPANY INTERESTS I. DAYTON SUPERIOR CORPORATION: None II. SYMONS CORPORATION: None III. DUR-O-WAL, INC.: None ANNEX E to PLEDGE AGREEMENT LIST OF PARTNERSHIP INTERESTS I. DAYTON SUPERIOR CORPORATION: None II. SYMONS CORPORATION: None III. DUR-O-WAL, INC.: None ANNEX F to PLEDGE AGREEMENT LIST OF CHIEF EXECUTIVE OFFICES I. DAYTON SUPERIOR CORPORATION: 7777 Washington Village Drive Suite 130 Dayton, OH 45459 II. SYMONS CORPORATION: 200 East Touhy Avenue Des Plaines, IL III. DUR-O-WAL, INC.: 4260 Westbrook Drive Suite 120 Aurora, IL ANNEX G to PLEDGE AGREEMENT FORM OF AGREEMENT REGARDING UNCERTIFICATED SECURITIES, LIMITED LIABILITY COMPANY INTERESTS AND PARTNERSHIP INTERESTS AGREEMENT (as amended, modified or supplemented from time to time, this "Agreement"), dated as of _________ __, ____, among each of the undersigned pledgors (each a "Pledgor" and, collectively, the "Pledgors"), Bankers Trust Company, not in its individual capacity but solely as Collateral Agent (the "Pledgee"), and __________, as the issuer of the Uncertificated Securities, Limited Liability Company Interests and/or Partnership Interests (each as defined below) (the "Issuer"). W I T N E S S E T H : WHEREAS, each Pledgor and the Pledgee have entered into a Pledge Agreement, dated as of June 16, 2000, 2000 (as amended, amended and restated, modified or supplemented from time to time, the "Pledge Agreement"), under which, among other things, in order to secure the payment of the Obligations (as defined in the Pledge Agreement), each Pledgor will pledge to the Pledgee for the benefit of the Secured Creditors (as defined in the Pledge Agreement), and grant a security interest in favor of the Pledgee for the benefit of the Secured Creditors in, all of the right, title and interest of such Pledgor in and to any and all (1) "uncertificated securities" (as defined in Section 8-102(a)(18) of the Uniform Commercial Code, as adopted in the State of New York) ("Uncertificated Securities"), (2) Partnership Interests (as defined in the Pledge Agreement) and (3) Limited Liability Company Interests (as defined in the Pledge Agreement), in each case issued from time to time by the Issuer, whether now existing or hereafter from time to time acquired by such Pledgor (with all of such Uncertificated Securities, Partnership Interests and Limited Liability Company Interests being herein collectively called the "Issuer Pledged Interests"); and WHEREAS, each Pledgor desires the Issuer to enter into this Agreement in order to perfect the security interest of the Pledgee under the Pledge Agreement in the Issuer Pledged Interests, to vest in the Pledgee control of the Issuer Pledge Interests and to provide for the rights of the parties under this Agreement; NOW THEREFORE, in consideration of the premises and the mutual promises and agreements contained herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 1. Each Pledgor hereby irrevocably authorizes and directs the Issuer, and the Issuer hereby agrees, to comply with any and all instructions and orders originated by the Pledgee (and its successors and assigns) regarding any and all of the Issuer Pledged Interests without the further consent by the registered owner (including the respective Pledgor), and not to comply with any instructions or orders regarding any or all of the Issuer Pledged Interests originated by any person or entity other than the Pledgee (and its successors and assigns) or a court of competent jurisdiction. 2. The Issuer hereby certifies that (i) no notice of any security interest, lien or other encumbrance or claim affecting the Issuer Pledged Interests (other than the security interest of the Pledgee) has been received by it, and (ii) the security interest of the Pledgee in the Issuer Pledged Interests has been registered in the books and records of the Issuer. 3. The Issuer hereby represents and warrants that (i) the pledge by the Pledgors of, and the granting by the Pledgors of a security interest in, the Issuer Pledged Interests to the Pledgee, for the benefit of the Secured Creditors, does not violate the charter, by-laws, partnership agreement, membership agreement or any other agreement governing the Issuer or the Issuer Pledged Interests, and (ii) the Issuer Pledged Interests are fully paid and nonassessable. 4. All notices, statements of accounts, reports, prospectuses, financial statements and other communications to be sent to any Pledgor by the Issuer in respect of the Issuer will also be sent to the Pledgee at the following address: Bankers Trust Company 130 Liberty Street New York, New York 10006 Attention: Diane Rolfe Telephone No.: (212) 250-1661 Telecopier No.: (212) 250-7218 5. Until the Pledgee shall have delivered written notice to the Issuer that all of the Obligations have been paid in full and this Agreement is terminated, the Issuer will send any and all redemptions, distributions, interest or other payments in respect of the Issuer Pledged Interests from the Issuer for the account of the Pledgor only by wire transfers to the account specified by the Collateral Agent at the time of distribution thereof. 6. Except as expressly provided otherwise in Sections 4 and 5, all notices, instructions, orders and communications hereunder shall be sent or delivered by mail, telex, telecopy or overnight courier service and all such notices and communications shall, when mailed, telexed, telecopied or sent by overnight courier, be effective when deposited in the mails or delivered to the overnight courier, prepaid and properly addressed for delivery on such or the next Business Day, or sent by telex or telecopier, except that notices and communications to the Pledgee shall not be effective until received by the Pledgee. All notices and other communications shall be in writing and addressed as follows: (a) if to any Pledgor, at: ________________________ ________________________ ________________________ 2 Attention: _______________ Telephone No..: __________ Telecopier No.: __________ (b) if to the Pledgee, at: Bankers Trust Company 130 Liberty Street New York, New York 10006 Attention: Diane Rolfe Telephone No..: (212) 250-1661 Telecopier No.: (212) 250-7218 (c) if to the Issuer, at: ________________________ ________________________ Attention: ______________ Telephone No.:___________ Telecopier No.:___________ or at such other address as shall have been furnished in writing by any Person described above to the party required to give notice hereunder. As used in this Section 6, "Business Day" means any day other than a Saturday, Sunday, or other day in which banks in New York are authorized to remain closed. 7. This Agreement shall be binding upon the successors and assigns of each Pledgor and the Issuer and shall inure to the benefit of and be enforceable by the Pledgee and its successors and assigns. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which shall constitute one instrument. In the event that any provision of this Agreement shall prove to be invalid or unenforceable, such provision shall be deemed to be severable from the other provisions of this Agreement which shall remain binding on all parties hereto. None of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever except in writing signed by the Pledgee, the Issuer and any Pledgor which at such time owns any Issuer Pledged Interests. 8. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to its principles of conflict of laws. 3 IN WITNESS WHEREOF, each Pledgor, the Pledgee and the Issuer have caused this Agreement to be executed by their duly elected officers duly authorized as of the date first above written. [_________________________], as a Pledgor By_____________________________ Name: Title: BANKERS TRUST COMPANY, not in its individual capacity but solely as Collateral Agent and Pledgee By_____________________________ Name: Title: [_________________________], the Issuer By_____________________________ Name: Title: 4 EXHIBIT I [CONFORMED AS EXECUTED] FORM OF SECURITY AGREEMENT among DAYTON SUPERIOR CORPORATION, CERTAIN SUBSIDIARIES OF DAYTON SUPERIOR CORPORATION and BANKERS TRUST COMPANY, as COLLATERAL AGENT -------------------------------- Dated as of June 16, 2000 -------------------------------- Exhibit I Page 2 FORM OF SECURITY AGREEMENT SECURITY AGREEMENT, dated as of June 16, 2000, made by each of the undersigned assignors (each an "Assignor" and, together with any other entity that becomes an assignor hereunder pursuant to Section 10.13 hereof, the "Assignors") in favor of Bankers Trust Company, as Collateral Agent (together with any successor collateral agent, the "Collateral Agent"), for the benefit of the Secured Creditors (as defined below). Except as otherwise defined herein, capitalized terms used herein and defined in the Credit Agreement (as defined below) shall be used herein as so defined. W I T N E S S E T H : WHEREAS, Dayton Superior Corporation (the "Borrower"), the lenders party from time to time party thereto (the "Lenders") and Bankers Trust Company, as Administrative Agent (together with any successor administrative agent, the "Administrative Agent"), have entered into a Credit Agreement, dated as of June 16, 2000, providing for the making of Loans to, and the issuance of Letters of Credit for the account of, the Borrower as contemplated therein (as amended, modified or supplemented from time to time, the "Credit Agreement") (the Lenders, the Administrative Agent, the Letter of Credit Issuers and the Collateral Agent are herein called the "Lender Creditors"); WHEREAS, the Borrower may at any time and from time to time enter into one or more Interest Rate Protection Agreements or Other Hedging Agreements with one or more Lenders or any affiliate thereof (each such Lender or affiliate, even if the respective Lender subsequently ceases to be a Lender under the Credit Agreement for any reason, together with such Lender's or affiliate's successors and assigns, if any, collectively, the "Other Creditors", and together with the Lender Creditors, are herein called the "Secured Creditors"); WHEREAS, pursuant to the Subsidiaries Guaranty, each Subsidiary Guarantor has jointly and severally guaranteed to the Secured Creditors the payment when due of all Guaranteed Obligations as described therein; WHEREAS, it is a condition precedent to the making of Loans to, and the issuance of Letters of Credit for the account of, the Borrower under the Credit Agreement that each Assignor shall have executed and delivered to the Collateral Agent this Agreement; and WHEREAS, each Assignor will obtain benefits from the incurrence of Loans to, and the issuance of Letters of Credit for the account of, the Borrower under the Credit Agreement and the entering into by the Borrower of Interest Rate Protection Agreements or Other Hedging Agreements and, accordingly, each Assignor desires to enter into this Agreement in order to satisfy the condition described in the preceding paragraph; Exhibit I Page 3 NOW, THEREFORE, in consideration of the benefits accruing to each Assignor, the receipt and sufficiency of which are hereby acknowledged, each Assignor hereby makes the following representations and warranties to the Collateral Agent for the benefit of the Secured Creditors and hereby covenants and agrees with the Collateral Agent for the benefit of the Secured Creditors as follows: ARTICLE I SECURITY INTERESTS 1.1 GRANT OF SECURITY INTERESTS. (a) As security for the prompt and complete payment and performance when due of all of its Obligations, each Assignor does hereby assign and transfer unto the Collateral Agent, and does hereby pledge and grant to the Collateral Agent for the benefit of the Secured Creditors, a continuing security interest in, all of the right, title and interest of such Assignor in, to and under all of the following, whether now existing or hereafter from time to time acquired: (i) each and every Receivable, (ii) all Contracts, together with all Contract Rights arising thereunder, (iii) all Inventory, (iv) all Equipment, (v) all Marks, together with the registrations and right to all renewals thereof, and the goodwill of the business of such Assignor symbolized by the Marks, (vi) all Patents and Copyrights, (vii) all computer programs of such Assignor and all intellectual property rights therein and all other proprietary information of such Assignor, including, but not limited to, Trade Secret Rights, (viii) all other Goods, General Intangibles, Investment Property, Permits, Chattel Paper, Documents, Instruments and other assets (including cash), (ix) the Cash Collateral Account and all monies, securities, instruments and other investments deposited or required to be deposited in such Cash Collateral Account, (x) all other bank, demand, time savings, cash management, passbook, certificates of deposit and similar accounts maintained by such Assignor and all monies, securities, instruments and other investments deposited or required to be deposited in any of the foregoing accounts, and (xi) all Proceeds and products of any and all of the foregoing (all of the above, collectively, the "Collateral"). (b) The security interest of the Collateral Agent under this Agreement extends to all Collateral of the kind which is the subject of this Agreement which any Assignor may acquire at any time during the term of this Agreement. 1.2 POWER OF ATTORNEY. Each Assignor hereby constitutes and appoints the Collateral Agent its true and lawful attorney, irrevocably, with full power after the occurrence of and during the continuance of an Event of Default (in the name of such Assignor or otherwise) to act, require, demand, receive, compound and give acquittance for any and all moneys and claims for moneys due or to become due to such Assignor under or arising out of the Collateral, to endorse any checks or other instruments or orders in connection therewith and to file any claims or take any action or institute any proceedings which the Collateral Agent may deem to be necessary or advisable to protect the interests of the Secured Creditors, which appointment as attorney is coupled with an interest. Exhibit I Page 4 ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS Each Assignor represents, warrants and covenants, which representations, warranties and covenants shall survive execution and delivery of this Agreement, as follows: 2.1 NECESSARY FILINGS. All filings, registrations and recordings necessary or appropriate to create, preserve and perfect the security interest granted by such Assignor to the Collateral Agent hereby in respect of the Collateral have been accomplished (or within 10 days after the Initial Borrowing Date will be accomplished) and the security interest granted to the Collateral Agent pursuant to this Agreement in and to the Collateral creates a perfected security interest therein prior to the rights of all other Persons therein and subject to no other Liens (other than Permitted Liens) and is entitled to all the rights, priorities and benefits afforded by the Uniform Commercial Code or other relevant law as enacted in any relevant jurisdiction to perfected security interests, in each case to the extent that the Collateral consists of the type of property in which a security interest may be perfected by filing a financing statement under the Uniform Commercial Code as enacted in any relevant jurisdiction or in the United States Patent and Trademark Office or in the United States Copyright Office. 2.2 NO LIENS. Such Assignor is, and as to Collateral acquired by it from time to time after the date hereof such Assignor will be, the owner of all Collateral free from any Lien, security interest, encumbrance or other right, title or interest of any Person (other than Permitted Liens), and such Assignor shall defend the Collateral against all claims and demands of all Persons at any time claiming the same or any interest therein adverse to the Collateral Agent. 2.3 OTHER FINANCING STATEMENTS. As of the date hereof, there is no financing statement (or similar statement or instrument of registration under the law of any jurisdiction) covering or purporting to cover any interest of any kind in the Collateral (other than financing statements filed in respect of Permitted Liens), and so long as the Termination Date has not occurred, such Assignor will not execute or authorize to be filed in any public office any financing statement (or similar statement or instrument of registration under the law of any jurisdiction) or statements relating to the Collateral, except financing statements filed or to be filed in respect of and covering the security interests granted hereby by such Assignor or in connection with Permitted Liens. 2.4 CHIEF EXECUTIVE OFFICE, RECORD LOCATIONS. The chief executive office of such Assignor is located at the address indicated on Annex A hereto for such Assignor. Such Assignor will not move its chief executive office except to such new location as such Assignor may establish in accordance with the last sentence of this Section 2.4. The originals of all documents evidencing all Receivables and Contract Rights of such Assignor and the only original books of account and records of such Assignor relating thereto are, and will continue to be, kept at such chief executive office, at one or more of the other locations set forth on Annex A hereto or at such new locations as such Assignor may establish in accordance with the last sentence of this Section 2.4. All Receivables and Contract Rights of such Assignor are, and will continue to be, maintained at, and controlled and directed (including, without limitation, for Exhibit I Page 5 general accounting purposes) from, the office locations described above or such new location established in accordance with the last sentence of this Section 2.4. No Assignor shall establish new locations for such offices until (i) it shall have given to the Collateral Agent not less than 15 days' prior written notice of its intention to do so, clearly describing such new location and providing such other information in connection therewith as the Collateral Agent may reasonably request, and (ii) with respect to such new location, it shall have taken all action reasonably satisfactory to the Collateral Agent to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. 2.5 LOCATION OF INVENTORY AND EQUIPMENT. All Inventory and Equipment held on the date hereof by each Assignor is located at one of the locations shown on Annex B hereto for such Assignor. Each Assignor agrees that all Inventory and Equipment now held or subsequently acquired by it shall be kept at (or shall be in transport to) any one of the locations shown on Annex B hereto, or such new location as such Assignor may establish in accordance with the last sentence of this Section 2.5. Any Assignor may establish a new location for Inventory and Equipment only if (i) it shall have given to the Collateral Agent not less than 15 days' prior written notice of its intention so to do, clearly describing such new location and providing such other information in connection therewith as the Collateral Agent may request and (ii) with respect to such new location, it shall have taken all action reasonably satisfactory to the Collateral Agent to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. 2.6 RECOURSE. This Agreement is made with full recourse to each Assignor (including, without limitation, with full recourse to all assets of such Assignor) and pursuant to and upon all the warranties, representations, covenants and agreements on the part of such Assignor contained herein, in the other Secured Debt Agreements and otherwise in writing in connection herewith or therewith. 2.7 TRADE NAMES; CHANGE OF NAME. No Assignor has or operates in any jurisdiction under, or in the preceding five years has had or has operated in any jurisdiction under, any trade names, fictitious names or other names except its legal name and such other trade or fictitious names as are listed on Annex C hereto for such Assignor. No Assignor shall change its legal name or assume or operate in any jurisdiction under any trade, fictitious or other name except those names listed on Annex C hereto for such Assignor and new names established in accordance with the last sentence of this Section 2.7. No Assignor shall assume or operate in any jurisdiction under any new trade, fictitious or other name until (i) it shall have given to the Collateral Agent not less than 15 days' prior written notice of its intention so to do, clearly describing such new name and the jurisdictions in which such new name shall be used and providing such other information in connection therewith as the Collateral Agent may reasonably request and (ii) with respect to such new name, it shall have taken all action reasonably requested by the Collateral Agent to maintain the security interest of the Collateral Agent in the Collateral intended to be granted hereby at all times fully perfected and in full force and effect. Exhibit I Page 6 ARTICLE III SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER 3.1 ADDITIONAL REPRESENTATIONS AND WARRANTIES. As of the time when each of its Receivables arises, each Assignor shall be deemed to have represented and warranted that such Receivable, and all records, papers and documents relating thereto (if any) are what they purport to be. 3.2 MAINTENANCE OF RECORDS. Each Assignor will keep and maintain at its own cost and expense accurate records of its Receivables and Contracts, including, but not limited to, originals of all documentation (including each Contract) with respect thereto, records of all payments received, all credits granted thereon, all merchandise returned and all other dealings therewith, and such Assignor will make the same available on such Assignor's premises to the Collateral Agent for inspection, at such Assignor's own cost and expense, at any and all reasonable times upon prior notice to such Assignor. Upon the occurrence and during the continuance of an Event of Default and at the request of the Collateral Agent, such Assignor shall, at its own cost and expense, deliver all tangible evidence of its Receivables and Contract Rights (including, without limitation, all documents evidencing the Receivables and all Contracts) and such books and records to the Collateral Agent or to its representatives (copies of which evidence and books and records may be retained by such Assignor). Upon the occurrence and during the continuance of an Event of Default and if the Collateral Agent so directs, such Assignor shall legend, in form and manner satisfactory to the Collateral Agent, the Receivables and the Contracts, as well as books, records and documents (if any) of such Assignor evidencing or pertaining to such Receivables and Contracts with an appropriate reference to the fact that such Receivables and Contracts have been assigned to the Collateral Agent and that the Collateral Agent has a security interest therein. 3.3 DIRECTION TO ACCOUNT DEBTORS; CONTRACTING PARTIES; ETC. Upon the occurrence and during the continuance of an Event of Default, if the Collateral Agent so directs any Assignor, such Assignor agrees (x) to cause all payments on account of the Receivables and Contracts to be made directly to the Cash Collateral Account, (y) that the Collateral Agent may, at its option, directly notify the obligors with respect to any Receivables and/or under any Contracts to make payments with respect thereto as provided in the preceding clause (x), and (z) that the Collateral Agent may enforce collection of any such Receivables and Contracts and may adjust, settle or compromise the amount of payment thereof, in the same manner and to the same extent as such Assignor. Without notice to or assent by any Assignor, the Collateral Agent may apply any or all amounts then in, or thereafter deposited in, the Cash Collateral Account which application shall be effected in the manner provided in Section 7.4 of this Agreement. The costs and expenses (including reasonable attorneys' fees) of collection, whether incurred by an Assignor or the Collateral Agent, shall be borne by the relevant Assignor. The Collateral Agent shall deliver a copy of each notice referred to in the preceding clause (y) to the relevant Assignor, PROVIDED, that the failure by the Collateral Agent to so notify such Assignor shall not affect the effectiveness of such notice or the other rights of the Collateral Agent created by this Section 3.3. Exhibit I Page 7 3.4 MODIFICATION OF TERMS; ETC. Except in accordance with such Assignor's ordinary course of business and consistent with reasonable business judgment, no Assignor shall rescind or cancel any indebtedness evidenced by any Receivable or under any Contract, or modify any term thereof or make any adjustment with respect thereto, or extend or renew the same, or compromise or settle any material dispute, claim, suit or legal proceeding relating thereto, or sell any Receivable or Contract, or interest therein, without the prior written consent of the Collateral Agent. No Assignor will do anything to impair the rights of the Collateral Agent in the Receivables or Contracts. 3.5 COLLECTION. Each Assignor shall endeavor in accordance with reasonable business practices to cause to be collected from the account debtor named in each of its Receivables or obligor under any Contract, as and when due (including, without limitation, amounts which are delinquent, such amounts to be collected in accordance with generally accepted lawful collection procedures) any and all amounts owing under or on account of such Receivable or Contract, and apply forthwith upon receipt thereof all such amounts as are so collected to the outstanding balance of such Receivable or under such Contract, except as otherwise directed by the Collateral Agent after the occurrence and during the continuation of an Event of Default, any Assignor may allow in the ordinary course of business as adjustments to amounts owing under its Receivables and Contracts (i) an extension or renewal of the time or times of payment, or settlement for less than the total unpaid balance, which such Assignor finds appropriate in accordance with reasonable business judgment and (ii) a refund or credit due as a result of returned or damaged merchandise or improperly performed services or for other reasons which such Assignor finds appropriate in accordance with reasonable business judgment. The reasonable costs and expenses (including, without limitation, reasonable attorneys' fees) of collection, whether incurred by an Assignor or the Collateral Agent, shall be borne by the relevant Assignor. 3.6 INSTRUMENTS. If any Assignor owns or acquires any Instrument constituting Collateral (other than checks and other payment instruments received and collected in the ordinary course of business), such Assignor will within 10 Business Days notify the Collateral Agent thereof, and upon request by the Collateral Agent will promptly deliver such Instrument to the Collateral Agent appropriately endorsed to the order of the Collateral Agent as further security hereunder. 3.7 ASSIGNORS REMAIN LIABLE UNDER RECEIVABLES. Anything herein to the contrary notwithstanding, the Assignors shall remain liable under each of the Receivables to observe and perform all of the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise to such Receivables. Neither the Collateral Agent nor any other Secured Creditor shall have any obligation or liability under any Receivable (or any agreement giving rise thereto) by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Creditor of any payment relating to such Receivable pursuant hereto, nor shall the Collateral Agent or any other Secured Creditor be obligated in any manner to perform any of the obligations of any Assignor under or pursuant to any Receivable (or any agreement giving rise thereto), to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by them or as to the Exhibit I Page 8 sufficiency of any performance by any party under any Receivable (or any agreement giving rise thereto), to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times. 3.8 ASSIGNORS REMAIN LIABLE UNDER CONTRACTS. Anything herein to the contrary notwithstanding, the Assignors shall remain liable under each of the Contracts to observe and perform all of the conditions and obligations to be observed and performed by them thereunder, all in accordance with and pursuant to the terms and provisions of each Contract. Neither the Collateral Agent nor any other Secured Creditor shall have any obligation or liability under any Contract by reason of or arising out of this Agreement or the receipt by the Collateral Agent or any other Secured Creditor of any payment relating to such contract pursuant hereto, nor shall the Collateral Agent or any other Secured Creditor be obligated in any manner to perform any of the obligations of any Assignor under or pursuant to any Contract, to make any payment, to make any inquiry as to the nature or the sufficiency of any performance by any party under any Contract, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to them or to which they may be entitled at any time or times. 3.9 FURTHER ACTIONS. Each Assignor will, at its own expense, 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, certificates, reports and other assurances or instruments and take such further steps relating to its Receivables, Contracts, Instruments and other property or rights covered by the security interest hereby granted, as the Collateral Agent may reasonably require. ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS 4.1 ADDITIONAL REPRESENTATIONS AND WARRANTIES. Each Assignor represents and warrants that it is the true and lawful owner of or otherwise has the right to use the registered Marks listed in Annex D hereto for such Assignor and that said listed Marks include all United States marks and applications for United States marks registered in the United States Patent and Trademark Office that such Assignor owns or uses in connection with its business as of the date hereof. Each Assignor represents and warrants that it owns, is licensed to use or otherwise has the right to use, all Marks that it uses. Each Assignor further warrants that it has no knowledge of any third party claim that any aspect of such Assignor's present or contemplated business operations infringes or will infringe any trademark, service mark or trade name other than as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each Assignor represents and warrants that it is the true and lawful owner of or otherwise has the right to use all U.S. trademark registrations and applications listed in Annex D hereto and that said registrations are valid, subsisting, have not been cancelled and that such Assignor is not aware of any third-party claim that any of said registrations is invalid or unenforceable, or is not aware that there is any reason that any of said registrations is invalid or Exhibit I Page 9 unenforceable, or is not aware that there is any reason that any of said applications will not pass to registration other than as could not, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each Assignor hereby grants to the Collateral Agent an absolute power of attorney to sign, upon the occurrence and during the continuance of an Event of Default, any document which may be required by the United States Patent and Trademark Office in order to effect an absolute assignment of all right, title and interest in each Mark, and record the same. 4.2 LICENSES AND ASSIGNMENTS. Except as otherwise permitted by the Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any right under any Mark absent prior written approval of the Collateral Agent. 4.3 INFRINGEMENTS. Each Assignor agrees, promptly upon learning thereof, to notify the Collateral Agent in writing of the name and address of, and to furnish such pertinent information that may be available with respect to, any party who such Assignor believes is infringing or diluting or otherwise violating any of such Assignor's rights in and to any Mark, or with respect to any party claiming that such Assignor's use of any Mark violates in any material respect any property right of that party. Each Assignor further agrees to prosecute in accordance with reasonable business practices any Person infringing any Mark in any manner that could reasonably be expected to have a Material Adverse Effect. 4.4 PRESERVATION OF MARKS. Each Assignor agrees to use its Marks in interstate commerce during the time in which this Agreement is in effect and to take all such other actions as are necessary to preserve such Marks as trademarks or service marks under the laws of the United States. 4.5 MAINTENANCE OF REGISTRATION. Each Assignor shall, at its own expense, diligently process all documents required to maintain trademark registrations, including but not limited to affidavits of use and applications for renewals of registration in the United States Patent and Trademark Office for all of its significant registered Marks, and shall pay all fees and disbursements in connection therewith and shall not abandon any such filing of affidavit of use or any such application of renewal prior to the exhaustion of all administrative and judicial remedies without prior written consent of the Collateral Agent. 4.6 FUTURE REGISTERED MARKS. If any Mark registration is issued hereafter to any Assignor as a result of any application now or hereafter pending before the United States Patent and Trademark Office, within 30 days of receipt of such certificate, such Assignor shall deliver to the Collateral Agent a copy of such certificate, and an assignment for security in such Mark, to the Collateral Agent and at the expense of such Assignor, confirming the assignment for security in such Mark to the Collateral Agent hereunder, the form of such security to be substantially in the form of Annex G hereto, or in such other form as may be reasonably satisfactory to the Collateral Agent. 4.7 REMEDIES. If an Event of Default shall occur and be continuing, the Collateral Agent may, by written notice to the relevant Assignor, take any or all of the following actions: (i) declare the entire right, title and interest of such Assignor in and to each of the Exhibit I Page 10 Marks, together with all trademark rights and rights of protection to the same, vested in the Collateral Agent for the benefit of the Secured Creditors, in which event such rights, title and interest shall immediately vest, in the Collateral Agent for the benefit of the Secured Creditors, and the Collateral Agent shall be entitled to exercise the power of attorney referred to in Section 4.1 hereof to execute, cause to be acknowledged and notarized and record said absolute assignment with the applicable agency; (ii) take and use or sell the Marks and the goodwill of such Assignor's business symbolized by the Marks and the right to carry on the business and use the assets of such Assignor in connection with which the Marks have been used; and (iii) direct such Assignor to refrain, in which event such Assignor shall refrain, from using the Marks in any manner whatsoever, directly or indirectly, and such Assignor shall execute such further documents that the Collateral Agent may reasonably request to further confirm this and to transfer ownership of the Marks and registrations and any pending trademark application in the United States Patent and Trademark Office to the Collateral Agent. ARTICLE V SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS 5.1 ADDITIONAL REPRESENTATIONS AND WARRANTIES. Each Assignor represents and warrants that it is the true and lawful owner of all rights in (i) all United States trade secrets and proprietary information necessary to operate the business of the Assignor (the "Trade Secret Rights"), (ii) the Patents listed in Annex E hereto for such Assignor and that said Patents include all the United States patents and applications for United States patents that such Assignor owns as of the date hereof and (iii) the Copyrights listed in Annex F hereto for such Assignor and that said Copyrights constitute all the United States copyrights registered with the United States Copyright Office and applications to United States copyrights that such Assignor owns as of the date hereof. Each Assignor further warrants that it has no knowledge of any third party claim that any aspect of such Assignor's present or contemplated business operations infringes or will infringe any patent or such Assignor has misappropriated any trade secret or proprietary information which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Each Assignor hereby grants to the Collateral Agent an absolute power of attorney to sign, upon the occurrence and during the continuance of any Event of Default, any document which may be required by the United States Patent and Trademark Office in order to effect an absolute assignment of all right, title and interest in each Patent, and to record the same. 5.2 LICENSES AND ASSIGNMENTS. Except as otherwise permitted by the Secured Debt Agreements, each Assignor hereby agrees not to divest itself of any right under any Patent or Copyright acquired after the date hereof absent prior written approval of the Collateral Agent. 5.3 INFRINGEMENTS. Each Assignor agrees, promptly upon learning thereof, to furnish the Collateral Agent in writing with all pertinent information available to such Assignor with respect to any infringement, contributing infringement or active inducement to infringe in any Patent or Copyright or to any claim that the practice of any Patent or use of any Copyright Exhibit I Page 11 violates any property right of a third party, or with respect to any misappropriation of any Trade Secret Right or any claim that practice of any Trade Secret Right violates any property right of a third party in any manner which, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. Each Assignor further agrees, absent direction of the Collateral Agent to the contrary, to diligently prosecute any Person infringing any Patent or Copyright or any Person misappropriating any Trade Secret Right in accordance with such Assignor's reasonable business judgment. 5.4 MAINTENANCE OF PATENTS OR COPYRIGHT. At its own expense, each Assignor shall make timely payment of all post-issuance fees required pursuant to 35 U.S.C. ss. 41 to maintain in force its rights under each PatenT or Copyright, absent prior written consent of the Collateral Agent. 5.5 PROSECUTION OF PATENT APPLICATIONS. At its own expense, each Assignor shall diligently prosecute all significant applications for (i) United States Patents listed in Annex E hereto and (ii) Copyrights listed on Annex F hereto, in each case for such Assignor and shall not abandon any such application prior to exhaustion of all administrative and judicial remedies, absent written consent of the Collateral Agent. 5.6 OTHER PATENTS AND COPYRIGHTS. Within 30 days of the acquisition or issuance of a United States Patent, registration of a Copyright, or acquisition of a registered Copyright, or of filing of an application for a United States Patent or Copyright, the relevant Assignor shall deliver to the Collateral Agent a copy of said Copyright or certificate or registration of, or application therefor, said Patents, as the case may be, with an assignment for security as to such Patent or Copyright, as the case may be, to the Collateral Agent and at the expense of such Assignor, confirming the assignment for security, the form of such assignment for security to be substantially in the form of Annex H or I hereto, as appropriate, or in such other form as may be reasonably satisfactory to the Collateral Agent. 5.7 REMEDIES. If an Event of Default shall occur and be continuing, the Collateral Agent may by written notice to the relevant Assignor, take any or all of the following actions: (i) declare the entire right, title, and interest of such Assignor in each of the Patents and Copyrights vested in the Collateral Agent for the benefit of the Secured Creditors, in which event such right, title, and interest shall immediately vest in the Collateral Agent for the benefit of the Secured Creditors, in which case the Collateral Agent shall be entitled to exercise the power of attorney referred to in Section 5.1 hereof to execute, cause to be acknowledged and notarized and to record said absolute assignment with the applicable agency; (ii) take and practice or sell the Patents and Copyrights; and (iii) direct such Assignor to refrain, in which event such Assignor shall refrain, from practicing the Patents and using the Copyrights directly or indirectly, and such Assignor shall execute such further documents as the Collateral Agent may reasonably request further to confirm this and to transfer ownership of the Patents and Copyrights to the Collateral Agent for the benefit of the Secured Creditors. ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL Exhibit I Page 12 6.1 PROTECTION OF COLLATERAL AGENT'S SECURITY. Each Assignor will do nothing to impair the rights of the Collateral Agent in the Collateral. Each Assignor will at all times keep its Inventory and Equipment insured in favor of the Collateral Agent, at such Assignor's own expense to the extent and in the manner provided in the Credit Agreement. Except to the extent otherwise permitted to be retained by such Assignor or applied by such Assignor pursuant to the terms of the Credit Agreement, the Collateral Agent shall, at the time any proceeds of such insurance are distributed to the Secured Creditors, apply such proceeds in accordance with Section 7.4 hereof. Each Assignor assumes all liability and responsibility in connection with the Collateral acquired by it and the liability of such Assignor to pay the Obligations shall in no way be affected or diminished by reason of the fact that such Collateral may be lost, destroyed, stolen, damaged or for any reason whatsoever unavailable to such Assignor. 6.2 WAREHOUSE RECEIPTS NON-NEGOTIABLE. Each Assignor agrees that if any warehouse receipt or receipt in the nature of a warehouse receipt is issued with respect to any of its Inventory, such Assignor shall request that such warehouse receipt or receipt in the nature thereof shall not be "negotiable" (as such term is used in Section 7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction or under other relevant law). 6.3 FURTHER ACTIONS. Each Assignor will, at its own expense and upon the request of the Collateral Agent, make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from time to time such lists, descriptions and designations of its Collateral, warehouse receipts, receipts in the nature of warehouse receipts, bills of lading, documents of title, vouchers, invoices, schedules, confirmatory assignments, conveyances, financing statements, transfer endorsements, certificates, reports and other assurances or instruments and take such further steps relating to the Collateral and other property or rights covered by the security interest hereby granted, which the Collateral Agent deems reasonably appropriate or advisable to perfect, preserve or protect its security interest in the Collateral. 6.4 FINANCING STATEMENTS. Each Assignor agrees to execute and deliver to the Collateral Agent such financing statements, in form reasonably acceptable to the Collateral Agent, as the Collateral Agent may from time to time reasonably request or as are necessary or desirable in the opinion of the Collateral Agent to establish and maintain a valid, enforceable, first priority perfected security interest in the Collateral as provided herein and the other rights and security contemplated hereby all in accordance with the UCC as enacted in any and all relevant jurisdictions or any other relevant law. Each Assignor will pay any applicable filing fees, recordation taxes and related expenses relating to its Collateral. Each Assignor hereby authorizes the Collateral Agent to file any such financing statements without the signature of such Assignor where permitted by law. ARTICLE VII REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT 7.1 REMEDIES; OBTAINING THE COLLATERAL UPON DEFAULT. Each Assignor agrees that, if any Event of Default shall have occurred and be continuing, then and in every such case, the Collateral Agent, in addition to any rights now or hereafter existing under applicable law, shall Exhibit I Page 13 have all rights as a secured creditor under any UCC, and such additional rights and remedies to which a secured creditor is entitled under the laws in effect, in all relevant jurisdictions and may: (i) personally, or by agents or attorneys, immediately take possession of the Collateral or any part thereof, from such Assignor or any other Person who then has possession of any part thereof with or without notice or process of law, and for that purpose may enter upon such Assignor's premises where any of the Collateral is located and remove the same and use in connection with such removal any and all services, supplies, aids and other facilities of such Assignor; (ii) instruct the obligor or obligors on any agreement, instrument or other obligation (including, without limitation, the Receivables and the Contracts) constituting the Collateral to make any payment required by the terms of such agreement, instrument or other obligation directly to the Collateral Agent and may exercise any and all remedies of such Assignor in respect of such Collateral; (iii) withdraw all monies, securities and instruments in the Cash Collateral Account for application to the Obligations in accordance with Section 7.4 hereof; (iv) sell, assign or otherwise liquidate any or all of the Collateral or any part thereof in accordance with Section 7.2 hereof, or direct the relevant Assignor to sell, assign or otherwise liquidate any or all of the Collateral or any part thereof, and, in each case, take possession of the proceeds of any such sale or liquidation; (v) take possession of the Collateral or any part thereof, by directing the relevant Assignor in writing to deliver the same to the Collateral Agent at any place or places designated by the Collateral Agent, in which event such Assignor shall at its own expense: (x) forthwith cause the same to be moved to the place or places so designated by the Collateral Agent and there delivered to the Collateral Agent; (y) store and keep any Collateral so delivered to the Collateral Agent at such place or places pending further action by the Collateral Agent as provided in Section 7.2 hereof; and (z) while the Collateral shall be so stored and kept, provide such guards and maintenance services as shall be necessary to protect the same and to preserve and maintain them in good condition; and (vi) license or sublicense, whether on an exclusive or nonexclusive basis, any Marks, Patents or Copyrights included in the Collateral for such term and on such conditions and in such manner as the Collateral Agent shall in its sole judgment determine; it being understood that each Assignor's obligation so to deliver the Collateral is of the essence of this Agreement and that, accordingly, upon application to a court of equity having jurisdiction, the Collateral Agent shall be entitled to a decree requiring specific performance by such Assignor of Exhibit I Page 14 said obligation. By accepting the benefits of this Agreement, the Secured Creditors agree that this Agreement may be enforced only by the action of the Collateral Agent acting upon the instructions of the Required Secured Creditors and that no other Secured Creditor shall have any right individually to seek to enforce this Agreement or to realize upon the security to be granted hereby, it being understood and agreed that such rights and remedies may be exercised by the Collateral Agent for the benefit of the Secured Creditors upon the terms of this Agreement and the Credit Agreement. 7.2 REMEDIES; DISPOSITION OF THE COLLATERAL. If any Event of Default shall have occurred and be continuing, then any Collateral repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and any other Collateral whether or not so repossessed by the Collateral Agent, may be sold, assigned, leased or otherwise disposed of under one or more contracts or as an entirety, and without the necessity of gathering at the place of sale the property to be sold, and in general in such manner, at such time or times, at such place or places and on such terms as the Collateral Agent may, in compliance with any mandatory requirements of applicable law, determine to be commercially reasonable. Any of the Collateral may be sold, leased or otherwise disposed of, in the condition in which the same existed when taken by the Collateral Agent or after any overhaul or repair at the expense of the relevant Assignor which the Collateral Agent shall determine to be commercially reasonable. Any such disposition which shall be a private sale or other private proceedings permitted by such requirements shall be made upon not less than 10 days' prior written notice to the relevant Assignor specifying the time at which such disposition is to be made and the intended sale price or other consideration therefor, and shall be subject, for the 10 days after the giving of such notice, to the right of the relevant Assignor or any nominee of such Assignor to acquire the Collateral involved at a price or for such other consideration at least equal to the intended sale price or other consideration so specified. Any such disposition which shall be a public sale permitted by such requirements shall be made upon not less than 10 days' prior written notice to the relevant Assignor specifying the time and place of such sale and, in the absence of applicable requirements of law, shall be by public auction (which may, at the Collateral Agent's option, be subject to reserve), after publication of notice of such auction (where required by applicable law) not less than 10 days prior thereto. The Collateral Agent may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the sale may be so adjourned. To the extent permitted by any such requirement of law, the Collateral Agent may bid for and become the purchaser of the Collateral or any item thereof, offered for sale in accordance with this Section without accountability to the relevant Assignor. If, under mandatory requirements of applicable law, the Collateral Agent shall be required to make disposition of the Collateral within a period of time which does not permit the giving of notice to the relevant Assignor as hereinabove specified, the Collateral Agent need give such Assignor only such notice of disposition as shall be reasonably practicable in view of such mandatory requirements of applicable law. Each Assignor agrees to do or cause to be done all such other acts and things as may be reasonably necessary to make such sale or sales of all or any portion of the Collateral valid and binding and in compliance with any and all applicable laws, regulations, orders, writs, injunctions, decrees or awards of any and all courts, arbitrators or governmental instrumentalities, domestic or foreign, having jurisdiction over any such sale or sales, all at such Assignor's expense. Exhibit I Page 15 7.3 WAIVER OF CLAIMS. Except as otherwise provided in this Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and each Assignor hereby further waives, to the extent permitted by law: (i) all damages occasioned by such taking of possession except any damages which are the direct result of the Collateral Agent's gross negligence or willful misconduct; (ii) all other requirements as to the time, place and terms of sale or other requirements with respect to the enforcement of the Collateral Agent's rights hereunder; and (iii) all rights of redemption, appraisement, valuation, stay, extension or moratorium now or hereafter in force under any applicable law in order to prevent or delay the enforcement of this Agreement or the absolute sale of the Collateral or any portion thereof, and each Assignor, for itself and all who may claim under it, insofar as it or they now or hereafter lawfully may, hereby waives the benefit of all such laws. Any sale of, or the grant of options to purchase, or any other realization upon, any Collateral shall operate to divest all right, title, interest, claim and demand, either at law or in equity, of the relevant Assignor therein and thereto, and shall be a perpetual bar both at law and in equity against such Assignor and against any and all Persons claiming or attempting to claim the Collateral so sold, optioned or realized upon, or any part thereof, from, through and under such Assignor. 7.4 APPLICATION OF PROCEEDS. (a) All moneys collected by the Collateral Agent (or, to the extent the Pledge Agreement or any Additional Security Document require proceeds of collateral under such Security Document to be applied in accordance with the provisions of this Agreement, the Pledgee or Collateral Agent under such other Security Document) upon any sale or other disposition of the Collateral, together with all other moneys received by the Collateral Agent hereunder, shall be applied as follows. (i) first, to the payment of all amounts owing the Collateral Agent of the type described in clauses (iii) and (iv) of the definition of "Obligations"; (ii) second, to the extent proceeds remain after the application pursuant to the preceding clause (i), an amount equal to the outstanding Primary Obligations shall be paid to the Secured Creditors as provided in Section 7.4(e) hereof, with each Secured Creditor receiving an amount equal to such outstanding Primary Obligations or, if the proceeds are insufficient to pay in full all such Primary Obligations, its Pro Rata Share of the amount remaining to be distributed; (iii) third, to the extent proceeds remain after the application pursuant to the preceding clauses (i) and (ii), an amount equal to the outstanding Secondary Obligations shall be paid to the Secured Creditors as provided in Section 7.4(e) hereof, with each Secured Creditor receiving an amount equal to its outstanding Secondary Obligations or, if the proceeds are Exhibit I Page 16 insufficient to pay in full all such Secondary Obligations, its Pro Rata Share of the amount remaining to be distributed; and (iv) fourth, to the extent proceeds remain after the application pursuant to the preceding clauses (i) through (iii), inclusive, and following the termination of this Agreement pursuant to Section 10.8(a) hereof, to the relevant Assignor or to whomever may be lawfully entitled to receive such surplus. (b) For purposes of this Agreement (x) "Pro Rata Share" shall mean, when calculating a Secured Creditor's portion of any distribution or amount, that amount (expressed as a percentage) equal to a fraction the numerator of which is the then unpaid amount of such Secured Creditor's Primary Obligations or Secondary Obligations, as the case may be, and the denominator of which is the then outstanding amount of all Primary Obligations or Secondary Obligations, as the case may be, (y) "Primary Obligations" shall mean (i) in the case of the Credit Document Obligations, all principal of, and interest on, all Loans, all Unpaid Drawings and all Fees and (ii) in the case of the Other Obligations, all amounts due under such Interest Rate Protection Agreements or Other Hedging Agreements (other than indemnities, fees (including, without limitation, attorneys' fees) and similar obligations and liabilities) and (z) "Secondary Obligations" shall mean all Obligations other than Primary Obligations. (c) When payments to Secured Creditors are based upon their respective Pro Rata Shares, the amounts received by such Secured Creditors hereunder shall be applied (for purposes of making determinations under this Section 7.4 only) (i) first, to their Primary Obligations and (ii) second, to their Secondary Obligations. If any payment to any Secured Creditor of its Pro Rata Share of any distribution would result in overpayment to such Secured Creditor, such excess amount shall instead be distributed in respect of the unpaid Primary Obligations or Secondary Obligations, as the case may be, of the other Secured Creditors, with each Secured Creditor whose Primary Obligations or Secondary Obligations, as the case may be, have not been paid in full to receive an amount equal to such excess amount multiplied by a fraction the numerator of which is the unpaid Primary Obligations or Secondary Obligations, as the case may be, of such Secured Creditor and the denominator of which is the unpaid Primary Obligations or Secondary Obligations, as the case may be, of all Secured Creditors entitled to such distribution. (d) Each of the Secured Creditors, by their acceptance of the benefits hereof, agrees and acknowledges that if the Lender Creditors are to receive a distribution on account of undrawn amounts with respect to Letters of Credit issued under the Credit Agreement (which shall only occur after all outstanding Loans and Unpaid Drawings with respect to such Letters of Credit have been paid in full), such amounts shall be paid to the Administrative Agent under the Credit Agreement and held by it, for the equal and ratable benefit of the Lender Creditors, as cash security for the repayment of Obligations owing to the Lender Creditors as such. If any amounts are held as cash security pursuant to the immediately preceding sentence, then upon the termination of all outstanding Letters of Credit, and after the application of all such cash security to the repayment of all Obligations owing to the Lender Creditors after giving effect to the termination of all such Letters of Credit, if there remains any excess cash, such excess cash shall Exhibit I Page 17 be returned by the Administrative Agent to the Collateral Agent for distribution in accordance with Section 7.4(a) hereof. (e) All payments required to be made hereunder shall be made (x) if to the Lender Creditors, to the Administrative Agent under the Credit Agreement for the account of the Lender Creditors, and (y) if to the Other Creditors, to the trustee, paying agent or other similar representative (each a "Representative") for the Other Creditors or, in the absence of such a Representative, directly to the Other Creditors. (f) For purposes of applying payments received in accordance with this Section 7.4, the Collateral Agent shall be entitled to rely upon (i) the Administrative Agent under the Credit Agreement and (ii) the Representative for the Other Creditors or, in the absence of such a Representative, upon the Other Creditors for a determination (which the Administrative Agent, each Representative for any Other Creditors and the Secured Creditors agree (or shall agree) to provide upon request of the Collateral Agent) of the outstanding Primary Obligations and Secondary Obligations owed to the Lender Creditors or the Other Creditors, as the case may be. Unless it has actual knowledge (including by way of written notice from a Lender Creditor or an Other Creditor) to the contrary, the Administrative Agent and each Representative, in furnishing information pursuant to the preceding sentence, and the Collateral Agent, in acting hereunder, shall be entitled to assume that no Secondary Obligations are outstanding. Unless it has actual knowledge (including by way of written notice from an Other Creditor) to the contrary, the Collateral Agent, in acting hereunder, shall be entitled to assume that no Interest Rate Protection Agreements or Other Hedging Agreements are in existence. (g) It is understood that the Assignors shall remain jointly and severally liable to the extent of any deficiency between the amount of the proceeds of the Collateral and the aggregate amount of the Obligations. 7.5 REMEDIES CUMULATIVE. Each and every right, power and remedy hereby specifically given to the Collateral Agent shall be in addition to every other right, power and remedy specifically given under this Agreement, the other Secured Debt Agreements or now or hereafter existing at law, in equity or by statute and each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to time or simultaneously and as often and in such order as may be deemed expedient by the Collateral Agent. All such rights, powers and remedies shall be cumulative and the exercise or the beginning of the exercise of one shall not be deemed a waiver of the right to exercise any other or others. No delay or omission of the Collateral Agent in the exercise of any such right, power or remedy and no renewal or extension of any of the Obligations shall impair any such right, power or remedy or shall be construed to be a waiver of any Default or Event of Default or an acquiescence therein. No notice to or demand on any Assignor in any case shall entitle it to any other or further notice or demand in similar or other circumstances or constitute a waiver of any of the rights of the Collateral Agent to any other or further action in any circumstances without notice or demand. In the event that the Collateral Agent shall bring any suit to enforce any of its rights hereunder and shall be entitled to judgment, then in such suit the Collateral Agent may Exhibit I Page 18 recover reasonable expenses, including reasonable attorneys' fees, and the amounts thereof shall be included in such judgment. 7.6 DISCONTINUANCE OF PROCEEDINGS. In case the Collateral Agent shall have instituted any proceeding to enforce any right, power or remedy under this Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Collateral Agent, then and in every such case the relevant Assignor, the Collateral Agent and each holder of any of the Obligations shall be restored to their former positions and rights hereunder with respect to the Collateral subject to the security interest created under this Agreement, and all rights, remedies and powers of the Collateral Agent shall continue as if no such proceeding had been instituted. ARTICLE VIII INDEMNITY 8.1 INDEMNITY. (a) Each Assignor jointly and severally agrees to indemnify, reimburse and hold the Collateral Agent, each other Secured Creditor and their respective successors, permitted assigns, employees, agents and servants (hereinafter in this Section 8.1 referred to individually as "Indemnitee," and collectively as "Indemnitees") harmless from any and all liabilities, obligations, damages, injuries, penalties, claims, demands, actions, suits, judgments and any and all costs, expenses or disbursements (including reasonable attorneys' fees and expenses) (for the purposes of this Section 8.1 the foregoing are collectively called "expenses") of whatsoever kind and nature imposed on, asserted against or incurred by any of the Indemnitees in any way relating to or arising out of this Agreement, any other Secured Debt Agreement or any other document executed in connection herewith or therewith or in any other way connected with the administration of the transactions contemplated hereby or thereby or the enforcement of any of the terms of, or the preservation of any rights under any thereof, or in any way relating to or arising out of the manufacture, ownership, ordering, purchase, delivery, control, acceptance, lease, financing, possession, operation, condition, sale, return or other disposition, or use of the Collateral (including, without limitation, latent or other defects, whether or not discoverable), the violation of the laws of any country, state or other governmental body or unit, any tort (including, without limitation, claims arising or imposed under the doctrine of strict liability, or for or on account of injury to or the death of any Person (including any Indemnitee), or property damage), or contract claim; provided that no Indemnitee shall be indemnified pursuant to this Section 8.1(a) for losses, damages or liabilities to the extent caused by the gross negligence or willful misconduct of such Indemnitee (as determined by a court of competent jurisdiction in a final and non-appealable decision). Each Assignor agrees that upon written notice by any Indemnitee of the assertion of such a liability, obligation, damage, injury, penalty, claim, demand, action, suit or judgment, the relevant Assignor shall assume full responsibility for the defense thereof. Each Indemnitee agrees to use its best efforts to promptly notify the relevant Assignor of any such assertion of which such Indemnitee has knowledge. (b) Without limiting the application of Section 8.1(a) hereof, each Assignor agrees, jointly and severally, to pay, or reimburse the Collateral Agent for any and all reasonable Exhibit I Page 19 fees, costs and expenses of whatever kind or nature incurred in connection with the creation, preservation or protection of the Collateral Agent's Liens on, and security interest in, the Collateral, including, without limitation, all fees and taxes in connection with the recording or filing of instruments and documents in public offices, payment or discharge of any taxes or Liens upon or in respect of the Collateral, premiums for insurance with respect to the Collateral and all other fees, costs and expenses in connection with protecting, maintaining or preserving the Collateral and the Collateral Agent's interest therein, whether through judicial proceedings or otherwise, or in defending or prosecuting any actions, suits or proceedings arising out of or relating to the Collateral. (c) Without limiting the application of Section 8.1(a) or (b) hereof, each Assignor agrees, jointly and severally, to pay, indemnify and hold each Indemnitee harmless from and against any loss, costs, damages and expenses which such Indemnitee may suffer, expend or incur in consequence of or growing out of any misrepresentation by any Assignor in this Agreement, any other Secured Debt Agreement or in any writing contemplated by or made or delivered pursuant to or in connection with this Agreement or any other Secured Debt Agreement. (d) If and to the extent that the obligations of any Assignor under this Section 8.1 are unenforceable for any reason, such Assignor hereby agrees to make the maximum contribution to the payment and satisfaction of such obligations which is permissible under applicable law. 8.2 INDEMNITY OBLIGATIONS SECURED BY COLLATERAL; SURVIVAL. Any amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement shall constitute Obligations secured by the Collateral. The indemnity obligations of each Assignor contained in this Article VIII shall continue in full force and effect notwithstanding the full payment of all of the other Obligations and notwithstanding the full payment of all the Notes issued under the Credit Agreement, the termination of all Interest Rate Protection Agreements or Other Hedging Agreements and all Letters of Credit and the payment of all other Obligations and notwithstanding the discharge thereof but shall not thereafter be secured by any security interest granted hereby. ARTICLE IX DEFINITIONS The following terms shall have the meanings herein specified. Such definitions shall be equally applicable to the singular and plural forms of the terms defined. "Administrative Agent" shall have the meaning provided in the recitals of this Agreement. "Agreement" shall mean this Security Agreement as the same may be modified, supplemented or amended from time to time in accordance with its terms. Exhibit I Page 20 "Assignor" shall have the meaning provided in the first paragraph of this Agreement. "Borrower" shall have the meaning provided in the recitals of this Agreement. "Cash Collateral Account" shall mean a cash collateral account maintained with, and in the sole dominion and control of, the Collateral Agent for the benefit of the Secured Creditors. "Chattel Paper" shall have the meaning provided in the Uniform Commercial Code as in effect on the date hereof in the State of New York. "Class" shall have the meaning provided in Section 10.2 of this Agreement. "Collateral" shall have the meaning provided in Section 1.1(a) of this Agreement. "Collateral Agent" shall have the meaning provided in the first paragraph of this Agreement. "Contract Rights" shall mean all rights of any Assignor under each Contract, including, without limitation, (i) any and all rights to receive and demand payments under any or all Contracts, (ii) any and all rights to receive and compel performance under any or all Contracts and (iii) any and all other rights, interests and claims now existing or in the future arising in connection with any or all Contracts. "Contracts" shall mean all contracts between any Assignor and one or more additional parties (including, without limitation, any Interest Rate Protection Agreements or Other Hedging Agreements and any partnership agreements, joint venture agreements and limited liability company agreements), but excluding any contract to the extent that the terms thereof prohibit (after giving effect to any approvals or waivers) the assignment of, or granting a security interest in, such contract (it being understood and agreed, however, that notwithstanding the foregoing, all rights to payment for money due or to become due pursuant to any such excluded contract shall be subject to the security interests created by this Agreement). "Copyrights" shall mean any United States copyright owned by any Assignor, including any registrations of any Copyrights, in the United States Copyright Office or any foreign equivalent office, as well as any application for a copyright registration now or hereafter made with the United States Copyright Office or any foreign equivalent office by any Assignor. "Credit Agreement" shall have the meaning provided in the recitals of this Agreement. "Credit Document Obligations" shall have the meaning provided in the definition of "Obligations" in this Article IX. "Default" shall mean any event which, with notice or lapse of time, or both, would constitute an Event of Default. Exhibit I Page 21 "Documents" shall have the meaning provided in the Uniform Commercial Code as in effect on the date hereof in the State of New York. "Equipment" shall mean any "equipment," as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York, now or hereafter owned by any Assignor and, in any event, shall include, but shall not be limited to, all machinery, equipment, furnishings, fixtures and vehicles now or hereafter owned by any Assignor and any and all additions, substitutions and replacements of any of the foregoing, wherever located, together with all attachments, components, parts, equipment and accessories installed thereon or affixed thereto. "Event of Default" shall mean any Event of Default under, and as defined in, the Credit Agreement and shall in any event include, without limitation, any payment default on any of the Other Obligations after the expiration of any applicable grace period. "General Intangibles" shall have the meaning provided in the Uniform Commercial Code as in effect on the date hereof in the State of New York (and shall include all partnership interests and all limited liability company and membership interests). "Goods" shall have the meaning provided in the Uniform Commercial Code as in effect on the date hereof in the State of New York. "Indemnitee" shall have the meaning provided in Section 8.1 of this Agreement. "Instrument" shall have the meaning provided in the Uniform Commercial Code as in effect on the date hereof in the State of New York. "Inventory" shall mean merchandise, inventory and goods, and all additions, substitutions and replacements thereof, wherever located, together with all goods, supplies, incidentals, packaging materials, labels, materials and any other items used or usable in manufacturing, processing, packaging or shipping same, in all stages of production -- from raw materials through work-in-process to finished goods -- and all products and proceeds of whatever sort and wherever located and any portion thereof which may be returned, rejected, reclaimed or repossessed by the Collateral Agent from any Assignor's customers, and shall specifically include all "inventory" as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York, now or hereafter owned by any Assignor. "Investment Property" shall have the meaning provided in the Uniform Commercial Code as in effect on the date hereof in the State of New York. "Lender Creditors" shall have the meaning provided in the recitals of this Agreement. "Lenders" shall have the meaning provided in the recitals of this Agreement. Exhibit I Page 22 "Liens" shall mean any security interest, mortgage, pledge, lien, claim, charge, encumbrance, title retention agreement, lessor's interest in a financing lease or analogous instrument, in, of, or on any Assignor's property. "Marks" shall mean all right, title and interest in and to any trademarks, service marks and trade names now held or hereafter acquired by any Assignor, including any registration of any trademarks and service marks in the United States Patent and Trademark Office or in any equivalent foreign office and any trade dress including logos and/or designs used by any Assignor. "Obligations" shall mean (i) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations and indebtedness (including, without limitation, indemnities, Fees and interest thereon) of each Assignor to the Lender Creditors, whether now existing or hereafter incurred under, arising out of, or in connection with the Credit Agreement and the other Credit Documents to which such Assignor is a party (including, in the case of each Assignor which is a Subsidiary Guarantor, all such obligations and indebtedness of such Assignor under the Subsidiaries Guaranty) and the due performance and compliance by such Assignor with all of the terms, conditions and agreements contained in the Credit Agreement and in such other Credit Documents (all such obligations and liabilities under this clause (i), except to the extent consisting of obligations or indebtedness with respect to Interest Rate Protection Agreements or Other Hedging Agreements, being herein collectively called the "Credit Document Obligations"); (ii) the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations and liabilities owing by such Assignor to the Other Creditors under, or with respect to (including, in the case of each Assignor which is a Subsidiary Guarantor, by reason of the Subsidiaries Guaranty), any Interest Rate Protection Agreement or Other Hedging Agreement, whether such Interest Rate Protection Agreement or Other Hedging Agreement is now in existence or hereafter arising, and the due performance and compliance by such Assignor with all of the terms, conditions and agreements contained therein (all such obligations and liabilities described in this clause (ii) being herein collectively called the "Other Obligations"); (iii) any and all sums advanced by the Assignee in order to preserve the Collateral or preserve its security interest in the Collateral; (iv) in the event of any proceeding for the collection or enforcement of any indebtedness, obligations, or liabilities of such Assignor referred to in clauses (i) and (ii) above, after an Event of Default shall have occurred and be continuing, the reasonable expenses of retaking, holding, preparing for sale or lease, selling or otherwise disposing of or realizing on the Collateral, or of any exercise by the Assignee of its rights hereunder, together with reasonable attorneys' fees and court costs; and (v) all amounts paid by any Indemnitee as to which such Indemnitee has the right to reimbursement under Section 8.1 of this Agreement; it being acknowledged and agreed that the "Obligations" shall include extensions of credit of the types described above, whether outstanding on the date of this Agreement or extended from time to time after the date of this Agreement. "Other Creditors" shall have the meaning provided in the recitals of this Agreement. Exhibit I Page 23 "Other Obligations" shall have the meaning provided in the definition of "Obligations" in this Article IX. "Patents" shall mean any patent to which any Assignor now or hereafter has title and any divisions or continuations thereof, as well as any application for a patent now or hereafter made by any Assignor. "Primary Obligations" shall have the meaning provided in Section 7.4(b) of this Agreement. "Pro Rata Share" shall have the meaning provided in Section 7.4(b) of this Agreement. "Proceeds" shall have the meaning provided in the Uniform Commercial Code as in effect in the State of New York on the date hereof or under other relevant law and, in any event, shall include, but not be limited to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty payable to the Collateral Agent or any Assignor from time to time with respect to any of the Collateral, (ii) any and all payments (in any form whatsoever) made or due and payable to any Assignor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any governmental authority (or any person acting under color of governmental authority) and (iii) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral. "Receivables" shall mean any "account" as such term is defined in the Uniform Commercial Code as in effect on the date hereof in the State of New York, now or hereafter owned by any Assignor and, in any event, shall include, but shall not be limited to, all of such Assignor's rights to payment for goods sold or leased or services performed by such Assignor, whether now in existence or arising from time to time hereafter, including, without limitation, rights evidenced by an account, note, contract, security agreement, chattel paper, or other evidence of indebtedness or security, together with (a) all security pledged, assigned, hypothecated or granted to or held by such Assignor to secure the foregoing, (b) all of any Assignor's right, title and interest in and to any goods, the sale of which gave rise thereto, (c) all guarantees, endorsements and indemnifications on, or of, any of the foregoing, (d) all powers of attorney for the execution of any evidence of indebtedness or security or other writing in connection therewith, (e) all books, records, ledger cards, and invoices relating thereto, (f) all evidences of the filing of financing statements and other statements and the registration of other instruments in connection therewith and amendments thereto, notices to other creditors or secured parties, and certificates from filing or other registration officers, (g) all credit information, reports and memoranda relating thereto and (h) all other writings related in any way to the foregoing. "Representative shall have the meaning provided in Section 7.4(e) of this Agreement. "Required Secured Creditors" shall mean (i) the Required Lenders (or, to the extent required by Section 13.12 of the Credit Agreement, each of the Lenders) under the Credit Agreement so long as any Credit Document Obligations remain outstanding and (ii) in any Exhibit I Page 24 situation not covered by the preceding clause (i), the holders of a majority of the outstanding principal amount of the Other Obligations. "Requisite Creditors" shall have the meaning provided in Section 10.2 of this Agreement. "Secondary Obligations" shall have the meaning provided in Section 7.4(b) of this Agreement. "Secured Creditors" shall have the meaning provided in the recitals of this Agreement. "Secured Debt Agreements" shall mean and include this Agreement, the other Credit Documents and the Interest Rate Protection Agreements and Other Hedging Agreements. "Termination Date" shall have the meaning provided in Section 10.8 of this Agreement. "Trade Secret Rights" shall have the meaning provided in Section 5.1 of this Agreement. "UCC" shall mean the Uniform Commercial Code as in effect from time to time in the relevant jurisdiction. ARTICLE X MISCELLANEOUS 10.1 Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the respective parties hereto shall be deemed to have been duly given or made when delivered to the party to which such notice, request, demand or other communication is required or permitted to be given or made under this Agreement, addressed as follows: (a) if to any Assignor, at the address set forth opposite such Assignor's signature below; (b) if to the Collateral Agent, at: Bankers Trust Company 130 Liberty Street New York, New York 10006 Attention: Diane Rolfe Telephone No.: (212) 250-1661 Telecopier No.: (212) 250-7218; Exhibit I Page 25 (c) if to any Lender Creditor, at such address as such Lender Creditor shall have specified in the Credit Agreement; (d) if to any Other Creditor, at such address as such Other Creditor shall have specified in writing to each Assignor and the Collateral Agent; or at such other address as shall have been furnished in writing by any Person described above to the party required to give notice hereunder. 10.2 WAIVER; AMENDMENT. None of the terms and conditions of this Agreement may be changed, waived, modified or varied in any manner whatsoever unless in writing duly signed by each Assignor directly effected thereby and the Collateral Agent (with the written consent of the Required Secured Creditors); PROVIDED, HOWEVER, that any change, waiver, modification or variance affecting the rights and benefits of a single Class of Secured Creditors (and not all Secured Creditors in a like or similar manner) shall require the written consent of the Requisite Creditors of such affected Class. For the purpose of this Agreement, the term "Class" shall mean each class of Secured Creditors, I.E., whether (x) the Lender Creditors as holders of the Credit Document Obligations or (y) the Other Creditors as the holders of the Other Obligations. For the purpose of this Agreement, the term "Requisite Creditors" of any Class shall mean each of (x) with respect to the Credit Document Obligations, the Required Lenders and (y) with respect to the Other Obligations, the holders of at least a majority of all obligations outstanding from time to time under the respective Interest Rate Protection Agreements or Other Hedging Agreements. 10.3 OBLIGATIONS ABSOLUTE. The obligations of each Assignor hereunder shall remain in full force and effect without regard to, and shall not be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or the like of such Assignor; (b) any exercise or non-exercise, or any waiver of, any right, remedy, power or privilege under or in respect of this Agreement or any other Secured Debt Agreement; or (c) any amendment to or modification of any Secured Debt Agreement or any security for any of the Obligations; whether or not such Assignor shall have notice or knowledge of any of the foregoing. 10.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon each Assignor and its successors and assigns (although no Assignor may assign its rights and obligations hereunder except in accordance with the provisions of the Secured Debt Agreements) and shall inure to the benefit of the Collateral Agent and the Secured Creditors and their respective successors and assigns. All agreements, statements, representations and warranties made by each Assignor herein or in any certificate or other instrument delivered by such Assignor or on its behalf under this Agreement shall be considered to have been relied upon by the Secured Creditors and shall survive the execution and delivery of this Agreement and the other Secured Debt Agreements regardless of any investigation made by the Secured Creditors or on their behalf. Exhibit I Page 26 10.5 HEADINGS DESCRIPTIVE. The headings of the several sections 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. 10.6 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. 10.7 ASSIGNOR'S DUTIES. It is expressly agreed, anything herein contained to the contrary notwithstanding, that each Assignor shall remain liable to perform all of the obligations, if any, assumed by it with respect to the Collateral and the Collateral Agent shall not have any obligations or liabilities with respect to any Collateral by reason of or arising out of this Agreement, nor shall the Collateral Agent be required or obligated in any manner to perform or fulfill any of the obligations of any Assignor under or with respect to any Collateral. 10.8 TERMINATION; RELEASE. (a) After the Termination Date, this Agreement shall terminate (provided that all indemnities set forth herein including, without limitation, in Section 8.1 hereof shall survive such termination) and the Collateral Agent, at the request and expense of the respective Assignor, will promptly execute and deliver to such Assignor a proper instrument or instruments (including Uniform Commercial Code termination statements on form UCC-3) acknowledging the satisfaction and termination of this Agreement, and will duly assign, transfer and deliver to such Assignor (without recourse and without any representation or warranty) such of the Collateral as may be in the possession of the Collateral Agent and as has not theretofore been sold or otherwise applied or released pursuant to this Agreement. As used in this Agreement, "Termination Date" shall mean the date upon which the Total Commitment and all Interest Rate Protection Agreements and Other Hedging Agreements have been terminated, no Note is outstanding (and all Loans have been repaid in full), all Letters of Credit have been terminated and all Obligations then due and payable have been paid in full. (b) In the event that any part of the Collateral is sold in connection with a sale permitted by Section 9.02 of the Credit Agreement (other than a sale to any Assignor or a Subsidiary thereof) or otherwise released at the direction of the Required Secured Creditors and the proceeds of such sale or sales or from such release are applied in accordance with the provisions of the Credit Agreement, to the extent required to be so applied, such Collateral will be sold free and clear of the Liens created by this Agreement and the Collateral Agent, at the request and expense of the relevant Assignor, will duly assign, transfer and deliver to such Assignor (without recourse and without any representation or warranty) such of the Collateral as is then being (or has been) so sold or released and as may be in the possession of the Collateral Agent and has not theretofore been released pursuant to this Agreement. (c) At any time that an Assignor desires that the Collateral Agent take any action to acknowledge or give effect to any release of Collateral pursuant to the foregoing Section 10.8(a) or (b), such Assignor shall deliver to the Collateral Agent a certificate signed by Exhibit I Page 27 a principal executive officer of such Assignor stating that the release of the respective Collateral is permitted pursuant to Section 10.8(a) or (b). 10.9 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 each Assignor and the Collateral Agent. 10.10 SEVERABILITY. Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 10.11 THE COLLATERAL AGENT. The Collateral Agent will hold in accordance with this Agreement all items of the Collateral at any time received under this Agreement. It is expressly understood and agreed that the obligations of the Collateral Agent as holder of the Collateral and interests therein and with respect to the disposition thereof, and otherwise under this Agreement, are only those expressly set forth in this Agreement and in Section 12 of the Credit Agreement. The Collateral Agent shall act hereunder and thereunder on the terms and conditions set forth herein and in Section 12 of the Credit Agreement. 10.12 BENEFIT OF AGREEMENT. This Agreement shall be binding upon the parties hereto and their respective successors and assigns and shall inure to the benefit of and be enforceable by each of the parties hereto and its successors and assigns. 10.13 ADDITIONAL ASSIGNORS. It is understood and agreed that any Subsidiary of the Borrower that is required to execute a counterpart of this Agreement after the date hereof pursuant to the Credit Agreement shall become an Assignor hereunder by executing a counterpart hereof and delivering the same to the Collateral Agent. * * * Exhibit I Page 28 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their duly authorized officers as of the date first above written. ADDRESS: 7777 Washington Village Drive DAYTON SUPERIOR CORPORATION, Suite 130 as an Assignor Dayton, OH 45459 Attention: President By /s/ John A. Ciccarelli Telephone: (937) 428-6368 ------------------------------- Telecopier: (973) 428-9560 Title: President 4260 Westbrook Drive DUR-O-WAL, INC., Suite 120 as an Assignor Aurora, IL 60504 Attention: President Telephone: (630) 851-8400 By /s/ John A. Ciccarelli Telecopier: (630) 854-0500 ------------------------------- Title: President 200 East Touhy Avenue SYMONS CORPORATION, Des Plaines, IL 60018 as an Assignor Attention: President Telephone: (847) 298-3200 Telecopier: (847) 635-9287 By /s/ John A. Ciccarelli ------------------------------- Title: President Accepted and Agreed to: BANKERS TRUST COMPANY, as Assignee, Collateral Agent By /s/ Susan L. Le Fevre ---------------------------- Title: Director ANNEX A to SECURITY AGREEMENT ------------------ SCHEDULE OF CHIEF EXECUTIVE OFFICES AND OTHER RECORD LOCATIONS I. DAYTON SUPERIOR CORPORATION: 7777 Washington Village Drive Suite 130 Dayton, OH 45459 II. SYMONS CORPORATION: 200 East Touhy Avenue Des Plaines, IL III. DUR-O-WAL, INC.: 4260 Westbrook Drive Suite 120 Aurora, IL ANNEX B to SECURITY AGREEMENT ------------------ SCHEDULE OF INVENTORY AND EQUIPMENT LOCATIONS ASSIGNOR LOCATION I. Dayton Superior Corporation 1900 Wilson Parsons, KS 530 Madison Avenue (Centralia) Junction City, IL 402 South First Street Oregon, IL 721 Richard Street Miamisburg, OH County Road 113 Rushsylvania, OH 5025 Easton Road St. Joseph, MO 298 Keystone Drive Bethlehem, PA 3 Horne Drive, PO Box 409 Folcroft, PA 55 North Pine Street Tremont, PA 1421 Hildegarde Drive Birmingham, AL 580 Elm Street Helena, AL 1201 Mohave Road Parker, AZ 530 E. Dyer Road Santa Ana, CA 9415 Sorenson Avenue Santa Fe Springs, CA 4975 Pontiac Street Commerce City, CO 6625 N. Washington Street Denver, CO 1887 Central Florida Parkway Orlando, FL 9745 NW 80th Avenue Hialeah Gardens, FL 670 Great Southwest Parkway Atlanta, GA 2150B South Route 45-52 Kankakee, IL 30 Manning Road Billercia, MA 7777 Washington Village Drive Dayton, OH 2564 Kohnle Drive Miamisburg, OH 1202 Avenue T Grand Prairie, TX 6417 Toledo Houston, TX 1000 Lofland Drive Waxahachie, TX 500 South Lander Street Seattle, WA 742 Boul. Industriel, Suite 104 Blainville Que, Canada 396 Attwell Drive Rexdale, Ontario Canada II. Symons Corporation 6665 N. Washington Street Denver, CO 150 Bryan Road Dania, FL 200 East Touhy Avenue Des Plaines, IL 1112 East Airline Highway La Place, LA 7053 Brookdale Drive Elkridge, MD 1010 Hutton Drive Carrollton, TX 1989 Peachleaf Houston, TX 1155 Church Hill Drive New Braunfels, TX 511 E. Mohave Phoenix, AZ 3447 Investment Blvd., Suite 5 Hayward, CA 722 S. Parriott Place Industry, CA 8280 Utica Rancho Cucamonga, CA 880 Thorpe Road Orlando, FL 2219 Lithonia Industrial Blvd Lithonia, GA 591 River Road Silver Grove, KY 9301 Penn Avenue South Bloomington, MN 6000 Old Pineville Road Charlotte, NC 1550 Highway 70 W Clayton, NC 203 Swing Road Greensboro, NC 509 Gurley's Mill Road Princeton, NC 2049 Corporate Drive Wilmington, NC 400 Max Court Henderson, NV 6415 Plaster Mill Road Victor, NY 200 King Manor Drive King of Prussia, PA 4201 Grand Avenue Neville Island, PA 1361 Stockholder Avenue Myrtle Beach, SC 5071 Rivers Avenue North Charleston, SC 8406 Earle Road, Suite A Mechanicsville, VA N11 W 24651 Silvernail Road Pewaukee, WI 70 Golden Drive Coquitlam, British Columbia 5423B Portage Avenue Headingley, Manitoba III. Dur-O-Wal 625 Crane Street Aurora, IL 601 North Point Baltimore, MD 829 34th Street North Birmingham, AL 3213-15-17 8th Avenue North Birmingham, AL 213 South Alma School Road Mesa, AZ 4260 Westbrook Drive, Suite 120 Aurora, IL ANNEX C to SECURITY AGREEMENT ------------------ SCHEDULE OF TRADE AND FICTITIOUS NAMES I. TRADE NAMES (name in square brackets indicates division using the trade name) Concrete Accessories Inc. [Symons Corporation] Richmond Screw Anchor [Symons Corporation] Dayton Superior Construction Chemicals [Dayton Superior Corporation] America Highway Technology [Dayton Superior Corporation] Robert Screw Products [Dayton Superior Corporation] Secure [Dayton Superior Corporation] II. FICTITIOUS NAMES Cempro ANNEX D to SECURITY AGREEMENT ------------------ DAYTON SUPERIOR CORPORATION SYMONS CORPORATION DUR-O-WAL, INC. INDEX OF TRADEMARK LISTS 1 . . . DAYTON SUPERIOR CORPORATION/RICHMOND SCREW ANCHOR CO. TRADEMARKS. 2 . . . SYMONS CORPORATION TRADEMARKS. 3 . . . DUR-O-WAL, INC. TRADEMARKS. 4 . . . TRADEMARK APPLICATIONS/REGISTRATIONS FOUND WHICH ARE OWNED BY OTHER PARTIES. TRADEMARK LIST #1 DAYTON SUPERIOR CORPORATION (INCLUDES MARKS WHEREIN RICHMOND SCREW ANCHOR COMPANY IS THE OWNER OF RECORD) TRADEMARKS
- ------------------------------------------------------------------------------------------------------------------ APPLICATION NO. REGISTRATION NO. TRADEMARK COUNTRY STATUS AND DATE AND DATE COMMENTS - ------------------------------------------------------------------------------------------------------------------ AMERICAN HIGHWAY US allowed - intent 75/121051 Int'l. Class(es) 6, TECHNOLOGY to use 6/18/96 17, 19, 37 - ------------------------------------------------------------------------------------------------------------------ GYRO TILT PLUS US published 75/413784 Int'l. Class(es) 6 1/05/98 - ------------------------------------------------------------------------------------------------------------------ DAYTON SUPERIOR US registered 73/399517 1287643 Int'l. Class(es) 6; 10/01/82 7/31/84 Security Interest in favor of Bank One recorded 11/6/97 - ------------------------------------------------------------------------------------------------------------------ DAYTON SUPERIOR US registered 75/138973 2158144 Int'l. Class(es) 2, 3, 7/24/96 5/19/98 19 - ------------------------------------------------------------------------------------------------------------------ S US expired 72/383292 0941224 Classes unavailable 2/08/71 8/22/72 - ------------------------------------------------------------------------------------------------------------------ SURE-GRIP US registered 74/161032 1768658 Int'l. Class(es) 19 4/26/91 5/04/93 - ------------------------------------------------------------------------------------------------------------------ A US registered 73/643458 1452916 Int'l. Class(es) 6 1/28/87 8/18/87 - ------------------------------------------------------------------------------------------------------------------ C US registered 73/641698 1453913 Int'l. Class(es) 6 1/28/87 8/25/87 - ------------------------------------------------------------------------------------------------------------------ LEVELAYER US registered 73/543931 1397671 Int'l. Class(es) 19 6/19/85 6/17/86 - ------------------------------------------------------------------------------------------------------------------ DAY-CHEM US registered 73/284292 1177246 Int'l. Class(es) 19 11/03/80 11/10/81 - ------------------------------------------------------------------------------------------------------------------ SWIFT LIFT US registered 73/028742 1009108 Int'l. Class(es) 6 8/05/74 4/22/75 - ------------------------------------------------------------------------------------------------------------------
APPLICATION NO. REGISTRATION NO. TRADEMARK COUNTRY STATUS AND DATE AND DATE COMMENTS - ------------------------------------------------------------------------------------------------------------------ TWIST-LIFT US registered 72/291787 0880316 Int'l. Class(es) 6 2/23/68 11/11/69 - ------------------------------------------------------------------------------------------------------------------ JAHN US registered 72/264561 0846110 Int'l. Class(es) 19 2/13/67 3/19/68 - ------------------------------------------------------------------------------------------------------------------ RAPI-TIES US registered 72/180151 0784682 Int'l. Class(es) 19 10/10/63 2/09/65 - ------------------------------------------------------------------------------------------------------------------ CRETE CURE US registered 72/452142 0982189 Int'l. Class(es) 1 3/21/73 4/16/74 - ------------------------------------------------------------------------------------------------------------------ GASKET-LOCK US registered 72/301271 0889203 Int'l. Class(es) 19 6/24/68 4/07/70 - ------------------------------------------------------------------------------------------------------------------ SURE-GRIP US registered 72/205043 0798721 Int'l. Class(es) 19 10/29/64 11/16/65 - ------------------------------------------------------------------------------------------------------------------ JAHN US registered 72/149581 0751913 Int'l. Class(es) 6 7/23/62 7/02/63 - ------------------------------------------------------------------------------------------------------------------ HEXAGON LOGO US abandoned 75/135891 Int'l. Class(es) 1, 6 7/18/96 - ------------------------------------------------------------------------------------------------------------------ DAYTON/RICHMOND US pending 75/892,252 1/7/00 - ------------------------------------------------------------------------------------------------------------------ GYRO TILT PLUS US registered 413,784 2,301,428 1/5/98 12/21/99 - ------------------------------------------------------------------------------------------------------------------ MAXI-LIFT US registered 73/287993 1200183 Int'l. Class 7 1/07/81 7/06/82 Symons assigned a security interest to third party 11/06/97 - ------------------------------------------------------------------------------------------------------------------ TYSCRU US registered 71/419125 0371282 Int'l. Class 19 5/05/39 9/19/39 Symons assigned a security interest to third party 11/06/97 - ------------------------------------------------------------------------------------------------------------------
APPLICATION NO. REGISTRATION NO. TRADEMARK COUNTRY STATUS AND DATE AND DATE COMMENTS - ------------------------------------------------------------------------------------------------------------------ TYWEDGE US registered 72/126178 0751853 Int'l. Class 19 8/17/61 6/25/63 Symons assigned a security interest to third party 11/06/97 - ------------------------------------------------------------------------------------------------------------------ RICHMOND SCREW ANCHOR US registered 72/162664 0759042 Int'l. Class 1 CO., INC. INSIST ON 2/13/63 10/29/63 RICHMOND Symons assigned a . . . security interest to third party 11/06/97 - ------------------------------------------------------------------------------------------------------------------ RICHMOND SNAP-TYS US expired 71/653397 0594423 Int'l. Class 19 9/18/53 8/31/54 Symons assigned a security interest to third party 11/06/97 - ------------------------------------------------------------------------------------------------------------------
TRADEMARK LIST #2 SYMONS CORPORATION TRADEMARKS - ------------------------------------------------------------------------------------------------------------------ APPLICATION NO. REGISTRATION NO. TRADEMARK COUNTRY STATUS AND DATE AND DATE COMMENTS - ------------------------------------------------------------------------------------------------------------------ MAX-A-FORM US registered 74/561867 1912991 Int'l. Class(es) 6 8/15/94 8/22/95 - ------------------------------------------------------------------------------------------------------------------ QUAD CURE US registered 74/561866 1954371 Int'l. Class(es) 1 8/15/94 2/06/96 - ------------------------------------------------------------------------------------------------------------------ GYRO LIFT US registered 73/746256 1538915 Int'l. Class(es) 6 8/15/88 5/16/89 - ------------------------------------------------------------------------------------------------------------------ FLEX-FORM US registered 73/676415 1481622 Int'l. Class(es) 19 8/03/87 3/22/88 - ------------------------------------------------------------------------------------------------------------------ SYMONS DURA-TEX US registered 73/559936 1401206 Int'l. Class(es) 19; 9/24/85 7/15/86 Security Interest recorded in favor of Bank One on 11/6/99 - ------------------------------------------------------------------------------------------------------------------ FRP MULTI KOTE US registered 73/415760 1290610 Int'l. Class(es) 1 3/04/83 8/21/84 - ------------------------------------------------------------------------------------------------------------------ S US registered 73/397574 1280346 Int'l. Class(es) 1, 3, 9/30/82 6/05/84 6, 7, 8, 17, 19 - ------------------------------------------------------------------------------------------------------------------ ELASTOTEX US registered 73/415314 1273527 Int'l. Class(es) 19 2/28/83 4/10/84 - ------------------------------------------------------------------------------------------------------------------ THRIFT KOTE US registered 73/389613 1277614 Int'l. Class(es) 1 9/27/82 5/15/84 - ------------------------------------------------------------------------------------------------------------------ DXB PLY US registered 73/369541 1246389 Int'l. Class(es) 19 6/14/82 7/26/83 - ------------------------------------------------------------------------------------------------------------------ DECK-A-MATIC US registered 73/366415 1246846 Int'l. Class(es) 6 5/24/82 8/02/83 - ------------------------------------------------------------------------------------------------------------------
APPLICATION NO. REGISTRATION NO. TRADEMARK COUNTRY STATUS AND DATE AND DATE COMMENTS - ------------------------------------------------------------------------------------------------------------------ RESI-CHEM US registered 73/335067 1246732 Int'l. Class(es) 2 11/02/81 8/02/83 - ------------------------------------------------------------------------------------------------------------------ SYMONS US registered 73/314790 1254958 Int'l. Class(es) 1, 3, 6/15/81 10/25/83 6, 8, 17, 19; Security Interest in favor of Bank One recorded 11/6/97 - ------------------------------------------------------------------------------------------------------------------ MAX-A-PLY US registered 73/233405 1157317 Int'l. Class(es) 19 10/01/79 6/09/81 - ------------------------------------------------------------------------------------------------------------------ STEEL-PLY US registered 73/157401 1100771 Int'l. Class(es) 19 2/02/78 8/29/78 - ------------------------------------------------------------------------------------------------------------------ SPANFORM US expired 73/056403 1039675 Int'l. Class(es) 17 6/27/75 5/18/76 - ------------------------------------------------------------------------------------------------------------------ SPRINGFORM US registered 73/056402 1038505 Int'l. Class(es) 19 6/27/75 4/27/76 - ------------------------------------------------------------------------------------------------------------------ BEAMFORM US expired 73/056401 1039674 Int'l. Class(es) 17 6/27/75 5/18/76 - ------------------------------------------------------------------------------------------------------------------ DOMEFORM US expired 73/056400 1056079 Int'l. Class(es) 19 6/27/75 1/11/77 - ------------------------------------------------------------------------------------------------------------------ MAX-A-FORM US expired 72/401920 0956779 Int'l. Class(es) 19 9/03/71 4/10/73 - ------------------------------------------------------------------------------------------------------------------ QUAD CURE US expired 72/395660 0950189 Int'l. Class(es) 1 6/23/71 1/09/73 - ------------------------------------------------------------------------------------------------------------------ MAGIC KOTE US registered 72/104341 0728771 Int'l. Class(es) 1 9/12/60 3/20/62 - ------------------------------------------------------------------------------------------------------------------ SYMONS STEEL-PLY FORM US expired 72/008036 0656240 Int'l. Class(es)12 5/09/56 12/24/57 - ------------------------------------------------------------------------------------------------------------------ VERSIFORM US registered 72/449879 0981820 Int'l. Class(es) 6, 19 2/26/73 4/09/74 - ------------------------------------------------------------------------------------------------------------------
APPLICATION NO. REGISTRATION NO. TRADEMARK COUNTRY STATUS AND DATE AND DATE COMMENTS - ------------------------------------------------------------------------------------------------------------------ FORM-FIX US registered 72/244267 0826701 Int'l. Class(es) 19 4/25/66 4/04/67 - ------------------------------------------------------------------------------------------------------------------ S US registered 72/139695 0745290 Int'l. Class(es) 19 3/12/62 2/19/63 - ------------------------------------------------------------------------------------------------------------------ S US registered 72/135920 0760829 Int'l. Class(es) 37 1/16/62 11/26/63 - ------------------------------------------------------------------------------------------------------------------ MAGIC KOTE US registered 72/104,341 728,771 Int'l. Class(es) 1 9/12/60 3/20/62 - ------------------------------------------------------------------------------------------------------------------ - -------------------------------------------------------------------------------------------------------------------
TRADEMARK COUNTRY APPLN. NO. FILING DATE REG. REG. COMMENTS NO. DATE - ------------------------------------------------------------------------------------------------------------------- SAFETY LOGO - 1995 US 00000001 0/0/0 No registration found - ------------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------------- SYMONS and Design US 0692658 2/09/60 No registration found. - ------------------------------------------------------------------------------------------------------------------- SYMONS MAG-PLY FORM and US 0656239 12/24/57 No registration found. Design - ------------------------------------------------------------------------------------------------------------------- SYMONS WOOD-PLY FORM and US 0656238 12/24/57 No registration found. Design - -------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------- TRADEMARK COMMENTS ---------------------------------------------------------------------------- ACTION KOTE(TM) Nothing found. ---------------------------------------------------------------------------- CURE & HARD(TM) Nothing found. ---------------------------------------------------------------------------- DESIGN-CRETE(TM) Registrations owned by other parties found. See Trademark List #4. ---------------------------------------------------------------------------- DURA-TEX(R) Registrations owned by other parties found. See Trademark List #4. ---------------------------------------------------------------------------- GLIDE RACK Nothing found. ---------------------------------------------------------------------------- LINER KOTE Nothing found. ---------------------------------------------------------------------------- MAXI-WALER Nothing found. ---------------------------------------------------------------------------- QUICK-HOOK (TM) Registrations owned by other parties found. HANDLE See Trademark List #4. ---------------------------------------------------------------------------- RESCON(R) Registrations owned by other parties found. See Trademark List #4. ---------------------------------------------------------------------------- RESI-PLY(TM) Nothing found. ---------------------------------------------------------------------------- SILVER PREP(TM) Nothing found. ---------------------------------------------------------------------------- SKY-LIFT(TM) Nothing found. ---------------------------------------------------------------------------- SPEC-CURE Nothing found. ---------------------------------------------------------------------------- SPRAY-RITE Registrations owned by other parties found. See Trademark List #4. ---------------------------------------------------------------------------- GR Registrations owned by other parties found. See Trademark List #4. ---------------------------------------------------------------------------- DAYTON and Design Registrations owned by other parties found. See Trademark List #4. ---------------------------------------------------------------------------- STREETSMART(TM) Registrations owned by other parties found. See Trademark List #4. ---------------------------------------------------------------------------- SYMONS SILVER(TM) Nothing found. ----------------------------------------------------------------------------
TRADEMARK LIST #3 DUR-O-WAL, INC. TRADEMARKS
- ------------------------------------------------------------------------------------------------------------------ APPLICATION NO. REGISTRATION NO. TRADEMARK COUNTRY STATUS AND DATE AND DATE COMMENTS - ------------------------------------------------------------------------------------------------------------------ DUR-O-PAIR "GELCRETE" US pending - 75/744805 Int'l. Class(es) 1 intent to use 7/07/99 - ------------------------------------------------------------------------------------------------------------------ SPLICE-RITE 150 US pending - 75/658983 Int'l. Class(es) 6 intent to use 3/12/99 - ------------------------------------------------------------------------------------------------------------------ SURE-STAY US pending - 75/611099 Int'l. Class(es) 6 intent to use 12/22/98 - ------------------------------------------------------------------------------------------------------------------ SURE-STRESS US pending - 75/611092 Int'l. Class(es) 6 intent to use 12/22/98 - ------------------------------------------------------------------------------------------------------------------ DUR-O-WEB US registered 73/262400 1239157 Int'l. Class(es) 6 5/16/80 5/24/83 - ------------------------------------------------------------------------------------------------------------------ DUR-O-EYE US registered 73/125185 1082553 Int'l. Class(es) 19 5/02/77 1/17/78 - ------------------------------------------------------------------------------------------------------------------ LADUR-EYE US registered 73/125184 1082552 Int'l. Class(es)19 5/02/77 1/17/78 - ------------------------------------------------------------------------------------------------------------------ DUR-O-WAL US registered 71/629826 0574351 Int'l. Class(es) 6; 5/16/52 5/12/53 security interest in favor of Bank One recorded 1/27/94; record shows security interests to Parker Petrie, Inc. and Bay Street Restaurants, Inc. that may be erroneous. - ------------------------------------------------------------------------------------------------------------------ LADUR TYPE US registered 72/074165 0696623 Int'l. Class(es) 6 5/20/59 4/26/60 - ------------------------------------------------------------------------------------------------------------------
APPLICATION NO. REGISTRATION NO. TRADEMARK COUNTRY STATUS AND DATE AND DATE COMMENTS - ------------------------------------------------------------------------------------------------------------------ RAPID US registered 72/070992 0689737 Int'l. Class(es) 17, 19 4/07/59 12/15/59 - ------------------------------------------------------------------------------------------------------------------ BRACE-RITE US pending 75/904,390 1/27/00 - ------------------------------------------------------------------------------------------------------------------
TRADEMARK LIST #4 TRADEMARKS IDENTIFIED IN THE INFORMATION PROVIDED BY THE CLIENT FOR WHICH NO APPLICATIONS/REGISTRATIONS WERE FOUND
- ----------------------------------------------------------------------------------------------------------------------- COUNTRY APPLN. NO. REG. NO. INT'L. CLASSES/ TRADEMARK AND AND DATE AND DATE GOODS OWNER STATUS - ----------------------------------------------------------------------------------------------------------------------- DAYTON and Design** US 73/065891 1057112 racquets for tennis, badminton and Dayton Racquet Company expired 10/14/75 1/25/77 racquetball Inc. Dayton, OH - ----------------------------------------------------------------------------------------------------------------------- SPRAY-RITE US 75/637527 Int'l. Class 7 / machines for Robert D. Sawyer pending 2/10/99 spraying coatings Oak Creek, WI - ----------------------------------------------------------------------------------------------------------------------- STREETSMART US 74/437732 1859450 Int'l. Class 6 / fabricated metal JWI, Inc. registered 9/20/93 10/25/94 structures and metal site Holland, MI furnishings; namely, canopies, pedestrian shelters . . . - ----------------------------------------------------------------------------------------------------------------------- DESIGN-CRETE US 75/044871 2064699 Int'l. Class 37 / installation of Jerry A. Offenberger registered 1/18/96 5/27/97 decorative concrete driveways, Marietta, OH walkways . . . - ----------------------------------------------------------------------------------------------------------------------- RESCON US 73/578449 1440618 Int'l. Class 19 / structural foamed R.S.L. Woodworking canceled 1/21/86 5/26/87 [SIC] building products, namely Products Company building entrances comprising doors Cardiff, NJ . . . - ----------------------------------------------------------------------------------------------------------------------- DURA-TEX US 73/369242 1275894 Int'l. Class 9 / outer husks sold K&H Industries Inc. registered 6/11/82 5/01/84 as a component part of electrical Angola, NY plugs and connectors . . . - ----------------------------------------------------------------------------------------------------------------------- DURA-TEX US 72/283823 1184864 Int'l. Class 24 / carded-web fabric Fibertech Group, Inc. registered 10/29/80 1/06/82 of polypropylene Charleston, NC - -----------------------------------------------------------------------------------------------------------------------
- ---------- *This Trademark Registration No. was specifically identified by the client.
- ----------------------------------------------------------------------------------------------------------------------- DURA-TEX US 73/127230 1120557 Int'l. Class 24 / non-woven fabric Fibertech Group, Inc. registered 5/19/77 6/19/79 of polyester fibers Charleston, NC - ----------------------------------------------------------------------------------------------------------------------- COUNTRY APPLN. NO. REG. NO. INT'L. CLASSES/ TRADEMARK AND AND DATE AND DATE GOODS OWNER STATUS - ----------------------------------------------------------------------------------------------------------------------- DURA-TEX US 72/374874 0926714 Int'l. Class 27 / vinyl Duron, Inc. expired 10/30/70 1/11/72 wallcoverings and wallpaper Beltsville, MD - ----------------------------------------------------------------------------------------------------------------------- DURA-TEX US 71/641460 0584166 Int'l. Class 3 / self-polishing wax Sterling Winthrop Inc. expired 1/28/53 12/29/53 . . . Delaware - ----------------------------------------------------------------------------------------------------------------------- DURA-TEX US 71/678083 0612898 Int'l. Class 19 / ceramic tile Aztec Ceramics Corporation expired 12/10/54 9/27/55 SanAntonio, TX - ----------------------------------------------------------------------------------------------------------------------- GR US 74/100804 1692441 Int'l. Class 7 / ceramic coatings Sulzer Escher Wyss. Inc. registered 9/27/90 6/09/92 for paper machine rolls Middletown, OH - ----------------------------------------------------------------------------------------------------------------------- GR US 73/473397 1347037 Int'l. Class 1 / hydrotreating W.R. Grace & Co. registered 4/02/84 7/09/85 catalyst used in refining crude oil New York, NY - ----------------------------------------------------------------------------------------------------------------------- GR US 73/350674 1254335 Int'l. Class 7 / reducers, motor Rossi Motoriduttori S.p.A. registered 2/17/82 10/18/83 reducers, motor variators, Italy transmission couplings for machines - ----------------------------------------------------------------------------------------------------------------------- GR US 72/461047 0991578 Int'l. Class 19 / tombstones Keith Monument Company registered 6/22/73 8/20/74 Elizabethtown, KY - ----------------------------------------------------------------------------------------------------------------------- GR US 72/242124 0843520 Int'l. Class 19 / refractory brick General Refractories registered 3/29/66 2/06/68 Company Philadelphia, PA - ----------------------------------------------------------------------------------------------------------------------- GR US 72/142633 0746885 Int'l. Class 9 / standard units of General Radio Company registered 4/19/62 3/19/63 resistance, inductance and West Concord, MA capacitance for use in electric measuring circuits . . . - ----------------------------------------------------------------------------------------------------------------------- GR US 72/142632 0746850 Int'l. Class 9 / electrical General Radio Company registered 4/19/62 3/19/63 apparatus; namely; audio and radio West Concord, MA generators . . . - ----------------------------------------------------------------------------------------------------------------------- GR US 71/153208 0155972 Int'l. Classes 7 & 11 / air and gas Griscom-Russell Company registered 9/22/21 6/13/22 compressors, vapor condensers . . . New York, NY - ----------------------------------------------------------------------------------------------------------------------- GR US 71/149183 0154038 Int'l. Class 11 / oil heaters, oil Griscom-Russell Company registered 6/15/21 4/04/22 and gas water heaters . . . New York, NY - -----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------- GR US 75/595099 Int'l. Class 1 / heat transfer Paratherm Corporation pending 11/27/98 fluids which are biodegradable, Conshohocken, PA inorganic . . . - ----------------------------------------------------------------------------------------------------------------------- COUNTRY APPLN. NO. REG. NO. INT'L. CLASSES/ TRADEMARK AND AND DATE AND DATE GOODS OWNER STATUS - ----------------------------------------------------------------------------------------------------------------------- GR US 75/489857 Int'l. Classes 9 & 41/ printed GenRad, Inc. pending 5/20/98 circuit board and integrated Westford, MA circuit testers. . .; educational services, namely, conducting conferences . . . - ----------------------------------------------------------------------------------------------------------------------- GR US 75/450727 Int'l. Classes 9 & 41/ printed GenRad, Inc. pending 3/16/98 circuit board and integrated Westford, MA circuit testers. . .; educational services, namely, conducting conferences . . . - ----------------------------------------------------------------------------------------------------------------------- QUICK HOOK US 75/019728 2086423 Int'l. Class 28 / fish hooks Jesse Burns registered 11/02/95 8/05/97 Las Vegas, NV - ----------------------------------------------------------------------------------------------------------------------- QUICK HOOK US 74/465714 1922929 Int'l. Class 18 / luggage Samsonite Corporation registered 12/06/93 9/26/95 Denver, CO - -----------------------------------------------------------------------------------------------------------------------
ANNEX E to SECURITY AGREEMENT SCHEDULE OF PATENTS I. DAYTON SUPERIOR CORPORATION/RICHMOND SCREW ANCHOR PATENTS. II. SYMONS CORPORATION/SYMONS CONCRETE FORMS, INC. PATENTS. III. DUR-O-WAL, INC. PATENTS. PATENT LIST #1 DAYTON SUPERIOR CORPORATION (INCLUDES PATENTS WHEREIN RICHMOND SCREW ANCHOR COMPANY IS THE OWNER OF RECORD) ISSUED PATENTS
- ------------------------------------------------------------------------------------------------------------- TITLE COUNTRY PATENT NO. ISSUE DATE COMMENTS - ------------------------------------------------------------------------------------------------------------- QUICK CONNECT REBAR SPLICE US 5,967,691 10/19/99 - ------------------------------------------------------------------------------------------------------------- KNEE BRACE BRACKET FOR TILT-UP US 5,943,830 08/31/99 CONSTRUCTION - ------------------------------------------------------------------------------------------------------------- CONCRETE SANDWICH PANEL ERECTION ANCHOR US 5,857,296 01/12/99 - ------------------------------------------------------------------------------------------------------------- STRONGBACK ATTACHMENT SYSTEM US 5,572,838 11/12/96 - ------------------------------------------------------------------------------------------------------------- CONCRETE FORM TIE WEDGE US 5,351,456 10/04/94 - ------------------------------------------------------------------------------------------------------------- CONCRETE FORM SNAP TIE US 5,050,365 09/24/91 - ------------------------------------------------------------------------------------------------------------- DEVICE AND METHOD FOR HOUSING A STEEL US 4,984,401 01/15/91 REINFORCEMENT IN AN AREA WHERE JOINTS ARE MADE BETWEEN FIRST AND SUBSEQUENTLY POURED CONCRETE STRUCTURES - ------------------------------------------------------------------------------------------------------------- LOAD TRANSFER ASSEMBLY US 4,883,385 11/28/89 - ------------------------------------------------------------------------------------------------------------- ADJUSTABLE HANGER US 4,846,433 07/11/89 - ------------------------------------------------------------------------------------------------------------- RECESS PLUG FOR PRECAST CONCRETE PANELS US 4,807,843 02/28/89 - ------------------------------------------------------------------------------------------------------------- APPARATUS FOR CASTING AN ANCHOR IN A US 4,726,562 02/23/88 CONCRETE UNIT - ------------------------------------------------------------------------------------------------------------- APPARATUS FOR LIFTING CONCRETE PANELS US RE 33,881 04/14/92 US 4,700,979 10/20/87 - -------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------- TITLE COUNTRY PATENT NO. ISSUE DATE COMMENTS - ------------------------------------------------------------------------------------------------------------- METHOD AND APPARATUS FOR HOT FORMING A US 4,473,738 09/25/84 POLYGONAL HEAD ON A SNAP TIE ROD - ------------------------------------------------------------------------------------------------------------- APPARATUS FOR ERECTING CONCRETE WALL US 4,417,425 11/29/83 PANELS - ------------------------------------------------------------------------------------------------------------- SWIVEL HOLD-DOWN DEVICE US 4,251,047 02/17/81 - ------------------------------------------------------------------------------------------------------------- REINFORCING BAR SUPPORT US 4,132,045 01/02/79 - ------------------------------------------------------------------------------------------------------------- CAVITY FORMING PLUG FOR COIL INSERT IN US 4,084,780 04/18/78 CONCRETE PRODUCT - ------------------------------------------------------------------------------------------------------------- FILLER PLUG FOR COIL INSERT IN CONCRETE US 4,074,499 02/21/78 SLAB OR PANEL - ------------------------------------------------------------------------------------------------------------- METHOD FOR RELEASING TILT-UP PANEL US 4,056,912 11/08/77 HOISTING MEMBER - ------------------------------------------------------------------------------------------------------------- TIE ROD HOLE PLUG IN COMBINATION WITH A US 4,016,696 04/12/77 WALL HOLE - ------------------------------------------------------------------------------------------------------------- SPLIT BOLT US 3,943,817 03/16/76 - ------------------------------------------------------------------------------------------------------------- SPLIT BOLT US 3,922,946 12/02/75 - ------------------------------------------------------------------------------------------------------------- CONCRETE SLAB PICK-UP UNIT US 4,368,914 1/18/83 This patent was not provided by the client. It was located in a World Patent Index search for patents assigned to Dayton Superior Corporation. However, the USPTO records indicate Superior Concrete Accessories, Inc. (San Diego, CA) as the owner. - ------------------------------------------------------------------------------------------------------------- QUICK CONNECT REBAR SPLICE US 5,967,691 10/19/99 - ------------------------------------------------------------------------------------------------------------- KNEE BRACE BRACKET FOR TILT UP US 5,943,830 8/31/99 CONSTRUCTION - ------------------------------------------------------------------------------------------------------------- TITLE COUNTRY PATENT NO. ISSUE DATE COMMENTS - -------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------- WELDED CONCRETE REINFORCEMENT BARS US 5,491,941 2/20/96 Assigned to Symons Corporation d/b/a Richmond Screw Anchor Company; Assignment recorded as an assignment to Richmond Screw Anchor Company - ------------------------------------------------------------------------------------------------------------- COMBINATION MECHANICAL/GROUT SLEEVE US 5,383,740 1/24/95 COUPLING FOR CONCRETE REINFORCEMENT BARS - ------------------------------------------------------------------------------------------------------------- STRONGBACK ATTACHMENT SYSTEM US 5,212,920 5/25/93 - ------------------------------------------------------------------------------------------------------------- COUPLING FOR CONCRETE REINFORCEMENT BARS US 5,152,118 10/06/92 - ------------------------------------------------------------------------------------------------------------- SETTING HOIST ANCHORS IN POURED CONCRETE US 4,888,922 12/26/89 STRUCTURES - ------------------------------------------------------------------------------------------------------------- HOIST COUPLING US 4,671,554 6/09/87 - ------------------------------------------------------------------------------------------------------------- REBAR SPLICING AND ANCHORING US 4,619,096 10/28/86 - -------------------------------------------------------------------------------------------------------------
PENDING PATENT APPLICATIONS NOT PUBLIC RECORD. UNABLE TO VERIFY. - ------------------------------------------------------------------------------------------------------------- TITLE COUNTRY APPLN. NO. FILING DATE COMMENTS - ------------------------------------------------------------------------------------------------------------- ANCHOR POSITIONING INSERT US 09/213,211 12/17/98 Same as below? - ------------------------------------------------------------------------------------------------------------- A BASE ADAPTED FOR SUPPORTING AN ANCHOR US 00/00/00 Only information provided by client. - ------------------------------------------------------------------------------------------------------------- CONCRETE VOID FORMER AND COOPERATING COVER US 60/128,349 4/8/99 - ------------------------------------------------------------------------------------------------------------- CONCRETE VOID FORMER AND COOPERATING COVER US 09/544,746 4/7/00 - ------------------------------------------------------------------------------------------------------------- KNEE BRACE BRACKET FOR TILT-UP US 09/291,219 4/13/00 CONSTRUCTION - ------------------------------------------------------------------------------------------------------------- CONCRETE ANCHOR US 29/118,169 2/4/00 - ------------------------------------------------------------------------------------------------------------- CONCRETE ANCHOR INCLUDING AN ELLIPTICAL US 29/118,168 2/4/00 BASE - ------------------------------------------------------------------------------------------------------------- CONCRETE ANCHOR INCLUDING A PENTAGONAL US 29/118,230 2/4/00 BASE - ------------------------------------------------------------------------------------------------------------- CONCRETE ANCHOR INCLUDING A HEXAGONAL BASE US 29/118,171 2/4/00 - ------------------------------------------------------------------------------------------------------------- CONCRETE ANCHOR INCLUDING AN OCTAGONAL US 29/118,170 2/4/00 BASE - ------------------------------------------------------------------------------------------------------------- QUICK CONNECT REBAR SPLICE US 09/321,146 5/27/99 - ------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------- QUICK CONNECT REBAR SPLICE US 09/321,147 5/27/99 - ------------------------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------- WELDED CONCRETE REINFORCEMENT BARS US 08/753,810 12/02/96 Not public record. Unable to verify. - -------------------------------------------------------------------------------------------------------------
PATENT LIST #2 SYMONS CORPORATION ISSUED PATENTS/PENDING APPLICATIONS I. ISSUED PATENTS
- ------------------------------------------------------------------------------------------------------------- TITLE COUNTRY PATENT NO. ISSUE DATE COMMENTS - ------------------------------------------------------------------------------------------------------------- SAND JACK APPARATUS US 5,816,562 10/06/98 - ------------------------------------------------------------------------------------------------------------- CONCRETE FORM WITH SAFETY BAR US 5,707,539 01/13/98 Indicated as "963938" in client's information. - ------------------------------------------------------------------------------------------------------------- PILASTER FORM US 5,656,193 08/12/97 - ------------------------------------------------------------------------------------------------------------- CONCRETE FORMING CHAMFER STRIP US 5,616,271 04/01/97 - ------------------------------------------------------------------------------------------------------------- CONCRETE FORM AND SELF-CONTAINED WALER US 5,562,845 10/08/96 CLAMP ASSEMBLY - ------------------------------------------------------------------------------------------------------------- SCAFFOLD BRACKET US 5,316,253 05/31/94 - ------------------------------------------------------------------------------------------------------------- SLAB JOINT SYSTEM AND APPARATUS FOR US 5,261,635 11/16/93 JOINING CONCRETE SLABS IN SIDE-BY-SIDE RELATION - ------------------------------------------------------------------------------------------------------------- CONCRETE POURING FORM SYSTEM FOR BRIDGE US 5,104,089 4/14/92 This patent was listed on OVERHANG DECKS the list provided by the client. It was also identified in a World Patent Index search for patents assigned to Symons. However, the USPTO records indicate Landes Company Inc. as the owner. Patent No. 5,083,739, which is a divisional of this Patent, is owned by Symons. - ------------------------------------------------------------------------------------------------------------- TITLE COUNTRY PATENT NO. ISSUE DATE COMMENTS - -------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------- CONCRETE FORM SUPPORT BRACKET FOR US 5,083,739 01/28/92 This patent is a divisional BRIDGE OVERHANG DECKS of Serial No. 417,744, now U.S. Patent No. 5,104,089 (which USPTO records indicate is still owned by Landes Company Inc.). - ------------------------------------------------------------------------------------------------------------- OUTSIDE BAY ADAPTER FOR A CONCRETE US 5,044,601 09/03/91 FORMING SYSTEM - ------------------------------------------------------------------------------------------------------------- WALER BRACKET FOR CONCRETE FORMING US 5,039,059 08/13/91 STRUCTURE - ------------------------------------------------------------------------------------------------------------- BOX CULVERT TRAVELER FOR USE WITH US 4,930,937 06/05/90 CONCRETE FORMING SYSTEMS - ------------------------------------------------------------------------------------------------------------- CONCRETE FORMING SYSTEM FOR CURVED WALLS US 4,915,345 04/10/90 - ------------------------------------------------------------------------------------------------------------- MULTI-PANELLED CONCRETE FORMING US 4,553,729 11/19/85 STRUCTURE FOR FORMING FLAT CURVED WALLS - ------------------------------------------------------------------------------------------------------------- CONCRETE FORMING STRUCTURE HAVING A US 4,465,257 08/14/84 DOUBLE HINGE FILLER - ------------------------------------------------------------------------------------------------------------- CONCRETE FORM STRUCTURE INCLUDING US 4,463,925 08/07/84 ONE-WAY ESCAPE HINGE - ------------------------------------------------------------------------------------------------------------- ADJUSTABLE LONG BOLT US 4,433,826 02/28/84 - ------------------------------------------------------------------------------------------------------------- DOUBLE-HINGE CORNER FOR A CONCRETE US 4,418,884 12/06/83 FORMING STRUCTURE - ------------------------------------------------------------------------------------------------------------- TRANSITION BOLT FOR CLAMPING TOGETHER US 4,235,560 11/25/80 THE SIDE RAILS OF CONCRETE WALL FORM PANELS OR THE LIKE - ------------------------------------------------------------------------------------------------------------- ATTACHMENT FOR ANCHORING A SAFETY BELT US 4,228,986 10/21/80 - -------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------- TITLE COUNTRY PATENT NO. ISSUE DATE COMMENTS - ------------------------------------------------------------------------------------------------------------- SAFETY KEY AND LOCKING MEANS THEREFOR US 4,210,306 07/01/80 FOR USE WITH CONCRETE WALL FORM PANELS - ------------------------------------------------------------------------------------------------------------- ADJUSTABLE SHORING APPARATUS US 4,106,256 08/15/78 - ------------------------------------------------------------------------------------------------------------- FASTENING MEANS FOR A LOAD-BEARING US 4,102,108 07/25/78 STRUCTURE - ------------------------------------------------------------------------------------------------------------- LEG BRACE ASSEMBLY FOR ADJUSTABLE US 4,102,096 07/25/78 SHORING APPARATUS - ------------------------------------------------------------------------------------------------------------- MULTI-PURPOSE CONCRETE FORMWORK US 4,070,845 01/31/78 STRUCTURAL MEMBER WITH NOVEL FACILITIES FOR EXTENDING THE EFFECTIVE LENGTH THEREOF - ------------------------------------------------------------------------------------------------------------- INSIDE CONCRETE COREWALL FORM WITH US 4,055,321 10/25/77 PARTICULAR THREE-WAY HINGE ASSEMBLIES THEREFOR - ------------------------------------------------------------------------------------------------------------- METHOD AND MEANS FOR SUPPORTING AN US 4,043,087 08/23/77 ELEVATED CONCRETE WALL PANEL FROM - ------------------------------------------------------------------------------------------------------------- FLYING DECK-TYPE CONCRETE FORM US 4,036,466 07/19/77 INSTALLATION - ------------------------------------------------------------------------------------------------------------- CONCRETE FORMWORK INCLUDING I-BEAM US 4,034,957 07/12/77 SUPPORT - ------------------------------------------------------------------------------------------------------------- COMPOSITE CONCRETE WALL FORM UNIT WITH US 4,030,694 06/21/77 A SPECIAL TRANSITION BOLT - ------------------------------------------------------------------------------------------------------------- INVERTABLE, MULTI-PURPOSE STRUCTURAL US 4,030,266 06/21/77 CLAMP - -------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------- REPAIR SLEEVE FOR A MARINE PILE AND US 4,023,374 05/17/77 METHOD OF APPLYING THE SAME - ------------------------------------------------------------------------------------------------------------- TITLE COUNTRY PATENT NO. ISSUE DATE COMMENTS - ------------------------------------------------------------------------------------------------------------- SPREADER CLIP ASSEMBLY FOR A CONCRETE US 3,981,476 09/21/76 WALL FROM - ------------------------------------------------------------------------------------------------------------- SPREADER BAR ASSEMBLY FOR A CONCRETE US 3,972,501 08/03/76 WALL FORM - ------------------------------------------------------------------------------------------------------------- SHE-BOLT TYPE GRIPPER DEVICE FOR US 3,965,543 06/29/76 CONCRETE WALL FORM TIE RODS OF INDETERMINATE LENGTH - ------------------------------------------------------------------------------------------------------------- LATCH-EQUIPPED, SHE-BOLT GRIPPER DEVICE US 3,965,542 06/29/76 FOR A CONCRETE WALL FROM TIE ROD - ------------------------------------------------------------------------------------------------------------- ARTICULATED CONCRETE COLUMN FORM WITH US 3,917,216 11/04/75 NOVEL CORNER FASTENING DEVICE - ------------------------------------------------------------------------------------------------------------- SHE-BOLT TYPE GRIPPER DEVICE FOR A US 3,910,546 10/07/75 CONCRETE WALL FORM TIE ROD - ------------------------------------------------------------------------------------------------------------- BRACE LOCK ASSEMBLY FOR SCAFFOLDING US 3,867,043 02/18/75 - ------------------------------------------------------------------------------------------------------------- REMOVABLE GUARD RAIL ASSEMBLY AND US 3,863,900 02/04/75 STANCHION BRACKET THEREFOR - ------------------------------------------------------------------------------------------------------------- COLUMN-MOUNTED SHORING BRACKET ASSEMBLY US 3,863,878 02/04/75 FOR OVERHEAD FORMWORK - ------------------------------------------------------------------------------------------------------------- TRACTION HEAD FOR A COLUMN-MOUNTED US 3,863,877 02/04/75 SHORING BRACKET - ------------------------------------------------------------------------------------------------------------- DISTRIBUTING CONVEYOR SYSTEM FOR A US 3,863,783 02/04/75 ROTARY CONCRETE MIXING OR OTHER TRUCK - ------------------------------------------------------------------------------------------------------------- COLUMN-MOUNTED SHORING BRACKET ASSEMBLY US 3,843,084 10/22/74 FOR OVERHEAD FORMWORK - -------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------- TITLE COUNTRY PATENT NO. ISSUE DATE COMMENTS - ------------------------------------------------------------------------------------------------------------- POWER-ACTUATED DISTRIBUTING CONVEYOR US 3,828,949 08/13/74 SYSTEM FOR A READY-MIX CONCRETE TRUCK - ------------------------------------------------------------------------------------------------------------- RELEASABLE METAL SCAFFOLDING CONNECTOR US 3,807,884 04/30/74 - ------------------------------------------------------------------------------------------------------------- CONCRETE WALL FORM TIE ROD ASSEMBLY US 3,785,610 01/15/74 WITH TWIST-OFF SPACER MEMBERS - ------------------------------------------------------------------------------------------------------------- TOEBOARD CLAMP FOR STEEL SCAFFOLDING US 3,785,602 01/15/74 - ------------------------------------------------------------------------------------------------------------- DOME-SUPPORTING SHORE ASSEMBLY FOR A US 3,771,756 11/13/73 CONCRETE CEILING SLAB FORM - ------------------------------------------------------------------------------------------------------------- DISTRIBUTING CONVEYOR SYSTEM FOR A US 3,768,784 10/30/73 ROTARY CONCRETE MIXING OR OTHER TRUCK - ------------------------------------------------------------------------------------------------------------- GROOVE-FORMING PATTERN ASSEMBLY FOR A US 3,754,729 08/28/73 CONCRETE WALL FORM STRUCTURE - ------------------------------------------------------------------------------------------------------------- THREE-PIECE CLAMP ASSEMBLY FOR THE US 3,751,081 08/07/73 BRACES OF SCAFFOLDING - ------------------------------------------------------------------------------------------------------------- HYDRAULIC TURNTABLE US 3,743,223 07/03/73 - ------------------------------------------------------------------------------------------------------------- ELECTRICAL HOIST CONTROL SYSTEM US 3,735,221 05/22/73 - ------------------------------------------------------------------------------------------------------------- ADJUSTABLE BULKHEAD FOR A CONCRETE WALL US 3,731,902 05/08/73 FORM - ------------------------------------------------------------------------------------------------------------- SELF-CONTAINED WALER CLAMP FOR CONCRETE US 3,724,806 04/03/73 WALL FORM - ------------------------------------------------------------------------------------------------------------- WALER CLAMPING ASSEMBLY FOR A CONCRETE US 3,712,576 01/23/73 WALL FORM - -------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------- TITLE COUNTRY PATENT NO. ISSUE DATE COMMENTS - ------------------------------------------------------------------------------------------------------------- SCAFFOLD-SUPPORTING BRACKET FOR A US 3,698,680 10/17/72 CONCRETE WALL FORM - ------------------------------------------------------------------------------------------------------------- CONCRETE WALL FORM INSTALLATION WITH US 3,690,613 09/12/72 PARTICULAR TIE ROD SECURING MEANS THEREFOR - ------------------------------------------------------------------------------------------------------------- REINFORCED CONCRETE WALL FORM PANEL US 3,661,354 05/09/72 - ------------------------------------------------------------------------------------------------------------- SELF-CONTAINED WALER CLAMP ASSEMBLY FOR US 3,655,162 04/11/72 CONCRETE WALL FORM - ------------------------------------------------------------------------------------------------------------- TIE ROD AND CONE ASSEMBLY FOR A US 3,653,628 04/04/72 CONCRETE WALL FORM - ------------------------------------------------------------------------------------------------------------- CONCRETE CEILING SLAB FORM INSTALLATION US 3,647,173 03/07/72 AND DOME-SUPPORTING SHORE ASSEMBLY THEREFOR - ------------------------------------------------------------------------------------------------------------- SELF-CONTAINED WALER CLAMP ASSEMBLY FOR US 3,584,829 06/15/71 CONCRETE WALL FORM - ------------------------------------------------------------------------------------------------------------- CONCRETE WALL FORM WITH WALER CLAMP US 3,584,827 06/15/71 ASSEMBLY - ------------------------------------------------------------------------------------------------------------- BRIDGE OVERHANG SUPPORT BRACKET US D 323,716 02/04/92 - ------------------------------------------------------------------------------------------------------------- BRACKET FOR CONCRETE FORMS US D 317 250 06/04/91 - ------------------------------------------------------------------------------------------------------------- CONCRETE POURING FORM SYSTEM FOR BRIDGE US 5,104,089 4/14/92 Landes Company Inc. OVERHANG DECKS - ------------------------------------------------------------------------------------------------------------- METHOD OF ASSEMBLING A CONCRETE FORM US 4,996,770 3/05/91 Economy Forms Corporation BRACE (Re-examined) Des Moines, IA - ------------------------------------------------------------------------------------------------------------- APPARATUS FOR STRIPPING CONCRETE FORMS US 4,873,738 10/17/89 CFC Fabrication Corporation FROM BRIDGE STRUCTURES Chattanooga, TN - ------------------------------------------------------------------------------------------------------------- STRUCTURAL BEAM FOR CONCRETE FORM US D 325,261 4/07/92 Wilian Holding Company SYSTEMS (Re-examined) Des Moines, IA - -------------------------------------------------------------------------------------------------------------
II. SYMONS PENDING PATENT APPLICATIONS NOT PUBLIC RECORD. UNABLE TO VERIFY.
- ------------------------------------------------------------------------------------------------------------- TITLE COUNTRY APPLN. NO. FILING DATE COMMENTS - ------------------------------------------------------------------------------------------------------------- CONCRETE FORMING CHAMFER STRIP US 08/271059 7/05/94 - ------------------------------------------------------------------------------------------------------------- CONCRETE FORM STACKING SYSTEM US 08/431788 5/01/95 - ------------------------------------------------------------------------------------------------------------- CONCRETE FORM STACKING SYSTEM WITH US 08/681283 7/22/96 ADJUSTABLE LATCHES - ------------------------------------------------------------------------------------------------------------- CONCRETE FORM WITH SAFETY BAR US 08/935609 9/23/97 - ------------------------------------------------------------------------------------------------------------- CONCRETE FORM WALER BRACKET US 09/350770 7/09/99 - ------------------------------------------------------------------------------------------------------------- OVER THE TOP HINGED STABILITY BEAM AND US 60/183,488 2/18/00 METHOD OF USING THE SAME - ------------------------------------------------------------------------------------------------------------- GANGED OVERHANG FORM SYSTEM AND METHOD US 60/183399 2/18/00 OF USING THE SAME - ------------------------------------------------------------------------------------------------------------- FORM FOR CONCRETE COLUMNS US 09/507329 2/18/00 - -------------------------------------------------------------------------------------------------------------
PATENT LIST # 3 DUR-O-WAL, INC. I. ISSUED PATENTS
- ------------------------------------------------------------------------------------------------------------- TITLE COUNTRY PATENT NO. ISSUE DATE COMMENTS - ------------------------------------------------------------------------------------------------------------- REMEDIAL WALL ANCHOR SYSTEM US 5,644,889 07/08/97 - ------------------------------------------------------------------------------------------------------------- VENEER WALL ANCHOR SYSTEM US 4,869,038 9/26/89 - ------------------------------------------------------------------------------------------------------------- DAPPED END REINFORCEMENT ASSEMBLY FOR US 4,612,751 09/23/86 PRECAST PRESTRESSED CONCRETE MEMBERS - ------------------------------------------------------------------------------------------------------------- APERTURED CHANNEL VENEER ANCHOR US 4,606,163 08/19/86 - ------------------------------------------------------------------------------------------------------------- ANCHOR FOR MASONRY VENEER US 4,596,102 06/24/86 - -------------------------------------------------------------------------------------------------------------
II. PENDING PATENT APPLICATIONS. NOT PUBLIC RECORD. UNABLE TO VERIFY.
- ------------------------------------------------------------------------------------------------------------- TITLE COUNTRY APPLN. NO. FILING DATE COMMENTS - ------------------------------------------------------------------------------------------------------------- REINFORCEMENT BAR SUPPORT SYSTEM US 09/016,495 1/30/98 - -------------------------------------------------------------------------------------------------------------
ANNEX F to SECURITY AGREEMENT SCHEDULE OF COPYRIGHTS I. Dayton Superior Corporation Registration Number Publication Date Copyright Title - ------------------- ---------------- --------------- NONE II. [Other Assignors] Registration Number Publication Date Copyright Title - ------------------- ---------------- --------------- NONE ANNEX G to SECURITY AGREEMENT GRANT OF SECURITY INTEREST IN UNITED STATES TRADEMARKS FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which are hereby acknowledged, [Name of Grantor], a __________ corporation (the "Grantor") with principal offices at ____________________________, hereby assigns and grants to Bankers Trust Company, as Collateral Agent, with principal offices at 130 Liberty Street, New York, New York 10006 (the "Grantee"), a security interest in (i) all of the Grantor's right, title and interest in and to the United States trademarks, trademark registrations and trademark applications (the "Marks") set forth on Schedule A attached hereto, (ii) all Proceeds (as such term is defined in the Security Agreement referred to below) and products of the Marks, (iii) the goodwill of the businesses with which the Marks are associated and (iv) all causes of action arising prior to or after the date hereof for infringement of any of the Marks or unfair competition regarding the same. THIS GRANT is made to secure the satisfactory performance and payment of all the Obligations of the Grantor, as such term is defined in the Security Agreement among the Grantor, the other assignors from time to time party thereto and the Grantee, dated as of June 16, 2000 (as amended from time to time, the "Security Agreement"). Upon the occurrence of the Termination Date (as defined in the Security Agreement), the Grantee shall, upon such satisfaction, execute, acknowledge, and deliver to the Grantor an instrument in writing releasing the security interest in the Marks acquired under this Grant. This Grant has been granted in conjunction with the security interest granted to the Grantee under the Security Agreement. The rights and remedies of the Grantee with respect to the security interest granted herein are as set forth in the Security Agreement, all terms and provisions of which are incorporated herein by reference. In the event that any provisions of this Grant are deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall govern. * * * ANNEX G to SECURITY AGREEMENT IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the ____ day of _________, ____. [NAME OF GRANTOR], Grantor By___________________________ Name: Title: BANKERS TRUST COMPANY, as Collateral Agent, Grantee By___________________________ Name: Title: ANNEX G to SECURITY AGREEMENT STATE OF __________ ) ) ss.: COUNTY OF __________ ) On this ____ day of _________, ____, before me personally came ________ _________________ who, being by me duly sworn, did state as follows: that [s]he is _______________ of [Name of Grantor], that [s]he is authorized to execute the foregoing Grant on behalf of said corporation and that [s]he did so by authority of the Board of Directors of said corporation. _________________________ Notary Public ANNEX G to SECURITY AGREEMENT STATE OF __________ ) ) ss.: COUNTY OF __________ ) On this ____ day of _________, ____, before me personally came ________ _____________________ who, being by me duly sworn, did state as follows: that [s]he is __________________ of Bankers Trust Company that [s]he is authorized to execute the foregoing Grant on behalf of said corporation and that [s]he did so by authority of the Board of Directors of said corporation. ____________________________ Notary Public ANNEX G to SECURITY AGREEMENT SCHEDULE A MARK REG. NO. REG. DATE - ---- -------- --------- ANNEX H to SECURITY AGREEMENT GRANT OF SECURITY INTEREST IN UNITED STATES PATENTS FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which are hereby acknowledged, [Name of Grantor], a __________ corporation (the "Grantor") with principal offices at ____________________________, hereby assigns and grants to Bankers Trust Company, as Collateral Agent, with principal offices at 130 Liberty Street, New York, New York 10006 (the "Grantee"), a security interest in (i) all of the Grantor's right, title and interest in and to the United States patents (the "Patents") set forth on Schedule A attached hereto, (ii) all Proceeds (as such term is defined in the Security Agreement referred to below) and products of the Patents, and (iii) all causes of action arising prior to or after the date hereof for infringement of any of the Patents or unfair competition regarding the same. THIS GRANT is made to secure the satisfactory performance and payment of all the Obligations of the Grantor, as such term is defined in the Security Agreement among the Grantor, the other assignors from time to time party thereto and the Grantee, dated as of June 16, 2000 (as amended from time to time, the "Security Agreement"). Upon the occurrence of the Termination Date (as defined in the Security Agreement), the Grantee shall, upon such satisfaction, execute, acknowledge, and deliver to the Grantor an instrument in writing releasing the security interest in the Patents acquired under this Grant. This Grant has been granted in conjunction with the security interest granted to the Grantee under the Security Agreement. The rights and remedies of the Grantee with respect to the security interest granted herein are as set forth in the Security Agreement, all terms and provisions of which are incorporated herein by reference. In the event that any provisions of this Grant are deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall govern. * * * ANNEX H to SECURITY AGREEMENT IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the ____ day of _________, ____. [NAME OF GRANTOR], Grantor By___________________________ Name: Title: BANKERS TRUST COMPANY, as Collateral Agent, Grantee By___________________________ Name: Title: ANNEX H to SECURITY AGREEMENT STATE OF __________ ) ) ss.: COUNTY OF __________ ) On this ____ day of _________, ____, before me personally came ________ _________________ who, being by me duly sworn, did state as follows: that [s]he is _______________ of [Name of Grantor], that [s]he is authorized to execute the foregoing Grant on behalf of said corporation and that [s]he did so by authority of the Board of Directors of said corporation. _____________________________ Notary Public ANNEX H to SECURITY AGREEMENT STATE OF __________ ) ) ss.: COUNTY OF __________ ) On this ____ day of _________, ____, before me personally came ________ _____________________ who, being by me duly sworn, did state as follows: that [s]he is __________________ of Bankers Trust Company that [s]he is authorized to execute the foregoing Grant on behalf of said corporation and that [s]he did so by authority of the Board of Directors of said corporation. _____________________________ Notary Public ANNEX H to SECURITY AGREEMENT SCHEDULE A PATENT PATENT NO. ISSUE DATE - ------ ---------- ---------- ANNEX I to SECURITY AGREEMENT GRANT OF SECURITY INTEREST IN UNITED STATES COPYRIGHTS WHEREAS, [Name of Grantor], a _______________ corporation (the "Grantor"), having its chief executive office at __________________________, ________________, is the owner of all right, title and interest in and to the United States copyrights and associated United States copyright registrations and applications for registration set forth in Schedule A attached hereto; WHEREAS, BANKERS TRUST COMPANY, as Collateral Agent, having its principal offices at 130 Liberty Street, New York, New York 10006 (the "Grantee"), desires to acquire a security interest in said copyrights and copyright registrations and applications therefor; and WHEREAS, the Grantor is willing to assign to the Grantee, and to grant to the Grantee a security interest in and lien upon the copyrights and copyright registrations and applications therefor described above. NOW, THEREFORE, for good and valuable consideration, the receipt of which is hereby acknowledged, and subject to the terms and conditions of the Security Agreement, dated as of June 16, 2000, made by the Grantor, the other assignors from time to time party thereto and the Grantee (as amended from time to time, the "Security Agreement"), the Assignor hereby assigns to the Grantee as collateral security, and grants to the Grantee a security interest in, the copyrights and copyright registrations and applications therefor set forth in Schedule A attached hereto. This Grant has been granted in conjunction with the security interest granted to the Grantee under the Security Agreement. The rights and remedies of the Grantee with respect to the security interest granted herein are as set forth in the Security Agreement, all terms and provisions of which are incorporated herein by reference. In the event that any provisions of this Grant are deemed to conflict with the Security Agreement, the provisions of the Security Agreement shall govern. ANNEX I to SECURITY AGREEMENT Executed at __________, __________, the __ day of _________, ____. [NAME OF GRANTOR], as Grantor By__________________________ Name: Title: BANKERS TRUST COMPANY, as Collateral Agent, Grantee By__________________________ Name: Title: ANNEX I to SECURITY AGREEMENT STATE OF __________ ) ) ss.: COUNTY OF __________ ) On this __ day of _________, ____, before me personally came ___________ _______________, who being duly sworn, did depose and say that [s]he is ___________________ of [Name of Grantor], that [s]he is authorized to execute the foregoing Grant on behalf of said corporation and that [s]he did so by authority of the Board of Directors of said corporation. __________________________ Notary Public ANNEX I to SECURITY AGREEMENT STATE OF __________ ) ) ss.: COUNTY OF __________ ) On this ____ day of _________, ____, before me personally came ________ _____________________ who, being by me duly sworn, did state as follows: that [s]he is __________________ of Bankers Trust Company that [s]he is authorized to execute the foregoing Grant on behalf of said corporation and that [s]he did so by authority of the Board of Directors of said corporation. ____________________________ Notary Public ANNEX I to SECURITY AGREEMENT SCHEDULE A U.S. COPYRIGHTS REGISTRATION PUBLICATION NUMBERS DATE COPYRIGHT TITLE ------------ ----------- --------------- TABLE OF CONTENTS ARTICLE I SECURITY INTERESTS................................................2 1.1 Grant of Security Interests.......................................2 1.2 Power of Attorney.................................................2 ARTICLE II GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS................3 2.1 Necessary Filings.................................................3 2.2 No Liens..........................................................3 2.3 Other Financing Statements........................................3 2.4 Chief Executive Office, Record Locations..........................3 2.5 Location of Inventory and Equipment...............................4 2.6 Recourse..........................................................4 2.7 Trade Names; Change of Name.......................................4 ARTICLE III SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER......................5 3.1 Additional Representations and Warranties.........................5 3.2 Maintenance of Records............................................5 3.3 Direction to Account Debtors; Contracting Parties; etc............5 3.4 Modification of Terms; etc........................................6 3.5 Collection........................................................6 3.6 Instruments.......................................................6 3.7 Assignors Remain Liable Under Receivables.........................6 3.8 Assignors Remain Liable Under Contracts...........................7 3.9 Further Actions...................................................7 ARTICLE IV SPECIAL PROVISIONS CONCERNING TRADEMARKS.........................7 4.1 Additional Representations and Warranties.........................7 4.2 Licenses and Assignments..........................................8 4.3 Infringements.....................................................8 4.4 Preservation of Marks.............................................8 4.5 Maintenance of Registration.......................................8 4.6 Future Registered Marks...........................................8 4.7 Remedies..........................................................8 ARTICLE V SPECIAL PROVISIONS CONCERNING PATENTS, COPYRIGHTS AND TRADE SECRETS.....................................9 5.1 Additional Representations and Warranties.........................9 5.2 Licenses and Assignments..........................................9 5.3 Infringements.....................................................9 5.4 Maintenance of Patents or Copyright..............................10 5.5 Prosecution of Patent Applications...............................10 5.6 Other Patents and Copyrights.....................................10 5.7 Remedies.........................................................10 ARTICLE VI PROVISIONS CONCERNING ALL COLLATERAL............................10 6.1 Protection of Collateral Agent's Security........................10 6.2 Warehouse Receipts Non-Negotiable................................11 6.3 Further Actions..................................................11 6.4 Financing Statements.............................................11 ARTICLE VII REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT...................11 7.1 Remedies; Obtaining the Collateral Upon Default..................11 7.2 Remedies; Disposition of the Collateral..........................13 7.3 Waiver of Claims.................................................13 7.4 Application of Proceeds..........................................14 7.5 Remedies Cumulative..............................................16 7.6 Discontinuance of Proceedings....................................16 ARTICLE VIII INDEMNITY.....................................................17 8.1 Indemnity........................................................17 8.2 Indemnity Obligations Secured by Collateral; Survival............18 ARTICLE IX DEFINITIONS.....................................................18 ARTICLE X MISCELLANEOUS....................................................23 10.2 Waiver; Amendment...............................................23 10.3 Obligations Absolute............................................24 10.4 Successors and Assigns..........................................24 10.5 Headings Descriptive............................................24 10.6 Governing Law...................................................24 10.7 Assignor's Duties...............................................24 10.8 Termination; Release............................................24 10.9 Counterparts....................................................25 10.10 Severability...................................................25 10.11 The Collateral Agent...........................................25 10.12 Benefit of Agreement...........................................26 10.13 Additional Assignors...........................................26 ANNEX A Schedule of Chief Executive Offices/Record Locations ANNEX B Schedule of Inventory and Equipment Location ANNEX C Schedule of Trade and Fictitious Names ANNEX D Schedule of Marks ii ANNEX E Schedule of Patent ANNEX F Schedule of Copyrights ANNEX G Form of Grant of Security Interest in United States Trademarks ANNEX H Form of Grant of Security Interest in United States Patents ANNEX I Form of Grant of Security Interest in United States Copyrights iii EXHIBIT J [CONFORMED AS EXECUTED] FORM OF SUBSIDIARIES GUARANTY SUBSIDIARIES GUARANTY, dated as of June 16, 2000 (as amended, modified or supplemented from time to time, this "Guaranty"), made by each of the undersigned guarantors (each a "Guarantor," and together with any other entity that becomes a guarantor hereunder pursuant to Section 26 hereof, the "Guarantors"). Except as otherwise defined herein, capitalized terms used herein and defined in the Credit Agreement (as defined below) shall be used herein as therein defined. W I T N E S S E T H : WHEREAS, Dayton Superior Corporation (the "Borrower"), the lenders from time to time party thereto (the "Lenders"), and Bankers Trust Company, as Administrative Agent (together with any successor administrative agent, the "Administrative Agent"), have entered into a Credit Agreement, dated as of June 16, 2000 (as amended, modified, or supplemented from time to time, the "Credit Agreement"), providing for the making of Loans to, and the issuance of Letters of Credit for the account of, the Borrower as contemplated therein (the Lenders, the Collateral Agent, the Letter of Credit Issuers and the Administrative Agent are herein called the "Lender Creditors"); WHEREAS, the Borrower may at any time and from time to time enter into one or more Interest Rate Protection Agreements or Other Hedging Agreements with one or more Lenders or any affiliate thereof (each such Lender or affiliate, even if the respective Lender subsequently ceases to be a Lender under the Credit Agreement for any reason, together with such Lender's or affiliate's successors and assigns, if any, collectively, the "Other Creditors," and together with the Lender Creditors, the "Secured Creditors"); WHEREAS, each Guarantor is a direct or indirect Subsidiary of the Borrower; WHEREAS, it is a condition to the making of Loans to, and the issuance of Letters of Credit for the account of, the Borrower under the Credit Agreement that each Guarantor shall have executed and delivered this Guaranty; and WHEREAS, each Guarantor will obtain benefits from the incurrence of Loans to, and the issuance of Letters of Credit for the account of, the Borrower under the Credit Agreement and the entering into by the Borrower of Interest Rate Protection Agreements or Other Hedging Agreements and, accordingly, desires to execute this Guaranty in order to satisfy the conditions described in the preceding paragraph; NOW, THEREFORE, in consideration of the foregoing and other benefits accruing to each Guarantor, the receipt and sufficiency of which are hereby acknowledged, each Guarantor hereby makes the following representations and warranties to the Secured Creditors and hereby covenants and agrees with each Secured Creditor as follows: 1. Each Guarantor, jointly and severally, irrevocably, absolutely and unconditionally guarantees: (i) to the Lender Creditors the full and prompt payment when due Exhibit J Page 2 (whether at the stated maturity, by acceleration or otherwise) of (x) the principal of and interest on the Notes issued by, and the Loans made to, the Borrower under the Credit Agreement, and all reimbursement obligations and Unpaid Drawings with respect to Letters of Credit issued under the Credit Agreement and (y) all other obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due), liabilities and indebtedness owing by the Borrower to the Lender Creditors under the Credit Agreement and any other Credit Document to which the Borrower is a party (including, without limitation, indemnities, Fees and interest thereon), whether now existing or hereafter incurred under, arising out of or in connection with the Credit Agreement and each such other Credit Document and the due performance and compliance by the Borrower with all of the terms, conditions and agreements contained in all such Credit Documents (all such principal, interest, liabilities, indebtedness and obligations being herein collectively called the "Credit Document Obligations"); and (ii) to each Other Creditor the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise) of all obligations (including obligations which, but for the automatic stay under Section 362(a) of the Bankruptcy Code, would become due), liabilities and indebtedness owing by the Borrower under any Interest Rate Protection Agreement and Other Hedging Agreement, whether now in existence or hereafter arising, and the due performance and compliance by the Borrower with all of the terms, conditions and agreements contained in the Interest Rate Protection Agreements and Other Hedging Agreements (all such obligations, liabilities and indebtedness being herein collectively called the "Other Obligations," and together with the Credit Document Obligations, the "Guaranteed Obligations"). Each Guarantor understands, agrees and confirms that the Secured Creditors may enforce this Guaranty up to the full amount of the Guaranteed Obligations against such Guarantor without proceeding against any other Guarantor, the Borrower, against any security for the Guaranteed Obligations, or under any other guaranty covering all or a portion of the Guaranteed Obligations. 2. Additionally, each Guarantor, jointly and severally, unconditionally, absolutely and irrevocably, guarantees the payment of any and all Guaranteed Obligations whether or not due or payable by the Borrower upon the occurrence in respect of the Borrower of any of the events specified in Section 10.05 of the Credit Agreement, and unconditionally and irrevocably, jointly and severally, promises to pay such Guaranteed Obligations to the Secured Creditors, or order, on demand, in legal tender of the United States. This Guaranty shall constitute a guaranty of payment, and not of collection. 3. The liability of each Guarantor hereunder is primary, absolute and unconditional and is exclusive and independent of any security for or other guaranty of the indebtedness of the Borrower whether executed by such Guarantor, any other Guarantor, any other guarantor or by any other party, and the liability of each Guarantor hereunder shall not be affected or impaired by any circumstance or occurrence whatsoever, including, without limitation: (a) any direction as to application of payment by the Borrower or by any other party, (b) any other continuing or other guaranty, undertaking or maximum liability of a guarantor or of any other party as to the Guaranteed Obligations, (c) any payment on or in reduction of any such other guaranty or undertaking, (d) any dissolution, termination or increase, decrease or change in personnel by the Borrower, (e) any payment made to any Secured Creditor on the indebtedness which any Secured Creditor repays the Borrower pursuant to court order in any bankruptcy, Exhibit J Page 3 reorganization, arrangement, moratorium or other debtor relief proceeding, and each Guarantor waives any right to the deferral or modification of its obligations hereunder by reason of any such proceeding, (f) any action or inaction by the Secured Creditors as contemplated in Section 6 hereof or (g) any invalidity, irregularity or unenforceability of all or any part of the Guaranteed Obligations or of any security therefor. 4. The obligations of each Guarantor hereunder are independent of the obligations of any other Guarantor, any other guarantor or the Borrower, and a separate action or actions may be brought and prosecuted against each Guarantor whether or not action is brought against any other Guarantor, any other guarantor or the Borrower and whether or not any other Guarantor, any other guarantor or the Borrower be joined in any such action or actions. Each Guarantor waives, to the fullest extent permitted by law, the benefits of any statute of limitations affecting its liability hereunder or the enforcement thereof. Any payment by the Borrower or other circumstance which operates to toll any statute of limitations as to the Borrower shall operate to toll the statute of limitations as to each Guarantor. 5. Each Guarantor hereby waives notice of acceptance of this Guaranty and notice of any liability to which it may apply, and waives promptness, diligence, presentment, demand of payment, protest, notice of dishonor or nonpayment of any such liabilities, suit or taking of other action by the Administrative Agent or any other Secured Creditor against, and any other notice to, any party liable thereon (including such Guarantor, any other Guarantor, any other guarantor or the Borrower). 6. Any Secured Creditor may at any time and from time to time without the consent of, or notice to, any Guarantor, without incurring responsibility to such Guarantor, without impairing or releasing the obligations of such Guarantor hereunder, upon or without any terms or conditions and in whole or in part: (a) change the manner, place or terms of payment of, and/or change or extend the time of payment of, renew or alter, any of the Guaranteed Obligations (including any increase or decrease in the rate of interest thereon), any security therefor, or any liability incurred directly or indirectly in respect thereof, and the guaranty herein made shall apply to the Guaranteed Obligations as so changed, extended, renewed or altered; (b) take and hold security for the payment of the Guaranteed Obligations and sell, exchange, release, surrender, impair, realize upon or otherwise deal with in any manner and in any order any property by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, the Guaranteed Obligations or any liabilities (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and/or any offset thereagainst; (c) exercise or refrain from exercising any rights against the Borrower, any other Credit Party, any Subsidiary thereof or otherwise act or refrain from acting; (d) release or substitute any one or more endorsers, Guarantors, other guarantors, the Borrower or other obligors; Exhibit J Page 4 (e) settle or compromise any of the Guaranteed Obligations, any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and may subordinate the payment of all or any part thereof to the payment of any liability (whether due or not) of the Borrower to creditors of the Borrower other than the Secured Creditors; (f) apply any sums by whomsoever paid or howsoever realized to any liability or liabilities of the Borrower to the Secured Creditors regardless of what liabilities of the Borrower remain unpaid; (g) consent to or waive any breach of, or any act, omission or default under, any of the Interest Rate Protection Agreements or Other Hedging Agreements, the Credit Documents or any of the instruments or agreements referred to therein, or otherwise amend, modify or supplement any of the Interest Rate Protection Agreements or Other Hedging Agreements, the Credit Documents or any of such other instruments or agreements; (h) act or fail to act in any manner referred to in this Guaranty which may deprive such Guarantor of its right to subrogation against the Borrower to recover full indemnity for any payments made pursuant to this Guaranty; and/or (i) take any other action which would, under otherwise applicable principles of common law, give rise to a legal or equitable discharge of such Guarantor from its liabilities under this Guaranty. 7. This Guaranty is a continuing one and all liabilities to which it applies or may apply under the terms hereof shall be conclusively presumed to have been created in reliance hereon. No failure or delay on the part of any Secured Creditor in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein expressly specified are cumulative and not exclusive of any rights or remedies which any Secured Creditor would otherwise have. No notice to or demand on any Guarantor in any case shall entitle such Guarantor to any other further notice or demand in similar or other circumstances or constitute a waiver of the rights of any Secured Creditor to any other or further action in any circumstances without notice or demand. It is not necessary for any Secured Creditor to inquire into the capacity or powers of the Borrower or the officers, directors, partners or agents acting or purporting to act on its behalf, and any indebtedness made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder. 8. Any indebtedness of the Borrower now or hereafter held by any Guarantor is hereby subordinated to the indebtedness of the Borrower to the Secured Creditors, and such indebtedness of the Borrower to any Guarantor, if the Administrative Agent or the Collateral Agent, after the occurrence and during the continuance of an Event of Default, so requests, shall be collected, enforced and received by such Guarantor as trustee for the Secured Creditors and be paid over to the Secured Creditors on account of the indebtedness of the Borrower to the Secured Creditors, but without affecting or impairing in any manner the liability of such Guarantor under Exhibit J Page 5 the other provisions of this Guaranty. Without limiting the generality of the foregoing, each Guarantor hereby agrees with the Secured Creditors that it will not exercise any right of subrogation which it may at any time otherwise have as a result of this Guaranty (whether contractual, under Section 509 of the Bankruptcy Code or otherwise) until all Guaranteed Obligations have been irrevocably paid in full in cash. 9. (a) Each Guarantor waives any right (except as shall be required by applicable law and cannot be waived) to require the Secured Creditors to: (i) proceed against the Borrower, any other Guarantor, any other guarantor of the Guaranteed Obligations or any other party; (ii) proceed against or exhaust any security held from the Borrower, any other Guarantor, any other guarantor of the Guaranteed Obligations or any other party; or (iii) pursue any other remedy in the Secured Creditors' power whatsoever. Each Guarantor waives any defense based on or arising out of any defense of the Borrower, any other Guarantor, any other guarantor of the Guaranteed Obligations or any other party other than payment in full of the Guaranteed Obligations, including, without limitation, any defense based on or arising out of the disability of the Borrower, any other Guarantor, any other guarantor of the Guaranteed Obligations or any other party, or the unenforceability of the Guaranteed Obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Borrower other than payment in full of the Guaranteed Obligations. The Secured Creditors may, at their election, foreclose on any security held by the Administrative Agent, the Collateral Agent or the other Secured Creditors by one or more judicial or nonjudicial sales, whether or not every aspect of any such sale is commercially reasonable, or exercise any other right or remedy the Secured Creditors may have against the Borrower or any other party, or any security, without affecting or impairing in any way the liability of any Guarantor hereunder except to the extent the Guaranteed Obligations have been paid in full in cash. Each Guarantor waives any defense arising out of any such election by the Secured Creditors, even though such election operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of such Guarantor against the Borrower or any other party or any security. (b) Each Guarantor waives all presentments, demands for performance, protests and notices, including, without limitation, notices of nonperformance, notices of protest, notices of dishonor, notices of acceptance of this Guaranty, and notices of the existence, creation or incurring of new or additional indebtedness. Each Guarantor assumes all responsibility for being and keeping itself informed of the Borrower's financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations and the nature, scope and extent of the risks which such Guarantor assumes and incurs hereunder, and agrees that the Secured Creditors shall have no duty to advise any Guarantor of information known to them regarding such circumstances or risks. 10. The Secured Creditors agree that this Guaranty may be enforced only by the action of the Administrative Agent or the Collateral Agent, in each case acting upon the instructions of the Required Lenders (or, after the date on which all Credit Document Obligations have been paid in full, the holders of at least the majority of the outstanding Other Obligations) and that no other Secured Creditors shall have any right individually to seek to enforce or to enforce this Guaranty or to realize upon the security to be granted by the Security Documents, it Exhibit J Page 6 being understood and agreed that such rights and remedies may be exercised by the Administrative Agent or the Collateral Agent or, after all the Credit Document Obligations have been paid in full, by the holders of at least a majority of the outstanding Other Obligations, as the case may be, for the benefit of the Secured Creditors upon the terms of this Guaranty and the Security Documents. The Secured Creditors further agree that this Guaranty may not be enforced against any director, officer, employee, partner or stockholder of any Guarantor (except to the extent such partner or stockholder is also a Guarantor hereunder). 11. In order to induce the Lenders to make Loans to, and issue Letters of Credit for the account of, the Borrower pursuant to the Credit Agreement, and in order to induce the Other Creditors to execute, deliver and perform the Interest Rate Protection Agreements or Other Hedging Agreements, each Guarantor represents, warrants and covenants that: (a) Such Guarantor (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 conduct of its business requires such qualification except for failures to be so qualified which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. (b) Such Guarantor 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 this Guaranty and each other Document to which it is a 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 this Guaranty and each such other Document. Such Guarantor has duly executed and delivered this Guaranty and each other Document to which it is a party, and this Guaranty and each such other Document constitutes the legal, valid and binding obligation of such Guarantor enforceable in accordance with its terms, except to the extent that the enforceability hereof or 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). (c) Neither the execution, delivery or performance by such Guarantor of this Guaranty or any other Document to which it is a party, nor compliance by it with the terms and provisions hereof and thereof, will (i) contravene any provision of any applicable law, statute, rule or regulation or any applicable order, writ, injunction or decree of any court or governmental instrumentality, (ii) 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 such Guarantor or any of its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement, credit agreement, or any other material agreement, contract or instrument to which such Guarantor 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) Exhibit J Page 7 violate any provision of the certificate of incorporation or by-laws (or equivalent organizational documents) of such Guarantor or any of its Subsidiaries. (d) No order, consent, approval, license, authorization or validation of, or filing, recording or registration with (except as have been obtained or made), or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required for, (i) the execution, delivery and performance of this Guaranty by such Guarantor or any other Document to which such Guarantor is a party or (ii) the legality, validity, binding effect or enforceability of this Guaranty or any other Document to which such Guarantor is a party. (e) There are no actions, suits or proceedings pending or threatened (i) with respect to this Guaranty or any other Document to which such Guarantor is a party or (ii) with respect to such Guarantor that, either individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect. 12. Each Guarantor covenants and agrees that on and after the Effective Date and until the termination of the Total Commitment and all Interest Rate Protection Agreements and Other Hedging Agreements and when no Note or Letter of Credit remains outstanding and all Guaranteed Obligations have been paid in full, such Guarantor will comply, and will cause each of its Subsidiaries to comply, with all of the applicable provisions, covenants and agreements contained in Sections 8 and 9 of the Credit Agreement, and will take, or will refrain from taking, as the case may be, all actions that are necessary to be taken or not taken so that it is not in violation of any provision, covenant or agreement contained in Section 8 or 9 of the Credit Agreement, and so that no Default or Event of Default, is caused by the actions of such Guarantor or any of its Subsidiaries. 13. The Guarantors hereby jointly and severally agree to pay all reasonable out-of-pocket costs and expenses of each Secured Creditor in connection with the enforcement of this Guaranty and of the Administrative Agent in connection with any amendment, waiver or consent relating hereto (including in each case, without limitation, the reasonable fees and disbursements of counsel employed by each Secured Creditor). 14. This Guaranty shall be binding upon each Guarantor and its successors and assigns and shall inure to the benefit of the Secured Creditors and their successors and assigns. 15. Neither this Guaranty nor any provision hereof may be changed, waived, discharged or terminated except with the written consent of each Guarantor directly affected thereby and with the written consent of either (x) the Required Lenders (or to the extent required by Section 13.12 of the Credit Agreement, with the written consent of each Lender) at all times prior to the time on which all Credit Document Obligations have been paid in full or (y) the holders of at least a majority of the outstanding Other Obligations at all times after the time on which all Credit Document Obligations have been paid in full; PROVIDED, that any change, waiver, modification or variance affecting the rights and benefits of a single Class (as defined below) of Secured Creditors (and not all Secured Creditors in a like or similar manner) shall also require the written consent of the Requisite Creditors (as defined below) of such Class of Secured Exhibit J Page 8 Creditors (it being understood that the addition or release of any Guarantor hereunder shall not constitute a change, waiver, discharge or termination affecting any Guarantor other than the Guarantor so added or released). For the purpose of this Guaranty, the term "Class" shall mean each class of Secured Creditors, I.E., whether (x) the Lender Creditors as holders of the Credit Document Obligations or (y) the Other Creditors as the holders of the Other Obligations. For the purpose of this Guaranty, the term "Requisite Creditors" of any Class shall mean (x) with respect to the Credit Document Obligations, the Required Lender (or to the extent required by Section 13.12 of the Credit Agreement, each Lender) and (y) with respect to the Other Obligations, the holders of at least a majority of all obligations outstanding from time to time under the Interest Rate Protection or Other Hedging Agreements. 16. Each Guarantor acknowledges that an executed (or conformed) copy of each of the Credit Documents and Interest Rate Protection Agreements or Other Hedging Agreements has been made available to its principal executive officers and such officers are familiar with the contents thereof. 17. In addition to any rights now or hereafter granted under applicable law (including, without limitation, Section 151 of the New York Debtor and Secured Creditor Law) and not by way of limitation of any such rights, upon the occurrence and during the continuance of an Event of Default (such term to mean and include any "Event of Default" as defined in the Credit Agreement or any payment default under any Interest Rate Protection Agreement or Other Hedging Agreement continuing after any applicable grace period), each Secured Creditor is hereby authorized, at any time or from time to time, without notice to any Guarantor or to any other Person, any such notice being 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 such Secured Creditor to or for the credit or the account of such Guarantor, against and on account of the obligations and liabilities of such Guarantor to such Secured Creditor under this Guaranty, irrespective of whether or not such Secured Creditor shall have made any demand hereunder and although said obligations, liabilities, deposits or claims, or any of them, shall be contingent or unmatured. Notwithstanding anything to the contrary contained in this Section 17, no Secured Creditor shall exercise any such right of set-off without the prior consent of the Administrative Agent or the Required Lenders if, and so long as, the Guaranteed Obligations shall be secured by any Real Property located in the State of California, it being understood and agreed, however, that this sentence is for the sole benefit of the Secured Creditors and may be amended, modified or waived in any respect by the Required Lenders without the requirement of prior notice to or consent by any Credit Party and does not constitute a waiver of any rights against any Credit Party or against any Collateral. 18. All notices, requests, demands or other communications pursuant hereto shall be deemed to have been duly given or made when delivered to the Person to which such notice, request, demand or other communication is required or permitted to be given or made under this Guaranty, addressed to such party at (i) in the case of any Lender Creditor, as provided in the Credit Agreement, (ii) in the case of any Guarantor, at the address set forth opposite such Guarantor's signature below and (iii) in the case of any Other Creditor, at such address as such Exhibit J Page 9 Other Creditor shall have specified in writing to the Guarantors; or in any case at such other address as any of the Persons listed above may hereafter notify the others in writing. 19. If claim is ever made upon any Secured Creditor for repayment or recovery of any amount or amounts received in payment or on account of any of the Guaranteed Obligations and any of the aforesaid payees repays all or part of said amount by reason of (i) any judgment, decree or order of any court or administrative body having jurisdiction over such payee or any of its property or (ii) any settlement or compromise of any such claim effected by such payee with any such claimant (including the Borrower) then and in such event each Guarantor agrees that any such judgment, decree, order, settlement or compromise shall be binding upon such Guarantor, notwithstanding any revocation hereof or other instrument evidencing any liability of the Borrower, and such Guarantor shall be and remain liable to the aforesaid payees hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by any such payee. 20. (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE SECURED CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding with respect to this Guaranty or any other Credit Document to which any Guarantor is a party may be brought in the courts of the State of New York or of the United States of America 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 Guaranty, each Guarantor hereby irrevocably accepts for itself and in respect of its property, generally and unconditionally, the jurisdiction of the aforesaid courts. Each Guarantor hereby further irrevocably waives any claim that any such court lacks personal jurisdiction over such Guarantor, and agrees not to plead or claim in any legal action or proceeding with respect to this Guaranty or any other Credit Document to which such Guarantor is a party brought in any of the aforesaid courts that any such court lacks personal jurisdiction over such Guarantor. Each Guarantor further irrevocably consents to the service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to such Guarantor at its address set forth opposite its signature below, such service to become effective 30 days after such mailing. Each Guarantor 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 to which such Guarantor is a party that such service of process was in any way invalid or ineffective. Nothing herein shall affect the right of any of the Secured Creditors to serve process in any other manner permitted by law or to commence legal proceedings or otherwise proceed against each Guarantor in any other jurisdiction. (b) Each Guarantor hereby irrevocably waives (to the fullest extent permitted by applicable law) any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Guaranty or any other Credit Document to which such Guarantor is a party brought in the courts referred to in clause (a) above and hereby further irrevocably waives and agrees not to plead or claim in any Exhibit J Page 10 such court that such action or proceeding brought in any such court has been brought in an inconvenient forum. (c) EACH GUARANTOR AND EACH SECURED CREDITOR (BY ITS ACCEPTANCE OF THE BENEFITS OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY, THE OTHER CREDIT DOCUMENTS TO WHICH SUCH GUARANTOR IS A PARTY OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. 21. In the event that all of the capital stock of one or more Guarantors is sold or otherwise disposed of or liquidated in compliance with the requirements of Section 9.02 of the Credit Agreement (or such sale or other disposition has been approved in writing by the Required Lenders (or all Lenders if required by Section 13.12 of the Credit Agreement)) and the proceeds of such sale, disposition or liquidation are applied in accordance with the provisions of the Credit Agreement, to the extent applicable, such Guarantor shall upon consummation of such sale or other disposition (except to the extent that such sale or disposition is to the Borrower or another Subsidiary thereof) be released from this Guaranty automatically and without further action and this Guaranty shall, as to each such Guarantor or Guarantors, terminate, and have no further force or effect (it being understood and agreed that the sale of one or more Persons that own, directly or indirectly, all of the capital stock of any Guarantor shall be deemed to be a sale of such Guarantor for the purposes of this Section 21). 22. At any time a payment in respect of the Guaranteed Obligations is made under this Guaranty, the right of contribution of each Guarantor against each other Guarantor shall be determined as provided in the immediately following sentence, with the right of contribution of each Guarantor to be revised and restated as of each date on which a payment (a "Relevant Payment") is made on the Guaranteed Obligations under this Guaranty. At any time that a Relevant Payment is made by a Guarantor that results in the aggregate payments made by such Guarantor in respect of the Guaranteed Obligations to and including the date of the Relevant Payment exceeding such Guarantor's Contribution Percentage (as defined below) of the aggregate payments made by all Guarantors in respect of the Guaranteed Obligations to and including the date of the Relevant Payment (such excess, the "Aggregate Excess Amount"), each such Guarantor shall have a right of contribution against each other Guarantor who has made payments in respect of the Guaranteed Obligations to and including the date of the Relevant Payment in an aggregate amount less than such other Guarantor's Contribution Percentage of the aggregate payments made to and including the date of the Relevant Payment by all Guarantors in respect of the Guaranteed Obligations (the aggregate amount of such deficit, the "Aggregate Deficit Amount") in an amount equal to (x) a fraction the numerator of which is the Aggregate Excess Amount of such Guarantor and the denominator of which is the Aggregate Excess Amount of all Guarantors multiplied by (y) the Aggregate Deficit Amount of such other Guarantor. A Guarantor's right of contribution pursuant to the preceding sentences shall arise at the time of each computation, subject to adjustment to the preceding sentences shall arise at the time of each computation, subject to adjustment to the proceeding sentences; PROVIDED, that no Guarantor may take any action to enforce such right until the Guaranteed Obligations have been Exhibit J Page 11 irrevocably paid in full in cash, it being expressly recognized and agreed by all parties hereto that any Guarantor's right of contribution arising pursuant to this Section 22 against any other Guarantor shall be expressly junior and subordinate to such other Guarantor's obligations and liabilities in respect of the Guaranteed Obligations and any other obligations owing under this Guaranty. As used in this Section 22: (i) each Guarantor's "Contribution Percentage" shall mean the percentage obtained by dividing (x) the Adjusted Net Worth (as defined below) of such Guarantor by (y) the aggregate Adjusted Net Worth of all Guarantors; (ii) the "Adjusted Net Worth" of each Guarantor shall mean the greater of (x) the Net Worth (as defined below) of such Guarantor and (y) zero; and (iii) the "Net Worth" of each Guarantor shall mean the amount by which the fair salable value of such Guarantor's assets on the date of any Relevant Payment exceeds its existing debts and other liabilities (including contingent liabilities, but without giving effect to any Guaranteed Obligations arising under this Guaranty or under any guaranty of the Subordinated Notes) on such date. All parties hereto recognize and agree that, except for any right of contribution arising pursuant to this Section 22, each Guarantor who makes any payment in respect of the Guaranteed Obligations shall have no right of contribution or subrogation against any other Guarantor in respect of such payment until all of the Guaranteed Obligations have been irrevocably paid in full in cash. Each of the Guarantors recognizes and acknowledges that the rights to contribution arising hereunder shall constitute an asset in favor of the party entitled to such contribution. In this connection, each Guarantor has the right to waive its contribution right against any Guarantor to the extent that after giving effect to such waiver such Guarantor would remain solvent, in the determination of the Required Lenders. 23. Each Guarantor and each Secured Creditor (by its acceptance of the benefits of this Guaranty) hereby confirms that it is its intention that this Guaranty not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act of any similar Federal or state law. To effectuate the foregoing intention, each Guarantor and each Secured Creditor (by its acceptance of the benefits of this Guaranty) hereby irrevocably agrees that the Guaranteed Obligations guaranteed by such Guarantor shall be limited to such amount as will, after giving effect to such maximum amount and all other (contingent or otherwise) liabilities of such Guarantor that are relevant under such laws (it being understood that it is the intention of the parties to this Guaranty and the parties to any guaranty of the Senior Subordinated Notes that, to the maximum extent permitted under applicable laws, the liabilities in respect of the guaranties of the Senior Subordinated Notes shall not be included for the foregoing purposes and that, if any reduction is required to the amount guaranteed by any Guarantor hereunder and with respect to the Senior Subordinated Notes that its guaranty of amounts owing in respect of the Senior Subordinated Notes shall first be reduced), and after giving effect to any rights to contribution pursuant to any agreement providing for an equitable contribution among such Guarantor and other Guarantors, result in the Guaranteed Obligations of such Guarantor in respect of such maximum amount not constituting a fraudulent transfer or conveyance. 24. This Guaranty may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. A set Exhibit J Page 12 of counterparts executed by all the parties hereto shall be lodged with the Guarantors and the Administrative Agent. 25. All payments made by any Guarantor hereunder will be made without setoff, counterclaim or other defense and on the same basis as payments are made by the Borrower under Sections 4.03 and 4.04 of the Credit Agreement. 26. It is understood and agreed that any Subsidiary of the Borrower that is required to execute a counterpart of this Guaranty after the date hereof pursuant to the Credit Agreement shall become a Guarantor hereunder by executing a counterpart hereof and delivering the same to the Administrative Agent. IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be executed and delivered as of the date first above written. ADDRESS: 4260 Westbrook Drive DUR-O-WAL, INC., Suite 120 as a Guarantor Aurora, IL 60504 Attention: President Telephone: (630) 851-8400 By /s/ John A. Ciccarelli Telecopier: (630) 854-0500 ------------------------------- Title: President 200 East Touhy Avenue SYMONS CORPORATION, Des Plaines, IL 60018 as a Guarantor Attention: President Telephone: (847) 298-3200 Telecopier: (847) 635-9287 By /s/ John A. Ciccarelli ------------------------------- Title: President Accepted and Agreed to: BANKERS TRUST COMPANY, as Collateral Agent By /s/ Susan L. Le Fevre ---------------------------- Title: Director EXHIBIT K FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT DATE: ________ __, ____ Reference is made to the Credit Agreement described in Item 2 of Annex I annexed hereto (as such Credit Agreement may hereafter be amended, modified or supplemented from time to time, the "Credit Agreement"). Unless defined in Annex I attached hereto, terms defined in the Credit Agreement are used herein as therein defined. _____________ (the "Assignor") and ______________ (the "Assignee") hereby agree as follows: 1. The Assignor hereby sells and assigns to the Assignee without recourse and without representation or warranty (other than as expressly provided herein), and the Assignee hereby purchases and assumes from the Assignor, that interest in and to all of the Assignor's rights and obligations under the Credit Agreement as of the date hereof which represents the percentage interest specified in Item 4 of Annex I (the "Assigned Share") of all of the outstanding rights and obligations under the Credit Agreement relating to the facilities listed in Item 4 of Annex I, including, without limitation, (u) in the case of any assignment of all or any portion of the Total Initial A Term Loan Commitment, all rights and obligations with respect to the Assigned Share of such Total Initial A Term Loan Commitment, (v) in the case of any assignment of all or any portion of the Total Acquisition Loan Commitment, all rights and obligations with respect to the Assigned Share of the Total Acquisition Loan Commitment and any outstanding Acquisition Revolving Loans, (w) in the case of any assignment of outstanding A Term Loans, all rights and obligations with respect to the Assigned Share of such A Term Loans, (x) in the case of any assignment of outstanding B Term Loans, all rights and obligations with respect to the Assigned Share of such outstanding B Term Loans, (y) in the case of any assignment of outstanding Acquisition Term Loans, all rights and obligations with respect to the Assigned Share of such Acquisition Term Loans, and (z) in the case of any assignment of all or any portion of the Total Revolving Loan Commitment, all rights and obligations with respect to the Assigned Share of such Total Revolving Loan Commitment and of any outstanding Revolving Loans, Swingline Loans and Letters of Credit. 2. The Assignor (i) represents and warrants that it is the legal and beneficial owner of the interest being assigned by it hereunder and that such interest is free and clear of any adverse claims; (ii) makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with the Credit Agreement or the other Credit Documents or the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Credit Agreement or the other Credit Documents or any other instrument or document furnished pursuant thereto; and (iii) makes no representation or warranty and assumes no responsibility with respect to the financial condition of the Borrower or any of its Subsidiaries or the performance or observance by the Borrower or any of its Subsidiaries of any of their respective obligations under the Credit Agreement or the other Credit Documents or any other instrument or document furnished pursuant thereto. 3. The Assignee (i) confirms that it has received a copy of the Credit Agreement and the other Credit Documents, together with copies of the financial statements referred to Exhibit K Page 2 therein and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption Agreement; (ii) agrees that it will, independently and without reliance upon the Administrative Agent, the Assignor or any other Lender and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Credit Agreement; (iii) appoints and authorizes the Administrative Agent and the Collateral Agent to take such action as agent on its behalf and to exercise such powers under the Credit Agreement and the other Credit Documents as are delegated to the Administrative Agent and the Collateral Agent by the terms thereof, together with such powers as are reasonably incidental thereto; [and] (iv) agrees that it will perform in accordance with their terms all of the obligations which by the terms of the Credit Agreement are required to be performed by it as a Lender [; and (v) attaches the Forms and/or Certificate described in Section 13.04(b) of the Credit Agreement.](1) 4. Following the execution of this Assignment and Assumption Agreement by the Assignor and the Assignee, an executed original hereof (together with all attachments) will be delivered to the Administrative Agent. The effective date of this Assignment and Assumption Agreement shall be the date of execution hereof by the Assignor and the Assignee, the receipt of the consent of the Administrative Agent, the Borrower and each Letter of Credit Issuer to the extent required by the Credit Agreement, receipt by the Administrative Agent of the assignment fee referred to in Section 13.04(b) of the Credit Agreement, and the recordation by the Administrative Agent of the assignment effected hereby in the Register, unless otherwise specified in Item 5 of Annex I (the "Settlement Date"). 5. Upon the delivery of a fully executed original hereof to the Administrative Agent, as of the Settlement Date, (i) the Assignee shall be a party to the Credit Agreement and, to the extent provided in this Assignment and Assumption Agreement, have the rights and obligations of a Lender thereunder and under the other Credit Documents and (ii) the Assignor shall, to the extent provided in this Assignment and Assumption Agreement, relinquish its rights and be released from its obligations under the Credit Agreement and the other Credit Documents. 6. It is agreed that upon the effectiveness hereof, the Assignee shall be entitled to (w) all interest on the Assigned Share of the Loans at the rates specified in Item 6 of Annex I hereto, (x) all Commitment Fees (if applicable) on the Assigned Share of the Total Revolving Loan Commitment at the rate specified in Item 7 of Annex I hereto and (y) all Letter of Credit Fees (if applicable) on the Assignee's participation in all Letters of Credit at the rate specified in Item 8 of Annex I hereto, which, in each case, accrue on and after the Settlement Date, such interest and, if applicable, Commitment Fees and Letter of Credit Fees, to be paid by the Administrative Agent directly to the Assignee. It is further agreed that all payments of principal made on the Assigned Share of the Loans which occur on and after the Settlement Date will be paid directly by the Administrative Agent to the Assignee. Upon the Settlement Date, the Assignee shall pay to the Assignor an amount specified by the Assignor in writing which represents the Assigned Share of the principal amount of the respective Loans made by the - ---------- (1) If the Assignee is organized under the laws of a jurisdiction outside the United States. Exhibit K Page 3 Assignor pursuant to the Credit Agreement which are outstanding on the Settlement Date, net of any closing costs, and which are being assigned hereunder. The Assignor and the Assignee shall make all appropriate adjustments in payments under the Credit Agreement for periods prior to the Settlement Date directly between themselves. 7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. IN WITNESS WHEREOF, the parties hereto have caused this Assignment and Assumption Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written, such execution also being made on Annex I hereto. [NAME OF ASSIGNOR], as Assignor By____________________________ Name: Title: [NAME OF ASSIGNEE], as Assignee By____________________________ Name: Title: Exhibit K Page 4 [Acknowledged and Agreed: BANKERS TRUST COMPANY, as Administrative Agent By____________________________ Name: Title:](2) [[LETTER OF CREDIT ISSUER] By____________________________ Name: Title:](3) [DAYTON SUPERIOR CORPORATION By____________________________ Name: Title:](4) - ---------- (2) Insert only if assignment is being made pursuant to Section 13.04(b)(y) of the Credit Agreement. (3) Insert only if assignment of any portion of the Total Revolving Loan Commitment is being made pursuant to Section 13.04(b)(y) of the Credit Agreement. (4) Insert only if assignment is being made pursuant to Section 13.04(b)(y) of the Credit Agreement after the Syndication Date and so long as no Default or Event of Default exists. ANNEX I ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT ANNEX I 1. The Borrower: Dayton Superior Corporation (the "Borrower"). 2. Name and Date of Credit Agreement: Credit Agreement, dated as of June 16, 2000, among the Borrower, the lenders from time to time party thereto and Bankers Trust Company, as Administrative Agent. 3. Date of Assignment Agreement: 4. Amounts (as of date of item #3 above):
Amount of Outstanding Outstanding Initial A Outstanding Principal of Amount of Amount of Principal of Term Loan Principal of Acquisition Acquisition Revolving A Term Loans Commitment B Term Loans Term Loans Loan Commitment Loan Commitment ------------ ---------- ------------ ------------ --------------- --------------- a. Aggregate Amount for $________ $________ $________ $________ $________ $________ all Lenders b. Assigned ________% ________% ________% ________% ________% ________% Share c. Amount of Assigned $_________ $_________ $_________ $________ $_________ $_________ Share
5. Settlement Date: 6. Rate of Interest to the Assignee: As set forth in Section 1.08 of the Credit Agreement.(5) 7. Commitment Fees to the Assignee: As set forth in Section 3.01(a) of the Credit Agreement.(6) 8. Letter of Credit - ---------- (5) The Borrower and the Administrative Agent shall, following recordation of such assignment by the Administrative Agent on the Register, direct the entire amount of interest to the Assignee at the rate set forth in Section 1.08 of the Credit Agreement. (6) Insert "Not Applicable" in lieu of text if no portion of the Total Initial A Term Loan Commitment, Total Acquisition Loan Commitment or the Total Revolving Loan Commitment is being assigned. Otherwise the Borrower and the Administrative Agent shall, following recordation of such assignment by the Administrative Agent on the Register, direct the entire amount of the applicable Commitment Fee to the Assignee at the rate set forth in the appropriate clause of Section 3.01(a) of the Credit Agreement. Annex I Page 2 Fee to the Assignee: As set forth in Section 3.01(b) of the Credit Agreement (unless otherwise agreed to by the Assignor and the Assignee).(7) 9. Notice: ASSIGNEE: ____________________ ____________________ ____________________ ____________________ Attention: Telephone: Telecopier: Reference: Payment Instructions: ASSIGNEE: ____________________ ____________________ ____________________ ____________________ Attention: Reference: - ---------- (7) Insert "Not Applicable" in lieu of text if no portion of the Total Revolving Loan Commitment is being assigned. Otherwise the Borrower and the Administrative Agent shall, following recordation of such assignment by the Administrative Agent on the Register, direct the entire amount of the Letter of Credit Fee to the Assignee at the rate set forth in Section 3.01(b) of the Credit Agreement. Annex I Page 3 Accepted and Agreed: [NAME OF ASSIGNEE] [NAME OF ASSIGNOR] By____________________ By_______________________ Name: Name: Title: Title: EXHIBIT L FORM OF INTERCOMPANY NOTE [Date] FOR VALUE RECEIVED, [NAME OF PAYOR] (the "Payor"), hereby promises to pay on demand to the order of _____________ or its assigns (the "Payee"), in lawful money of the United States of America in immediately available funds, at such location in the United States of America as the Payee shall from time to time designate, the unpaid principal amount of all loans and advances made by the Payee to the Payor. The Payor promises also to pay interest on the unpaid principal amount hereof in like money at said office from the date hereof until paid at such rate per annum as shall be agreed upon from time to time by the Payor and Payee. Upon the commencement of any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar proceeding of any jurisdiction relating to the Payor, the unpaid principal amount hereof shall become immediately due and payable without presentment, demand, protest or notice of any kind in connection with this Note. This Note evidences certain permitted intercompany Indebtedness referred to in the Credit Agreement, dated as of June 16, 2000 (as amended, modified or supplemented from time to time, the "Credit Agreement"), among Dayton Superior Corporation, the lenders from time to time party thereto and Bankers Trust Company, as Administrative Agent and is subject to the terms thereof, and shall be pledged by the Payee pursuant to the Pledge Agreement (as defined in the Credit Agreement). The Payor hereby acknowledges and agrees that the Collateral Agent pursuant to and as defined in the Pledge Agreement, as in effect from time to time, may exercise all rights provided therein with respect to this Note. The Payee is hereby authorized to record all loans and advances made by it to the Payor (all of which shall be evidenced by this Note), and all repayments or prepayments thereof, in its books and records, such books and records constituting prima facie evidence of the accuracy of the information contained therein. All payments under this Note shall be made without offset, counterclaim or deduction of any kind. Exhibit L Page 2 THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK. [NAME OF PAYOR] By ________________________________ Name: Title: Pay to the order of - ------------------------------ [NAME OF PAYEE] By ____________________________ Name: Title: EXHIBIT M SHAREHOLDER SUBORDINATED NOTE $_______________ New York, New York [Date] FOR VALUE RECEIVED, DAYTON SUPERIOR CORPORATION, an Ohio corporation (the "Company"), hereby promises to pay to __________ or [his] [her] [its] assigns (the "Payee"), in lawful money of the United States of America in immediately available funds, at ____________________________, the principal sum of _____________ DOLLARS, which amount shall be payable on ______________.1 [The Company promises also to pay interest on the unpaid principal amount hereof in like money at said office from the date hereof until paid at a rate per annum equal to _______________, such interest to be paid [semi-annually] [annually] on _____________________ [and ___________] of each year and at maturity hereof.] This Note is subject to voluntary prepayment, in whole or in part, at the option of the Company, without premium or penalty. This Note is one of the Shareholder Subordinated Notes referred to in the Credit Agreement, dated as of June 16, 2000 (as amended, modified, supplemented, extended, restated, refinanced, replaced or refunded from time to time, the "Credit Agreement"), among the Company, the lenders from time to time party thereto and Bankers Trust Company, as Administrative Agent, and shall be subject to the provisions thereof. Unless otherwise defined herein, all capitalized terms used herein or in Annex A attached hereto and defined in the Credit Agreement shall have the meaning assigned to such term in the Credit Agreement. Notwithstanding anything to the contrary contained in this Note, the Payee understands and agrees that the Company shall not be required to make, and shall not make, any payment of principal, interest or other amounts on this Note to the extent that such payment is prohibited by the terms of any Senior Indebtedness (as defined in Annex A attached hereto), including, but not limited to, Sections 9.06 and 9.12 of the Credit Agreement. This Note, and the Company's obligations hereunder, shall be subordinate and junior to all indebtedness of the Company constituting Senior Indebtedness on the terms and - ---------- (1) Insert a date after June 30, 2011. EXHIBIT M Page 2 conditions set forth in Annex A attached hereto, which Annex A is herein incorporated by reference and made a part hereof as if set forth herein in its entirety. The Company hereby waives presentment, demand, protest or notice of any kind in connection with this Note. THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. DAYTON SUPERIOR CORPORATION By:________________________________ Name: Title: ANNEX A to EXHIBIT M Section 1.01. SUBORDINATION OF LIABILITIES. Dayton Superior Corporation (the "Company"), for itself, its successors and assigns, covenants and agrees, and each holder of the Note to which this Annex A is attached (the "Note") by its acceptance thereof likewise covenants and agrees, that the payment of the principal of, interest on, and all other amounts owing in respect of, the Note (the "Subordinated Indebtedness") is hereby expressly subordinated, to the extent and in the manner set forth below, to the prior payment in full in cash of all Senior Indebtedness (as defined in Section 1.07 of this Annex A). The provisions of this Annex A shall constitute a continuing offer to all persons who, in reliance upon such provisions, become holders of, or continue to hold, Senior Indebtedness, and such holders are made obligees hereunder the same as if their names were written herein as such, and they and/or each of them may proceed to enforce such provisions. Section 1.02. COMPANY NOT TO MAKE PAYMENTS WITH RESPECT TO SUBORDINATED INDEBTEDNESS IN CERTAIN CIRCUMSTANCES. (a) Upon the maturity of any Senior Indebtedness (including interest thereon or fees or any other amounts owing in respect thereof), whether at stated maturity, by acceleration or otherwise, all Obligations (as defined in Section 1.07 of this Annex A) owing in respect thereof shall first be paid in full in cash, before any payment, whether in cash, property, securities or otherwise, is made on account of the Subordinated Indebtedness. (b) Until all Senior Indebtedness has been paid in full in cash and all commitments in respect of such Senior Indebtedness have been terminated, the sum of all payments in respect of the Note (including principal and interest), together with the sum of (i) all payments made under all other Shareholder Subordinated Notes and (ii) all payments made by the Company and its Subsidiaries to repurchase stock or options to purchase stock of the Company held by directors, officers and employees of the Company and its Subsidiaries (or former directors, officers or employees) shall not exceed at any time that amount permitted by the terms of the respective issue of Senior Indebtedness. (c) The Company may not, directly or indirectly, make any payment of any Subordinated Indebtedness and may not acquire any Subordinated Indebtedness for cash or property until all Senior Indebtedness has been paid in full in cash if any default or event of default under the Credit Agreement (as defined in Section 1.07 of this Annex A) or any other issue of Senior Indebtedness is then in existence or would result therefrom. Each holder of the Note hereby agrees that, so long as any such default or event of default in respect of any issue of Senior Indebtedness exists, it will not sue for, or otherwise take any action to enforce the Company's obligations to pay, amounts owing in respect of the Note. Each holder of the Note understands and agrees that to the extent that clause (b) of this Section 1.02 reduces the payment of interest and/or principal which would otherwise be payable under the Note but for the limitations set forth in such clause (b), such unpaid amount shall not constitute a payment default under the Note and the holder of the Note may not sue for, or otherwise take action to enforce the Company's obligation to pay such amount, PROVIDED that such unpaid principal or interest shall remain an obligation of the Company to the holder of the Note pursuant to the terms of the Note. ANNEX A to EXHIBIT M Page 2 (d) In the event that, notwithstanding the provisions of the preceding subsections (a), (b) and (c) of this Section 1.02, the Company (or any Person on behalf of the Company) shall make any payment on account of the Subordinated Indebtedness at a time when payment is not permitted by said subsection (a), (b) or (c), such payment shall be held by the holder of the Note, in trust for the benefit of, and shall be paid forthwith over and delivered to, the holders of Senior Indebtedness or their representative or the trustee under the indenture or other agreement pursuant to which any instruments evidencing any Senior Indebtedness may have been issued, as their respective interests may appear, for application pro rata to the payment of all Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior Indebtedness in full in accordance with the terms of such Senior Indebtedness, after giving effect to any concurrent payment or distribution to or for the holders of Senior Indebtedness. Without in any way modifying the provisions of this Annex A or affecting the subordination effected hereby, the Company shall give the holder of the Note prompt written notice of any event which would prevent payments under Section 1.02(a), (b) or (c) hereof. Section 1.03. SUBORDINATION TO PRIOR PAYMENT OF ALL SENIOR INDEBTEDNESS ON DISSOLUTION, LIQUIDATION OR REORGANIZATION OF COMPANY. Upon any distribution of assets of the Company upon dissolution, winding up, liquidation or reorganization of the Company (whether in bankruptcy, insolvency or receivership proceedings or upon an assignment for the benefit of creditors or otherwise): (a) the holders of all Senior Indebtedness shall first be entitled to receive payment in full in cash of all Senior Indebtedness (including, without limitation, post-petition interest at the rate provided in the documentation with respect to the Senior Indebtedness, whether or not such post-petition interest is an allowed claim against the debtor in any bankruptcy or similar proceeding) before the holder of the Note is entitled to receive any payment of any kind or character on account of the Subordinated Indebtedness; (b) any payment or distributions of assets of the Company of any kind or character, whether in cash, property or securities to which the holder of the Note would be entitled except for the provisions of this Annex A, shall be paid by the liquidating trustee or agent or other person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or other trustee or agent, directly to the holders of Senior Indebtedness or their representative or representatives, or to the trustee or trustees under any indenture under which any instruments evidencing any such Senior Indebtedness may have been issued, to the extent necessary to make payment in full in cash of all Senior Indebtedness remaining unpaid, after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness; and (c) in the event that, notwithstanding the foregoing provisions of this Section 1.03, 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 holder of the Note on account of Subordinated Indebtedness before all Senior Indebtedness is paid in full in ANNEX A to EXHIBIT M Page 3 cash, such payment or distribution shall be received and held in trust for and shall be paid over to the holders of the Senior Indebtedness remaining unpaid or unprovided for or their representative or representatives, or to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior Indebtedness may have been issued, for application to the payment of such Senior Indebtedness until all such Senior Indebtedness shall have been paid in full in cash, after giving effect to any concurrent payment or distribution to the holders of such Senior Indebtedness. Without in any way modifying the provisions of this Annex A or affecting the subordination effected hereby, the Company shall give prompt written notice to the holder of the Note of any dissolution, winding up, liquidiation or reorganization of the Company (whether in bankruptcy, insolvency or receivership proceedings or upon assignment for the benefit of creditors or otherwise). Section 1.04. SUBROGATION. Subject to the prior payment in full in cash of all Senior Indebtedness, the holder of the Note shall be subrogated to the rights of the holders of Senior Indebtedness to receive payments or distributions of assets of the Company applicable to the Senior Indebtedness until all amounts owing on the Note shall be paid in full, and for the purpose of such subrogation no payments or distributions to the holders of the Senior Indebtedness by or on behalf of the Company or by or on behalf of the holder of the Note by virtue of this Annex A which otherwise would have been made to the holder of the Note shall, as between the Company, its creditors other than the holders of Senior Indebtedness, and the holder of the Note, be deemed to be payment by the Company to or on account of the Senior Indebtedness, it being understood that the provisions of this Annex A are and are intended solely for the purpose of defining the relative rights of the holder of the Note, on the one hand, and the holders of the Senior Indebtedness, on the other hand. Section 1.05. OBLIGATION OF THE COMPANY UNCONDITIONAL. Nothing contained in this Annex A or in the Note is intended to or shall impair, as between the Company and the holder of the Note, the obligation of the Company, which is absolute and unconditional, to pay to the holder of the Note the principal of and interest on the Note 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 holder of the Note and creditors of the Company other than the holders of the Senior Indebtedness, nor shall anything herein or therein prevent the holder of the Note from exercising all remedies otherwise permitted by applicable law upon an event of default under the Note, subject to the provisions of this Annex A and the rights, if any, under this Annex A of the holders of Senior Indebtedness in respect of cash, property, or securities of the Company received upon the exercise of any such remedy. Upon any distribution of assets of the Company referred to in this Annex A, the holder of the Note shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which such dissolution, winding up, liquidation or reorganization proceedings are pending, or a certificate of the liquidating trustee or agent or other person making any distribution to the holder of the Note, for the purpose of ascertaining the persons entitled to participate in such distribution, the holders of the Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the ANNEX A to EXHIBIT M Page 4 amount of amounts paid or distributed thereon and all other facts pertinent thereto or to this Annex A. Section 1.06. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF COMPANY OR HOLDERS OF SENIOR INDEBTEDNESS. No right of any present or future holders of any Senior Indebtedness to enforce subordination as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any act or failure to act in good faith by any such holder, or by any noncompliance by the Company with the terms and provisions of the Note, regardless of any knowledge thereof which any such holder may have or be otherwise charged with. The holders of the Senior Indebtedness may, without in any way affecting the obligations of the holder of the Note with respect hereto, at any time or from time to time and in their absolute discretion, change the manner, place or terms of payment of, change or extend the time of payment of, or renew, increase or otherwise alter, any Senior Indebtedness or amend, modify or supplement any agreement or instrument governing or evidencing such Senior Indebtedness or any other document referred to therein, or exercise or refrain from exercising any other of their rights under the Senior Indebtedness including, without limitation, the waiver of default thereunder and the release of any collateral securing such Senior Indebtedness, all without notice to or assent from the holder of the Note. Section 1.07. SENIOR INDEBTEDNESS. The term "Senior Indebtedness" shall mean all Obligations (as defined below) (i) of the Company under, or in respect of, the Credit Agreement (as amended, modified, supplemented, extended, restated, refinanced, replaced or refunded from time to time, the "Credit Agreement"), dated as of June 16, 2000, by and among the Company, the lenders from time to time party thereto and Bankers Trust Company, as Administrative Agent and any renewal, extension, restatement, refinancing or refunding thereof, (ii) of the Company under, or in respect of, any Interest Rate Protection Agreements or Other Hedging Agreements (each as defined in the Credit Agreement), (iii) of the Company under, or in respect of, the Senior Subordinated Note Documents (as defined in the Credit Agreement) and (iv) of the Company (including guarantees) under, or in respect of, all other Indebtedness except Indebtedness that is, by its express terms, pari passu with the Shareholder Subordinated Note to which this Annex A is attached (including other Shareholder Subordinated Notes) or subordinated to the Shareholder Subordinated Notes. As used herein, the term "Obligation" shall mean any principal, interest, premium, penalties, fees, expenses, indemnities and other liabilities and obligations (including guaranties of the foregoing obligations) payable under the documentation governing any Senior Indebtedness (including post-petition interest at the rate provided in the documentation with respect to such Senior Indebtedness, whether or not such post-petition interest is an allowed claim against the debtor in any bankruptcy or similar proceeding). EX-10.25 16 ex-10_25.txt EXHIBIT 10.25 Exhibit 10.25 ================================================================================ MANAGEMENT STOCKHOLDERS' AGREEMENT Dated as of June 16, 2000 ================================================================================ TABLE OF CONTENTS SECTION PAGE - ------- ---- 1. Restrictions on Transfer of Common Stock................................2 1.1. General Restriction on Transfer................................2 1.2. Permitted Transferees..........................................2 2. Sales of Common Stock to Company........................................3 2.1. The Management Stockholders' Rights............................3 2.2. Notice.........................................................3 2.3. Payment........................................................3 3. Company's Rights To Purchase Shares And Cancel Options..................3 3.1. Company's Rights...............................................3 3.2. Determination of Purchase Price................................4 3.3. Notice.........................................................4 3.4. Payment........................................................5 4. Tag-Along and Drag-Along Rights.........................................6 4.1. Tag-Along Rights...............................................6 4.2. Drag-Along Rights..............................................6 5. Purchase Price..........................................................6 5.1. Appraisal......................................................6 5.2. Fair Market Value..............................................7 5.3. Notice to Stockholders.........................................8 6. Prohibited Purchases....................................................8 7. Involuntary Transfers...................................................9 8. Intentionally Omitted..................................................10 9. Termination of Rights and Obligations Under Certain Sections/Lock-Up.......................................................10 10. Stock Certificate Legend...............................................10 11. Covenant Regarding 83(b) Election......................................11 12. Amendment and Modification.............................................11 13. Parties................................................................12 13.1. Assignment by Company.........................................12 13.2. Assignment Generally..........................................12 SECTION PAGE - ------- ---- 13.3. Termination...................................................12 13.4. Agreements to Be Bound........................................12 14. Recapitalizations, Exchanges, etc. Affecting the Common Stock..........13 15. Transfer of Common Stock...............................................13 16. Employment by Company..................................................13 17. Offset.................................................................13 18. Further Assurances.....................................................13 19. Governing Law..........................................................13 20. Invalidity of Provision................................................14 21. Notices................................................................14 22. Headings; Execution in Counterpart.....................................15 23. Effectiveness of Voting Agreements.....................................15 24. Entire Agreement.......................................................15 25. Injunctive Relief......................................................15 26. Defined Terms..........................................................15 26.1. Affiliate.....................................................15 26.2. Cause.........................................................15 26.3. Closing Date..................................................15 26.4. Disability....................................................15 26.5. Exchange Act..................................................16 26.6. Fair Market Value.............................................16 26.7. Initial Price.................................................16 26.8. Involuntary Transfer..........................................16 26.9. Majority Management Stockholders..............................16 26.10. Management Stockholder Party..................................16 26.11. Merger; Merger Agreement......................................16 26.12. Option Excess Price...........................................16 26.13. Permitted Assignee............................................16 26.14. Person........................................................16 26.15. Principal Stockholder.........................................17 26.16. Retirement....................................................17 26.17. Roll-Over Options.............................................17 26.18. Roll-Over Shares..............................................18 26.19. Transfer......................................................18 26.20. Vested........................................................18 ii MANAGEMENT STOCKHOLDERS' AGREEMENT This MANAGEMENT STOCKHOLDERS' AGREEMENT (this "AGREEMENT"), dated as of June 16, 2000, by and among Dayton Superior Corporation, an Ohio corporation ("COMPANY"), Odyssey Investment Partners Fund, LP ("ODYSSEY"), and those employees of Company listed on Schedule A attached hereto (such employees, together with any persons who subsequently become parties to this Agreement and each of their respective Permitted Transferees, are referred to herein, collectively, as the "MANAGEMENT STOCKHOLDERS"). Schedule A shall be updated from time to time to include each Management Stockholder who becomes a party to this Agreement after the date hereof. Odyssey and the Management Stockholders are hereinafter referred to collectively as the "STOCKHOLDERS." RECITALS In connection with that certain Agreement and Plan of Merger, dated as of January 19, 2000, between Stone Acquisition Corp. ("STONE") and Company, as amended (such agreement, the "MERGER AGREEMENT" and the merger contemplated therein, the "MERGER"), as of the date of consummation of the Merger (the "CLOSING DATE"), each Management Stockholder listed on Schedule B attached hereto holds certain options to purchase shares of Class A common shares of Company, without par value (the "COMMON STOCK"), as set forth on Schedule B attached hereto, which options were held by such Management Stockholder immediately prior to the Merger and which options shall be exercisable in full and remain outstanding immediately following the Merger (the "ROLL-OVER OPTIONS"). Each Roll-Over Option will be subject to the terms of the 2000 Stock Option Plan of Dayton Superior Corporation, as the same may be amended from time to time (the "2000 PLAN"), and will remain subject to the terms of any applicable written option agreement between Company and the applicable Management Stockholder, as the same may be amended from time to time, and will be subject to the provisions of this Agreement. In addition, effective as of the Closing Date, Company is granting to certain employees options to purchase Common Stock pursuant to the terms of the 2000 Plan and a Stock Option Agreement between Company and such Management Stockholder, and Company may in the future grant additional options to purchase Common Stock to certain employees. As used in this Agreement, "Options" shall mean all options to purchase Common Stock granted to or held by a Management Stockholder at any time when this Agreement is in effect (including, where applicable, Roll-Over Options). Further, in connection with the Merger, each Management Stockholder listed on Schedule C hereto holds certain shares of Common Stock, as set forth on such Schedule C, which stock was by operation of the Merger exchanged for the same number of Series A Preferred Shares of the Company, without par value, held by such Management Stockholder immediately prior to the Merger (such stock, the "ROLL-OVER SHARES;" and together with any shares of Common Stock acquired by such Management Stockholder upon exercise of Roll-Over Options, the "ROLL-OVER EQUITY"). Capitalized terms used herein without definition elsewhere in this Agreement are defined in Section 26. NOW, THEREFORE, in consideration of the mutual covenants and obligations set forth in this Agreement, and to implement the foregoing, the parties hereto agree as follows: AGREEMENT 1. RESTRICTIONS ON TRANSFER OF COMMON STOCK. 1.1. GENERAL RESTRICTION ON TRANSFER. No shares of Common Stock now or hereafter owned by any Management Stockholder nor any interest therein nor any rights relating thereto may be Transferred, except for (a) Transfers to a Permitted Transferee pursuant to Section 1.2, (b) sales of shares of Common Stock to Company pursuant to Section 2 or 3, (c) a pledge of shares of Common Stock to Company to secure indebtedness of such Management Stockholder owing to Company or (d) Transfers to a third party pursuant to Section 4.1. Any attempt to Transfer any shares of Common Stock not in compliance with this Agreement shall be null and void and neither Company nor any transfer agent shall give any effect in the Company's stock records to such attempted Transfer. 1.2. PERMITTED TRANSFEREES. (a) TRUST, CORPORATION, PARTNERSHIP, ETC. Subject to Section 13.4, a Management Stockholder may Transfer any shares of Common Stock or any interest therein (i) in a Transfer in compliance with applicable federal and state securities law for estate-planning purposes of such Management Stockholder, and with the prior written consent of the Compensation Committee of the Board of Directors of Company (the "COMMITTEE"), which consent shall not be unreasonably withheld, to (x) a trust under which the distribution of the shares of Common Stock may be made only to beneficiaries who are such Management Stockholder, his or her spouse, his or her parents, members of his or her immediate family or his or her lineal descendants ("PERMITTED FAMILY MEMBERS"), (y) a corporation the stockholders of which are only Permitted Family Members or (z) a partnership the partners of which are only Permitted Family Members or (ii) in case of his or her death, by will or by the laws of intestate succession, to his or her executors, administrators, testamentary trustees, legatees or beneficiaries (each such person and entity a "PERMITTED TRANSFEREE" and collectively, the "PERMITTED TRANSFEREES"); PROVIDED, HOWEVER, that in each such case, the shares of Common Stock so Transferred shall be subject to all provisions of this Agreement as though the transferring Management Stockholder were still the holder of such shares. (b) SECURITY AGREEMENTS. Subject to Section 13.4, a Management Stockholder may pledge any or all shares of Common Stock now or hereafter owned by him or her or grant a security interest therein to secure indebtedness of such Management Stockholder owing to a bank or other financial institution approved by Company so long as such indebtedness was incurred for the purpose of paying all or part of the purchase price of such shares of Common Stock or for the purpose of refinancing indebtedness incurred for such purpose, PROVIDED, HOWEVER, that any transferee pursuant to this Section 1.2(b) shall acquire only a security interest in such shares of Common Stock entitling such transferee to the proceeds from any sale of such shares of Common Stock made in compliance with the terms of this Agreement and any proceeds of any distribution 2 to stockholders on account of the stock in any liquidation as a result of any bankruptcy proceeding or the winding up of affairs of Company, but not title to such shares of Common Stock or any other rights incident thereto. The pledge agreements or other related financing agreements of any Management Stockholder shall be subject to, and acknowledge, the rights of Company and the other Stockholders set forth herein. 2. SALES OF COMMON STOCK TO COMPANY. 2.1. THE MANAGEMENT STOCKHOLDERS' RIGHTS. Subject to all subsections of this Section 2 and of Section 6, if the employment of a Management Stockholder with Company or any of its subsidiaries is terminated as a result of (i) termination by Company or any such subsidiary without Cause or (ii) the death, Disability or Retirement of such Management Stockholder, such Management Stockholder and his or her Permitted Transferees shall have the right to sell to Company, and Company shall have the obligation to purchase, in a single transaction, from all such Management Stockholder Parties, at their Fair Market Value, all, but not less than all, shares of Common Stock (including Roll-Over Equity, where applicable) held by such Management Stockholder Parties that have been held by one or more of such Management Stockholder Parties for at least six months as of the date of the notice described in Section 2.2. 2.2. NOTICE. If any Management Stockholder and his or her Permitted Transferees desire to sell shares of Common Stock pursuant to Section 2.1, they shall so notify Company in writing, in a single notice signed by all such Management Stockholder Parties, not more than 15 months after the effective date of such Management Stockholder's termination of employment (or such later date as mutually agreed to by such Management Stockholder and Company) and shall specify the number of shares of Common Stock each such Management Stockholder Party owns. 2.3. PAYMENT. Subject to Section 6, payment for shares of Common Stock sold by a Management Stockholder Party pursuant to Section 2.1 shall be made on or prior to the date 30 days (or the first business day thereafter if the 30th day is not a business day) following the date of the receipt by Company of the notice described in Section 2.2; PROVIDED, HOWEVER, that if such payment is being made pursuant to Section 5.2(c), then such payment shall be made on or prior to the date that is 30 days (or the first business day thereafter if the 30th day is not a business day) following the date of the determination of Fair Market Value. 3. COMPANY'S RIGHTS TO PURCHASE SHARES AND CANCEL OPTIONS. 3.1. COMPANY'S RIGHTS. (a) Subject to all subsections of this Section 3 and of Section 6, if the employment of a Management Stockholder with Company or any of its subsidiaries is terminated for any reason, Company shall have the right, in a single transaction at any time during the 15 months following the effective date of such termination of employment (except as provided in Section 3.1(b)) (i) to purchase from such Management Stockholder and his or her Permitted 3 Transferees, and each such Management Stockholder Party shall have the obligation to sell to Company, all, but not less than all, of each such Management Stockholder Party's shares of Common Stock in exchange for the purchase price set forth in Section 3.2, and (ii) to cancel all, but not less than all, of each such Management Stockholder Party's Vested Options (or Vested portion thereof) in exchange for payment of the Option Excess Price, pursuant to this Section 3. (b) Notwithstanding anything to the contrary in this Section 3, in the event Company or any of its subsidiaries terminates the Management Stockholder's employment without Cause and the Fair Market Value of a share of Common Stock determined pursuant to Section 5.2(a) or (c), as applicable, is less than the Initial Price of any share of Roll-Over Equity held by such Management Stockholder or his or her Permitted Transferees, Company shall not be entitled to purchase any Roll-Over Shares or cancel any Roll-Over Options held by such Management Stockholder Parties until the expiration of the 15-month period following the date of termination of such Management Stockholder's employment, and thereafter, in a single transaction at any time during the 6 months following the expiration of such 15-month period, shall have the right to purchase all, but not less than all, of each such Management Stockholder Party's Roll-Over Shares in exchange for the purchase price set forth in Section 3.2 and to cancel all, but not less than all, of each such Management Stockholder Party's Roll-Over Options in exchange for payment of the Option Excess Price, pursuant to this Section 3. 3.2. DETERMINATION OF PURCHASE PRICE. (a) If such Management Stockholder's employment with Company or any of its subsidiaries is terminated as a result of (i) the termination of employment by Company or one of its subsidiaries without Cause or (ii) the death, Disability or Retirement of such Management Stockholder, the purchase price for shares of Common Stock will be the Fair Market Value of a share of Common Stock. (b) If such Management Stockholder's employment with Company or any of its subsidiaries is terminated as a result of (i) the termination of employment by Company or one of its subsidiaries for Cause or (ii) the resignation of such Management Stockholder, the purchase price for each share of Common Stock (including Roll-Over Shares) will be the lesser of the Fair Market Value of a share of Common Stock and the Initial Price of such share of Common Stock. 3.3. NOTICE. (a) Subject to Section 3.1(b), if Company desires to purchase shares of Common Stock from any Management Stockholder Party and/or to cancel Options held by him, her or it pursuant to Section 3.1(a), it shall so notify each such Management Stockholder Party not more than 15 months after the effective date of the termination of such Management Stockholder's employment (or such later date as mutually agreed to by such Management Stockholder and Company). (b) If Company desires to purchase shares of Common Stock from any Management Shareholder Party and/or to cancel Options held by him, her or it pursuant to Section 3.1(b), it shall so notify each such Management Stockholder Party not more than 6 4 months after the end of the 15-month period described in Section 3.1(b) (or such later date as mutually agreed to by such Management Stockholder and Company). 3.4. PAYMENT. (a) Subject to Section 6, payment pursuant to this Section 3 by reason of an event described in Section 3.2(a) shall be made on or prior to the date 30 days (or the first business day thereafter if the 30th day is not a business day) following the date of the receipt by such Management Stockholder Party of Company's notice of such purchase of Common Stock and/or cancellation of Options pursuant to Section 3.3(a) or (b), as applicable; PROVIDED, HOWEVER, that if such payment is being made pursuant to Section 5.2(c), then such payment shall be made on or prior to the date that is 30 days (or the first business day thereafter if the 30th day is not a business day) following the date of determination of Fair Market Value. (b) Subject to Section 6, and in the sole discretion of the Committee, payment pursuant to this Section 3 by reason of an event described in Section 3.2(b) shall be made as follows (or on a more accelerated schedule if the Committee so elects): (i) if the date of termination occurs prior to the third anniversary of the Closing Date, then one-third of the aggregate purchase price of the purchased shares and Option Excess Value shall be paid within 30 days following each of the third, fourth and fifth anniversaries of the Closing Date; (ii) if the date of termination occurs on or after the third anniversary of the Closing Date and prior to the fourth anniversary of the Closing Date, then (x) two-thirds of the aggregate purchase price of the purchased shares and Option Excess Value shall be paid within 30 days following such fourth anniversary and (y) one-third of such aggregate payment amount shall be paid within 30 days following the fifth anniversary of the Closing Date; (iii) if the date of termination occurs on or after the fourth anniversary of the Closing Date and prior to the fifth anniversary of the Closing Date, then the aggregate purchase price of the purchased shares and Option Excess Value shall be paid within 30 days following such fifth anniversary; and (iv) if the date of termination occurs on or after the fifth anniversary of the Closing Date, then the aggregate purchase price of the purchased shares and Option Excess Value shall be paid contemporaneously with the surrender of the certificates representing the purchased shares and evidence of cancellation of such Options; PROVIDED, HOWEVER, that if such payment is being made pursuant to Section 5.2(c), the first payment (or, in the event of payment pursuant to Section 3.4(b)(iii) or (iv), the payment) shall be made on or prior to the date that is 30 days (or the first business day thereafter if the 30th day is not a business day) following the date of determination of Fair Market Value. (c) Any payments required to be made by Company under Section 3.4(b) (other than payments made under the terms of a note issued by Company pursuant to Section 6) 5 shall accrue simple interest at a rate per annum equal to the mid-term applicable federal rate determined pursuant to Section 1274 of the Code as of the first day any payment is due on the amounts not paid from the date of the Notice pursuant to Section 3.3 to the date Company makes such payments. All payments of interest accrued hereunder (other than interest on any note issued by Company pursuant to Section 6) shall be paid only at the date or dates of payment by Company for the shares of Common Stock being purchased. 4. TAG-ALONG AND DRAG-ALONG RIGHTS. 4.1. TAG-ALONG RIGHTS. No Principal Stockholder may sell any shares of Common Stock to one or more third parties if such shares, together with all shares of Common Stock previously sold by Principal Stockholders to one or more third parties, would represent more than 25% of the aggregate number of shares of Common Stock held by the Principal Stockholders immediately after the Closing Date (as adjusted to reflect any stock dividend, split, reverse split, combination, recapitalization, reclassification of shares or capital contributions), UNLESS each Management Stockholder is offered a PRO RATA right (calculated by reference to the aggregate number of shares of Common Stock held, and shares of Common Stock underlying Roll-Over Options held, by such Management Stockholder and his or her Permitted Transferees at the time of such sale) to participate in such sale for a purchase price per share of Common Stock and on other terms and conditions not less favorable to such Management Stockholder than those applicable to the Principal Stockholders. For the purposes of this Section 4.1, a sale to a "third party" shall not include a sale to any Permitted Assignee, a sale pursuant to an effective registration statement (a "REGISTRATION STATEMENT") under the Securities Act of 1933, as amended (the "SECURITIES ACT") or a sale to the public pursuant to Rule 144 under the Securities Act. 4.2. DRAG-ALONG RIGHTS. If any Principal Stockholder proposes to sell to one or more third parties shares of Common Stock which, together with all shares of Common Stock previously sold by the Principal Stockholders to one or more third parties, would represent more than 25% of the aggregate number of shares of Common Stock held by the Principal Stockholders immediately after the Closing Date (as adjusted to reflect any stock dividend, split, reverse split, combination, recapitalization, reclassification of shares or capital contributions), then, if requested by the Principal Stockholders, each Management Stockholder Party shall be required to join the Principal Stockholders in such sale on a PRO RATA basis (calculated by reference to the aggregate number of shares of Common Stock held by, and shares of Common Stock underlying Roll-Over Options held by, each Management Stockholder Party at the time of such sale) for a purchase price per share of Common Stock and on other terms and conditions not less favorable to each Management Stockholder Party than those applicable to the Principal Stockholders. For the purposes of this Section 4.2, a sale to a "third party" shall not include a sale to any Permitted Assignee or a sale pursuant to a Registration Statement. 5. PURCHASE PRICE. 5.1. APPRAISAL. Company shall engage, from time to time, but not less often than once with respect to every fiscal year commencing with the fiscal year ending on December 31, 2000, and not later than 90 days after the end of each fiscal year, an independent valuation consultant or appraiser of recognized national standing selected by the Compensation Committee (the 6 "APPRAISER") to appraise the Fair Market Value of a share of Common Stock as of the last day of the fiscal year then most recently ended or, at the request of Company, as of any more recent date (the "APPRAISAL DATE") and to prepare and deliver a report to Company describing the results of such appraisal (the "APPRAISAL"). 5.2. FAIR MARKET VALUE. (a) The "FAIR MARKET VALUE" of a share of Common Stock determined for purposes of Section 2 and 3 hereof shall be (i) the fair market value of the entire Common Stock equity interest of Company taken as a whole, without additional premiums for control or discounts for minority interests or restrictions on transfer, divided by (ii) the number of outstanding shares of Common Stock, calculated on a fully-diluted basis. Except as set forth in subsections (b), (c) and (d) of this Section 5.2, the Fair Market Value of a share of Common Stock shall be calculated with reference to the most recent Appraisal and as of the most recent Appraisal Date prior to the termination of the relevant Management Stockholder's employment (or as of the first Appraisal and the first Appraisal Date in the event that such termination occurs prior to December 31, 2000). (b) For the purposes of Section 7, the Fair Market Value of a share of Common Stock shall be calculated with reference to the most recent Appraisal and as of the most recent Appraisal Date prior to the date of the Involuntary Transfer. (c) Except as set forth in subsection (d) of this Section 5.2, beginning with the fiscal year commencing January 1, 2001, if the effective date of termination of the relevant Management Stockholder's employment is on or after the first day of the seventh month of any fiscal year, the Fair Market Value of a share of Common Stock shall equal the sum of (i) the Appraisal determined as of the most recent Appraisal Date prior to the effective date of such termination of employment (the PRIOR APPRAISAL DATE") and (ii) the product of (A) the increase (or decrease) in the Fair Market Value from such Prior Appraisal Date to the Appraisal Date next following the effective date of such termination of employment and (B) a fraction, the denominator of which is the number of days in the period between the Appraisal Dates immediately preceding and following the effective date of such termination of employment and the numerator of which is the number of days elapsed from the Prior Appraisal Date through the effective date of such termination of employment. (d) Notwithstanding any provision to the contrary in this Section 5.2, solely for purposes of Section 2, in the event Company or any of its subsidiaries terminates a Management Stockholder's employment without Cause and the Fair Market Value of a share of Common Stock as determined pursuant to Section 5.2(a) or (c), as applicable and without regard to this Section 5.2(d), is less than the Initial Price of any share of Roll-Over Equity held by such Management Stockholder or his or her Permitted Transferees, the purchase price to be paid by Company upon the purchase of Common Stock pursuant to Section 2.1 shall be (i) the Fair Market Value of a share of Common Stock calculated with reference to the most recent Appraisal and as of the most recent Appraisal Date prior to the date of Company's receipt of the notice described in Section 2.2 or (ii) if the date of the notice described in Section 2.2 is on or after the first day of the seventh month of any fiscal year, the Fair Market Value shall be calculated as 7 described in Section 5.2(c) as if the date of Company's receipt of such notice is the effective date of termination of employment of such Management Stockholder. 5.3. NOTICE TO STOCKHOLDERS. Promptly after receipt of each Appraisal, Company shall deliver to each Management Stockholder a copy of the letter as to value included with the Appraisal. 6. PROHIBITED PURCHASES. Notwithstanding anything to the contrary herein, Company shall not be permitted or obligated to purchase any shares of Common Stock or pay the Option Excess Value for any Options held by any Management Stockholder Party hereunder to the extent (a) Company is prohibited from making such payment by applicable law or by any debt instruments or agreements, including any amendment, renewal, extension, substitution, refinancing, replacement or other modification thereof (the "FINANCING DOCUMENTS") entered into by Company in connection with the Merger or thereafter (provided, however, that Company will use reasonable efforts in negotiating such Financing Documents to have such repurchases be permitted), (b) a default has occurred under any Financing Document and is continuing, (c) the making of such payment would, or in the opinion of the Committee might, result in the occurrence of an event of default under any Financing Document or create a condition which would, or in the opinion of the Committee might, with notice or lapse of time or both, result in such an event of default or (d) the making of such payment would, in the reasonable opinion of the Committee, be imprudent in view of the financial condition (present or projected) of Company or the anticipated impact of making such payment on Company's ability to meet its respective obligations under any Financing Document. If payments to be made with respect to the purchase of shares of Common Stock and/or cancellation of Options which Company has the right or obligation to purchase and cancel on any date exceed the total amount permitted to be paid on such date pursuant to the preceding sentence (the "MAXIMUM AMOUNT"), Company shall make payments on such date only up to the Maximum Amount (and shall not be required to make any payment in excess of the Maximum Amount) in such amounts as the Committee shall determine in good faith applying the following order of priority: (a) First, payment for the purchase of the shares of Common Stock that are Roll-Over Shares and cancellation of Roll-Over Options, which shares are being repurchased and/or which Options are being cancelled by Company by reason of the Management Stockholder's termination of employment for any reason and, to the extent that such amount (but for this Section 6) exceeds the Maximum Amount, such Shares of Roll-Over Equity and Roll-Over Options PRO RATA among all similarly situated Management Stockholders (on the basis of the aggregate number of Roll-Over Shares and number of shares of Common Stock underlying Roll-Over Options held by each such Management Stockholder (and his or her Permitted Transferees)); (b) Second, to the extent that the Maximum Amount is in excess of the amount Company pays pursuant to clause (a) above, payment for the purchase of the shares of Common Stock and cancellation of Options of all Management Stockholder Parties whose shares of Common Stock are being purchased and Options are being cancelled by Company by reason of termination of employment due to death or Disability and, to the extent that such amount (but for this Section 6) exceeds the Maximum Amount, such shares of Common Stock and Options 8 PRO RATA among all similarly situated Management Stockholders (on the basis of the number of shares of Common Stock and number of shares underlying Options held by each such Management Stockholder (and his or her Permitted Transferees)); (c) Third, to the extent that the Maximum Amount is in excess of the amount Company pays pursuant to clauses (a) and (b) above, payment for the purchase of the shares of Common Stock and cancellation of Options of all Management Stockholder Parties whose shares of Common Stock are being purchased and Options are being cancelled by Company by reason of termination of employment without Cause or due to Retirement up to the Maximum Amount and, to the extent that such amount (but for this Section 6) exceeds the Maximum Amount, such shares of Common Stock and Options PRO RATA among all similarly situated Management Stockholders (on the basis of the number of shares of Common Stock and shares of Common Stock underlying Options held by each such Management Stockholder (and his or her Permitted Transferees)); and (d) Fourth, to the extent the Maximum Amount is in excess of the amounts Company pays pursuant to clauses (a), (b) and (c) above, the shares of Common Stock and Options of all other Management Stockholder Parties whose shares of Common Stock are being purchased and/or Options being cancelled by Company up to the Maximum Amount and, to the extent that such payments (but for this Section 6) exceed the Maximum Amount, the shares of Common Stock and Options held by such Management Stockholder Parties in such order of priority and in such amounts as the Committee, in its sole discretion, shall in good faith determine to be appropriate under the circumstances. Notwithstanding anything to the contrary contained in this Agreement, if Company is unable to make any payment when due to any Management Stockholder Party under this Agreement by reason of this Section 6, Company shall issue a note to such Management Stockholder Party for the amount of such payment, the terms of which note shall be acceptable to the lenders party to the Financing Documents and shall not result in a breach or violation of any of the Financing Documents. A note issued to a Management Stockholder Party by Company under this Section 6 shall bear simple interest at a rate per annum equal to the mid-term applicable federal rate determined pursuant to Section 1274 of the Code as of the first day any payment is due on the date of such note to the date such payment is made, and such note will remain outstanding until the earliest practicable date on which Company is able to make payment therefor. All payments of interest accrued hereunder shall be paid only at the date of payment by Company for the shares of Common Stock being purchased and Options being canceled. 7. INVOLUNTARY TRANSFERS. In the case of any transfer of title or beneficial ownership of shares of Common Stock upon default, foreclosure, forfeit, divorce, court order or otherwise than by a voluntary decision on the part of a Management Stockholder Party (each, an "INVOLUNTARY TRANSFER"), Company shall have the right to purchase such shares pursuant to this Section 7. Upon the Involuntary Transfer of any shares of Common Stock, such Management Stockholder Party shall promptly (but in no event later than two days after such Involuntary Transfer) furnish written notice (the "NOTICE") to Company indicating that the Involuntary Transfer has occurred, specifying the name of the person to whom such shares have been transferred (the "INVOLUNTARY TRANSFEREE"), giving a detailed description of the circumstances giving rise to, and stating the 9 legal basis for, the Involuntary Transfer. Upon the receipt of the Notice, and for 60 days thereafter, Company shall have the right to purchase, and the Involuntary Transferee shall have the obligation to sell, all (but not less than all) of the shares of Common Stock acquired by the Involuntary Transferee for a purchase price equal to the lesser of (a) the Fair Market Value of such shares of Common Stock as determined pursuant to the Appraisal as of the most recent Appraisal Date prior to the date of the Involuntary Transfer and (b) the amount of the indebtedness or other liability that gave rise to the Involuntary Transfer plus the excess, if any, of the Initial Price of such shares of Common Stock over the amount of such indebtedness or other liability that gave rise to the Involuntary Transfer. 8. INTENTIONALLY OMITTED 9. TERMINATION OF RIGHTS AND OBLIGATIONS UNDER CERTAIN SECTIONS/LOCK-UP. (a) All rights and obligations pursuant to Sections 1, 2, 3, 4, 5, 7 and 13.4 of this Agreement shall terminate upon the closing of a public offering pursuant to a Registration Statement (a "REGISTRATION") that covers (together with prior Registrations) (i) not less than 50% of the outstanding shares of Common Stock, on a fully-diluted basis or (ii) shares of Common Stock that, after the closing of such public offering, will be traded on the New York Stock Exchange, the American Stock Exchange or the National Association of Securities Dealers Automated Quotation System or any successor to one of the foregoing (a "QUALIFIED REGISTRATION"). (b) Each Management Stockholder agrees that, if any shares of Common Stock (or securities convertible into or exchangeable for Common Stock) are offered to the public pursuant to an effective Registration Statement, such Management Stockholder will not effect any public sale or distribution of any shares of Common Stock not covered by such Registration Statement within 7 days prior to, or within 180 days after, the effective date of such Registration Statement, unless otherwise agreed to in writing by the Committee. 10. STOCK CERTIFICATE LEGEND. A copy of this Agreement shall be filed with the Secretary of Company and kept with the records of Company. Each certificate representing shares of Common Stock owned by any Management Stockholder shall bear upon its face the following legends, as appropriate: (i) THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") OR THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS AND UNTIL REGISTERED UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS UNLESS, IN THE OPINION OF COUNSEL TO THE STOCKHOLDER, WHICH COUNSEL MUST BE, AND THE FORM AND SUBSTANCE OF WHICH OPINION ARE, SATISFACTORY TO THE ISSUER, SUCH 10 OFFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION, TRANSFER OR OTHER DISPOSITION IS EXEMPT FROM REGISTRATION OR IS OTHERWISE IN COMPLIANCE WITH THE ACT, SUCH LAWS AND THE MANAGEMENT STOCKHOLDERS' AGREEMENT DATED AS OF JUNE 16, 2000 BY AND AMONG DAYTON SUPERIOR CORPORATION, ODYSSEY INVESTMENT PARTNERS FUND, LP AND THOSE EMPLOYEES OF THE COMPANY LISTED ON SCHEDULE A ATTACHED THERETO, AS AMENDED FROM TIME TO TIME (THE "MANAGEMENT STOCKHOLDERS' AGREEMENT"). (ii) THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND OTHER CONDITIONS, AS SPECIFIED IN THE MANAGEMENT STOCKHOLDERS' AGREEMENT, COPIES OF WHICH ARE ON FILE AT THE OFFICE OF THE ISSUER AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF SUCH SHARES UPON WRITTEN REQUEST, WITHIN 5 DAYS OF SUCH REQUEST. (iii) THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL AND OTHER SPECIAL RIGHTS OF EACH CLASS OR SERIES OF SHARES AUTHORIZED TO BE ISSUED AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND OR RIGHTS." In addition, certificates representing shares of Common Stock owned by residents of certain states shall bear any legends required by the laws of such states. All stockholders shall be bound by the requirements of such legends. Upon a Registration that covers any shares of Common Stock held by a Management Stockholder Party, the certificate representing such registered shares shall be replaced, at the expense of Company, with certificates not bearing the legends required by Sections 10(i) and 10(ii). 11. COVENANT REGARDING 83(b) ELECTION. Each Management Stockholder hereby covenants and agrees that if he or she makes an election as provided pursuant to Treasury Regulation 1.83-2 with respect to the Common Stock acquired upon exercise of his or her Options, he or she will furnish Company with copies of the forms of election he or she files within 30 days after such exercise of the Options and with evidence that any such election has been filed in a timely manner. 12. AMENDMENT AND MODIFICATION. This Agreement may be amended, modified or supplemented only by written agreement of Company, Odyssey and the Majority Management Stockholders. If Company, Odyssey and such Majority Management Stockholders shall have so 11 agreed, Company shall notify all other Management Stockholders promptly after such amendment, modification or supplement shall take effect. 13. PARTIES. 13.1. ASSIGNMENT BY COMPANY. Company shall have the right to assign to one or more Permitted Assignees, and/or the right to cause one or more Permitted Assignees to assume, all or any portion of its rights and obligations under Sections 2, 3, and 7, provided that any such assignment or assumption is accepted by the proposed assignee or assignees. If Company has not exercised its right to purchase shares of Common Stock pursuant to any such Sections within 20 days of receipt by Company of the letter or notice giving rise to such right (or, in the case of Section 3, the giving of notice by Company), then Odyssey shall have the right to require Company to assign such right to one or more Permitted Assignees. If such right to purchase is assigned to a Permitted Assignee or Permitted Assignees pursuant to this Section 13.1, such Permitted Assignee or Permitted Assignees shall be deemed to be Company for purposes of such purchases under Section 2, 3 or 7, as the case may be. 13.2. ASSIGNMENT GENERALLY. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns; PROVIDED, that Company shall not be permitted to assign this Agreement without the consent of Odyssey, and no Management Stockholder shall be permitted to assign any of his or her obligations pursuant to this Agreement without the prior written consent of Odyssey, unless such assignment is in connection with a Transfer explicitly permitted by this Agreement and, prior to such assignment, such assignee complies with the requirements of Section 13.4. 13.3. TERMINATION. Any party to, or person who is subject to, this Agreement who ceases to own any shares of Common Stock, Options or any interest therein shall cease to be a party to, or person who is subject to, this Agreement and thereafter shall have no rights or obligations hereunder; PROVIDED, HOWEVER, that a Transfer by a Management Stockholder of shares of Common Stock not explicitly permitted under this Agreement shall not relieve such Management Stockholder of any of his or her obligations hereunder. 13.4. AGREEMENTS TO BE BOUND. Notwithstanding anything to the contrary contained in this Agreement, any Transfer of shares by a Management Stockholder shall be permitted under the terms of this Agreement only if the transferee (i) shall agree in writing to be bound by the terms and conditions of this Agreement pursuant to an instrument of assumption reasonably satisfactory in substance and form to Company and (ii) shall cause his or her spouse, if any, to execute a spousal waiver in form and substance satisfactory to the Committee, if such transferee is an individual who resides in a state with a community property system. Upon the execution of the instrument of assumption by such transferee and, if applicable, the spousal waiver by the spouse of such transferee, such transferee shall be deemed to be a Management Stockholder for all purposes of this Agreement except that all provisions that relate to termination of employment of a Management Stockholder and the effects thereof shall continue to apply to such Management Stockholder transferor and not to such transferee. 12 14. RECAPITALIZATIONS, EXCHANGES, ETC. AFFECTING THE COMMON STOCK. Except as otherwise provided herein, the provisions of this Agreement shall apply to the full extent set forth herein with respect to (a) the shares of Common Stock and (b) any and all shares of capital stock of Company or any successor or assign of Company (whether by merger, consolidation, sale of assets or otherwise) or a parent company of the Company which may be issued in respect of, in exchange for, or in substitution for the shares of Common Stock, by reason of any stock dividend, split, reverse split, combination, recapitalization, reclassification, merger, consolidation or otherwise. Except as otherwise provided herein, this Agreement is not intended to confer upon any person, except for the parties hereto, any rights or remedies hereunder. 15. TRANSFER OF COMMON STOCK. If at any time Company purchases any shares of Common Stock pursuant to this Agreement, Company may pay the purchase price determined under this Agreement for the shares of Common Stock it purchases by wire transfer of funds or Company check in the amount of the purchase price, and upon receipt of payment of such purchase price or, pursuant to Section 3.4 or Section 6, any portion thereof, the selling Management Stockholder Party shall deliver the certificates representing the number of shares of Common Stock being purchased in a form suitable for transfer, duly endorsed in blank, and free and clear of any lien, claim or encumbrance. Notwithstanding anything in this Agreement to the contrary, Company shall not be required to make any payment for shares of Common Stock purchased hereunder until delivery to it of the certificates representing such shares. If Company is purchasing less than all the shares of Common Stock represented by a single certificate, Company shall deliver to the selling Management Stockholder a certificate for any unpurchased shares of Common Stock. 16. EMPLOYMENT BY COMPANY. Nothing contained in this Agreement (i) obligates Company or any subsidiary of Company to employ any Management Stockholder in any capacity whatsoever or (ii) prohibits or restricts Company (or any of its subsidiaries) from terminating the employment, if any, of any Management Stockholder at any time or for any reason whatsoever, with or without Cause, and each Management Stockholder hereby acknowledges and agrees that neither Company nor any other Person has made any representations or promises whatsoever to any Management Stockholder concerning his or her employment or continued employment by Company. 17. OFFSET. Company shall be permitted to offset and reduce from any amounts payable to a Management Stockholder and/or his or her Permitted Transferees, the amount of any indebtedness or other obligation or payment owing to Company by such Management Stockholder. 18. FURTHER ASSURANCES. Each party hereto or person subject hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments and documents as any other party hereto or person subject hereto may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. 19. GOVERNING LAW. This Agreement and the rights and obligations of the parties hereunder and the persons subject hereto shall be governed by, and construed and interpreted in accordance with, the laws of the State of Ohio, without giving effect to the choice of law principles thereof. 13 20. INVALIDITY OF PROVISION. The invalidity or unenforceability of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision, in any other jurisdiction. 21. NOTICES. All notices, requests, demands, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (i) delivered personally, (ii) mailed, certified or registered mail with postage pre-paid, (iii) sent by next-day or overnight mail or delivery or (iv) sent by facsimile, as follows: (a) If to Company, to it at: Dayton Superior Corporation 7777 Washington Village Drive, Suite 130 Dayton, Ohio 45459 Facsimile: (937) 428-6360 Attention: Corporate Secretary with a copy to: Odyssey Investment Partners Fund, LP 280 Park Avenue West Tower, 38th Floor New York, New York 10017 Facsimile: (212) 351-7925 Attention: William Hopkins (b) If to a Management Stockholder, to him or her at the address listed on the signature page hereto or as such Management Stockholder shall designate to Company in writing, with a copy to Odyssey at its address indicated herein. (c) If to Odyssey, to it at: Odyssey Investment Partners Fund, LP 280 Park Avenue West Tower, 38th Floor New York, New York 10017 Facsimile: (212) 351-7925 Attention: William Hopkins with a copy to: Latham & Watkins 885 Third Avenue New York, New York 10022 Facsimile: (212) 751-4864 Attention: Maureen A. Riley, Esq. 14 or to such other person or address as any party shall specify by notice in writing to Company in accordance with this Section 21. All such notices, requests, demands, waivers and other communications shall be deemed to have been received (w) if by personal delivery, on the day after such delivery, (x) if by certified or registered mail, on the fifth business day after the mailing thereof, (y) if by next-day or overnight mail or delivery, on the day delivered, (z) if by facsimile, on the next day following the day on which such facsimile was sent, provided that a copy is also sent by certified or registered mail. 22. HEADINGS; EXECUTION IN COUNTERPART. The headings and captions contained herein are for convenience only and shall not control or affect the meaning or construction of any provision hereof. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and which together shall constitute one and the same instrument. 23. EFFECTIVENESS OF VOTING AGREEMENTS. Any provision contained herein which shall be deemed to be a "voting trust" or "voting agreement" (as provided in Chapter 1701 of the Ohio Revised Code) shall be effective, pursuant to this Agreement or pursuant to any extension entered into in accordance with such law, only for so long a period as provided for in such law. 24. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and understanding of the parties hereto in respect of the subject matter contained herein. This Agreement supersedes all prior agreements and understandings among the parties with respect to the subject matter contained herein, including, without limitation, those certain letter agreements and Management Compensation and Equity Term Sheets dated as of January 19, 2000 by and between Stone Acquisition Corporation and any Management Stockholder and the provisions regarding Options set forth in those certain letter agreements pertaining to enhanced severance benefits dated January 19, 2000 by and between Company and any Management Stockholder, if any, and it is the understanding of all parties hereto that any such prior agreement or provision in such prior agreement is hereby terminated, null and void as of the Closing Date. 25. INJUNCTIVE RELIEF. The shares of Common Stock cannot readily be purchased or sold in the open market, and for that reason, among others, Company, Odyssey, and the Management Stockholders will be irreparably damaged in the event this Agreement is not specifically enforced. Each of the parties therefore agrees that in the event of a breach of any provision of this Agreement, the aggrieved party may elect to institute and prosecute proceedings in any court of competent jurisdiction to enforce specific performance or to enjoin the continuing breach of this Agreement. Such remedies shall, however, be cumulative and not exclusive, and shall be in addition to any other remedy which Company, Odyssey or the Management Stockholders may have. Each Management Stockholder hereby irrevocably submits to the non-exclusive jurisdiction of the state and federal courts in Ohio for the purposes of any suit, action or other proceeding arising out of or based upon this Agreement or the subject matter hereof. Each Management Stockholder hereby consents to service of process by mail made in accordance with Section 21. 26. DEFINED TERMS. As used in this Agreement, the following terms shall have the meanings ascribed to them below: 15 26.1. AFFILIATE. "Affiliate" shall mean, with respect to any Person, a Person directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with, such Person, and with respect to Company, also any entity designated by the Board in which Company or one of its Affiliates has an interest, and with respect to Odyssey, also any Affiliate of any partner of Odyssey. 26.2. CAUSE. The term "Cause," used in connection with the termination of employment of a Management Stockholder, shall mean a termination of such Management Stockholder's employment by Company or any of its subsidiaries due to the Management Stockholder's (i) willful or gross misconduct or material failure in the performance of his duties and responsibilities to Company, other than any such failure resulting from such Management Stockholder's Disability, which misconduct or failure continues beyond 14 days after Company notifies such Management Stockholder, in writing, of Company's finding of such misconduct or failure; or (ii) conviction of or plea of guilty or nolo contendre to, a felony, or a crime involving moral turpitude; or (iii) fraud or personal dishonesty involving Company's assets. 26.3. CLOSING DATE. The "Closing Date" is defined in the Recitals hereto. 26.4. DISABILITY. The termination of the employment of any Management Stockholder by Company or any of its subsidiaries shall be deemed to be by reason of a "Disability" if, as a result of such Management Stockholder's incapacity due to reasonably documented physical or mental illness, such Management Stockholder shall have been unable for more than six months within any 12-month period to perform his or her duties with Company or such subsidiary on a full-time basis and within 30 days after written notice of termination has been given to such Management Stockholder, such Management Stockholder shall not have returned to the full-time performance of his or her duties. 26.5. EXCHANGE ACT. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended. 26.6. FAIR MARKET VALUE. "Fair Market Value" shall have the meaning set forth in Section 5.2. 26.7. INITIAL PRICE. "Initial Price" with respect to a share of Common Stock means: (a) with respect to a share of Roll-Over Equity, $27.00 and (b) with respect to all other shares of Common Stock, the purchase price paid therefor. 26.8. INVOLUNTARY TRANSFER. "Involuntary Transfer" shall have the meaning set forth in Section 7. 26.9. MAJORITY MANAGEMENT STOCKHOLDERS. "Majority Management Stockholders" as of any date of determination shall mean those Management Stockholders who then hold 50% or more of the aggregate of all shares of Common Stock then held of record and beneficially owned by the Management Stockholders. 26.10. MANAGEMENT STOCKHOLDER PARTY. "Management Stockholder Party" shall mean any Management Stockholder or Permitted Transferee. 16 26.11. MERGER; MERGER AGREEMENT. "Merger" and "Merger Agreement" shall have the meaning set forth in the Recitals hereto. 26.12. OPTION EXCESS PRICE. In the event of termination of the Management Stockholder's employment as described in Section 3.2(a) the "Option Excess Price" with respect to an Option shall mean the product of (i) the number of shares of Common Stock subject to such Option and (ii) the excess, if any, of (x) the Fair Market Value of a share of Common Stock as determined pursuant to Section 5, over (y) the exercise price applicable to such Option. In the event of termination of the Management Stockholder's employment as described in Section 3.2(b), the "Option Excess Price" with respect to an Option shall mean (a) with respect to Options other than Roll-Over Options, zero and (b) with respect to Roll-Over Options, the product of (i) the number of shares subject to such Option and (ii) the excess, if any of (x) $27.00, over (y) the exercise price applicable to such Option. Notwithstanding the foregoing, if the exercise price applicable to an Option is equal to or greater than the Fair Market Value of a share of Common Stock or $27.00, as applicable, the Option Excess Price shall be zero. 26.13. PERMITTED ASSIGNEE. A "Permitted Assignee" shall mean, (i) Odyssey and Odyssey Coinvestors, LLC (together the "ODYSSEY STOCKHOLDERS"), (ii) any general or limited partner or member of any Odyssey Stockholder (an "ODYSSEY PARTNER"), (iii) any corporation, partnership, limited liability company or other entity that is an Affiliate of any Odyssey Stockholder or of any Odyssey Partner (collectively, the "ODYSSEY AFFILIATES"), (iv) any managing director, member, general partner, director, limited partner, officer or employee of (a) any Odyssey Stockholder, (b) any Odyssey Partner or (c) any Odyssey Affiliate, or the heirs, executors, administrators, testamentary trustees, legatees or beneficiaries of any of the foregoing Persons referred to in this clause (iv) (collectively, the "ODYSSEY ASSOCIATES"), (v) any trust, the beneficiaries of which, or corporation, limited liability company or partnership, the stockholders, members or general or limited partners of which, include only Odyssey Stockholders, Odyssey Partners, Odyssey Affiliates, Odyssey Associates, their spouses or their lineal descendants; and (v) a voting trustee for one or more Odyssey Stockholders, Odyssey Affiliates, Odyssey Partners or Odyssey Associates. 26.14. PERSON. "Person" shall mean an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, governmental authority or other entity of whatever nature. 26.15. PRINCIPAL STOCKHOLDER. "Principal Stockholder" shall mean Odyssey Investment Partners Fund, LP and any of its Permitted Assignees. 26.16. RETIREMENT. "Retirement" with respect to a Management Stockholder shall mean the retirement of such Management Stockholder upon or after reaching the age of 65 or as otherwise defined in a written agreement between Company and such Management Stockholder. 26.17. ROLL-OVER OPTIONS. "Roll-Over Options" shall have the meaning ascribed to such term in the Recitals hereto. 17 26.18. ROLL-OVER SHARES. "Roll-Over Shares" shall have the meaning ascribed to such term in the Recitals hereto. 26.19. TRANSFER. "Transfer" (or any variation thereof used herein) shall mean any direct or indirect sale, assignment, mortgage, transfer, pledge, hypothecation or other disposal. 26.20. VESTED. "Vested" with respect to an Option, as of any date of determination, shall mean that portion of such Option that is then Vested and exercisable. [signature pages follow] 18 IN WITNESS WHEREOF, the undersigned has executed this Management Stockholders' Agreement as of the day and year first written above. Dayton Superior Corporation By: --------------------------------------- Name: Title: --------------------------------------- John A. Ciccarelli --------------------------------------- James C. Stewart --------------------------------------- Michael C. Deis --------------------------------------- William C. Mongole --------------------------------------- James W. Fennessy --------------------------------------- Scott Wills --------------------------------------- Alan F. McIlroy --------------------------------------- Mark K. Kaler --------------------------------------- 19 Management Stockholders' Agreement Raymond E. Bartholomae --------------------------------------- Jaime Taronji, Jr. --------------------------------------- Thomas W. Roehrig --------------------------------------- Gregory K. Arnett --------------------------------------- Gaylyn B. Betker --------------------------------------- Thomas Degnan --------------------------------------- Leslie A. Gaines --------------------------------------- Rodney Jacobs --------------------------------------- Keith Janning --------------------------------------- Myron Jornov --------------------------------------- Anthony F. Kripp --------------------------------------- 20 Management Stockholders' Agreement --------------------------------------- Dennis Mallaney --------------------------------------- Douglas W. Piar --------------------------------------- Lee Randall --------------------------------------- John M. Rutherford --------------------------------------- Michael A. Barnett --------------------------------------- Andrew O. Cannon --------------------------------------- Roy L. Edgar --------------------------------------- Steve Getz --------------------------------------- Richard Hetisimer --------------------------------------- William S. Jagger --------------------------------------- Keith E. Keller --------------------------------------- Management Stockholders' Agreement 21 --------------------------------------- Daniel G. Lalowski --------------------------------------- Jonathon Paine Jr. --------------------------------------- Lloyd A. Rafalsky --------------------------------------- Robert R. Roeller --------------------------------------- Ardee D. Toppe --------------------------------------- Charles L. Webster --------------------------------------- Joseph W. Zinck Management Stockholders' Agreement 22 Odyssey Coinvestment Partners, LLC By: ------------------------------------ Name: Title Odyssey Investment Partners Fund, LP By: Odyssey Capital Partners, LLC, its general partner By: ------------------------------------ Name: Title Management Stockholders' Agreement 23 EX-12.1 17 ex-12_1.txt EXHIBIT 12.1 Exhibit 12.1
Pro Forma Twelve Year Ended December 31, Three Months Ended Months Ended --------------------------------------------------------- ------------------ ------------ Pro Forma April 2, March 31, March 31, 1995 1996 1997 1998 1999 1999 1999 2000 2000 Income before income taxes $ 4,395 $ 8,154 $12,230 $18,320 $26,646 $11,131 (646) 853 $12,207 Interest expense 4,231 4,829 5,556 11,703 11,661 30,618 2,975 2,728 30,657 Lease expense 425 627 910 1,397 1,521 1,521 380 380 1,521 ------- ------- ------- ------- ------- ------- ----- ----- ------- 9,051 13,610 18,696 31,420 39,828 43,270 2,709 3,961 44,385 ------- ------- ------- ------- ------- ------- ----- ----- ------- Interest expense 4,231 4,829 5,556 11,703 11,661 30,618 2,975 2,728 30,657 Lease expense 425 627 910 1,397 1,521 1,521 380 380 1,521 Dividends on Company- obligated mandatorily redeemable convertible trust preferred securities -- -- -- -- 533 -- -- 533 -- ------- ------- ------- ------- ------- ------- ----- ----- ------- 4,656 5,456 6,466 13,100 13,715 32,139 3,355 3,641 32,178 ------- ------- ------- ------- ------- ------- ----- ----- ------- Ratio of earnings to fixed charges 1.9 2.5 2.9 2.4 2.9 1.3 0.8 1.1 1.4 ======= ======= ======= ======= ======= ======= ===== ===== =======
EX-21.1 18 ex-21_1.txt EXHIBIT 21.1 EXHIBIT 21.1 SUBSIDIARIES The Subsidiaries of the Dayton Superior Corporation are: Symons Corporation Dur-O-Wal, Inc. Dayton Superior Canada Ltd. Dayton Superior FSC Corp. EX-23.2 19 ex-23_2.txt EXHIBIT 23.2 Exhibit 23.2 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the use of our report included in this registration statement and to the incorporation by reference in this registration statement of our report dated February 4, 2000, included in Dayton Superior Corporation's Form 10-K for the year ended December 31, 1999, and to all references to our Firm included in this registration statement. Dayton, Ohio July 13, 2000 EX-25.1 20 ex-25_1.txt FORM T-1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 -------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE -------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) _______ -------------------------- UNITED STATES TRUST COMPANY OF NEW YORK (Exact name of trustee as specified in its charter) New York 13-3818954 (Jurisdiction of incorporation (I. R. S. Employer if not a U. S. national bank) Identification No.) 114 West 47th Street 10036-1532 New York, New York (Zip Code) (Address of principal executive offices) -------------------------- Dayton Superior Corporation (Exact name of obligor as specified in its charter) Ohio 31-0676346 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) 7777 Washington Village Drive 45459 Suite 130 (Zip code) Dayton, Ohio (Address of principal executive offices) -2- -------------------------- Dur-O-Wal, Inc. (Exact name of obligor as specified in its charter) Delaware 36-3104265 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) 4260 Wesbrook Drive 60504 Suite 120 (Zip code) Aurora, Illinois (Address of principal executive offices) -------------------------- Symons Corporation (Exact name of obligor as specified in its charter) Delaware 06-1053316 (State or other jurisdiction of (I. R. S. Employer incorporation or organization) Identification No.) 200 East Touhy Avenue 60017 Des Plaines, Illinois (Zip code) (Address of principal executive offices) -------------------------- 13% Senior Subordinated Notes due 2009 (Title of the indenture securities) -3- GENERAL 1. GENERAL INFORMATION Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. Federal Reserve Bank of New York (2nd District), New York, New York (Board of Governors of the Federal Reserve System) Federal Deposit Insurance Corporation, Washington, D.C. New York State Banking Department, Albany, New York (b) Whether it is authorized to exercise corporate trust powers. The trustee is authorized to exercise corporate trust powers. 2. AFFILIATIONS WITH THE OBLIGOR If the obligor is an affiliate of the trustee, describe each such affiliation. None 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15: Dayton Superior Corporation currently is not in default under its indenture. Accordingly, responses to Items 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15 of Form T-1 are not required under General Instruction B. 16. LIST OF EXHIBITS T-1.1 -- Organization Certificate, as amended, issued by the State of New York Banking Department to transact business as a Trust Company, is incorporated by reference to Exhibit T-1.1 to Form T-1 filed on September 15, 1995 with the Commission pursuant to the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990 (Registration No. 33-97056). T-1.2 -- Included in Exhibit T-1.1. T-1.3 -- Included in Exhibit T-1.1. - 4 - 16. LIST OF EXHIBITS (CONT'D) T-1.4 -- The By-Laws of United States Trust Company of New York, as amended, is incorporated by reference to Exhibit T-1.4 to Form T-1 filed on September 15, 1995 with the Commission pursuant to the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990 (Registration No. 33-97056). T-1.6 -- The consent of the trustee required by Section 321(b) of the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990. T-1.7 -- A copy of the latest report of condition of the trustee pursuant to law or the requirements of its supervising or examining authority. NOTE ==== As of July 11, 2000, the trustee had 2,999,020 shares of Common Stock outstanding, all of which are owned by its parent company, U.S. Trust Corporation. The term "trustee" in Item 2, refers to each of United States Trust Company of New York and its parent company, U. S. Trust Corporation. In answering Item 2 in this statement of eligibility as to matters peculiarly within the knowledge of the obligor or its directors, the trustee has relied upon information furnished to it by the obligor and will rely on information to be furnished by the obligor and the trustee disclaims responsibility for the accuracy or completeness of such information. ------------------ Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee, United States Trust Company of New York, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York, and State of New York, on the 11th day of July 2000. UNITED STATES TRUST COMPANY OF NEW YORK, Trustee By: ------------------------------- Cynthia Chaney Assistant Vice President EXHIBIT T-1.6 The consent of the trustee required by Section 321(b) of the Act. United States Trust Company of New York 114 West 47th Street New York, NY 10036 June 27, 2000 Securities and Exchange Commission 450 5th Street, N.W. Washington, DC 20549 Gentlemen: Pursuant to the provisions of Section 321(b) of the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, and subject to the limitations set forth therein, United States Trust Company of New York ("U.S. Trust") hereby consents that reports of examinations of U.S. Trust by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. Very truly yours, UNITED STATES TRUST COMPANY OF NEW YORK /s/Gerard F. Ganey ------------------------- By: Gerard F. Ganey Senior Vice President EXHIBIT T-1.7 UNITED STATES TRUST COMPANY OF NEW YORK CONSOLIDATED STATEMENT OF CONDITION MARCH 31, 2000 ($ IN THOUSANDS)
ASSETS Cash and Due from Banks $ 341,320 Short-Term Investments 63,345 Securities, Available for Sale 541,852 Loans 2,569,198 Less: Allowance for Credit Losses 17,809 -------------- Net Loans 2,551,388 Premises and Equipment 58,788 Other Assets 200,645 -------------- TOTAL ASSETS $ 3,757,339 ============== LIABILITIES Deposits: Non-Interest Bearing $ 890,544 Interest Bearing 2,158,793 -------------- Total Deposits 3,049,337 Short-Term Credit Facilities 296,646 Accounts Payable and Accrued Liabilities 196,619 -------------- TOTAL LIABILITIES $ 3,542,602 ============== STOCKHOLDER'S EQUITY Common Stock 14,995 Capital Surplus 53,041 Retained Earnings 151,504 Unrealized Loss on Securities Available for Sale (Net of Taxes) (4,804) -------------- TOTAL STOCKHOLDER'S EQUITY 214,736 -------------- TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 3,757,339 ==============
I, Richard E. Brinkmann, Managing Director & Comptroller of the named bank do hereby declare that this Statement of Condition has been prepared in conformance with the instructions issued by the appropriate regulatory authority and is true to the best of my knowledge and belief. Richard E. Brinkmann, Managing Director & Controller May 16, 2000 EX-99.1 21 ex-99_1.txt EXHIBIT 99.1 LETTER OF TRANSMITTAL TO TENDER UNREGISTERED 13% SENIOR SUBORDINATED NOTES DUE 2009 (INCLUDING THOSE IN BOOK-ENTRY FORM) OF DAYTON SUPERIOR CORPORATION PURSUANT TO THE EXCHANGE OFFER AND PROSPECTUS DATED , 2000 - -------------------------------------------------------------------------------- THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2000 (THE "EXPIRATION DATE"), UNLESS THE EXCHANGE OFFER IS EXTENDED BY THE COMPANY. - -------------------------------------------------------------------------------- THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS: United States Trust Company of New York DELIVER TO: BY REGISTERED OR CERTIFIED BY HAND DELIVERY TO 4:30 BY OVERNIGHT COURIER MAIL: P.M.: AND BY HAND DELIVERY United States Trust Company United States Trust Company AFTER 4:30 P.M. of New York of New York ON EXPIRATION DATE: P.O. Box 112 30 Broad Street, B-Level United States Trust Company Bowling Green Station New York, NY 10004-2304 of New York New York, NY 10274-0112 30 Broad Street, 14th Floor BY FACSIMILE: New York, NY 10004-2304 (Eligible Institutions Only) (212) 422-0183 OR (646) 458-8104 FOR INFORMATION OR CONFIRMATION BY TELEPHONE: (800) 548-6565
Originals of all documents sent by facsimile should be sent promptly by registered or certified mail, by hand or by overnight delivery service. Delivery of this letter of transmittal to an address or transmission of instructions via facsimile other than as set forth above will not constitute a valid delivery. If you wish to exchange unregistered 13% Senior Subordinated Notes due 2009 (The "Old Notes"), for an equal aggregate principal amount of registered 13% Senior Subordinated Notes due 2009 (The "New Notes"), pursuant to the exchange offer, you must validly tender (and not withdraw) old Notes to the exchange agent prior to the expiration date. SIGNATURES MUST BE PROVIDED. PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY BEFORE COMPLETING THIS LETTER OF TRANSMITTAL This Letter of Transmittal is to be completed by holders of Old Notes either if Old Notes are to be forwarded herewith or if tenders of Old Notes are to be made by book-entry transfer to an account maintained by United States Trust Company of New York (the "Exchange Agent") at The Depository Trust Company pursuant to the procedures set forth in "The Exchange Offer--Procedures for Tendering" in the Prospectus (as defined). Holders of Old Notes whose certificates for such Old Notes are not immediately available or who cannot deliver their certificates and all other required documents to the Exchange Agent on or prior to the Expiration Date or who cannot complete the procedures for book-entry transfer on a timely basis, must tender their Old Notes according to the guaranteed delivery procedures set forth in "The Exchange Offer--Guaranteed Delivery Procedures" in the Prospectus. - ---------------------------------------------------------------------------------------------------- DESCRIPTION OF TENDERED OLD NOTES - ---------------------------------------------------------------------------------------------------- NAMES(S) AND ADDRESS(ES) OF REGISTERED OWNER(S) AS IT APPEARS ON THE 13% SENIOR SUBORDINATED NOTES DUE CERTIFICATE 2009 NUMBER(S) (PLEASE FILL IN, IF BLANK) OF OLD NOTES AGGREGATE PRINCIPAL AMOUNT OF OLD NOTES TENDERED - ---------------------------------------------------------------------------------------------------- ------------------------------- ------------------------------- ------------------------------- ------------------------------- ------------------------------- ------------------------------- ------------------------------- TOTAL PRINCIPAL AMOUNT OF OLD NOTES TENDERED - ----------------------------------------------------------------------------------------------------
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY) / / CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH THE BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING: Name of Tendering Institution ______________________________________________ Account Number _____________________________________________________________ Transaction Code Number ____________________________________________________ / / CHECK HERE AND ENCLOSE A COPY OF THE NOTICE OF GUARANTEED DELIVERY IF TENDERED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY AND COMPLETE THE FOLLOWING: Name of Registered Holder(s) _______________________________________________ Window Ticket Number (if any) ______________________________________________ Date of Execution of Notice of Guaranteed Delivery _________________________ Name of Institution which Guaranteed Delivery ______________________________ If Guaranteed Delivery is to be made By Book-Entry Transfer: Name of Tendering Institution ______________________________________________ Account Number _____________________________________________________________ Transaction Code Number ____________________________________________________ / / CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON- EXCHANGED OLD NOTES ARE TO BE RETURNED BY CREDITING THE BOOK-ENTRY TRANSFER FACILITY ACCOUNT NUMBER SET FORTH ABOVE. / / CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE OLD NOTES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET MAKING OR OTHER TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. Name: ______________________________________________________________________ Address: ___________________________________________________________________ Ladies and Gentlemen: 1 The undersigned hereby tenders to Dayton Superior Corporation, an Ohio corporation (the "Company"), the Old Notes, described above pursuant to the Company's offer of $1,000 principal amount of the New Notes, in exchange for each $1,000 principal amount of the Old Notes, upon the terms and subject to the conditions contained in the Prospectus dated , 2000 (the "Prospectus"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which together constitute the "Exchange Offer"). 2 The undersigned hereby represents and warrants that it has full authority to tender the Old Notes described above. The undersigned will, upon request, execute and deliver any additional documents deemed by the Company to be necessary or desirable to complete the tender of Old Notes. 3 The undersigned understands that the tender of the Old Notes pursuant to all of the procedures set forth in the Prospectus will constitute an agreement between the undersigned and the Company as to the terms and conditions set forth in the Prospectus. 4 Unless the box under the heading "Special Registration Instructions" is checked, the undersigned hereby represents and warrants that: (i) the New Notes acquired pursuant to the Exchange Offer are being obtained in the ordinary course of business of the undersigned and any beneficial owner of the Old Notes (a "Beneficial Owner"); (ii) neither the undersigned nor any Beneficial Owner is engaging in or intends to engage in a distribution of such New Notes; (iii) neither the undersigned nor any Beneficial Owner has an arrangement or understanding with any person to participate in the distribution of such New Notes; (iv) if the undersigned or any Beneficial Owner is a resident of the State of California, it falls under the self-executing institutional investor exemption set forth under Section 25102(i) of the Corporate Securities Law of 1968 and Rules 260.102.10 and 260.105.14 of the California Blue Sky Regulations; (v) if the undersigned or any Beneficial Owner is a resident of the Commonwealth of Pennsylvania, it falls under the self-executing institutional investor exemption set forth under Sections 203(c), 102(d) and (k) of the Pennsylvania Securities Act of 1972, Section 102.111 of the Pennsylvania Blue Sky Regulations and an interpretive opinion dated November 16, 1985; (vi) the undersigned and each Beneficial Owner acknowledges and agrees that any person who is a broker-dealer registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or is participating in the Exchange Offer for the purpose of distributing the New Notes must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction of the New Notes or interests therein acquired by such person and cannot rely on the position of the staff of the Commission set forth in certain no-action letters; (vii) the undersigned and each Beneficial Owner understands that a secondary resale transaction described in clause (vi) above and any resales of New Notes or interests therein obtained by such holder in exchange for Old Notes or interests therein originally acquired by such holder directly from the Company should be covered by an effective registration statement containing the selling security holder information required by Item 507 or Item 508, as applicable, of Regulation S-K of the Commission; and (viii) neither the holder nor any Beneficial Owner is an "affiliate," as such term is defined under Rule 405 promulgated under the Securities Act of 1933, as amended (the "Securities Act"), of the Company. Upon request by the Company, the undersigned or Beneficial Owner will deliver to the Company a legal opinion confirming it is not such an affiliate. 5 The undersigned may, IF AND ONLY IF UNABLE TO MAKE ALL OF THE REPRESENTATIONS AND WARRANTIES CONTAINED IN ITEM 4 ABOVE, elect to have its Old Notes registered in the shelf registration described in the Registration Rights Agreement, dated as of June 16, 2000, between the Company and Deutsche Bank Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as initial purchasers, in the form filed as an exhibit to the registration statement of which the Prospectus is a part. Such election may be made by checking the box under "Special Registration Instructions" on page 7. By making such election, the undersigned agrees, jointly and severally, as a holder of transfer restricted securities participating in a shelf registration, to indemnify and hold harmless the Company, its agents, employees, directors and officers and each Person who controls the Company, within the meaning of Section 15 of the Securities Act or Section 20 (a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), against any and all losses, claims, damages and liabilities whatsoever (including, without limitation, the reasonable legal and other expenses actually incurred in connection with any suit, action or proceeding or any claim asserted) arising out of or based upon (i) any untrue statement or alleged untrue statement of any material fact contained in the shelf registration statement filed with respect to such Old Notes or the Prospectus or in any amendment thereof or supplement thereto or (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that any such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with information relating to the undersigned furnished to the Company in writing by or on behalf of the undersigned expressly for use therein. Any such indemnification shall be governed by the terms and subject to the conditions set forth in the Registration Rights Agreement, including, without limitation, the provisions regarding notice, retention of counsel, contribution and payment of expenses set forth therein. The above summary of the indemnification provision of the Registration Rights Agreement is not intended to be exhaustive and is qualified in its entirety by reference to the Registration Rights Agreement. 6 If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of New Notes. If the undersigned is a broker-dealer that will receive New Notes for its own account in exchange for Old Notes that were acquired as a result of market- making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such New Notes, however, by so acknowledging and delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. If the undersigned is a broker-dealer and Old Notes held for its own account were not acquired as a result of market-making or other trading activities, such Old Notes cannot be exchanged pursuant to the Exchange Offer. 7 Any obligation of the undersigned hereunder shall be binding upon the successors, assigns, executors, administrators, trustees in bankruptcy and legal and personal representatives of the undersigned. 8 Unless otherwise indicated herein under "Special Delivery Instructions," the certificates for the New Notes will be issued in the name of the undersigned. SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTION 1) To be completed ONLY IF the New Notes are to be issued or sent to someone other than the undersigned or to the undersigned at an address other than that provided above. Mail / / Issue / / (check appropriate boxes) certificates to: Name: ______________________________________________________________________ (Please Print) Address: ___________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ (Including Zip Code) SPECIAL REGISTRATION INSTRUCTIONS (SEE ITEM 5) To be completed ONLY IF (i) the undersigned satisfies the conditions set forth in Item 5 above, (ii) the undersigned elects to register its Old Notes in the Shelf Registration described in the Registration Rights Agreement and (iii) the undersigned agrees to indemnify certain entities and individuals as set forth in the Registration Rights Agreement and summarized in Item 5 above. / / By checking this box the undersigned hereby (i) represents that it is unable to make all of the representations and warranties set forth in Item 4 above, (ii) elects to have its Old Notes registered pursuant to the shelf registration described in the Registration Rights Agreement and (iii) agrees to indemnify certain entities and individuals identified in, and to the extent provided in, the Registration Rights Agreement and summarized in Item 5 above. - -------------------------------------------------------------------------------- SIGNATURE To be completed by all exchanging noteholders. Must be signed by registered holder exactly as name appears on Old Notes. If signature is by trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title. See Instruction 3. X __________________________________________________________________________ X __________________________________________________________________________ SIGNATURE(S) OF REGISTERED HOLDER(S) OR AUTHORIZED SIGNATURE Dated: _____________________________________________________________________ Names(s): __________________________________________________________________ (PLEASE TYPE OR PRINT) Capacity: __________________________________________________________________ Address: ___________________________________________________________________ (INCLUDING ZIP CODE) Area Code and Telephone No.: _______________________________________________ SIGNATURE GUARANTEE (IF REQUIRED BY INSTRUCTION 1) CERTAIN SIGNATURES MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION ____________________________________________________________________________ (NAME OF ELIGIBLE INSTITUTION GUARANTEEING SIGNATURES) __________________________________________________________________________ (ADDRESS (INCLUDING ZIP CODE) AND TELEPHONE NUMBER (INCLUDING AREA CODE) OF FIRM) __________________________________________________________________________ (AUTHORIZED SIGNATURE) __________________________________________________________________________ (PRINTED NAME) __________________________________________________________________________ (TITLE) Dated: _____________________________________________________________________ ____________________________________________________________________________ PLEASE READ THE FOLLOWING INSTRUCTIONS, WHICH FORM A PART OF THIS LETTER OF TRANSMITTAL - -------------------------------------------------------------------------------- INSTRUCTIONS 1. GUARANTEE OF SIGNATURES. Signatures on this Letter of Transmittal must be guaranteed by an eligible guarantor institution that is a member of or participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program or by an "eligible guarantor institution" within the meaning of Rule l7Ad-15 promulgated under the Exchange Act (an "Eligible Institution") unless the box entitled "Special Registration Instructions" or "Special Delivery Instructions" above has not been completed or the Old Notes described above are tendered for the account of an Eligible Institution. 2. DELIVERY OF LETTER OF TRANSMITTAL AND OLD NOTES. The Old Notes, together with a properly completed and duly executed Letter of Transmittal (or copy thereof), should be mailed or delivered to the Exchange Agent at the address set forth above. THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE HOLDER. INSTEAD OF DELIVERY BY MAIL, IT IS RECOMMENDED THAT HOLDERS USE AN OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO THE COMPANY. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES, OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS. 3. SIGNATURE ON LETTER OF TRANSMITTAL, BOND POWERS AND ENDORSEMENTS. If this Letter of Transmittal is signed by a person other than a registered holder of any Old Notes, such Old Notes must be endorsed or accompanied by appropriate bond powers, signed by such registered holder exactly as such registered holder's name appears on such Old Notes. If this Letter of Transmittal or any Old Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations, or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and, unless waived by the Company, proper evidence satisfactory to the Company of their authority to so act must be submitted with this Letter of Transmittal. 4. MISCELLANEOUS. All questions as to the validity, form, eligibility (including time of receipt), acceptance, and withdrawal of tendered Old Notes will be determined by the Company in its sole discretion, which determination will be final and binding on all parties. The Company reserves the absolute right to reject any or all Old Notes not properly tendered or any Old Notes the Company's acceptance of which would, in the opinion of counsel for the Company, be unlawful. The Company also reserves the right to waive any defects, irregularities, or conditions of tender as to particular Old Notes. The Company's interpretation of the terms and conditions of the Exchange Offer (including the instructions in this Letter of Transmittal) will be final and binding. Unless waived, any defects or irregularities in connection with tenders of Old Notes must be cured within such time as the Company shall determine. Neither the Company, the Exchange Agent, nor any other person shall be under any duty to give notification of defects in such tenders or shall incur any liability for failure to give such notification. Tenders of Old Notes will not he deemed to have been made until such defects or irregularities have been cured or waived. Any Old Notes received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering holder thereof as soon as practicable following the Expiration Date. EX-99.2 22 ex-99_2.txt EXHIBIT 99.2 NOTICE OF GUARANTEED DELIVERY TO TENDER UNREGISTERED 13% SENIOR SUBORDINATED NOTES DUE 2009 (INCLUDING THOSE IN BOOK-ENTRY FORM) OF DAYTON SUPERIOR CORPORATION PURSUANT TO THE EXCHANGE OFFER AND PROSPECTUS DATED , 2000 As set forth in the Prospectus (as defined), this form or one substantially equivalent hereto must be used to accept the Exchange Offer (i) if certificates for unregistered 13% Senior Subordinated Notes due 2009 (the "Old Notes") of Dayton Superior Corporation, an Ohio corporation (the "Company"), are not immediately available, (ii) time will not permit a holder's Old Notes or other required documents to reach United States Trust Company of New York (the "Exchange Agent") on or prior to the Expiration Date (as defined) or (iii) the procedure for book-entry transfer cannot be completed on a timely basis. This form may be delivered by facsimile transmission, registered or certified mail, by hand or by overnight delivery service to the Exchange Agent. See "The Exchange Offer--Procedures for Tendering" in the Prospectus. - -------------------------------------------------------------------------------- THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2000 (THE "EXPIRATION DATE"), UNLESS THE EXCHANGE OFFER IS EXTENDED BY THE COMPANY. - -------------------------------------------------------------------------------- THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS: United States Trust Company of New York Deliver to: BY REGISTERED OR CERTIFIED BY HAND DELIVERY TO 4:30 BY OVERNIGHT COURIER MAIL: P.M.: AND BY HAND DELIVERY United States Trust Company United States Trust Company AFTER 4:30 P.M. of New York of New York ON EXPIRATION DATE: P.O. Box 112 30 Broad Street, B-Level Bowling Green Station New York, NY 10004-2304 United States Trust Company New York, NY 10274-00112 of New York 30 Broad Street, 14th Floor New York, NY 10004-2304 BY FACSIMILE: (Eligible Institutions Only) (212) 422-0183 OR (646) 458-8104 FOR INFORMATION OR CONFIRMATION BY TELEPHONE: (800) 548-6565
Originals of all documents sent by facsimile should be sent promptly by registered or certified mail, by hand or by overnight delivery service. DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. Ladies and Gentlemen: The undersigned hereby tenders to the Company, upon the terms and subject to the conditions set forth in the Prospectus dated , 2000 (as the same may be amended or supplemented from time to time, the "Prospectus"), and the related Letter of Transmittal, receipt of which is hereby acknowledged, the aggregate principal amount of Old Notes set forth below pursuant to the guaranteed delivery procedures set forth in the Prospectus under the caption "The Exchange Offer--Guaranteed Delivery Procedures." Name(s) of Registered Holder(s): _______________________________________________ Aggregate Principal Amount Tendered: $ _________________________________________ Certificate No.(s) (if available): _____________________________________________ (Total Principal Amount Represented by Old Notes Certificate(s)): _____________________________________________________ $ ______________________________________________________________________________ If Old Notes will be tendered by book-entry transfer, provide the following information; DTC Account Number: ____________________________________________________________ Date: __________________________________________________________________________ * Must be in denominations of $1,000 and any integral multiple thereof. All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and every obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. - -------------------------------------------------------------------------------- PLEASE SIGN HERE X __________________________________________________________________________ X __________________________________________________________________________ SIGNATURE(S) OR OWNER(S) OR AUTHORIZED SIGNATORY DATE Area Code and Telephone Number: ____________________________________________ Must be signed by the holder(s) of the Old Notes as their name(s) appear(s) on certificates for Old Notes or on a security position listing, or by person(s) authorized to become registered holder(s) by endorsement and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below. PLEASE PRINT NAME(S) AND ADDRESS(ES) Name(s): ___________________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ Capacity: __________________________________________________________________ Address(es): _______________________________________________________________ ____________________________________________________________________________ ____________________________________________________________________________ ---------------------------------------------------------------------------- THE GUARANTEE ON THE NEXT PAGE MUST BE COMPLETED. GUARANTEE (Not to be Used for Signature Guarantee) The undersigned, a member of or participant in the Securities Transfer Agents Medallion Program, the New York Stock Exchange Signature Program or a firm or other identity identified in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, as an "eligible guarantor institution," including (as such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal securities broker, municipal securities dealer, government securities broker, government securities dealer; (iii) a credit union; (iv) a national securities exchange, registered securities association or learning agency; or (v) a savings association that is a participant in a Securities Transfer Association recognized program (each of the foregoing being referred to as an "Eligible Institution"), hereby guarantees to deliver to the Exchange Agent, at one of its addresses set forth above, either the Old Notes to the Exchange Agent's account at The Depositary Trust Company, pursuant to the procedures for book-entry transfer set forth in the Prospectus, within three New York Stock Exchange, Inc. trading days after the date of execution of this Notice of Guaranteed Delivery. The undersigned acknowledges that it must deliver the Old Notes tendered hereby to the Exchange Agent within the time period set forth above and that failure to do so could result in a financial loss to the undersigned. Name of Firm Authorized Signature Address Title Zip Code (Please Type or Print) Area Code and Telephone No.: Dated:
Note: Do not send certificates for old notes with this form. EX-99.3 23 ex-99_3.txt EXHIBIT 99.3 LETTER TO REGISTERED HOLDERS AND DTC PARTICIPANTS REGARDING THE OFFER TO EXCHANGE $170,000,000 PRINCIPAL AMOUNT OF 13% SENIOR SUBORDINATED NOTES DUE 2009 OF DAYTON SUPERIOR CORPORATION To Registered Holders and The Depository Trust Company Participants: We are enclosing herewith the materials listed below relating to the offer by Dayton Superior Corporation (the "Company") to exchange the Company's new 13% Senior Subordinated Notes due 2009 (the "New Notes"), pursuant to an offering registered under the Securities Act of 1933, as amended (the "Securities Act"), for a like principal amount of the Company's issued and outstanding 13% Senior Subordinated Notes due 2009 (the "Old Notes") upon the terms and subject to the conditions set forth in the Company's Prospectus, dated , 2000, and the related Letter of Transmittal (which together constitute the "Exchange Offer"). Enclosed herewith are copies of the following documents: 1. Prospectus dated , 2000; 2. Letter of Transmittal; 3. Notice of Guaranteed Delivery; 4. Instructions to Registered Holder or DTC Participant from Beneficial Owner; and 5. Letter which may be sent to your clients for whose account you hold definitive registered notes or book-entry interests representing Old Notes in your name or in the name of your nominee, to accompany the instruction form referred to above, for obtaining such client's instruction with regard to the Exchange Offer. WE URGE YOU TO CONTACT YOUR CLIENTS PROMPTLY. PLEASE NOTE THAT THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2000, UNLESS EXTENDED. The Exchange Offer is not conditioned upon any minimum number of Old Notes being tendered. To participate in the Exchange Offer, a beneficial holder must either (i) cause to be delivered to United States Trust Company of New York (the "Exchange Agent"), at the address set forth in the Letter of Transmittal, definitive registered notes representing Old Notes in proper form for transfer together with a properly executed Letter of Transmittal or (ii) cause a DTC Participant to tender such holder's Old Notes to the Exchange Agent's account maintained at the Depository Trust Company ("DTC") for the benefit of the Exchange Agent through DTC's Automated Tender Offer Program ("ATOP"), including transmission of a computer-generated message that acknowledges and agrees to be bound by the terms of the Letter of Transmittal. By complying with DTC's ATOP procedures with respect to the Exchange Offer, the DTC Participant confirms on behalf of itself and the beneficial owners of tendered Old Notes all provisions of the Letter of Transmittal applicable to it and such beneficial owners as fully as if it completed, executed and returned the Letter of Transmittal to the Exchange Agent. You will need to contact those of your clients for whose account you hold definitive registered notes or book-entry interests representing Old Notes and seek their instructions regarding the Exchange Offer. Pursuant to the Letter of Transmittal, each holder of Old Notes will represent to the Company and the Guarantors that: (i) the New Notes or book-entry interests therein to be acquired by such holder and any beneficial owner(s) of such Old Notes or interests therein ("Beneficial Owner(s)") in connection with the Exchange Offer are being acquired by such holder and any Beneficial Owner(s) in the ordinary course of business of the holder and any Beneficial Owner(s), (ii) the holder and each Beneficial Owner are not participating, do not intend to participate, and have no arrangement or understanding with any person to participate, in the distribution of the New Notes, (iii) if the holder or Beneficial Owner is a resident of the State of California, it falls under the self-executing institutional investor exemption set forth under Section 25102(i) of the Corporate Securities Law of 1968 and Rules 260.102.10 and 260.105.14 of the California Blue Sky Regulations, (iv) if the holder or Beneficial Owner is a resident of the Commonwealth of Pennsylvania, it falls under the self-executing institutional investor exemption set forth under Sections 203(c), 102(d) and (k) of the Pennsylvania Securities Act of 1972, Section 102.111 of the Pennsylvania Blue Sky Regulations and an interpretive opinion dated November 16, 1985, (v) the holder and each Beneficial Owner acknowledge and agree that any person who is a broker-dealer registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act") or is participating in the Exchange Offer for the purpose of distributing the New Notes must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction of the New Notes or interests therein acquired by such person and cannot rely on the position of the staff of the Commission set forth in certain no-action letters, (vi) the holder and each Beneficial Owner understand that a secondary resale transaction described in clause (v) above and any resales of New Notes or interests therein obtained by such holder in exchange for Old Notes or interests therein originally acquired by such holder directly from the Company should be covered by an effective registration statement containing the selling security holder information required by Item 507 or Item 508, as applicable, of Regulation S-K of the Commission and (vii) neither the holder nor any Beneficial Owner(s) is an "affiliate," as defined in Rule 405 under the Securities Act, of the Company. Upon a request by the Company, a holder or beneficial owner will deliver to the Company a legal opinion confirming its representation made in clause (vii) above. If the tendering holder of Old Notes is a broker-dealer (whether or not it is also an "affiliate") or any Beneficial Owner(s) that will receive New Notes for its own or their account pursuant to the Exchange Offer, the tendering holder will represent on behalf of itself and the Beneficial Owner(s) that the Old Notes to be exchanged for the New Notes were acquired as a result of market-making activities or other trading activities, and acknowledge on its own behalf and on the behalf of such Beneficial Owner(s) that it or they will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such New Notes; however, by so acknowledging and by delivering a prospectus, such tendering holder will not be deemed to admit that it or any Beneficial Owner is an "underwriter" within the meaning of the Securities Act. The enclosed "Instructions to Registered Holder or DTC Participant from Beneficial Owner" form contains an authorization by the beneficial owners of Old Notes for you to make the foregoing representations. You should forward this form to your clients and ask them to complete it and return it to you. You will then need to tender Old Notes on behalf of those of your clients who ask you to do so. The Company will not pay any fee or commission to any broker or dealer or to any other persons (other than the Exchange Agent) in connection with the solicitation of tenders of Old Notes pursuant to the Exchange Offer. The Company will pay or cause to be paid any transfer taxes payable on the transfer of Old Notes to it, except as otherwise provided in the section "The Exchange Offer--Transfer Taxes" of the enclosed Prospectus. Additional copies of the enclosed material may be obtained from the Exchange Agent. Very truly yours, DAYTON SUPERIOR CORPORATION NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU THE AGENT OF THE COMPANY OR THE EXCHANGE AGENT OR AUTHORIZE YOU TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON THEIR BEHALF IN CONNECTION WITH THE EXCHANGE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN. 2 EX-99.4 24 ex-99_4.txt EXHIBIT 99.4 INSTRUCTIONS TO REGISTERED HOLDER OR DTC PARTICIPANT FROM BENEFICIAL OWNER FOR 13% SENIOR SUBORDINATED NOTES DUE 2009 OF DAYTON SUPERIOR CORPORATION The undersigned hereby acknowledges receipt of the Prospectus dated , 2000 (the "Prospectus"), of Dayton Superior Corporation, an Ohio corporation (the "Company"), and the accompanying Letter of Transmittal (the "Letter of Transmittal") that together constitute the Company's offer (the "Exchange Offer"). Capitalized terms used but not defined herein have the meanings assigned to them in the Prospectus and the Letter of Transmittal. This will instruct you as to the action to be taken by you relating to the Exchange Offer with respect to the 13% Senior Subordinated Notes due 2009 (the "Old Notes") held by you for the account of the undersigned. The principal amount of the Old Notes held by you for the account of the undersigned is (fill in amount): $ principal amount of Old Notes. With respect to the Exchange Offer, the undersigned hereby instructs you (check appropriate box): / / To TENDER the following principal amount of Old Notes held by you for the account of the undersigned (insert amount of Old Notes to be tendered, if any): $ principal amount of Old Notes. / / NOT to TENDER any Old Notes held by you for the account of the undersigned. If the undersigned instructs you to tender the Old Notes held by you for the account of the undersigned, it is understood that you are authorized: (a) to make, on behalf of the undersigned (and the undersigned, by its signature below, hereby makes to you), the representations and warranties contained in the Letter of Transmittal that are to be made with respect to the undersigned as a beneficial owner, including but not limited to the representations that (i) the New Notes or book-entry interests therein to be acquired by the undersigned (the "Beneficial Owner(s)") in connection with the Exchange Offer are being acquired by the undersigned in the ordinary course of business of the undersigned, (ii) the undersigned is not participating, does not intend to participate, and has no arrangement or understanding with any person to participate, in the distribution of the New Notes, (iii) if the undersigned is a resident of the State of California, it falls under the self-executing institutional investor exemption set forth under Section 25102(i) of the Corporate Securities Law of 1968 and Rules 260.102.10 and 260.105.14 of the California Blue Sky Regulations, (iv) if the undersigned is a resident of the Commonwealth of Pennsylvania, it falls under the self-executing institutional investor exemption set forth under Sections 203(c), 102(d) and (k) of the Pennsylvania Securities Act of 1972, Section 102.111 of the Pennsylvania Blue Sky Regulations and an interpretive opinion dated November 16, 1985, (v) the undersigned acknowledges and agrees that any person who is a broker-dealer registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or is participating in the Exchange Offer for the purpose of distributing the New Notes must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction of the New Notes or interests therein acquired by such person and cannot rely on the position of the staff of the Commission set forth in certain no-action letters, (vi) the undersigned understands that a secondary resale transaction described in clause (v) above and any resales of New Notes or interests therein obtained by such holder in exchange for Old Notes or interests therein originally acquired by such holder directly from the Company should be covered by an effective registration statement containing the selling security holder information required by Item 507 or Item 508, as applicable, of Regulation S-K of the Commission and (vii) the undersigned is not an "affiliate," as defined in Rule 405 under the Securities Act, of the Company. Upon a request by the Company, a holder or beneficial owner will deliver to the Company a legal opinion confirming its representation made in clause (vii) above. If the undersigned is a broker-dealer (whether or not it is also an "affiliate") that will receive New Notes for its own account pursuant to the Exchange Offer, the undersigned represents that the Old Notes to be exchanged for the New Notes were acquired by it as a result of market-making activities or other trading activities, and acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such New Notes; however, by so acknowledging and by delivering a prospectus, the undersigned does not and will not be deemed to admit that is an "underwriter" within the meaning of the Securities Act; (b) to agree, on behalf of the undersigned, as set forth in the Letter of Transmittal; and (c) to take such other action as necessary under the Prospectus or the Letter of Transmittal to effect the valid tender of such Old Notes. ---------------------------------------------------------------------------- SIGN HERE Name of Beneficial Owner(s): _______________________________________________ Signature(s): ______________________________________________________________ Name(s) ____________________________________________________________________ (PLEASE PRINT): Address: ___________________________________________________________________ Telephone Number: __________________________________________________________ Taxpayer Identification or Social Security Number: _________________________ Date: ______________________________________________________________________ ---------------------------------------------------------------------------- 2 EX-99.5 25 ex-99_5.txt EXHIBIT 99.5 LETTER TO CLIENTS REGARDING THE OFFER TO EXCHANGE $170,000,000 PRINCIPAL AMOUNT OF 13% SENIOR SUBORDINATED NOTES DUE 2009 OF DAYTON SUPERIOR CORPORATION To Our Clients: We are enclosing herewith a Prospectus, dated , 2000, of Dayton Superior Corporation (the "Company") and a related Letter of Transmittal (which together constitute the "Exchange Offer") relating to the offer by the Company to exchange the Company's new 13% Senior Subordinated Notes due 2009 (the "New Notes"), pursuant to an offering registered under the Securities Act of 1933, as amended (the "Securities Act"), for a like principal amount of the Company's issued and outstanding 13% Senior Subordinated Notes due 2009 (the "Old Notes") upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal. - -------------------------------------------------------------------------------- PLEASE NOTE THAT THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2000, UNLESS EXTENDED. - -------------------------------------------------------------------------------- The Exchange Offer is not conditioned upon any minimum number of Old Notes being tendered. We are the Registered Holder or DTC participant through which you hold an interest in the Old Notes. A tender of such Old Notes can be made only by us pursuant to your instructions. The Letter of Transmittal is furnished to you for your information only and cannot be used by you to tender your beneficial ownership of Old Notes held by us for your account. Pursuant to the Letter of Transmittal, each holder of Old Notes must make certain representations and warranties that are set forth in the Letter of Transmittal and in the attached form that we have provided to you for your instructions regarding what action we should take in the Exchange Offer with respect to your interest in the Old Notes. We request instructions as to whether you wish to tender any or all of your Old Notes held by us for your account pursuant to the terms and subject to the conditions of the Exchange Offer. We also request that you confirm that we may on your behalf make the representations contained in the Letter of Transmittal that are to be made with respect to you as beneficial owner. Your instructions to us should be forwarded as promptly as possible in order to permit us to tender Old Notes on your behalf in accordance with the provisions of the Exchange Offer. THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON , 2000. Old Notes tendered pursuant to the Exchange Offer may be withdrawn, subject to the procedures described in the Prospectus, at any time prior to the Expiration Date. If you wish to have us tender any or all of your Old Notes held by us for your account or benefit, please so instruct us by completing, executing and returning to us the attached instruction form. The accompanying Letter of Transmittal is furnished to you for informational purposes only and may not be used by you to tender Old Notes held by us and registered in our name for your account or benefit. EX-99.6 26 ex-99_6.txt EXHIBIT 99.6 GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER. Social Security numbers have nine digits separated by two hyphens: I.E. 000-00-0000. Employer identification numbers have nine digits separated by only one hyphen: 00-0000000. The table below will help determine the number to give the payer. - ----------------------------------------------- GIVE THE SOCIAL SECURITY FOR THIS TYPE OF ACCOUNT NUMBER OF - ----------------------------------------------- 1. An individual's The individual account 2. Two or more The actual owner of individuals (joint the account or, if account) combined funds, any one of the individuals(1) 3. Husband and wife The actual owner of (joint account) the account or, if joint funds, either person(1) 4. Custodian account of The minor(2) a minor (Uniform Gift to Minors Act) 5. Adult and minor The adult or, if the (joint account) minor is the only contributor, the minor(1) 6. Account in the name The ward, minor, or of guardian or incompetent committee for a person(3) designated ward, minor, or incompetent person 7. a. The usual The grantor- revocable savings trustee(1) trust account (grantor is also trustee) b. So-called trust The actual owner(1) account that is not a legal or valid trust under State law 8. Sole proprietorship The owner(4) account - ----------------------------------------------- GIVE THE EMPLOYER IDENTIFICATION FOR THIS TYPE OF ACCOUNT: NUMBER OF - ----------------------------------------------- 9. A valid estate or The legal entity (Do pension trust not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title.)(5) 10. Corporate account The corporation 11. Religious, The organization charitable or educational organization account 12. Partnership account The partnership held in the name of the partnership 13. Association, club, The organization or other tax-exempt organization 14. A broker or The broker or registered nominee nominee 15. Account with the The public entity Department of Agriculture in the name of a public entity (such as a State or local government, school district or prison) that receives agricultural program payments
- --------------------------------------------- - --------------------------------------------- (1) List first and circle the name of the person whose number you furnish. (2) Circle the minor's name and furnish the minor's social security number. (3) Circle the ward's, minor's or incompetent person's name and furnish such person's social security number. (4) You must show your individual name, but you may also enter your business or "doing business" name. You may use either your Social Security Number or Employer Identification Number. (5) List first and circle the name of the legal trust, estate, or pension trust. NOTE: If no name is circled when there is more than one name, the number will be considered to be that of the first name listed. NUMBER ON SUBSTITUTE FORM W-9 PAGE 2 OBTAINING A NUMBER If you do not have a taxpayer identification number or if you do not know your number, obtain Form SS-5, Application for Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service (the "IRS") and apply for a number. Payees specifically exempted from backup withholding on ALL payments by brokers include the following: - - A corporation. - - A financial institution. - - An organization exempt from a tax under Section 501(a), or an individual retirement plan or a custodial account under Section 403(b)(7) if the account satisfies the requirements of Section 401(F)(2). - - The United States or any agency or instrumentality thereof. - - A State, the District of Columbia, a possession of the United States, or any subdivision or instrumentality thereof. - - A foreign government, a political subdivision of a foreign government, or any agency or instrumentality thereof. - - An international organization or any agency or instrumentality thereof. - - A registered dealer in securities or commodities registered in the U.S. or a possession of the U.S. - - A real estate investment trust. - - A common trust fund operated by a bank under Section 584(a). - - An entity registered at all times under the Investment Company Act of 1940. - - A foreign central bank of issue. - - A futures commission merchant registered with the Commodity Futures Trading Commission. - - A person registered under the Investment Advisors Act of 1940 who regularly acts as a broker. Payments of dividends and patronage dividends not generally subject to backup withholding include the following: - - Payments to nonresident aliens subject to withholding under Section 1441. - - Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner. - - Payments of patronage dividends where the amount received is not paid in money. - - Payments made by certain foreign organizations. - - Payments made to a nominee. Payments of interest not generally subject to backup withholding include the following: - - Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer's trade or business and you have not provided your correct taxpayer identification number to the payer. - - Payments of tax-exempt interest (including exempt-interest dividends under Section 852). - - Payments described in Section 6049(b)(5) to nonresident aliens. - - Payments on tax-free covenant bonds under Section 1451. - - Payments made by certain foreign corporations. - - Payments made to a nominee. EXEMPT PAYEES DESCRIBED ABOVE SHOULD FILE FORM W-9 TO AVOID POSSIBLE ERRONEOUS BACKUP WITHHOLDING. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, CHECK "EXEMPT" IN PART II OF THE FORM, SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER. Certain payments other than interest, dividends, and patronage dividends, which are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under Section 6041, 6041(A)(a), 6045, and 6050A. PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend, interest, or other payments to give taxpayer identification numbers to payers who must report the payments to IRS. IRS uses the numbers for identification purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Beginning January 1, 1993, payers must generally withhold 31% of taxable interest, dividend, and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply. PENALTIES (1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail to furnish you taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect. (2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.--If you fail to include any portion of an includible payment for interest, dividends, or patronage dividends in gross income, such failure will be treated as being due to negligence and will be subject to a penalty of 5% on any portion of an under-payment attributable to that failure unless there is clear and convincing evidence to the contrary. (3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500. (4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment. FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE. -----END PRIVACY-ENHANCED MESSAGE-----