UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 31, 2008
John Bean Technologies Corporation
(Exact name of registrant as specified in its charter)
Delaware | 001-34036 | 91-1650317 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
200 East Randolph Drive
Chicago, Illinois 60601
(Address of Principal executive offices, including Zip Code)
(312) 861-5900
(Registrants telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
The information set forth in Items 2.03 and 3.03 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.
On July 31, 2008, in connection with the spin-off (the Spin-Off) of John Bean Technologies Corporation (the Company) from FMC Technologies, Inc. (FTI), the Company and FTI entered into several agreements as described below:
Separation and Distribution Agreement
On July 31, 2008, the Company entered into a Separation and Distribution Agreement with FTI (the Separation Agreement), which sets forth the agreement between FTI and the Company with respect to the principal corporate transactions required to effect the Companys separation from FTI; the transfer of certain assets and liabilities required to effect such separation; the distribution of the Companys shares to FTI stockholders; the Companys dividend to FTI; and other agreements governing the relationship between FTI and the Company following the separation.
The Contribution; Allocation of Assets and Liabilities; No Representations and Warranties
The Separation Agreement required FTI to contribute to the Company certain business segments and assets to be included in the Companys business. As a result of the contribution, FTI no longer has an interest in the Companys assets and business and, subject to certain exceptions described below, generally has no obligation with respect to the Companys liabilities. Similarly, the Company has no interest in the assets of FTI and generally has no obligation with respect to the liabilities of FTI after the distribution.
The Separation Agreement required that, in connection with the Spin-Off, the Company would pay a cash dividend to FTI, adjusted by the value of the Companys after-tax operating cash flow for the period from and including January 1, 2008 to and including the distribution date. The amount of this dividend that was paid on July 31, 2008 was approximately $150.5 million. This payment is subject to certain potential true-up adjustments pursuant to the terms of the Separation Agreement.
FTI generally made no representations or warranties as to the assets, businesses or liabilities transferred or assumed as part of the contribution, and generally made the transfers on an as is, where is basis, and each transferee agreed to bear the economic and legal risks that any conveyance was insufficient to vest in the transferee good and marketable title free and clear of any security interest and that any necessary consent or approval was not obtained or that requirements of laws or judgments were not complied with.
The Distribution
In connection with the Spin-Off, each FTI stockholder received .216 of a share of the Companys common stock for every share of FTI common stock such stockholder owned as of the record date of the Spin-Off. No fractional shares of the Companys common stock were distributed in the distribution. FTI was required, pursuant to the Separation Agreement, to direct the distribution agent to determine, as soon as practicable, the sum of fractional shares of the Companys common stock that would have been issued in the distribution and sell the nearest number of whole shares equal to such sum in open market transactions or otherwise, in each case at then prevailing trading prices, with the net proceeds to be distributed to the holders of FTI common stock entitled to receive such proceeds in lieu of fractional shares.
Indemnification and Survival
FTI agreed to indemnify, defend and hold harmless the Company, its affiliates and their representatives and each of the heirs, executors, successors and assigns of any of the foregoing from and against all indemnifiable losses relating to, arising out of or resulting from:
(a) the failure of FTI:
(i) to pay or otherwise promptly discharge any of FTIs liabilities, whether such indemnifiable losses relate to events, occurrences or circumstances occurring or existing, or whether such indemnifiable losses are asserted, before or after the distribution; or
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(ii) to perform any of its obligations under the Separation Agreement; and
(b) FTIs business and liabilities, except to the extent such liabilities relate to the Companys businesses or except as otherwise specifically provided in the Separation Agreement.
The Company agreed indemnify, defend and hold harmless FTI, its affiliates and their respective representatives and each of the heirs, executors, successors and assigns of any of the foregoing from and against all indemnifiable losses relating to, arising out of or resulting from:
(a) the failure by the Company:
(i) to pay or otherwise promptly discharge any of the Companys liabilities (which liabilities shall include all liabilities, whether incurred before or after the Spin-Off, of the Company and of the former FoodTech and Airport Systems business segments of FTI, and whether or not currently owned, used or occupied by FTI and its subsidiaries or affiliates), whether such indemnifiable losses relate to events, occurrences or circumstances occurring or existing, or whether such indemnifiable losses are asserted, before or after the distribution; or
(ii) to perform any of the Companys obligations under the Separation Agreement; and
(b) any untrue statement or alleged untrue statement of a material fact, or omission or alleged omission to state a material fact required to be stated, in any portion of the registration statement or information statement (or any preliminary or final form thereof or any amendment thereto) to be filed with the SEC, or necessary to make any assertions in the registration statement or information statement not misleading.
All covenants and agreements of the parties contained in the Separation Agreement survived the Spin-Off and will survive the sale or other transfer by any party or its subsidiaries of any assets or businesses or the assignment by it of any liabilities.
A copy of the Separation Agreement is filed with this report as Exhibit 2.1 and is incorporated herein by reference.
Tax Sharing Agreement
The Tax Sharing Agreement sets forth the responsibilities of FTI and the Company with respect to, among other things, liabilities for federal, state, local and foreign taxes for periods before and including the Spin-Off, the preparation and filing of tax returns for such periods and disputes with taxing authorities regarding taxes for such periods. FTI is responsible for the filing of tax returns and the payment of the Companys federal, state, local and foreign income taxes for periods before and including the Spin-Off. The Company is responsible for making payments to FTI for income tax liabilities with respect to such periods to the extent such income tax liabilities are attributable to taxable income generated by the Companys operations, after adjustment for any losses, credits, or other tax attributes generated by the Companys operations in such periods. The Company is responsible for the payment of all other taxes relating to the Companys business. FTI is responsible for managing disputes with taxing authorities that relate to liabilities for federal, state, local and foreign income taxes for such periods. However, under the agreement, the Company has rights to control and contest certain audit or tax proceedings that relate to income taxes for which the Company is responsible. Under certain circumstances, FTI and the Company may jointly control disputes relating to income taxes for which both parties are responsible. The Company is responsible for managing disputes relating to all other taxes for which the Company is responsible. The Tax Sharing Agreement also provides that the Company will indemnify FTI for some or all of the taxes resulting from the transactions related to the distribution of the Companys common stock if the Company takes certain actions which ultimately result in disqualifying the distribution as tax-free under Sections 355 and 368 of the Internal Revenue Code (the Code). The Tax Sharing Agreement also requires FTI to indemnify the Company against any liability for tax if FTIs actions cause the disqualification of the Spin-Off as tax-free under the Code.
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To maintain the qualification of the distribution as tax-free under sections 368(a)(1)(D) and 355 of the Code, there are material limitations on transactions in which the Company may be involved during the two-year period following the distribution date. Specifically, during this two-year period, the Company agreed in the Tax Sharing Agreement to refrain from engaging in any of the transactions listed below unless it first obtains a private letter ruling from the IRS or an opinion reasonably acceptable in substance to FTI from a tax advisor reasonably acceptable to FTI providing that the transaction will not affect the tax-free treatment of the distribution.
The Company is restricted from entering into any negotiation, agreement, understanding, or arrangement with respect to transactions or events that may cause the Spin-Off to be treated as part of a plan pursuant to which one or more persons acquire (other than pursuant to the Spin-Off) directly or indirectly the Companys stock representing a 50-percent or greater interest therein within the meaning of Section 355(d)(4) of the Code, including stock issuances pursuant to the exercise of options, lapsing of restrictions on restricted stock or option grants (excluding option grants made pursuant to compensatory equity incentive arrangements satisfying specified conditions and stock issuances made pursuant to the exercise of options or the lapse of restrictions on stock granted under any such arrangement), capital contributions or acquisitions, entering into any partnership or joint venture arrangements or a series of such transactions or events, and any of the following:
(a) merging or consolidating with or into another corporation;
(b) liquidating or partially liquidating;
(c) selling or transferring all or substantially all of the Companys assets in a single transaction or series of related transactions, or selling or transferring any portion of the Companys assets that would violate certain continuity requirements imposed by the Code; or
(d) redeeming or otherwise repurchasing any of the Companys capital stock other than pursuant to open market stock repurchase programs meeting certain Internal Revenue Service requirements.
If the Company enters into any of these transactions, with or without the required private letter ruling or opinion from tax counsel, the Company will be responsible for, and will indemnify FTI from and against, any tax liability resulting from any such transaction, under terms reasonably acceptable to FTI, including, in certain circumstances, the posting of an acceptable letter of credit or other security.
A copy of the Tax Sharing Agreement is filed with this report as Exhibit 10.1 and is incorporated herein by reference.
Trademark License Agreement
On July 31, 2008, the Company and FTI entered into a Trademark License Agreement. The Trademark License Agreement allows the Company to use certain trademarks owned or licensed by FTI after the Spin-Off. This Agreement allows the continued use of these trademarks on the Companys installed base of equipment at the time of the Spin-Off indefinitely. The Company has the right to utilize these trademarks on its existing stock of inventory and supplies through the earlier of a one year period after the Spin-Off date or the exhaustion of such inventory and supplies in the ordinary course. The Agreement also permits the Company to indicate its former affiliation with FTI and maintain a web site link from FTIs web site to the Companys own web site for up to two years following the Spin-Off date. Promptly following termination of the Companys rights to utilize FTIs trademarks, the Company is required either to destroy any materials in its possession that include the licensed trademarks or to label items that are not removable or destroyable in a manner that clearly indicates the owner of the trademark.
The license is worldwide, royalty-free and non-exclusive, and generally is non-assignable. Under the Trademark License Agreement, the Company agrees that the licensor retains full ownership of the trademarks, and that it will comply with all applicable laws and ensure that its use of the other parties trademarks meets or exceeds the quality standards of the licensor. The Company and FTI each agree to indemnify the other for any breach of the trademark license agreement and for any liability related to or arising from such partys use of the trademarks.
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A copy of the Trademark License Agreement is filed with this report as Exhibit 10.2 and is incorporated herein by reference.
Trademark Assignment and Coexistence Agreement
On July 31, 2008, the Company and FTI entered into a Trademark Assignment Coexistence Agreement in which FTIs ownership rights in the Bean, John Bean and related trademarks generally were transferred to the Company for the Companys exclusive use in its business. Under the Trademark Assignment Coexistence Agreement, FTI retains the ownership of such trademarks to the extent used in connection with pumps manufactured, used, sold, leased or otherwise disposed of by FTIs existing energy business. The Company agrees in the Trademark Assignment and Coexistence Agreement not to use the trademarks in connection with the businesses for which FTI has retained ownership, and FTI agrees to limit its use to such businesses.
A copy of the Trademark Assignment and Coexistence Agreement is filed with this report as Exhibit 10.3 and is incorporated herein by reference.
Incentive Compensation and Stock Plan
The John Bean Technologies Corporation Incentive Compensation and Stock Plan (the Plan), dated as of July 31, 2008 provides certain incentives and awards to officers, employees, directors and consultants of the Company or its affiliates. The Plan allows the Compensation Committee (the Committee) of the Board of Directors to make various types of awards to eligible individuals, including management incentive awards, stock options, stock appreciation rights, restricted stock and performance units. All awards are subject to the provisions of the Plan and to terms and conditions as determined by the Committee.
Management incentive awards may be awards of cash, common stock, restricted stock or a combination thereof. Grants of common stock options may be incentive and/or nonqualified stock options. The exercise price for options is not less than the fair market value of the Companys common stock at the date of grant. Options are exercisable after a period of time designated by the Committee and expire not later than 10 years after the grant date. Stock appreciation rights specify the price, the term, the method of exercise and the form of payment of the appreciation right. The grant of a stock appreciation right shall be at a price per share that is at least equal to the fair market value of a share of common stock as of the date of grant of such appreciation right. Restricted stock grants specify any applicable performance goals, the time and rate of vesting and such other provisions as the Committee may determine. Grants of performance units specify any applicable performance goals and whether the grant will be paid in cash, shares of common stock or a combination of cash and shares.
The Plan also provides that each non-employee director will receive an annual retainer in an amount to be determined by the Companys Board of Directors. Until changed by resolution of the Board, the grant date of the annual retainer will be May 1 of each year, and the amount of the annual retainer will be reviewed and adjusted only by board resolution. At least 50% of the retainer must be paid in the form of stock units or restricted units on the date of grant, provided the non-employee director makes an irrevocable election to receive such stock units or restricted stock units in lieu of cash on or before December 31 of the year prior to the fiscal year in which the annual retainer is to be earned, and the remainder of which, if any, will be paid in cash in quarterly installments within seventy days following the end of each calendar quarter. The number of stock units or restricted stock units constituting the annual retainer for each non-employee director will be equal to the number obtained by dividing the value of the retainer which the non-employee director has elected to defer by the fair market value of the common stock on the grant date.
Under the Plan, 3,700,000 shares of the Companys common stock became available to be issued or transferred to participants and their beneficiaries. No participant may be granted stock options and stock appreciation rights covering in excess of 400,000 shares of common stock in any calendar year. Cancellation (through expiration, forfeiture or otherwise) of outstanding awards and options preserves the number of shares available for future awards and grants.
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A copy of the John Bean Technologies Corporation Incentive Compensation and Stock Plan is filed with this report as Exhibit 10.4 and is incorporated herein by reference.
Savings Plans
Non-Qualified Savings and Investment Plan
The John Bean Technologies Corporation Non-Qualified Savings and Investment Plan (the Non-Qualified Savings Plan), dated as of July 31, 2008, will allow executives of the Company to participate in a pre-tax non-qualified defined contribution plan, which will provide executives and employees who reach contribution limits imposed by the Internal Revenue Service for the Companys Qualified Savings and Investment Plan (the Qualified Savings Plan) with the opportunity to participate in a tax advantaged savings plan comparable to the Qualified Savings Plan. The investment options offered to participants in the Non-Qualified Savings Plan will be similar to those offered in its Qualified Savings Plan. Participants may elect to defer up to 100% of their remaining base pay or annual non-equity incentive compensation after reaching the contribution limits in the Non-Qualified Savings Plan. The Company will match up to the first 5% of the employees contributions to the Non-Qualified Savings Plan. Participants are vested on a five-year graded vesting schedule for employer matching contributions.
A copy of the Non-Qualified Savings Plan is filed with this report as Exhibit 10.5 and is incorporated herein by reference.
International Non-Qualified Savings and Investment Plan
The John Bean Technologies Corporation International Non-Qualified Savings and Investment Plan (the International Savings Plan), dated as of July 31, 2008, will allow certain of the Companys employees who are not subject to U.S. taxes to participate in the International Savings Plan. The International Savings Plan will be administered in the United Kingdom. Participation in this plan is generally restricted to key employees who are not subject to U.S. taxes (and not citizens of the U.S., Canada or the Cayman Islands). Participants will be able to contribute up to 75% of base pay and eligible incentives. The Company will match up to the first 5% of each employees contributions. Both contributions to the International Savings Plan and the distributions from the International Savings Plan will be made in U.S. dollars. All vested funds must be distributed upon an employees termination or retirement from the company.
A copy of the International Savings Plan is filed with this report as Exhibit 10.6 and is incorporated herein by reference.
Non-Qualified Pension Plan
The JBT Corporation Salaried Employees Equivalent Retirement Plan (the Non-Qualified Pension Plan), dated as of July 31, 2008, provides income replacement retirement benefits to current employees who meet the minimum service requirement of five years for earnings above Internal Revenue Service limits. The Non-Qualified Pension Plan is based on final average pay, which is calculated for the period that includes the employees highest 60 consecutive months of pay in the final 120 months of service, and includes base pay and annual non-equity incentive compensation in the calculation. Eligible earnings under the provisions of the Non-Qualified Pension Plan do not include the value of the equity grants (stock options or restricted stock awards), matching contributions to the Companys Qualified Savings Plan, its Non-Qualified Savings Plan or perquisites. The benefits under this plan are the Companys general obligations and are not protected under the Employee Retirement Income Security Act.
A copy of the JBT Corporation Salaried Employees Equivalent Retirement Plan is filed with this report as Exhibit 10.7 and is incorporated herein by reference.
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Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
Credit Agreement
On July 31, 2008, the Company and its Dutch subsidiary, John Bean Technologies B.V. (the Dutch Borrower), entered into a credit agreement (the Credit Agreement) with JPMorgan Chase Bank, N.A. as administrative agent, an issuing lender, a swingline lender and a lender, The Bank of Tokyo-Mitsubishi UFJ, Ltd. as a co-documentation agent and a lender, U.S. Bank National Association as a co-documentation agent, an issuing lender and a lender, Wells Fargo Bank, N.A. as syndication agent, an issuing lender, a swingline lender, and a lender, and J.P. Morgan Securities, Inc. and Wells Fargo Bank, N.A. as joint bookrunners and joint lead arrangers, pursuant to which the lenders agree to make unsecured revolving loans to the Company and the Dutch Borrower in an aggregate amount of up to $225,000,000 (the Revolving Loans), including issuances of letters of credit, from time to time. The Credit Agreement also contains a $20,000,000 swingline loan facility which is a sublimit of the Revolving Loans. Subject to obtaining commitments from existing or new lenders and satisfying other conditions specified in the Credit Agreement, the Company may increase the aggregate commitments or enter into one or more tranches of term loans of at least $20,000,000 each in integral multiples of $5,000,000 so long as the aggregate amount of the increases does not exceed $100,000,000. The Credit Agreement has an initial term of five years and, unless extended, all amounts will be due and payable on July 31, 2013.
Borrowings under the Credit Agreement (other than swingline loans) will bear interest based on either a London Interbank Offered Rate (LIBOR) plus an applicable margin or the alternate base rate plus an applicable margin, at the Companys election. Swingline loans bear interest at the alternate base rate plus the applicable margin. The alternate base rate will equal the higher of the administrative agents announced base rate and the federal funds rate plus 0.5%. The applicable rate for each of alternate base rate loans or LIBOR loans will be based on the Companys leverage ratio. The applicable rate for alternate base rate loans will range between 0.20% and 0.40%. The applicable rate for LIBOR rate loans will range between 0.825% and 1.65%. The Company will also pay a facility fee on the total commitments of the lenders under the Credit Agreement at a rate based on the Companys leverage ratio. The rate will range between 0.175% and 0.35%. The Company will also pay a fee for each letter of credit issued under the Credit Agreement equal to the applicable margin for LIBOR loans as well as a customary fronting fee to the issuer of the letter of credit.
Each of the Companys domestic subsidiaries is a guarantor of the Companys borrowings under the Credit Agreement, and each of the Company and each of its domestic subsidiaries is a guarantor of the borrowings of the Dutch Borrower. Following closing, it is contemplated that certain subsidiaries of the Dutch Borrower will guaranty the borrowings of the Dutch Borrower. The Credit Agreement contains various affirmative and negative covenants customary in an agreement of this type.
The Credit Agreement also contains customary events of default for credit facilities of this type, including failure to pay principal, interest or other amounts when due, breach of its affirmative or negative covenants or a breach of its representations or warranties. In the event of a default under the Credit Agreement, the lenders may terminate their commitments under the Credit Agreement and declare all amounts outstanding, including accrued interest and unpaid fees, immediately due and payable. In the event of certain events of default relating to bankruptcy, insolvency or receivership, the commitments terminate automatically and all amounts outstanding are due and payable immediately.
At closing, Revolving Loans were used to finance a portion of the dividend payable to FTI pursuant to the Spin-Off. Revolving Loans may also be used for general corporate purposes.
A copy of the Credit Agreement is filed with this report as Exhibit 10.8 and is incorporated herein by reference.
Note Purchase Agreement
On July 31, 2008, the Company entered into a note purchase agreement (the Note Purchase Agreement) with certain institutional purchasers pursuant to which the Company issued and sold to the purchasers $75,000,000 of its 6.66% Senior Guaranteed Notes due July 31, 2015 (the Notes).
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The Notes bear interest at the fixed rate of 6.66% per annum. Interest is payable semi-annually, calculated on the basis of a 360-day year of twelve 30-day months, on the 31st day of January July and beginning on January 15, 2009, and principal is payable at the maturity of the notes on July 31, 2015.
Each of the Companys domestic subsidiaries is a guarantor of the Companys obligations under the Notes. The Notes rank pari passu with the Companys indebtedness under the Credit Agreement.
The proceeds from the sale of the Notes were used to finance the dividend payable to FTI pursuant to the Spin-Off and for general corporate purposes.
The Notes contain customary events of default, including the Companys failure to pay any principal, interest or other amount when due, violation of its affirmative or negative covenants or breach of its representations and warranties. Upon the occurrence of an event of default, payment of the Notes may be accelerated by the holders of the notes.
A copy of the Note Purchase Agreement (which includes the form of the Notes as Exhibit 1
Item 3.03 Material Modification to Rights of Security Holders.
Rights Agreement
On July 31, 2008, the Company entered into a Rights Agreement with National City Bank, as rights agent, pursuant to which one preferred share purchase right was issued for each outstanding share of the Companys common stock (the Rights). The Rights are subject to the terms of the Companys Rights Agreement.
The Rights
The Companys Rights initially trade with, and are inseparable from, the common stock. The Rights are evidenced only by certificates that represent shares of the Companys common stock. New Rights will accompany any new shares of common stock that the Company issues after July 31, 2008 until the date on which the Rights are distributed, are redeemed or expire as described below.
Exercise Price
Each of the Rights will allow its holder to purchase from the Company one one-hundredth of a share of the series A junior participating preferred stock for $72.00, once the Rights become exercisable. This portion of the preferred stock will give the Companys stockholders approximately the same dividend, voting, and liquidation rights as would one share of the common stock. Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights.
Expiration
The Rights will expire on July 31, 2018.
Exercisability
The Rights will not be exercisable until:
(a) ten days after the public announcement that a person or group has become an acquiring person by obtaining beneficial ownership of 15% or more of the Companys outstanding common stock, or, if earlier,
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(b) ten business days (or a later date determined by the board of directors of the Company before any person or group becomes an acquiring person) after a person or group begins a tender or exchange offer that, if completed, would result in that person or group becoming an acquiring person.
Until the date the Rights become exercisable, the Companys common stock certificates also evidence the Rights, and any transfer of shares of the Companys common stock constitutes a transfer of the Rights. After that date, the Rights will separate from its common stock and be evidenced by book-entry credits or by certificates that the Company will mail to all eligible holders of its common stock. Any of the Companys rights held by an acquiring person are void and may not be exercised.
Consequences of a Person or Group Becoming an Acquiring Person
(a) Flip In . If a person or group becomes an acquiring person, all holders of the Companys Rights except the acquiring person may, for $72.00, purchase shares of the Companys common stock with a market value of $144.00, based on the market price of the common stock prior to such acquisition.
(b) Flip Over . If the Company is later acquired in a merger or similar transaction after the date its Rights become exercisable, all holders of the Rights except the acquiring person may, for $72.00, purchase shares of the acquiring corporation with a market value of $144.00 based on the market price of the acquiring corporations stock prior to such merger.
The Companys Preferred Share Provisions
Each one one-hundredth of a share of the Companys preferred stock, if issued:
(a) will not be redeemable;
(b) will entitle holders to quarterly dividend payments of $0.01 per share, or an amount equal to the dividend paid on one share of the Companys common stock, whichever is greater;
(c) will entitle holders upon liquidation either to receive $1.00 per share or an amount equal to the payment made on one share of the Companys common stock, whichever is greater;
(d) will have the same voting power as one share of the Companys common stock; and
(e) if shares of the Companys common stock are exchanged via merger, consolidation or a similar transaction, will entitle holders to a per share payment equal to the payment made on one share of the Companys common stock.
The value of one one-hundredth interest in a share of the Companys preferred stock should approximate the value of one share of the Companys common stock.
Exchange
After a person or group becomes an acquiring person, but before an acquiring person owns 50% or more of the Companys outstanding common stock, the Board of Directors may extinguish the Rights by exchanging one share of the Companys common stock or an equivalent security for each Right, other than Rights held by the acquiring person.
Redemption
The Board of Directors may redeem the Rights for $0.01 per Right at any time before any person or group becomes an acquiring person. If the Board of Directors redeems any of the Rights, it must redeem all of the Rights. Once the Companys Rights are redeemed, the only right of the holders of the Rights will be to receive the redemption price of $0.01 per Right. The redemption price will be adjusted if the Company has a stock split or stock dividends of its common stock.
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Amendments
The terms of the Companys rights agreement may be amended by the Board of Directors without the consent of the holders of the Rights. After a person or group becomes an acquiring person, the Board of Directors may not amend the agreement in a way that adversely affects holders of the Rights.
Anti-Dilution Provisions
The Board of Directors may adjust the purchase price of the Companys preferred stock, the number of shares of the preferred stock issuable and the number of the outstanding Rights to prevent dilution that may occur from a stock dividend, a stock split or a reclassification of the preferred stock or common stock. No adjustments to the purchase price of the preferred stock of less than 1% will be made.
A copy of the Rights Agreement is filed with this report as Exhibit 4.2 and is incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
Resignation of Directors
In connection with the Spin-Off, on July 31, 2008, Jeffrey W. Carr and William H. Schumann III resigned from the Companys board of directors.
Election of Directors
Alan D. Feldman was elected to serve on the Companys board of directors effective as of the Spin-Off. Mr. Feldman will serve on the Audit Committee and the Nominating and Corporate Governance Committee of the Companys board of directors. Since 2003, Mr. Feldman has served as, and he continues to be, the Chairman, President and Chief Executive Officer of Midas, Inc. Prior to joining Midas, Mr. Feldman held several senior management posts with McDonalds Corporation, becoming President of McDonalds USA in 1998 and Chief Operating Officer and President of McDonalds Americas in 2001. From 1983 through 1994, Mr. Feldman was with PepsiCo, where he served in financial and operations posts at Frito-Lay and Pizza Hut. At Pizza Hut, Mr. Feldman was named senior Vice President of Operations in 1990 and Senior Vice President, Business Strategy and Chief Financial Officer, in 1993. Mr. Feldman also serves on the Board of Directors of Footlocker, Inc.
James A. Goodwin was elected to serve on the Companys board of directors effective as of the Spin-Off. Mr. Goodwin will serve on the Audit Committee and the Nominating and Corporate Governance Committee of the Companys board of directors. Mr. Goodwin served as Chairman and Chief Executive Officer of UAL Corporation and United Airlines from March 1999 until his retirement on October 31, 2001. Mr. Goodwin served as President and Chief Operating Officer of UAL Corporation and United Airlines from 1998 to 1999. During his career with UAL Corporation and United Airlines, Mr. Goodwin became Senior Vice President-Marketing in 1985, Senior Vice President- Services in 1988, Senior Vice President-Maintenance Operations in 1991, Senior Vice President-International in 1992 and Senior Vice President-North America in 1995. Mr. Goodwin serves on the Boards of Directors of AAR Corporation, Federal Signal Corporation and First Chicago Bank & Trust, as well as the Advisory Board of Hu-Friedy, the Board of Trustees of the Chicago Symphony Orchestra and Lewis University and is a member of The Council of Retired Chief Executives.
Polly B. Kawalek was elected to serve on the Companys board of directors effective as of the Spin-Off. Ms. Kawalek will serve on the Compensation Committee and the Nominating and Corporate Governance Committee of the Companys board of directors. Ms. Kawalek retired in 2004 after serving for 25 years in various capacities with Quaker Oats, Inc., which in 2001 became a business unit of PepsiCo. She served as President of PepsiCos Quaker Foods division from 2002 until her retirement. In 2001, Ms. Kawalek served as President of Quaker Oats U.S. Foods division and from 1997 through 2000 she served as President of its Hot Breakfast division. Ms. Kawalek serves as a director of Martek Biosciences Corp. and Kimball International, Inc.
James M. Ringler was elected to serve on the Companys board of directors effective as of the Spin-Off. Mr. Ringler will serve on the Compensation Committee and the Nominating and Corporate Governance Committee of the Companys board of directors. Since 2001, Mr. Ringler has served as, and he continues to be, a director of FMC Technologies. Mr. Ringler serves as Chairman of Teradata Corporation. Mr. Ringler served as Vice Chairman of Illinois Tool Works Inc. until his retirement in 2004. Prior to joining Illinois Tool Works, he was Chairman, President and Chief Executive Officer of Premark International Inc., which merged with Illinois Tool Works in November 1999. Mr. Ringler joined Premark in 1990 and served as Executive Vice President and Chief Operating Officer until 1996. From 1986 to 1990, he was President of White Consolidated Industries Major Appliance Group, and from 1982 to 1986 he was President and Chief Operating Officer of The Tappan Company. Prior to joining The Tappan Company in 1976, Mr. Ringler was a consulting manager with Arthur Andersen & Co. He serves on the Board of Directors of the Dow Chemical Company, Corn Products International, Inc. and Autoliv Inc.
James R. Thompson was elected to serve on the Companys board of directors effective as of the Spin-Off. Mr. Thompson will serve on the Compensation Committee and the Nominating and Corporate Governance Committee of the Companys board of directors. Since 2001, Governor Thompson has served as, and he continues to be, a director of FMC Technologies. Governor Thompson has served as the Senior Chairman of the Chicago law firm of Winston & Strawn LLP since September 2006 and as the firms Chairman from January 1993 to September 2006. He joined the firm in January 1991 as Chairman of the Executive Committee after serving four terms as Governor of the State of Illinois from 1977 until January 14, 1991. Prior to his terms as Governor, he served as U.S. Attorney for the Northern District of Illinois from 1971 to 1975. Governor Thompson served as the Chief of the Department of Law Enforcement and Public Protection in the Office of the Attorney General of Illinois, as an Associate Professor at Northwestern University School of Law, and as an Assistant States Attorney of Cook County. Governor Thompson was a member of the National Commission on Terrorist Attacks Upon the United States (also known as the 9/11 Commission). He is a former Chairman of the Presidents Intelligence Oversight Board. He is the Chairman of the United HEREIU Public Review Board and serves on the Board of Directors of Navigant Consulting Group, Inc. and Maximus, Inc.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
On July 31, 2008, the Company filed a Certificate of Designations (the Certificate of Designations) to its Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware, establishing the voting powers, designations, preferences, limitations, restrictions, and relative rights of the Series A Participating Preferred Stock (the Series A Preferred Stock). The Board of Directors of the Company authorized 1,500,000 shares of $.01 par value Series A Preferred Stock. Holders of the Series A Preferred Stock shall be entitled to vote on all matters submitted to the shareholders of the Company and shall be entitled to one hundred votes for each share of Series A Preferred Stock owned at the determined record date. A copy of the Certificate of Designations is with this report as Exhibit 3.1 and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. | Description | |
2.1 |
Separation and Distribution Agreement, dated July 31, 2008 between FTI and the Company |
10
3.1 | Certificate of Designations of the Company relating to the Series A Preferred Stock | |
4.1 | Note Purchase Agreement, July 31, 2008, between the Company and the purchasers and guarantors named therein | |
4.2 | Rights Agreement, dated July 31, 2008 between the Company and National City Bank, as rights agent | |
10.1 | Tax Sharing Agreement, dated July 31, 2008, between the Company and FTI | |
10.2 | Trademark License Agreement, dated July 31, 2008, between the Company and FTI | |
10.3 | Trademark Assignment and Coexistence Agreement, dated July 31, 2008, between the Company and FTI | |
10.4 | John Bean Technologies Corporation Incentive Compensation and Stock Plan | |
10.4(a) | Form of Nonqualified Stock Option Agreement under the John Bean Technologies Corporation Non-Qualified Savings and Investment Plan (U.S. Employees) | |
10.4(b) | Form of Nonqualified Stock Option Agreement under the John Bean Technologies Corporation Non-Qualified Savings and Investment Plan (Non-U.S. Employees) | |
10.4(c) | Form of Long-Term Incentive Performance Share Restricted Stock Agreement under the John Bean Technologies Corporation Non-Qualified Savings and Investment Plan | |
10.4(d) | Form of Key Managers Restricted Stock Agreement under the John Bean Technologies Corporation Non-Qualified Savings and Investment Plan | |
10.4(e) | Form of Restricted Stock Agreement for Non-Employee Directors under the John Bean Technologies Corporation Non-Qualified Savings and Investment Plan | |
10.4(f) | Form of Performance Units Award Agreement under the John Bean Technologies Corporation Non-Qualified Savings and Investment Plan | |
10.4(g) | Form of Long-Term Incentive Restricted Stock Agreement under the John Bean Technologies Corporation Non-Qualified Savings and Investment Plan | |
10.5 | John Bean Technologies Corporation Non-Qualified Savings and Investment Plan | |
10.6 | John Bean Technologies Corporation International Savings Plan | |
10.7 | JBT Corporation Salaried Employees Equivalent Retirement Plan | |
10.8 | Credit Agreement, July 31, 2008, between the Company, the guarantors party thereto and the financial institutions party thereto |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
John Bean Technologies Corporation | ||||
Date: August 6, 2008 | By: |
/s/ Charles H. Cannon, Jr. |
||
Name | Charles H. Cannon, Jr. | |||
Title | Chief Executive Officer and President |
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Exhibit 2.1
SEPARATION AND DISTRIBUTION AGREEMENT
by and between
FMC TECHNOLOGIES, INC.
and
JOHN BEAN TECHNOLOGIES CORPORATION
Dated as of July 31, 2008
TABLE OF CONTENTS
Page | ||||
ARTICLE I. |
DEFINITIONS |
2 | ||
1.1 |
General |
2 | ||
ARTICLE II. |
THE CONTRIBUTION |
10 | ||
2.1 |
Contribution |
10 | ||
2.2 |
Conditions Precedent to Completion of the Contribution |
12 | ||
2.3 |
Transfers Not Effected Prior to the Separation; Transfers Deemed Effective at the Assumption Time |
13 | ||
2.4 |
Ancillary Agreements |
13 | ||
2.5 |
Certificate of Incorporation; By-laws; Rights Plan |
14 | ||
2.6 |
Dividend and Cash |
14 | ||
2.7 |
Pension Asset Transfers |
15 | ||
2.8 |
Foreign Exchange Forward Instruments |
17 | ||
ARTICLE III. |
THE DISTRIBUTION |
17 | ||
3.1 |
Record Date and Distribution Date |
17 | ||
3.2 |
The Agent |
18 | ||
3.3 |
Delivery of Shares to the Agent |
18 | ||
3.4 |
Actions Prior to the Distribution |
18 | ||
3.5 |
The Distribution |
18 | ||
3.6 |
Conditions to Obligations |
19 | ||
ARTICLE IV. |
SURVIVAL AND INDEMNIFICATION |
19 | ||
4.1 |
Survival of Agreements |
19 | ||
4.2 |
Indemnification |
20 | ||
4.3 |
Procedures for Indemnification for Third-Party Actions |
20 | ||
4.4 |
Additional Matters |
22 | ||
4.5 |
Survival of Indemnities |
22 | ||
4.6 |
Remedies Cumulative |
22 | ||
ARTICLE V. |
CERTAIN ADDITIONAL COVENANTS |
22 | ||
5.1 |
Cooperation; Notices to Third Parties |
22 | ||
5.2 |
Intercompany Agreements and Accounts |
23 | ||
5.3 |
Guarantee Obligations |
24 | ||
5.4 |
Qualification as Tax-Free Distribution |
25 | ||
5.5 |
Non-Solicitation and Non-Hire |
25 |
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ARTICLE VI. |
ACCESS TO INFORMATION |
25 |
||
6.1 |
Agreement for Exchange of Information |
25 | ||
6.2 |
Ownership of Information |
26 | ||
6.3 |
Compensation for Providing Information |
26 | ||
6.4 |
Record Retention |
26 | ||
6.5 |
Limitation of Liability |
26 | ||
6.6 |
Confidentiality |
26 | ||
6.7 |
Protective Arrangements |
27 | ||
ARTICLE VII. |
NO REPRESENTATIONS OR WARRANTIES |
27 |
||
7.1 |
No Representations or Warranties |
27 | ||
ARTICLE VIII. |
TERMINATION |
28 | ||
8.1 |
Termination by Mutual Consent |
28 | ||
8.2 |
Effect of Termination |
28 | ||
ARTICLE IX. |
MISCELLANEOUS |
28 |
||
9.1 |
Complete Agreement; Corporate Power |
28 | ||
9.2 |
Expenses |
29 | ||
9.3 |
Governing Law |
29 | ||
9.4 |
Notices |
29 | ||
9.5 |
Amendment and Modification |
30 | ||
9.6 |
Successors and Assigns; No Third-Party Beneficiaries |
30 | ||
9.7 |
Counterparts |
30 | ||
9.8 |
Interpretation |
30 | ||
9.9 |
Severability |
30 | ||
9.10 |
References; Construction |
30 | ||
9.11 |
Specific Performance |
31 | ||
9.12 |
Conflict with Ancillary Agreements |
31 | ||
9.13 |
Joint Defense Cost Sharing Agreement |
31 | ||
9.14 |
Insurance Sharing |
32 | ||
ARTICLE X. |
DISPUTE RESOLUTION |
33 |
||
10.1 |
Dispute Resolution |
33 |
Schedules to Separation and Distribution Agreement
Schedule 1.1(a) |
Equity Interests |
|
Schedule 1.1(b) |
Other Assets |
|
Schedule 1.1(c) |
Excluded Assets |
|
Schedule 1.1(d)-(2) |
Discontinued and Closed Businesses |
|
Schedule 1.1(d)-(3) |
Environmental Liabilities |
ii
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SEPARATION AND DISTRIBUTION AGREEMENT
This SEPARATION AND DISTRIBUTION AGREEMENT (this Agreement ), dated as of July 31, 2008, is by and between FMC TECHNOLOGIES, INC. , a Delaware corporation ( Parent ), and JOHN BEAN TECHNOLOGIES CORPORATION , a Delaware corporation and a wholly owned subsidiary of Parent ( Spinco ) (each of Parent and Spinco, a Part y and together, the Parties ).
RECITALS
WHEREAS, the Board of Directors of Parent has determined that it is in the best interests of Parent and its stockholders to separate Parents existing businesses into two independent companies (the Separation ), pursuant to the terms and subject to the conditions set forth in this Agreement;
WHEREAS, to effect the Separation, Parent intends to cause the transfer to Spinco of certain assets of Parent and its subsidiaries, and the assumption by Spinco of certain liabilities of Parent and its subsidiaries associated with the assets being transferred, all of which are primarily related to the Spinco Business (the Contribution ) as contemplated by this Agreement and the Ancillary Agreements;
WHEREAS, in connection with the Separation, the Board of Directors of Parent has determined that it would be advisable and in the best interests of Parent and its stockholders for Parent to distribute to the holders of the issued and outstanding shares of common stock, par value $0.01 per share, of Parent (the Parent Common Stock ) as of the Record Date 100% of the issued and outstanding shares of common stock, par value $0.01 per share, of Spinco (the Spinco Common Stock ), together with the associated preferred stock purchase rights (each share of such stock, together with the associated preferred stock purchase right, a Spinco Share ), on the basis of 0.216 Spinco Shares for every share of Parent Common Stock (the Distribution );
WHEREAS, it is the intention of the parties to this Agreement that, for United States federal income tax purposes, the Distribution shall qualify as a tax-free spin-off under Section 355 of the Internal Revenue Code of 1986, as amended;
WHEREAS, the Boards of Directors of Parent and Spinco have each determined that the Separation, the Contribution, the Distribution and the other transactions contemplated by this Agreement and the Ancillary Agreements are in furtherance of and consistent with their respective business strategies and are in the best interests of their respective companies and stockholders and have approved this Agreement and the Ancillary Agreements; and
WHEREAS, it is appropriate and desirable to set forth the principal corporate transactions required to effect the Separation and certain other agreements that will govern certain matters relating to the Separation, the Contribution, the Distribution and the relationship of Parent and Spinco and their respective subsidiaries following the Separation and the Distribution.
NOW, THEREFORE, in consideration of the premises, and of the representations, warranties, covenants and agreements set forth in this Agreement, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 General . As used in this Agreement, the following terms shall have the following meanings:
Action: any claim, demand, action, lawsuit, countersuit, arbitration, inquiry, proceeding or investigation by or before any governmental or regulatory authority or any arbitration or mediation tribunal.
After Tax Operating Cash Flow: the sum of, based on Parents financial reporting system for the period from and including January 1, 2008 to and including the close of business on the Distribution Date, with all business transactions accounted for according Parents established cut-off, accounting and reporting procedures and protocols, the Net Operating Income of the Spinco Businesss continuing operations, plus or minus each of the following (as specified below):
(1) plus, Net Operating Income of Spincos discontinued businesses,
(2) plus, Spincos incremental corporate staff expense, after tax,
(3) plus the decrease or minus the increase in Spincos capital employed for its continuing operations, excluding cash and cash equivalents,
(4) plus the decrease or minus the increase in Spincos capital employed for its discontinued operations, excluding cash and cash equivalents,
(5) plus or minus, as applicable, the correcting adjustment for foreign exchange translation related to Spincos capital employed for both its continuing and discontinued operations,
(6) plus the increase or minus the decrease in Spincos liability for current and deferred income taxes and deferred tax assets,
(7) plus or minus, as applicable, the correcting adjustment for the foreign exchange translation adjustment related to Spincos liability for current and deferred income taxes and deferred tax assets,
(8) plus restatement gains or minus restatement losses, net of tax,
(9) plus impact of OCI, deferred derivative gains (losses) and other,
(10) plus, provisions for defined benefit retirement plans, pre-tax,
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(11) less, amortization expense in 2008 related to the 2006 restricted stock equity award, pre-tax,
(12) plus the increase or minus the decrease in Spincos health care reserves, and
(13) plus the increase or minus the decrease in Spincos insurance reserves.
Parent and Spinco agree to make such other adjustments as the parties determine necessary to fairly state the After Tax Operating Cash Flow and the Dividend Amount. Examples may include adjustments required for the impact on tax reserves of intercompany interest income or expense and prior year(s) taxes paid in 2008. Exhibit J includes an example of the calculation methodology for After Tax Operating Cash Flow.
Ancillary Agreements: the Tax Sharing Agreement, the agreements relating to the transfers and assumptions contemplated by Section 2.3 , the Transition Services Agreement substantially in the form of Exhibit B , the Trademark License Agreement substantially in the form of Exhibit F , the Trademark Assignment and Coexistence Agreement substantially in the form of Exhibit G , the Distributor Agreements substantially in the forms attached as Exhibit I , the Sublease Agreements substantially in the forms attached as Exhibit H and the other agreements entered into or to be entered into in connection with the Separation as contemplated by Article II of this Agreement.
Assets: any and all assets, properties and rights (including goodwill), whether accrued, contingent or otherwise, whether now existing or hereafter acquired, wheresoever situated, and in each case whether or not recorded or reflected or required to be recorded or reflected on the books and records or financial statements of any Person, including the following:
(1) all cash, cash equivalents, notes, accounts receivable, notes receivable and mortgages receivable (whether current or non-current);
(2) all interests in any capital stock or other equity interests, all rights as a partner or joint venturer or participant, certificates of deposit, bankers acceptances, bonds, notes, debentures, evidences of indebtedness, certificates of interest or participation in profit-sharing agreements, all puts, calls and options and all other securities of any kind;
(3) all Intellectual Property Rights;
(4) all rights, title and interests in, to and under leases, subleases, contracts, licenses, permits, registrations, certifications, distribution arrangements, open purchase orders for raw materials, supplies, parts or services, unfilled orders for the manufacture and sale of products, other sales and purchase agreements, confidentiality agreements, and other agreements and business arrangements;
(5) all rights, title and interests in, to and under real property of whatever nature, including all easements and rights of way, servitudes, leases, subleases, permits, licenses, options and other real property rights and interests, as an owner, mortgagee or
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holder of a security interest in real property, lessor, sublessor, lessee, sublessee or otherwise, and all rights, title and interests in and to all buildings, fixtures and improvements thereon;
(6) all leasehold improvements, fixtures, trade fixtures, machinery, equipment (including transportation and office equipment), tools, dies, furniture and furnishings;
(7) all fixtures, machinery, equipment, tools, other inventories of supplies and spare parts, vehicles and transportation equipment, miscellaneous supplies, models, prototypes, test devices and other tangible assets or properties of any kind;
(8) all computers and other electronic data processing and computer equipment and all computer applications, programs and other software, including design tools, systems documentation and instructions;
(9) all written technical information, data, specifications, research and development information, engineering drawings, operating and maintenance manuals, and materials and analyses prepared by consultants and other third parties;
(10) all raw materials, parts, work-in-process, supplies, finished goods, consigned goods, products and other inventories;
(11) all deposits, letters of credit, performance and surety bonds, prepayments and prepaid or advanced payments and expenses, trade accounts and other accounts and notes receivable;
(12) all rights to causes of action, lawsuits, judgments, claims, causes in action, all rights under express or implied warranties, all claims or rights against any Person arising from the ownership of any Asset, all rights in connection with any bids or offers, all rights of recovery and all rights of setoff of any kind and demands of any nature, in each case whether mature, contingent or otherwise, whether in tort, contract or otherwise, whether arising by way of counterclaim or otherwise;
(13) all rights to receive mail, payments on accounts receivable and other communications;
(14) all rights under insurance policies and all rights in the nature of insurance, indemnification or contribution;
(15) all accounting and other files, records and data, including schematics, books, manuals, technical information and engineering data, programming information, computerized data, books of account, ledgers, employment records, lists and files relating to customers, vendors, suppliers and agents, quality records and reports, research records, cost information, pricing data, market surveys and marketing know-how, mailing lists, purchase and sale records and correspondence, advertising and marketing records, of every kind;
(16) all goodwill as a going concern and other intangible properties;
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(17) all rights under employee contracts;
(18) all tax assets (including carryforwards) described in the Tax Sharing Agreement; and
(19) all permits, approvals, orders, authorizations, consents, licenses, certificates, franchises, exemptions of, or filings or registrations with or issued by, any governmental or regulatory authority in any jurisdiction, and all pending applications therefor.
Assumption Time: 12:01 a.m. on the Distribution Date.
Contribution: as defined in the Recitals hereto.
Distribution: as defined in the Recitals hereto.
Distribution Date: the date as of which the Distribution shall be effected, to be determined by, or under the authority of, the Board of Directors of Parent consistent with this Agreement.
Dividend Amount: an amount equal to:
(1) $200,000,000, plus
(2) the aggregate amount of cash and cash equivalents (as such term is defined in the footnotes to the financial statements included in Parents most recent Form 10-K filed with the U.S. Securities and Exchange Commission) of Spinco as of 11:59 p.m. on the Distribution Date, minus
(3) the amount of any Spinco indebtedness for borrowed money to the extent the creditor is not Parent, Spinco or any of their respective affiliates, minus
(4) the value of the After Tax Operating Cash Flow of the Spinco Business for the period from and including January 1, 2008 to and including 11:59 p.m. on the Distribution Date, if that amount is positive, plus
(5) the absolute value of the After Tax Operating Cash Flow of the Spinco Business for the period from and including January 1, 2008 to and including 11:59 p.m. on the Distribution Date, if such After Tax Operating Cash Flow amount is negative, minus
(6) the after-tax offset for excess assets left in Parents Brazilian pension plan, which is estimated at $463,737 (66% of $702,632).
Exhibit J includes an illustration of the calculation methodology for the Dividend Amount, including the identification of the accounts to be used to determine the After Tax Operating Cash Flow for the applicable period.
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Group: the Parent Group or the Spinco Group.
Guarantees: as defined in Section 5.3 hereof.
Indemnifiable Losses: all Liabilities suffered (and not actually reimbursed by insurance proceeds, provided that it is understood that any amount paid by a third party administrator that is within a self-insured retention shall not be considered to have been reimbursed by insurance proceeds) by an Indemnitee, including any reasonable out-of-pocket fees, costs or expenses of enforcing any indemnity hereunder; provided that Indemnifiable Losses shall not include:
(1) any special, indirect, incidental, punitive or consequential damages whatsoever of any indemnitee, including damages for lost profits and lost business opportunities, arising in connection with any Action other than any Action by any Person (including any governmental or regulatory authority) who is not a party to this Agreement or an affiliate or subsidiary of such a party; or
(2) any such Liability caused by, resulting from or arising out of the gross negligence, willful misconduct or fraud of such indemnitee.
Information: all records, books, contracts, instruments, computer data and other data and information.
Information Statement: as defined in Section 3.4 hereof.
Intellectual Property Rights:
(1) all inventions (whether patentable or unpatentable and whether or not reduced to practice), all improvements thereto, and all patents, patent applications, and patent disclosures, together with all reissuances, continuations, continuations-in-part, revisions, extensions, and reexaminations thereof;
(2) all Marks, whether registered or unregistered Marks, and all applications, registrations, and renewals in connection with the Marks;
(3) all copyrightable works, all copyrights, and all applications, registrations, and renewals in connection therewith, all computer software (including data and related documentation), all websites as well as supporting HTML coding and source code, all mask works and all applications, registrations, and renewals in connection therewith;
(4) all trade secrets and confidential information, including ideas, research and development, know-how, proprietary processes and formulas, compositions, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer and supplier lists, pricing and cost information, and business and marketing plans and proposals;
(5) any income, royalties and payments which accrue as of the Distribution Date or thereafter with respect to any of the foregoing items, including payments for past, present or future infringements or misappropriation thereof, the right to sue and recover for past infringements or misappropriation thereof;
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(6) any goodwill associated with any of the foregoing;
(7) all other proprietary rights; and
(8) all copies and tangible embodiments thereof (in whatever form or medium).
Liabilities: losses, damages, Actions, judgments, payments, debts, commissions, duties, costs, fees, expenses, settlements, salaries, performance or delivery penalties, liabilities, warranty liabilities (whether implicit or explicit or whether granted orally or in writing) and obligations (whether pecuniary or not, including obligations to perform or forebear from performing acts or services), fines or penalties, of any kind or nature (including all reasonable out-of-pocket costs, fees and expenses, whether legal, accounting or otherwise), whether accrued or fixed, absolute or contingent, matured or un-matured, determined or determinable, known or unknown.
Marks : all trademarks, service marks, trade dress, logos, trade names, and corporate names, together with all translations, adaptations, derivation, and combinations thereof and including all goodwill associated therewith.
Parent: as defined in the Recitals hereto.
Parent Assets: all of the Assets owned by Parent or its subsidiaries, other than the Spinco Assets.
Parent Business: all businesses and operations (including related joint ventures and alliances) of Parent, other than the Spinco Business.
Parent Common Stock: as defined in the Recitals hereto.
Parent Group: Parent and its subsidiaries other than members of the Spinco Group.
Parent Indemnitees: Parent, each affiliate of Parent and each of their respective Representatives and each of the heirs, executors, successors and assigns of any of the foregoing.
Parent Liabilities: all of the Liabilities of Parent and its subsidiaries, other than the Spinco Liabilities.
Person: an individual, a partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organization or a government or any department or agency thereof.
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Record Date: the close of business on the date to be determined by the Board of Directors of Parent as the record date for determining shareholders of Parent entitled to receive shares of Spinco Common Stock in the Distribution.
Registration Statement : Spincos final registration statement on Form 10 filed with the U.S. Securities and Exchange Commission in connection with the Distribution.
Representative: with respect to any Person, any of such Persons directors, officers, employees, agents, consultants, advisors, accountants, attorneys and representatives.
Separation: as defined in the Recitals to this Agreement.
Spinco: as defined in the Recitals hereto.
Spinco Assets: except as expressly provided in this Agreement or in the Ancillary Agreements,
(1) all Assets reflected on the Spinco Balance Sheet as set forth in the Registration Statement or the accounting records supporting the Spinco Balance Sheet and all Assets of either the Parent Group or the Spinco Group acquired between December 31, 2007 and the Assumption Time that would have been included on the Spinco Balance Sheet had they been owned on December 31, 2007, excluding any Assets sold or otherwise disposed of on or prior to the Assumption Time;
(2) all Assets primarily related to or used by the Spinco Business that are owned, leased, licensed or held by any member of either Group at the Assumption Time;
(3) all equity interests in any of Spincos subsidiaries and other equity interests and similar arrangements primarily related to the Spinco Business, including those shares of capital stock and other interests listed on Schedule 1.1(a) ;
(4) all hedge and option arrangements entered into by Parent in respect of the Spinco Business;
(5) all rights held of Spinco set forth in Section 9.14 ; and
(6) all of the Assets listed on Schedule 1.1(b) ; provided that:
(a) Intellectual Property Rights shall be Spinco Assets only in the form and to the extent provided in Section 2.1(b) ;
(b) cash shall be a Spinco Asset only to the extent set forth in Section 2.6 hereof;
(c) the leased real property at 200 E. Randolph Drive, Suite 6600, Chicago, Illinois shall not be a Spinco Asset or a Spinco Liability, but the Parties shall enter into a sublease agreement substantially in the form of Exhibit H with respect to such leased property;
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(d) pension assets shall be transferred to Spinco only in the amounts, to the extent and in the manner set forth in Section 2.7; and
(e) Spinco Assets shall not include the Assets set forth on Schedule 1.1(c) .
Spinco Balance Sheet: the audited combined balance sheet of Spinco as of December 31, 2007, and the notes thereto, as set forth in the Registration Statement.
Spinco Business: all businesses, operations or products (including related joint ventures and alliances) of the FoodTech and Airport Systems businesses of Parent and its subsidiaries and affiliates (whether or not currently owned, used or occupied by the Parent and its subsidiaries or affiliates).
Spinco Common Stock: as defined in the Recitals to this Agreement.
Spinco Group: Spinco and its subsidiaries.
Spinco Indemnitees: Spinco, each affiliate of Spinco and each of their respective Representatives and each of the heirs, executors, successors and assigns of any of the foregoing.
Spinco Liabilities: all Liabilities related to or arising out of the Spinco Assets or the Spinco Business or otherwise specified as Spinco Liabilities in this Agreement or any Ancillary Agreement, including:
(1) except as expressly provided in the Ancillary Agreements, all Liabilities reflected on the Spinco Balance Sheet as set forth in the Registration Statement or the accounting records supporting such Spinco Balance Sheet and all Liabilities of either Group incurred or arising between December 31, 2007 and the Assumption Time which would have been included on the Spinco Balance Sheet had they been incurred or arisen on or prior to December 31, 2007, excluding those Liabilities (or portions thereof) that have been satisfied, paid or discharged prior to the Assumption Time;
(2) all Liabilities of any discontinued or closed business, operation or product that would have been part of the Spinco Business as of December 31, 2007 if such business, operation or product had not been discontinued or closed prior to such time; provided that, notwithstanding such general rule, any discontinued or closed business, operation or product listed on Schedule 1.1(d)-(2) shall be the obligation and liability of Spinco and/or Parent as specified on such Schedule 1.1(d)-(2) ;
(3) all environmental Liabilities primarily related to the Spinco Business or any environmental Liability to the extent arising out of or resulting from the use by Spinco Business of any property owned, operated, used or leased in the course of operating any Spinco Business at any time or any other property where the Spinco Business contracted or arranged for disposal at any time; provided that, notwithstanding such general rule, environmental Liabilities for the facilities set forth on Schedule 1.1(d)-(3) shall be the obligation and liability of Spinco and/or Parent as specified on such Schedule 1.1(d)-(3) . With respect to environmental Liabilities arising from any facility
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that was jointly used by Spinco and Parent, except as otherwise specified on Schedule 1.1(d)-(3) , if one party was the primary or predominant user of the property, that party shall be responsible to administer any Action related thereto, including providing any required defense, and the other party shall cooperate in the administration and defense. Liabilities associated with any such Action shall be shared equally by Parent and Spinco unless there is another allocation methodology that more accurately and reasonably reflects the appropriate allocation of responsibility as between Parent and Spinco (including, for the avoidance of doubt, a reasonable estimation of relative fault or cause of the Liabilities);
(4) all Liabilities related to or incurred in the manufacture of products of the Spinco Business sold to third parties by any member of either the Parent Group or the Spinco Group;
(5) Liabilities for Taxes specifically allocated to Spinco under the Tax Sharing Agreement; and
(6) all Liabilities with respect to the various claims and potential claims set forth on Schedule 1.1(d)-(6) .
To the extent any third party has purchased products or services from business units of the Energy Processing or Energy Production divisions of Parent prior to the Distribution Date through (i) formal or informal distribution arrangements between the FoodTech or Airport Systems businesses, on the hand, and any such Energy Processing or Energy Production business units, on the other hand, or (ii) contracts executed by legal entities operating as FoodTech or Airport Systems businesses whose ownership is transferred to Spinco in the Contribution, any Liabilities resulting from such arrangements are Parent Liabilities and will not be considered to be Spinco Liabilities; provided that, to the extent that any such Liability arises out of or relates to the actions or inactions of Spinco or any person acting on behalf of Spinco or the FoodTech or Airport Businesses in a manner inconsistent with the applicable arrangement with the Energy Processing or Energy Production divisions of Parent, such Liabilities shall be Spinco Liabilities.
Tax: as defined in the Tax Sharing Agreement.
Tax Sharing Agreement: the Tax Sharing Agreement between Parent and Spinco, substantially in the form of Exhibit A hereto.
Trademark License Agreement: the Trademark License Agreement between Parent and Spinco, substantially in the form of Exhibit F .
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ARTICLE II
THE CONTRIBUTION
SECTION 2.1 Contribution .
(a) On or prior to the Assumption Time, Parent shall assign and transfer to a member of the Spinco Group to be selected by Spinco, all of Parents and its subsidiaries respective rights, title and interests in all Spinco Assets except as otherwise specified in this Agreement. Except to the extent of any later transfers described in Section 2.3 , the transfers described in this Section will become effective at the Assumption Time. In partial consideration for the transfers described above, Spinco shall deliver to Parent all of the shares of Spinco Common Stock.
(b) Effective as of the Assumption Time, Spinco shall assume and discharge in due course all of the Spinco Liabilities in accordance with their respective terms.
(i) Separation of Assets . The Spinco Assets (other than Intellectual Property Rights, which will be licensed or assigned only as set forth in Section 2.1(b)(ii) ) shall, to the extent reasonably practicable (including taking into account the costs of any actions taken), be separated from the Parent Assets so that members of the Spinco Group will own and control the Spinco Assets at the Assumption Time and members of the Parent Group will own and control the Parent Assets at the Assumption Time. Such separation shall be effected in a manner that does not unreasonably disrupt either the Spinco Business or the Parent Business and minimizes, to the extent practicable, current and future costs (and losses of Tax or other economic benefits) of the respective businesses. With respect to any Asset that cannot reasonably be separated or otherwise allocated as provided above (A) all right, title and interest of the Parent Group shall be allocated to the party as to which such Asset is primarily used or held for use or primarily relates and (B) the other party shall have a right to use such Asset in its business in a manner consistent with past practice for a period which is coterminous with the life of the Asset described in (A) (and the obligation to pay its allocable share of any costs or expenses related to such Asset based on the methodology historically used by Parent); provided that if any Ancillary Agreement provides a more specific allocation or methodology with respect to any such Asset, the more specific treatment provided in the Ancillary Agreement shall prevail. To the extent the separation of Assets cannot be achieved in a reasonably practicable manner, the parties will enter into appropriate arrangements regarding such shared Asset.
(ii) Intellectual Property. In connection with the Contribution, any Intellectual Property Rights of Parent or any of its subsidiaries shall be licensed or assigned to Spinco, as the case may be, as follows:
(1) | With respect to Intellectual Property Rights (other than any Intellectual Property Rights described in the Trademark License Agreement, which shall remain assets of Parent other than as set forth in the Trademark License Agreement) used or held for use primarily in connection with the Spinco Business ( Spinco Group IP ), including the Intellectual Property Rights listed in Schedule 2.1(b) , Spinco shall have full ownership (to the extent of Parents rights therein) of such rights. |
(2) |
Except as otherwise provided in Schedule 2.1(b) , with respect to Spinco Group IP used or held for use in both the Spinco Business and the Parent Business on or before the Assumption Time, the Parent |
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Group shall have a non-exclusive, worldwide, fully-paid, perpetual, royalty-free license, with the right to grant sublicenses in the ordinary course of an on-going business, to all rights therein only to the extent it was used or held for use by the Parent Business at or before the Assumption Time. Parent and Spinco shall jointly determine the most cost-efficient means of obtaining and using software that is used by the Parent corporate staff prior to the Assumption Time and shall evenly divide the cost of obtaining new licenses for or copies of existing software that both Groups will require to operate their respective corporate staffs. |
(3) | Except as otherwise provided in Schedule 2.1(b) , with respect to Intellectual Property Rights other than Spinco Group IP that are used or held for use in both the Spinco Business and the Parent Business on or before the Assumption Time, title to such rights shall be owned by the Parent Group, and the Spinco Group shall have a non-exclusive, worldwide, fully-paid, perpetual, royalty-free license, with the right to grant sublicenses in the ordinary course of an ongoing business, to all rights in the Intellectual Property Rights only to the extent it was used or held for use by the Spinco Business on or before the Assumption Time; provided that to the extent any such Intellectual Property Rights are of the kind covered by the Trademark License Agreement or the Trademark Assignment and Coexistence Agreement in substantially the form set forth on Exhibit G , the terms of the Trademark License Agreement or Trademark Assignment and Coxistence Agreement, as applicable, shall prevail and the license rights described in this paragraph shall not apply. |
(4) | The licenses specified in this Section shall not restrict the subsequent transfer or license by the licensee (within the applicable field of use) of the Intellectual Property Rights, other than as specified in the Trademark License Agreement. |
(5) | Notwithstanding anything to the contrary in this Agreement, the Intellectual Property Rights described in the Trademark Assignment and Coexistence Agreement in substantially the form set forth on Exhibit G shall be transferred to Spinco only to the extent set forth in such agreement, and the terms of such agreement shall prevail with respect to any Intellectual Property Rights described in such agreement. |
SECTION 2.2 Conditions Precedent to Completion of the Contribution .
The obligations of the parties to complete the Contribution shall be conditioned on the satisfaction, or waiver by Parent, of the following conditions:
(a) Final approval of the Contribution shall have been given by the Board of Directors of Parent in its sole discretion; and
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(b) The conditions to the completion of the Distribution set forth in Section 3.6 hereof shall have been satisfied or waived pursuant to such Section 3.6 .
SECTION 2.3 Transfers Not Effected Prior to the Separation; Transfers Deemed Effective at the Assumption Time .
To the extent that any transfers contemplated by this Article II shall not have been completed at the Assumption Time, the parties shall cooperate and use reasonable efforts to effect such transfers as promptly following the Assumption Time as shall be practicable. Nothing in this Agreement shall be deemed to require the transfer of any Assets or the assumption of any Liabilities which by their terms or operation of law cannot be transferred or assumed; provided , however , that Parent and Spinco shall cooperate and use reasonable efforts to obtain any necessary consents or approvals for the transfer of all Assets and Liabilities contemplated to be transferred pursuant to this Article II . In the event that any such transfer of Assets or Liabilities has not been completed effective as of and after the Assumption Time, the party retaining such Asset or Liability shall thereafter hold such Asset for the use and benefit of the party entitled thereto (at the expense of the party entitled thereto) and retain such Liability for the account of the party by whom such Liability is to be assumed pursuant hereto, and take such other action as may be reasonably requested by the party to which such Asset is to be transferred, or by whom such Liability is to be assumed, as the case may be, in order to place such party, insofar as reasonably possible, in the same position as would have existed had such Asset or Liability been transferred as contemplated by this Agreement. As and when any such Asset or Liability becomes transferable, such transfer shall be effected promptly. The parties agree that, at the Assumption Time, each Party shall be deemed to have acquired complete and sole beneficial ownership over all of the Assets, together with all rights, powers and privileges incident thereto, and shall be deemed to have assumed in accordance with the terms of this Agreement all of the Liabilities, and all duties, obligations and responsibilities incident thereto, which such party is entitled to acquire or required to assume pursuant to the terms of this Agreement.
SECTION 2.4 Ancillary Agreements .
Parent and Spinco shall, on or prior to the Assumption Time, enter into the Ancillary Agreements in connection with the Separation, including (i)(A) such bills of sale, stock powers, capital contribution agreements, certificates of title, assignments of contracts and other instruments of transfer and assignment as and to the extent necessary to evidence the transfer and assignment of all of Parents and its respective subsidiaries right, title and interest in and to the Spinco Assets to Spinco or any subsidiary thereof and (B) such bills of sale, stock powers, capital contribution agreements, certificates of title, assumptions of contracts and other instruments of assumption as and to the extent necessary to evidence the valid and effective assumption of the Spinco Liabilities by Spinco or any subsidiary thereof, and (ii) agreements with respect to (A) transition services (including shared facilities) pursuant to the Transition Services Agreement between Parent and Spinco, substantially in the form of Exhibit B , (B) intellectual property licenses as contemplated by Section 2.1(b) , (C) each other Ancillary
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Agreement and (D) other matters as may be advisable. The Ancillary Agreements (or, in the case of the forms of agreement attached hereto, any amendments thereto) shall be on terms reasonably acceptable to Parent and Spinco.
SECTION 2.5 Certificate of Incorporation; By-laws; Rights Plan .
Prior to the completion of the Distribution, Parent and Spinco shall take all action necessary so that (i) the Amended and Restated Certificate of Incorporation and the Amended and Restated By-laws, each as previously finalized as set forth on Exhibits C and D , respectively, shall remain in full force and effect on the Distribution Date, and (ii) the Preferred Share Purchase Rights Agreement of Spinco, in substantially the form of Exhibit E hereto, shall become effective upon the Distribution.
SECTION 2.6 Dividend and Cash .
(a) On or before the Distribution Date,
(i) Spinco shall cause to be received from the Credit Agreement and the Note Purchase Agreement, each dated on or before the Distribution Date, in substantially the forms reviewed by Parent prior to the Distribution Date, an amount not less than that necessary to enable Spinco to pay the Initial Dividend Amount to Parent on or before the Distribution Date
(ii) Spinco and Parent shall jointly determine the Initial Dividend Amount, which amount shall be based on the parties best estimate of the expected pro forma accounts of the Spinco Business as of the Distribution Date; and
(iii) Spinco shall cause to be paid to Parent an amount equal to the estimate of the Dividend Amount (such amount actually paid to Parent on or before the Distribution Date, the Initial Dividend Amount).
(b) Unless otherwise specified in this Agreement or any exhibit or schedule hereto, for purposes of calculating the Initial Dividend Amount, the Final Dividend Amount and the After Tax Operating Cash Flow of the Spinco Business, those certain one time expenses, restructuring expenses (including tax costs associated with foreign transfers) and deal related costs specified in Section 9.2 are to be paid by Parent, including reimbursement to Spinco for any such costs incurred.
(c) Settlement of inter-company loans will not create any third party indebtedness for borrowed money.
(d) Within 60 days after the Distribution Date, Spinco shall determine the final Dividend Amount (such amount, subject to adjustment for any dispute settled as set forth in this Section 2.6(d), the Final Dividend Amount) and shall deliver to Parent the calculation of the Final Dividend Amount, along with all relevant documents used to determine the Final Dividend Amount. At Parents reasonable request, Spinco shall promptly deliver or make available to Parent all books and records used or useful in Parents review of the Final Dividend Amount. Parent shall have 30 days to review the Final Dividend Amount delivered by Spinco, and shall bring any dispute to Spincos attention by written notice within such 30 day review period. If
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Parent agrees to the Final Dividend Amount and such amount is less than the Initial Dividend Amount, Parent shall pay the difference to Spinco not later than 10 business days after Parents written agreement to such amount (or 10 business days after the expiration of the 30-day review period, if earlier). If the Final Dividend Amount is greater than the Initial Dividend Amount, Spinco shall pay the excess to Parent not later than 10 business days after Spincos delivery of the Final Dividend Amount (provided that Parent shall still have 30 days from the date of its receipt of such books and records to dispute that the Final Dividend Amount should have been greater). In the event of a dispute of the Final Dividend Amount by Parent, Parent shall give notice thereof no later than 30 days after delivery of the certificate of the Final Dividend Amount from Spinco; provided that, if the Final Dividend Amount is less than the Initial Dividend Amount and the Parent agrees with the calculation of that shortfall, then Parent shall pay such undisputed amount to Spinco not later than 10 business days after Parents written agreement to such amount (or 10 business days after the expiration of the 30-day review period, if earlier). The parties shall cooperate in an effort to resolve any such dispute. If they are unable to resolve any such dispute within 30 days after the expiration of Parents 30-day review period, either party may submit the matter for resolution to PricewaterhouseCoopers (or if PricewaterhouseCoopers is not willing or able to serve, to Ernst & Young, or if Ernst and Young is not willing or able to serve, to any other nationally recognized independent accounting firm). The decision of such firm shall be final and binding upon the parties and shall thereafter represent the Final Dividend Amount for purposes hereof. Within 5 business days after the earlier of Parent and Spinco mutually agreeing to the Final Dividend Amount or the final determination of the independent accountant, (i) Parent shall pay to Spinco any previously unpaid amount by which the Initial Dividend Amount exceeds the Final Dividend Amount or (ii) Spinco shall pay to Parent any previously unpaid amount by which the Final Dividend Amount exceeds the Initial Dividend Amount. The fees and expenses of the firm shall be borne equally by Parent and Spinco.
SECTION 2.7 Pension Asset Transfers .
(a) Prior to the date hereof, the FMC Technologies Employees Retirement Program was applicable to both employees who have become, or will become on the Distribution Date, employees of Spinco or its subsidiaries. Subsequent to June 30, 2008, the JBT Defined Benefit Retirement Trust will bear the allocated assets and liabilities of the employees of Spinco, retirees from Spinco businesses or locations and terminated vested employees from Spinco businesses or locations. The parties hereto agree that the total amount that Parent shall cause to be transferred from the trust funding the FMC Technologies Employees Retirement Program to the JBT Defined Benefit Retirement Trust will be an amount equal to the portion of the total assets of the FMC Technologies Employees Retirement Plan that Mercer (who shall be engaged by Parent to make such determination) shall determine is allocable to the JBT Defined Benefit Retirement Trust in accordance with a Section 4044 of ERISA asset allocation of the current FMC Technologies Employees Retirement Program as of June 30, 2008. This allocation will be completed prior to December, 31, 2008.
Prior to the date hereof, Parent has caused or will cause the FMC Technologies Employees Retirement Program to transfer to the trustee of the JBT Defined Benefit Retirement Trust an amount in cash equal to $10,000,000. Parent shall cause the trustee of the trust funding the FMC Technologies Employees Retirement Program to make a subsequent asset transfer to the trustee of the JBT Defined Benefit Retirement Trust prior to December 31, 2008 in an
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aggregate amount equal to the sum of (a) (i) the Section 4044 asset allocation at June 30, 2008 attributable to the JBT Defined Benefit Retirement Trust as determined by Mercer, minus (ii) $10,000,000, and (b) (i) the investment performance gain or loss percentage of the FMC Technologies Employees Retirement Program from June 30, 2008 to the funding date times (ii) the Section 4044 asset allocation at June 30, 2008 attributable to the JBT Defined Benefit Retirement Trust as determined by Mercer at June 30, 2008 minus $10,000,000. Investment performance will be calculated monthly and compounded, including all investment management fees and asset based trustee fees, excluding contributions and benefit payments. For administrative purposes, the investment performance will be estimated at the funding date and trued up to actual performance within 30 days, with the true up payment bearing interest at one-month Treasury bill rates. Parent and Spinco shall cooperate with Mercer as is reasonably requested by it or the other party hereto in order to assist Mercer with its tasks hereunder. Additionally, Parent shall consult with Spinco for all major changes to the investments of the FMC Technologies Employees Retirement Program during the period from June 30, 2008 to the funding date.
(b) Prior to the Distribution Date, Parent will cause the transfer from the FMC Technologies Employees Savings and Investment Plan and FMC Technologies Employees Non-qualified Savings and Investment Plan the liabilities and assets associated with current Spinco employees, retirees from Spinco businesses or locations, and terminated vested former employees from Spinco businesses or locations to the John Bean Technologies Corporation Savings and Investment Plan and the John Bean Technologies Corporation Non-qualified Savings and Investment Plan.
(c) In Brazil, Parents subsidiary converted its defined benefit retirement plan to a defined contribution plan. All employees were converted to the defined contribution plan with the exception of approximately 22 current and term vested employees. The Brazilian retirement plan will be split between the Parent and Spinco as follows in (i)-(iii).
(i) The vested defined benefit retirement liabilities for all term vested employees will remain with the Parent along with the defined contribution liabilities for employees, terminated vested employees, and retirees associated with the Parents remaining business. Except for the vested defined benefit retirement plan liabilities retained by the Parent, Spinco will assume the liabilities of employees, terminated vested employees, and retirees associated with Spincos businesses. Towers Perrin, the plan actuary, will perform an actuarial valuation at June 30, 2008 of the defined benefit and the defined contribution plans. After that valuation, a sufficient amount of assets to provide for payment of the vested defined benefit retirement liability will be allocated to the Parents plan. These assets will be invested in a manner to match the benefit payments and defined benefit liability. Defined contribution assets associated with the defined contribution plans will be allocated to Parent or Spincos defined contribution plans based on whether the employee is or was at retirement a Parent or Spinco employee. After the allocation described above and other actuarial adjustments, the actuarial gain or loss from the valuation will be distributed to the Parent and Spinco plans in proportion to the defined contribution and defined benefit liabilities. For the avoidance of doubt, the actuarial valuation gain or loss referenced in this section comes from the calculation on page 18 in the Towers Perrin March 2008 presentation of the actuarial valuation as of June 2007.
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(ii) Parent will compensate Spinco in the Initial Dividend Amount and Final Dividend Amount by an amount equal to the estimated difference between 50% of the total actuarial gain or loss of the combined plans and the amount of actuarial gain or loss estimated to remain in the Parents plan multiplied by 1 minus the applicable Brazilian tax rate. For purposes of the estimation, the difference between 50% of the total actuarial gain or loss and the amount of actuarial gain or loss estimated to remain in the Parents plan will be $702,632 ( Brazilian Reais 1,147,750@ 1.6335 Brazilian Reais/$). This portion of the Initial Dividend Amount and Final Dividend Amount will be adjusted to actual after the completion of the June 30, 2008 actuarial valuation but not later than December 30, 2008 based on the actual difference between 50% of the total actuarial gain or loss and the amount of actuarial gain or loss remaining in the Parents Plan times 1 minus the applicable Brazilian tax rate.
(iii) Spinco agrees to indemnify Parent for ten (10) years for 50% of any change in the difference between actuarial liability associated with the retained defined benefit retirement liability and the assets invested to match that liability. Every two years Parents actuary will furnish Spinco an annual report in reasonable detail showing both the components and change in the retained defined benefit retirement liabilities and invested matched assets. Within 30 days of the report, Spinco will make indemnifying payments to Parent such that the indemnifying amount will equal 50% of the shortfall in matched asset market values from the actuarial liability. Parent will cause Parents Brazilian subsidiary to contribute 100% of the identified shortfall to the Brazilian retirement plan within 30 days of the Spinco payment. No indemnification payment will be due if assets in the matched asset account are greater than the actuarial liability.
SECTION 2.8 Foreign Exchange Forward Instruments .
Parent and Spinco agree that certain foreign exchange forward instruments related to the Spinco Business may not be assigned to Spinco due to counterparty constraints. Within 60 days after the Distribution Date Parent shall terminate the instruments not assigned to Spinco in such a manner that Spinco may replace the instruments contemporaneously with their selected financial institutions. Parent shall transfer to Spinco all cash proceeds as a result of the termination of the instruments and pay to Spinco within 10 business days of cash receipt. If Parent is required to submit cash proceeds to the institutions those amounts will be communicated to Spinco and Spinco shall pay to Parent within 10 businesses days.
ARTICLE III
THE DISTRIBUTION
SECTION 3.1 Record Date and Distribution Date .
Subject to the satisfaction of the conditions set forth in Section 3.6 , the Board of Directors of Parent shall establish the Record Date and the Distribution Date, as applicable, and any appropriate procedures to be followed in connection with a Distribution.
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SECTION 3.2 The Agent .
Prior to the Distribution Date, Parent shall enter into an agreement with a distribution agent providing for, among other things, the completion of the Distribution in accordance with this Article III .
SECTION 3.3 Delivery of Shares to the Agent .
Prior to the Distribution Date, Parent shall deliver to the distribution agent a share certificate representing (or authorize the related book-entry transfer of) all of the outstanding shares of Spinco Common Stock to be distributed in connection with the completion of the Distribution. After the Distribution Date, upon the request of the distribution agent, Spinco shall provide all certificates for shares (or book-entry transfer authorizations) of Spinco Common Stock that the distribution agent shall require in order to effectuate the Distribution.
SECTION 3.4 Actions Prior to the Distribution .
(a) Parent and Spinco shall prepare and mail to holders of Parent Common Stock such information concerning Spinco and its business, operations and management, the Distribution and such other matters as Parent shall reasonably determine and as may be required by law, including the Securities Act of 1933, as amended and the Securities Exchange Act of 1934, as amended, in each case together with the rules and regulations promulgated thereunder, if applicable (the Information Statement ). Parent and Spinco will prepare, and, to the extent required under applicable law, file with the U.S. Securities and Exchange Commission such Information Statement and any requisite no-action request letters which Parent determines are necessary or desirable to effectuate the Distribution and Parent and Spinco shall use their reasonable best efforts to obtain any necessary approvals from the U.S. Securities and Exchange Commission with respect thereto as soon as practicable.
(b) Parent and Spinco shall take all such action as Parent may determine necessary or appropriate under state securities or blue sky laws of the United States (and any comparable laws under any foreign jurisdiction) in connection with the Distribution.
SECTION 3.5 The Distribution .
(a) Subject to the terms and conditions of this Agreement, each holder of Parent Common Stock on the Record Date (or such holders designated transferee or transferees) will be entitled to receive 0.216 Spinco Shares for every share of Parent Common Stock held by such holder on the Record Date.
(b) No fractional shares of Spinco Common Stock shall be distributed in the Distribution. Parent shall direct the distribution agent to determine, as soon as practicable, the sum of fractional shares of Spinco Common Stock that would have been issued in the Distribution and sell the nearest number of whole shares equal to such sum in open market transactions or otherwise, in each case at then prevailing trading prices. The distribution agent shall then cause to be distributed to the holders of Parent Common Stock entitled to receive such proceeds in lieu of fractional shares an amount in cash equal to such holders ratable share of the proceeds of such sale, without interest, after making appropriate deductions of the amount required to be withheld for federal income tax purposes and after deducting an amount equal to all brokerage charges, commissions and transfer taxes attributed to such sale.
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SECTION 3.6 Conditions to Obligations .
The following conditions must be satisfied (or waived by Parent) prior to the Parties becoming obligated to complete the Distribution:
(a) Final approval of the Distribution shall have been given by the Board of Directors of Parent in its sole discretion.
(b) The actions and filings necessary or appropriate under federal and state securities laws and state blue sky laws of the United States (and any comparable laws under any foreign jurisdictions) in connection with the Distribution (including, if applicable, any actions and filings relating to the Information Statement) shall have been taken and, where applicable, have become effective or been accepted.
(c) The Spinco Common Stock to be issued in the Distribution shall have been accepted for listing on the New York Stock Exchange, Inc., subject to official notice of issuance.
(d) No order, injunction or decree issued by any court or agency of competent jurisdiction or other legal restraint or prohibition preventing the completion of the Separation, the Contribution or the Distribution or any of the other transactions contemplated by this Agreement or any Ancillary Agreement shall be in effect.
(e) A private letter ruling from the Internal Revenue Service, in form and substance satisfactory to Parent, shall have been obtained, and shall continue in effect, to the effect that no gain or loss will be recognized by Parent, Spinco, or Parents or Spincos shareholders for federal income tax purposes as a result of the Distribution or the Contribution.
(f) All required consents and approvals in connection with the transactions contemplated hereby shall have been received or provided, except where the failure to obtain such consents or approvals would not have a material adverse effect on either (A) the ability of the parties to complete the transactions contemplated by this Agreement and the Ancillary Agreements or (B) the business, assets, liabilities, financial condition or results of operations of Spinco and its subsidiaries, taken as a whole.
(g) This Agreement shall not have been terminated.
ARTICLE IV
SURVIVAL AND INDEMNIFICATION
SECTION 4.1 Survival of Agreements .
All covenants and agreements of the parties contained in this Agreement shall survive each of the Contribution, the Separation and the Distribution.
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SECTION 4.2 Indemnification .
(a) Except as specifically otherwise provided in the Ancillary Agreements and without regard as to when any transfer is completed, from and after the Assumption Time the Parent Group shall indemnify, defend and hold harmless the Spinco Indemnitees from and against all Indemnifiable Losses relating to, arising out of or resulting from (i) the failure of any member of the Parent Group to pay or otherwise promptly discharge any Parent Liabilities, whether such Indemnifiable Losses relate to events, occurrences or circumstances occurring or existing, or whether such Indemnifiable Losses are asserted, before or after the Distribution Date, (ii) the failure of any member of the Parent Group to perform any of its obligations under this Agreement and (iii) the Parent Business or any Parent Liability (unless this Agreement specifically allocates such liability to Spinco).
(b) Except as specifically otherwise provided in the Ancillary Agreements and without regard as to when any transfer is completed, from and after the Assumption Time, the Spinco Group shall indemnify, defend and hold harmless the Parent Indemnitees from and against (i) all Indemnifiable Losses relating to, arising out of or resulting from the failure of any member of the Spinco Group (A) to pay or otherwise promptly discharge any Spinco Liabilities, whether such Indemnifiable Losses relate to events, occurrences or circumstances occurring or existing, or whether such Indemnifiable Losses are asserted, before or after the Distribution Date or (B) to perform any of its obligations under this Agreement; and (ii) all Indemnifiable Losses arising out of or based upon any untrue statement or alleged untrue statement of a material fact, or omission or alleged omission to state a material fact required to be stated, in any portion of the Registration Statement or the Information Statement (or any preliminary or final form thereof or any amendment thereto), or necessary to make the statements in the Registration Statement or the Information Statement not misleading.
(c) If any indemnity payment required to be made hereunder or under any Ancillary Agreement is denominated in a currency other than United States dollars, such payment shall be made in United States dollars and the amount thereof shall be computed using the closing exchange rate at which United States dollars may be exchanged for such currency (as quoted in the Wall Street Journal) on the payment date for such currency.
SECTION 4.3 Procedures for Indemnification for Third-Party Actions .
(a) Parent or Spinco, as applicable, shall notify the other in writing promptly after learning of any third-party Action for which any indemnitee intends to seek indemnification from the other under this Agreement. The failure of any indemnitee to give such notice shall not relieve any indemnifying party of its obligations under this Article IV except to the extent that such indemnifying party or its affiliate is actually prejudiced by such failure to give notice. Such notice shall describe such third-party Action in reasonable detail considering the information provided to the indemnitee.
(b) An indemnifying party may, by notice to the indemnitee and to Parent, if Spinco is the indemnifying party, or to the indemnitee and Spinco, if Parent is the indemnifying party, within 30 days after receipt by such indemnifying party of such indemnitees notice of a third-party Action (or sooner, if the nature of such third-party Action so requires), undertake the defense or settlement of such third-party Action. The indemnifying party shall not have the right to assume the defense of a third-party Action (i) seeking material non-monetary remedies (such
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as criminal or material injunctive relief) or (ii) for which the indemnitee reasonably determines that the indemnifying party and the indemnitee have different legal defenses available which make it inappropriate for the indemnifying party to assume such defense, and in each case such third-party Actions may be defended by the indemnitee at the indemnifying partys expense; provided that the indemnitee shall use reasonable efforts to keep the indemnifying party apprised of the status of such matter(s) (provided that the failure to do so shall not affect the amount owed by the indemnifying party with respect to such third-party Action). If an indemnifying party undertakes the defense of any third-party Action, such indemnifying party shall thereby admit its obligation to indemnify the indemnitee against such third-party Action, and such indemnifying party shall control the investigation and defense or settlement thereof, and the indemnitee may not settle or compromise such third-party Action, except that such indemnifying party shall not (x) require any indemnitee, without its prior written consent, to take or refrain from taking any action in connection with such third-party Action, or make any public statement, which such indemnitee reasonably considers to be against its interests, or (y) without the prior written consent of the indemnitee and of Parent, if the indemnitee is a Parent Indemnitee, or the indemnitee and of Spinco, if the Indemnitee is a Spinco Indemnitee, consent to any settlement that does not include as a part thereof an unconditional release of the indemnitees from liability with respect to such third-party Action or that requires the indemnitee or any of its Representatives or affiliates to make any payment that is not fully indemnified under this Agreement or to be subject to any non-monetary remedy. Subject to the indemnifying partys control rights, the indemnitees may, at its expense, participate in the investigation and defense of any third-party Action assumed by the indemnifying party. Following the provision of notices to the indemnifying party, until such time as an indemnifying party has undertaken the defense of any third-party Action as provided in this Agreement, such indemnitee shall control the investigation and defense or settlement thereof at the cost and expense of the indemnifying party, without prejudice to its right to seek indemnification hereunder.
(c) In no event shall an indemnifying party be liable for the costs, fees and expenses of more than one law firm for all indemnitees (in addition to its own counsel, if any) in connection with any one action, or separate but similar or related actions, in the same jurisdiction arising out of the same general allegations or circumstances.
(d) Spinco and Parent shall make available to each other, their counsel and other Representatives, all information and documents reasonably available to them which relate to any third-party Action, and otherwise cooperate as may reasonably be required in connection with the investigation, defense and settlement thereof, subject to the terms and conditions of a mutually acceptable joint defense agreement. Any joint defense agreement entered into by Spinco or Parent with any third party relating to any third-party Action shall provide that Spinco or Parent may, if requested, provide information obtained through any such agreement to the Spinco Indemnitees and/or the Parent Indemnitees.
(e) The provisions of Section 4.3 (other than this Section 4.3(e) ) and Section 4.4 shall not apply to Taxes (which are covered by the Tax Sharing Agreement).
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SECTION 4.4 Additional Matters .
(a) Any claim on account of a Liability which does not result from a third-party Action shall be asserted by written notice given by the indemnitee to the indemnifying party. Such indemnifying party may, within 30 days after receipt by such indemnifying party of such indemnitees notice of such claim (or sooner, if the nature of such claim so requires), undertake the defense or settlement of such claim. If such indemnifying party does not respond within such 30-day period or rejects such claim in whole or in part, such indemnitee shall be free to pursue such remedies as may be available to such party as contemplated by this Agreement and the Ancillary Agreements.
(b) In the event of payment by or on behalf of any indemnifying party to or on behalf of any indemnitee in connection with any third-party Action, such indemnifying party shall be subrogated to and shall stand in the place of such indemnitee as to any events or circumstances in respect of which such indemnitee may have any right, defense or claim relating to such third-party Action against any claimant or plaintiff asserting such third-party Action or against any other person. Such indemnitee shall cooperate with such indemnifying party in a reasonable manner, and at the cost and expense (including allocated costs of in-house counsel and other personnel) of such indemnifying party, in prosecuting any subrogated right, defense or claim.
SECTION 4.5 Survival of Indemnities .
(a) The indemnity and contribution agreements contained in this Article IV shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of any Indemnitee; (ii) the knowledge by the indemnitee of Indemnifiable Losses for which it might be entitled to indemnification or contribution hereunder; or (iii) any termination of this Agreement.
(b) The rights and obligations of each Party and their respective indemnitees under this Article IV shall survive the sale or other transfer by any Party or its respective subsidiaries of any Assets or businesses or the assignment by it of any Liabilities.
SECTION 4.6 Remedies Cumulative .
The remedies provided in this Article IV shall be cumulative and shall not preclude assertion by any indemnitee of any other rights or the seeking of any other remedies against any indemnifying party. However, the procedures set forth in Section 4.3 and Section 4.4 shall be the exclusive procedures governing any indemnity action brought under this Agreement, except as otherwise specifically provided in any of the Ancillary Agreements.
ARTICLE V
CERTAIN ADDITIONAL COVENANTS
SECTION 5.1 Cooperation; Notices to Third Parties .
(a) In addition to the actions described in Section 5.2 , the members of the Parent Group and the Spinco Group shall cooperate and use reasonable best efforts to make all other filings and give notice to and obtain any consents and waivers (including those from or to
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any governmental or regulatory authority) that may reasonably be required (both before and after the Assumption Time), and to take any other actions that may be required, to (i) complete and effectuate the transactions, provisions and purposes contemplated by this Agreement and the Ancillary Agreements (including completing any required employee or employee-related communications required by law or contract) and (ii) operate its business after the Assumption Time. On or prior to the Assumption Time, Parent and Spinco shall take all actions as may be necessary to approve the stock-based employee benefit plans of Spinco in order to satisfy any applicable requirement, including Rule 16b-3 under the Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder, Section 162(m) of the Internal Revenue Code of 1986, as amended and the rules and regulations of the New York Stock Exchange, Inc. If either party identifies any commercial or other service that is needed to assure a smooth and orderly transition of the businesses in connection with the completion of the transactions contemplated hereby, and that is not otherwise governed by the provisions of this Agreement or any Ancillary Agreement, the parties will cooperate in determining whether there is a mutually acceptable arms-length basis on which the other party will provide such service.
(b) After the Assumption Time, except in the case of an Action by one Party against the other Party (which shall be governed by such discovery rules as may be applicable thereto), each Party shall use its reasonable best efforts to make available to each other party, upon written request, the former, current and future directors, officers, employees, other personnel and agents of the members of its respective Group as witnesses and any books, records or other documents within its control or which it otherwise has the ability to make available, to the extent that any such person (giving consideration to business demands of such directors, officers, employees, other personnel and agents) or books, records or other documents may reasonably be required in connection with any Action in which the requesting party may from time to time be involved, regardless of whether such Action is a matter with respect to which indemnification may be sought hereunder. The requesting party shall bear all out-of-pocket costs, fees and expenses (including allocated costs of in-house counsel and other personnel) in connection therewith.
(c) Without limiting any provision of this Section 5.1 , each of the parties agrees to cooperate with each other in the defense of any infringement or similar claim with respect any Intellectual Property Rights and shall not claim to acknowledge, or permit any member of its respective Group to claim to acknowledge, the validity or infringing use of any intellectual property of a third Person in a manner that would hamper or undermine the defense of such infringement or similar claim.
(d) In connection with any matter contemplated by this Section 5.1 , the parties will enter into a mutually acceptable joint defense agreement so as to maintain to the extent practicable any applicable attorney-client privilege or work product immunity of any member of any Group.
SECTION 5.2 Intercompany Agreements and Accounts .
(a) All contracts, commitments or other arrangements between any member of the Parent Group and any member of the Spinco Group in existence at the Assumption Time, pursuant to which any member of either Group makes payments in respect of Taxes to any
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member of the other Group or provides to any member of the other Group goods or services (including management, administrative, legal, financial, accounting, data processing, insurance or technical support), or the use of any Assets of any member of the other Group, or the secondment of any employee, or pursuant to which rights, privileges or benefits are afforded to members of either Group as affiliates of the other Group, shall terminate effective at the Assumption Time, except as specifically provided in this Agreement or in the Ancillary Agreements. From and after the Assumption Time, no member of either Group shall have any rights under any such contract, commitment or arrangement with any member of the other Group, except as specifically provided in this Agreement or in the Ancillary Agreements.
(b) After the Assumption Time, the parties shall be obligated to pay only those intercompany accounts between members of the Spinco Group and members of the Parent Group that arose in connection with transfers of goods and services in the ordinary course of business, consistent with past practices (which the parties shall use reasonable best efforts to settle prior to the Assumption Time), and all other intercompany accounts shall be settled by the transfer of financial assets at the Assumption Time, except as otherwise contemplated by this Agreement.
SECTION 5.3 Guarantee Obligations .
(a) Prior to and from and after the Assumption Time, Parent and Spinco shall use their respective reasonable best efforts to cause Parent and each member of the Parent Group to be released, effective from and after the Assumption Time, from any obligations to guarantee or otherwise support any liabilities or obligations of any member of the Spinco Group, including guarantee of performance (the Guarantees ), including through the substitution of such Guarantees by Parent or such members of the Parent Group with replacement guarantees by Spinco (or, if acceptable to the beneficiary of such a Guarantee, another member of the Spinco Group). Without limiting the foregoing, Spinco agrees that it shall cause Parent and each member of the Parent Group to be released from all such Guarantees not later than 24 months after the Assumption Time, including by way of termination of the applicable contract, but only if such release and termination is permitted without liability under such applicable contract.
(b) From and after the Assumption Time, (i) neither Parent nor any member of the Parent Group shall have any obligation to extend, renew or increase the principal amount of any Guarantee or create or enter into any new or additional Guarantee, and (ii) Spinco shall not increase the amount of any Guarantee by Spinco or any other member of the Spinco Group, extend any expiration date of any such Guarantee, extend the period of time for presentation of documents or demands under any such Guarantee, agree to any substitution of any such Guarantee, or agree to any creation, amendment, supplement, waiver or other modification of any such Guarantee provided that the limitations in clause (ii) shall not apply in the event that a member of the Spinco Group obtains a letter of credit from a financial institution reasonably acceptable to Parent and for the benefit of Parent with respect to such obligation of the Parent Group.
(c) Spinco shall reimburse and otherwise indemnify and hold harmless Parent for the full amount of all payments made or products or services delivered to third parties under any Guarantee not terminated prior to the Assumption Time, which reimbursement shall be made
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by wire transfer of immediately available funds in the full amount of any such payment or delivery. Any such reimbursement shall be made within ten (10) days after written demand by Parent.
SECTION 5.4 Qualification as Tax-Free Distribution .
After the Assumption Time, neither Parent nor Spinco shall take, or permit any member of its respective Group to take, any action which could reasonably be expected to prevent the Distribution from qualifying as a tax-free distribution within the meaning of Section 355 of the Internal Revenue Code of 1986, as amended or any other transaction contemplated by this Agreement or any Ancillary Agreement which is intended by the parties to be tax-free from failing so to qualify.
SECTION 5.5 Non-Solicitation and Non-Hire .
(a) Neither Parent nor Spinco shall, or shall permit any member of its respective group to, for a period of 18 months following the Assumption Time, directly or indirectly, solicit for employment any employee of the other partys Group; provided , however , that the foregoing shall not apply (i) to solicitations made by job opportunity advertisements and headhunter searches directed to the general public rather than targeting any employees of the other partys Group or (ii) with respect to any employee who has been terminated by such other party prior to (or has voluntarily left his or her employment more than six months prior to) such solicitation.
(b) Neither Parent nor Spinco shall, or shall permit any member of its respective group to, for a period of 18 months following the Assumption Time, directly or indirectly, hire any employee of the other (or any person who has been employed by the other at any time during the three months prior to the date of hire); provided that such hiring restriction shall not apply to employees of the other entity who were terminated as part of a reduction in force or for any other reason other than for cause.
ARTICLE VI
ACCESS TO INFORMATION
SECTION 6.1 Agreement for Exchange of Information .
(a) Parent and Spinco agree to provide to the other Group, as soon as reasonably practicable after written request therefor, any Information in the possession or under the control of such respective Group which the requesting party reasonably needs (i) to comply with reporting, disclosure, filing or other requirements imposed on the requesting party (including under applicable securities or Tax laws) by a governmental or regulatory authority having jurisdiction over the requesting party including in connection with any Registration Statement, (ii) for use in any other judicial, regulatory, administrative, Tax or other proceeding or in order to satisfy audit, accounting, claims, regulatory, litigation, Tax or other similar requirements, or (iii) to comply with its obligations under this Agreement or any Ancillary Agreement; provided , however , that in the event that any party determines that any such provision of Information could be commercially detrimental, violate any law or agreement, or
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waive any attorney-client privilege, the parties shall take all reasonable measures to permit the compliance with such obligations in a manner that avoids any such harm or consequence. Parent and Spinco intend that any transfer of Information that would otherwise be within the attorney-client privilege shall not operate as a waiver of any potentially applicable privilege. Each party shall make its employees and facilities available during normal business hours and on reasonable prior notice to provide explanation of any Information provided hereunder.
(b) After the Assumption Time, Spinco shall provide, or cause to be provided, to Parent in such form as Parent shall request, at no charge to Parent, all Information as Parent determines necessary or advisable in order to prepare Parent financial statements and reports or filings with any governmental or regulatory authority.
SECTION 6.2 Ownership of Information .
Any Information owned by one Group that is provided to a requesting party pursuant to Section 6.1 shall be deemed to remain the property of the providing party. Unless specifically set forth in this Agreement, nothing contained in this Agreement shall be construed as granting or conferring rights of license or otherwise in any such Information.
SECTION 6.3 Compensation for Providing Information .
The party requesting such Information agrees to reimburse the other party for the reasonable out-of-pocket costs, fees and expenses, if any, of creating, gathering and copying such information, to the extent that such costs, fees and expenses are incurred for the benefit of the requesting party, provided that reasonable detail of such costs, fees and expenses have been provided.
SECTION 6.4 Record Retention .
To facilitate the possible exchange of information pursuant to this Article VI and other provisions of this Agreement after the Assumption Time, the parties agree to use their reasonable best efforts to retain all Information in their respective possession or control at the Assumption Time in accordance with the policies of Parent as in effect at the Assumption Time.
SECTION 6.5 Limitation of Liability .
No party shall have any Liability to any other party in the event that any Information exchanged or provided pursuant to this Agreement that is an estimate or forecast, or which is based on an estimate or forecast, is found to be inaccurate, in the absence of willful misconduct or fraud by the party providing such information. No party shall have any Liability to any other party if any Information is destroyed after reasonable best efforts by such party to comply with the provisions of Section 6.4 .
SECTION 6.6 Confidentiality .
(a) Subject to Section 6.7 , each of Parent and Spinco, on behalf of itself and each member of its respective Group, agrees to hold, and to cause its respective Representatives to hold, in strict confidence, with at least the same degree of care that such party then uses with
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respect to its own confidential and proprietary information, all Information concerning each such other Group that is either in its possession (including information in its possession prior to any of the date hereof, the Assumption Time or the Distribution Date) or furnished by any such other Group or its respective Representatives at any time pursuant to this Agreement, any Ancillary Agreement or otherwise, and shall not use any such Information other than for such purposes as shall be expressly permitted hereunder or thereunder, except, in each case, to the extent that such information has been (i) in the public domain through no fault of such party or any member of such Group or any of their respective Representatives, (ii) later lawfully acquired from other sources by such party (or any member of such partys Group) which sources are not themselves bound by a confidentiality obligation, or (iii) independently generated without reference to any proprietary or confidential information of the other party.
(b) Each party agrees not to release or disclose, or permit to be released or disclosed, any such Information to any other Person, except its Representatives who need to know such information (who shall be advised of their obligations hereunder with respect to such information), except in compliance with Section 6.7 . Without limiting the foregoing, when any Information is no longer needed for the purposes contemplated by this Agreement or any Ancillary Agreement, each party will promptly after request of the other party either return to the other party all Information in a tangible form (including all copies thereof and all notes, extracts or summaries based thereon) or certify to the other party that it has destroyed such Information (and such copies thereof and such notes, extracts or summaries based thereon).
SECTION 6.7 Protective Arrangements .
In the event that any party or any member of its Group either determines on the advice of its counsel that it is required to disclose any Information pursuant to applicable law or receives any demand under lawful process or from any governmental or regulatory authority to disclose or provide information of any other party (or any member of any other partys Group) that is subject to the confidentiality provisions hereof, such party shall notify the other party prior to disclosing or providing such information and shall cooperate at the expense of the requesting party in seeking any reasonable protective arrangements requested by such other party. Subject to the foregoing, the Person that received such request may thereafter disclose or provide Information to the extent required by such law (as so advised by counsel) or by lawful process or such governmental or regulatory authority.
ARTICLE VII
NO REPRESENTATIONS OR WARRANTIES
SECTION 7.1 No Representations or Warranties .
Except as expressly set forth in this Agreement or in any other Ancillary Agreement, Spinco understands and agrees that no member of the Parent Group is, in this Agreement or in any other agreement or document, representing or warranting to Spinco or any member of the Spinco Group in any way as to the Spinco Assets, the Spinco Business or the Spinco Liabilities, it being agreed and understood that Spinco and each member of the Spinco Group shall take all of the Spinco Assets as is, where is. Except as expressly set forth in this
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Agreement or in any other Ancillary Agreement, Spinco and each member of the Spinco Group shall bear the economic and legal risk that the Spinco Assets shall prove to be insufficient or that the title of any member of the Spinco Group to any Spinco Assets shall be other than good and free from encumbrances. The foregoing shall be without prejudice to any rights to indemnification under Section 4.2 or to the covenants otherwise contained in this Agreement or any other Ancillary Agreement.
ARTICLE VIII
TERMINATION
SECTION 8.1 Termination by Mutual Consent .
This Agreement may be terminated at any time prior to the Distribution Date at the sole determination of Parent.
SECTION 8.2 Effect of Termination .
(a) In the event of any termination of this Agreement prior to completion of the Distribution, no party to this Agreement (or any of its directors or officers) shall have any Liability or further obligation to any other party.
(b) In the event of any termination of this Agreement on or after the completion of the Distribution, only the provisions of Article III (the Distribution) and Section 5.4 (Qualification as Tax-Free Distribution) will terminate and the other provisions of this Agreement and each Ancillary Agreement shall remain in full force and effect.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Complete Agreement; Corporate Power .
(a) This Agreement, the Exhibits and Schedules hereto and the Ancillary Agreements shall constitute the entire agreement between the Parties with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter.
(b) Parent represents on behalf of itself and each other member of the Parent Group and Spinco represents on behalf of itself and each other member of the Spinco Group as follows:
(i) each such Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute, deliver and perform each of this Agreement and each other Ancillary Agreement to which it is a party and to complete the transactions contemplated hereby and thereby; and
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(ii) this Agreement and each Ancillary Agreement to which it is a party has been duly executed and delivered by it and constitutes a valid and binding agreement of it enforceable in accordance with the terms thereof.
SECTION 9.2 Expenses .
Except as expressly set forth in or limited by Schedule 9.2 or elsewhere in this Agreement or in any Ancillary Agreement, all third party fees, costs and expenses paid or incurred prior to the Distribution in connection with the transactions contemplated by this Agreement and the Ancillary Agreements will be paid by the Parent. If the Separation and Distribution do not occur, then the Parent shall bear all fees, costs and expenses paid or incurred in connection with the transactions contemplated by this Agreement and the Ancillary Agreements.
SECTION 9.3 Governing Law .
This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware (other than the laws regarding choice of laws and conflicts of laws that would apply the substantive laws of any other jurisdiction) as to all matters, including matters of validity, construction, effect, performance and remedies.
SECTION 9.4 Notices .
All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by standard form of telecommunications, by courier, or by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:
If to Parent or any member of the Parent Group:
FMC Technologies, Inc.
1803 Gears Road
Houston, Texas 77067
Attention: General Counsel
Fax: (281) 591-4102
If to Spinco or any member of the Spinco Group:
John Bean Technologies Corporation
200 E. Randolph Dr.
Chicago, IL 60601
Attention: General Counsel
or to such other address as any Party may have furnished to the other Party by a notice in writing in accordance with this Section 9.4 .
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SECTION 9.5 Amendment and Modification .
This Agreement may be amended, modified or supplemented only by a written agreement signed by all of the Parties.
SECTION 9.6 Successors and Assigns; No Third-Party Beneficiaries .
This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the Parties and their successors and permitted assigns, but neither this Agreement nor any of the rights, interests and obligations hereunder shall be assigned by any Party without the prior written consent of the other Party or except in connection with a merger or similar business combination involving a Party if the successor under applicable law expressly assumes all rights and obligations of such party hereunder and under each Ancillary Agreement as if it were such Party. Except for the provisions of Sections 4.2 and 4.3 relating to indemnities, which are also for the benefit of the indemnitees, this Agreement is solely for the benefit of the Parties and their subsidiaries and affiliates and is not intended to confer upon any other Persons any rights or remedies hereunder.
SECTION 9.7 Counterparts .
This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
SECTION 9.8 Interpretation .
The Article and Section headings contained in this Agreement are solely for the purpose of reference, are not part of the agreement of the Parties and shall not in any way affect the meaning or interpretation of this Agreement.
SECTION 9.9 Severability .
If any provision of this Agreement or the application thereof to any person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party.
SECTION 9.10 References; Construction .
References to any Article, Exhibit, Schedule or Section, without more, are to Articles, Exhibits, Schedules and Sections to or of this Agreement. Unless otherwise expressly stated, clauses beginning with the term including set forth examples only and in no way limit the generality of the matters thus exemplified. To the extent any provision of this Agreement requires action or cooperation by the Parent, such requirement shall be deemed to include a requirement to cause the other members of the Parent Group and/or the Parent Indemnitees to take such action or to so cooperate unless the context requires otherwise, and to the extent any provision of this Agreement requires action or cooperation by Spinco, such requirement shall be deemed to include a requirement to cause the other members of the Spinco Group and/or the Spinco Indemnitees to take such action or to so cooperate unless the context requires otherwise
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SECTION 9.11 Specific Performance .
In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement or any Ancillary Agreement, the party or parties who are or are to be thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief of its rights under this Agreement or such Ancillary Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. The parties agree that the remedies at law for any breach or threatened breach, including monetary damages, are inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived. Any requirements for the securing or posting of any bond with such remedy are waived. Each Party hereby submits to the exclusive jurisdiction of Delaware for purposes of all legal proceedings for equitable relief arising out of or relating to this Agreement or the transactions contemplated hereby. Each Party irrevocably waives, to the fullest extent permitted by Law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. EACH PARTY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY DISPUTE IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED IN THIS AGREEMENT OR ANY ANCILLARY AGREEMENT, AND AGREES TO TAKE ANY AND ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH WAIVER.
SECTION 9.12 Conflict with Ancillary Agreements .
Except to the extent Section 4.2 , 4 .3 or 10.1 conflict with the Tax Sharing Agreement, in which case the Tax Sharing Agreement shall govern, the provisions of this Agreement shall govern in the event of any conflict between the provisions of any Ancillary Agreement and this Agreement.
SECTION 9.13 Joint Defense Cost Sharing Agreement .
Spinco hereby acknowledges and agrees that it has received a copy of the joint defense agreement between Parent and FMC Corporation, dated April 1, 2003, pursuant to which Parent and FMC Corporation agreed to the joint defense of certain matters (including mass tort litigation where both such entities are named as defendants). Spinco and Parent hereby agree that, beginning on the Distribution Date, Spinco shall promptly (and in any event within 10 business days after notice of such costs) reimburse and pay to Parent twenty percent (20%) of Parents portion of the legal fees and other costs incurred by Parent in connection with the joint defense agreement between Parent and FMC Corporation, dated April 1, 2003. Parent shall provide Spinco with access to all information related to the administration of the joint defense agreement between Parent and FMC Corporation, dated April 1, 2003, including access to the records maintained in the Parents matter management system related to such joint defense agreement.
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SECTION 9.14 Insurance Sharing .
(a) For all policies incepted on or after the Distribution Date, Parent and Spinco shall be completely responsible for managing all aspects of its own claims, at its own expense, including formal notification to insurers, interacting with insurance brokers, making payments to third-party administrators and shall in general make its own decisions regarding settlement of claims based on its own business judgment. However, for all claims related to or covered by insurance policies bound prior to the Distribution Date, the FMC Risk Management Department shall have the responsibility of formal notification to insurers and Parent and Spinco shall be responsible to coordinate its legal position with the other party and seek to avoid legal positions that may be in conflict with the legal position of the other party. To the extent a conflict in position cannot be avoided after discussion between the Parties, the issue shall be resolved pursuant to the dispute resolution procedure required by Article X of this Agreement.
(b) Responsibility for claims management and/or indemnity obligations, and any related claim for insurance coverage, shall belong to the party associated with the loss, except where the other party has assumed responsibility for that specific liability or type of liability in this Agreement or any schedule or exhibit hereto, in which case such responsibility and obligations shall belong to such other party. Neither this provision nor any other aspect of this Section 9.14 is intended to increase: (a) the burden on or the financial exposure to the insurers under the subject policies or (b) the benefits to the parties under those policies. Instead, it is the intent of Parent and Spinco to reflect the reality of which each such party is financially responsible for the alleged liability resulting from the subject claim(s) and to provide that the insurance benefits applicable to the claim(s) are available to the financially responsible party.
(c) If Spinco submits a claim under a policy in effect prior to the Distribution Date which is rejected in whole or in part by an insurer because Spinco is not a named insured on the policy, and if it is determined by Spinco and Parent that the claim would otherwise be covered if that claim were assumed and submitted by Parent, and to the extent such claim is payable and paid by insurance, then to that extent, Parent shall re-assume responsibility (only to the extent insurance proceeds are actually recovered) for that claim and present it to the insurer in its own name. In such event, Spinco shall, on an on-going monthly basis, hold harmless and indemnity Parent for all loss, cost and expense not covered by insurance. In such event, the re-assumed claim and any payment received from an insurer, shall be treated as belonging to Spinco.
(d) Where a third party presents a claim against both Parent and Spinco in error (Third Party Error) and it is jointly agreed by the Parent and Spinco that only one Parent or Spinco should be involved, the involved party shall be responsible for claim management and promptly take all necessary actions to have the uninvolved party dismissed from the claim. To the extent Parent and Spinco are unable to agree on whether a claim represents a Third Party Error, the issue shall be resolved pursuant to the dispute resolution procedure required by Article X of this Agreement. Third Party Errors shall be deemed to include any action or claim against a party who, as between Parent and Spinco, is not responsible for such action or claim by operation of this Agreement, even though the party may be potentially responsible to the third party by operation of law.
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(e) Regarding policies in effect at the Distribution Date, Parent and Spinco agree to waive subrogation against the other party following the settlement or other resolution of any action which involves such insurance policy. In addition, Parent agrees that Spinco should be deemed and treated as an insured entitled to benefits under such policies based upon its historical business and activities covered under those policies when part of Parent, but only to the extent such policy is an occurrence-based policy.
(f) Parent and Spinco shall bear the cost of the applicable per occurrence deductible or self-insured retention as their claims occur. The burden created by the insolvency of any insurer in any layer of insurance shall be borne by the party or parties (on a pro rata basis) that incurred the loss and which resulted in the inability to collect the insurance because of insolvency of the insurer. For example, if both Parent and Spinco had claims that should have been covered by a layer of insurance, the lack of recovery would be split based on the relative losses incurred by Parent and Spinco in that layer. If only one of Parent or Spinco incurs losses that are not recoverable, that party shall bear the loss. If one of Parent or Spinco collects on a claim for a layer of insurance, the carrier becomes insolvent and then the other party incurs a claim, the insurance recoveries of the party that had recovered insurance proceeds will be shared pro rata (based on relative losses suffered within such layer of insurance by Parent and Spinco) with the other party.
(g) If both Parent and Spinco losses exceed an aggregate deductible then the insurance recoveries shall be shared by Parent and Spinco on a pro rata basis based on loss claims from each such party.
ARTICLE X
DISPUTE RESOLUTION
SECTION 10.1 Dispute Resolution .
(a) Except for any claims for equitable relief in connection with the failure of any party to perform its covenants hereunder and except with respect to disputes under Section 2.6(d) , in the event of any dispute or disagreement between any member of the Parent Group and any member of the Spinco Group as to the interpretation of any provision of this Agreement (or the performance of obligations hereunder), the parties shall promptly meet in a good faith effort to resolve the dispute. Should such good faith effort fail to resolve the dispute within fifteen (15) days after first meeting to resolve the dispute and upon the written request of Parent or Spinco, the dispute shall be referred to either the Chief Financial Officers (for matters that are deemed financial in nature) or the Chief Executive Officers (for each other matter) of the parties for decision. If the officers do not agree upon a decision within thirty (30) days after reference of the matter to them, each of Parent and Spinco shall submit any controversy, dispute or claim arising out of or relating in any way to this Agreement or the transactions arising hereunder for arbitration in the City of Chicago, Illinois, and such arbitration shall be the sole remedy for such monetary claims. Such arbitration shall be administered by the Center for Public Resources Institute for Dispute Resolutions in accordance with its then prevailing Rules for Non-Administered Arbitration of Business Disputes (except as otherwise provided in this Agreement), by an arbitrator or arbitrators as selected and described in Section 10.1(b) . The
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arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. § 1 et seq. The award rendered by the arbitrator(s) shall be final and not subject to judicial review and judgment thereon may be entered in any court of competent jurisdiction.
(b) For all disputes for which the aggregate disputed dollar amount is equal to or less than $3,000,000, then Parent and Spinco shall agree upon a single arbitrator to oversee the dispute. If Parent and Spinco cannot agree on such arbitrator within 20 days after submitting the dispute for arbitration, then the dispute shall be managed by a single independent arbitrator to be chosen by the Center for Public Resources Institute for Dispute Resolutions. For all disputes for which the aggregate disputed dollar amount exceeds $3,000,000, such dispute shall be managed and ruled upon by a panel of three arbitrators. Parent and Spinco shall each name one of the arbitrators, and the third arbitrator shall be chosen by Parent and Spinco or, if Parent and Spinco cannot agree on such arbitrator within 20 days after submitting the dispute for arbitration, then the third arbitrator shall be an independent arbitrator selected by the Center for Public Resources Institute for Dispute Resolutions.
(c) The fees and expenses of the Center for Public Resources Institute for Dispute Resolution and the arbitrator(s) shall be shared equally by Parent and Spinco.
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IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the date first above written.
FMC TECHNOLOGIES, INC. |
||
By: |
/s/ William H. Schumann, III |
|
Name: William H. Schumann, III | ||
Title: Executive Vice President and Chief Financial Officer |
JOHN BEAN TECHNOLOGIES CORPORATION |
||
By: |
/s/ Ronald D. Mambu |
|
Name: Ronald D. Mambu | ||
Title: Vice President, Chief Financial Officer, Treasurer and Controller |
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Exhibit 3.1
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
JOHN BEAN TECHNOLOGIES CORPORATION
(Pursuant to Section 151 of the
Delaware General Corporation Law)
-------------------------------------
John Bean Technologies Corporation, a corporation organized and existing under the General Corporation Law of the State of Delaware (hereinafter called the Corporation), hereby certifies that the following resolution was adopted by the Board of Directors of the Corporation as required by Section 151 of the General Corporation Law by unanimous written consent on July 28, 2008:
RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of this Corporation (hereinafter called the Board of Directors or the Board) in accordance with the provisions of the Certificate of Incorporation, the Board of Directors hereby creates a series of Preferred Stock, par value $.01 per share, of the Corporation (the Preferred Stock), and hereby states the designation and number of shares, and fixes the relative rights, preferences, and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount . The shares of such series shall be designated as Series A Junior Participating Preferred Stock (the Series A Preferred Stock) and the number of shares constituting the Series A Preferred Stock shall be 1,500,000. Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, that no decrease shall reduce the number of shares of Series A Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions .
(A) Subject to the rights of the holders of any shares of any series of Preferred Stock (or any similar stock) ranking prior and superior to the Series A Preferred Stock with respect to dividends, the holders of shares of Series A Preferred Stock, in preference to the holders of Common Stock, par value $.01 per share (the Common Stock), of the Corporation, and of any other junior stock, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the first day of March, June, September and December in each year (each such date being referred to herein as a Quarterly Dividend Payment Date), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $1 or (b) subject to the provision for adjustment hereinafter set forth, 100 times the aggregate per share amount
1
of all cash dividends, and 100 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Preferred Stock. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Series A Preferred Stock as provided in paragraph (A) of this Section immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on the Series A Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not more than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights . The holders of shares of Series A Preferred Stock shall have the following voting rights:
2
(A) Subject to the provision for adjustment hereinafter set forth, each share of Series A Preferred Stock shall entitle the holder thereof to 100 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other Certificate of Designations creating a series of Preferred Stock or any similar stock, or by law, the holders of shares of Series A Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by law, holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions .
(A) Whenever quarterly dividends or other dividends or distributions payable on the Series A Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Preferred Stock outstanding shall have been paid in full, the Corporation shall not:
(i) |
declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock; |
(ii) |
declare or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except dividends paid ratably on the Series A Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; |
(iii) |
redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution |
3
or winding up) to the Series A Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Preferred Stock; or |
(iv) |
redeem or purchase or otherwise acquire for consideration any shares of Series A Preferred Stock, or any shares of stock ranking on a parity with the Series A Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. |
(B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 2, purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares . Any shares of Series A Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein, in the Certificate of Incorporation, or in any other Certificate of Designations creating a series of Preferred Stock or any similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up . Upon any liquidation, dissolution or winding up of the Corporation, no distribution shall be made (1) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock unless, prior thereto, the holders of shares of Series A Preferred Stock shall have received $100 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, provided that the holders of shares of Series A Preferred Stock shall be entitled to receive an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to 100 times the aggregate amount to be distributed per share to holders of shares of Common Stock, or (2) to the holders of shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except distributions made ratably on the Series A Preferred Stock and all such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by
4
reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under the proviso in clause (1) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
Section 7 . Consolidation, Merger, etc . In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series A Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share, subject to the provision for adjustment hereinafter set forth, equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
Section 8. No Redemption . The shares of Series A Preferred Stock shall not be redeemable.
Section 9 . Rank . The Series A Preferred Stock shall rank, with respect to the payment of dividends and the distribution of assets, junior to all series of any other class of the Corporations Preferred Stock.
Section 10 . Amendment . The Certificate of Incorporation of the Corporation shall not be amended in any manner which would materially alter or change the powers, preferences or special rights of the Series A Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series A Preferred Stock, voting together as a single class.
5
IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf of the Corporation by its Chief Executive Officer and attested by its Secretary this 31st day of July, 2008.
/s/ Charlie H. Cannon, Jr. |
Charlie H. Cannon, Jr. |
President and Chief Executive Officer |
Attest:
/s/ James L. Marvin |
James L. Marvin |
Secretary |
6
Exhibit 4.1
E XECUTION C OPY
J OHN B EAN T ECHNOLOGIES C ORPORATION
$75,000,000
6.66% Senior Guaranteed Notes, due July 31, 2015
N OTE P URCHASE A GREEMENT
Dated July 31, 2008
T ABLE OF C ONTENTS
S ECTION |
H EADING |
P AGE |
||
S ECTION 1. | A UTHORIZATION OF N OTES | 1 | ||
Section 1.1. |
Authorization of Notes |
1 | ||
Section 1.2. |
Guarantee Agreement |
1 | ||
S ECTION 2. | S ALE AND P URCHASE OF N OTES | 1 | ||
S ECTION 3. | C LOSING | 2 | ||
S ECTION 4. | C ONDITIONS TO C LOSING | 2 | ||
Section 4.1. |
Representations and Warranties |
2 | ||
Section 4.2. |
Performance; No Default |
2 | ||
Section 4.3. |
Compliance Certificates |
3 | ||
Section 4.4. |
Opinions of Counsel |
3 | ||
Section 4.5. |
Purchase Permitted By Applicable Law, Etc. |
3 | ||
Section 4.6. |
Payment of Special Counsel Fees |
3 | ||
Section 4.7. |
Private Placement Number |
3 | ||
Section 4.8. |
Changes in Corporate Structure |
3 | ||
Section 4.9. |
Funding Instructions |
4 | ||
Section 4.10. |
Additional Agreements |
4 | ||
Section 4.11. |
Proceedings and Documents |
4 | ||
S ECTION 5. | R EPRESENTATIONS AND W ARRANTIES OF THE O BLIGORS | 4 | ||
Section 5.1. |
Organization; Power and Authority |
4 | ||
Section 5.2. |
Authorization, Etc. |
4 | ||
Section 5.3. |
Disclosure |
5 | ||
Section 5.4. |
Organization and Ownership of Shares of Subsidiaries; Affiliates |
5 | ||
Section 5.5. |
Financial Statements; Material Liabilities |
6 | ||
Section 5.6. |
Compliance with Laws, Other Instruments, Etc. |
6 | ||
Section 5.7. |
Governmental Authorizations, Etc. |
6 | ||
Section 5.8. |
Litigation; Observance of Agreements, Statutes and Orders |
6 | ||
Section 5.9. |
Taxes |
7 | ||
Section 5.10. |
Title to Property; Leases |
7 | ||
Section 5.11. |
Licenses, Permits, Etc. |
7 | ||
Section 5.12. |
Compliance with ERISA |
8 | ||
Section 5.13. |
Private Offering by the Company |
8 | ||
Section 5.14. |
Use of Proceeds; Margin Regulations |
9 | ||
Section 5.15. |
Existing Indebtedness; Future Liens |
9 | ||
Section 5.16. |
Foreign Assets Control Regulations, Etc. |
9 |
Section 5.17. |
Status under Certain Statutes |
10 | ||
Section 5.18. |
Environmental Matters |
10 | ||
Section 5.19. |
Ranking of Obligations |
10 | ||
Section 5.20. |
Obligor Group |
11 | ||
S ECTION 6. | R EPRESENTATIONS OF THE P URCHASERS | 11 | ||
Section 6.1. |
Purchase for Investment |
11 | ||
Section 6.2. |
Source of Funds |
11 | ||
S ECTION 7. | I NFORMATION AS TO C OMPANY | 13 | ||
Section 7.1. |
Financial and Business Information |
13 | ||
Section 7.2. |
Officers Certificate |
16 | ||
Section 7.3. |
Visitation |
16 | ||
S ECTION 8. | P AYMENT AND P REPAYMENT OF THE N OTES | 17 | ||
Section 8.1. |
Maturity |
17 | ||
Section 8.2. |
Optional Prepayments with Make-Whole Amount |
17 | ||
Section 8.3. |
Allocation of Partial Prepayments |
17 | ||
Section 8.4. |
Maturity; Surrender, Etc. |
17 | ||
Section 8.5. |
Purchase of Notes |
17 | ||
Section 8.6. |
Make-Whole Amount |
18 | ||
Section 8.7. |
Change in Control |
19 | ||
Section 8.8. |
Payment in Connection with Asset Disposition |
20 | ||
S ECTION 9. | A FFIRMATIVE C OVENANTS | 21 | ||
Section 9.1. |
Compliance with Law |
21 | ||
Section 9.2. |
Insurance |
21 | ||
Section 9.3. |
Maintenance of Properties |
21 | ||
Section 9.4. |
Payment of Taxes and Claims |
21 | ||
Section 9.5. |
Corporate Existence, Etc. |
22 | ||
Section 9.6. |
Books and Records |
22 | ||
Section 9.7. |
Priority of Obligations |
22 | ||
Section 9.8. |
Additional Obligors |
22 | ||
Section 9.9 |
Intercreditor Agreement |
22 | ||
S ECTION 10. | N EGATIVE C OVENANTS | 22 | ||
Section 10.1. |
Transactions with Affiliates |
23 | ||
Section 10.2. |
Merger, Consolidation, etc. |
23 | ||
Section 10.3. |
Line of Business |
24 | ||
Section 10.4. |
Terrorism Sanctions Regulations |
25 | ||
Section 10.5. |
Liens |
25 | ||
Section 10.6. |
Interest Coverage |
27 | ||
Section 10.7. |
Leverage Ratio |
27 | ||
Section 10.8. |
Priority Debt |
27 |
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Section 10.9. |
Subsidiary Debt Limitation |
27 | ||
Section 10.10. |
Sale of Asset |
28 | ||
S ECTION 11. | E VENTS OF D EFAULT | 28 | ||
S ECTION 12. | R EMEDIES ON D EFAULT , E TC . | 31 | ||
Section 12.1. |
Acceleration |
31 | ||
Section 12.2. |
Other Remedies |
32 | ||
Section 12.3. |
Rescission |
32 | ||
Section 12.4. |
No Waivers or Election of Remedies, Expenses, Etc. |
32 | ||
S ECTION 13. | R EGISTRATION ; E XCHANGE ; S UBSTITUTION OF N OTES | 32 | ||
Section 13.1. |
Registration of Notes |
32 | ||
Section 13.2. |
Transfer and Exchange of Notes |
33 | ||
Section 13.3. |
Replacement of Notes |
33 | ||
S ECTION 14. | P AYMENTS ON N OTES | 34 | ||
Section 14.1. |
Place of Payment |
34 | ||
Section 14.2. |
Home Office Payment |
34 | ||
S ECTION 15. | E XPENSES , E TC . | 34 | ||
Section 15.1. |
Transaction Expenses |
34 | ||
Section 15.2. |
Survival |
35 | ||
S ECTION 16. | S URVIVAL OF R EPRESENTATIONS AND W ARRANTIES ; E NTIRE A GREEMENT | 35 | ||
S ECTION 17. | A MENDMENT AND W AIVER | 35 | ||
Section 17.1. |
Requirements |
35 | ||
Section 17.2. |
Solicitation of Holders of Notes |
35 | ||
Section 17.3. |
Binding Effect, etc. |
36 | ||
Section 17.4. |
Notes Held by Company, etc. |
36 | ||
S ECTION 18. | N OTICES | 36 | ||
S ECTION 19. | R EPRODUCTION OF D OCUMENTS | 37 | ||
S ECTION 20. | C ONFIDENTIAL I NFORMATION | 37 | ||
S ECTION 21. | S UBSTITUTION OF P URCHASER | 38 |
- iii -
- iv -
S CHEDULE A |
|
I NFORMATION R ELATING TO P URCHASERS |
||
S CHEDULE B |
|
D EFINED T ERMS |
||
S CHEDULE 5.3 |
|
Disclosure Materials |
||
S CHEDULE 5.4 |
|
Subsidiaries of the Company and Ownership of Subsidiary Stock |
||
S CHEDULE 5.5 |
|
Financial Statements |
||
S CHEDULE 5.15 |
|
Existing Indebtedness |
||
E XHIBIT 1 |
|
Form of 6.66% Senior Guaranteed Note due July 31, 2015 |
||
E XHIBIT 4.4(a)(i) |
|
Form of Opinion of Special Counsel for the Company |
||
E XHIBIT 4.4(a)(ii) |
|
Form of Opinion of Assistant General Counsel for the Company |
||
E XHIBIT 4.4(b) |
|
Form of Opinion of Special Counsel for the Purchasers |
||
E XHIBIT 9.8 |
|
Form of Joinder Agreement |
- v -
John Bean Technologies Corporation
200 East Randolph Drive
Chicago, IL 60601
6.66% Senior Guaranteed Notes due July 31, 2015
July 31, 2008
T O E ACH OF THE P URCHASERS L ISTED IN
S CHEDULE A H ERETO :
Ladies and Gentlemen:
John Bean Technologies Corporation, a Delaware corporation (the Company ) and each of the Guarantors, jointly and severally, agree with each of the purchasers whose names appear at the end hereof (each, a Purchaser and, collectively, the Purchasers ) as follows:
S ECTION 1. A UTHORIZATION OF N OTES .
Section 1.1. Authorization of Notes. The Company will authorize the issue and sale of $75,000,000 aggregate principal amount of 6.66% Senior Guaranteed Notes, due July 31, 2015 (the Notes , such term to include any such notes issued in substitution therefor pursuant to Section 13). The Notes shall be substantially in the form set out in Exhibit 1.
Certain capitalized and other terms used in this Agreement are defined in Schedule B; and references to a Schedule or an Exhibit are, unless otherwise specified, to a Schedule or an Exhibit attached to this Agreement.
Section 1.2. Guarantee Agreement . The payment and performance of all obligations of the Company hereunder and under the Notes, including, without limitation, the payment of the principal of, interest on, and Make-Whole Amount, if any, with respect to the Notes and all other amounts owing hereunder are fully and unconditionally guaranteed by the Guarantors as provided in the Guarantee Agreement set forth in Section 22.
S ECTION 2. S ALE AND P URCHASE OF N OTES .
Subject to the terms and conditions of this Agreement, the Company will issue and sell to each Purchaser and each Purchaser will purchase from the Company, at the Closing provided for in Section 3, Notes in the principal amount specified opposite such Purchasers name in Schedule A at the purchase price of 100% of the principal amount thereof. The Purchasers obligations hereunder are several and not joint obligations and no Purchaser shall have any liability to any Person for the performance or non-performance of any obligation by any other Purchaser hereunder.
John Bean Technologies Corporation |
Note Purchase Agreement |
S ECTION 3. C LOSING .
The sale and purchase of the Notes to be purchased by each Purchaser shall occur at the offices of Chapman and Cutler LLP, 111 W. Monroe Street, Chicago, Illinois 60603-4080, at 10:00 a.m., Chicago time, at a closing (the Closing ) on July 31, 2008 or on such other Business Day thereafter on or prior to August 31, 2008 as may be agreed upon by the Company and the Purchasers. At the Closing the Company will deliver to each Purchaser the Notes to be purchased by such Purchaser in the form of a single Note (or such greater number of Notes in denominations of at least $100,000 as such Purchaser may request) dated the date of the Closing and registered in such Purchasers name (or in the name of its nominee), against delivery by such Purchaser to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds for the account of the Company to account number: , account name: John Bean Technologies Corporation at Wells Fargo Bank NA, 420 Montgomery Street, San Francisco, CA, ABA number . If at the Closing the Company shall fail to tender such Notes proposed to be issued by the Company to any Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to such Purchasers satisfaction, such Purchaser shall, at its election, be relieved of all further obligations under this Agreement, without thereby waiving any rights such Purchaser may have by reason of such failure or such nonfulfillment.
S ECTION 4. C ONDITIONS TO C LOSING .
Each Purchasers obligation to purchase and pay for the Notes to be sold to such Purchaser at the Closing is subject to the fulfillment to such Purchasers satisfaction, prior to or at the Closing, of the following conditions:
Section 4.1. Representations and Warranties . The representations and warranties of the Obligors in this Agreement shall be correct in all material respects when made and at the time of the Closing.
Section 4.2. Performance; No Default . Each Obligor shall have performed and complied in all material respects with all agreements and conditions contained in this Agreement required to be performed or complied with by it prior to or at the Closing and after giving effect to the issue and sale of the Notes (and the application of the proceeds thereof as contemplated by Section 5.14) no Default or Event of Default shall have occurred and be continuing. Other than transactions contemplated by the Spin-Off, no Obligor nor any Subsidiary shall have entered into any transaction since the date of the Memorandum that would have been prohibited by Section 10 (excluding Section 10.1) had such Section applied since such date.
-2-
John Bean Technologies Corporation |
Note Purchase Agreement |
Section 4.3. Compliance Certificates .
(a) Officers Certificate . Each Obligor shall have delivered to such Purchaser an Officers Certificate, dated the date of the Closing, certifying that the conditions specified in Sections 4.1, 4.2 and 4.8 have been fulfilled.
(b) Secretarys Certificate . Each Obligor shall have delivered to such Purchaser a certificate of its Secretary or Assistant Secretary, dated the date of Closing, certifying as to the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of each Financing Agreement to which it is a party.
Section 4.4. Opinions of Counsel . The Purchasers shall have received an opinion in form and substance satisfactory to such Purchaser, dated the date of the Closing (a) (i) from Kirkland & Ellis LLP, counsel for the Obligors and (ii) James Marvin, Assistant General Counsel for the Company, in substantially the form attached as Exhibit 4.4(a)(i) and Exhibit 4.4(a)(ii), respectively, and covering such other matters incident to the transactions contemplated hereby as the Purchasers or their counsel may reasonably request (and the Obligors hereby instruct their counsel to deliver such opinion to the Purchasers) and (b) from Chapman and Cutler LLP, the Purchasers special counsel in connection with such transactions, substantially in the form set forth in Exhibit 4.4(b) and covering such other matters incident to such transactions as such Purchaser may reasonably request.
Section 4.5. Purchase Permitted By Applicable Law, Etc . On the date of the Closing such Purchasers purchase of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which such Purchaser is subject, without recourse to provisions (such as section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or liability under or pursuant to any applicable law or regulation, which law or regulation was not in effect on the date hereof. If requested by such Purchaser, such Purchaser shall have received an Officers Certificate certifying as to such matters of fact as such Purchaser may reasonably specify to enable such Purchaser to determine whether such purchase is so permitted.
Section 4.6. Payment of Special Counsel Fees . Without limiting the provisions of Section 15.1, the Obligors shall have paid on or before the Closing the reasonable fees, charges and disbursements of the Purchasers special counsel referred to in Section 4.4 to the extent reflected in a statement of such counsel rendered to the Company at least one Business Day prior to the Closing.
Section 4.7. Private Placement Number. A Private Placement Number issued by Standard & Poors CUSIP Service Bureau (in cooperation with the SVO) shall have been obtained of the Notes.
Section 4.8. Changes in Corporate Structure. Except for the transactions contemplated by the Spin-Off, no Obligor shall have changed its jurisdiction of incorporation or organization,
-3-
John Bean Technologies Corporation |
Note Purchase Agreement |
as applicable, or been a party to any merger or consolidation or succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements referred to in Schedule 5.5.
Section 4.9. Funding Instructions . At least three Business Days prior to the date of the Closing, each Purchaser shall have received written instructions signed by a Responsible Officer on letterhead of the Company confirming the information specified in Section 3 including (i) the name and address of the transferee bank, (ii) such transferee banks ABA number and (iii) the account name and number into which the purchase price for the Notes is to be deposited.
Section 4.10. Additional Agreements. The Intercreditor Agreement and the Credit Agreement shall be reasonably satisfactory in form and substance to the Purchasers and shall have been executed and delivered by the parties thereto and shall be in full force and effect. The closing of the credit facility contemplated by the Credit Agreement shall have occurred or shall occur concurrently with the issuance of the Notes hereunder and each Purchaser shall have received a true, correct and complete copy of the Intercreditor Agreement and the Credit Agreement.
Section 4.11. Proceedings and Documents . All corporate and other proceedings in connection with the transactions contemplated by Financing Agreements and all documents and instruments incident to such transactions shall be satisfactory to such Purchaser and its special counsel, and such Purchaser and its special counsel shall have received all such counterpart originals or certified or other copies of such documents as such Purchaser or such special counsel may reasonably request.
S ECTION 5. R EPRESENTATIONS AND W ARRANTIES OF THE O BLIGORS .
The Obligors, jointly and severally, represent and warrant to each Purchaser that:
Section 5.1. Organization; Power and Authority . Each Obligor is a corporation or limited liability company duly organized or formed, as applicable, validly existing and in good standing under the laws of its jurisdiction of incorporation or formation, as applicable, and is duly qualified as a foreign corporation and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each Obligor has the corporate or limited liability company power, as applicable, and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver each Financing Agreement to which it is a party and to perform the provisions hereof and thereof.
Section 5.2. Authorization, Etc . The Financing Agreements have been duly authorized by all necessary corporate or limited liability company action, as applicable, on the part of each Obligor party thereto, and this Agreement constitutes, and upon execution and delivery thereof each Note will constitute, a legal, valid and binding obligation of the Obligors party thereto enforceable against the Obligors in accordance with its terms, except as such enforceability may
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be limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
Section 5.3. Disclosure . The Company, through its agent, J.P. Morgan Securities Inc., has delivered to each Purchaser a copy of a Private Placement Memorandum, dated June 2008 (as amended or supplemented prior to June 20, 2008 the Memorandum ), relating to the transactions contemplated hereby. The Memorandum fairly describes, in all material respects, the general nature of the business and principal properties of the Company and its Subsidiaries. The Financing Agreements, the Memorandum and the documents, certificates or other writings delivered to the Purchasers by or on behalf of the Company in connection with the transactions contemplated hereby and identified in Schedule 5.3, and the financial statements listed in Schedule 5.5 (the Financing Agreements, the Memorandum and such documents, certificates or other writings and such financial statements delivered to each Purchaser prior to June 20, 2008 being referred to, collectively, as the Disclosure Documents ), taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made. Except as disclosed in the Disclosure Documents, since December 31, 2007, there has been no change in the financial condition, operations, business, properties or prospects of the Company or any Subsidiary except changes that individually or in the aggregate could not reasonably be expected to have a Material Adverse Effect. There is no fact known to the Company that could reasonably be expected to have a Material Adverse Effect that has not been set forth herein or in the Disclosure Documents.
Section 5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates . (a) Schedule 5.4 contains (except as noted therein) complete and correct lists of the Companys Subsidiaries, showing, as to each Subsidiary, the correct name thereof and the jurisdiction of its organization. Except as provided in Schedule 5.4, each Subsidiary is a Wholly-Owned Subsidiary. Schedule 5.4 also contains (except as noted therein) complete and correct lists of (1) the Companys Affiliates after giving effect to the Spin-Off and (2) the Companys directors and senior officers to the extent identified as of the date hereof and without limiting further appointments which may be effective in connection with the Spin-Off.
(b) All of the outstanding shares of capital stock or similar equity interests of each Subsidiary owned by the Company and its Subsidiaries have been validly issued, are fully paid and nonassessable and are owned by the Company or another Subsidiary free and clear of any Lien (except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each such Subsidiary has the corporate or other power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact.
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(d) No Subsidiary is a party to, or otherwise subject to any legal, regulatory, contractual or other restriction (other than the Financing Agreements, the Credit Agreement, the agreements listed on Schedule 5.4 and customary limitations imposed by corporate law or similar statutes) restricting the ability of such Subsidiary to pay dividends out of profits or make any other similar distributions of profits to any Obligor or any of its Subsidiaries that owns outstanding shares of capital stock or similar equity interests of such Subsidiary.
Section 5.5. Financial Statements; Material Liabilities . The Company has delivered to each Purchaser copies of the financial statements of the Company and its Subsidiaries as of and for the three years ended December 31, 2007 and as of and for the three months ended March 31, 2008 and March 31, 2007. All of said financial statements (including in each case the related schedules and notes) fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the respective dates and the consolidated results of their operations and cash flows for the respective periods so specified and have been prepared in accordance with GAAP consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year-end adjustments). Except as set forth in Schedule 5.5, the Company and its Subsidiaries do not have any liabilities that are not disclosed on such financial statements or otherwise disclosed in the Disclosure Documents which could reasonably be expected to have a Material Adverse Effect.
Section 5.6. Compliance with Laws, Other Instruments, Etc . The execution, delivery and performance by the Obligors of the Financing Agreements to which each is a party will not (i) contravene, result in any Material breach of, or constitute a default under, or result in the creation of any Lien (not permitted by Section 10.5) in respect of any property of any Obligor or any Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, corporate charter or by-laws, or any other agreement or instrument to which any Obligor or any Subsidiary is bound or by which any Obligor or any Subsidiary or any of their respective properties may be bound or affected, (ii) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to any Obligor or any Subsidiary or (iii) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to any Obligor or any Subsidiary.
Section 5.7. Governmental Authorizations, Etc . No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by the Obligors of the Financing Agreements, which has not been obtained or filed.
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders . (a) There are no actions, suits, investigations or proceedings pending or, to the knowledge of the Company, threatened against or affecting any Obligor or any Subsidiary or any property of any Obligor or any Subsidiary in any court or before any arbitrator of any kind or before or by any Governmental Authority that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
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(b) No Obligor nor any Subsidiary is in default under any term of any agreement or instrument to which it is a party or by which it is bound, or any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority or is in violation of any applicable law, ordinance, rule or regulation (including without limitation Environmental Laws or the USA Patriot Act) of any Governmental Authority, which default or violation, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.
Section 5.9. Taxes . The Company and its Subsidiaries have filed all tax returns that are required to have been filed in any jurisdiction, and have paid all taxes shown to be due and payable on such returns and all other taxes and assessments levied upon them or their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (i) the amount of which is not individually or in the aggregate Material or (ii) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which the Company or a Subsidiary, as the case may be, has established adequate reserves in accordance with GAAP. The Company knows of no basis for any other tax or assessment that could reasonably be expected to have a Material Adverse Effect. The charges, accruals and reserves on the books of each Obligor and its Subsidiaries in respect of federal, state or other taxes for all fiscal periods are adequate in all Material respects. The federal income tax liabilities of the Company and its Subsidiaries have been finally determined (whether by reason of completed audits or the statute of limitations having run) for all fiscal years up to and including the fiscal year ended December 31, 2001.
Section 5.10. Title to Property; Leases . Each Obligor and its Subsidiaries have good and sufficient title to their respective properties that individually or in the aggregate are Material, including all such properties reflected in the most recent audited balance sheet referred to in Section 5.5 or purported to have been acquired by any Obligor or any Subsidiary after said date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens prohibited by this Agreement. All leases that individually or in the aggregate are Material are valid and subsisting and are in full force and effect in all Material respects.
Section 5.11. Licenses, Permits, Etc . (a) Each Obligor and its Subsidiaries own or possess all licenses, permits, franchises, authorizations, patents, copyrights, proprietary software, service marks, trademarks and trade names, or rights thereto, that individually or in the aggregate are Material, without known conflict with the rights of others.
(b) To the best knowledge of the Company, no product of the Company or any of its Subsidiaries infringes in any material respect any license, permit, franchise, authorization, patent, copyright, proprietary software, service mark, trademark, trade name or other right owned by any other Person.
(c) To the best knowledge of the Company, there is no Material violation by any Person of any right of the Company or any of its Subsidiaries with respect to any patent, copyright, proprietary software, service mark, trademark, trade name or other right owned or used by the Company or any of its Subsidiaries.
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Section 5.12. Compliance with ERISA . (a) Each Obligor and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and could not reasonably be expected to result in a Material Adverse Effect. No Obligor nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA), and no event, transaction or condition has occurred or exists that could reasonably be expected to result in the incurrence of any such liability by any Obligor or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of any Obligor or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions or to section 401(a)(29) or 412 of the Code or section 4068 of ERISA, other than such liabilities or Liens as would not be individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plans most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plans most recent actuarial valuation report, did not exceed the aggregate current value of the assets of such Plan allocable to such benefit liabilities by more than $40,000,000 in the case of any single Plan and by more than $50,000,000 in the aggregate for all Plans. The term benefit liabilities has the meaning specified in section 4001 of ERISA and the terms current value and present value have the meaning specified in section 3 of ERISA.
(c) Each Obligor and its ERISA Affiliates have not incurred withdrawal liabilities (and are not subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that individually or in the aggregate are Material.
(d) The expected postretirement benefit obligation (determined as of the last day of such Obligors most recently ended fiscal year in accordance with Financial Accounting Standards Board Statement No. 106, without regard to liabilities attributable to continuation coverage mandated by section 4980B of the Code) of each Obligor and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of section 406 of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation by each Obligor to each Purchaser in the first sentence of this Section 5.12(e) is made in reliance upon and subject to the accuracy of such Purchasers representation in Section 6.2 as to the sources of the funds used to pay the purchase price of the Notes to be purchased by such Purchaser.
Section 5.13. Private Offering by the Obligors . No Obligor nor anyone acting on its behalf has offered the Notes, the Guarantee Agreement or any similar securities for sale to, or solicited any offer to buy any of the same from, or otherwise approached or negotiated in respect thereof with, any Person other than the Purchasers and not more than 30 other Institutional Investors, each of which has been offered the Notes pursuant to a private sale for investment. No Obligor nor anyone acting on its behalf has taken, or will take, any action that would subject the
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issuance or sale of the Notes or the Guarantee Agreement to the registration requirements of Section 5 of the Securities Act or to the registration requirements of any securities or blue sky laws of any applicable jurisdiction.
Section 5.14. Use of Proceeds; Margin Regulations . The Company will apply the proceeds of the sale of the Notes to finance a dividend payable to FTI and for general corporate purposes. No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any securities under such circumstances as to involve the Company in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock does not constitute more than 1.0% of the value of the consolidated assets of the Company and its Subsidiaries and each Obligor does not have any present intention that margin stock will constitute more than 1.0% of the value of such assets. As used in this Section, the terms margin stock and purpose of buying or carrying shall have the meanings assigned to them in said Regulation U.
Section 5.15. Existing Indebtedness; Future Liens . (a) Except as described therein, Schedule 5.15 sets forth a complete and correct list of all outstanding Indebtedness which aggregates in excess of $5,000,000 of each Obligor and its Subsidiaries as of March 31, 2008 (including a description of the obligors and obligees, principal amount outstanding and collateral therefor, if any, and Guaranty thereof, if any), since which date there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of any Obligor or its Subsidiaries except as set forth in the Disclosure Documents. No Obligor nor any Subsidiary is in default and no waiver of default is currently in effect, in the payment of any principal or interest on any Indebtedness of such Obligor or such Subsidiary and no event or condition exists with respect to any Indebtedness of any Obligor or any Subsidiary that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, no Obligor nor any Subsidiary has agreed or consented to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien not permitted by Section 10.5.
(c) No Obligor nor any Subsidiary is a party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness of any Obligor or such Subsidiary, any agreement relating thereto or any other agreement (including, but not limited to, its charter or other organizational document) which limits the amount of, or otherwise imposes restrictions on the incurring of, Indebtedness of such Obligor, except as specifically indicated in Schedule 5.15 or under the Credit Agreement.
Section 5.16. Foreign Assets Control Regulations, Etc . (a) Neither the sale of the Notes by the Company hereunder nor its use of the proceeds thereof will violate the Trading with the
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Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto.
(b) No Obligor nor any Subsidiary (i) is a Person described or designated in the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or (ii) to the knowledge of the Company engages in any dealings or transactions with any such Person. The Obligors and their Subsidiaries are in compliance, in all Material respects, with the USA Patriot Act.
(c) No part of the proceeds from the sale of the Notes hereunder will be used, directly or indirectly, for any payments to any governmental official or employee, political party, official of a political party, candidate for political office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt Practices Act of 1977, as amended, assuming in all cases that such Act applies to the Obligors.
Section 5.17. Status under Certain Statutes . No Obligor nor any Subsidiary is subject to regulation under the Investment Company Act of 1940, as amended, the Public Utility Holding Company Act of 2005, as amended, the ICC Termination Act of 1995, as amended, or the Federal Power Act, as amended.
Section 5.18. Environmental Matters . (a) No Obligor nor any Subsidiary has knowledge of any claim or has received any notice of any claim, and no proceeding has been instituted raising any claim against any Obligor or any of its Subsidiaries or any of their respective real properties now or formerly owned, leased or operated by any of them or other assets, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary has knowledge of any facts which would give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to real properties now or formerly owned, leased or operated by any of them or to other assets or their use, except, in each case, such as could not reasonably be expected to result in a Material Adverse Effect.
(c) No Obligor nor any Subsidiary has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them and has not disposed of any Hazardous Materials in a manner contrary to any Environmental Laws in each case in any manner that could reasonably be expected to result in a Material Adverse Effect; and
(d) All buildings on all real properties now owned, leased or operated by any Obligor or any Subsidiary are in compliance with applicable Environmental Laws, except where failure to comply could not reasonably be expected to result in a Material Adverse Effect.
Section 5.19. Ranking of Obligations. Each Obligors payment obligations under this Agreement will, upon issuance of the Notes and the Guarantee Agreement, rank at least pari passu , without preference or priority, with the obligations of such Obligor under the Credit Agreement and all other unsecured and unsubordinated Indebtedness of such Obligor.
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Section 5.20. Obligor Group. Each Subsidiary (other than Affected Foreign Subsidiaries) of the Company which is or will be as of the date of Closing a borrower, guarantor or otherwise an obligor under the Credit Agreement as of the date hereof is or will be as of the date of Closing a Guarantor hereunder.
S ECTION 6. R EPRESENTATIONS OF THE P URCHASERS .
Section 6.1. Purchase for Investment . (a) Each Purchaser severally represents that it is purchasing the Notes for its own account or for one or more separate accounts maintained by such Purchaser or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of such Purchasers or their property shall at all times be within such Purchasers or their control. Each Purchaser understands that the Notes and the Guarantee Agreement have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes.
(b) Each Purchaser represents that it is an accredited investor (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) acting for its own account (and not for the account of others) or as a fiduciary or agent for others (which others are also accredited investors). Each Purchaser further represents that such Purchaser has had the opportunity to ask questions of the Company concerning the terms and conditions of the sale of the Notes.
Section 6.2. Source of Funds . Each Purchaser severally represents that at least one of the following statements is an accurate representation as to each source of funds (a Source ) to be used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser hereunder:
(a) the Source is an insurance company general account (as the term is defined in the United States Department of Labors Prohibited Transaction Exemption ( PTE ) 95-60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the National Association of Insurance Commissioners (the NAIC Annual Statement )) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchasers state of domicile; or
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(b) the Source is a separate account that is maintained solely in connection with such Purchasers fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or
(c) the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1 or (ii) a bank collective investment fund, within the meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the Company in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or
(d) the Source constitutes assets of an investment fund (within the meaning of Part V of PTE 84-14 (the QPAM Exemption )) managed by a qualified professional asset manager or QPAM (within the meaning of Part V of the QPAM Exemption), no employee benefit plans assets that are included in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, exceed 20% of the total client assets managed by such QPAM, the conditions of Part I(a), (c) and (g) of the QPAM Exemption are satisfied, the QPAM does not own a 10% or more interest in the Company and any person controlling or controlled by the QPAM (applying the definition of control in Section V(e) of the QPAM Exemption) does not own a 20% or more interest in the Company and (i) the identity of such QPAM and (ii) the names of all employee benefit plans whose assets are included in such investment fund have been disclosed to the Company in writing pursuant to this clause (d); or
(e) the Source constitutes assets of a plan(s) (within the meaning of Section IV of PTE 96-23 (the INHAM Exemption )) managed by an in-house asset manager or INHAM (within the meaning of Part IV of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled by the INHAM (applying the definition of control in Section IV(d) of the INHAM Exemption) owns a 5% or more interest in the Company and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this clause (e); or
(f) the Source is a governmental plan; or
(g) the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this clause (g); or
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(h) the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms employee benefit plan, governmental plan, and separate account shall have the respective meanings assigned to such terms in section 3 of ERISA.
S ECTION 7. I NFORMATION AS TO C OMPANY .
Section 7.1. Financial and Business Information . The Company shall deliver to each holder of Notes that is an Institutional Investor:
(a) Quarterly Statements within 60 days (or such shorter period as is 15 days greater than the period applicable to the filing of the Companys Quarterly Report on Form 10-Q (the Form 10-Q ) with the SEC regardless of whether the Company is subject to the filing requirements thereof) after the end of each quarterly fiscal period in each fiscal year of the Company (other than the last quarterly fiscal period of each such fiscal year), duplicate copies of,
(i) a consolidated balance sheet of the Company and its Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in shareholders equity and cash flows of the Company and its Subsidiaries, for such quarter and (in the case of the second and third quarters) for the portion of the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP applicable to quarterly financial statements generally, and certified by a Senior Financial Officer as fairly presenting, in all material respects, the financial position of the companies being reported on and their results of operations and cash flows, subject to changes resulting from year-end adjustments, provided that delivery within the time period specified above of copies of the Companys Form 10-Q prepared in compliance with the requirements therefor and filed with the SEC shall be deemed to satisfy the requirements of this Section 7.1(a), provided, further, that the Company shall be deemed to have made such delivery (and without the requirement of duplicate copies) of such Form 10-Q if it shall have timely made such Form 10-Q available on (x) EDGAR, (y) on its home page on the worldwide web (at the date of this Agreement located at: http//www.jbtcorporation.com) or (z) on IntraLinks or a similar website where each holder has access to the information (an Information Website ) and shall have given each Purchaser prior notice of such availability on EDGAR, its home page or on the Information Website in connection with each delivery (such availability and notice thereof being referred to as Electronic Delivery );
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(b) Annual Statements within 105 days (or such shorter period as is 15 days greater than the period applicable to the filing of the Companys Annual Report on Form 10-K (the Form 10-K ) with the SEC regardless of whether the Company is subject to the filing requirements thereof) after the end of each fiscal year of the Company, duplicate copies of
(i) a consolidated balance sheet of the Company and its Subsidiaries as at the end of such year, and
(ii) consolidated statements of income, changes in shareholders equity and cash flows of the Company and its Subsidiaries for such year,
setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP, and accompanied by an opinion thereon of independent public accountants of recognized national standing, which opinion shall state that such financial statements present fairly, in all material respects, the financial position of the companies being reported upon and their results of operations and cash flows and have been prepared in conformity with GAAP, and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances, and
provided that the delivery within the time period specified above of the Companys Form 10-K for such fiscal year (together with the Companys annual report to shareholders, if any, prepared pursuant to Rule 14a-3 under the Exchange Act) prepared in accordance with the requirements therefor and filed with the SEC, shall be deemed to satisfy the requirements of this Section 7.1(b), provided, further, that the Company shall be deemed to have made such delivery (and without the requirement of duplicate copies) of such Form 10-K if it shall have timely made Electronic Delivery thereof;
(c) SEC and Other Reports promptly upon their becoming available and without duplication of any items delivered pursuant to Section 7.1(a) or 7.1(b), one copy of (i) each financial statement, report, notice or proxy statement sent by the Company or any Subsidiary to its principal lending banks as a whole (excluding information sent to such banks in the ordinary course of administration of a bank facility, such as information relating to pricing and borrowing availability) or to its public securities holders generally, and (ii) each regular or periodic report, each registration statement (without exhibits except as expressly requested by such holder), and each prospectus and all amendments thereto filed by the Company or any Subsidiary with the SEC and of all press releases and other statements made available generally by the Company or any Subsidiary to the public concerning developments that could reasonably be expected to have a Material Adverse Effect;
(d) Notice of Default or Event of Default promptly, and in any event within ten Business Days after a Responsible Officer becoming aware of the existence of any Default or Event of Default or that any Person has given any notice or taken any action
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with respect to a claimed default hereunder or that any Person has given any notice or taken any action with respect to a claimed default of the type referred to in Section 11(f), in each case, that is then continuing as of the end of such 10 Business Day period, a written notice specifying the nature and period of existence thereof and what action the Company is taking or proposes to take with respect thereto;
(e) ERISA Matters promptly, and in any event within ten Business Days after a Responsible Officer becoming aware of any of the following, a written notice setting forth the nature thereof and the action, if any, that any Obligor or an ERISA Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable event, as defined in section 4043(c) of ERISA and the regulations thereunder, for which notice thereof has not been waived pursuant to such regulations as in effect on the date thereof; or
(ii) the taking by the PBGC of steps to institute, or the threatening by the PBGC of the institution of, proceedings under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan; or
(iii) any event, transaction or condition that could result in the incurrence of any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or the imposition of a penalty or excise tax under the provisions of the Code relating to employee benefit plans, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or excise tax provisions, if such liability or Lien, taken together with any other such liabilities or Liens then existing, would reasonably be expected to have a Material Adverse Effect;
(f) Notices from Governmental Authority promptly, and in any event within 30 days of receipt thereof, copies of any notice to the Company or any Subsidiary from any Federal or state Governmental Authority relating to any order, ruling, statute or other law or regulation that would reasonably be expected to have a Material Adverse Effect; and
(g) Requested Information with reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of any Obligor or any of its Subsidiaries (including, but without limitation, actual copies of the Companys Form 10-Q and Form 10-K) or relating to the ability of any Obligor to perform its obligations under any Financing Agreement to which it is a party as from time to time may be reasonably requested by any such holder of Notes.
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Section 7.2. Officers Certificate . Each set of financial statements delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate of a Senior Financial Officer setting forth (which, in the case of Electronic Delivery of any such financial statements, shall be by separate concurrent delivery of such certificate to each holder of Notes):
(a) Covenant Compliance the information (including detailed calculations) required in order to establish whether the Company was in compliance with the requirements of Section 10.5 through Section 10.10, inclusive, during the quarterly or annual period covered by the statements then being furnished (including with respect to each such Section, where applicable, the calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Sections, and the calculation of the amount, ratio or percentage then in existence); and
(b) Event of Default a statement that such Senior Financial Officer has reviewed the relevant terms hereof and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Company and its Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default or, if any such condition or event existed or exists (including, without limitation, any such event or condition resulting from the failure of the Company or any Subsidiary to comply with any Environmental Law), specifying the nature and period of existence thereof and what action the Company shall have taken or proposes to take with respect thereto.
Section 7.3. Visitation . The Company shall permit the representatives of each holder of Notes that is an Institutional Investor:
(a) No Default if no Default or Event of Default then exists, at the expense of such holder and upon reasonable prior notice to the Company, to visit the principal executive office of the Company, to discuss the affairs, finances and accounts of the Company and its Subsidiaries with the Companys officers, and (with the consent of the Company, which consent will not be unreasonably withheld) its independent public accountants, and (with the consent of the Company, which consent will not be unreasonably withheld) to visit the other offices and properties of the Company and each Subsidiary, all at such reasonable times and as often as may be reasonably requested in writing, but in no event more than once in any calendar year; and
(b) Default if a Default or Event of Default then exists, at the expense of the Company to visit and inspect any of the offices or properties of the Company or any Subsidiary, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers and independent public accountants (and by this provision the Company authorizes said accountants to discuss the affairs, finances and accounts of the Company and its Subsidiaries), all at such reasonable times and as often as may be requested.
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S ECTION 8. P AYMENT AND P REPAYMENT OF THE N OTES .
Section 8.1. Maturity . As provided therein, the entire unpaid principal balance of the Notes shall be due and payable on the stated maturity date thereof.
Section 8.2. Optional Prepayments with Make-Whole Amount . The Company may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes, in an amount not less than 5% of the aggregate principal amount of the Notes then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid, and the Make-Whole Amount determined for the prepayment date with respect to such principal amount. The Company will give each holder of Notes written notice of each optional prepayment under this Section 8.2 not less than 30 days and not more than 60 days prior to the date fixed for such prepayment. Each such notice shall specify such date (which shall be a Business Day), the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.3), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation. Two Business Days prior to such prepayment, the Company shall deliver to each holder of Notes a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified prepayment date.
Section 8.3. Allocation of Partial Prepayments . In the case of each partial prepayment of the Notes pursuant to Section 8.2, the principal amount of the Notes to be prepaid shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment.
Section 8.4. Maturity; Surrender, Etc. In the case of each prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment (which shall be a Business Day), together with interest on such principal amount accrued to such date and the applicable Make-Whole Amount, if any. From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.
Section 8.5. Purchase of Notes . The Company will not and will not permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except upon the payment or prepayment of the Notes in accordance with the terms of this Agreement and the Notes. The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment or prepayment of Notes pursuant to any provision of this Agreement and no Notes may be issued in substitution or exchange for any such Notes.
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Section 8.6. Make-Whole Amount .
Make-Whole Amount means, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero. For the purposes of determining the Make-Whole Amount, the following terms have the following meanings:
Called Principal means, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.
Discounted Value means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal.
Reinvestment Yield means, with respect to the Called Principal of any Note, .50% over the yield to maturity calculated by using (i) the yields reported as of 10:00 a.m. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as Page PX1 (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on the run U.S. Treasury securities having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date, or (ii) if such yields are not reported as of such time or the yields reported as of such time are not ascertainable (including by way of interpolation), the Treasury Constant Maturity Series Yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for actively traded U.S. Treasury securities having a constant maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date.
In the case of each determination under clause (i) or clause (ii), as the case may be, of the preceding paragraph, such implied yield will be determined, if necessary, by (a) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between (1) the actively traded U.S. Treasury security with the maturity closest to and greater than such Remaining Average Life and (2) the actively traded U.S. Treasury security with the maturity closest to and less than such Remaining Average Life. The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.
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Remaining Average Life means, with respect to any Called Principal, the number of years (calculated to the nearest one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years (calculated to the nearest one-twelfth year) that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.
Remaining Scheduled Payments means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest thereon that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which interest payments are due to be made under the terms of the Notes, then the amount of the next succeeding scheduled interest payment will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.2 or Section 12.1.
Settlement Date means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.2 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.
Section 8.7. Change in Control .
(a) Notice of Change in Control. The Company will, within ten (10) Business Days after any Acquisition of Control, give written notice of such Acquisition of Control to each holder of Notes. If a Change in Control has occurred, the Company shall give written notice of such Change in Control within five (5) Business Days thereafter and such notice of a Change in Control shall contain and constitute an offer by the Company to prepay the Notes of the Company as described in Section 8.7(b) hereof and shall be accompanied by the certificate described in Section 8.7(e).
(b) Offer to Prepay Notes . The offer to prepay Notes contemplated by paragraph (a) of this Section 8.7 shall be an offer to prepay by the Company, in accordance with and subject to this Section 8.7, all, but not less than all, the Notes held by each holder (in this case only, holder in respect of any Note registered in the name of a nominee for a disclosed beneficial owner shall mean such beneficial owner) on a date specified in such offer (the Prepayment Date ) which shall be a Business Day occurring subsequent to the effective date of the Change in Control which is not less than 30 days or more than 60 days after the date of the notice of prepayment.
(c) Acceptance . A holder of Notes may accept the offer to prepay made pursuant to this Section 8.7 by causing a notice of such acceptance to be delivered to the Company at least five (5) Business Days prior to the Prepayment Date. A failure by a holder of Notes to respond to an offer to prepay made pursuant to this Section 8.7 shall be deemed to constitute a rejection of such offer by such holder.
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(d) Prepayment . Prepayment of the Notes to be prepaid pursuant to this Section 8.7 shall be at 100% of the principal amount of the Notes together with accrued and unpaid interest thereon and shall be made on the Prepayment Date. No prepayment under this Section 8.7 shall include any premium or Make-Whole Amount of any kind.
(e) Officers Certificate . Each offer to prepay the Notes pursuant to this Section 8.7 shall be accompanied by a certificate, executed by a Senior Financial Officer of the Company and dated the date of such offer, specifying: (i) the Prepayment Date; (ii) that such offer is made pursuant to this Section 8.7; (iii) the principal amount of each Note offered to be prepaid (which shall be 100% of the principal amount thereof); (iv) the interest that would be due on each Note offered to be prepaid, accrued to the Prepayment Date; (v) that the conditions of Section 8.7(a) have been fulfilled; and (vi) in reasonable detail, the nature and date of the Change in Control.
(f) Certain Definitions. Change in Control shall be deemed to have occurred if an event or series of events by which any person or related persons constituting a group (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act as in effect on the date of Closing, but excluding any Plan of the Company or its Subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such Plan) becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of 50% or more of the equity securities of the Company entitled to vote for members of the board of directors or equivalent governing body of the Company on a fully-diluted basis (the foregoing referred to as an Acquisition of Control) .
(g) All calculations contemplated in this Section 8.7 involving the capital stock or other equity interest of any Person shall be made with the assumption that all convertible securities of such Person then outstanding and then convertible and all convertible securities issuable upon the exercise of any warrants, options and other rights outstanding at such time that are then convertible were converted at such time and that all options, warrants and similar rights to acquire shares of capital stock or other equity interest of such Person that are then exercisable were exercised at such time.
Section 8.8. Payment in Connection with Asset Disposition . If the Company makes an offer to prepay the Notes in connection with a Debt Prepayment Application, the Company will give written notice thereof to the holders of all outstanding Notes, which notice shall (i) refer specifically to this Section 8.8 and describe in reasonable detail the Asset Disposition giving rise to such offer to prepay the Notes, (ii) specify the ratable portion of each Note being offered to be prepaid, (iii) specify a date which is a Business Day not less than 30 days and not more than 60 days after the date of such notice (the Disposition Prepayment Date ) and specify the Disposition Response Date (as defined below) and (iv) offer to prepay on the Disposition Prepayment Date such ratable portion of each Note together with interest accrued thereon to the Disposition Prepayment Date. Each holder of a Note shall notify the Company of such holders acceptance or rejection of such offer by giving written notice of such acceptance or rejection to the Company ( provided, however, that any holder who fails to so notify the Company shall be deemed to have rejected such offer) on a date at least 10 days prior to the Disposition Prepayment Date (such date 10 days prior to the Disposition Prepayment Date being the Disposition Response Date ), and the Company shall prepay on the Disposition Prepayment
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Date such ratable portion of each Note held by the holders who have accepted such offer in accordance with this Section 8.8. No prepayment under this Section 8.8 shall include any premium or Make-Whole Amount of any kind.
S ECTION 9. A FFIRMATIVE C OVENANTS .
The Company covenants that so long as any of the Notes are outstanding:
Section 9.1. Compliance with Law . Without limiting Section 10.4, the Company will, and will cause each of its Subsidiaries to, comply with all laws, ordinances or governmental rules or regulations to which each of them is subject, including, without limitation, ERISA, the USA Patriot Act and Environmental Laws, and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 9.2. Insurance . The Company will, and will cause each of its Subsidiaries to, maintain, with financially sound and reputable insurers, insurance with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated except for any non-maintenance that could not reasonably be expected to have a Material Adverse Effect.
Section 9.3. Maintenance of Properties . The Company will, and will cause each of its Subsidiaries to, maintain and keep, or cause to be maintained and kept, their respective properties in good repair, working order and condition (other than ordinary wear and tear), so that the business carried on in connection therewith may be properly conducted at all times, provided that this Section shall not prevent the Company or any Subsidiary from discontinuing the operation and the maintenance of any of its properties if such discontinuance is desirable in the conduct of its business and the Company has concluded that such discontinuance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 9.4. Payment of Taxes and Claims . The Company will, and will cause each of its Subsidiaries to, file all tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges, or levies imposed on them or any of their properties, assets, income or franchises, to the extent the same have become due and payable and before they have become delinquent and all claims for which sums have become due and payable that have or might become a Lien (not permitted by Section 10.5) on properties or assets of the Company or any Subsidiary, provided that neither the Company nor any Subsidiary need pay any such tax, assessment, charge, levy or claim if (i) the amount, applicability or validity thereof is contested by the Company or such Subsidiary on a timely basis in good faith and in appropriate
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proceedings, and the Company or a Subsidiary has established adequate reserves therefor to the extent required by GAAP on the books of the Company or such Subsidiary or (ii) the non-filing or nonpayment, as the case may be, of all such taxes, assessments, charges, levies and claims in the aggregate could not reasonably be expected to have a Material Adverse Effect.
Section 9.5. Corporate Existence, Etc . Subject to Section 10.2, each Obligor will at all times preserve and keep in full force and effect its corporate existence. Subject to Sections 10.2 and 10.10, the Obligors will at all times preserve and keep in full force and effect the corporate existence of each of its Subsidiaries (unless merged into the Company or a Wholly-Owned Subsidiary) and all rights and franchises of an Obligor and its Subsidiaries unless, in the good faith judgment of such Obligor, the termination of or failure to preserve and keep in full force and effect such corporate existence, right or franchise could not, individually or in the aggregate, have a Material Adverse Effect.
Section 9.6. Books and Records . The Company will, and will cause each of its Subsidiaries to, maintain proper books of record and account in conformity with GAAP and all applicable requirements of any Governmental Authority having legal or regulatory jurisdiction over the Company or such Subsidiary, as the case may be.
Section 9.7. Priority of Obligations . Each Obligor will ensure that its payment obligations under the Financing Agreements (to which it is a party) will at all times rank at least pari passu, without preference or priority, with all other unsecured and unsubordinated Indebtedness of such Obligor.
Section 9.8. Additional Obligors. In the event that any Subsidiary (other than an Affected Foreign Subsidiary) of the Company becomes a borrower, guarantor or obligor under the Credit Agreement, concurrently therewith, the Company shall cause such Subsidiary, to become a Guarantor under the Guarantee Agreement by executing a joinder agreement to this Agreement set forth in Exhibit 9.8 for the benefit of the holders of Notes. Concurrently with the execution of such joinder agreement, the Company shall cause to be delivered to the holders of the Notes an opinion of counsel (which may be in-house counsel) to the effect that such joinder agreement and this Agreement constitute the legal, valid and binding obligations of such Subsidiary, enforceable in accordance with its terms, which opinion shall be subject to such reasonable and customary assumptions and qualifications which are not materially less favorable to the holders than the qualification and assumptions being delivered with respect to Guarantors hereunder as of the date of Closing.
Section 9.9 Intercreditor Agreement . The Company will and will cause each Subsidiary which is a borrower, guarantor or obligor under the Credit Agreement to join the Intercreditor Agreement.
S ECTION 10. N EGATIVE C OVENANTS .
The Company covenants that so long as any of the Notes are outstanding:
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Section 10.1. Transactions with Affiliates . The Company will not and will not permit any Subsidiary to enter into directly or indirectly any transaction or group of related transactions (including without limitation the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) (other than the making of equity distributions to consummate the Spin-Off Transaction and other transactions and documents (which documents have been described in or publicly filed as exhibits to the Form-10 filing prior to June 20, 2008) evidencing the Spin-Off Transaction) with any Affiliate (other than transactions between or among Company and its Wholly-Owned Subsidiaries not involving any other Affiliate), except in the ordinary course and pursuant to the reasonable requirements of the Companys or such Subsidiarys business and upon fair and reasonable terms that are not Materially less favorable to the Company or such Subsidiary than would be obtainable in a comparable arms-length transaction with a Person not an Affiliate.
Section 10.2. Merger, Consolidation, etc . (a) The Company will not consolidate with or merge with any other Person or convey, transfer or lease all or substantially all of its assets in a single transaction or series of transactions to any Person unless:
(i) the successor formed by such consolidation or the survivor of such merger or the Person that acquires by conveyance, transfer or lease all or substantially all of the assets of the Company as an entirety, as the case may be, shall be a solvent corporation or limited liability company organized and existing under the laws of the United States or any State thereof (including the District of Columbia) or of Canada, and, if the Company is not such corporation or limited liability company (in any such event, the successor corporation or limited liability company being referred to as the Successor Company ), (x) such corporation or limited liability company shall have executed and delivered to each holder of any Notes its assumption of the due and punctual performance and observance of each covenant and condition of this Agreement and the Notes and (y) such corporation or limited liability company shall have caused to be delivered to each holder of any Notes an opinion of nationally recognized independent counsel, or other independent counsel reasonably satisfactory to the Required Holders, to the effect that all agreements or instruments effecting such assumption are enforceable in accordance with their terms and comply with the terms hereof;
(ii) except in the case of the Company merging with an Affiliate solely for the purpose and with the sole effect of reincorporating the Company in another jurisdiction, immediately before and immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing.
The Successor Company shall be the successor to the Company and shall succeed to, and be substituted for, and may exercise every right and power of and shall be subject to every obligation of, the Company under the Financing Agreements and the predecessor Company, upon full compliance with this Section 10.2, shall be released from the obligation to pay the principal of and interest on the Notes.
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(b) The Company shall not permit any Guarantor to consolidate with or merge with any other Person or convey, transfer or lease all or substantially all of its assets in a single transaction or series of transactions to any Person unless:
(i) the successor formed by such consolidation or the survivor of such merger or the Person that acquires by conveyance, transfer or lease all or substantially all of the assets of such Guarantor as an entirety, as the case may be, shall be a solvent corporation or limited liability company organized and existing under the laws of the United States or any State thereof (including the District of Columbia) or of Canada, and, if such Guarantor is not such corporation or limited liability company (in any such event, the successor corporation or limited liability company being referred to as the Successor Guarantor ), (x) such corporation or limited liability company shall have executed and delivered to each holder of any Notes its assumption of the due and punctual performance and observance of each covenant and condition of this Agreement and the Guarantee Agreement and (y) such Person shall have caused to be delivered to each holder of any Notes an opinion of nationally recognized independent counsel, or other counsel reasonably satisfactory to the Required Holders, to the effect that all agreements or instruments effecting such assumption are enforceable in accordance with their terms and comply with the terms hereof; provided that the foregoing shall not apply in the case of a Guarantor (1) that has been disposed of in its entirety to another Person, whether through a merger, consolidation or sale of capital stock or assets or (2) that, as a result of the disposition of all or a portion of its capital stock, ceases to be a Subsidiary, in both cases, if in connection therewith the Company complies with its obligations under Section 10.10 in respect of such disposition; and
(ii) except in the case of such Guarantor merging with an Affiliate solely for the purpose and with the sole effect of reincorporating such Guarantor in another jurisdiction, immediately before and immediately after giving effect to such transaction, no Default shall have occurred and be continuing;
provided, however, that the foregoing shall not be applicable to any Guarantor consolidating with, merging into or transferring all or part of its properties and assets to the Company or another Guarantor.
The Successor Guarantor shall be the successor to such Guarantor and shall succeed to, and be substituted for, and may exercise every right and power of and shall be subject to every obligation of, the Guarantor under the Financing Agreements and the predecessor Guarantor, upon full compliance with this Section 10.2, shall be released from the obligation to pay the principal of and interest on the Notes.
Section 10.3. Line of Business . The Company will not and will not permit any Subsidiary to engage in any business if, as a result, the general nature of the business in which the Company and its Subsidiaries, taken as a whole, would then be engaged would be substantially changed from the general nature of the business in which the Company and its Subsidiaries, taken as a whole, are engaged on the date of this Agreement as described in the Memorandum.
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Section 10.4. Terrorism Sanctions Regulations . The Company will not and will not permit any Subsidiary to (a) become a Person described or designated in the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets Control or in Section 1 of the Anti-Terrorism Order or (b) engage in any dealings or transactions with any such Person.
Section 10.5. Liens . The Company will not, and will not permit any Subsidiary to, directly or indirectly, create, incur, assume or permit to exist (upon the happening of a contingency or otherwise) any Lien on or with respect to any property or asset (including without limitation any document or instrument in respect of goods or accounts receivable) of the Obligors or any Subsidiary, whether now owned or held or hereafter acquired, or any income or profits therefrom, or assign or otherwise convey any right to receive income or profits (x) except any Liens ratably securing obligations of Obligors under the Credit Agreement and under the Financing Agreements so long as such Liens are evidenced by agreements reasonably satisfactory to the Required Holders and are subject to the terms of the Intercreditor Agreement (such Liens described in this clause (x) being referred to as Special Parity Liens ) and (y) except:
(a) Liens imposed by law for taxes that are not yet due or are being contested in compliance with Section 9.4;
(b) carriers, warehousemens, mechanics, materialmens, repairmens and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than thirty (30) days or are being contested in compliance with Section 9.4;
(c) pledges and deposits made in the ordinary course of business in compliance with workers compensation, unemployment insurance and other social security laws or regulations;
(d) Liens incidental to the conduct of a Persons business or the ownership of assets which arise in the ordinary course of business and do not materially detract from the value of the affected property or interfere or impair with the ordinary course of its business including, without limitation, deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;
(e) judgment Liens in respect of judgments that do not constitute an Event of Default under Section 11(i);
(f) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Company or any Subsidiary;
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(g) Liens existing on the date of this Agreement as described on Schedule 5.15;
(h) the extension, renewal or replacement of any Lien permitted by the subsections (g) or (i) of this Section 10.5 in respect of the same property subject thereto or the extension or renewal of such replacement liens (without increase of principal amount of the Indebtedness secured plus such amount as is necessary to pay any fees and expenses, including premiums, related to such extension, renewal or replacement);
(i) (i) any Lien in property or in rights relating thereto to secure any rights granted with respect to such property in connection with the provision of all or a part of the purchase price or cost of the acquisition, construction, improvement or development of such property created contemporaneously with, or within 180 days after, such acquisition or the completion of such construction, improvement or development, or
(ii) any Lien on property existing on such property at the time of acquisition thereof (and not granted in contemplation of such acquisition), whether or not the Indebtedness secured thereby is assumed by the Company or such Subsidiary, or
(iii) any Lien existing in the property of a Person at the time such Person is merged into or consolidated with the Company or a Subsidiary or at the time of a sale, lease or other disposition of the properties of a corporation or firm as an entirety or substantially as an entirety to the Company or a Subsidiary (and not granted in contemplation of such acquisition),
provided, however , that all of such Liens described in this Section 10.5(i) shall not exceed, in the aggregate, 100% of the fair market value on the related property;
(j) Liens securing obligations of a Subsidiary which is an Obligor to an Obligor or Liens securing an obligation of a Subsidiary which is not an Obligor to the Company or any Subsidiary;
(k) any Lien encumbering assets of a Securitization Entity arising in connection with a Permitted Securitization Transaction; and
(l) other Liens not otherwise permitted by subsections (a) through (k) securing Indebtedness of any Obligor or any Subsidiary (other than Special Parity Liens), provided that at the time of incurrence of such Lien and immediately after giving effect thereto, no Default or Event of Default under Section 10 (including, without limitation, under Section 10.8) would exist.
The Liens described in Sections 10.5(a) through (f), inclusive, shall not secure Indebtedness.
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Section 10.6. Interest Coverage. The Company will not permit, as of the end of each fiscal quarter of the Company (for the purposes of this Section 10.6, an Interest Coverage Measurement Date ), the ratio of Consolidated EBITDA to Consolidated Interest Expense, to be less than 2.75 to 1.00, for the twelve month period ending on such Interest Coverage Measurement Date.
Section 10.7. Leverage Ratio. The Company will not permit, as of the end of each fiscal quarter of the Company (a Leverage Measurement Date ), the ratio of Consolidated Total Debt to Consolidated EBITDA, to be greater than 3.25 to 1.00, for the twelve month period ending on such Leverage Measurement Date, provided, that, in the event a Qualified Acquisition shall have occurred and the Company shall have given notice thereof to the holders of the Notes prior to the first Leverage Measurement Date occurring subsequent to the consummation of such Qualified Acquisition, the ratio of Consolidated Total Debt to Consolidated EBITDA on each of the four consecutive Leverage Measurement Dates following the Qualified Acquisition may exceed 3.25 to 1.00, but in no event shall be greater than 3.75 to 1.00, so long as the Company timely pays the Additional Interest provided for below.
If the ratio of Consolidated Total Debt to Consolidated EBITDA is greater than 3.25 to 1.00 but less than 3.75 to 1.00 as of the Leverage Measurement Date first occurring after the consummation of a Qualified Acquisition or for any of the three consecutive Leverage Measurement Dates thereafter, then the interest rate per annum on the Notes shall increase by 0.75% (the Additional Interest ) for a period of up to four (4) quarters beginning with the first day immediately after the first Leverage Measurement Date with respect to which the aforementioned ratio exceeded 3.25 to 1.00. Such adjustment in the interest rate shall continue until such time as the Company has delivered a quarterly compliance certificate, certified by a Senior Financial Officer, demonstrating that Consolidated Total Debt to Consolidated EBITDA is less than or equal to 3.25 to 1.00.
Section 10.8. Priority Debt. The Company will not at any time permit Priority Debt to exceed 10% of Consolidated Total Assets (which Consolidated Total Assets shall be determined as of the end of the most recently ended fiscal quarter).
Section 10.9. Subsidiary Debt Limitation. The Company will not permit any Subsidiary to create, assume, incur, guarantee or otherwise be liable in respect of any Indebtedness, except:
(a) Indebtedness of Subsidiaries owing to the Company or to a Wholly-Owned Subsidiary;
(b) Indebtedness of Subsidiaries existing as of the date hereof and described on Schedule 5.15 (and any renewals, extension, or replacement thereof, without increase in the principal amount thereof, plus an amount necessary to pay any reasonable fees or expenses, including premiums, related to such renewal, extension or replacement);
(c) Indebtedness of a Subsidiary which is a Guarantor hereunder provided that such Indebtedness is not secured by Liens other than Special Parity Liens and Liens permitted by Sections 10.5(a) through 10.5(k);
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(d) Acquired Subsidiary Debt, provided that immediately after such Subsidiary becomes a Subsidiary, no Default or Event of Default shall exist;
(e) Indebtedness of a Subsidiary owed under the Credit Agreement provided that the lenders under the Credit Agreement are parties to the Intercreditor Agreement; and
(f) other Indebtedness of a Subsidiary, provided that, at the time thereof and immediately after giving effect to the creation, assumption, incurrence or guarantee of such Indebtedness, no Default or Event of Default under Section 10 (including, without limitation, under Section 10.8) would exist.
Section 10.10. Sale of Assets. Except as otherwise permitted in Section 10.2, the Company will not and will not permit any of its Subsidiaries to, make any Asset Disposition unless:
(a) in the good faith opinion of the Company or such Subsidiary making the Asset Disposition, the Asset Disposition is in exchange for consideration having a fair market value at least equal to that of the property exchanged;
(b) at the time thereof and immediately after giving effect to the Asset Disposition, no Default or Event of Default would exist; and
(c) immediately after giving effect to the Asset Disposition (but subject to the next succeeding sentence), the Disposition Value of all property that was the subject of any Asset Disposition occurring during the 12 month period ending on the date of the proposed Asset Disposition would not exceed 15% of Consolidated Total Assets as of the end of the immediately preceding fiscal quarter as evidenced by the most recent annual financial statements or (if more recent) quarterly financial statements of the Company and its Subsidiaries delivered to the holders pursuant to Section 7.1).
For purposes of determining compliance with this Section 10.10, the Disposition Value of any property that was the subject of any Asset Disposition to a Person (other than an Affiliate of the Company or Subsidiary thereof) shall not be included for purposes of clause (c) above until the 366th day following the date of such Asset Disposition and shall be included only if the Net Proceeds Amount from such Asset Disposition is not applied to a Debt Prepayment Application or a Property Reinvestment Application (or any combination thereof) within 365 days after such Asset Disposition (and, if a portion of the Net Proceeds Amount is not applied within 365 days, a pro rata portion of the Disposition Value shall be included for purposes of clause (c)).
S ECTION 11. E VENTS OF D EFAULT .
An Event of Default shall exist if any of the following conditions or events shall occur and be continuing:
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(a) the Company defaults in the payment of any principal or Make-Whole Amount, if any, on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any Note for more than five Business Days after the same becomes due and payable; or
(c) (i) any Guarantor defaults in the performance of or compliance with any term contained in the Guarantee Agreement (beyond the period of grace or other cure period, if any, provided in the Guarantee Agreement) or (ii) the Company defaults in the performance of or compliance with any term contained in Section 7.1(d) or any of Sections 10.5 through 10.10, inclusive ; or
(d) the Company defaults in the performance of or compliance with any term contained herein (other than those referred to in Sections 11(a), (b) and (c)) or under the Intercreditor Agreement and such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Company receiving written notice of such default from any holder of a Note (any such written notice to be identified as a notice of default and to refer specifically to this Section 11(d)); or
(e) any representation or warranty made in writing by or on behalf of any Obligor or any Subsidiary or by any officer of any Obligor or any Subsidiary in any Financial Agreement or in any writing furnished in connection with the transactions contemplated hereby proves to have been false or incorrect in any Material respect on the date as of which made and if capable of being cured is not cured within 30 days; or
(f) (i) the Company or any Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or interest on any Indebtedness that is outstanding in an aggregate principal amount of at least, the greater of (i) $30,000,000 or (ii) 2.00% of Consolidated Total Assets beyond any period of grace provided with respect thereto, or (ii) the Company or any Subsidiary is in default in the performance of or compliance with any term of any evidence of any Indebtedness in an aggregate outstanding principal amount of at least, the greater of (i) $30,000,000 or (ii) 2.00% of Consolidated Total Assets or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Indebtedness has become, or has been declared (or one or more Persons are entitled to declare such Indebtedness to be), due and payable before its stated maturity or before its regularly scheduled dates of payment, or (iii) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Indebtedness to convert such Indebtedness into equity interests), (x) the Company or any Subsidiary has become obligated to purchase or repay Indebtedness before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at least, the greater of (i) $30,000,000 or (ii) 2.00% of Consolidated Total Assets, or (y) one or more Persons have the right to require the Company or any Subsidiary so to purchase or repay such Indebtedness; or
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(g) the Company or any Significant Subsidiary (i) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi) takes corporate or other action for the purpose of any of the foregoing; or
(h) a court or Governmental Authority of competent jurisdiction enters an order appointing, without consent by the Company or any of its Significant Subsidiaries, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company or any of its Significant Subsidiaries, or any such petition shall be filed against the Company or any of its Significant Subsidiaries and such petition shall not be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money aggregating in excess of the greater of (i) $30,000,000 or (ii) 2.00% of Consolidated Total Assets are rendered against one or more of the Company and its Subsidiaries and which judgments are not, within 60 days after entry thereof, bonded, contested by appropriate proceedings, discharged or stayed pending appeal, or are not discharged within 60 days after the expiration of such stay; or
(j) if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA or the Code for any plan year or part thereof or a waiver of such standards or extension of any amortization period is sought or granted under section 412 of the Code, (ii) a notice of intent to terminate any Plan shall have been or is reasonably expected to be filed with the PBGC or the PBGC shall have instituted proceedings under ERISA section 4042 to terminate or appoint a trustee to administer any Plan or the PBGC shall have notified the Company or any ERISA Affiliate that a Plan may become a subject of any such proceedings, (iii) the aggregate amount of unfunded benefit liabilities (within the meaning of section 4001(a)(18) of ERISA) under all Plans, determined in accordance with Title IV of ERISA, shall exceed the greater of (i) $30,000,000 or 2.00% of Consolidated Total Assets, (iv) the Company or any ERISA Affiliate shall have incurred or is reasonably expected to incur any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, (v) the Company or any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or any Subsidiary establishes or amends any employee welfare benefit plan that
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provides post-employment welfare benefits in a manner that would increase the liability of the Company or any Subsidiary thereunder; and any such event or events described in clauses (i) through (vi) above, either individually or together with any other such event or events, could reasonably be expected to have a Material Adverse Effect; or
(k) the Spin-Off shall fail to have been fully and completely completed and consummated (including, without limitation, the payment of the Spin-Off Dividend and the distribution of the Company Common Stock to FTI shareholders) by 9:00 a.m. Chicago time on the Business Day following the Effective Date.
As used in Section 11(j), the terms employee benefit plan and employee welfare benefit plan shall have the respective meanings assigned to such terms in section 3 of ERISA.
S ECTION 12. R EMEDIES ON D EFAULT , E TC .
Section 12.1. Acceleration . (a) If an Event of Default with respect to any Obligor described in Section 11(g) or (h) (other than an Event of Default described in clause (i) of Section 11(g) or described in clause (vi) of Section 11(g) by virtue of the fact that such clause encompasses clause (i) of Section 11(g)) has occurred, all the Notes then outstanding shall automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, any holder or holders of more than 51% in principal amount of the Notes at the time outstanding may at any time at its or their option, by notice or notices to the Company, declare all the Notes then outstanding to be immediately due and payable.
(c) If any Event of Default described in Section 11(a) or (b) has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by it or them to be immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest thereon (including, but not limited to, interest accrued thereon at the Default Rate) and (y) the Make-Whole Amount determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived provided, however, that such Make-Whole Amount otherwise required by the provisions of clause (y) above shall not be payable in the case of the Event of Default described in Section 11(k) if the Company shall have repaid to all holders of the Notes within one Business Day after the occurrence of such Event of Default 100% of the aggregate unpaid principal amount of the Notes plus all accrued and unpaid interest thereon. The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for) and that the provision for payment of a Make-Whole Amount, if any, by the Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.
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Section 12.2. Other Remedies . If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.
Section 12.3. Rescission . At any time after any Notes have been declared due and payable pursuant to Section 12.1(b) or (c), the Required Holders, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) neither the Company nor any other Person shall have paid any amounts which have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17, and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes. No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc . No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holders rights, powers or remedies. No right, power or remedy conferred by this Agreement or by any Note upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise. Without limiting the obligations of the Company under Section 15, the Company will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including, without limitation, reasonable attorneys fees, expenses and disbursements.
S ECTION 13. R EGISTRATION ; E XCHANGE ; S UBSTITUTION OF N OTES .
Section 13.1. Registration of Notes . The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes. The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register. Prior to due presentment for registration of transfer, the Person in whose name any Note shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary. The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.
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Section 13.2. Transfer and Exchange of Notes. Upon surrender of any Note to the Company at the address and to the attention of the designated officer (all as specified in Section 18(iii)), for registration of transfer or exchange (and in the case of a surrender for registration of transfer accompanied by a written instrument of transfer duly executed by the registered holder of such Note or such holders attorney duly authorized in writing and accompanied by the relevant name, address and other information for notices of each transferee of such Note or part thereof), within ten Business Days thereafter, the Company shall execute and deliver, at the Companys expense (except as provided below), one or more new Notes (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note. Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Exhibit 1. Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon. The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes. Notes shall not be transferred in denominations of less than $250,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than $250,000. Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.2.
The Notes have not been registered under the Securities Act or under the Securities Law of any State and may not be transferred or resold unless registered under the Securities Act and all applicable State securities laws or unless an exemption from the requirement for such registration is available.
Section 13.3. Replacement of Notes. Upon receipt by the Company at the address and to the attention of the designated officer (all as specified in Section 18(iii)) of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser or another holder of a Note with a minimum net worth of at least $25,000,000 or a Qualified Institutional Buyer, such Persons own unsecured agreement of indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation thereof,
within ten Business Days thereafter, the Company at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.
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S ECTION 14. P AYMENTS ON N OTES .
Section 14.1. Place of Payment. Subject to Section 14.2, payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in New York, New York at the principal office of JPMorgan Chase Bank N.A. in such jurisdiction. The Company may at any time, by notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be either the principal office of the Company in such jurisdiction or the principal office of a bank or trust company in such jurisdiction.
Section 14.2. Home Office Payment. So long as any Purchaser or its nominee shall be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, and interest by the method and at the address specified for such purpose below such Purchasers name in Schedule A, or by such other method or at such other address as such Purchaser shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to Section 14.1. Prior to any sale or other disposition of any Note held by a Purchaser or its nominee, such Purchaser will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 13.2. The Company will afford the benefits of this Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by a Purchaser under this Agreement and that has made the same agreement relating to such Note as the Purchasers have made in this Section 14.2.
S ECTION 15. E XPENSES , E TC .
Section 15.1. Transaction Expenses. Whether or not the transactions contemplated hereby are consummated, the Company will pay all reasonable costs and expenses (including reasonable attorneys fees of a special counsel and, if reasonably required by the Required Holders, local counsel) incurred by the Purchasers and each other holder of a Note in connection with such transactions and in connection with any amendments, waivers or consents under or in respect of any Financing Agreement (whether or not such amendment, waiver or consent becomes effective), including, without limitation: (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under any Financing Agreement or in responding to any subpoena or other legal process or informal investigative demand issued in connection with any Financing Agreement or by reason of being a holder of any Note, (b) the costs and expenses, including reasonable financial advisors fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated by the
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Financing Agreements and (c) the costs and expenses incurred in connection with the initial filing of this Agreement and all related documents and financial information with the SVO provided, that such costs and expenses under this clause (c) shall not exceed $3,000. The Company will pay, and will save each Purchaser and each other holder of a Note harmless from, all claims in respect of any reasonable fees, costs or expenses, if any, of brokers and finders (other than those, if any, retained by a Purchaser or other holder in connection with its purchase of the Notes).
Section 15.2. Survival. The obligations of the Company under this Section 15 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of any Financing Agreement, and the termination of any Financing Agreement.
S ECTION 16. S URVIVAL OF R EPRESENTATIONS AND W ARRANTIES ; E NTIRE A GREEMENT .
All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by any Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of such Purchaser or any other holder of a Note. All statements contained in any certificate or other instrument delivered by or on behalf of any Obligor pursuant to any Financing Agreement shall be deemed representations and warranties of such Obligor under such Financing Agreement. Subject to the preceding sentence, the Financing Agreements embody the entire agreement and understanding between each Purchaser and the Obligors and supersede all prior agreements and understandings relating to the subject matter hereof.
S ECTION 17. A MENDMENT AND W AIVER .
Section 17.1. Requirements. This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), with (and only with) the written consent of the Company and the Required Holders, except that (a) no amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it is used therein), will be effective as to any Purchaser unless consented to by such Purchaser in writing, and (b) no such amendment or waiver may, without the written consent of the holder of each Note at the time outstanding affected thereby, (i) subject to the provisions of Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage of the principal amount of the Notes the holders of which are required to consent to any such amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.
Section 17.2. Solicitation of Holders of Notes .
(a) Solicitation. The Company will provide each holder of the Notes (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered
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decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes. The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to the provisions of this Section 17 to each holder of outstanding Notes promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes.
(b) Payment. The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security or provide other credit support, to any holder of Notes as consideration for or as an inducement to the entering into by any holder of Notes of any waiver or amendment of any of the terms and provisions hereof unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently provided, on the same terms, ratably to each holder of Notes then outstanding even if such holder did not consent to such waiver or amendment.
Section 17.3. Binding Effect, etc. Any amendment or waiver consented to as provided in this Section 17 applies equally to all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver. No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon. No course of dealing between the Company and the holder of any Note nor any delay in exercising any rights hereunder or under any Note shall operate as a waiver of any rights of any holder of such Note. As used herein, the term this Agreement and references thereto shall mean this Agreement as it may from time to time be amended or supplemented.
Section 17.4. Notes Held by Company, etc. Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement or the Notes, or have directed the taking of any action provided herein or in the Notes to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding.
S ECTION 18. N OTICES .
All notices and communications provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by a recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by a recognized overnight delivery service (with charges prepaid). Any such notice must be sent:
(i) if to any Purchaser or its nominee, to such Purchaser or nominee at the address specified for such communications in Schedule A, or at such other address as such Purchaser or nominee shall have specified to the Company in writing,
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(ii) if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Company in writing, or
(iii) if to any Obligor, to the Company at its address set forth at the beginning hereof to the attention of the Treasurer with a copy to the General Counsel, or at such other address as the Company shall have specified to the holder of each Note in writing.
Notices under this Section 18 will be deemed given only when actually received.
S ECTION 19. R EPRODUCTION OF D OCUMENTS .
This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by any Purchaser at the Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to any Purchaser, may be reproduced by such Purchaser by any photographic, photostatic, electronic, digital, or other similar process and such Purchaser may destroy any original document so reproduced. The Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by such Purchaser in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. This Section 19 shall not prohibit the Company or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.
S ECTION 20. C ONFIDENTIAL I NFORMATION .
For the purposes of this Section 20, Confidential Information means information delivered to any Purchaser by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by such Purchaser as being confidential information or material non-public information of the Company or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to such Purchaser prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such Purchaser or any person acting on such Purchasers behalf, (c) otherwise becomes known to such Purchaser other than through disclosure by the Company or any Subsidiary or (d) constitutes financial statements delivered to such Purchaser under Section 7.1 that are otherwise publicly available. Each Purchaser will maintain the confidentiality of such Confidential Information in accordance with procedures adopted by such Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser, provided that such Purchaser may deliver or disclose Confidential Information to (i) its directors, officers, employees, agents, attorneys, trustees and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by its Notes), (ii) its financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with the terms of this
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Section 20, (iii) any other holder of any Note, (iv) any Institutional Investor to which it sells or offers to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (v) any Person from which it offers to purchase any security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by the provisions of this Section 20), (vi) any federal or state regulatory authority having jurisdiction over such Purchaser, (vii) the NAIC or the SVO or, in each case, any similar organization, or any nationally recognized rating agency that requires access to information about such Purchasers investment portfolio, or (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to such Purchaser, (x) in response to any subpoena or other legal process, (y) in connection with any litigation to which such Purchaser is a party or (z) if an Event of Default has occurred and is continuing, to the extent such Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchasers Notes and this Agreement. Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement. On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying the provisions of this Section 20.
S ECTION 21. S UBSTITUTION OF P URCHASER .
Each Purchaser shall have the right to substitute any one of its Affiliates as the purchaser of the Notes that it has agreed to purchase hereunder, by written notice to the Company, which notice shall be signed by both such Purchaser and such Affiliate, shall contain such Affiliates agreement to be bound by this Agreement and shall contain a confirmation by such Affiliate of the accuracy with respect to it of the representations set forth in Section 6. Upon receipt of such notice, any reference to such Purchaser in this Agreement (other than in this Section 21), shall be deemed to refer to such Affiliate in lieu of such original Purchaser. In the event that such Affiliate is so substituted as a Purchaser hereunder and such Affiliate thereafter transfers to such original Purchaser all of the Notes then held by such Affiliate, upon receipt by the Company of notice of such transfer, any reference to such Affiliate as a Purchaser in this Agreement (other than in this Section 21), shall no longer be deemed to refer to such Affiliate, but shall refer to such original Purchaser, and such original Purchaser shall again have all the rights of an original holder of the Notes under this Agreement.
S ECTION 22. G UARANTEE .
Section 22.1. Guaranteed Obligations . Each Guarantor hereby, irrevocably, unconditionally and absolutely guarantees to each holder of Notes, as and for such Guarantors own debt, until final and indefeasible payment has been made:
(a) the due and punctual payment by the Company of the principal of, and interest (including default interest and post-petition interest), and the Make-Whole
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Amount, if any, on, the Notes at any time outstanding and the due and punctual payment of all other amounts payable, and all other obligations owing, by the Company to the holders of the Notes under any Financing Agreement (all such obligations so guaranteed are herein collectively referred to as the Guaranteed Obligations ), in each case when and as the same shall become due and payable, whether at maturity, pursuant to mandatory or optional prepayment, by acceleration or otherwise, all in accordance with the terms and provisions hereof and thereof; and
(b) the punctual and faithful performance, keeping, observance, and fulfillment by the Company of all duties, agreements, covenants and obligations of the Company contained in the Financing Agreements.
Section 22.2. Performance under this Agreement . In the event that the Company fails to make, on or before the due date thereof, any payment of the Guaranteed Obligations owed by the Company, or if the Company shall fail to perform, keep, observe, or fulfill any other obligation referred to in clause (a) or clause (b) of Section 22.1 in the manner provided in the Financing Agreements after in each case giving effect to any applicable grace periods or cure provisions or waivers or amendments, each Guarantor shall cause forthwith to be paid the moneys, or to be performed, kept, observed, or fulfilled each of such obligations, in respect of which such failure has occurred in accordance with the terms and provisions of the Financing Agreements.
Section 22.3. Waivers . To the fullest extent permitted by law and except as might otherwise be expressly provided for in this Section 22, each Guarantor does hereby waive:
(a) notice of acceptance of this Guarantee Agreement;
(b) notice of any purchase of the Notes under this Agreement, or the creation, existence or acquisition of any of the Guaranteed Obligations, subject to such Guarantors right to make inquiry of each holder of Notes to ascertain the amount of the Guaranteed Obligations at any reasonable time;
(c) notice of the amount of the Guaranteed Obligations, subject to such Guarantors right to make inquiry of each holder of Notes to ascertain the amount of the Guaranteed Obligations at any reasonable time;
(d) notice of adverse change in the financial condition of the Company or any other fact that might increase or expand the Guarantors risk hereunder;
(e) notice of any Default or Event of Default;
(f) the defense of the single action rule or any similar right or protection, and the right by statute or otherwise to require any holder of Notes to institute suit against the Company or to exhaust its rights and remedies against the Company, the Guarantor being bound to the payment of each and all Guaranteed Obligations, whether now existing or hereafter accruing, as fully as if such Guaranteed Obligations were directly owing to the holders of Notes by such Guarantor;
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(g) any defense relating to the validity or enforceability (or absence or failure thereof) of any term of any Financing Agreement;
(h) any defense arising by reason of any disability or other defense (other than the defense that the Guaranteed Obligations shall have been fully and finally performed and indefeasibly paid) of the Company or by reason of the cessation from any cause whatsoever of the liability of the Company in respect thereof;
(i) any stay (except in connection with a pending appeal), valuation, appraisal redemption or extension law now or at any time hereafter in force which, but for this waiver, might be applicable to any sale of property of the Guarantor made under any judgment, order or decree based on this Agreement, and the Guarantor covenants that it will not at any time insist upon or plead, or in any manner claim or take the benefit or advantage of such law; and
(j) any other defense which the Guarantor may have to the full and complete performance of its obligations hereunder.
Section 22.4. Certain Waivers of Subrogation, Reimbursement and Indemnity . Until all of the Guaranteed Obligations owed by the Company shall have been fully and finally paid, each Guarantor shall have no right of subrogation, reimbursement or indemnity whatsoever and no right of recourse to or with respect to any assets or property of the Company. Without limiting the foregoing, each Guarantor will not in the event of a dissolution of the Company: (a) take steps to recover (whether directly or by set-off, counterclaim or otherwise) or accept money or other property, or exercise or enforce rights in respect of, Indebtedness of the Company to such Guarantor so long as there is any Guaranteed Obligations due by the Company, nor (b) claim, prove or accept payment in composition by, or a dissolution of, the Company in competition with any holder of Notes. Except as expressly provided in Section 22.22, nothing shall discharge or satisfy the liability of any Guarantor hereunder except the full and final performance and indefeasible payment of the Guaranteed Obligations.
Section 22.5. No Release . Each Guarantor consents and agrees that, without notice to or by such Guarantor and without impairing, releasing, abating, deferring, suspending, reducing, terminating or otherwise affecting the obligations of such Guarantor hereunder, each holder of Notes, in the manner provided herein, by action or inaction, may:
(a) compromise or settle, renew or extend the period of duration or the time for the payment, or discharge the performance of, or may refuse to, or otherwise not, enforce, or may, by action or inaction, release all or any one or more parties to, any one or more of any Financing Agreement;
(b) assign, sell or transfer, or otherwise dispose of, any one or more of the Notes;
(c) grant waivers, extensions, consents and other indulgences to the Company in respect of any one or more of any Financing Agreement;
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(d) amend, modify or supplement in any manner and at any time (or from time to time) any one or more of any Financing Agreement including, without limitation, by any increase in the principal amount of any Notes or any change in interest rates or make-whole or swap breakage determinations;
(e) release or substitute any one or more of the endorsers or guarantors of the Guaranteed Obligations whether parties hereto or not;
(f) sell, exchange, release or surrender any property at any time pledged or granted by the Company or any Guarantor as security in respect of the Guaranteed Obligations in accordance with the agreement or instrument granting any such security;
(g) exchange, enforce, waive, or release, by action or inaction, any security for the Guaranteed Obligations or any other guarantee of any of the Notes; and
(h) do any other act or event which could have the effect of releasing the Guarantor from the full and complete performance of its obligations hereunder.
Section 22.6. Marshaling . Each Guarantor consents and agrees that:
(a) each holder of Notes shall be under no obligation to marshal any assets in favor of any Guarantor or against or in payment of any or all of the Guaranteed Obligations; and
(b) to the extent the Company makes a payment or payments to any holder of Notes, which payment or payments or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, or required, for any of the foregoing reasons or for any other reason, to be repaid or paid over to a custodian, trustee, receiver, or any other party under any bankruptcy law, common law, or equitable cause, then to the extent of such payment or repayment, the obligation or part thereof intended to be satisfied thereby shall be revived and continued in full force and effect as if said payment or payments had not been made and each Guarantor shall be primarily liable for such obligation.
Section 22.7. Liability . Each Guarantor agrees that the liability of each Guarantor in respect of this Section shall be immediate, and shall not be contingent upon the exercise or enforcement by any holder of Notes of whatever remedies such holder may have against the Company or the enforcement of any Lien or realization upon any security such holder may at any time possess.
Section 22.8. Character of Obligation . The Guaranty set forth in this Section is a primary and original obligation of each Guarantor and is an absolute, unconditional, continuing and irrevocable guarantee of payment and performance (and not of collectibility) and shall remain in full force and effect until the full, final and indefeasible payment of the Guaranteed Obligations without respect to future changes in conditions.
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The obligations of each Guarantor under this Guarantee Agreement and the rights of the holders of Notes to enforce such obligations by any proceedings, whether by action at law, suit in equity or otherwise, shall not be subject to any reduction, limitation, impairment or termination, whether by reason of any claim of any character whatsoever or otherwise, including, without limitation, claims of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense, set-off, counterclaim, recoupment or termination whatsoever.
Without limiting the generality of the foregoing, the obligations of each Guarantor hereunder shall not be discharged or impaired or otherwise affected by:
(a) any default, failure or delay, willful or otherwise, in the performance by any Obligor of any obligations of any kind or character whatsoever of such Obligor;
(b) any creditors rights, bankruptcy, receivership or other insolvency proceeding of any Obligor or any other Person or in respect of the property of any Obligor or any other Person or any merger, consolidation, reorganization, dissolution, liquidation or winding up of any Obligor or any other Person;
(c) impossibility or illegality of performance on the part of any Obligor of its obligations under any Financing Agreement or any other instruments or agreements;
(d) the validity or enforceability of any Financing Agreement or any other instruments or agreements;
(e) in respect of any Obligor or any other Person, any change of circumstances, whether or not foreseen or foreseeable, whether or not imputable to any Obligor or any other Person, or other impossibility of performance through fire, explosion, accident, labor disturbance, floods, droughts, embargoes, wars (whether or not declared), civil commotions, acts of terrorism, acts of God or the public enemy, delays or failure of suppliers or carriers, inability to obtain materials, action of any federal or state regulatory body or agency, change of law or any other causes affecting performance, or any other force majeure, whether or not beyond the control of any Obligor or any other Person and whether or not of the kind hereinbefore specified;
(f) any attachment, claim, demand, charge, lien, order, process, encumbrance or any other happening or event or reason, similar or dissimilar to the foregoing, or any withholding or diminution at the source, by reason of any taxes, assessments, expenses, debt, obligations or liabilities of any charter, foreseen or unforeseen, and whether or not valid, incurred by or against any Person, or any claims, demands, charges or Liens of any nature, foreseen or unforeseen, incurred by any Person, or against any sums payable under any Financing Agreement, so that such sums would be rendered inadequate or would be unavailable to make the payments herein provided;
(g) any order, judgment, decree, law, ruling or regulation (whether or not valid) of any court of any nation or of any political subdivision thereof or any body, agency, department, official or administrative or regulatory agency of any thereof or any
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other action, happening, event or reason whatsoever which shall delay, interfere with, hinder or prevent, or in any way adversely affect, the performance by any party of its respective obligations under any instruments;
(h) any merger, consolidation, disposition of assets or other business combination of any Obligor; or
(i) any other circumstance which might otherwise constitute a defense available to, or a discharge of, any Guarantor in respect of the obligations of any Guarantor under this Guarantee Agreement.
Section 22.9. Election to Perform Obligations . Any election by any Guarantor to pay or otherwise perform any of the obligations of any Obligor under any Financing Agreement, whether pursuant to this Section or otherwise, shall not release such Obligor from such obligations (except to the extent such obligation is indefeasibly paid or performed) or any of such Obligors other obligations under the related Financing Agreements.
Section 22.10. No Election . Each holder of Notes shall have the right to seek recourse against each Guarantor to the fullest extent provided for in this Section 22 and elsewhere as provided in this Agreement, and against the Company, to the full extent provided for in this Agreement. Each Guarantor hereby acknowledges that it has other undertakings in this Agreement and running in favor of each of the holders of Notes that are separate and apart from its obligations under this Section 22. No election to proceed in one form of action or proceeding, or against any party, or on any obligation, shall constitute a waiver of the right of such holder of Notes to proceed in any other form of action or proceeding or against other parties unless such holder of Notes has expressly waived such right in writing. Specifically, but without limiting the generality of the foregoing, no action or proceeding by any holder of Notes against the Company or any Guarantor under any document or instrument evidencing obligations of the Company or such Guarantor to such holder of Notes shall serve to diminish the liability of such Guarantor under this Agreement (including, without limitation, this Section 22) except to the extent that such holder of Notes finally and unconditionally shall have realized payment of the Guaranteed Obligations by such action or proceeding, notwithstanding the effect of any such action or proceeding upon such Guarantors right of subrogation against the Company.
Section 22.11. Severability . Each of the rights and remedies granted under this Section 22 to the holder of Notes in respect of the Notes held by such holder may be exercised by such holder without notice by such holder to, or the consent of or any other action by, any other holder of Notes.
Section 22.12. Other Enforcement Rights . Each holder of Notes may proceed to protect and enforce the Guarantee Agreement under this Section 22 by suit or suits or proceedings in equity, at law or in bankruptcy, and whether for the specific performance of any covenant or agreement contained in this Section 22 or in execution or aid of any power herein granted or for the recovery of judgment for or in respect of the Guaranteed Obligations or for the enforcement of any other proper, legal or equitable remedy available under applicable law.
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Section 22.13. Delay or Omission; No Waiver . No course of dealing on the part of any holder of Notes and no delay or failure on the part of such holder to exercise any right under any Financing Agreement (including this Section 22) shall impair such right or operate as a waiver of such right or otherwise prejudice such holders rights, powers and remedies hereunder. Every right and remedy given in or by this Section 22 or by law to any holder of Notes may be exercised from time to time as often as may be deemed expedient by such Person.
Section 22.14. Restoration of Rights and Remedies . If any holder of Notes shall have instituted any proceeding to enforce any right or remedy hereunder held by such holder and such proceeding shall have been discontinued or abandoned for any reason, or shall have been determined adversely to such holder, then and in every such case each such holder, the Company and each Guarantor shall, except as may be limited or affected by any determination in such proceeding, be restored severally and respectively to their respective former positions hereunder and thereunder, and thereafter the rights and remedies of such holder shall continue as though no such proceeding had been instituted.
Section 22.15. Cumulative Remedies . No remedy under this Agreement (including, without limitation, this Section 22) or the Notes is intended to be exclusive of any other remedy, but each and every remedy shall be cumulative and in addition to any and every other remedy given pursuant to this Agreement (including, without limitation, this Section 22), or pursuant to the Notes.
Section 22.16. Survival. So long as the Guaranteed Obligations shall not have been fully and finally performed and indefeasibly paid, the obligations of each Guarantor under this Section 22 shall survive the transfer and payment of any Note and the payment in full of all the Notes.
Section 22.17. Miscellaneous . So long as the Guaranteed Obligations owed by the Company shall not have been fully and finally performed and indefeasibly paid, each Guarantor (to the fullest extent that it may lawfully do so) expressly waives any claim of any nature arising out of any right of indemnity, contribution, reimbursement or any similar right in respect of any payment made by such Guarantor on or with respect to such Guaranteed Obligations under this Section 22 or in connection with this Section 22 or otherwise, or any claim of subrogation arising with respect to any such payment made under this Section 22 or otherwise, against any Obligor or the estate of such Obligor (including Liens on the property of such Obligor or the estate of such Obligor), in each case if, and for so long as, such Obligor is the subject of any proceeding brought under any bankruptcy, reorganization, arrangement, insolvency, administration, readjustment of debt, dissolution or liquidation law of any jurisdiction, whether now or hereafter in effect, and further agrees that it will not file any claims against such Obligor or the estate of such Obligor in the course of such proceeding in respect of the rights referred to in this Section 22, and further agrees that each holder of Notes may specifically enforce the provisions of this Section 22. This clause creates a promise which is intended to create obligations enforceable at the suit of each holder of Notes.
If an Event of Default exists, then the holders of Notes shall have the right to declare all of the Guaranteed Obligations to be, and such Guaranteed Obligations shall thereupon become,
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forthwith due and payable, without any presentment, demand, protest or other notice of any kind, all of which have been expressly waived by the Company and the Guarantors, and notwithstanding any stay, injunction or other prohibition preventing such declaration (or such Guaranteed Obligations from becoming automatically due and payable) as against the Company. In any such event, the holders of Notes shall have immediate recourse to such Guarantor to the fullest extent set forth herein.
Section 22.18. Limitation . Anything herein or in the Notes to the contrary notwithstanding, the liability of each Guarantor under this Agreement shall in no event exceed an amount equal to the maximum amount which can be guaranteed by such Guarantor under applicable laws relating to the insolvency of debtors and fraudulent conveyance.
Section 22.19. Written Notice . Notwithstanding any other provision of this Section 22, in the event of any acceleration of the Notes in accordance with the provisions of Section 12 hereof, any requirement of written notice to, or demand of, the Guarantors pursuant to this Section 22 shall be deemed automatically satisfied upon such acceleration without further action on the part of any holder (notwithstanding any stay, injunction or other prohibition preventing any notice, demand or acceleration).
Section 22.20. Unenforceability of Obligations . As a separate and continuing undertaking, each Guarantor unconditionally and irrevocably undertakes to each holder of Notes that, should any Guaranteed Obligations not be recoverable against such Guarantor under this Guarantee Agreement on the footing of a guarantee for any reason, including, without limitation, a provision of this Guarantee Agreement or an obligation (or purported obligation) of any Obligor to pay any Guaranteed Obligation being or becoming void, voidable, unenforceable or otherwise invalid, and whether or not that reason is or was known to any holder of Notes, and whether or not that reason is:
(a) a defect in or lack of powers affecting any Obligor, or the irregular exercise of those powers; or
(b) a defect in or lack of authority by a person purporting to act on behalf of any Obligor; or
(c) a dissolution, change in status, constitution or control, reconstruction or reorganization of any Obligor (or the commencement of steps to effect the same),
then such Guarantor will, as a separate and additional obligation under this Guarantee Agreement, indemnify the holder of Notes concerned immediately on demand against the amount which such holder would otherwise have been able to recover (on a full indemnity basis). In this subsection 22.20, the expression Guaranteed Obligations includes any Indebtedness which would have been included in that expression but for anything referred to in this clause.
Section 22.21. Indemnity . As a separate and continuing undertaking, each Guarantor unconditionally and irrevocably undertakes to each holder of Notes to indemnify and hold harmless that holder against all losses, liabilities, damages, costs and expenses whatsoever arising out of:
(a) any failure by an Obligor to discharge its obligations under this Agreement, the Notes or any other any agreement relating to Guaranteed Obligations; or
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(b) any failure by any Obligor in the due and punctual performance and observance of any obligation contained in this Agreement
Section 22.22. Certain Releases . Notwithstanding anything to the contrary in the other provisions of this Section 22 (including, without limitation, Sections 22.3, 22.5 or 22.8(h)) and provided that no Default or Event of Default then exists or would result therefrom if either (a) any Guarantor or all or substantially all of the assets of such Guarantor is sold or transferred, in each case, in a transaction otherwise permitted hereunder, (b) as a result of the disposition of all or a portion of its capital stock, a Guarantor ceases to be a Subsidiary, or (c) such Guarantor is no longer a borrower, guarantor or other obligor under the Credit Agreement, then, in each such case, such Guarantor shall be automatically released from its duties and obligations under this Agreement, including without limitation the Guarantee Agreement provided in this Section 22.
S ECTION 23. M ISCELLANEOUS .
Section 23.1. Successors and Assigns. All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not.
Section 23.2. Payments Due on Non-Business Days. Anything in this Agreement or the Notes to the contrary notwithstanding (but without limiting the requirement in Section 8.4 that the notice of any optional prepayment specify a Business Day as the date fixed for such prepayment), any payment of principal of or Make-Whole Amount or interest on any Note that is due on a date other than a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day; provided that if the maturity date of any Note is a date other than a Business Day, the payment otherwise due on such maturity date shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.
Section 23.3. Accounting Terms. (a) All accounting terms used herein which are not expressly defined in this Agreement have the meanings respectively given to them in accordance with GAAP. Except as otherwise specifically provided herein, (i) all computations made pursuant to this Agreement shall be made in accordance with GAAP, and (ii) all financial statements shall be prepared in accordance with GAAP.
(b) If the Company notifies the holders of the Notes that the Company requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the
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Required Holders notify the Company that the Required Holders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective ( Existing GAAP ) until such notice shall have been withdrawn or such provision amended in accordance herewith. At any time that any covenant shall be calculated in accordance with Existing GAAP, appropriate reconciliations to the financial statements then being furnished shall be included with each Officers Certificate delivered pursuant to Section 7.1.
Section 23.4. Severability. Any provision of this Agreement that 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 (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.
Section 23.5. Construction, etc. Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.
For the avoidance of doubt, all Schedules and Exhibits attached to this Agreement shall be deemed to be a part hereof.
Section 23.6. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.
Section 23.7. Governing Law. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.
Section 23.8. Jurisdiction and Process; Waiver of Jury Trial. (a) The Company irrevocably submits to the non-exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to this Agreement or the Notes. To the fullest extent permitted by applicable law, the Company irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.
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(b) The Company consents to process being served by or on behalf of any holder of Notes in any suit, action or proceeding of the nature referred to in Section 23.8(a) by mailing a copy thereof by registered or certified mail (or any substantially similar form of mail), postage prepaid, return receipt requested, to it at its address specified in Section 18 or at such other address of which such holder shall then have been notified pursuant to said Section. The Company agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it. Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.
(c) Nothing in this Section 23.8 shall affect the right of any holder of a Note to serve process in any manner permitted by law, or limit any right that the holders of any of the Notes may have to bring proceedings against the Company in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.
(d) T HE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS A GREEMENT , THE N OTES OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THEREWITH .
* * * * *
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If you are in agreement with the foregoing, please sign the form of agreement on a counterpart of this Agreement and return it to the Company, whereupon this Agreement shall become a binding agreement between you and the Company.
Very truly yours, |
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J OHN B EAN T ECHNOLOGIES C ORPORATION | ||||
By |
/s/ Joseph J. Meyer |
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Name: |
Joseph J. Meyer |
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Title: |
Assistant Treasurer |
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J OHN B EAN T ECHNOLOGIES LLC | ||||
By: |
John Bean Corporation |
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Its: |
Sole Member |
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By |
/s/ Joseph J. Meyer |
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Name: |
Joseph J. Meyer |
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Title: |
Assistant Treasurer |
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J ETWAY S YSTEMS A SIA , I NC . | ||||
By |
/s/ James L. Marvin |
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Name: |
James L. Marvin |
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Title: |
President |
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J OHN B EAN T ECHNOLOGIES H OLDING AB | ||||
By |
/s/ Joseph J. Meyer |
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Name: |
Joseph J. Meyer |
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Title: |
Treasurer |
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This Agreement is hereby
accepted and agreed to as
of the date thereof.
T HE P RUDENTIAL I NSURANCE C OMPANY OF A MERICA |
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By |
/s/ Anthony Coletta |
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Name: |
Anthony Coletta |
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Title: |
Vice President |
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P RUDENTIAL R ETIREMENT I NSURANCE AND A NNUITY C OMPANY |
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By: |
Prudential Investment Management, Inc., as investment manager |
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By |
/s/ Anthony Coletta |
|||||
Name: |
Anthony Coletta |
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Title: |
Vice President |
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U NIVERSAL P RUDENTIAL A RIZONA R EINSURANCE C OMPANY |
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By: |
Prudential Investment Management, Inc., as investment manager |
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By |
/s/ Anthony Coletta |
|||||
Name: |
Anthony Coletta |
|||||
Title: |
Vice President |
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This Agreement is hereby
accepted and agreed to as
of the date thereof.
H ARTFORD L IFE I NSURANCE C OMPANY | ||||||
H ARTFORD F IRE I NSURANCE C OMPANY | ||||||
By: |
Hartford Investment Management Company |
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Its: |
Agent and Attorney-in-Fact |
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By |
/s/ Ronald A. Mendel |
|||||
Name: |
Ronald A. Mendel |
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Title: |
Managing Director |
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This Agreement is hereby
accepted and agreed to as
of the date thereof.
M UTUAL OF O MAHA I NSURANCE C OMPANY | ||||
U NITED OF O MAHA L IFE I NSURANCE C OMPANY | ||||
By |
/s/ Justin P. Kavan |
|||
Name: |
Justin P. Kavan |
|||
Title: |
Vice President |
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John Bean Technologies Corporation |
Note Purchase Agreement |
This Agreement is hereby
accepted and agreed to as
of the date thereof.
A MERICO F INANCIAL L IFE & A NNUITY I NSURANCE C O . |
||||
I NVESTORS L IFE I NSURANCE C O . OF N ORTH A MERICA |
||||
By |
/s/ Greg Hamilton |
|||
Name: |
Greg Hamilton |
|||
Title: |
VP - Investments |
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D EFINED T ERMS
As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:
Acquired Subsidiary Debt means all Indebtedness of any Person which becomes a Subsidiary after the date of Closing or is consolidated with or merged into a Subsidiary after the date of Closing and which (i) is outstanding on the date such Person becomes a Subsidiary or is consolidated with or merged into a Subsidiary and (ii) has not been (or is not being) incurred, extended or renewed in contemplation of such Person becoming a Subsidiary.
Acquisition of Control is defined in Section 8.7(f).
Affected Foreign Subsidiary means any Foreign Subsidiary to the extent such Foreign Subsidiary acting as a Guarantor would cause a Deemed Dividend Problem or Financial Assistance Problem.
Affiliate means, at any time, and with respect to any Person, any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person, and, with respect to the Company, shall include any Person beneficially owning or holding, directly or indirectly, 10% or more of any class of voting or equity interests of the Company or any Subsidiary or any Person of which the Company and its Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly, 10% or more of any class of voting or equity interests. As used in this definition, 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. Unless the context otherwise clearly requires, any reference to an Affiliate is a reference to an Affiliate of the Company.
Anti-Terrorism Order means Executive Order No. 13,224 of September 24, 2001, Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support Terrorism, 66 U.S. Fed. Reg. 49, 079 (2001), as amended.
Asset Disposition means any Transfer except:
(a) any Transfer from any Subsidiary which is not an Obligor to any Obligor or to any other Subsidiary;
(b) any Transfer from any Obligor to any other Obligor;
(c) any Transfer from an Obligor to a Subsidiary which is not an Obligor, if, concurrently with such Transfer, such Subsidiary becomes an Obligor hereunder pursuant to Section 10.2 or by execution of a joinder agreement substantially in the form of Exhibit 9.8;
(d) any Transfer made pursuant to a Permitted Securitization Transaction up to but not exceeding an amount where the aggregate investment or claim held at any time by the Company and its Subsidiaries in all Permitted Securitization Transactions shall not exceed 10% of Consolidated Total Assets;
(e) any sale of all or substantially all of the assets of the Company in a transaction permitted by, and in accordance with, Section 10.2(a); and
(f) any Transfer either (i) made in the normal course of the business or (ii) involving property, equipment, fixtures, supplies or assets no longer required in the operation of the business of the Company or any of its Subsidiaries or that is obsolete.
Business Day means (a) for the purposes of Section 8.6 only, any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed, and (b) for the purposes of any other provision of this Agreement, any day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York or Chicago, Illinois are required or authorized to be closed.
Capital Lease Obligations of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
Change in Control is defined in Section 8.7(h).
Closing is defined in Section 3.
Code means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.
Company means John Bean Technologies Corporation, a Delaware corporation or any successor that becomes such in the manner prescribed in Section 10.2.
Confidential Information is defined in Section 20.
Consolidated EBITDA means Consolidated Net Income plus , to the extent deducted from revenues in determining Consolidated Net Income and without duplication, (i) Consolidated Interest Expense, (ii) expense for taxes paid or accrued, (iii) depreciation, (iv) amortization, (v) extraordinary, unusual or non-recurring non-cash expenses or losses incurred other than in the ordinary course of business, (vi) non-cash expenses, including those related to stock based compensation, (vii) extraordinary, unusual or non-recurring cash, income or gain realized other than in the ordinary course of business to the extent such income had previously been deducted from Consolidated EBITDA as non-cash income or gain under
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clause (xi) below, (viii) amounts representing non-cash adjustments arising by reason of the application of certain accounting principles including with respect to FASB Statement 142 (relating to changes in accounting for the amortization of goodwill and certain other intangibles), minus , to the extent included in Consolidated Net Income, (ix) income tax credits and refunds (to the extent not netted from tax expense), (x) any cash payments made during such period in respect of items described in clauses (v) or (vi) above subsequent to the fiscal quarter in which the relevant non-cash expenses or losses were incurred and (xi) extraordinary, unusual or non-recurring non-cash income or gains realized other than in the ordinary course of business, all calculated for the Company and its Subsidiaries in accordance with GAAP on a consolidated basis. For the purposes of calculating Consolidated EBITDA for any period of four consecutive fiscal quarters (each, a Reference Period ), (i) if during such Reference Period the Company or any Subsidiary shall have made any Material Disposition, the Consolidated EBITDA for such Reference Period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the property that is the subject of such Material Disposition for such Reference Period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such Reference Period, and (ii) if during such Reference Period the Company or any Subsidiary shall have made a Material Acquisition, Consolidated EBITDA for such Reference Period shall be calculated after giving pro forma effect thereto as if such Material Acquisition occurred on the first day of such Reference Period. As used in this definition, Material Acquisition means any acquisition of property or series of related acquisitions of property that (a) constitutes (i) assets comprising all or substantially all or any significant portion of a business or operating unit of a business, or (ii) all or substantially all of the common stock or other equity interests of a Person, and (b) involves the payment of consideration by the Company and its Subsidiaries in excess of $20,000,000; and Material Disposition means any sale, transfer or disposition of property or series of related sales, transfers, or dispositions of property that yields gross proceeds to the Company or any of its Subsidiaries in excess of $20,000,000.
Consolidated Interest Expense means, with reference to any period, the interest expense (including without limitation interest expense under Capital Lease Obligations that is treated as interest in accordance with GAAP) of the Company and its Subsidiaries calculated on a consolidated basis for such period with respect to all outstanding Indebtedness of the Company and its Subsidiaries allocable to such period in accordance with GAAP (including, without limitation, all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers acceptance financing and net costs under interest rate Swap Agreements to the extent such net costs are allocable to such period in accordance with GAAP).
Consolidated Net Income means, with reference to any period, the net income (or loss) of the Company and its Subsidiaries calculated in accordance with GAAP on a consolidated basis (without duplication) for such period.
Consolidated Total Assets means, as of the date of any determination thereof, total assets of the Company and its Subsidiaries calculated in accordance with GAAP on a consolidated basis as of such date.
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Consolidated Total Indebtedness means at any time the sum, without duplication, of (a) the aggregate Indebtedness of the Company and its Subsidiaries calculated on a consolidated basis as of such time in accordance with GAAP, (b) the aggregate amount of Indebtedness of the Company and its Subsidiaries relating to the maximum drawing amount of all letters of credit outstanding and bankers acceptances and (c) Indebtedness of the type referred to in clauses (a) or (b) hereof of another Person guaranteed by the Company or any of its Subsidiaries; provided that Consolidated Total Indebtedness shall exclude (i) the aggregate principal amount of Indebtedness of the Company and its Subsidiaries in respect of undrawn performance and commercial letters of credit and Guarantees related thereto and (ii) no more than $10,000,000 of the aggregate principal amount of Indebtedness of the Company and its Subsidiaries in respect of undrawn letters of credit posted to support or secure surety bonds posted for the Company or any of its Subsidiaries in the ordinary course of business.
Credit Agreement means the Companys primary credit facility providing for loans or other extensions of credit, including the issuance and sale of senior notes, to the Company and one or more of its Subsidiaries and under or pursuant to which one or more of the Companys subsidiaries is a borrower, obligor or guarantor.
Debt Prepayment Application means, with respect to any Asset Disposition, the application by the Company or a Subsidiary thereof of cash in an amount equal to the Net Proceeds Amount with respect to such Asset Disposition to pay, pro rata, Senior Debt (including the Notes) of the Company or such Subsidiary (other than Senior Debt in respect of any revolving credit or similar credit facility providing the Company or any of its Subsidiaries with the right to obtain loans or other extensions of credit from time to time, except to the extent that in connection with such payment of Senior Debt, the availability of credit under such credit facility is permanently reduced by an amount not less than the amount of such proceeds applied to the payment of such Senior Debt). In connection with any Debt Prepayment Application, the Company shall offer to prepay the Notes in an aggregate principal amount at least equal to the aggregate principal amount of the Notes multiplied by a fraction, the numerator of which is equal to the aggregate principal amount of the Notes and the denominator of which is equal to the aggregate principal amount of Senior Debt as of the date of prepayment. Any such prepayment of Notes shall be pursuant to Section 8.8.
Deemed Dividend Problem means, with respect to any Foreign Subsidiary, such Foreign Subsidiarys current accumulated and undistributed earnings and profits being deemed to be repatriated to the Company or the applicable parent Domestic Subsidiary under Section 956 of the Code (or any successor provision) and the effect of such repatriation causing adverse tax consequences to the Company, such parent Domestic Subsidiary or any member of the affiliated group within the meaning of Section 1504(a) of the Code (or any successor provision) in which the Company is a part, in each case as determined by the Company in its commercially reasonable judgment acting in good faith and in consultation with its legal and tax advisors.
Default means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.
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Default Rate means that rate of interest that is the greater of (i) 2% per annum above the rate of interest stated in clause (a) of the first paragraph of the Notes or (ii) 2% over the rate of interest publicly announced by JPMorgan Chase Bank, N.A. in New York, New York as its base or prime rate.
Disposition Prepayment Date is defined in Section 8.7.
Disposition Response Date is defined in Section 8.7.
Disposition Value means, at any time, with respect to any property
(a) in the case of property that does not constitute stock of a Subsidiary, the book value thereof, valued at the time of such disposition in good faith by the Company, and
(b) in the case of property that constitutes stock of a Subsidiary, an amount equal to that percentage of book value of the assets of the Subsidiary that issued such stock as is equal to the percentage that the book value of such stock represents of the book value of all of the outstanding capital stock of such Subsidiary (assuming, in making such calculations, that all securities convertible into such capital stock are so converted and giving full effect to all transactions that would occur or be required in connection with such conversion) determined at the time of the disposition thereof, in good faith by the Company.
Domestic Subsidiary means a Subsidiary organized under the laws of a jurisdiction located in the United States of America.
Effective Date means the date on which the conditions specified in Section 4 are satisfied.
Electronic Delivery is defined in Section 7.1(a).
Environmental Laws means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including but not limited to those related to Hazardous Materials.
ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.
ERISA Affiliate means any trade or business (whether or not incorporated) that is treated as a single employer together with the Company under section 414 of the Code.
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Event of Default is defined in Section 11.
Exchange Act means the Securities Exchange Act of 1934, as amended, and any successor act thereto.
Financial Assistance Problem means, with respect to any Foreign Subsidiary, the inability (whether due to an absolute prohibition or adverse legal or financial requirements) of such Foreign Subsidiary to become a Guarantor on account of legal or financial limitations imposed by the jurisdiction of organization of such Foreign Subsidiary or other relevant jurisdictions having authority over such Foreign Subsidiary, in each case as determined by the Company in its commercially reasonable judgment acting in good faith and in consultation with its legal and tax advisors.
Financing Agreements means this Agreement, the Notes and the Guarantee Agreement, in each case, as amended, restated, modified or supplemented from time to time.
FTI means FMC Technologies Inc., a Delaware corporation.
Foreign Subsidiary means any Subsidiary which is not a Domestic Subsidiary.
Form 10-K is defined in Section 7.1(b).
Form 10-Q is defined in Section 7.1(a).
GAAP means generally accepted accounting principles as in effect from time to time in the United States of America.
Governmental Authority means
(a) the government of
(i) the United States of America or any State or other political subdivision thereof, or
(ii) any other jurisdiction in which the Company or any Subsidiary conducts all or any part of its business, or which asserts jurisdiction over any properties of the Company or any Subsidiary, or
(b) any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.
Guarantee Agreement means the Guaranty of the Guarantors set forth in Section 22.
Guaranteed Obligations is defined in Section 22.1.
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Guarantor shall mean and include (i) the Persons listed as Guarantors on the signature pages hereto, each of which is a Subsidiary as of the date of Closing and (ii) each other Subsidiary which is required to become a Guarantor hereunder pursuant to the provisions of Section 9.8 excluding, in each case, any such Person who has been released in accordance with Section 22.22.
Guaranty means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend or other obligation of any other Person in any manner, whether directly or indirectly, including (without limitation) obligations incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of such indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such indebtedness or obligation of the ability of any other Person to make payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under any Guaranty, the indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor.
Hazardous Material means any and all pollutants, toxic or hazardous wastes or other substances that might pose a hazard to health and safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of which is or shall be restricted, prohibited or penalized by any applicable law including, but not limited to, asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized substances.
holder means, with respect to any Note the Person in whose name such Note is registered in the register maintained by the Company pursuant to Section 13.1.
Indebtedness of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all
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obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of bankers acceptances and (k) all obligations of such Person under Sale and Leaseback Transactions excluding rents under operating leases. For the avoidance of doubt, Indebtedness will not include obligations under or with respect to surety bonds posted by or for the benefit of any Person in the ordinary course of such Persons business. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Persons ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.
Institutional Investor means (a) any Purchaser of a Note, (b) any holder of a Note holding (together with one or more of its affiliates) more than 5% of the aggregate principal amount of the Notes then outstanding, (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form, and (d) any Related Fund of any holder of any Note.
Intercreditor Agreement means that certain Intercreditor Agreement dated as of the date of Closing by and among the parties to the Credit Agreement and the holders of the Notes, as amended, restated, supplemented or otherwise modified from time to time.
Lien means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
Make-Whole Amount is defined in Section 8.6.
Material means material in relation to the business, operations, affairs, financial condition, assets or properties, of the Company and its Subsidiaries taken as a whole.
Material Adverse Effect means a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Company and its Subsidiaries taken as a whole, or (b) the ability of an Obligor to perform its obligations under this Agreement and the Notes, or (c) the validity or enforceability of this Agreement or the Notes.
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Memorandum is defined in Section 5.3.
Multiemployer Plan means any Plan that is a multiemployer plan (as such term is defined in section 4001(a)(3) of ERISA).
NAIC means the National Association of Insurance Commissioners or any successor thereto.
Net Proceeds Amount means, with respect to any Transfer of any property by the Company or any Subsidiary, an amount equal to the difference of:
(a) the aggregate amount of consideration (valued at the fair market value thereof by the Company or such Subsidiary in good faith) received by the Company or such Subsidiary in respect of such Transfer minus
(b) (i) all out-of-pocket costs and expenses actually incurred by the Company or such Subsidiary in connection with such Transfer.
Notes is defined in Section 1.1.
Obligor shall mean and include the Company and each Guarantor.
Officers Certificate means a certificate of a Senior Financial Officer or of any other officer of the Company whose responsibilities extend to the subject matter of such certificate.
PBGC means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto.
Permitted Securitization Transaction means any asset securitization transaction (i) which is a sale or other transfer by the Company or any Subsidiary to a Securitization Entity of an interest in accounts or notes receivable, which accounts and notes receivable do not, together with all other accounts and notes receivable then held by Securitization Entities, exceed an amount equal to 10% of Consolidated Total Assets (determined as of the end of the most recent fiscal quarter), and (ii) which is otherwise permitted by the terms of this Agreement and any other agreement binding on the Company or any of its Subsidiaries.
Person means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, or a government or agency or political subdivision thereof.
Plan means an employee benefit plan (as defined in section 3(3) of ERISA) subject to Title I of ERISA that is or, within the preceding five years, has been established or
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maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate may have any liability.
Preferred Stock means any class of capital stock of a Person that is preferred over any other class of capital stock (or similar equity interests) of such Person as to the payment of dividends or the payment of any amount upon liquidation or dissolution of such Person.
Priority Debt means, at any time, and without duplication the sum of (i) all Indebtedness of the Company or any Subsidiary secured by Liens (excluding Special Parity Liens) not otherwise permitted by clauses (a) through (k) of Sections 10.5 and (ii) all Indebtedness of Subsidiaries not otherwise permitted by clauses (a) through (e) of Section 10.9.
Property Reinvestment Application means, with respect to any Asset Disposition, the application of the Net Proceeds Amount (or a portion thereof) with respect to such Asset Disposition to the acquisition by the Company or any Subsidiary of fixed or capital assets of the Company or any Subsidiary to be used in the business of such Person.
property or properties means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate.
PTE is defined in Section 6.2(a).
Purchaser is defined in the first paragraph of this Agreement.
Qualified Acquisition means any acquisition of either or both the capital stock or assets of any Person or Persons (or any portion thereof), or the last to occur of a series of such acquisitions consummated within a period of six consecutive months, if the aggregate amount of Indebtedness incurred by one or more of the Company and its Subsidiaries to finance the purchase price of, or assumed by one or more of them in connection with the acquisition of, such stock and property is at least $100,000,000.
Qualified Institutional Buyer means any Person who is a qualified institutional buyer within the meaning of such term as set forth in Rule 144A(a)(1) under the Securities Act.
Related Fund means, with respect to any holder of any Note, any fund or entity that (i) invests in Securities or bank loans, and (ii) is advised or managed by such holder, the same investment advisor as such holder or by an affiliate of such holder or such investment advisor.
Required Holders means, at any time, the holders of at least 51% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates).
Responsible Officer means any Senior Financial Officer and any other officer of the Company with responsibility for the administration of the relevant portion of this Agreement.
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Sale and Leaseback Transaction means any sale or other transfer of any property or asset by any Person with the intent to lease such property or asset as lessee.
SEC shall mean the Securities and Exchange Commission of the United States, or any successor thereto.
Securities or Security shall have the meaning specified in Section 2(1) of the Securities Act.
Securities Act means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.
Securitization Entity means a wholly-owned Subsidiary of the Company that engages in no activities other than Permitted Securitization Transactions and any necessary related activities and owns no assets other than as required for Permitted Securitization Transactions and no portion of the Indebtedness (contingent or otherwise) of which is guaranteed by the Company or any Subsidiary of the Company or is recourse to or obligates the Company or any Subsidiary of the Company in any way, other than pursuant to customary representations, warranties, covenants, indemnities, performance guaranties and other obligations entered into in connection with a Permitted Securitization Transaction.
Senior Debt means and includes any Indebtedness of the Company or any Subsidiary thereof owing to any Person other than the Company, a Subsidiary thereof or an Affiliate and which is not expressed to be junior or subordinate to any other Indebtedness of the Company or such Subsidiary.
Senior Financial Officer means the chief financial officer, principal accounting officer, treasurer or comptroller of the Company.
Significant Subsidiary means at any time (i) each Guarantor and (ii) any other Subsidiary that would at such time constitute a significant subsidiary (as such term is defined in Regulation S-X of the SEC as in effect on the date of Closing) of the Company.
Special Parity Liens is defined in Section 10.5.
Spin-Off Dividend means the payment on the Effective Date by the Company of a dividend to FTI in an amount not to exceed $225,000,000.
Spin-Off Transaction means the tax-free distribution by FTI to its shareholders of the common stock of the Company in a transaction that transfers FTIs FoodTech and Airport Systems businesses to the Company (i) pursuant to which the Company will emerge as a separate publicly traded company, (ii) which will be effected by way of a dividend of the common stock and accompanying preferred share purchase rights (which will constitute all of the outstanding shares of the Companys common stock immediately after such transaction) and (iii) in connection with which the Company shall pay the Spin-Off Dividend.
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Subsidiary means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries). Unless the context otherwise clearly requires, any reference to a Subsidiary is a reference to a Subsidiary of the Company.
SVO means the Securities Valuation Office of the NAIC or any successor to such Office.
Transfer means, with respect to any Person, any transaction (including by merger, consolidation or disposition of all or substantially all the assets of such) in which such Person sells, conveys, transfers or leases (as lessor) any of its property, including, without limitation, capital stock of a Subsidiary.
USA Patriot Act means United States Public Law 107-56, Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.
Wholly-Owned Subsidiary means, at any time, any Subsidiary one hundred percent of all of the equity interests (except directors qualifying shares) and voting interests of which are owned by any one or more of the Company and the Companys other Wholly-Owned Subsidiaries at such time.
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[F ORM OF N OTE ]
J OHN B EAN T ECHNOLOGIES C ORPORATION
6.66% S ENIOR G UARANTEED N OTE D UE J ULY 31, 2015
No. R-[ ] |
[Date] | |
$[ ] | PPN 477839 A*5 |
F OR V ALUE R ECEIVED , the undersigned, J OHN B EAN T ECHNOLOGIES C ORPORATION , under the laws of the State of Delaware, hereby promises to pay to [ ], or registered assigns, the principal sum of [ ] D OLLARS (or so much thereof as shall not have been prepaid) on July 31, 2015, with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of 6.66% per annum from the date hereof, payable semiannually, on the 31st day of January and July in each year, commencing with the January or July next succeeding the date hereof, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, on any overdue payment of interest and, during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount, at a rate per annum from time to time equal to the greater of (i) 8.66% or (ii) 2% over the rate of interest publicly announced by JPMorgan Chase Bank, N.A. from time to time in New York, New York as its base or prime rate, payable semiannually as aforesaid (or, at the option of the registered holder hereof, on demand).
Payments of principal of, interest on and any Make-Whole Amount with respect to this Note are to be made in lawful money of the United States of America at JPMorgan Chase Bank, N.A. in New York, New York or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.
This Note is one of a series of Senior Notes (herein called the Notes ) issued pursuant to the Note Purchase Agreement, dated as of July 31, 2008 (as from time to time amended, the Note Purchase Agreement ), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof. Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) made the representation set forth in Section 6.2 of the Note Purchase Agreement. Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.
This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holders attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of,
the transferee. Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.
The Company will make required prepayments of principal on the dates and in the amounts specified in the Note Purchase Agreement. This Note is also subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.
If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.
This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by, the law of the State of New York, New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.
J OHN B EAN T ECHNOLOGIES C ORPORATION |
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By |
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Name: |
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Its: |
E-1-2
Exhibit 4.2
John Bean Technologies Corporation
Rights Agreement
Dated as of July 31, 2008
TABLE OF CONTENTS
Page | ||||
1. |
Definitions |
1 | ||
2. |
Appointment of Rights Agent |
4 | ||
3. |
Issue of Right Certificates |
4 | ||
4. |
Form of Right Certificates |
6 | ||
5. |
Countersignature and Registration |
6 | ||
6. |
Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates |
6 | ||
7. |
Exercise of Rights; Purchase Price; Expiration Date of Rights |
7 | ||
8. |
Cancellation and Destruction of Right Certificates |
8 | ||
9. |
Availability of Preferred Shares |
8 | ||
10. |
Preferred Shares Record Date |
10 | ||
11. |
Adjustment of Purchase Price, Number of Shares or Number of Rights |
10 | ||
12. |
Certificate of Adjusted Purchase Price or Number of Shares |
17 | ||
13. |
Consolidation, Merger or Sale or Transfer of Assets or Earning Power |
17 | ||
14. |
Fractional Rights and Fractional Shares |
18 | ||
15. |
Rights of Action |
19 | ||
16. |
Agreement of Right Holders |
19 | ||
17. |
Right Certificate Holder Not Deemed a Stockholder |
20 | ||
18. |
Concerning the Rights Agent |
20 | ||
19. |
Merger or Consolidation or Change of Name of Rights Agent |
21 | ||
20. |
Duties of Rights Agent |
21 | ||
21. |
Change of Rights Agent |
23 | ||
22. |
Issuance of New Right Certificates |
24 |
i
23. |
Redemption |
25 | ||
24. |
Exchange |
25 | ||
25. |
Notice of Certain Events |
26 | ||
26. |
Notices |
27 | ||
27. |
Supplements and Amendments |
28 | ||
28. |
Successors |
28 | ||
29. |
Benefits of this Agreement |
28 | ||
30. |
Severability |
29 | ||
31. |
Governing Law |
29 | ||
32. |
Counterparts |
29 | ||
33. |
Descriptive Headings |
29 | ||
34. |
Book-Entry Account Statements |
29 |
Exhibit A |
Form of Certificate of Designations |
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Exhibit B |
Form of Right Certificate |
|
Exhibit C |
Summary of Rights to Purchase Preferred Shares |
ii
Rights Agreement, dated as of July 31, 2008, between John Bean Technologies Corporation, a Delaware corporation (the Company), and National City Bank, as rights agent (the Rights Agent).
The Board of Directors of the Company has authorized and declared a dividend of one preferred share purchase right (a Right) for each Common Share (as hereinafter defined) of the Company outstanding as of the Close of Business on July 31, 2008 (the Record Date), each Right representing the right to purchase one one-hundredth of a Preferred Share (as hereinafter defined), upon the terms and subject to the conditions herein set forth, and has further authorized and directed the issuance of one Right with respect to each Common Share that shall become outstanding between the Record Date and the earliest of the Distribution Date, the Redemption Date and the Final Expiration Date (as such terms are hereinafter defined).
Accordingly, in consideration of the premises and the mutual agreements herein set forth, the parties hereby agree as follows:
1. |
Definitions . For purposes of this Agreement, the following terms have the meanings indicated: |
(a) |
Acquiring Person shall mean any Person who or which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of 15% or more of the Common Shares of the Company then outstanding, but shall not include (i) the Company, (ii) any Subsidiary of the Company, (iii) any employee benefit plan of the Company or any Subsidiary of the Company or (iv) any entity holding Common Shares for or pursuant to the terms of any such plan. Notwithstanding the foregoing, no Person shall become an Acquiring Person as the result of an acquisition of Common Shares by the Company which, by reducing the number of Common Shares of the Company outstanding, increases the proportionate number of Common Shares of the Company beneficially owned by such Person to 15% or more of the Common Shares of the Company then outstanding; provided, however, that, if a Person shall become the Beneficial Owner of 15% or more of the Common Shares of the Company then outstanding by reason of share purchases by the Company and shall, after such share purchases by the Company, become the Beneficial Owner of any additional Common Shares of the Company (other than as a result of a stock dividend, stock split or similar transaction in which all holders of Common Shares are treated equally), then such Person shall be deemed to be an Acquiring Person. Notwithstanding the foregoing, if the Board of Directors of the Company determines in good faith that a Person who would otherwise be an Acquiring Person, as defined pursuant to the foregoing provisions of this paragraph (a), has become such inadvertently, and such Person divests as promptly as practicable a sufficient number of Common Shares so that such Person would no longer be an Acquiring Person, as defined pursuant to the foregoing provisions of this paragraph (a), then such Person shall not be deemed to be an Acquiring Person for any purposes of this Agreement. |
(b) |
Affiliate shall have the meaning ascribed to such term in Rule12b-2 of the General Rules and Regulations under the Exchange Act as in effect on the date of this Agreement. |
(c) |
Associate shall have the meaning ascribed to such term in Rule12b-2 of the General Rules and Regulations under the Exchange Act as in effect on the date of this Agreement. |
(d) |
A Person shall be deemed the Beneficial Owner of and shall be deemed to beneficially own any securities: |
(i) which such Person or any of such Persons Affiliates or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Persons Affiliates or Associates has (A) the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities), or upon the exercise of conversion rights, exchange rights, rights (other than these Rights), warrants or options, or otherwise; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, securities tendered pursuant to a tender or exchange offer made by or on behalf of such Person or any of such Persons Affiliates or Associates until such tendered securities are accepted for purchase or exchange; or (B) the right to vote pursuant to any agreement, arrangement or understanding; provided, however, that a Person shall not be deemed the Beneficial Owner of, or to beneficially own, any security if the agreement, arrangement or understanding to vote such security (1) arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and regulations promulgated under the Exchange Act and (2) is not also then reportable on Schedule 13D under the Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by any other Person with which such Person or any of such Persons Affiliates or Associates has any agreement, arrangement or understanding (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities) for the purpose of acquiring, holding, voting (except to the extent contemplated by the proviso to Section 1(d)(ii)(B) hereof) or disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial Ownership to the contrary, the phrase then outstanding, when used with reference to a Persons Beneficial Ownership of securities of the Company, shall mean the number of such securities then issued and outstanding together with the number of such securities not then actually issued and outstanding which such Person would be deemed to own beneficially hereunder.
(e) |
Business Day shall mean any day other than a Saturday, a Sunday, or a day on which banking institutions in the State of Illinois are authorized or obligated by law or executive order to close. |
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(f) |
Close of Business on any given date shall mean 5:00 P.M., Chicago time, on such date; provided, however, that, if such date is not a Business Day, it shall mean 5:00 P.M., Chicago time, on the next succeeding Business Day. |
(g) |
Common Shares when used with reference to the Company shall mean the shares of common stock, par value $.01 per share, of the Company. Common Shares when used with reference to any Person other than the Company shall mean the capital stock (or equity interest) with the greatest voting power of such other Person or, if such other Person is a Subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned Person. |
(h) |
Distribution Date shall have the meaning set forth in Section 3(a) hereof. |
(i) |
Exchange Act shall mean the Securities Exchange Act of 1934, as amended. |
(j) |
Exchange Ratio shall have the meaning set forth in Section 24(a) hereof. |
(k) |
Final Expiration Date shall have the meaning set forth in Section 7(a) hereof. |
(l) |
NASDAQ shall mean The NASDAQ Stock Market. |
(m) |
Person shall mean any individual, firm, corporation or other entity, and shall include any successor (by merger or otherwise) of such entity. |
(n) |
Preferred Shares shall mean shares of Series A Junior Participating Preferred Stock, par value $.01 per share, of the Company having the rights and preferences set forth in the Form of Certificate of Designations attached to this Agreement as Exhibit A. |
(o) |
Purchase Price shall have the meaning set forth in Section 4 hereof. |
(p) |
Record Date shall have the meaning set forth in the second paragraph hereof. |
(q) |
Redemption Date shall have the meaning set forth in Section 7(a) hereof. |
(r) |
Redemption Price shall have the meaning set forth in Section 23(a) hereof. |
(s) |
Right shall have the meaning set forth in the second paragraph hereof. |
(t) |
Right Certificate shall have the meaning set forth in Section 3(a) hereof. |
(u) |
Shares Acquisition Date shall mean the first date of public announcement by the Company or an Acquiring Person that an Acquiring Person has become such. |
(v) |
Subsidiary of any Person shall mean any corporation or other entity of which a majority of the voting power of the voting equity securities or equity interest is owned, directly or indirectly, by such Person. |
(w) |
Summary of Rights shall have the meaning set forth in Section 3(b) hereof. |
3
(x) |
Trading Day shall have the meaning set forth in Section 11(d) hereof. |
2. |
Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as agent for the Company and the holders of the Rights (who, in accordance with Section 3 hereof, shall, prior to the Distribution Date, also be the holders of the Common Shares of the Company) in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-Rights Agents as it may deem necessary or desirable, and will promptly notify the Rights Agent of any such appointment. Any actions that may be taken by the Rights Agent pursuant to the terms of this Agreement may also be taken by any such co-Rights Agent. To the extent that any co-Rights Agent takes any action pursuant to this Agreement, such co-Rights Agent will be entitled to all of the rights and protections of, and subject to all of the applicable duties and obligations imposed upon, the Rights Agent pursuant to the terms of this Agreement. The Rights Agent will have no duty to supervise, and in no event shall be liable for, the acts or omissions of any co-Rights Agent. |
3. |
Issue of Right Certificates |
(a) |
Until the earlier of (i) the tenth day after the Shares Acquisition Date or (ii) the tenth Business Day (or such later date as may be determined by action of the Board of Directors of the Company prior to such time as any Person becomes an Acquiring Person) after the date of the commencement by any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company or any entity holding Common Shares of the Company for or pursuant to the terms of any such plan) of a tender or exchange offer the consummation of which would result in any Person becoming the Beneficial Owner of Common Shares of the Company aggregating 15% or more of the then outstanding Common Shares of the Company (including any such date which is after the date of this Agreement and prior to the issuance of the Rights; the earlier of such dates being herein referred to as the Distribution Date), (x) the Rights will be evidenced (subject to the provisions of Section 3(b) hereof) by the certificates for Common Shares of the Company registered in the names of the holders thereof (which certificates shall also be deemed to be Right Certificates) and not by separate Right Certificates, and (y) the right to receive Right Certificates will be transferable only in connection with the transfer of Common Shares of the Company. As soon as practicable after the Distribution Date, the Company will prepare and execute, the Rights Agent will countersign, and the Company will send or cause to be sent (and the Rights Agent will, if requested, send) by first-class, insured, postage-prepaid mail, to each record holder of Common Shares of the Company as of the Close of Business on the Distribution Date, at the address of such holder shown on the records of the Company, a Right Certificate, in substantially the form of Exhibit B hereto (a Right Certificate), evidencing one Right for each Common Share so held. As of the Distribution Date, the Rights will be evidenced solely by such Right Certificates. |
4
(b) |
On the Record Date, or as soon as practicable thereafter, the Company will make available upon request a copy of a Summary of Rights to Purchase Preferred Shares, in substantially the form of Exhibit C hereto (the Summary of Rights) to each record holder of Common Shares as of the Close of Business on the Record Date. With respect to certificates for Common Shares of the Company outstanding as of the Record Date, until the Distribution Date, the Rights will be evidenced by such certificates registered in the names of the holders thereof. Until the Distribution Date (or the earlier of the Redemption Date or the Final Expiration Date), the surrender for transfer of any certificate for Common Shares of the Company outstanding on the Record Date shall also constitute the transfer of the Rights associated with the Common Shares of the Company represented thereby. |
(c) |
Certificates for Common Shares which become outstanding (including, without limitation, reacquired Common Shares referred to in the last sentence of this paragraph (c)) after the Record Date but prior to the earliest of the Distribution Date, the Redemption Date or the Final Expiration Date shall have impressed on, printed on, written on or otherwise affixed to them the following legend: |
This certificate also evidences and entitles the holder hereof to certain rights as set forth in an Agreement between John Bean Technologies Corporation and National City Bank, dated as of July 31, 2008, as it may be amended from time to time (the Agreement), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the principal executive offices of John Bean Technologies Corporation. Under certain circumstances, as set forth in the Agreement, such Rights (as defined in the Agreement) will be evidenced by separate certificates and will no longer be evidenced by this certificate. John Bean Technologies Corporation will mail to the holder of this certificate a copy of the Agreement without charge after receipt of a written request therefor. As set forth in the Agreement, Rights beneficially owned by any Person (as defined in the Agreement) who becomes an Acquiring Person (as defined in the Agreement) become null and void.
With respect to such certificates containing the foregoing legend, until the Distribution Date, the Rights associated with the Common Shares of the Company represented by such certificates shall be evidenced by such certificates alone, and the surrender for transfer of any such certificate shall also constitute the transfer of the Rights associated with the Common Shares of the Company represented thereby. In the event that the Company purchases or acquires any Common Shares of the Company after the Record Date but prior to the Distribution Date, any
5
Rights associated with such Common Shares of the Company shall be deemed cancelled and retired so that the Company shall not be entitled to exercise any Rights associated with the Common Shares of the Company which are no longer outstanding.
4. |
Form of Right Certificates . The Right Certificates (and the forms of election to purchase Preferred Shares and of assignment to be printed on the reverse thereof) shall be substantially the same as Exhibit B hereto, and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement, and as do not affect the rights, duties or responsibilities of the Rights Agent, or as may be required to comply with any applicable law or with any applicable rule or regulation made pursuant thereto or with any applicable rule or regulation of any stock exchange or the National Association of Securities Dealers, Inc., or to conform to usage. Subject to the provisions of Section 22 hereof, the Right Certificates shall entitle the holders thereof to purchase such number of one one-hundredths of a Preferred Share as shall be set forth therein at the price per one one-hundredth of a Preferred Share set forth therein (the Purchase Price), but the number of such one one-hundredths of a Preferred Share and the Purchase Price shall be subject to adjustment as provided herein. |
5. |
Countersignature and Registration. The Right Certificates shall be executed on behalf of the Company by its Chairman of the Board, its Chief Executive Officer, its President, any of its Vice Presidents or its Treasurer, either manually or by facsimile signature, shall have affixed thereto the Companys seal or a facsimile thereof, and shall be attested by the Secretary or an Assistant Secretary of the Company, either manually or by facsimile signature. The Right Certificates shall be countersigned by the Rights Agent by manual or facsimile signature, and such Rights Certificates shall not be valid for any purpose unless countersigned. In case any officer of the Company who shall have signed any of the Right Certificates shall cease to be such officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates, nevertheless, may be countersigned by the Rights Agent and issued and delivered by the Company with the same force and effect as though the individual who signed such Right Certificates had not ceased to be such officer of the Company; and any Right Certificate may be signed on behalf of the Company by any individual who, at the actual date of the execution of such Right Certificate, shall be a proper officer of the Company to sign such Right Certificate, although at the date of the execution of this Agreement any such individual was not such an officer. |
Following the Distribution Date, the Rights Agent will keep or cause to be kept, at its principal office, books for registration and transfer of the Right Certificates issued hereunder. Such books shall show the names and addresses of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates and the date of each of the Right Certificates.
6. |
Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates . Subject to the provisions of Section 14 hereof, at any time after the Close of Business on the Distribution Date, and at or prior to the Close of Business on the earlier of the Redemption Date or the Final Expiration Date, |
6
any Right Certificate or Right Certificates (other than Right Certificates representing Rights that have become void pursuant to Section 11(a)(ii) hereof or that have been exchanged pursuant to Section 24 hereof) may be transferred, split up, combined or exchanged for another Right Certificate or Right Certificates entitling the registered holder to purchase a like number of one one-hundredths of a Preferred Share as the Right Certificate or Right Certificates surrendered then entitled such holder to purchase. Any registered holder desiring to transfer, split up, combine or exchange any Right Certificate or Right Certificates shall make such request in writing delivered to the Rights Agent, and shall surrender the Right Certificate or Right Certificates to be transferred, split up, combined or exchanged at the principal office of the Rights Agent. Thereupon the Rights Agent shall countersign and deliver to the Person entitled thereto a Right Certificate or Right Certificates, as the case may be, as so requested. The Company may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Right Certificates. |
Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a Right Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to them, and, at the Companys request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Right Certificate if mutilated, the Company will make and deliver a new Right Certificate of like tenor to the Rights Agent for delivery to the registered holder in lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
7. |
Exercise of Rights; Purchase Price; Expiration Date of Rights. |
(a) |
The registered holder of any Right Certificate may exercise the Rights evidenced thereby (except as otherwise provided herein), in whole or in part, at any time after the Distribution Date, upon surrender of the Right Certificate, with the form of election to purchase on the reverse side thereof duly executed, to the Rights Agent at the principal office of the Rights Agent, together with payment of the Purchase Price for each one one-hundredth of a Preferred Share as to which the Rights are exercised, at or prior to the earliest of (i) the Close of Business on July 31, 2018 (the Final Expiration Date), (ii) the time at which the Rights are redeemed as provided in Section 23 hereof (the Redemption Date), or (iii) the time at which such Rights are exchanged as provided in Section 24 hereof. |
(b) |
The Purchase Price for each one one-hundredth of a Preferred Share purchasable pursuant to the exercise of a Right shall initially be $72.00, and shall be subject to adjustment from time to time as provided in Section 11 or 13 hereof, and shall be payable in lawful money of the United States of America in accordance with paragraph (c) below. |
(c) |
Upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase duly executed, accompanied by payment of the Purchase Price for the shares to be purchased and an amount equal to any applicable |
7
transfer tax required to be paid by the holder of such Right Certificate in accordance with Section 9 hereof by certified check, cashiers check or money order payable to the order of the Company, the Rights Agent shall thereupon promptly (i) (A) requisition from any transfer agent of the Preferred Shares certificates for the number of Preferred Shares to be purchased and the Company hereby irrevocably authorizes any such transfer agent to comply with all such requests, or (B) requisition from the depositary agent depositary receipts representing such number of one one-hundredths of a Preferred Share as are to be purchased (in which case certificates for the Preferred Shares represented by such receipts shall be deposited by the transfer agent of the Preferred Shares with such depositary agent) and the Com directs such depositary agent to comply with such request; (ii) when appropriate, requisition from the Company the amount of cash to be paid in lieu of issuance of fractional shares in accordance with Section 14 hereof; (iii) promptly after receipt of such certificates or depositary receipts, cause the same to be delivered to or upon the order of the registered holder of such Right Certificate, registered in such name or names as may be designated by such holder; and (iv) when appropriate, after receipt, promptly deliver such cash to or upon the order of the registered holder of such Right Certificate. |
(d) |
In case the registered holder of any Right Certificate shall exercise less than all the Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent to registered holder of such Right Certificate or to such holders duly authorized assigns, subject to the provisions of Section 14 hereof. |
8. |
Cancellation and Destruction of Right Certificates . All Right Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered to the Rights Agent for cancellation or in cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights Agent shall so cancel and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all cancelled Right Certificates to the Company, or shall, at the written request of the Company, destroy such cancelled Right Certificates, and, in such case, shall deliver a certificate of destruction thereof to the Company. |
9. |
Availability of Preferred Shares. |
(a) |
The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued Preferred Shares or any Preferred Shares held in its treasury the number of Preferred Shares that will be sufficient to permit the exercise in full of all outstanding Rights in accordance with Section 7 hereof. The Company covenants and agrees that it will take all such action as may be necessary to ensure that all Preferred Shares delivered upon exercise of Rights shall, at the time of delivery of the certificates for such Preferred Shares (subject to payment of the Purchase Price), be duly and validly authorized and issued and fully paid and nonassessable shares. |
8
(b) |
The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect of the issuance or delivery of the Right Certificates or of any Preferred Shares upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax which may be payable in respect of any transfer or delivery of Right Certificates to a Person other than, or the issuance or delivery of certificates or depositary receipts for the Preferred Shares in a name other than that of, the registered holder of the Right Certificate evidencing Rights surrendered for exercise or to issue or to deliver any certificates or depositary receipts for Preferred Shares upon the exercise of any Rights until any such tax shall have been paid (any such tax being payable by the holder of such Right Certificate at the time of surrender) or until it has been established to the Companys reasonable satisfaction that no such tax is due. |
(c) |
The Company further covenants and agrees, for so long as the Preferred Shares (and, following the date any Person becomes an Acquiring Person, shares of Common Stock and/or other securities) issuable upon the exercise of Rights may be listed on any United States national securities exchange or quoted on any automated quotation system, to use its best efforts to cause, from and after the time that the Rights become exercisable, all such shares and/or other securities reserved for such issuance to be listed on such exchange or quoted on such automated quotation system upon official notice of issuance. |
(d) |
The Company shall (i) as soon as practicable after any Person becomes an Acquiring Person (or such earlier time following the Distribution Date as may be required by law), prepare and file a registration statement on an appropriate form under the Securities Act with respect to the securities purchasable upon exercise of the Rights, (ii) cause such registration statement to become effective as soon as practicable after such filing, and (iii) cause such registration statement to remain effective (with a prospectus at all times meeting the requirements of the Securities Act) until the earlier of (A) the date as of which Rights are no longer exercisable for such securities and (B) the Expiration Date. The Company shall also take such action as may be necessary or appropriate under, or to ensure compliance with, the securities or blue sky laws of the various states in connection with the exercise of the Rights. The Company may temporarily suspend, for a period of time not to exceed 90 days after the date set forth in clause (i) of the first sentence of this Section 9(d), the exercisability of the Rights in order to prepare and file such registration statement and permit it to become effective. Upon any such suspension, the Company shall make a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be exercisable in any jurisdiction if the requisite qualification in such jurisdiction shall not have been obtained, the exercise thereof shall not be permitted by applicable law or a registration statement shall not have been declared effective. |
9
10. |
Preferred Shares Record Date. Each Person in whose name any certificate for Preferred Shares is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the Preferred Shares represented thereby on, and such certificate shall be dated, the date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and any applicable transfer taxes) was made; provided, however, that, if the date of such surrender and payment is a date upon which the Preferred Shares transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding Business Day on which the Preferred Shares transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not be entitled to any rights of a holder of Preferred Shares for which the Rights shall be exercisable, including, without limitation, the right to vote, to receive dividends or other distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein. |
11. |
Adjustment of Purchase Price, Number of Shares or Number of Rights. The Purchase Price, the number of Preferred Shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11. |
(a) |
(i) |
In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Shares payable in Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine the outstanding Preferred Shares into a smaller number of Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), except as otherwise provided in this Section 11(a), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of capital stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Shares transfer books of the Company were open, such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. |
10
(ii) |
Subject to Section 24 hereof, in the event any Person becomes an Acquiring Person, each holder of a Right shall thereafter have a right to receive, upon exercise thereof at a price equal to the then current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of Preferred Shares, such number of Common Shares of the Company as shall equal the result obtained by (A) multiplying the then current Purchase Price by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable and dividing that product by (B) 50% of the then current per share market price of the Common Shares of the Company (determined pursuant to Section 11(d) hereof) on the date of the occurrence of such event. In the event that any Person shall become an Acquiring Person and the Rights shall then be outstanding, the Company shall not take any action which would eliminate or diminish the benefits intended to be afforded by the Rights. |
From and after the occurrence of such event, any Rights that are or were acquired or beneficially owned by any Acquiring Person (or any Associate or Affiliate of such Acquiring Person) shall be void, and any holder of such Rights shall thereafter have no right to exercise such Rights under any provision of this Agreement. No Right Certificate shall be issued pursuant to Section 3 hereof that represents Rights beneficially owned by an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof; no Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and any Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person whose Rights would be void pursuant to the preceding sentence shall be cancelled.
(iii) |
In the event that there shall not be sufficient Common Shares issued but not outstanding or authorized but unissued to permit the exercise in full of the Rights in accordance with subparagraph (ii) above, the Company shall take all such action as may be necessary to authorize additional Common Shares for issuance upon exercise of the Rights. In the event the Company shall, after good faith effort, be unable to take all such action as may be necessary to authorize such additional Common Shares, the Company shall substitute, for each Common Share that would otherwise be issuable upon exercise of a Right, a number of Preferred Shares or fraction thereof such that the current per share market price of one Preferred Share multiplied by such number or fraction is equal to the current per share market price of one Common Share as of the date of issuance of such Preferred Shares or fraction thereof. |
(b) |
In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Shares entitling them (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Preferred Shares (or shares having the same rights, privileges and preferences as |
11
the Preferred Shares (equivalent preferred shares)) or securities convertible into Preferred Shares or equivalent preferred shares at a price per Preferred Share or equivalent preferred share (or having a conversion price per share, if a security convertible into Preferred Shares or equivalent preferred shares) less than the then current per share market price of the Preferred Shares (as defined in Section 11(d)) on such record date, the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the number of Preferred Shares outstanding on such record date plus the number of Preferred Shares which the aggregate offering price of the total number of Preferred Shares and/or equivalent preferred shares so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such current market price and the denominator of which shall be the number of Preferred Shares outstanding on such record date plus the number of additional Preferred Shares and/or equivalent preferred shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and holders of the Rights. Preferred Shares owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed; and, in the event that such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. |
(c) |
In case the Company shall fix a record date for the making of a distribution to all holders of the Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend payable in Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the then-current per share market price of the Preferred Shares on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and holders of the Rights) of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one Preferred Share and the denominator of which shall be such then-current per share market price of the |
12
Preferred Shares on such record date; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and, in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed. |
(d) |
(i) |
For the purpose of any computation hereunder, the current per share market price of any security (a Security for the purpose of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such Security for the 30 consecutive Trading Days immediately prior to such date; provided, however, that, in the event that the current per share market price of the Security is determined during a period following the announcement by the issuer of such Security of (A) a dividend or distribution on such Security payable in shares of such Security or Securities convertible into such shares, or (B) any subdivision, combination or reclassification of such Security and prior to the expiration of 30 Trading Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the current per share market price shall be appropriately adjusted to reflect the current market price per share equivalent of such Security. The closing price for each day shall be the last sale price, regular way, reported at or prior to 4:00 P.M. New York City time or, in case no such sale takes place on such day, the average of the bid and asked prices, regular way, reported as of 4:00 P.M. New York City time, in either case, as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Security is not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Security is listed or admitted to trading or, if the Security is not listed or admitted to trading on any national securities exchange, the last quoted price reported at or prior to 4:00 P.M. New York City time or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported as of 4:00 P.M. New York City time by NASDAQ or such other system then in use, or, if on any such date the Security is not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board of Directors of the Company. The term Trading Day shall mean a day on which the principal national securities exchange on which the Security is listed or admitted to trading is open for the transaction of business, or, if the Security is not listed or admitted to trading on any national securities exchange, a Business Day. |
13
(ii) |
For the purpose of any computation hereunder, the current per share market price of the Preferred Shares shall be determined in accordance with the method set forth in Section 11(d)(i). If the Preferred Shares are not publicly traded, the current per share market price of the Preferred Shares shall be conclusively deemed to be the current per share market price of the Common Shares as determined pursuant to Section 11(d)(i) hereof (appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof), multiplied by one hundred. If neither the Common Shares nor the Preferred Shares are publicly held or so listed or traded, current per share market price shall mean the fair value per share as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent. |
(e) |
No adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Purchase Price; provided, however, that any adjustments which by reason of this Section 11(e) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest one one-millionth of a Preferred Share or one ten-thousandth of any other share or security as the case may be. Notwithstanding the first sentence of this Section 11(e), any adjustment required by this Section 11 shall be made no later than the earlier of (i) three years from the date of the transaction which requires such adjustment or (ii) the date of the expiration of the right to exercise any Rights. |
(f) |
If, as a result of an adjustment made pursuant to Section 11(a) hereof, the holder of any Right thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than Preferred Shares, thereafter the number of such other shares so receivable upon exercise of any Right shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Preferred Shares contained in Section 11(a) through (c) hereof, inclusive, and the provisions of Sections 7, 9, 10 and 13 hereof with respect to the Preferred Shares shall apply on like terms to any such other shares. |
(g) |
All Rights originally issued by the Company subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number of one one-hundredths of a Preferred Share purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein. |
(h) |
Unless the Company shall have exercised its election as provided in Section 11(i) hereof, upon each adjustment of the Purchase Price as a result of the calculations made in Sections 11(b) and (c) hereof, each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one one-hundredths of a Preferred |
14
Share (calculated to the nearest one one- millionth of a Preferred Share) obtained by (A) multiplying (x) the number of one one-hundredths of a share covered by a Right immediately prior to this adjustment by (y) the Purchase Price in effect immediately prior to such adjustment of the Purchase Price and (B) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price. |
(i) |
The Company may elect, on or after the date of any adjustment of the Purchase Price, to adjust the number of Rights in substitution for any adjustment in the number of one one-hundredths of a Preferred Share purchasable upon the exercise of a Right. Each of the Rights outstanding after such adjustment of the number of Rights shall be exercisable for the number of one one-hundredths of a Preferred Share for which a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one ten-thousandth) obtained by dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the Purchase Price is adjusted or any day thereafter, but, if the Right Certificates have been issued, shall be at least 10 days later than the date of the public announcement. If Right Certificates have been issued, upon each adjustment of the number of Rights pursuant to this Section 11(i), the Company shall, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to Section 14 hereof, the additional Rights to which such holders shall be entitled as a result of such adjustment, or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Right Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Company, new Right Certificates evidencing all the Rights to which such holders shall be entitled after such a Right Certificates so to be distributed shall be issued, executed and countersigned in the manner provided for herein, and shall be registered in the names of the holders of record of Right Certificates on the record date specified in the public announcement. |
(j) |
Irrespective of any adjustment or change in the Purchase Price or in the number of one one-hundredths of a Preferred Share issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price and the number of one one-hundredths of a Preferred Share which were expressed in the initial Right Certificates issued hereunder. |
(k) |
Before taking any action that would cause an adjustment reducing the Purchase Price below one one-hundredth of the then par value, if any, of the Preferred Shares issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and nonassessable Preferred Shares at such adjusted Purchase Price. |
15
(l) |
In any case in which this Section 11 shall require that an adjustment in the Purchase Price be made effective as of a record date for a specified event, the Company may elect to defer until the occurrence of such event the issuing to the holder of any Right exercised after such record date of the Preferred Shares and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the Preferred Shares and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided, however, that the Company shall deliver to such holder a due bill or other appropriate instrument evidencing such holders right to receive such additional shares upon the occurrence of the event requiring such adjustment. |
(m) |
Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that it, in its sole discretion, shall determine to be advisable in order that any consolidation or subdivision of the Preferred Shares, issuance wholly for cash of any Preferred Shares at less than the current market price, issuance wholly for cash of Preferred Shares or securities which by their terms are convertible into or exchangeable for Preferred Shares, dividends on Preferred Shares payable in Preferred Shares or issuance of rights, options or warrants referred to in Section 11(b) hereof, hereafter made by the Company to holders of the Preferred Shares shall not be taxable to such stockholders. |
(n) |
In the event that, at any time after the date of this Agreement and prior to the Distribution Date, the Company shall (i) declare or pay any dividend on the Common Shares payable in Common Shares, or (ii) effect a subdivision, combination or consolidation of the Common Shares (by reclassification or otherwise than by payment of dividends in Common Shares) into a greater or lesser number of Common Shares, then, in any such case, (A) the number of one one-hundredths of a Preferred Share purchasable after such event upon proper exercise of each Right shall be determined by multiplying the number of one one-hundredths of a Preferred Share so purchasable immediately prior to such event by a fraction, the numerator of which is the number of Common Shares outstanding immediately before such event and the denominator of which is the number of Common Shares outstanding immediately after such event, and (B) each Common Share outstanding immediately after such event shall have issued with respect to it that number of Rights which each Common Share outstanding immediately prior to such event had issued with respect to it. The adjustments provided for in this Section 11(n) shall be made successively whenever such a dividend is declared or paid or such a subdivision, combination or consolidation is effected. |
16
12. |
Certificate of Adjusted Purchase Price or Number of Shares . Whenever an adjustment is made as provided in Section 11 or 13 hereof, the Company shall promptly (a) prepare a certificate setting forth such adjustment and a brief statement of the facts accounting for such adjustment, (b) file with the Rights Agent and with each transfer agent for the Common Shares or the Preferred Shares and the Securities and Exchange Commission a copy of such certificate and (c) if such adjustment occurs at any time after the Distribution Date, mail a brief summary thereof to each holder of a Right Certificate in accordance with Section 25 hereof. |
13. |
Consolidation, Merger or Sale or Transfer of Assets or Earning Power . In the event, directly or indirectly, at any time after a Person has become an Acquiring Person, (a) the Company shall consolidate with, or merge with and into, any other Person, (b) any Person shall consolidate with the Company, or merge with and into the Company and the Company shall be the continuing or surviving corporation of such merger and, in connection with such merger, all or part of the Common Shares shall be changed into or exchanged for stock or other securities of any other Person (or the Company) or cash or any other property, or (c) the Company shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise transfer), in one or more transactions, assets or earning power aggregating 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to any other Person other than the Company or one or more of its wholly-owned Subsidiaries, then, and in each such case, proper provision shall be made so that (i) each holder of a Right (except as otherwise provided herein) shall thereafter have the right to receive, upon the exercise thereof at a price equal to the then current Purchase Price multiplied by the number of one one- hundredths of a Preferred Share for which a Right is then exercisable, in accordance with the terms of this Agreement and in lieu of Preferred Shares, such number of Common Shares of such other Person (including the Company as successor thereto or as the surviving corporation) as shall equal the result obtained by (A) multiplying the then current Purchase Price by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable and dividing that product by (B) 50% of the then current per share market price of the Common Shares of such other Person (determined pursuant to Section 11(d) hereof) on the date of consummation of such consolidation, merger, sale or transfer; (ii) the issuer of such Common Shares shall thereafter be liable for, and shall assume, by virtue of such consolidation, merger, sale or transfer, all the obligations and duties of the Company pursuant to this Agreement; (iii) the term Company shall thereafter be deemed to refer to such issuer; and (iv) such issuer shall take such steps (including, but not limited to, the reservation of a sufficient number of its Common Shares in accordance with Section 9 hereof) in connection with such consummation as may be necessary to assure that the provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to the Common Shares of the Company thereafter deliverable upon the exercise of the Rights. The Company shall not consummate any such consolidation, merger, sale or transfer unless, prior thereto, the Company and such issuer shall have executed and delivered to the Rights Agent a supplemental agreement so providing. The Company shall not enter into any transaction of the kind referred to in this Section 13 if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements or arrangements which, as a result of the consummation of such transaction, would eliminate or substantially diminish the benefits intended to be afforded by the Rights. The provisions of this Section 13 shall similarly apply to successive mergers or consolidations or sales or other transfers. |
17
14. |
Fractional Rights and Fractional Shares. |
(a) |
The Company shall not be required to issue fractions of Rights or to distribute Right Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be paid to the registered holders of the Right Certificates with regard to which such fractional Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current market value of a whole Right. For the purposes of this Section 14(a), the current market value of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the date on which such fractional Rights would have been otherwise issuable. The closing price for any day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case, as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New York Stock Exchange or, if the Rights are not listed or admitted to trading on the New York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the Rights are listed or admitted to trading or, if the Rights are not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by NASDAQ or such other system then in use or, if on any such date the Rights are not quoted by any such organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Rights selected by the Board of Directors of the Company. If on any such date no such market maker is making a market in the Rights, the fair value of the Rights on such date as determined in good faith by the Board of Directors of the Company shall be used. |
(b) |
The Company shall not be required to issue fractions of Preferred Shares (other than fractions which are integral multiples of one one-hundredth of a Preferred Share) upon exercise of the Rights or to distribute certificates which evidence fractional Preferred Shares (other than fractions which are integral multiples of one one-hundredth of a Preferred Share). Fractions of Preferred Shares in integral multiples of one one-hundredth of a Preferred Share may, at the election of the Company, be evidenced by depositary receipts, pursuant to an appropriate agreement between the Company and a depositary selected by it; provided that such agreement shall provide that the holders of such depositary receipts shall have all the rights, privileges and preferences to which they are entitled as beneficial owners of the Preferred Shares represented by such depositary receipts. In lieu of fractional Preferred Shares that are not integral multiples of one one-hundredth of a Preferred Share, the Company shall pay to the registered holders of Right Certificates at the time such Rights are exercised as herein provided an amount in cash equal to the same fraction of the current market value of one |
18
Preferred Share. For the purposes of this Section 14(b), the current market value of a Preferred Share shall be the closing price of a Preferred Share (as determined pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of such exercise. |
(c) |
The holder of a Right, by the acceptance of the Right, expressly waives such holders right to receive any fractional Rights or any fractional shares upon exercise of a Right (except as provided above). |
15. |
Rights of Action. All rights of action in respect of this Agreement, excepting the rights of action given to the Rights Agent hereunder, are vested in the respective registered holders of the Right Certificates (and, prior to the Distribution Date, the registered holders of the Common Shares); and any registered holder of any Right Certificate (or, prior to the Distribution Date, of the Common Shares), without the consent of the Rights Agent or of the holder of any other Right Certificate (or, prior to the Distribution Date, of the Common Shares), may, in such holders own behalf and for such holders own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, such holders right to exercise the Rights evidenced by such Right Certificate in the manner provided in such Right Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement, and will be entitled to specific performance of the obligations under, and injunctive relief against actual or threatened violations of the obligations of any Person subject to, this Agreement. |
16. |
Agreement of Right Holders. Every holder of a Right, by accepting the same, consents and agrees with the Company and the Rights Agent and with every other holder of a Right that: |
(a) |
prior to the Distribution Date, the Rights will be transferable only in connection with the transfer of the Common Shares; |
(b) |
after the Distribution Date, the Right Certificates are transferable only on the registry books of the Rights Agent if surrendered at the principal office of the Rights Agent, duly endorsed or accompanied by a proper instrument of transfer; and |
(c) |
the Company and the Rights Agent may deem and treat the person in whose name the Right Certificate (or, prior to the Distribution Date, the associated Common Shares certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Right Certificate or the associated Common Shares certificate made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected by any notice to the contrary. |
19
17. |
Right Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Right Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the Preferred Shares or any other securities of the Company which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in Section 25 hereof), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Right Certificate shall have been exercised in accordance with the provisions hereof. |
18. | Concerning the Rights Agent. |
(a) |
The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder, and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the preparation, administration and execution of this Agreement and the exercise and performance of its duties hereunder. The Company also agrees to indemnify the Rights Agent for, and to hold it harmless against, any loss, liability, damage, judgment, fine, penalty, claim, demand, cost or expense incurred without negligence, bad faith or willful misconduct on the part of the Rights Agent (which gross negligence, bad faith or willful misconduct must be determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction), for anything done or omitted by the Rights Agent in connection with the acceptance and administration of this Agreement and the performance of its duties and responsibilities and the exercise of its rights hereunder, including the costs and expenses of defending against any claim of liability in the premises. The costs and expenses of enforcing this right of indemnification will also be paid by the Company. The provisions of this Section 18 shall survive the exercise, exchange, redemption or expiration of the Rights, the resignation, replacement or removal of the Rights Agent and the termination of this Agreement. |
(b) |
The Rights Agent may conclusively rely on, and will be protected and shall incur no liability for, or in respect of any action taken, suffered or omitted by it in connection with, its administration of this Agreement and the performance of its duties and responsibilities and the exercise of its rights hereunder, in reliance upon any Right Certificate or certificate for the Preferred Shares or Common Shares or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement, or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper person or persons, or otherwise upon the advice of counsel as set forth in Section 20 hereof. |
20
(c) |
Notwithstanding anything in this Agreement to the contrary, in no event will the Rights Agent be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits), even if the Rights Agent has been advised of the likelihood of such loss or damage and regardless of the form of action. |
19. |
Merger or Consolidation or Change of Name of Rights Agent. Any Person into which the Rights Agent or any successor Rights Agent may be merged or with which it may be consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to the stock transfer or corporate trust powers of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto; provided that such Person would be eligible for appointment as a successor Rights Agent under the provisions of Section 21 hereof. In case at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Right Certificates shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates so countersigned; and, in case at that time any of the Right Certificates shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and, in all such cases, such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement. |
In case at any time the name of the Rights Agent shall be changed and at such time any of the Right Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned; and, in case at that time any of the Right Certificates shall not have been countersigned, the Rights Agent may countersign such Right Certificates either in its prior name or in its changed name; and, in all such cases, such Right Certificates shall have the full force provided in the Right Certificates and in this Agreement.
20. |
Duties of Rights Agent. The Rights Agent undertakes to perform only the duties and obligations expressly imposed by this Agreement (and no implied duties or obligations, other than the duty of good faith, shall be read into this Agreement against the Rights Agent) only upon the following terms and conditions, by all of which the Company and the holders of Right Certificates, by their acceptance thereof, shall be bound: |
(a) |
Before the Rights Agent acts or refrains from acting, the Rights Agent may consult with legal counsel (who may be legal counsel for the Company), and the advice or opinion of such counsel shall be full and complete authorization and protection to the Rights Agent, and the Rights Agent shall incur no liability for or in respect of any action taken or omitted by it in good faith and in accordance with such advice or opinion. |
(b) |
Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or matter be proved or |
21
established by the Company prior to taking or suffering or omitting to take any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by any one of the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Treasurer or the Secretary of the Company and delivered to the Rights Agent; and such certificate shall be full authorization to the Rights Agent for any action taken, suffered or omitted in good faith by it under the provisions of this Agreement in reliance upon such certificate. |
(c) |
The Rights Agent shall be liable hereunder to the Company and any other Person only for its own gross negligence, bad faith or willful misconduct (which gross negligence, bad faith or willful misconduct must be determined by a final, non-appealable court of competent jurisdiction). |
(d) |
The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Right Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only. |
(e) |
The Rights Agent will not have any liability for or be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the validity or execution of any Right Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Right Certificate; nor shall it be responsible for any change in the exercisability of the Rights (including the Rights becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment in the terms of the Rights (including the manner, method or amount thereof) provided for in Section 3, 11, 13, 23 or 24 hereof, or the ascertaining of the existence of facts that would require any such change or adjustment (except with respect to the exercise of Rights evidenced by Right Certificates after actual notice that such change or adjustment is required); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any Preferred Shares to be issued pursuant to this Agreement or any Right Certificate or as to whether any Preferred Shares will, when issued, be validly authorized and issued, fully paid and nonassessable. |
(f) |
The Company agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement. |
(g) |
The Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties and the exercise of its rights hereunder from any person believed in good faith by the Rights Agent to be the Chairman of |
22
the Board, the Chief Executive Officer, the President, any Vice President, the Secretary or the Treasurer of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable for any action taken or suffered by it in good faith in accordance with instructions of any such officer or for any delay in acting while waiting for those instructions. |
(h) |
The Rights Agent and any stockholder, affiliate, director, officer or employee of the Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity for the Company or for any other legal entity. |
(i) |
The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Company or any other Person resulting from any such act, default, neglect or misconduct, absent gross negligence, bad faith or willful misconduct in the selection and continued employment thereof (which gross negligence, bad faith or willful misconduct must be determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction). The Rights Agent will not be under any duty or responsibility to ensure compliance with any applicable securities laws in connection with the issuance, transfer or exchange of Rights Certificates. |
(j) |
No provision of this Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of its rights if there shall be reasonable grounds for believing that repayment of such funds or adequate indemnification against such risk or liability is not reasonably assured to it. |
(k) |
The Rights Agent will not be required to take notice or be deemed to have notice of any fact, event or determination (including, without limitation, any dates or events defined in this Agreement or the designation of any Person as an Acquiring Person, Affiliate or Associate) under this Agreement unless and until the Rights Agent is specifically notified in writing by the Company of such fact, event or determination. |
(l) |
The provisions of this Section 20 shall survive the exercise, exchange, redemption or expiration of the Rights, the resignation, replacement or removal of the Rights Agent and the termination of this Agreement. |
21. |
Change of Rights Agent . The Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon 30 days notice in writing mailed to the Company and to each transfer agent of the Common Shares or Preferred Shares by registered |
23
or certified mail, and to the holders of the Right Certificates by first-class mail. The Company may remove the Rights Agent or any successor Rights Agent upon 30 days notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Shares or Preferred Shares by registered or certified mail, and to the holders of the Right Certificates by (i) first-class mail or (ii) by disclosure in a periodic report of the Company required to be filed under the Exchange Act, any permitted report under the Exchange Act, a press release of the Company or in any proxy or other communication by the Company to its stockholders. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a period of 30 days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a Right Certificate (which holder shall, with such notice, submit such holders Right Certificate for inspection by the Company), then the registered holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be a Person organized and doing business under the laws of the United States or of the State of Illinois (or of any other state of the United States so long as such Person is authorized to do business as a banking institution in the State of Illinois), in good standing, having an office in the State of Illinois, which is authorized under such laws to exercise corporate trust or stock transfer powers and is subject to supervision or examination by federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $50 million. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Shares or Preferred Shares, and either (i) mail a notice thereof in writing to the registered holders of the Right Certificates or (ii) disclose such appointment in a periodic report of the Company required to be filed under the Exchange Act, any permitted report under the Exchange Act, a press release of the Company or in any proxy or other communication by the Company to its stockholders. Failure to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be. |
22. |
Issuance of New Right Certificates . Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary, the Company may, at its option, issue new Right Certificates evidencing Rights in such form as may be approved by the Board of Directors of the Company to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or property purchasable under the Right Certificates made in accordance with the provisions of this Agreement. |
24
23. Redemption.
(a) |
The Board of Directors of the Company may, at its option, at any time prior to such time as any Person becomes an Acquiring Person, redeem all but not less than all the then outstanding Rights at a redemption price of $.01 per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (such redemption price being hereinafter referred to as the Redemption Price). The redemption of the Rights by the Board of Directors of the Company may be made effective at such time, on such basis and with such conditions as the Board of Directors of the Company, in its sole discretion, may establish. |
(b) |
Immediately upon the action of the Board of Directors of the Company ordering the redemption of the Rights pursuant to paragraph (a) of this Section 23, and without any further action and without any notice, the right to exercise the Rights will terminate and the only right thereafter of the holders of Rights shall be to receive the Redemption Price. The Company shall promptly give public notice of any such redemption; provided, however, that the failure to give, or any defect in, any such notice shall not affect the validity of such redemption. Within 10 days after such action of the Board of Directors of the Company ordering the redemption of the Rights, the Company shall mail a notice of redemption to all the holders of the then outstanding Rights at their last addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books of the transfer agent for the Common Shares. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made. Neither the Company nor any of its Affiliates or Associates may redeem, acquire or purchase for value any Rights at any time in any manner other than that specifically set forth in this Section 23 or in Section 24 hereof, and other than in connection with the purchase of Common Shares prior to the Distribution Date. |
24. | Exchange. |
(a) |
The Board of Directors of the Company may, at its option, at any time after any Person becomes an Acquiring Person, exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights that have become void pursuant to the provisions of Section 11(a)(ii) hereof) for Common Shares at an exchange ratio of one Common Share per Right, appropriately adjusted to reflect any adjustment in the number of Rights pursuant to Section 11(i) (such exchange ratio being hereinafter referred to as the Exchange Ratio). Notwithstanding the foregoing, the Board of Directors of the Company shall not be empowered to effect such exchange at any time after any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or any such Subsidiary, or any entity holding Common Shares for or pursuant to the terms of any such plan), together with all Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or more of the Common Shares then outstanding. |
25
(b) |
Immediately upon the action of the Board of Directors of the Company ordering the exchange of any Rights pursuant to paragraph (a) of this Section 24 and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of Common Shares equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice of any such exchange; provided, however, that the failure to give, or any defect in, such notice shall not affect the validity of such exchange. The Company promptly shall mail a notice of any such exchange to all of the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the method by which the exchange of the Common Shares for Rights will be effected, and, in the event of any partial exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which have become void pursuant to the provisions of Section 11(a)(ii) hereof) held by each holder of Rights. |
(c) |
In the event that there shall not be sufficient Common Shares issued but not outstanding or authorized but unissued to permit any exchange of Rights as contemplated in accordance with this Section 24, the Company shall take all such action as may be necessary to authorize additional Common Shares for issuance upon exchange of the Rights. In the event the Company shall, after good faith effort, be unable to take all such action as may be necessary to authorize such additional Common Shares, the Company shall substitute, for each Common Share that would otherwise be issuable upon exchange of a Right, a number of Preferred Shares or fraction thereof such that the current per share market price of one Preferred Share multiplied by such number or fraction is equal to the current per share market price of one Common Share as of the date of issuance of such Preferred Shares or fraction thereof. |
(d) |
The Company shall not be required to issue fractions of Common Shares or to distribute certificates which evidence fractional Common Shares. In lieu of such fractional Common Shares, the Company shall pay to the registered holders of the Right Certificates with regard to which such fractional Common Shares would otherwise be issuable an amount in cash equal to the same fraction of the current market value of a whole Common Share. For the purposes of this paragraph (d), the current market value of a whole Common Share shall be the closing price of a Common Share (as determined pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange pursuant to this Section 24. |
25. | Notice of Certain Events. |
(a) |
In case the Company shall, at any time after the Distribution Date, propose (i) to pay any dividend payable in stock of any class to the holders of the Preferred |
26
Shares or to make any other distribution to the holders of the Preferred Shares (other than a regular quarterly cash dividend), (ii) to offer to the holders of the Preferred Shares rights or warrants to subscribe for or to purchase any additional Preferred Shares or shares of stock of any class or any other securities, rights or options, (iii) to effect any reclassification of the Preferred Shares (other than a reclassification involving only the subdivision of outstanding Preferred Shares), (iv) to effect any consolidation or merger into or with, or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one or more transactions, of 50% or more of the assets or earning power of the Company and its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the liquidation, dissolution or winding up of the Company, or (vi) to declare or pay any dividend on the Common Shares payable in Common Shares or to effect a subdivision, combination or consolidation of the Common Shares (by reclassification or otherwise than by payment of dividends in Common Shares), then, in each such case, the Company shall give to each holder of a Right Certificate, in accordance with Section 26 hereof, a notice of such proposed action, which shall specify the record date for the purposes of such stock dividend, or distribution of rights or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution, or winding up is to take place and the date of participation therein by the holders of the Common Shares and/or Preferred Shares, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above at least 10 days prior to the record date for determining holders of the Preferred Shares for purposes of such action, and, in the case of any such other action, at least 10 days prior to the date of the taking of such proposed action or the date of participation therein by the holders of the Common Shares and/or Preferred Shares, whichever shall be the earlier. |
(b) |
In case the event set forth in Section 11(a)(ii) hereof shall occur, then the Company shall, as soon as practicable thereafter, give to each holder of a Right Certificate, in accordance with Section 26 hereof, a notice of the occurrence of such event, which notice shall describe such event and the consequences of such event to holders of Rights under Section 11(a)(ii) hereof. |
26. |
Notices . Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by the holder of any Right Certificate to or on the Company shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Rights Agent) as follows: |
John Bean Technologies Corporation
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any Right Certificate to or
27
on the Rights Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until another address is filed in writing with the Company) as follows:
National City Bank
Shareholder Services Administration
Suite 635-LOC 01-3116
629 Euclid Avenue, Suite 635-L0C 01-3116
Cleveland, Ohio 44144
Notices or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown on the registry books of the Company.
27. |
Supplements and Amendments . The Company may from time to time supplement or amend this Agreement without the approval of any holders of Right Certificates in order to cure any ambiguity, to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, or to make any other provisions with respect to the Rights which the Company may deem necessary or desirable, any such supplement or amendment to be evidenced by a writing signed by the Company and the Rights Agent; provided, however, that, from and after such time as any Person becomes an Acquiring Person, this Agreement shall not be amended in any manner which would adversely affect the interests of the holders of Rights. Without limiting the foregoing, the Company may at any time prior to such time as any Person becomes an Acquiring Person amend this Agreement to lower the thresholds set forth in Section 1(a) and 3(a) hereof to not less than 10% (the Reduced Threshold); provided, however, that no Person who beneficially owns a number of Common Shares equal to or greater than the Reduced Threshold shall become an Acquiring Person unless such Person shall, after the public announcement of the Reduced Threshold, increase its beneficial ownership of the then outstanding Common Shares (other than as a result of an acquisition of Common Shares by the Company) to an amount equal to or greater than the greater of (x) the Reduced Threshold or (y) the sum of (i) the lowest beneficial ownership of such Person as a percentage of the outstanding Common Shares as of any date on or after the date of the public announcement of such Reduced Threshold plus (ii) .001%. Notwithstanding anything contained herein to the contrary, the Rights Agent shall not be obligated to enter into any supplement or amendment that affects the Rights Agents own rights, duties, liabilities, obligations or immunities under this Agreement. |
28. |
Successors . All the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. |
29. |
Benefits of this Agreement . Nothing in this Agreement shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Right Certificates (and, prior to the Distribution Date, the Common Shares). |
28
30. | Severability . If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. |
31. |
Governing Law . This Agreement and each Right Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such state applicable to contracts to be made and performed entirely within such state. |
32. |
Counterparts . This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. |
33. |
Descriptive Headings . Descriptive headings of the several Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. |
34. |
Book-Entry Account Statements. Except where the context otherwise indicates, (a) if at any time or from time to time the Company determines that shares of Common Stock shall be evidenced by book-entry account statements or similar instruments or documents (Book-Entry Account Statements), then all references in this Agreement to certificates for Common Stock or certificates for shares of Common Stock shall be deemed to include such Book-Entry Account Statements which evidence such shares of Common Stock, (b) if at any time or from time to time the Company determines that after the Distribution Date the Rights shall be evidenced by Book-Entry Account Statements, then all references in this Agreement to certificates for Rights or Rights Certificates shall be deemed to include such Book-Entry Account Statements which evidence such Rights and (c) if at any time or from time to time the Company determines that shares of Preferred Shares issued upon the exercise of Rights shall be evidenced by Book-Entry Account Statements, then all references in this Agreement to certificates for such shares of Preferred Shares shall be deemed to include such Book-Entry Account Statements which evidence such shares of Preferred Shares. |
29
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and attested, all as of the day and year first above written.
Attest: |
John Bean Technologies Corporation |
|||||||
By |
/s/ James L. Marvin |
By |
/s/ Charles H. Cannon, Jr |
|||||
Name: James L. Marvin |
Name: Charles H. Cannon, Jr |
|||||||
Title: Secretary |
Title: Chairman and CEO |
|||||||
Attest: |
National City Bank |
|||||||
By |
/s/ Jennifer E. Peachman |
By |
/s/ Megan Gibson |
|||||
Name: Jennifer E. Peachman |
Name: Megan Gibson |
|||||||
Title: Administrative Assistant |
Title: Vice President |
30
Exhibit A
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
JOHN BEAN TECHNOLOGIES CORPORATION
(Pursuant to Section 151 of the
Delaware General Corporation Law)
-------------------------------------
John Bean Technologies Corporation, a corporation organized and existing under the General Corporation Law of the State of Delaware (hereinafter called the Corporation), hereby certifies that the following resolution was adopted by the Board of Directors of the Corporation as required by Section 151 of the General Corporation Law by unanimous written consent at a meeting duly called and held on July 28, 2008:
RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of this Corporation (hereinafter called the Board of Directors or the Board) in accordance with the provisions of the Certificate of Incorporation, the Board of Directors hereby creates a series of Preferred Stock, par value $.01 per share, of the Corporation (the Preferred Stock), and hereby states the designation and number of shares, and fixes the relative rights, preferences, and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount . The shares of such series shall be designated as Series A Junior Participating Preferred Stock (the Series A Preferred Stock) and the number of shares constituting the Series A Preferred Stock shall be 1,500,000. Such number of shares may be increased or decreased by resolution of the Board of Directors; provided, that no decrease shall reduce the number of shares of Series A Preferred Stock to a number less than the number of shares then outstanding plus the number of shares reserved for issuance upon the exercise of outstanding options, rights or warrants or upon the conversion of any outstanding securities issued by the Corporation convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions .
(A) Subject to the rights of the holders of any shares of any series of Preferred Stock (or any similar stock) ranking prior and superior to the Series A Preferred Stock with respect to dividends, the holders of shares of Series A Preferred Stock, in preference to the holders of Common Stock, par value $.01 per share (the Common Stock), of the Corporation, and of any other junior stock, shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cash on the first day of March, June, September and December in each year (each such date being referred to herein as a Quarterly Dividend Payment Date), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Preferred Stock, in an amount
A-1
per share (rounded to the nearest cent) equal to the greater of (a) $1 or (b) subject to the provision for adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions, other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Preferred Stock. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Series A Preferred Stock as provided in paragraph (A) of this Section immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1 per share on the Series A Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be not more than 60 days prior to the date fixed for the payment thereof.
A-2
Section 3 . Voting Rights . The holders of shares of Series A Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each share of Series A Preferred Stock shall entitle the holder thereof to 100 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the number of votes per share to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other Certificate of Designations creating a series of Preferred Stock or any similar stock, or by law, the holders of shares of Series A Preferred Stock and the holders of shares of Common Stock and any other capital stock of the Corporation having general voting rights shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by law, holders of Series A Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions .
(A) Whenever quarterly dividends or other dividends or distributions payable on the Series A Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of Series A Preferred Stock outstanding shall have been paid in full, the Corporation shall not:
(i) |
declare or pay dividends, or make any other distributions, on any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock; |
(ii) |
declare or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except dividends paid ratably on the Series A Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; |
A-3
(iii) |
redeem or purchase or otherwise acquire for consideration shares of any stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such junior stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Preferred Stock; or |
(iv) |
redeem or purchase or otherwise acquire for consideration any shares of Series A Preferred Stock, or any shares of stock ranking on a parity with the Series A Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. |
(B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares . Any shares of Series A Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the conditions and restrictions on issuance set forth herein, in the Certificate of Incorporation, or in any other Certificate of Designations creating a series of Preferred Stock or any similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up . Upon any liquidation, dissolution or winding up of the Corporation, no distribution shall be made (1) to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Preferred Stock unless, prior thereto, the holders of shares of Series A Preferred Stock shall have received $100 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment, provided that the holders of shares of Series A Preferred Stock shall be entitled to receive an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to 100 times the aggregate amount to be distributed per share to holders of shares of Common Stock, or (2) to the holders of shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Preferred Stock, except distributions made ratably on the Series A Preferred Stock and all such parity stock in proportion to the total amounts to which the holders of all such shares are entitled upon such liquidation, dissolution or winding up. In the event the Corporation shall at any time declare or pay any dividend on
A-4
the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the aggregate amount to which holders of shares of Series A Preferred Stock were entitled immediately prior to such event under the proviso in clause (1) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
Section 7 . Consolidation, Merger, etc . In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case each share of Series A Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share, subject to the provision for adjustment hereinafter set forth, equal to 100 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time declare or pay any dividend on the Common Stock payable in shares of Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in shares of Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Preferred Stock shall be adjusted by multiplying such amount by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
Section 8. No Redemption . The shares of Series A Preferred Stock shall not be redeemable.
Section 9 . Rank . The Series A Preferred Stock shall rank, with respect to the payment of dividends and the distribution of assets, junior to all series of any other class of the Corporations Preferred Stock.
Section 10 . Amendment . The Certificate of Incorporation of the Corporation shall not be amended in any manner which would materially alter or change the powers, preferences or special rights of the Series A Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series A Preferred Stock, voting together as a single class.
A-5
IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf of the Corporation by its Chief Executive Officer and attested by its Secretary this 31st day of July, 2008.
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Chief Executive Officer |
Attest:
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Secretary |
A-6
Exhibit B
Form of Right Certificate
Certificate No. R- |
Rights |
NOT EXERCISABLE AFTER JULY 31, 2018 OR
EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.01 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT.
Right Certificate
John Bean Technologies Corporation
This certifies that , or registered assigns, is the registered owner of the number of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement, dated as of July 31, 2008 (the Agreement), between John Bean Technologies Corporation, a Delaware corporation (the Company), and National City Bank (the Rights Agent), to purchase from the Company at any time after the Distribution Date (as such term is defined in the Agreement) and prior to 5:00 P.M., New York City time, on July 31, 2018 at the principal office of the Rights Agent, or at the office of its successor as Rights Agent, one one-hundredth of a fully paid non-assessable share of Series A Junior Participating Preferred Stock, par value $.01 per share, of the Company (the Preferred Shares), at a purchase price of $72.00 per one one-hundredth of a Preferred Share (the Purchase Price), upon presentation and surrender of this Right Certificate with the Form of Election to Purchase duly executed. The number of Rights evidenced by this Right Certificate (and the number of one one-hundredths of a Preferred Share which may be purchased upon exercise hereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of July 31, 2008, based on the Preferred Shares as constituted at such date. As provided in the Agreement, the Purchase Price and the number of one one-hundredths of a Preferred Share which may be purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and conditions of the Agreement, which terms, provisions and conditions are hereby incorporated herein by reference and made a part hereof and to which Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights Agent, the Company and the holders of the Right Certificates. Copies of the Agreement are on file at the principal executive offices of the Company and the offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon surrender at the principal office of the Rights Agent, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like aggregate number of Preferred Shares as the Rights evidenced by the Right Certificate or Right Certificates surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not exercised.
B-1
Subject to the provisions of the Agreement, the Rights evidenced by this Right Certificate (i) may be redeemed by the Company at a redemption price of $.01 per Right or (ii) may be exchanged in whole or in part for Preferred Shares or shares of the Companys Common Stock, par value $.01 per share.
No fractional Preferred Shares will be issued upon the exercise of any Right or Rights evidenced hereby (other than fractions which are integral multiples of one one-hundredth of a Preferred Share, which may, at the election of the Company, be evidenced by depositary receipts), but, in lieu thereof, a cash payment will be made, as provided in the Agreement.
No holder of this Right Certificate shall be entitled to vote or receive dividends or be deemed for any purpose the holder of the Preferred Shares or of any other securities of the Company which may at any time be issuable on the exercise hereof, nor shall anything contained in the Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this Right Certificate shall have been exercised as provided in the Agreement.
This Right Certificate shall not be valid or obligatory for any purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and its corporate seal. Dated as of , .
ATTEST: |
John Bean Technologies Corporation |
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By |
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Name: Title: |
Name: Title: |
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Countersigned: |
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National City Bank |
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By |
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Name: Title: |
Form of Reverse Side of Right Certificate
B-2
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint Attorney, to transfer the within Right Certificate on the books of the within-named Company, with full power of substitution.
Dated:
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Signature |
Signature Guaranteed:
All Guarantees must be made by a financial institution (such as a bank or broker) which is a participant in the Securities Transfer Agents Medallion Program (STAMP), the New York Stock Exchange, Inc. Medallion Signature Program
(MSP), or the Stock Exchanges Medallion Program (SEMP) and must not be dated. Guarantees by a notary public are not acceptable.
The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in the Agreement).
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Signature |
B-3
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: John Bean Technologies Corporation
The undersigned hereby irrevocably elects to exercise Rights represented by this Right Certificate to purchase the Preferred Shares issuable upon the exercise of such Rights and requests that certificates for such Preferred Shares be issued in the name of:
Please insert social security
or other identifying number:
--------
(Please print name and address)
--------
If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the balance remaining of such Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:
--------
(Please print name and address)
------------
Dated:
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Signature |
Signature Guaranteed:
All Guarantees must be made by a financial institution (such as a bank or broker) which is a participant in the Securities Transfer Agents Medallion Program (STAMP), the New York Stock Exchange, Inc. Medallion Signature Program (MSP), or the Stock Exchanges Medallion Program (SEMP) and must not be dated. Guarantees by a notary public are not acceptable.
B-4
The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not beneficially owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in the Agreement).
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Signature |
NOTICE
------
The signature in the Form of Assignment or Form of Election to Purchase, as the case may be, must conform to the name as written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of Assignment or the Form of Election to Purchase, as the case may be, is not completed, the Company and the Rights Agent will deem the beneficial owner of the Rights evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as defined in the Agreement) and such Assignment or Election to Purchase will not be honored.
B-5
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
Introduction
------------
On July 31, 2008, the Board of Directors of our Company, John Bean Technologies Corporation, a Delaware corporation, declared a dividend of one preferred share purchase right (a Right) for each outstanding share of common stock, par value $.01 per share. The dividend is payable on July 31, 2008, to the stockholders of record on July 31, 2008.
Our Board has adopted this Rights Agreement to protect stockholders from coercive or otherwise unfair takeover tactics. In general terms, it works by imposing a significant penalty upon any person or group which acquires 15% or more of our outstanding common stock without the approval of our Board. The Rights Agreement should not interfere with any merger or other business combination approved by our Board.
For those interested in the specific terms of the Rights Agreement as made between our Company and National City Bank, as the Rights Agent, on July 31, 2008,, we provide the following summary description. Please note, however, that this description is only a summary, and is not complete, and should be read together with the entire Rights Agreement, which has been filed with the Securities and Exchange Commission as an exhibit to a Registration Statement on Form 10 dated April 30, 2008, as amended. A copy of the agreement is available free of charge from our Company.
The Rights. Our Board authorized the issuance of a Right with respect to each outstanding share of common stock on July 28, 2008. The Rights will initially trade with, and will be inseparable from, the common stock. The Rights are evidenced only by certificates that represent shares of common stock. New Rights will accompany any new shares of common stock we issue after July 31, 2008 until the Distribution Date described below.
Exercise Price. Each Right will allow its holder to purchase from our Company one one-hundredth of a share of Series A Junior Participating Preferred Stock (Preferred Share) for $72.00, once the Rights become exercisable. This portion of a Preferred Share will give the stockholder approximately the same dividend, voting, and liquidation rights as would one share of common stock. Prior to exercise, the Right does not give its holder any dividend, voting, or liquidation rights.
Exercisability. The Rights will not be exercisable until 10 days after the public announcement that a person or group has become an Acquiring Person by obtaining beneficial ownership of 15% or more of our outstanding common stock, or, if earlier, 10 business days (or a later date determined by our Board before any person or group becomes an Acquiring Person) after a person or group begins a tender or exchange offer which, if completed, would result in that person or group becoming an Acquiring Person.
We refer to the date when the Rights become exercisable as the Distribution Date. Until that date, the common stock certificates will also evidence the Rights, and any transfer of shares of common stock will constitute a transfer of Rights. After that date, the Rights will
C-1
separate from the common stock and be evidenced by book-entry credits or by Rights certificates that we will mail to all eligible holders of common stock. Any Rights held by an Acquiring Person are void and may not be exercised.
Our Board may reduce the threshold at which a person or group becomes an Acquiring Person from 15% to not less than 10% of the outstanding common stock.
Consequences of a Person or Group Becoming an Acquiring Person.
Flip In. If a person or group becomes an Acquiring Person, all holders of Rights except the Acquiring Person may, for $72.00, purchase shares of our common stock with a market value of $144.00, based on the market price of the common stock prior to such acquisition.
Flip Over. If our Company is later acquired in a merger or similar transaction after the Rights Distribution Date, all holders of Rights except the Acquiring Person may, for $72.00, purchase shares of the acquiring corporation with a market value of $144.00 based on the market price of the acquiring corporations stock, prior to such merger.
Preferred Share Provisions.
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Each one one-hundredth of a Preferred Share, if issued: |
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will not be redeemable. |
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will entitle holders to quarterly dividend payments of $.01 per share, or an amount equal to the dividend paid on one share of common stock, whichever is greater. |
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will entitle holders upon liquidation either to receive $1 per share or an amount equal to the payment made on one share of common stock, whichever is greater. |
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will have the same voting power as one share of common stock. |
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if shares of our common stock are exchanged via merger, consolidation, or a similar transaction, will entitle holders to a per share payment equal to the payment made on one share of common stock. |
The value of one one-hundredth interest in a Preferred Share should approximate the value of one share of common stock.
Expiration. The Rights will expire on July 31, 2018.
Redemption. Our Board may redeem the Rights for $.01 per Right at any time before any person or group becomes an Acquiring Person. If our Board redeems any Rights, it must redeem all of the Rights. Once the Rights are redeemed, the only right of the holders of Rights will be to receive the redemption price of $.01 per Right. The redemption price will be adjusted if we have a stock split or stock dividends of our common stock.
C-2
Exchange. After a person or group becomes an Acquiring Person, but before an Acquiring Person owns 50% or more of our outstanding common stock, our Board may extinguish the Rights by exchanging one share of common stock or an equivalent security for each Right, other than Rights held by the Acquiring Person.
Anti-Dilution Provisions. Our Board may adjust the purchase price of the Preferred Shares, the number of Preferred Shares issuable and the number of outstanding Rights to prevent dilution that may occur from a stock dividend, a stock split, a reclassification of the Preferred Shares or common stock. No adjustments to the Exercise Price of less than 1% will be made.
Amendments. The terms of the Rights Agreement may be amended by our Board without the consent of the holders of the Rights. However, our Board may not amend the Rights Agreement to lower the threshold at which a person or group becomes an Acquiring Person to below 10% of our outstanding common stock. In addition, the Board may not cause a person or group to become an Acquiring Person by lowering this threshold below the percentage interest that such person or group already owns. After a person or group becomes an Acquiring Person, our Board may not amend the agreement in a way that adversely affects holders of the Rights.
C-3
Exhibit 10.1
TAX SHARING AGREEMENT
by and among
FMC TECHNOLOGIES, INC.
AND ITS AFFILIATES
and
JOHN BEAN TECHNOLOGIES CORPORATION
AND ITS AFFILIATES
TABLE OF CONTENTS
Page |
||||
ARTICLE |
I | |||
DEFINITIONS |
1 | |||
ARTICLE |
II | |||
RESPONSIBILITY FOR TAXES |
8 | |||
2.1 |
Responsibility and Indemnification for Taxes |
8 | ||
2.2 |
Income Taxes |
8 | ||
2.3 |
Other Taxes |
9 | ||
2.4 |
Allocation of Certain Income Taxes and Income Tax Items |
9 | ||
2.5 |
Payment for Use of Net Operating Losses |
10 | ||
2.6 |
Payment for Use of Foreign Tax Credits |
10 | ||
2.7 |
Audit Adjustments |
11 | ||
2.8 |
Tax Refunds |
13 | ||
2.9 |
Carrybacks |
13 | ||
2.10 |
Timing of Certain Payments |
14 | ||
2.11 |
Treatment of Restricted Stock, Stock Options, and Deferred Compensation |
14 | ||
2.12 |
Successor Employer Status |
15 | ||
ARTICLE |
III | |||
TAX RETURNS AND INFORMATION EXCHANGE |
15 | |||
3.1 |
Tax Return Preparation Responsibility; Payment of Taxes Shown Thereon |
15 | ||
3.2 |
Review of Tax Returns |
16 | ||
3.3 |
Certain Items Related to Tax Return Preparation |
16 | ||
3.4 |
Tax Information Exchanges and Tax Services |
17 | ||
ARTICLE |
IV | |||
TAX TREATMENT OF THE DISTRIBUTION |
18 | |||
4.1 |
Representations |
18 | ||
4.2 |
Covenants |
18 | ||
4.3 |
Supplemental Rulings and Restrictions on Spinco |
21 | ||
4.4 |
Liability for Undertaking Certain Actions |
22 | ||
4.5 |
Cooperation |
23 | ||
4.6 |
Enforcement |
23 | ||
ARTICLE |
V | |||
COOPERATION AND EXCHANGE OF INFORMATION |
24 | |||
5.1 |
Cooperation |
24 |
i
5.2 |
Contest Provisions |
25 | ||
5.3 |
Information for Shareholders |
26 | ||
ARTICLE |
VI | |||
DISPUTE RESOLUTION |
26 | |||
6.1 |
Dispute Resolution |
26 | ||
ARTICLE |
VII | |||
MISCELLANEOUS |
26 | |||
7.1 |
Effectiveness |
26 | ||
7.2 |
Indemnification for Inaccurate, Incomplete or Untimely Information |
26 | ||
7.3 |
Breach |
27 | ||
7.4 |
Disclaimers |
27 | ||
7.5 |
Payments |
27 | ||
7.6 |
Changes in Law |
28 | ||
7.7 |
Notices |
28 | ||
7.8 |
Complete Agreement; Corporate Power |
29 | ||
7.9 |
Governing Law |
29 | ||
7.10 |
Successors and Assigns |
29 | ||
7.11 |
Joint and Several Liability |
30 | ||
7.12 |
Parties in Interest |
30 | ||
7.13 |
Legal Enforceability; Waiver of Default |
30 | ||
7.14 |
Action by Affiliates |
30 | ||
7.15 |
Expenses |
30 | ||
7.16 |
Confidentiality |
30 | ||
7.17 |
Amendments and Modification |
31 | ||
7.18 |
No Implied Waivers; Cumulative Remedies; Writing Required |
31 | ||
7.19 |
Limitation on Damages |
31 | ||
7.20 |
Severability |
31 | ||
7.21 |
Specific Performance |
31 | ||
7.22 |
Construction |
32 | ||
7.23 |
Counterparts |
32 | ||
7.24 |
Delivery by Facsimile and Other Electronic Means |
32 | ||
7.25 |
Consent by Affiliates |
32 |
ii
TAX SHARING AGREEMENT
This TAX SHARING AGREEMENT , dated as of July 31, 2008, by and among FMC TECHNOLOGIES, INC. ( Parent ), a Delaware corporation, by and on behalf of itself and each Affiliate of Parent, and JOHN BEAN TECHNOLOGIES CORPORATION ( Spinco ), a Delaware corporation and currently a direct, wholly owned subsidiary of Parent, by and on behalf of itself and each Affiliate of Spinco. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in Article I hereof.
RECITALS
WHEREAS, the Board of Directors of Parent has determined that it is in the best interests of Parent and its stockholders to separate Parents existing businesses into two independent companies (the Separation );
WHEREAS, to effect the Separation, Parent intends to cause the transfer to Spinco of certain assets of Parent and its subsidiaries, and the assumption by Spinco of certain liabilities of Parent and its subsidiaries associated with the assets being transferred, all of which are primarily related to the Spinco Business (the Contribution ) as contemplated by Separation and Distribution Agreement dated as of July 31, 2008 (the Separation Agreement ) and the Ancillary Agreements;
WHEREAS, in connection with the Separation, the Board of Directors of Parent has determined that it would be advisable and in the best interests of Parent and its stockholders for Parent to distribute to the holders of the issued and outstanding shares of common stock of Parent (the Parent Common Stock ) as of the Record Date 100% of the issued and outstanding shares of common stock of Spinco (the Spinco Common Stock ), together with the associated preferred stock purchase rights (each share of such stock, together with the associated preferred stock purchase right, a Spinco Share ), on the basis of 0.216 Spinco Shares for every share of Parent Common Stock (the Distribution );
WHEREAS, the Contribution and Distribution are intended to qualify as a tax-free reorganization and distribution under Sections 368(a)(1)(D) and 355 of the Code; and
WHEREAS, in contemplation of the Distribution, Parent and Spinco desire to set forth their agreement on the rights and obligations of Parent and Spinco and their respective Affiliates with respect to the responsibility, handling and allocation of federal, state, local, and foreign Taxes, and various other Tax matters.
NOW, THEREFORE, in consideration of the foregoing and the terms, conditions, covenants, and provisions of this Agreement, Parent, Spinco, and their respective Affiliates mutually covenant and agree as follows:
ARTICLE I
DEFINITIONS
Affiliate means any corporation, partnership, limited liability company, or other entity directly or indirectly Controlled by the entity in question. For purposes of this Agreement, an Affiliate of Parent shall not include Spinco or any entity that is also an Affiliate of Spinco.
After Tax Amount means any additional amount necessary to reflect (through a gross-up mechanism) the hypothetical Tax consequences of the receipt or accrual of any payment required to be made under this Agreement (including payment of an additional amount or amounts hereunder and the effect of the deductions available for interest paid or accrued and for Taxes such as state and local Income Taxes), determined by using the applicable corporate Tax rate (or rates, in the case of an item that affects more than one Tax) for the relevant taxable jurisdiction and period (or portion thereof).
Agreement means this Tax Sharing Agreement, including any schedules, exhibits, and appendices attached hereto.
Cash Acquisition Merger means a merger of a newly-formed subsidiary of Spinco with a corporation, limited liability company, limited partnership, general partnership or joint venture (in each case, not previously owned, directly or indirectly, by Spinco) solely for cash pursuant to which Spinco acquires such corporation, limited liability company, limited partnership, general partnership or joint venture and no Equity Securities of Spinco or any Spinco Affiliate are issued, sold, redeemed, or acquired, directly or indirectly.
Code means the Internal Revenue Code of 1986 (or, if relevant, the Internal Revenue Code of 1954), as amended, or any successor thereto, as in effect for the taxable period in question.
Combined Jurisdiction means, for any taxable period, any jurisdiction with respect to which a Combined Return is filed for United States federal, state, local, or foreign Income Tax purposes.
Combined Return means any combined, unitary, or consolidated Tax Return or report, or any Tax Return or report for a single entity that operated a Spinco Business for any portion of the relevant Tax period (and which is not otherwise a Spinco Separate Tax Return), used in the determination of a United States federal, state, local, or foreign Income Tax liability.
Contribution has the meaning prescribed in the recitals to this Agreement.
Control means the ownership of stock or other securities possessing at least 50 percent of the total combined voting power of all classes of securities entitled to vote.
Deferred Tax Assets means, as of a given date, the amount of deferred tax benefits (including deferred tax consequences attributable to deductible temporary differences and carryforwards) that would be recognized as assets on a business enterprises balance sheet computed in accordance with GAAP, but without regard to valuation allowances.
Deferred Tax Liabilities means, as of a given date, the amount of deferred tax liabilities (including deferred tax consequences attributable to deductible temporary differences) that would be recognized as liabilities on a business enterprises balance sheet computed in accordance with GAAP, but without regard to valuation allowances.
Deferred Taxes means, as of a given date, the amount of Deferred Tax Assets, less the amount of Deferred Tax Liabilities. Deferred Taxes may be a net negative or positive amount, and shall be computed without regard to any payments to be made pursuant to Section 2.10.
Distribution has the meaning prescribed in the preamble to this Agreement.
Distribution Date means the date on which the Spinco stock is distributed by Parent to its shareholders in a transaction intended to qualify as a tax-free distribution under Sections 355 and 368(a)(1)(D) of the Code.
Employee Restricted Stock means either Parent Restricted Stock or Spinco Restricted Stock.
Employee Stock Option means either a Parent Stock Option or a Spinco Stock Option.
Equity Securities means any stock or other equity securities treated as stock for Tax purposes, or options, warrants, rights, convertible debt, or any other instrument or security that affords any Person the right, whether conditional or otherwise, to acquire stock or to be paid an amount determined by reference to the value of stock.
Estimated Spinco Separate Tax Liability has the meaning prescribed in Section 2.2(e).
Filing Party has the meaning prescribed in Section 3.2(b).
Final Determination shall mean the final resolution of liability for any Tax for a taxable period, including any related interest, penalties or other additions to tax, (i) by Internal Revenue Service Form 870 or 870-AD (or any successor forms thereto), on the date of acceptance by or on behalf of the IRS, or by a comparable form under the laws of other jurisdictions; except that a Form 870 or 870-AD or comparable form that reserves (whether by its terms or by operation of law) the right of the taxpayer to file a claim for refund and/or the right of the Taxing Authority to assert a further deficiency with respect to a Tax Item shall not constitute a Final Determination with respect to such Tax Item; (ii) by a decision, judgment, decree, or other order by a court of competent jurisdiction, which has become final and unappealable; (iii) by a closing agreement or accepted offer in compromise under Section 7121 or Section 7122 of the Code, or comparable agreements under the laws of other jurisdictions; (iv) by any allowance of a refund or credit in respect of an overpayment of Tax, but only after the expiration of all periods during which such refund may be recovered (including by way of offset) by the jurisdiction imposing such Tax; or (v) by any other final disposition, including by reason of the expiration of the applicable statute of limitations.
2
GAAP means United States generally accepted accounting principles as in effect on the Distribution Date.
Income Taxes means all federal, state, local, and foreign income Taxes or other Taxes based on income or net worth, and any other franchise or similar Taxes.
IRS means the United States Internal Revenue Service or any successor thereto, including, but not limited to its agents, representatives, and attorneys.
Liability Issue has the meaning prescribed in Section 5.1(c).
Non-filing Party has the meaning prescribed in Section 3.2(b).
Non-preparing Party has the meaning prescribed in Section 3.4(a).
Option means an option to acquire common stock, or other equity-based incentives the economic value of which is designed to mirror that of an option, including non-qualified stock options, discounted non-qualified stock options, cliff options to the extent stock is issued or issuable (as opposed to cash compensation), and tandem stock options to the extent stock is issued or issuable (as opposed to cash compensation).
Other Taxes means all taxes other than Income Taxes, including (but not limited to) transfer, sales, use, payroll, property, and unemployment Taxes.
Owed Party has the meaning prescribed in Section 7.5.
Owing Party has the meaning prescribed in Section 7.5.
Parent has the meaning prescribed in the preamble to this Agreement.
Parent Common Stock has the meaning prescribed in the recitals to this Agreement.
Parent Consolidated Group means the affiliated group of corporations (within the meaning of Section 1504 of the Code) of which Parent is the common parent prior to the Distribution Date.
Parent Employee means an employee of Parent or any Parent Affiliate immediately after the Distribution.
Parent Group means the group of corporations that, immediately after the Distribution Date, are members of the affiliated group of corporations of which Parent is the common parent (within the meaning of Section 1504 of the Code).
3
Parent Representation Letter means an officers certificate in which certain representations, warranties and covenants are made on behalf of Parent and its Affiliates in connection with the issuance of a Tax Opinion or Tax Ruling.
Parent Restricted Stock means Parent common stock received by a Parent or Spinco Employee in connection with his or her employment, which stock has not yet been included in the income of such Employee as of the Distribution Date.
Parent Separate Tax Return means any Tax Return for any Tax period that includes one or more members of the Parent Group, but does not include any members of the Spinco Group.
Parent Stock Option means an Option to acquire Parent common stock received by a Parent or Spinco Employee in connection with his or her employment, which Option has not yet been exercised as of the Distribution Date.
Person means any natural person, corporation, general partnership, limited partnership, limited liability company, limited liability partnership, proprietorship, trust, association, union, governmental authority or other entity, enterprise, authority or organization.
Post-Distribution Tax Period means, with respect to a given entity, any taxable period (or portion thereof) for which a Tax Return is filed, if such period begins after the Distribution Date.
Pre-Distribution Tax Period means, with respect to a given entity, any taxable period (or portion thereof) for which a Tax Return is filed, if such period ends on or before the Distribution Date.
Preparing Party has the meaning prescribed in Section 3.4(a).
Reportable Transaction means a reportable or listed transaction as defined in Section 6011 of the Code or Treasury Regulations thereunder.
Representation Letter means the Spinco Representation Letter and the Parent Representation Letter.
Responsible Party has the meaning prescribed in Section 5.2.
Restriction Period means the period beginning on the date hereof and ending on the second anniversary of the Distribution Date.
Ruling Documents means the Ruling Request, the appendices, attachments and exhibits thereto, and any additional or supplemental information submitted to the IRS in connection with the Ruling Request.
Ruling Request means the private letter ruling request filed by Parent with the IRS dated March 20, 2008 pertaining to certain Tax aspects of the Contribution and the Distribution.
4
Separation Agreement has the meaning prescribed in the recitals to this Agreement.
Spinco has the meaning prescribed in the preamble to this Agreement.
Spinco Available FTCs has the meaning prescribed in Section 2.6(a).
Spinco Allocated FTCs has the meaning prescribed in Section 2.6(a).
Spinco Available NOLs has the meaning prescribed in Section 2.5(a).
Spinco Allocated NOLs has the meaning prescribed in Section 2.5(a).
Spinco Assets has the meaning prescribed in Section 1.1 of the Separation Agreement.
Spinco Business has the meaning prescribed in Section 1.1 of the Separation Agreement.
Spinco Common Stock has the meaning prescribed in the recitals to this Agreement.
Spinco Employee means an employee of Spinco or any Spinco Affiliate immediately after the Distribution.
Spinco Group means the group of corporations that, immediately after the Distribution Date, will be members of the affiliated group of corporations of which Spinco is the common parent (within the meaning of Section 1504 of the Code). For purposes of this definition, it is assumed that Spinco will elect to file consolidated federal income tax returns with Spinco as the common parent for the taxable year beginning immediately after the Distribution.
Spinco Representation Letter means an officers certificate in which certain representations, warranties and covenants are made on behalf of Spinco and its Affiliates in connection with the issuance of a Tax Opinion or Tax Ruling.
Spinco Restricted Stock means Spinco common stock received by a Spinco Employee or Parent Employee in connection with his or her employment, which stock has not yet been included in the income of such Employee as of the Distribution Date.
Spinco Separate Tax Liability means an amount equal to the Tax liability that Spinco and all Spinco Affiliates would have incurred on a consolidated, combined, unitary or separate basis (as applicable) as if at all times on or before the Distribution Date (a) each Spinco Asset transferred to Spinco or a Spinco Affiliate in connection with the Separation had at all relevant times been owned by such transferee entity, and the Spinco Business had been conducted solely and entirely by Spinco and the Spinco Affiliates, and (b) Spinco had been the common parent of an affiliate group (as defined in section 1504(a) of the Code without regard to Section 1504(b) of the Code) that was (i) separate from the members of the Parent Group and (ii) consisted solely of Spinco and the Spinco Affiliates.
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Spinco Separate Tax Return means any Tax Return for any Tax period that includes one or more members of the Spinco Group, but does not include any members of the Parent Group.
Spinco Share has the meaning prescribed in the recitals to this Agreement.
Spinco Stock Option means an Option to acquire Spinco common stock received by a Spinco Employee or Parent Employee in connection with his or her employment, which Option has not yet been exercised as of the Distribution Date.
Straddle Period means, with respect to a given entity, any state, local, or foreign taxable period beginning on or before the Distribution Date and ending after the Distribution Date;
Supplemental Ruling means any IRS private letter ruling issued in connection with the Contribution and/or the Distribution other than the Ruling Request.
Supplemental Ruling Documents means the Supplemental Ruling Request, the appendices, attachments and exhibits thereto, and any additional or supplemental information submitted to the IRS in connection with the Supplemental Ruling Request.
Supplemental Ruling Request means the Supplemental Ruling request filed by Parent with the IRS pertaining to certain Tax aspects of the Contribution and/or the Distribution.
Tax and Taxes mean any form of taxation, whenever created or imposed, and whenever imposed by a Taxing Authority, and without limiting the generality of the foregoing, shall include any net income, alternative or add-on minimum tax, gross income, sales, use, ad valorem, gross receipts, value added, franchise, profits, license, transfer, recording, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profit, custom duty, annual report, or other tax, government fee, or other like assessment or charge, of any kind whatsoever, together with any related interest, penalties, or other additions to tax, or additional amount imposed by any such Taxing Authority.
Tax Asset means any Tax Item that has accrued for Tax purposes (including a net operating loss, net capital loss, investment tax credit, foreign tax credit, charitable contribution deduction, credit related to alternative minimum tax and any other Tax credit), that could reduce a Tax in the taxable period in which it accrued, but which is available to reduce a Tax in a later taxable period.
Taxing Authority means any national, municipal, governmental, state, federal, foreign, or other body, or any quasi-governmental or private body, having jurisdiction over the assessment, determination, collection or imposition of any Tax (including the IRS).
Tax Benefit means, without double counting, the sum of (i) the amount of the reduction in the Tax liability of an entity (or of the consolidated or combined group of which it is a member), whether temporary or permanent, for any taxable period that arises, or may arise in the future, as a result of any adjustment to, or addition or deletion of, a Tax Item in the computation of the Tax liability of the entity (or the consolidated or combined group of which it
6
is a member), and (ii) the amount by which the entitys (or consolidated or combined group of which it is a member) Deferred Taxes are increased as a result of such adjustment, addition, or deletion.
Tax Controversy has the meaning prescribed in Section 5.2(a).
Tax Detriment means, without double counting, the sum of (i) the amount of the increase in the Tax liability of an entity (or of the consolidated or combined group of which it is a member), whether temporary or permanent, for any taxable period that arises, or may arise in the future, as a result of any adjustment to, or addition or deletion of, a Tax Item in the computation of the Tax liability of the entity (or the consolidated or combined group of which it is a member), and (ii) the amount by which the entitys (or consolidated or combined group of which it is a member) Deferred Taxes are decreased as a result of such adjustment, addition, or deletion.
Tax-Free Status means the qualification of the Contribution and the Distribution as a tax-free reorganization (i) described in Sections 355(a) and 368(a)(1)(D) of the Code, (ii) in which the stock distributed thereby is qualified property for purposes of Section 361(c) of the Code, (iii) in which each of Parent, the Parent Affiliates, Spinco, and the Spinco Affiliates recognize no income or gain other than intercompany items or excess loss accounts taken into account pursuant to the Treasury Regulations promulgated pursuant to Section 1502 of the Code, and (iv) in which no gain or loss is recognized by (and no amount is included in the income of) holders of Parent common stock upon the receipt of Spinco common stock pursuant to the Contribution and Distribution, other than cash in lieu of fractional shares.
Tax Item means any item of income, gain, loss, deduction, credit, recapture of credit, or any other item (including the basis or adjusted basis of property) which increases or decreases Income Taxes paid or payable in any taxable period.
Tax Opinion means an opinion issued to Parent by a law firm or an accounting firm with respect to the qualification of the Separation and the Distribution for treatment under Sections 355 and 368(a)(1)(D) of the Code.
Tax Package means the information and documents in the possession of the Non-preparing Party and its Affiliates that are reasonably necessary for the preparation of a Tax Return by the Preparing Party and its Affiliates with respect to a Combined Return, assembled in all material respects in accordance with the standards that Parent has heretofore applied to divisions and Affiliates of Parent.
Tax Return means any return, filing, questionnaire or other document required to be filed, including requests for extensions of time, filings made with estimated Tax payments, claims for refund or amended returns, that may be filed for any taxable period with any Taxing Authority in connection with any Tax or Taxes (whether or not a payment is required to be made with respect to such filing).
Tax Ruling means the IRS private letter ruling issued to Parent on July 8, 2008 in connection with the Ruling Request.
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Trademark Agreement means the Trademark Assignment and Co-Existence Agreement, dated as of July 31, 2008, between Parent and Spinco.
Treasury Regulations means the final and temporary (but not proposed) income tax regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).
ARTICLE II
RESPONSIBILITY FOR TAXES
2.1 |
Responsibility and Indemnification for Taxes. |
(a) From and after the Distribution Date, without duplication, each of Parent and Spinco shall be responsible for, and shall pay its respective share of, the liability for Taxes of Parent, Spinco, and their respective Affiliates as provided in this Agreement. Parent and its Affiliates shall indemnify and hold harmless Spinco and its Affiliates from any Taxes for which Parent is responsible pursuant to this Agreement. Spinco and its Affiliates shall indemnify and hold harmless Parent and its Affiliates from any Taxes for which Spinco is responsible pursuant to this Agreement.
(b) Payments to Taxing Authorities and between the parties, as the case may be, shall be made in accordance with the provisions of this Agreement.
2.2 |
Income Taxes. |
(a) Subject to the limitations set forth in Section 2.7, Spinco shall be responsible for all Income Taxes (i) incurred on any Combined Return for any Tax period which includes the Distribution Date in any Combined Jurisdiction to the extent such Taxes constitute a Spinco Separate Tax Liability, excluding (A) any Income Taxes attributable to the Foreign Transfers (as defined in the Separation Agreement) and (B) any Income Taxes resulting from the application of Treasury Regulation Sections 1.1502-13 and 1.1502-19 to the Separation, (ii) incurred on any Spinco Separate Tax Return for any Tax period, (iii) incurred on any Combined Return for any Tax period ending before the Distribution Date in any Combined Jurisdiction to the extent such Income Taxes constitute a Spinco Separate Tax Liability and are paid after the Distribution Date, including but not limited to, any Income Taxes resulting from a Final Determination, and (iv) of Parent and its Affiliates attributable to acts or omissions of Spinco or its Affiliates taken after the Distribution (other than acts or omissions in the ordinary course of business or otherwise contemplated by the Separation Agreement).
(b) Parent shall be responsible for all Income Taxes (i) incurred on any Combined Return in any Combined Jurisdiction for any Tax period which are not the responsibility of Spinco pursuant to Section 2.2(a), (ii) incurred on any Parent Separate Tax Return, and (iii) imposed under Treasury Regulation Section 1.1502-6 or under any comparable or similar provision of state, local or foreign laws or regulations on Spinco or its Affiliates as a result of such company being a member of a consolidated, combined, or unitary group with Parent or any Parent Affiliate during any Tax period.
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(c) Notwithstanding anything in Section 2.2(a) or 2.2(b) to the contrary, any Income Taxes (including, but not limited to, any Income Taxes resulting from a Final Determination) incurred on any Combined Return in any Combined Jurisdiction that are directly attributable to the Trademark Agreement shall be borne 50% by Parent and 50% by Spinco.
(d) Not later than 90 days following the Distribution Date, any Spinco Separate Tax Liability related to Section 2.2(a)(i) shall be computed by Spinco (i) assuming Spinco and each Spinco Affiliate use the same accounting methods and elections as the Parent Group uses in filing its relevant consolidated or combined Tax Return, (ii) applying the applicable corporate Income Tax rate in effect for the relevant Tax period in the relevant jurisdiction, (iii) with respect to any U.S. federal income Tax, excluding any Spinco Available NOLs (as computed in accordance with Section 2.5(a)) or Spinco Available FTCs (as computed in accordance with Section 2.6(a)), (iv) with respect to any U.S. state and local Taxes using overall apportionment factors, and (v) in a manner consistent with past practice, if any. Any Spinco Separate Tax Liability related to Section 2.2(a)(iii) shall be computed by Parent, but otherwise consistent with this Section 2.2(d).
(e) Not later than 45 days following the Distribution Date, with respect to any Spinco Separate Tax Liability related to Section 2.2(a)(i), Spinco shall determine and pay to Parent an amount equal to the Estimated Spinco Separate Tax Liability. For each relevant jurisdiction, the Estimated Spinco Separate Tax Liability shall equal the product of (x) audited GAAP earnings before interest and Taxes generated by the Spinco Business (and reported on the relevant Combined Return), and (y) the applicable corporate Income Tax rate in effect for the relevant Tax period. Any amount of Estimated Spinco Separate Tax Liability paid under this Section 2.2(e) shall be a credit against any final payment required to be made by Spinco with respect to the relevant Combined Return.
2.3 |
Other Taxes. |
(a) Spinco shall be responsible for all Other Taxes attributable to Spinco and its Affiliates or to the Spinco Business for all Tax periods.
(b) Parent shall be responsible for all Other Taxes attributable to Parent and its Affiliates (other than Spinco and its Affiliates) and to its business activities other than the Spinco Business, or resulting from the Contribution and Distribution, for all Tax periods.
2.4 |
Allocation of Certain Income Taxes and Income Tax Items. |
(a) If Parent, Spinco or any of their respective Affiliates is permitted but not required under applicable U.S. federal, state, local or foreign Tax laws to treat the Distribution Date as the last day of a taxable period, then the parties shall treat such date as the last day of a taxable period under such applicable Tax law, and shall file any elections necessary or appropriate to such treatment; provided that this Section 2.4(a) shall not be construed to require Parent to change its taxable year.
(b) Transactions occurring, or actions taken, on the Distribution Date but after the Distribution outside the ordinary course of business by, or with respect to, Spinco or any of its Affiliates shall be deemed subject to the next day rule of Treasury Regulation Section
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1.1502-76(b)(1)(ii)(B) (and under any comparable or similar provision under state, local or foreign laws or regulations, provided that if there is no comparable or similar provision under state, local or foreign laws or regulations, then the transaction will be deemed subject to the next day rule of Treasury Regulation Section 1.1502-76(b)(1)(ii)(B)) and as such shall for purposes of this Agreement be treated (and consistently reported by the parties) as occurring in a Post-Distribution Tax Period of Spinco or a Spinco Affiliate, as appropriate, and reported on a Spinco Separate Tax Return.
(c) Tax attributes determined on a consolidated or combined basis for taxable periods ending before or including the Distribution Date shall be allocated to Parent and its Affiliates, and Spinco and its Affiliates, in accordance with the Code and the Treasury Regulations (and any applicable state, local, or foreign law or regulation). Parent shall reasonably determine the amounts and proper allocation of such attributes, and the Tax basis of the assets and liabilities transferred to Spinco in connection with the Contribution and Distribution, as of the Distribution Date; provided that Spinco shall be entitled to participate in such determination. Parent and Spinco agree to compute their Tax liabilities for taxable periods after the Distribution Date consistent with that determination and allocation, and treat the Tax Assets and Tax Items as reflected on any federal (or applicable state, local or foreign) Income Tax Return filed by the parties as presumptively correct.
2.5 |
Payment for Use of Net Operating Losses. |
(a) Not later than 30 days following the filing of the 2008 U.S. federal income Tax Return for the Parent Consolidated Group, Parent shall determine the following amounts: (i) the aggregate amount of U.S. federal net operating loss carryforwards available to the Parent Consolidated Group as of January 1, 2008 which are attributable to the Spinco Business (based on the same principles used to allocate net operating losses to Spinco pursuant to Section 2.4(dc)), (ii) the aggregate amount of U.S. federal net operating losses generated by the Spinco Business from January 1, 2008 up to and including the Distribution Date that are available to the Parent Consolidated Group (the sum of (i) and (ii) shall be considered the Spinco Available NOLs), and (iii) the amount of the Spinco Available NOLs that are allocable to the Spinco Group as of the day after the Distribution Date in accordance with Section 2.4(c) hereof (the Spinco Allocated NOLs).
(b) If the amount of Spinco Available NOLs exceeds the amount of Spinco Allocated NOLs, then Parent shall pay an amount to Spinco equal to the product of (i) the applicable corporate Income Tax rate and (ii) such excess. Such amount shall be paid by Parent not later than 45 days following the filing of the 2008 U.S. federal income Tax Return for the Parent Consolidated Group.
2.6 |
Payment for Use of Foreign Tax Credits. |
(a) Not later than 30 days following the filing of the 2008 U.S. federal income Tax Return for the Parent Consolidated Group, Parent shall determine the following amounts: (i) the aggregate amount of foreign tax credit carryforwards available to the Parent Consolidated Group as of January 1, 2008 which are attributable to the Spinco Business (based on the same principles used to allocate foreign tax credits to Spinco pursuant to Section 2.4(c)), (ii) the
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aggregate amount of foreign tax credits generated by the Spinco Business from January 1, 2008 up to and including the Distribution Date that are available to the Parent Consolidated Group (the sum of (i) and (ii) shall be considered the Spinco Available FTCs ), and (iii) the amount of the Spinco Available FTCs that are allocable to the Spinco Group as of the day after the Distribution Date in accordance with Section 2.4(c) hereof (the Spinco Allocated FTCs ).
(b) If the amount of Spinco Available FTCs exceeds the amount of Spinco Allocated FTCs, then Parent shall pay an amount to Spinco equal to such excess. Such amount shall be paid by Parent not later than 45 days following the filing of the 2008 U.S. federal income Tax Return for the Parent Consolidated Group.
2.7 |
Audit Adjustments. |
(a) Temporary Items.
i) Not later than 30 days after any Final Determination is made with respect to any Combined Return for any Tax period for which Parent or any Parent Affiliate is the Preparing Party, Parent shall determine the amount of any Tax Detriment or Tax Benefit attributable to the adjustment of any temporary Tax Items reported (or required to be reported) on such Combined Return. If, and to the extent, the amount of any such Tax Detriment or Tax Benefit so determined i) relates to an adjustment of Income Taxes that constitute a Spinco Separate Tax Liability, and ii) results in (or can reasonably be expected to result in) a Tax Benefit or Tax Detriment to Spinco or any Spinco Affiliate in a Post-Distribution Period attributable to a corresponding increase or decrease in the tax basis of any Spinco or Spinco Affiliate asset or liability, then not later than 45 days after such Final Determination is made, Spinco shall pay to Parent the amount of any such Tax Detriment, or Parent shall pay to Spinco the amount of any such Tax Benefit, as appropriate.
ii) Not later than 30 days after any Final Determination is made with respect to any Combined Return for any Tax period for which Spinco or any Spinco Affiliate is the Preparing Party, Spinco shall determine the amount of any Tax Detriment or Tax Benefit attributable to the adjustment of any temporary Tax Items reported (or required to be reported) on such Combined Return. If, and to the extent, the amount of any such Tax Detriment or Tax Benefit so determined i) relates to an adjustment of Income Taxes that do not constitute a Spinco Separate Tax Liability, and ii) results in (or can reasonably be expected to result in) a Tax Benefit or Tax Detriment to Parent or any Parent Affiliate in a Post-Distribution Period attributable to a corresponding increase or decrease in the tax basis of any Parent or Parent Affiliate asset or liability, then not later than 45 days after such Final Determination is made, Parent shall pay to Spinco the amount of any such Tax Detriment, or Spinco shall pay to Parent the amount of any such Tax Benefit, as appropriate.
(b) Permanent Items.
i) Not later than 30 days after any Final Determination is made with respect to any Combined Return for any Tax period for which Parent or any Parent
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Affiliate is the Preparing Party, Parent shall determine the amount of any Tax Detriment or Tax Benefit attributable to the adjustment of any permanent Tax Items reported (or required to be reported) on such Combined Return. If, and to the extent, the amount of any such Tax Detriment or Tax Benefit so determined relates to an adjustment of Income Taxes that constitute a Spinco Separate Tax Liability, then not later than 45 days after such Final Determination is made, Spinco shall pay to Parent the amount of any such Tax Detriment, or Parent shall pay to Spinco the amount of any such Tax Benefit, as appropriate.
ii) Not later than 30 days after any Final Determination is made with respect to any Combined Return for any Tax period for which Spinco or any Spinco Affiliate is the Preparing Party, Spinco shall determine the amount of any Tax Detriment or Tax Benefit attributable to the adjustment of any permanent Tax Items reported (or required to be reported) on such Combined Return. If, and to the extent, the amount of any such Tax Detriment or Tax Benefit so determined relates to an adjustment of Income Taxes that do not constitute a Spinco Separate Tax Liability, then not later than 45 days after such Final Determination is made, Parent shall pay to Spinco the amount of any such Tax Detriment, or Spinco shall pay to Parent the amount of any such Tax Benefit, as appropriate.
iii) A Party shall be required to make payment under this Section 2.7(b) only to the extent the cumulative amount of all payments otherwise required to be made by such Party under Sections 2.7(b)(i) and 2.7(b)(ii), net of the cumulative amount of all payments such Party is otherwise entitled to receive from the other Party under Sections 2.7(b)(i) and 2.7(b)(ii), exceeds the greater of a) $2,000,000 or, b) the sum of $2,000,000 and the net amount (after the application of Section 2.7(b)(iv) below) of all payments previously made by such Party under this Section 2.7(b).
iv) If subsequent to the time a Party makes a payment under this Section 2.7(b), a Final Determination is made with respect to any Combined Return which would have had the effect of reducing the required amount of such payment if such Final Determination were made prior to such payment, then the other Party which received such payment shall make a payment to such Party in an amount equal to such reduction.
(c) Calculation.
i) For purposes of Section 2.7, the Parties agree that the extent to which any Tax Detriment or Tax Benefit is treated as being attributable to either a permanent adjustment or a temporary adjustment shall be made in a manner consistent with past historical practice of the Parent Consolidated Group.
ii) For purposes of determining any amount due under this Section 2.7, any foreign Taxes shall be translated into U.S. dollars using the same exchange rate as is used for purposes of translating the income statement of the relevant entity for the month in which the Tax is assessed.
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iii) Any Tax Detriment or Tax Benefit determined under this Section 2.7 shall be calculated by applying the applicable corporate Income Tax rate in effect for the relevant Tax period in the relevant jurisdiction.
2.8 Tax Refunds. Except as provided in Section 2.9 and subject to the limitations set forth in Section 2.7:
(a) Parent shall be entitled to all refunds (including refunds paid by means of a credit against other or future Tax liabilities) and credits with respect to any Tax for which Parent is responsible under Section 2.1. Spinco shall be entitled to all refunds (including refunds paid by means of a credit against other or future Tax liabilities) and credits with respect to any Tax for which Spinco is responsible under Section 2.1.
(b) Spinco and Parent shall each forward to the other party, or reimburse such other party for, any refunds received by the first party and due to such other party pursuant to this Section 2.8. Where a refund is received in the form of a credit against other or future Tax liabilities, reimbursement with respect to such refund shall be due in each case on the due date for payment of the Tax against which such refund has been credited. All payments made pursuant to this Section 2.8 shall describe in reasonable detail the basis for the calculation of the amount being paid.
(c) If one party reasonably so requests, the other party (at the first partys expense) shall file for and pursue any refund to which the first party is entitled under this Section; provided that the other party need not pursue any refund on behalf of the first party unless the first party provides the other party a certification by an appropriate officer of the first party setting forth the first partys belief (together with supporting analysis) that the Tax treatment of the Tax Items on which the entitlement to such refund is based is more likely than not correct, and is not a Tax Item arising from a Reportable Transaction.
(d) If the other party pays any amount to the first party under this Section 2.8 and, as a result of a subsequent Final Determination, the first party is not entitled to some or all of such amount, the other party shall notify the first party of the amount to be repaid to the other party, and the first party shall then repay such amount to the other party, together with any interest, fines, additions to Tax, penalties or any additional amounts imposed by a Taxing Authority relating thereto.
2.9 |
Carrybacks. |
(a) Notwithstanding anything in this Agreement, Spinco shall file (or cause to be filed) on a timely basis any available election to waive the carryback of net operating losses, Tax credits or other Tax Items by Spinco or any Affiliate from a Post-Distribution Tax Period to a Straddle Period or Pre-Distribution Tax Period. Such elections shall include, but not be limited to, the election described in Treasury Regulation Section 1.1502-21(b)(3)(ii)(B), and any analogous election under state, local, or foreign Income Tax laws, to waive the carryback of net operating losses for federal Income Tax purposes.
(b) If, notwithstanding the provisions of Section 2.9(a), Spinco is required to carryback losses or credits, Spinco shall be entitled to any refund of any Tax obtained by Parent
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or a Parent Affiliate as a result of the carryback of losses or credits of Spinco or its Affiliate from any Post-Distribution Tax Period to any Pre-Distribution Tax Period. Such refund is limited to the net amount received by Parent or a Parent Affiliate (by refund, offset against other Taxes, or otherwise), net of any Tax Detriment incurred by Parent or such Affiliate resulting from such refund. Upon request by Spinco, Parent shall advise Spinco of an estimate of any Tax Detriment Parent projects will be associated with any carryback of losses or credits of Spinco or its Affiliates as provided in this Section 2.9(b).
(c) If Spinco has a Tax Item that must be carried back to any Pre-Distribution Tax Period, Spinco shall notify in writing Parent that such Tax Item must be carried back. Such notification shall include a description in reasonable detail of the ground for the refund and the amount thereof, and a certification by an appropriate officer of Spinco setting forth Spincos belief (together with supporting analysis) that the Tax treatment of such Tax Item is more likely than not correct, and is not a Tax Item arising from a Reportable Transaction.
(d) If Parent pays any amount to Spinco under Section 2.9(b) and, as a result of a subsequent Final Determination, Spinco is not entitled to some or all of such amount, Parent shall notify Spinco of the amount to be repaid to Parent, and Spinco shall then repay such amount to Parent, together with any interest, fines, additions to Tax, penalties or any additional amounts imposed by a Taxing Authority relating thereto.
2.10 |
Timing of Certain Payments. |
(a) Any payment required to be made pursuant to Article II (other than payments specified in Section 2.5(b), Section 2.6(b), or Section 2.7(c)(ii)) shall be made by the party obligated to make such payment (i) in the case of a refund of Tax, within fourteen (14) days after receipt (whether by way of payment, credit, or offset against any payments due or otherwise) of such refund or (ii) in the case of a payment of Tax, the later of (x) fourteen (14) days prior to the due date for payment of such Tax and (y) the delivery of written demand for the payment hereunder to the party obligated to make such payment hereunder.
(b) All payments and demands for payment shall be accompanied by a calculation setting forth in reasonable detail the basis for the amount paid or demanded.
2.11 |
Treatment of Restricted Stock, Stock Options, and Deferred Compensation. |
(a) To the extent permitted by law, Parent (or the appropriate Parent Affiliate) shall claim all Tax deductions arising by reason of the grant or vesting of Employee Restricted Stock, and by reason of exercises of Employee Stock Options, at the time such Tax deduction can be claimed, provided that such Employee Restricted Stock or Employee Stock Option is then held by a Parent Employee. To the extent permitted by law, Spinco (or the appropriate Spinco Affiliate) shall claim all Tax deductions arising by reason of the grant or vesting of Employee Restricted Stock, and by reason of exercises of Employee Stock Options, at the time such Tax deduction can be claimed, provided that such Employee Restricted Stock or Employee Stock Option is then held by a Spinco Employee. To the extent permitted by law, Spinco (or the appropriate Spinco Affiliate) shall claim all Tax deductions arising by reason of the payment (or inclusion in income) of compensation the receipt of which was deferred by a Spinco Employee
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prior to the Distribution Date, the payment of which will occur after the Distribution Date, and the obligation to make such payment is assumed by Spinco in connection with the Contribution and Distribution.
(b) The party (or Affiliate thereof) initially claiming the Tax deduction described in Section 2.11(a) shall withhold applicable Taxes and satisfy applicable Tax reporting obligations with respect to the taxation of the Employee Restricted Stock, Employee Stock Options, or deferred compensation with respect to which the Tax deduction is claimed. The parties to this Agreement shall cooperate so as to permit the party initially claiming such deduction to discharge any applicable Tax withholding and Tax reporting obligations.
2.12 Successor Employer Status. Parent and Spinco shall, to the extent permitted by law, (i) treat Spinco and its Affiliates (as applicable) as a successor employer and Parent and its Affiliates (as applicable) as a predecessor, within the meaning of sections 3121(a)(1) and 3306(b)(1) of the Code, with respect to employees of the Spinco Business that were employed by Spinco and its Affiliates starting on January 1, 2008 for purposes of Taxes imposed under the United States Federal Unemployment Tax Act or the United States Federal Insurance Contributions Act and (ii) cooperate with each other to avoid the filing of more than one IRS Form W-2 with respect to each such employee for the calendar year in which the Distribution occurs.
ARTICLE III
TAX RETURNS AND INFORMATION EXCHANGE
3.1 |
Tax Return Preparation Responsibility; Payment of Taxes Shown Thereon. |
(a) Parent shall prepare and file (i) all Combined Returns in any Combined Jurisdiction for which Parent (or an Affiliate of Parent) is the parent entity (including, but not limited to, all Tax Returns for the Parent Consolidated Group), (ii) all Parent Separate Tax Returns, and (iii) all Tax Returns pertaining to Other Taxes for which Parent is responsible pursuant to Section 2.1.
(b) Spinco shall prepare and file (i) all Combined Returns in any Combined Jurisdiction for which Spinco (or an Affiliate of Spinco) is the parent entity, (ii) all Spinco Separate Tax Returns, and (iii) all Tax Returns pertaining to Other Taxes for which Spinco is responsible pursuant to Section 2.1.
(c) Parent and its Affiliates shall be responsible for the remitting of payment of any Taxes shown on a Tax Return for which it is responsible for the preparation and filing thereof pursuant to Section 3.1(a). Spinco and its Affiliates shall be responsible for the payment of any Taxes shown on a Tax Return for which it is responsible for the preparation and filing thereof pursuant to Section 3.1(b).
(d) If Parent remits a Tax payment pursuant to Section 3.1(c), but Spinco is responsible pursuant to Article II for all or a portion of the Tax shown on the applicable Tax Return, then Spinco shall pay to Parent that portion of the Tax shown on such Tax Return for
15
which Spinco is responsible pursuant to Article II. If Spinco remits a Tax payment pursuant to Section 3.1(c), but Parent is responsible pursuant to Article II for all or a portion of the Tax shown on the applicable Tax Return, then Parent shall pay to Spinco that portion of the Tax shown on such Tax Return for which Parent is responsible pursuant to Article II. Nothing in this Section 3.1(d) shall affect the allocation of responsibility for Taxes as set forth in Article II.
3.2 Review of Tax Returns. Parent, with respect to those Income Tax Returns prepared by Parent described in Sections 3.1(a)(i), and Spinco, with respect to those Income Tax Returns prepared by Spinco described in Sections 3.1(b)(i) (in each case, the Filing Party , and such other party the Non-filing Party ) shall prepare and file such Tax Returns in a manner consistent with past Tax reporting practices with respect to the Spinco Business. The Filing Party shall provide the Non-Filing Party with a draft of each such Income Tax Return at least 15 days prior to the due date for filing thereof. If such draft shows Tax for which the Non-Filing Party is responsible pursuant to this Agreement, the Non-Filing Party shall have the right to review and approve (which approval shall not be unreasonably withheld) each such Income Tax Return within 7 days following its receipt thereof. The Filing Party and Non-Filing Party shall attempt in good faith mutually to resolve any disagreements regarding such Income Tax Returns prior to the due date for filing thereof; provided , that the failure to resolve all disagreements prior to such date shall not relieve the Filing Party of its obligation to file (or cause to be filed) any such Income Tax Return.
3.3 |
Certain Items Related to Tax Return Preparation. |
(a) Unless otherwise required by a Taxing Authority, the parties hereby agree to prepare and file all Tax Returns, and to take all other actions, in a manner consistent with this Agreement and the Separation Agreement and, to the extent not inconsistent with this Agreement, the Separation Agreement or applicable law, any Tax Ruling, Ruling Documents, Tax Opinion, or Representation Letter. All Tax Returns shall be filed on a timely basis (taking into account applicable extensions) by the party responsible for filing such Tax Returns under this Agreement; provided , that if a Tax Return is to be signed by an officer of a company different from the party responsible for filing such Tax Return, each party hereto shall have (or cause its Affiliate to have) the appropriate officer sign such Tax Return promptly after presentation thereof for signature.
(b) Except as otherwise specifically provided for in this Agreement, Parent shall have the exclusive right, in its reasonable discretion, with respect to any Tax Return for which it is responsible for the filing thereof pursuant to this Agreement, to determine (i) the manner in which such Tax Return shall be prepared and filed, including the accounting methods, positions, conventions and principles of taxation to be used and the manner in which any Tax Item shall be reported; (ii) whether any extensions may be requested; (iii) the election(s) that will be made by Parent, any Parent Affiliate, Spinco, or any Spinco Affiliate on such Tax Return; (iv) whether any amended Tax Return(s) shall be filed; (v) whether any claim(s) for refund shall be made; (vi) whether any refund shall be paid by way of refund or credited against any liability for the related Tax; and (vii) whether to retain outside firms to prepare or review such Tax Returns; provided , that Parent shall (i) prepare all Tax Returns for which it has filing responsibility, to the extent such Tax Returns reflect activities of the Spinco Business, in a manner consistent with past Tax reporting practices with respect to the Spinco Business, except as required by law or
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regulation, and (ii) indemnify and hold harmless Spinco against any Tax Detriment to the extent such Tax Detriment is directly caused by any determination by Parent under this Section 3.3(b) which is inconsistent with past practice (if any).
(c) Within 10 days after filing the U.S. federal Income Tax Return for the Parent Consolidated Group for the tax year that includes the Distribution Date, at the written request of Spinco, Parent shall notify Spinco of the net operating loss, net capital loss, charitable contribution, and credit carryforwards associated with Spinco and each of its Affiliates, and the Tax bases of the assets and liabilities, transferred to Spinco in connection with the Contribution and Distribution. Any changes in such Tax attributes or Tax bases arising thereafter shall be communicated by Parent to Spinco within 10 days after such change is made or there is a Final Determination of such change.
(d) Parent and Spinco agree to take (or refrain from taking) any action reasonably requested by the other that would reasonably be expected to result in a Tax Benefit or avoid a Tax Detriment to the other, provided that such action does not result in any additional cost not fully compensated for by the requesting party. The parties hereby acknowledge that the preceding sentence is not intended to limit, and therefore shall not apply to, the rights of the parties with respect to matters otherwise covered by this Agreement.
(e) Nothing in this Agreement shall be construed as a guarantee or representation of the existence or amount of any loss, credit, carryforward, basis or other Tax Item or Tax Asset, whether past, present or future, of Parent, Spinco, or their respective Affiliates.
3.4 |
Tax Information Exchanges and Tax Services. |
(a) Parent, with respect to those Income Tax Returns prepared by Spinco described in Sections 3.1(b)(i), and Spinco, with respect to those Income Tax Returns prepared by Parent described in Sections 3.1(a)(i) (in each case, the Non-preparing Party , and such other party the Preparing Party ) shall provide the Preparing Party, no later than 45 days after the Distribution Date, a Tax Package for the purpose of preparing such Tax Return. The Non-preparing Party shall timely furnish to the Preparing Party such additional information and documents as the Preparing Party may reasonably request. The parties acknowledge that such information may include materials regarding accounting, accounting records, income and expense, costs and cost production, background, research and development, comparables, marketing, suppliers and customers, and other information regarding the Non-preparing Partys business related to the Tax treatment of such business. Upon request by the Preparing Party, an appropriate officer of the Non-preparing Party shall provide written certification that, to such officers best knowledge and belief, all information provided pursuant to this Section 3.4 is accurate and complete in all material respects. The Non-preparing Party and its Affiliates shall also make available it employees and officers as the Preparing Party may reasonably request in connection with such Tax Return preparation by the Preparing Party. The Non-preparing Party shall be responsible for the cost (without reimbursement from the Preparing Party) of furnishing to the Preparing Party the Tax Package, additional information, documents and employees and officers provided for in this Section 3.4(a).
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(b) If the Non-Preparing Party fails to provide any information required by Section 3.4(a) within the time period specified, the Preparing Party (i) shall be permitted, upon 48 hours notice, to use its own employees or agents to view or obtain the materials contemplated in Section 3.4(a) from the Non-preparing Partys facilities, and (ii) may file the applicable Tax Return based on the information available to the Preparing Party at the time such Tax Return is due. The Non-preparing and its Affiliates shall (i) reimburse the Preparing Party for any internal or incremental costs incurred by the Preparing Party in having its employees or agents view or obtain such material, and (ii) be responsible for and shall indemnify and hold harmless the Preparing Party and its Affiliates from Taxes or other costs imposed on the Preparing Party or any of its Affiliates, to the extent resulting from the Non-preparing Party failure to provide such information in a timely manner.
ARTICLE IV
TAX TREATMENT OF THE DISTRIBUTION
4.1 |
Representations. |
(a) Ruling Documents . Spinco hereby represents and warrants that (i) it has examined the Ruling Documents (including, without limitation, the representations to the extent that they relate to the plans, proposals, intentions, and policies of Spinco, the Spinco Affiliates, or the Spinco Business), and (ii) to the extent in reference to Spinco, the Spinco Affiliates, or the Spinco Business, the facts presented and the representations made therein are true, correct, and complete.
(b) Tax-Free Status . Spinco hereby represents and warrants that it has no plan or intention of taking any action, or failing or omitting to take any action, or knows of any circumstance, that could reasonably be expected to (i) cause the Contribution and/or the Distribution not to have Tax-Free Status or (ii) cause any representation or factual statement made in this Agreement, the Separation Agreement, the Tax Ruling, the Tax Opinion, or the Spinco Representation Letter to be untrue in a manner that would have an adverse effect on the Tax-Free Status of the Contribution and/or the Distribution.
(c) Plan or Series of Related Transactions . Spinco hereby represents and warrants that, to the knowledge of Spinco and the management of Spinco, neither the Contribution nor the Distribution are part of a plan (or series of related transactions) pursuant to which a Person will acquire stock representing a fifty-percent or greater interest (within the meaning of Sections 355(d) and (e) of the Code) in Spinco or any successor to Spinco.
4.2 |
Covenants. |
(a) Actions Consistent with Representations and Covenants . Spinco shall not (and shall not permit any of its Affiliates or grant or permit any of its Affiliates to grant implicit or explicit permission to any other person to) take any action, and Spinco shall not (and shall not permit any of its Affiliates or grant or permit any of its Affiliates to grant implicit or explicit permission to any other person to) fail to take any action, where such action or failure to act would be inconsistent with or cause to be untrue any material, information, covenant, or
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representation in this Agreement, the Separation Agreement, the Tax Ruling, the Ruling Documents (including, without limitation, the representations to the extent that they relate to the plans, proposals, intentions, and policies of Spinco, the Spinco Affiliates, or the Spinco Business), the Tax Opinion, or the Spinco Representation Letter.
(b) Preservation of Tax-Free Status; Spinco Business . Spinco shall not take any action (including, but not limited to, any cessation, transfer or disposition of all or any portion of the Spinco Business; payment of extraordinary dividends to shareholders; and acquisitions or issuances of stock) or permit any Spinco Affiliate to take any such action, and Spinco shall not fail to take any such action or permit any Spinco Affiliate to fail to take any such action where such action or failure to act would have an adverse effect on the Tax-Free Status of the Contribution and/or the Distribution.
(c) Sales, Issuances and Redemptions of Equity Securities . Until the first day after the Restriction Period, neither Spinco nor any Spinco Affiliate shall, or shall agree to, sell or otherwise issue to any Person, or redeem or otherwise acquire from any Person, any Equity Securities of Spinco or any Spinco Affiliate; provided , however , that (i) Spinco may repurchase such Equity Securities to the extent that such repurchases meet the requirements of Section 4.05(1)(b) of Revenue Procedure 96-30 (as in effect prior to its modification by Revenue Procedure 2003-48), (ii) Spinco may issue such Equity Securities to the extent such issuances satisfy Safe Harbor VIII (relating to acquisitions in connection with a persons performance of services) or Safe Harbor IX (relating to acquisitions by a retirement plan of an employer) of Treasury Regulation Section 1.355-7(d), and (iii) Spinco may issue Equity Securities provided that such issuance does not, individually or when aggregated with other issuances and any transactions occurring in the four-year period beginning on the date which is two years before the Distribution Date, and with any other transaction which is part of a plan or series of related transactions (within the meaning of Section 355(e) of the Code) that includes the Distribution (excluding issuances of Equity Securities described in clause (ii) above, but including, for the avoidance of doubt, transactions described in Section 4.2(d) below), result in one or more Persons acquiring, directly or indirectly, (as determined under Section 355(e) of the Code, taking into account applicable constructive ownership rules) stock representing a 25% or greater interest, by vote or value, in Spinco (or any successor thereto).
(d) Tender Offers; Other Business Transactions . Until the first day after the Restriction Period, neither Spinco nor any Spinco Affiliate shall (i) solicit any Person to make a tender offer for, or otherwise acquire or sell, the Equity Securities of Spinco, (ii) participate in or support any unsolicited tender offer for, or other acquisition, issuance or disposition of, the Equity Securities of Spinco, or (iii) approve or otherwise permit any proposed business combination or merger or any transaction which, in the case of clauses (i), (ii) or (iii), individually or when aggregated with any other transactions occurring within the four-year period beginning on the date which is two years before the Distribution Date, and with any other transaction which is part of a plan or series of related transactions (within the meaning of Section 355(e) of the Code) that includes the Distribution (excluding issuances of Equity Securities described in Section 4.2(c)(ii) above, but including, for the avoidance of doubt, issuances of Equity Securities described in Section 4.2(c)(i) and Section 4.2(c)(iii) above), results in one or more Persons acquiring, directly or indirectly, (as determined under Section 355(e) of the Code, taking into account applicable constructive ownership rules) stock representing a 25% or greater
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interest, by vote or value, in Spinco (or any successor thereto). In addition, neither Spinco nor any Spinco Affiliate shall at any time, whether before or subsequent to the expiration of the Restriction Period, engage in any action described in clauses (i), (ii) or (iii) of the preceding sentence if it is pursuant to an arrangement negotiated (in whole or in part) prior to the first anniversary of the Distribution, even if at the time of the Distribution or thereafter such action is subject to various conditions.
(e) Dispositions of Assets . Until the first day after the Restriction Period, neither Spinco nor any Spinco Affiliate shall, or shall agree to, sell, transfer, or otherwise dispose of or agree to dispose of assets (including, for such purpose, any shares of capital stock of a subsidiary and any transaction treated for tax purposes as a sale, transfer or disposition) that, in the aggregate, constitute more than 50% of the consolidated gross assets of Spinco, nor shall Spinco or any Spinco Affiliate sell, transfer, or otherwise dispose of or agree to dispose of assets (including, for such purpose, any shares of capital stock of a subsidiary and any transaction treated for tax purposes as a sale, transfer or disposition) that, in the aggregate, constitute more than 50% of the consolidated gross assets of the Spinco Group. The foregoing sentence shall not apply to sales, transfers, or dispositions of assets in the ordinary course of business. The percentages of gross assets or consolidated gross assets of Spinco or the Spinco Group, as the case may be, sold, transferred, or otherwise disposed of, shall be based on the fair market value of the gross assets of Spinco and the members of the Spinco Group as of the Distribution Date. For purposes of this Section 4.2(e), a merger of Spinco or one of its subsidiaries with and into any Person (other than Spinco or one of its subsidiaries) shall constitute a disposition of all of the assets of Spinco or such subsidiary.
(f) Liquidations, Mergers, Reorganizations . Until the first day after the Restriction Period, neither Spinco nor its subsidiaries shall, or shall agree to, voluntarily dissolve or liquidate or engage in any merger (except for a Cash Acquisition Merger), consolidation or other reorganization; provided , however , mergers of direct or indirect wholly-owned subsidiaries of Spinco solely with and into Spinco or with other direct or indirect wholly-owned subsidiaries of Spinco, and liquidations of Spincos subsidiaries, are not subject to this Section 4.2(f) to the extent not otherwise inconsistent with the Tax-Free Status of the Contribution and the Distribution; provided further that nothing in this Section 4.2(f) shall prohibit any merger involving Spinco or an Spinco Affiliate not otherwise prohibited by Section 4.2(d).
(g) Changes to Voting Rights . Until the first day after the Restriction Period, neither Spinco nor any Spinco Affiliate shall amend its certificate of incorporation (or other organizational documents), or take any other action, whether through a stockholder vote or otherwise, affecting the relative voting rights of its separate classes of stock (including, without limitation, through the conversion of one class of stock into another class of stock), but only to the extent such change, if treated as an issuance of Equity Securities, would be prohibited by Section 4.2(c).
(h) Permitted Transactions . Notwithstanding the restrictions otherwise imposed by Sections 4.2(c) through 4.2(g), during the Restriction Period, Spinco may (i) issue Equity Securities of Spinco or any Spinco Affiliate in a transaction that would otherwise breach the covenant set forth in Section 4.2(c), (ii) approve, participate in, support or otherwise permit a proposed business combination or transaction that would otherwise breach the covenant set forth
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in Section 4.2(d), (iii) sell or otherwise dispose of the assets of the Spinco Group in a transaction that would otherwise breach the covenant set forth in Section 4.2(e), (iv) merge Spinco or any Spinco Affiliate with another entity without regard to which party is the surviving entity in a transaction that would otherwise breach the covenant set forth in Section 4.2(f), or (v) take any action affecting the relative voting rights of the separate classes of stock of Spinco or any Spinco Affiliate that would otherwise breach the covenant set forth in Section 4.2(g), if and only if such transaction or action would not violate Section 4.2(a) or Section 4.2(b) and Section 4.2(i) is satisfied.
(i) Supplemental Ruling; Tax Opinion ; Financial Guarantee. Prior to entering into any agreement contemplating a transaction or action described in clauses (i), (ii), (iii), (iv) or (v) of Section 4.2(h) and prior to consummating any such transaction or action: (A) Spinco shall request that Parent obtain a Supplemental Ruling in accordance with Section 4.3 of this Agreement to the effect that such transaction will not affect the Tax-Free Status of the Contribution and the Distribution and Parent shall have received such a Supplemental Ruling in form and substance satisfactory to Parent in its sole and absolute discretion or (B) Spinco shall provide Parent with an unqualified Tax Opinion from a nationally recognized independent tax advisor in form and substance satisfactory to Parent in its sole and absolute discretion (and in determining whether an opinion is satisfactory, Parent may consider, among other factors, the appropriateness of any underlying assumptions and managements representations if used as a basis for the opinion) providing that such transaction or action will not affect the Tax-Free Status of the Contribution and the Distribution. In addition, regardless of whether Spinco satisfies the requirement of this Section 4.2(i)(A) or Section 4.2(i)(B), Spinco shall also deliver to Parent an unconditional letter of credit or other financial guarantee, the form and terms of which (including, but not limited to, face amount, issuer, expiration date, terms of renewal, and drawdown rights) are acceptable to Parent, in its sole and exclusive judgment.
4.3 |
Supplemental Rulings and Restrictions on Spinco. |
(a) Supplemental Rulings at Parent Request . Parent shall have the right to obtain a Supplemental Ruling in its sole and absolute discretion. If Parent determines to obtain a Supplemental Ruling, Spinco shall (and shall cause each Spinco Affiliate to) cooperate with Parent and take any and all actions reasonably requested by Parent in connection with obtaining the Supplemental Ruling (including, without limitation, by making any representation or covenant or providing any materials or information requested by any Tax Authority; provided that Spinco shall not be required to make (or cause any Spinco Affiliate to make) any representation or covenant that is inconsistent with historical facts or as to future matters or events over which it has no control). Parent shall reimburse Spinco for all reasonable costs and expenses incurred by Spinco or its Affiliates in obtaining a Supplemental Ruling requested by Parent within ten (10) Business Days after receiving an invoice from Spinco therefor. In connection with obtaining a Supplemental Ruling pursuant to this Section 4.3(a), (A) Parent shall keep Spinco informed in a timely manner of all material actions taken or proposed to be taken by Parent in connection therewith; (B) Parent shall (1) reasonably in advance of the submission of any Supplemental Ruling Request, provide Spinco with a draft copy thereof, (2) reasonably consider Spincos comments on such draft copy, and (3) provide Spinco with a final copy of any Supplemental Ruling Request; and (C) Parent shall provide Spinco with notice reasonably in advance of, and Spinco shall have the right to attend, any formally scheduled meetings with any Tax Authority (subject to the approval of the Tax Authority) that relate to such Supplemental Ruling.
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(b) Supplemental Rulings at Spincos Request . Parent agrees that at the reasonable request of Spinco pursuant to Section 4.2(i), Parent shall (and shall cause each Parent Affiliate to) cooperate with Spinco and use its reasonable best efforts to seek to obtain, as expeditiously as possible, a Supplemental Ruling from the IRS for the purpose of confirming compliance on the part of Spinco or an Spinco Affiliate with its obligations under Section 4.2 of this Agreement. Further, in no event shall Parent be required to file any Supplemental Ruling Request under this Section 4.3(b) unless Spinco represents that (A) it has reviewed the Supplemental Ruling Documents and (B) all information and representations, if any, relating to Spinco or any Spinco Affiliate, contained in the Supplemental Ruling Documents are true, correct and complete in all material respects. Spinco shall reimburse Parent for all reasonable costs and expenses incurred by Parent or its Affiliates in obtaining a Supplemental Ruling requested by Spinco within ten (10) Business Days after receiving an invoice from Parent therefor. Spinco hereby agrees that Parent shall have sole and exclusive control over the process of obtaining a Supplemental Ruling, and that only Parent shall apply for a Supplemental Ruling. In connection with obtaining a Supplemental Ruling pursuant to this Section 4.3(b), (A) Parent shall keep Spinco informed in a timely manner of all material actions taken or proposed to be taken by Parent in connection therewith; (B) Parent shall (1) reasonably in advance of the submission of any Supplemental Ruling Request, provide Spinco with a draft copy thereof, (2) reasonably consider Spincos comments on such draft copy, and (3) provide Spinco with a final copy of any Supplemental Ruling Request; and (C) Parent shall provide Spinco with notice reasonably in advance of, and Spinco shall have the right to attend, any formally scheduled meetings with any Tax Authority (subject to the approval of the Tax Authority) that relate to such Supplemental Ruling.
(c) Prohibition on Spinco . Spinco hereby agrees that neither it nor any Spinco Affiliate shall seek any guidance from the IRS or any other Tax Authority (whether written, verbal or otherwise) concerning the Contribution or the Distribution (or the impact of any transaction on the Contribution or the Distribution).
4.4 Liability for Undertaking Certain Actions. Notwithstanding anything in this Agreement to the contrary, Spinco shall be responsible for, and shall indemnify and hold harmless Parent and each of its Affiliates from and against any liability for Taxes that are attributable to or result from (i) any act or failure to act by Spinco or any Spinco Affiliate, which action or failure to act breaches any of the representations or covenants contained in Article IV hereof (without regard to the exceptions or provisos set forth in such provisions), expressly including, for this purpose, any Permitted Transactions and any act or failure to act that breaches Section 4.2(a) or 4.2(b), regardless of whether such act or failure to act is permitted by Section 4.2(c) through 4.2(g), and (ii) Tax counsel withdrawing all or any portion of the Tax Opinion or any Tax Authority withdrawing all or any portion of a private letter ruling issued to Parent in connection with the Contribution and/or the Distribution because of a breach by Spinco or any Spinco Affiliate of a representation made in this Agreement (or made in connection with the Tax Opinion or any Supplemental Ruling contemplated by Section 4.3(e)).
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4.5 |
Cooperation. |
(a) Without limiting the prohibition set forth in Section 4.3(c), until the first day after the Restriction Period, Spinco shall furnish Parent with a copy of any ruling request that Spinco or any Spinco Affiliate may file with the IRS or any other Tax Authority and any opinion received that in any respect relates to, or otherwise reasonably could be expected to have any effect on, the Tax-Free Status of any of the Contribution and the Distribution.
(b) Parent shall reasonably cooperate with Spinco in connection with any request by Spinco for an unqualified Tax Opinion pursuant to Section 4.2(i) and shall use its reasonable best efforts to assist Spinco in obtaining an unqualified Tax Opinion pursuant to Section 4.2(i).
(c) Until the first day after the Restriction Period, Spinco shall provide adequate advance notice to Parent in accordance with the terms of Section 4.5(d) of any action described in Sections 4.2(a) through 4.2(g) within a period of time sufficient to enable Parent to seek injunctive relief pursuant to Section 4.6 in a court of competent jurisdiction.
(d) Each notice required by Section 4.5(c) shall set forth the terms and conditions of any such proposed transaction, including, without limitation, (i) the nature of any related action proposed to be taken by the board of directors of Spinco, (ii) the approximate number of Equity Securities (and their voting and economic rights) of Spinco or any Spinco Affiliate (if any) proposed to be sold or otherwise issued, (iii) the approximate value of Spincos assets (or assets of any Spinco Affiliate) proposed to be transferred, and (iv) the proposed timetable for such transaction, all with sufficient particularity to enable Parent to seek such injunctive relief. Promptly, but in any event within 30 days, after Parent receives such written notice from Spinco, Parent shall notify Spinco in writing of Parents decision to seek injunctive relief pursuant to Section 4.6.
(e) From and after the date Parent first requests a Supplemental Ruling pursuant to Section 4.3 until the first day after the two-year anniversary of such date that Parent receives such Supplemental Ruling (pursuant to Section 4.3(a) or 4.3(b)), neither Spinco nor any Spinco Affiliate shall take (or refrain from taking) any action to the extent that such action or inaction would have caused a representation given by Spinco in connection with any such request for a Supplemental Ruling to have been untrue as of the relevant representation date, had Spinco or any Spinco Affiliate intended to take (or refrain from taking) such action on the relevant representation date.
4.6 Enforcement. The parties hereto acknowledge that irreparable harm would occur in the event that any of the provisions of this Article IV were not performed in accordance with their specific terms or were otherwise breached. The parties hereto agree that, in order to preserve the Tax-Free Status of the Contribution and the Distribution, injunctive relief is appropriate to prevent any violation of the foregoing covenants; provided , however , that injunctive relief shall not be the exclusive legal or equitable remedy for any such violation.
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ARTICLE V
COOPERATION AND EXCHANGE OF INFORMATION
5.1 |
Cooperation. |
(a) Notwithstanding anything to the contrary in the Separation Agreement, Parent and Spinco shall cooperate (and shall cause each of their respective Affiliates to cooperate) fully at such time and to the extent reasonably requested by the other party in connection with the preparation and filing of any Tax Return or the conduct of any audit, dispute, proceeding, suit, or Tax action concerning any issues or any other matter contemplated hereunder. Such cooperation shall include, without limitation:
i) Compliance with the provisions of Section 3.4;
ii) The retention and provision on demand of books, records, documentation, information, or other materials relating to any Tax Return, or any supplemental information necessary or reasonably helpful to support any position taken therein, until the later of (x) the expiration of the applicable statute of limitation (giving effect to any extension, waiver, or mitigation thereof) and (y) in the event any claim has been made under this Agreement for which such information is relevant, the occurrence of a Final Determination with respect to such claim;
iii) Unless otherwise agreed to by the parties, the retention and provision on demand, of any books, records, documentation, information, or other materials necessary or reasonably helpful in sustaining any position (including, without limitation, any transfer pricing position) taken with any Taxing Authority including, without limitation, materials regarding accounting, income and expense, costs and cost production, background, research and development, comparables, marketing, suppliers and customers, and other information regarding the Spinco Business related to the Tax treatment of such business;
iv) The retention and provision of additional information with respect to an explanation of the manner in which any Tax Return or Tax Package was prepared and filed, and any additional information reasonably helpful in explaining the materials provided under clauses (ii) and (iii) of this Section 5.1 until the other party provides written notice that such material may be destroyed;
v) The execution of any document that may be necessary or reasonably helpful in connection with the filing of any Tax Return by Parent or its Affiliates or Spinco or its Affiliates, or in connection with any audit, proceeding, refund claim, suit, or action for any such Tax Return; and
vi) The use of the parties reasonable best efforts to obtain any documentation from a governmental authority or a third party that may be necessary or helpful in connection with the foregoing;
Each party shall make its employees and facilities available on a mutually convenient basis, without cost to the other party, to facilitate such cooperation. In addition, upon 48 hours notice, each party shall have the option to use its own employees or agents to view or obtain the materials contemplated in this Section 5.1 from the other partys facilities on a mutually convenient basis.
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(b) Any materials contemplated under Section 5.1(a) and Section 3.4 shall be provided whether or not such material is or may be confidential or proprietary. If, however, the providing party determines in good faith that any materials are confidential or proprietary, the providing party may require the requesting party to enter into a confidentiality agreement with respect to such materials, not inconsistent with the purposes for which the party made the request for information. Each party shall be deemed to have satisfied its obligation to hold confidential information concerning or supplied by the other party if it exercises the same care as it takes to preserve confidentially for its own similar information.
(c) Parent shall advise Spinco with respect to any Final Determination of Tax adjustments relating to the Parent Consolidated Group if such Final Determination of Tax adjustments may affect any Tax attribute of any member of the Spinco Group after the Distribution Date.
(d) Notwithstanding anything to the contrary in this Agreement, if a party materially fails to comply with any of its obligations set forth in this Section 5.1, upon reasonable request and notice by the other party, the non-performing party shall (i) reimburse the other party for any internal or incremental costs incurred by such other party in having its employees or agents view or obtain such material, and (ii) to the extent such failure results in the imposition of additional Taxes be liable in full for such additional Taxes.
5.2 |
Contest Provisions. |
(a) The party responsible for preparation and filing Tax Returns under Section 3.1 (the Responsible Party ), shall have the exclusive right to control, contest, and represent the interests of Parent, Spinco and their respective Affiliates in any Tax controversy, including (without limitation) any audit, protest, or claim for refund to the Appeals Division of the IRS, competent authority proceeding and litigation in Tax Court or any other court of competent jurisdiction (a Tax Controversy ) related to such Tax Return. Subject to Section 5.2(c) hereof, such exclusive right shall include the right, in the Responsible Partys reasonable discretion, to resolve, settle or agree to any deficiency, claim or adjustment proposed, asserted or assessed in connection with or as a result of any such Tax Controversy. Such control rights shall extend to any matter pertaining to the management and control of a Tax Controversy, including execution of waivers, choice of forum, scheduling of conferences and the resolution of any Tax Item. Any costs incurred in the handling or contesting of a Tax Controversy shall be borne by the Responsible Party.
(b) Parent shall use reasonable efforts to keep Spinco advised as to the status of Tax audits and litigation involving any issue that relates to a Tax of Spinco or any Spinco Affiliate or that could give rise to a liability of Spinco or any Spinco Affiliate under this Agreement, and Spinco shall use reasonable efforts to keep Parent advised as to the status of Tax audits and litigation involving any issue that related to a Tax of Parent or any Parent Affiliate or could give rise to a liability of Parent or any Parent Affiliate under this Agreement (in each case, a Liability Issue ). Parent and Spinco shall promptly furnish each other copies of any inquiries or requests for information from any Taxing Authority or any other administrative, judicial, or other governmental authority concerning any Liability Issue pertaining to the other party. Without limiting the foregoing, Parent and Spinco, as the case may be, shall each promptly
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furnish to the other within 30 days of receipt a copy of the relevant section of the revenue agents report or similar report, notice of proposed adjustment, or notice of deficiency received by Parent or its Affiliate or by Spinco or its Affiliate, as the case may be, relating to any Liability Issue or any adjustment referred to in this Section 5.2(b).
(c) Notwithstanding Section 5.2(a),
i) To the extent resolution of any Tax Controversy could give rise to a material Tax Detriment or loss of a material Tax Benefit to the party responsible for such Taxes under Section 2.1 totaling at least $250,000, but such party is not the Responsible Party, then the Responsible Party shall provide such other party (at such other partys expense) reasonable participation rights with respect to so much of the Tax Controversy as relates to Taxes for which such other party may be responsible; and
ii) A Responsible Party shall not settle or otherwise voluntarily resolve or disclose any Tax Controversy which could give rise to a Tax Detriment or loss of a material Tax Benefit to the other party totaling at least $250,000 without such other partys consent, not to be unreasonably withheld
5.3 Information for Shareholders. Parent shall provide each shareholder that receives stock of Spinco pursuant to the Distribution with the information necessary for such shareholder to comply with the requirements of Section 355 of the Code and the Treasury regulations thereunder with respect to statements that such shareholders must file with their federal income tax returns demonstrating the applicability of Section 355 to the Distribution.
ARTICLE VI
DISPUTE RESOLUTION
6.1 Dispute Resolution. The parties desire that friendly collaboration will develop between them. Accordingly, they will try to resolve in an amicable manner all disputes and disagreements connected with their respective rights and obligations under this Agreement in accordance with Article X of the Separation Agreement; provided , however , that this Section 6.1 shall not apply to any (a) suits seeking injunctive relief or specific performance, or (b) dispute, controversy, or claim arising under Article IV of this Agreement (including any dispute, controversy, or claim relating to the breach, termination, or validity thereof).
ARTICLE VII
MISCELLANEOUS
7.1 Effectiveness. This Agreement shall become effective on the Distribution Date.
7.2 Indemnification for Inaccurate, Incomplete or Untimely Information.
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(a) Spinco and each Spinco Affiliate shall indemnify and hold harmless Parent and each Parent Affiliate from and against any liability, cost or expenses, including, without limitation, any fine, penalty, interest, charge or accountants fee, arising out of fraudulent or negligent information, workpapers, documents and other items prepared by Spinco or any Spinco Affiliate used in the preparation of any Tax Return or claim for refund filed by Parent or any Parent Affiliate for any period during which Spinco or any Spinco Affiliate was or has been a member of the Parent Consolidated Group, or arising out of the untimely provision of information required to provided under this Agreement.
(b) Parent and each Parent Affiliate shall indemnify and hold harmless Spinco and each Spinco Affiliate from and against any liability, cost or expense, including, without limitation, any fine, penalty, interest, charge or accountants fee, arising out of fraudulent or negligent preparation of any Tax Return or claim for refund filed by Parent or a Parent Affiliate for any period during which Spinco or any member of the Spinco Group was or has been a member of the Parent Consolidated Group, or arising out of the untimely provision of information required to provided under this Agreement.
7.3 Breach. Parent shall indemnify and hold harmless Spinco and each Spinco Affiliate, and Spinco shall indemnify and hold harmless Parent and each Parent Affiliate, from and against any payment required to be made under this Agreement as a result of the breach by Parent (or Parent Affiliate) or Spinco (or Spinco Affiliate), as the case may be, of any obligation under this Agreement.
7.4 |
Disclaimers. |
(a) Parent disclaims all knowledge of or responsibility for the content or accuracy of any separate returns or filings made by or on behalf of Spinco or any Spinco Affiliate for any taxable period during which such company was not a member of the Parent Consolidated Group.
(b) Spinco disclaims all knowledge of or responsibility for the content or accuracy of any Tax Returns or filings made by or on behalf of the Parent Consolidated Group or any member thereof for any period except to the extent such Tax Returns or filings reflect items of the Spinco Business.
7.5 Payments. In the event that one party (the Owing Party ) is required to make a payment to another party (the Owed Party ) pursuant to this Agreement, then to the extent not otherwise provided for in this Agreement, such payment shall be made according to this Section 7.5.
(a) All payments shall be made to the Owed Party or to the appropriate Taxing Authority as specified by the Owed Party within the time prescribed for the payment in this Agreement, or if no period is prescribed, within 20 days after delivery of written notice of payment owing together with a computation of the amounts due.
(b) Unless otherwise required by any Final Determination, the parties agree that any payment made by one party to another party (other than payments of interest and payment of After Tax Amounts pursuant to Section 7.5(d)) pursuant to this Agreement shall be
27
treated for all Tax and financial accounting purposes as payments with respect to stock (dividend distributions or capital contributions, as the case may be) made immediately prior to the Distribution.
(c) All actions required to be taken by any party under this Agreement shall be performed within the time prescribed for performance in this Agreement, or if no period is prescribed, such actions shall be performed promptly.
(d) If, pursuant to a Final Determination, it is determined that the receipt or accrual of any payment made under this Agreement (other than payments of interest) is subject to any Tax, the party making such payment shall be liable for (i) the After Tax Amount with respect to such payment, and (ii) interest at the rate described in 7.5(e) on the amount of such tax from the date such Tax is due through the date of payment of such After Tax Amount. A party making a demand for payment pursuant to this Agreement and for a payment of an After Tax Amount with respect to such payment shall separately specify and compute such After Tax Amount. However, a party may choose not to specify an After Tax Amount in a demand for payment pursuant to this Agreement without thereby being deemed to have waived its right subsequently to demand an After Tax Amount with respect to such payment.
(e) Any payment that is required to be made pursuant to this Agreement (i) by Spinco (or a Spinco Affiliate) to Parent (or a Parent Affiliate) or (ii) by Parent (or a Parent Affiliate) to Spinco (or a Spinco Affiliate), that is not made on or prior to the date that such payment is required to be made pursuant to this Agreement shall thereafter bear interest at the rate established for underpayments pursuant to Section 6621(a) (2) of the Code.
(f) Any payment that is required to be made pursuant to this Agreement (i) by Spinco (or a Spinco Affiliate) to Parent (or a Parent Affiliate) or (ii) by Parent (or a Parent Affiliate) to Spinco (or a Spinco Affiliate), shall be made by wire transfer of immediately available funds, provided that if the amount of any payment is less than $10,000, such payment may be made in a form other than a wire transfer.
7.6 Changes in Law. Any reference to a provision of the Code, Treasury Regulations, or a law of another jurisdiction shall include a reference to any applicable successor provision or law. If, due to any change in applicable law or regulations or their interpretation by any court of law or other governing body having jurisdiction subsequent to the date specified in the preamble to this Agreement, performance of any provision of this Agreement or any transaction contemplated hereby shall become impracticable or impossible, the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such provision.
7.7 Notices. All notices, requests, claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in person, by standard form of telecommunications, by courier, or by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:
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If to Parent, at:
FMC Technologies, Inc.
1803 Gears Road
Houston, Texas 77067
Attention: General Counsel
Fax: (281) 591-4102
If to Spinco, at:
John Bean Technologies Corporation
200 E. Randolph Dr.
Chicago, IL 60601
Attention: General Counsel
or to such other address as any party hereto may have furnished to the other parties by a notice in writing in accordance with this Section 7.7.
7.8 |
Complete Agreement; Corporate Power. |
(a) This Agreement, the Exhibits and Schedules hereto, the Separation Agreement, and the Ancillary Agreements shall constitute the entire agreement between the parties hereto with respect to the subject matter hereof and shall supersede all previous negotiations, commitments and writings with respect to such subject matter.
(b) Parent represents on behalf of itself and each of its Affiliates and Spinco represents on behalf of itself and each of it Affiliates as follows:
i) each such Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute, deliver and perform each of this Agreement and each other Ancillary Agreement to which it is a party and to complete the transactions contemplated hereby and thereby; and
ii) this Agreement, the Separation Agreement, and each Ancillary Agreement to which it is a party has been duly executed and delivered by it and constitutes a valid and binding agreement of it enforceable in accordance with the terms thereof.
7.9 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware (other than the laws regarding choice of laws and conflicts of laws that would apply the substantive laws of any other jurisdiction) as to all matters, including matters of validity, construction, effect, performance and remedies.
7.10 Successors and Assigns. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns, but neither this Agreement nor any of the rights, interests and obligations hereunder shall be assigned by any Party without the prior written consent of the other party or except in connection with a merger or similar business combination involving a party if the successor under applicable law expressly assumes all rights and obligations of such party hereunder and under each Ancillary Agreement as if it were such party. Except for the provisions of Sections 4.2 and 4.3
29
relating to indemnities, which are also for the benefit of the indemnitees, this Agreement is solely for the benefit of the parties hereto and their subsidiaries and affiliates and is not intended to confer upon any other Persons any rights or remedies hereunder.
7.11 Joint and Several Liability. Spinco and each Spinco Affiliate shall have joint and several liability for any obligation of Spinco or a Spinco Affiliate arising pursuant to this Agreement. Parent and each Parent Affiliate shall have joint and several liability for any obligation of Parent or a Parent Affiliate arising pursuant to this Agreement.
7.12 Parties in Interest. Nothing in this Agreement, express or implied, is intended to confer on any Person other than the parties, their respective Affiliates, and their respective successors and permitted assigns, any rights or remedies of any nature whatsoever under or by virtue of this Agreement.
7.13 |
Legal Enforceability; Waiver of Default. |
(a) Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of the prohibition or unenforceability without invalidating the remaining provisions. Any prohibition or unenforceability of any provision of this Agreement in any jurisdiction shall not invalidate or render unenforceable the provision in any other jurisdiction.
(b) Waiver by either party of any default by the other party of any provision of this Agreement shall not be deemed a waiver by the waiving party of any subsequent or other default, nor shall it prejudice the rights of the other party.
7.14 Action by Affiliates. To the extent Spinco is obligated to take any action under this Agreement, and such action is more properly taken by a Spinco Affiliate, then Spinco shall cause such Affiliate to take such action. To the extent Spinco is obligated to refrain from taking any action under this Agreement, Spinco shall cause each of its Affiliates to refrain from taking such action. Parent shall be subject to similar rules regarding actions to be taken, or to be refrained from being taken, by it and its Affiliates.
7.15 Expenses. Unless otherwise expressly provided in this Agreement, each party shall bear any and all expenses that arise from their respective obligations under this Agreement.
7.16 |
Confidentiality. |
(a) Each party shall hold and cause its consultants and advisors to hold in strict confidence, unless compelled to disclose by judicial or administrative process or, in the opinion of its counsel, by other requirements of law, all information written or oral concerning the other parties hereto furnished it by such other party or its representatives pursuant to this Agreement (except to the extent that such information can be shown to have been (a) previously known by the party to which it was furnished, (b) in the public domain through no fault of such party, or (c) later lawfully acquired from other sources by the party to which it was furnished), and each party shall not release or disclose such information to any other person, except its auditors, attorneys, financial advisors, bankers and other consultants and advisors who shall be advised of the provisions of this Section 7.16. Each party shall be deemed to have satisfied its obligation to hold confidential information concerning or supplied by the other party if its exercises the same care as it takes to preserve confidentiality for its own similar information.
30
(b) Notwithstanding Section 7.16(a), the provisions regarding confidentiality set forth in Section 5.1 shall govern information required to be provided pursuant to Sections 3.4 and 5.1.
7.17 Amendments and Modification. This Agreement may be amended, modified or supplemented only by a written agreement signed by all of the parties hereto.
7.18 No Implied Waivers; Cumulative Remedies; Writing Required. No delay or failure in exercising any right, power or remedy hereunder shall affect or operate as a waiver thereof; nor shall any single or partial exercise thereof or any abandonment or discontinuance of steps to enforce such a right, power or remedy preclude any further exercise thereof or of any other right, power or remedy. The rights and remedies hereunder are cumulative and not exclusive of any rights or remedies that any party hereto would otherwise have. Any waiver, permit, consent or approval of any kind or character of any breach or default under this Agreement or any such waiver of any provision of this Agreement must satisfy the conditions set forth in Section 7.17 and shall be effective only to the extent in such writing specifically set forth.
7.19 Limitation on Damages. Each party irrevocably waives, and no party shall be entitled to seek or receive, consequential, special, indirect or incidental damages (including without limitation damages for loss of profits) or punitive damages, regardless of how such damages were caused and regardless of the theory of liability; provided that the foregoing shall not limit each partys indemnification obligations set forth in the Separation Agreement and the Ancillary Agreements
7.20 Severability. If any provision of this Agreement or the application thereof to any person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to persons or circumstances other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party.
7.21 Specific Performance In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement or any Ancillary Agreement, the party or parties who are or are to be thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief of its rights under this Agreement or such Ancillary Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. The parties agree that the remedies at law for any breach or threatened breach, including monetary damages, are inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived. Any requirements for the securing or posting of any bond with such remedy are waived. Each Party hereby submits to the exclusive jurisdiction of Delaware for purposes of all legal proceedings for equitable relief arising out of or relating to
31
this Agreement or the transactions contemplated hereby. Each Party irrevocably waives, to the fullest extent permitted by Law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. EACH PARTY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY DISPUTE IN CONNECTION WITH OR RELATING TO THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR ANY MATTERS DESCRIBED OR CONTEMPLATED IN THIS AGREEMENT OR ANY ANCILLARY AGREEMENT, AND AGREES TO TAKE ANY AND ALL ACTION NECESSARY OR APPROPRIATE TO EFFECT SUCH WAIVER.
7.22 Construction. The descriptive headings herein are inserted for convenience of reference only and are not intended to be a substantive part of or to affect the meaning or interpretation of this Agreement. Whenever required by the context, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular forms of nouns, pronouns, and verbs shall include the plural and vice versa. Reference to any agreement, document, or instrument means such agreement, document, or instrument as amended or otherwise modified from time to time in accordance with the terms thereof, and if applicable hereof. The use of the words include or including in this Agreement shall be by way of example rather than by limitation. The use of the words or, either or any shall not be exclusive. The parties have participated jointly in the negotiation and drafting of this Agreement, the Separation Agreement, and the Ancillary Agreements. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. The parties agree that prior drafts of this Agreement shall be deemed not to provide any evidence as to the meaning of any provision hereof or the intent of the parties hereto with respect hereto.
7.23 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
7.24 Delivery by Facsimile and Other Electronic Means. This Agreement, and any amendments hereto, to the extent signed and delivered by means of a facsimile machine or other electronic transmission, shall be treated in all manner and respects as an original contract and shall be considered to have the same binding legal effects as if it were the original signed version thereof delivered in person. At the request of any party, each other party shall re-execute original forms thereof and deliver them to all other parties. No party shall raise the use of a facsimile machine or other electronic means to deliver a signature or the fact that any signature was transmitted or communicated through the use of facsimile machine or other electronic means as a defense to the formation of a contract and each such party forever waives any such defense.
7.25 Consent by Affiliates. Each of Parent and Spinco shall cause each of its respective Affiliates (including any entity that becomes an Affiliate after the date hereof) to consent to, and be bound by, the terms, conditions, covenants, and provisions of this Agreement.
32
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first above written.
FMC Technologies, Inc. | ||
By: |
/s/ William H. Schumann, III |
|
Title: |
Executive Vice President and Chief Financial Officer |
|
John Bean Technologies Corporation | ||
By: |
/s/ Ronald D. Mambu |
|
Title: |
Vice President, Chief Financial Officer, Treasurer and Controller |
Exhibit 10.2
TRADEMARK LICENSE AGREEMENT
This Trademark License Agreement (this Trademark Agreement ) is made and entered into as of July 31, 2008 (the Effective Date) by and between FMC Technologies, Inc., a Delaware corporation, having its principal place of business at 1803 Gears Road, Houston, Texas 77067 (FMCTI) and John Bean Technologies Corporation (formerly FMC FoodTech, Inc.), a Delaware corporation, having its principal place of business at 200 East Randolph Drive, Chicago, Illinois 60601 (JBT). FMCTI and JBT are referred to herein, collectively, as the Parties and, individually, as a Party .
RECITALS
WHEREAS , Pursuant to the Separation and Distribution Agreement between FMCTI and JBT of even date herewith (the SDA), FMCTI has contributed, transferred and conveyed to JBT certain of FMCTIs assets and JBT has assumed certain of FMCTIs liabilities;
WHEREAS , FMCTI is the exclusive, worldwide licensee of the FMC trademark (the FMC Trademark), pursuant to a certain Trademark License Agreement entered into by and between FMCTI and FMC Corporation on May, 31, 2001 (the FMC Trademark License Agreement), for use in connection with the assets being conveyed to JBT;
WHEREAS, FMCTI is the owner of certain derivative trademarks, including but not limited to those identified on attached Exhibit A (the FMC DERIVATIVES) (the FMC Trademark and FMC Derivatives will hereinafter be collectively referred to as the FMC Marks);
WHEREAS , it is a condition to the consummation of the transactions contemplated by the SDA that FMCTI and JBT execute and deliver this Agreement; and
WHEREAS , JBT desires to use the FMC Marks for a limited period of time in connection with its continued business operations including, without limitation, on or in association with certain assets acquired from FMCTI pursuant to the SDA on which the FMC Marks are affixed, including without limitation products (Products); labels, packaging and cartons (collectively Packaging); sales promotional materials, advertising materials and other ancillary marketing and sales materials; (collectively Sales Materials); signs used on real property, business cards, stationery, letterhead, other signage, invoices and other commercial documents and other current and similar incidental uses (collectively Incidental Uses).
NOW, THEREFORE, in consideration of the foregoing and the covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows.
Trademark License Agreement
1. |
LICENSE. |
1.1. |
License Grant . Subject to the terms and conditions of this Agreement, FMCTI hereby grants to JBT a limited, worldwide, royalty-free, non-exclusive, non-transferable and non-assignable license (with a limited right to sublicense only to Subsidiaries of JBT) to use the FMC Marks: |
a. |
on JBTs inventory of Products, Packaging, and Sales Materials, in existence at the Effective Date, for the earlier of one (1) year after the Effective Date or the exhaustion of JBTs existing inventory of Products, Packaging, and Sales Materials in the ordinary course; |
b. |
in a legend on JBTs Products, Packaging, Sales Materials and Incidental Uses to indicate JBTs former affiliation with FMCTI for a period of two (2) years after the Effective Date; and |
c. |
on JBTs existing, installed base of leased Products, indefinitely. |
1.2. |
Web Link . FMC Technologies shall provide, for a period of two (2) years after the Effective Date, a web site link from FMC Technologies web site to JBTs web site. |
1.3. |
No Other Rights . Any rights not expressly granted to JBT under this Agreement are reserved by FMCTI. Other than as described in Sections 1.1 and 6.6 of this Agreement, JBT shall have no power or right to, and shall not, sell, assign, sublicense or otherwise transfer this Agreement or the license granted hereunder, to any third party. In using the FMC Marks pursuant to this Agreement, JBT shall in no way represent that it has any right, title or interest in the FMC Marks other than those expressly granted under the terms and conditions of this Agreement. |
1.4. |
No Restriction on FMCTI . Subject to the terms of the SDA, nothing in this Agreement shall be construed to prevent FMCTI from using, or granting to third parties any other licenses for the use of, the FMC Marks on any products or for any purpose. |
2. |
OWNERSHIP AND PROTECTION OF THE FMC MARKS. |
2.1. |
FMCTIs Ownership . JBT acknowledges and agrees that the JBT shall not, directly or indirectly, contest or challenge FMCTIs sole and exclusive rights in and to the FMC Marks or the validity thereof, including, without limitation, the goodwill associated therewith and all goodwill arising from the use of the FMC Marks shall inure solely to the benefit of FMCTI. Except for the right to use the FMC Marks in accordance with this Agreement, JBT shall acquire no right, title or interest in (or adopt, use, register or apply for registrations anywhere for) the FMC Marks (or any translations, variations, adaptations, derivations or combinations of the foregoing) or FMC Marks confusingly similar thereto as a result of exercise of any rights under this Agreement. |
2
Trademark License Agreement
2.2. |
Quality Control . JBT shall only the FMC Marks in connection with goods and services that meet or exceed the quality standards of FMCTI as of the date of this Agreement and such other quality standards as the parties may from time to time agree to in writing. In order to ensure continuing quality control, JBT shall, as reasonably requested by FMCTI, provide FMCTI with representative samples of or access to goods and information about the services in connection with which LICENSE uses the FMC Marks. |
2.3. |
Notice of Infringement . JBT shall give FMCTI prompt written notice of any actual or threatened infringement of the FMC Marks by any third party after JBT has actual knowledge of such infringement or threatened infringement. Without regard to the manner in which an apparent infringement comes to FMCTIs attention, FMCTI shall in its sole discretion determine whether or not any official action shall be taken on account of any such apparent infringement. In no event shall JBT take any action in connection therewith unless expressly authorized to do so in writing by FMCTI or FMCTI fails to take any reasonable action requested by JBT. In the event of any claim that JBTs use of the FMC Marks infringes any proprietary rights of a third party, JBT shall promptly notify FMCTI thereof and FMCTI shall have the obligation (subject to Section 3.3 in the case of claims asserted by third parties arising out of JBTs use of the FMC Marks in accordance with the terms and conditions of this Trademark Agreement), and shall have the right, in its sole discretion (subject to Section 3.2 in the case of JBTs use of the FMC Marks in contravention of this Agreement) to defend and control such claim, including prosecution, defense and settlement thereof, and JBT shall cooperate fully with FMCTI, at FMCTIs expense, in the conduct thereof. |
2.4. |
Notice of Regulatory Action . JBT shall promptly notify FMCTI if JBT receives, or if JBT becomes aware that, a citation has been issued or investigation commenced by any regulatory agency (federal, central government, state or local, no matter where in the world) for violation of any law that may have a reasonable likelihood of materially damaging the goodwill associated with the FMC Marks. |
2.5. |
Protection of Rights in FMC Marks . Each party shall provide the other party with all commercially reasonable cooperation to assist the other party in protecting any of its rights in the FMC Marks affected by, or related to, JBTs use of the FMC Marks under this Trademark Agreement. |
3
Trademark License Agreement
3. |
USE OF FMC MARKS. |
3.1. |
Compliance with Laws . In using the FMC Marks as permitted hereunder, JBT shall comply in all material respects with all applicable laws pertaining to the proper use and designation of the FMC Marks. |
3.2. |
Indemnification . JBT shall defend, indemnify and hold harmless FMCTI, its affiliates and its and their shareholders, directors, officers, employees and agents from any claims, and all damages, liabilities, judgments, costs (including, without limitation, settlement costs) and expenses associated therewith (including, without limitation, reasonable attorneys fees) related to or arising from: (i) JBTs breach of this Trademark Agreement; or (ii) JBTs use of the FMC Marks in the operation of its business. |
3.3. |
Indemnification . FMCTI shall defend, indemnify and hold harmless JBT, its affiliates and its and their shareholders, directors, officers, employees and agents from any claims, and all damages, liabilities, judgments, costs (including, without limitation, settlement costs) and expenses associated therewith (including, without limitation, reasonable attorneys fees) related to or arising from: (i) FMCTIs breach of this Agreement; or (ii) FMCTIs use of the FMC Marks in the operation of its business. |
4. |
TERMINATION. |
4.1. |
General Term . The term of this Agreement shall commence on the date hereof and shall remain in force and in effect for the time periods indicated in Section 1.1, unless sooner terminated pursuant to Section 4.2. |
4.2. |
Termination . This Agreement and the licenses granted hereunder may be terminated by FMCTI or JBT without notice in the event that the other Party: (a) files a petition for insolvency, cessation of payments, bankruptcy or liquidation (or the substantial equivalent in any relevant jurisdiction) or the commencement of any such proceeding against either Party that is not discharged within ninety (90) days thereafter; (b) makes a general assignment for the benefit of its creditors; (c) ceases to conduct its business; or (d) has a receiver (or the substantial equivalent in any relevant jurisdiction) appointed for it or its business. This Agreement and the license granted hereunder may be terminated by FMCTI if there occurs a material breach by JBT of any provision of this Agreement that JBT fails to cure within thirty (30) days after receiving notice of such breach from FMCTI provided that such 30-day period shall continue to be extended so long as JBT is working in good faith to cure such breach. |
4.3. |
Effect of Termination . Upon termination of this Agreement, all rights of JBT to use the FMC Marks shall terminate immediately and shall revert to FMCTI. JBT shall thereafter claim no rights to the FMC Marks or make any further reference to them, whether directly or indirectly, in connection with its business or otherwise. |
4
Trademark License Agreement
4.4. |
JBT Must Remove and Destroy Materials . Promptly following termination of this Agreement, JBT shall remove or destroy all Packaging, Sales Materials, business cards, signage, stationery, letterhead and any other commercial documents or otherwise in the possession of JBT that include the FMC Marks and, upon request by FMCTI, provide a written certification to FMCTI signed by an officer of JBT of such removal or destruction. To the extent that the FMC Marks are not removable or destroyable on an item, JBT shall place a stamp, sticker or other similar notice or marking on such item clearly indicating that the FMC Marks are owned by FMCTI. |
4.5. |
Survival . The following provisions shall survive the termination of this Trademark Agreement for any reason: Sections 2.2, 3.2, 3.3 and 6. |
5. |
ASSUMPTION OF TRADEMARK LICENSE AGREEMENT. |
5.1. |
JBT agrees to be bound by all of the terms and condition of the FMC Trademark License Agreement as they pertain to the rights and obligations in the FMC Marks being licensed hereunder. A copy of the FMC Trademark License Agreement is attached hereto as Exhibit B. |
6. |
DISCLAIMER OF WARRANTIES. |
JBT ACKNOWLEDGES AND AGREES THAT FMCTI IS LICENSING THE FMC MARKS AS IS . FMCTI HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. FMCTI SHALL NOT BE LIABLE FOR ANY DIRECT, SPECIAL, INDIRECT, CONSEQUENTIAL, EXEMPLARY, OR INCIDENTAL DAMAGES (INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS) ARISING OUT OF OR RELATED TO THIS AGREEMENT, HOWEVER CAUSED AND UNDER ANY THEORY OF LIABILITY (INCLUDING, WITHOUT LIMITATION, NEGLIGENCE AND CONTRACT), EVEN IF FMCTI HAS BEEN ADVISED IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES.
7. |
GENERAL PROVISIONS. |
7.1. |
Amendment/Waiver . No modification, amendment, supplement to or waiver of, any provision of this Trademark Agreement shall be binding upon either Party unless made in a writing signed by the Party against which such modification, amendment, supplement to or waiver, is sought to be enforced. A failure of either Party to exercise any right provided for herein shall not be deemed to be a waiver of any such right hereunder. |
5
Trademark License Agreement
7.2. |
Entire Agreement . This Trademark Agreement, together with the SDA, sets forth the entire agreement between the Parties as it relates to the subject matter hereof, and such document replaces and supersedes any and all prior agreements, promises, proposals, representations, understandings and negotiations, written or not, between the Parties relating to the subject matter hereof. |
7.3. |
Order of Precedence . In the case of ambiguity or conflict between or among the terms and conditions of this Agreement and the terms and conditions of the SDA, the terms and conditions of this Agreement shall control with respect to the use of the FMC Marks. |
7.4. |
Headings and Interpretation . The article and section headings used herein are for reference and convenience only, and shall not enter into the interpretation hereof. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if jointly drafted by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provision of this Agreement. |
7.5. |
Governing Law . This Trademark Agreement shall be governed by, and construed in accordance with the substantive laws of the State of Texas (without giving effect to the principles of conflict of laws thereof) and, to the extent applicable, those United States laws, or the national laws of another country in which any of the Trademarks are used, whether or not registered or applied for and the appropriate rules and regulations governing trademarks in the respective countries.the internal laws of the State of Texas. |
7.6. |
Assignment . FMCTI may assign or transfer this Agreement without the prior written consent of JBT, provided that FMCTI shall notify JBT of such assignment in writing prior to such assignment and FMCTI shall continue to be liable hereunder to the extent the assignee fails to perform its obligations hereunder. JBT shall not assign or transfer this Agreement without the prior written consent of FMCTI, which consent shall not be unreasonably withheld or delayed. This Agreement shall inure to the benefit of, and be binding upon, the Parties and their respective permitted successors and permitted assigns. |
7.7. |
Notices . All notices or other communications required or permitted to be given hereunder shall be in writing and shall be delivered by hand or sent by facsimile, or sent, postage prepaid, by registered, certified or express mail, or reputable overnight courier service and shall be deemed given |
6
Trademark License Agreement
when so delivered by hand, or facsimile, or if mailed, three (3) days after mailing (one (1) business day in the case of express mail or overnight courier service), as follows: |
Notices to FMCTI :
FMC Technologies, Inc. 1803 Gears Road Houston, Texas 77067 |
||
Facsimile No. |
(281) 591-4102 |
|
Attention: |
General Counsel |
|
Notices to JBT : | ||
John Bean Technologies Corporation 200 East Randolph Drive Chicago, Illinois 60601 |
||
Facsimile No. |
(312) 861-6176 |
|
Attention: |
General Counsel |
7.8. |
Relationship of the Parties . The relationship between the Parties to this Agreement is that of independent contractors. Under no circumstances shall either Party be deemed an agent or representative of the other Party. Neither Party shall have authority to act for or bind the other Party in any way, or represent that it is in any way responsible for acts of the other Party. Nothing in this Agreement shall be construed or interpreted to create a relationship between the Parties of partner, joint venturer, representative, principal and agent, or employer and employee. |
7.9. |
Injunctive Relief . JBT acknowledges and agrees that the provisions of this Agreement are reasonable and necessary to protect FMCTIs rights and interests in the FMC Marks, that any breach of the provisions of this Agreement shall result in irreparable harm to FMCTI, and that the remedy at law for such breach may be inadequate. Accordingly, in the event of a breach of the provisions of this Agreement by JBT, FMCTI, in addition to any other relief available to it at law, in equity or otherwise, shall be entitled to seek attachment of assets and temporary and permanent injunctive relief restraining JBT from engaging in and/or continuing any conduct that constitutes a breach of this Agreement, without the necessity of proving irreparable harm or posting of a bond or other security. |
7.10. |
Severability . If any provision of this Agreement is held to be invalid or unenforceable, the meaning of such provision shall be construed, to the extent feasible, so as to render the provision enforceable, and if no feasible interpretation shall save such provision, it shall be severed from the remainder of this Agreement, as appropriate. The remainder of this Agreement shall remain in full force and effect unless the severed |
7
Trademark License Agreement
provision is essential and material to the rights or benefits received by either Party. In such event, the Parties shall use their best efforts to negotiate, in good faith, a substitute, valid and enforceable provision or agreement, which most nearly effects the Parties intent in entering into this Agreement, as appropriate. |
7.11. |
Counterparts; Facsimile Transmission . This Agreement may be executed in multiple counterparts, each of which shall constitute an original, but all of which together shall constitute one and the same agreement. Each Party may rely on facsimile signature pages as if such facsimile pages were originals. |
IN WITNESS WHEREOF, each of the Parties hereto, by its duly authorized representative, has caused this Trademark Agreement to be executed as of the Effective Date.
FMC TECHNOLOGIES, INC. |
JOHN BEAN TECHNOLOGIES CORPORATION |
|||||||
By: |
/s/ William H. Schumann, III |
By: |
/s/ Charles H. Cannon, Jr. |
|||||
Name: |
William H. Schumann, III |
Name: |
CHARLES H. CANNON, JR. |
|||||
Its: |
Executive VP and CFO |
Its: |
CHAIRMAN and CEO |
|||||
Date: |
7/31/08 |
Date: |
7/31/08 |
8
Exhibit 10.3
TRADEMARK ASSIGNMENT AND COEXISTENCE AGREEMENT
THIS TRADEMARK ASSIGNEMENT AND COEXISTENCE AGREEMENT is made and entered into as of the 31st day of July, 2008, by and between John Bean Technologies Corporation (formerly FMC FoodTech, Inc.), a Delaware corporation with its principal place of business located at 200 East Randolph Drive, Chicago, Illinois 60601 (JBT) and FMC Technologies, Inc., a Delaware corporation, with its principal place of business located at 1803 Gears Road, Houston, Texas 77067 (FMCTI).
W I T NE S S E T H:
WHEREAS, JBT and FMC have entered into that certain Separation and Distribution Agreement of even date herewith (the SDA) pursuant to which FMCTI has agreed to distribute to JBT substantially all of the assets, business properties and rights of its food and transportation business units (Business);
WHEREAS, FMCTI has been using the marks and names BEAN and JOHN BEAN, and variations thereof in connection with various businesses including the development, manufacture, sale and servicing of equipment and apparatus for agricultural and horticultural material handling, fluid control, and pumps;
WHEREAS, the Trademark is subject to existing agreements between FMCTIs predecessor, FMC Corporation, and third parties, including but not limited to Snap-On, Inc., and FMCTI wishes to ensure that any obligations to such third parties are satisfied;
WHEREAS, as part of the SDA, FMCTI desires to sell its ownership interest in the Trademark as applied to the Business, and retain its ownership interest in the Trademark in connection with pumps manufactured, used, sold, leased or otherwise disposed of by the existing energy businesses of FMCTI and JBT desires to obtain ownership of the Trademark for use in connection with the Business, it therefore being the intention of the parties to set forth their rights to use the Trademark on their respective goods and services so that the Marks may coexist in the marketplace without confusion as to the source of the goods and services, as hereinafter set forth below.
NOW THEREFORE, for and in consideration of the promises, agreements and covenants herein contained, the adequacy, sufficiency and receipt of which are conclusively acknowledged, the parties hereto agree as follows:
1. |
Definitions. |
1.1 |
Trademark shall mean the JOHN BEAN, BEAN and JBT-related trademarks, including but not limited to the trademark registrations listed on Exhibit A. |
1.2 |
Field shall mean pumps manufactured, used, sold, leased or otherwise disposed of by the existing energy businesses of FMCTI. |
Trademark Assignment and Coexistence Agreement
1.3 |
Snap-On Coexistence Agreement shall mean the agreement entered into between FMC Technologies predecessor in interest, FMC Corporation and Snap-On, Inc., dated March 31, 1996, which was subsequently assigned by FMC Corporation to FMC Technologies pursuant to a Separation and Distribution Agreement, dated May 31, 2001. |
2. |
Trademark Assignment and Retention of Rights. |
2.1 |
FMCTI hereby sells and assigns to JBT, FMCTIs right, title and interest in and to the Trademark throughout the world, whether or not such Trademark has been registered prior to, on or after the date of this assignment, and any and all renewals and extensions thereof, together with the goodwill associated with such Trademark for JBTs exclusive use in connection with the Business, together with trademark registrations and applications identified on Exhibit A. |
2.2 |
FMCTI hereby sells and assigns to JBT, all claims, demands and rights of action, both statutory and based upon common law, that FMCTI has or might have the right to assert against any third party by reason of any infringement of the Trademark, in connection with the Business, prior to, on or after the date of this assignment, together with the right to prosecute such claims, demands and rights of action in JBTs own name |
2.3 |
FMCTI hereby assigns to JBT, all right, title and interest in and to the Snap-On Trademark Agreement. JBT hereby accepts all of FMCTIs obligations under the Trademark Agreements, including any obligations to register and maintain the Trademark. JBT agrees to defend, indemnify and hold FMCTI harmless from any claims in any way related to JBTs failure to satisfy FMCTIs obligations under the Snap-On Agreement subsequent to FMCTIs assignment to JBT hereby. |
2.4 |
For the avoidance of doubt, FMCTI specifically retains all right, title and interest in and to the Trademark throughout the world, whether or not such Trademark has been prior to, on or after the date of this assignment, and any and all renewals and extensions thereof, together with the goodwill associated with such Trademark for FMCTIs exclusive use in connection with the Field, together with the trademark registrations and pending trademark applications identified on Exhibit B. |
3. |
Further Assurances. |
3.1 |
FMCTI agrees that it shall do, execute, acknowledge and deliver, at JBTs expense, all acts, agreements, instruments, notices and assurances as may be reasonably requested by JBT to further effect and evidence the transactions contemplated hereby. |
4. |
The Parties Use of the Marks . |
4.1 |
JBT agrees not to use the Trademark in connection with the Field; and |
2
Trademark Assignment and Coexistence Agreement
4.2 |
FMC agrees to use the Trademark only in connection with the Field. |
5. |
Authorized Manner of Use Company Name . FMC agrees not to object to JBTs use of the Trademark as a corporate, business and/or trade name in connection with the Business. |
6. |
No Likelihood of Confusion . The parties acknowledge and agree that with the limitations on use set forth herein, and in view of the differences between the parties respective goods and channels of trade, confusion between the parties respective goods, services and business is unlikely. The parties further acknowledge and agree that if either party receives a direct inquiry related to the goods and/or services of the other authorized hereunder, the party receiving such inquiry will use its best reasonable efforts to direct that inquiry to the appropriate party and both parties will take reasonable mutually acceptable steps to prevent further instances of misdirected inquiries or confusion. |
7. |
Representations and Warranties. |
7.1 |
Each party hereby represents and warrants to the other that it has the power and authority to execute and deliver this Trademark Assignment and Coexistence Agreement and to carry out its provisions. |
8. |
Notices. |
8.1 |
Any notice, demand, waiver, consent, approval, or disapproval (collectively referred to as notice) required or permitted herein shall be in writing and shall be given personally, by messenger, by air courier, by facsimile transmission, or by prepaid registered or certified mail, with return receipt requested, addressed to the parties at their respective addresses set forth above or at such other address as a party may hereafter designate in writing to the other party. |
8.2 |
A notice shall be deemed received on the date of receipt. |
9. |
Enforceability. |
9.1 |
If any provision of this Agreement shall be invalid or unenforceable, in whole or in part, or as applied to any circumstance, under the laws of any jurisdiction which may govern for such purpose, then such provision shall be deemed to be modified or restricted to the extent and in the manner necessary to render the same valid and enforceable, either generally or as applied to such circumstance, or shall be deemed excised from this Agreement, as the case may require, and this Agreement shall be construed and enforced to the maximum extent permitted by law as if such provision had been originally incorporated herein as so modified or restricted, or as if such provision had not been originally incorporated herein, as the case may be. |
3
Trademark Assignment and Coexistence Agreement
10. |
Modification, Amendment, Supplement, or Waiver. |
10.1 |
No modification, amendment, supplement to or waiver of this Agreement or any of its provisions shall be binding upon the parties hereto unless made in writing and signed by the party against whom enforcement of any modification, amendment, supplement or waiver is sought. |
10.2 |
A waiver by either party of any of the terms or conditions of this Agreement in any one instance shall not be deemed a waiver of such terms or conditions in the future. |
11. |
No Third-Party Beneficiaries. Nothing expressed or implied in this Agreement is intended to confer upon any person, other than the parties hereto, or their respective successors or permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement. |
12. |
Governing Law. This Agreement shall be governed by and construed in accordance with the substantive laws of the State of Texas (without giving effect to the principles of conflict of laws thereof) and, to the extent applicable, those United States laws, or the national laws of another country in which any of the Trademarks are used, whether or not registered or applied for and the appropriate rules and regulations governing trademarks in the respective countries. |
13. |
Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. |
14. |
Entire Agreement. This Agreement, in conjunction with the SDA, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all previous agreements, promises, representations, understandings, and negotiations, whether written or oral. |
15. |
Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but which together shall constitute one and the same agreement. |
IN WITNESS WHEREOF, the undersigned have executed the above and foregoing Trademark Assignment and Coexistence Agreement on the date first set forth above.
FMC TECHNOLOGIES, INC. |
JOHN BEAN TECHNOLOGIES CORPORATION |
|||||||
a Delaware corporation |
a Delaware corporation |
|||||||
By |
/s/ William H. [Illegible] III |
By |
/s/ CHARLES H. CANNON, JR. |
|||||
Name |
William H. [Illegible] III |
Name |
Charles H. Cannon, Jr. |
|||||
Title |
Executive VP and CFO |
Title |
CHAIRMAN and CEO |
4
Exhibit 10.4
JOHN BEAN TECHNOLOGIES CORPORATION
INCENTIVE COMPENSATION AND STOCK PLAN
SECTION 1. PURPOSE
The purpose of the Plan is to give the Company a competitive advantage in attracting, retaining and motivating officers, employees, directors and consultants of the Company and its Affiliates.
SECTION 2. DEFINITIONS
2.1 General . For purposes of the Plan, the following terms are defined as set forth below:
(a) | Affiliate means a corporation or other entity controlled by, controlling or under common control with the Company, including, without limitation, any corporation, partnership, joint venture or other entity during any period in which at least a fifty percent (50%) voting or profits interest is owned, directly or indirectly, by the Company or any successor to the Company. |
(b) | Annual Retainer means the retainer fee established by the Board and paid to a Non-Employee Director for services on the Board for a specified year. |
(c) | Award means a Management Incentive Award, Stock Option, Stock Appreciation Right, Performance Unit, Stock Unit, Restricted Stock or other award authorized under the Plan. |
(d) | Award Cycle means a period of consecutive fiscal years or portions thereof designated by the Committee over which Awards are to be earned. |
(e) | Board means the Board of Directors of the Company. |
(f) | Business Unit means a unit of the business of the Company or its Affiliates as determined by the Committee and the CEO. |
(g) | Capital Employed means operating working capital plus net property, plant and equipment. |
(h) |
Cause means (1) Cause as defined in any Individual Agreement to which the participant is a party, or (2) if there is no such Individual Agreement, or, if it does not define Cause: (A) the participant having been convicted of, or pleading guilty or nolo contendere to, a felony under federal or state law; (B) the willful and continued failure on the part of the participant to substantially perform his or her employment duties in any material respect (other than such failure resulting from Disability), after a written demand for substantial performance is delivered to the participant that specifically identifies the manner in which the Company |
believes the participant has failed to perform his or her duties, and after the participant has failed to resume substantial performance of his or her duties within thirty (30) days of such demand; or (C) willful and deliberate conduct on the part of the participant that is materially injurious to the Company or an Affiliate; or (D) prior to a Change in Control, such other events as will be determined by the Committee. The Committee will, unless otherwise provided in an Individual Agreement with the participant, determine whether Cause exists. |
(i) | CEO means the Companys chief executive officer. |
(j) | Change in Control and Change in Control Price have the meanings set forth in Sections 15.2 and 15.3, respectively. |
(k) | Code means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto. |
(l) | Committee means the Compensation Committee of the Board, or such other committee as the Board may from time to time designate. |
(m) | Common Stock means (1) the common stock of the Company, par value $.01 per share, subject to adjustment as provided in Section 4.1 Shares Available for Issuance ; or (2) if there is a merger or consolidation and the Company is not the surviving corporation, the capital stock of the surviving corporation given in exchange for such common stock of the Company. |
(n) | Company means John Bean Technologies Corporation, a Delaware corporation. |
(o) | Covered Employee means a participant who has received a Management Incentive Award, Restricted Stock, Performance Units, Stock Units or Restricted Stock Units, who has been designated as such by the Committee and who is or may be a covered employee within the meaning of Section 162(m)(3) of the Code in the year in which the Management Incentive Award, Restricted Stock or Performance Units are expected to be taxable to such participant. |
(p) | Disability means, unless otherwise provided by the Committee, (1) Disability as defined in any Individual Agreement to which the participant is a party, or (2) if there is no such Individual Agreement, or, if it does not define Disability, permanent and total disability as determined under the Companys long-term disability plan. |
(q) |
Dividend Equivalent Rights means the right to receive cash, Stock Options, Restricted Stock, Performance Units, Stock Units or Restricted Stock Units as determined by the Committee, in an amount equal to any dividends that would have been paid on a Stock Option, Restricted Stock, Performance Unit, Stock Units or Restricted Stock Units as applicable, with Dividend Equivalent Rights if such Stock Option, Restricted Stock, Performance Unit, Stock Units or Restricted Stock Units as applicable, was a share of Common Stock held by the participant |
Page 2 |
on the dividend payment date. Unless the Committee determines that Dividend Equivalent Rights will be paid in cash as of the dividend payment date, such Dividend Equivalent Rights, once credited, will be converted into an equivalent number of Stock Options, shares of Restricted Stock, Performance Units, Stock Units or Restricted Stock Units as applicable; provided, however, that the number of shares subject to any Award will always be a whole number. Unless otherwise determined by the Committee as of the dividend payment date, if a dividend is paid in cash, the number of Stock Options, shares of Restricted Stock, Performance Units, Stock Units or Restricted Stock Units into which a Dividend Equivalent Right will be converted will be calculated as of the dividend payment date, in accordance with the following formula: |
(A x B)/C
in which A equals the number of Stock Options, shares of Restricted Stock, Performance Units, Stock Units or Restricted Stock Units with Dividend Equivalent Rights held by the participant on the dividend payment date, B equals the cash dividend per share and C equals the Fair Market Value per share of Common Stock on the dividend payment date. Unless otherwise determined by the Committee as of the dividend payment date, if a dividend is paid in property other than cash, the number of Stock Options, shares of Restricted Stock Performance Units, Stock Units or Restricted Stock Units as applicable into which a Dividend Equivalent Right will be converted will be calculated, as of the dividend payment date, in accordance with the formula set forth above, except that B will equal the fair market value per share of the property which the participant would have received if the Stock Option, share of Restricted Stock Performance Unit, Stock Unit or Restricted Stock Unit as applicable, with Dividend Equivalent Rights held by the participant on the dividend payment date was a share of Common Stock.
(s) | Effective Date means February 25, 2008. |
(t) | Eligible Individuals means officers, employees, directors and consultants of the Company or any of its Affiliates, and prospective employees, directors and consultants who have accepted offers of employment, membership on a board or consultancy from the Company or its Affiliates, who are or will be responsible for or contribute to the management, growth or profitability of the business of the Company or its Affiliates, as determined by the Committee. |
(u) | Exchange Act means the Securities Exchange Act of 1934, as amended from time to time, and any successor thereto. |
(v) | Expiration Date means the date on which an Award becomes unexercisable and/or not payable by reason of lapse of time or otherwise as provided in Section 6.2 Expiration Date . |
Page 3 |
(w) | Fair Market Value means, except as otherwise provided by the Committee, as of any given date, the closing price for the shares on the New York Stock Exchange for the specified date (as of 4 p.m. Eastern Standard Time or Eastern Daylight Savings Time, whichever is then in effect), or, if the shares were not traded on the New York Stock Exchange on such date, then on the next preceding date on which the shares were traded, all as reported by such source as the Committee may select. |
(x) | Grant Date means the date designated by the Committee as the date of grant of an Award. |
(y) | Incentive Stock Option means any Stock Option designated as, and qualified as, an incentive stock option within the meaning of Section 422 of the Code. |
(z) | Individual Agreement means a severance, employment, consulting or similar agreement between a participant and the Company or one of its Affiliates. |
(aa) | Management Incentive Award means an Award of cash, Common Stock, Restricted Stock or a combination of cash, Common Stock and Restricted Stock, as determined by the Committee. |
(bb) | Net Contribution means for a Business Unit, its operating profit after-tax, less the product of (1) a percentage as determined by the Committee; and (2) the Business Units Capital Employed. |
(cc) | Non-Employee Director means each director of the Company who is not otherwise an employee of the Company or its Affiliates. |
(dd) | Nonqualified Stock Option means any Stock Option that is not an Incentive Stock Option. |
(ee) | Notice means the written evidence of an Award granted under the Plan in such form as the Committee will from time to time determine. |
(ff) |
Performance Goals means the performance goals established by the Committee in connection with the grant of Management Incentive Awards, Restricted Stock, Performance Units, Stock Units or Restricted Stock Units as set forth in the Notice. In the case of Qualified Performance-Based Awards, Performance Goals will be set by the Committee within the time period prescribed by Section 162(m) of the Code and related regulations, The performance goals upon which the payment or vesting of an Award to a Covered Employee that is intended to qualify as performance-based compensation shall be limited to one or more of the following performance measures: net revenue; net earnings (before or after taxes); operating earnings or income; absolute and/or relative return measures (including, but not limited to, return on assets, capital, invested capital, net contribution, equity, sales, or revenue); earnings per share; cash flow (including, but not limited to, operating cash flow, free cash flow, cash flow |
Page 4 |
return on equity, and cash flow return on investment); net operating profits; earnings before or after taxes, interest, depreciation, and/or amortization; earning as a percentage of sales; earnings growth before or after taxes, interest, depreciation, and/or amortization; gross, operating, or net margins; revenue growth; book value per share; stock price (including, but not limited to, growth measures and total shareholder return); economic value added; customer satisfaction; market share; working capital; productivity ratios; operating goals (including, but not limited to, safety, reliability, maintenance expenses, capital expenses, customer satisfaction, operating efficiency, and employee satisfaction); and performance relative to peer companies, each of which may be established on a corporate-wide basis or established with respect to one or more operating units, divisions, acquired businesses, minority investments, partnerships or joint ventures. |
(gg) | Performance Units means an Award granted under Section 12 Performance Units . |
(hh) | Plan means the John Bean Technologies Corporation Incentive Compensation and Stock Plan, as set forth herein and as hereinafter amended from time to time. |
(ii) | Qualified Performance-Based Award means a Management Incentive Award, an Award of Restricted Stock, an Award of Performance Units, an Award of Stock Units or an Award of Restricted Stock Units designated as such by the Committee, based upon a determination that (1) the recipient is or may be a Covered Employee; and (2) the Committee wishes such Award to qualify for the Section 162(m) Exemption. |
(jj) | Restricted Stock means an Award granted under Section 11 Restricted Stock . |
(kk) | Section 162(m) Exemption means the exemption from the limitation on deductibility imposed by Section 162(m) of the Code that is set forth in Section 162(m)(4)(C) of the Code. |
(ll) | Separation from Service means the cessation of a Non-Employee Directors service on the Board. Temporary absences from service on the Board for a period not to exceed six (6) consecutive months because of illness, vacation or leave of absence will not be considered a Separation from Service. |
(mm) | Stock Appreciation Right means an Award granted under Section 10 Stock Appreciation Rights . |
(nn) | Stock Option means an Award granted under Section 9 Stock Options . |
(oo) | Stock Units or Restricted Stock Units means an Award granted under Section 12 Performance Units, Stock Units or Restricted Stock Units. |
(pp) |
Termination of Employment means the termination of the participants employment with, or performance of services for, the Company and any of its |
Page 5 |
Affiliates. Temporary absences from employment because of illness, vacation or leave of absence and transfers among the Company and its Affiliates will not be considered a Termination of Employment. |
(qq) | Vesting Date means the date on which an Award becomes vested, and, if applicable, fully exercisable and/or payable by or to the participant as provided in Section 6.3 Vesting . |
2.2 Other Definitions . In addition, certain other terms used herein have definitions given to them in the first place in which they are used.
SECTION 3. ADMINISTRATION
3.1 Committee Administration . The Committee is the administrator of the Plan. Among other things, the Committee has the authority, subject to the terms of the Plan:
(a) | To select the Eligible Individuals to whom Awards are granted; |
(b) | To determine whether and to what extent Awards are granted; |
(c) | To determine the amount of each Award; |
(d) | To determine the terms and conditions of any Award, including, but not limited to, the option price, any vesting condition, restriction or limitation regarding any Award and the shares of Common Stock relating thereto, based on such factors as the Committee will determine; |
(e) | To modify, amend or adjust the terms and conditions of any Award, at any time or from time to time, to the extent that such modification, amendment, or adjustment does not conflict with Section 409A of the Code. |
(f) | To determine to what extent and under what circumstances Common Stock and other amounts payable with respect to an Award will be deferred, to the extent that such deferral does not conflict with Section 409A of the Code and |
(g) | To determine under what circumstances an Award may be settled in cash or Common Stock or a combination of cash and Common Stock. |
The Committee has the authority to adopt, alter and repeal administrative rules, guidelines and practices governing the Plan, to interpret the terms and provisions of the Plan, any Award, any Notice and any other agreement relating to any Award and to take any action it deems appropriate for the administration of the Plan.
3.2 Committee Action . The Committee may act only by a majority of its members then in office unless it allocates or delegates its authority to a Committee member or other person to act on its behalf. Except to the extent prohibited by applicable law or applicable rules of a stock exchange, the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any other person or persons. Any such allocation or delegation may be revoked by the Committee at any time.
Page 6 |
Any determination made by the Committee or its delegate with respect to any Award will be made in the sole discretion of the Committee or such delegate. All decisions of the Committee or its delegate are final, conclusive and binding on all parties.
3.3 Board Authority . Any authority granted to the Committee may also be exercised by the full Board. To the extent that any permitted action taken by the Board conflicts with action taken by the Committee, the Board action will control. Notwithstanding anything herein to the contrary, the Board is the administrator of the portion of the Plan applicable to Non-Employee Directors.
SECTION 4. SHARES
4.1 Shares Available For Issuance . The maximum number of shares of Common Stock that may be delivered to participants and their beneficiaries under the Plan will be 3,700,000. Shares subject to an Award under the Plan may be authorized and unissued shares or may be treasury shares.
No Award will be counted against the shares available for delivery under the Plan if the Award is payable to the participant only in the form of cash, or if the Award is paid to the participant in cash.
If any Award is forfeited, or if any Stock Option (and any related Stock Appreciation Right) terminates, expires or lapses without being exercised, or if any Stock Appreciation Right is exercised for cash, the shares of Common Stock subject to such Awards will again be available for delivery in connection with Awards under the Plan. If the option price of any Stock Option granted under the Plan is satisfied by delivering shares of Common Stock to the Company (by either actual delivery or by attestation), only the number of shares of Common Stock delivered to the participant, net of the shares of Common Stock delivered or attested to, will be deemed delivered for purposes of determining the maximum numbers of shares of Common Stock available for delivery under the Plan. To the extent any shares of Common Stock subject to an Award are not delivered to a participant because such shares are used to satisfy an applicable tax-withholding obligation, such shares will not be deemed to have been delivered for purposes of determining the maximum number of shares of Common Stock available for delivery under the Plan.
In the event of any corporate event or transaction, (including, but not limited to, a change in the number of shares of Common Stock outstanding), such as a stock split, merger, consolidation, separation, including a spin-off or other distribution of stock or property of the Company, any reorganization (whether or not such reorganization comes within the definition of such term in Section 368 of the Code) or any partial or complete liquidation of the Company, the Committee shall make such substitution or adjustments in the aggregate number, kind, and price of shares reserved for issuance under the Plan, and the maximum limitation upon any Awards to be granted to any participant, in the number, kind and price of shares subject to outstanding Awards granted under the Plan and/or such other equitable substitution or adjustments as it may
Page 7 |
determines are required to accomplish the same; provided, however, that the number of shares subject to any Award will always be a whole number. Such adjusted price will be used to determine the amount payable in cash or shares, as applicable, by the Company upon the exercise of any Award. Any such adjustment to an Award may be made to the extent that such adjustment does not conflict with Section 409A of the Code.
4.2 Individual Limits . No participant may be granted Stock Options and Stock Appreciation Rights covering in excess of 400,000 shares of Common Stock in any calendar year. The maximum aggregate amount with respect to each Management Incentive Award, Award of Performance Units, Award of Restricted Stock, Award of Stock Units or Award of Restricted Stock Units that may be granted, or, that may vest, as applicable, in any calendar year for any individual participant is 400,000 shares of Common Stock, or the dollar equivalent of 400,000 shares.
SECTION 5. ELIGIBILITY
Awards may be granted under the Plan to Eligible Individuals. Incentive Stock Options may be granted only to employees of the Company and its subsidiaries or parent corporation (within the meaning of Section 424(f) of the Code). The maximum number of Shares of the Share Authorization that may be issued pursuant to Incentive Stock Options under the Plan shall be 3,700,000.
SECTION 6. TERMS AND CONDITIONS OF AWARDS
6.1 General . Awards will be in the form and upon the terms and conditions as determined by the Committee, subject to the terms of the Plan. The Committee is authorized to grant Awards independent of, or in addition to other Awards granted under the Plan. The terms and conditions of each Award may vary from other Awards. Awards will be evidenced by Notices, the terms and conditions of which will be consistent with the terms of the Plan and will apply only to such Award.
6.2 Expiration Date . Unless otherwise provided in the Notice, the Expiration Date of an Award will be the earlier of the date that is ten (10) years after the Grant Date or the date of the participants Termination of Employment.
6.3 Vesting . Each Award vests and becomes fully payable, exercisable and/or released of any restriction on the Vesting Date. The Vesting Date of each Award, as determined by the Committee, will be set forth in the Notice. Prior to the Vesting Date, an Award remains subject to a substantial risk of forfeiture.
SECTION 7. QUALIFIED PERFORMANCE-BASED AWARDS
The Committee may designate a Management Incentive Award, or an Award of Restricted Stock or an Award of Performance Units or an Award of Stock Units or an Award or Restricted Stock Units as a Qualified Performance-Based Award, in which case, the Award is contingent upon the attainment of Performance Goals, and, as a result, remains subject to a substantial risk of forfeiture until the attainment of such Performance Goals.
Page 8 |
SECTION 8. MANAGEMENT INCENTIVE AWARDS
8.1 Management Incentive Awards . The Committee is authorized to grant Management Incentive Awards, subject to the terms of the Plan. Notices for Management Incentive Awards will indicate the Award Cycle, any applicable Performance Goals, any applicable designation of the Award as a Qualified Performance-Based Award and the form of payment of the Award.
8.2 Settlement . As soon as practicable after the later of the Vesting Date and the date any applicable Performance Goals are satisfied, but in any event within seventy (70) days following the later of such events, Management Incentive Awards will be paid to the participant in cash, Common Stock, Restricted Stock or a combination of cash, Common Stock and Restricted Stock, as determined by the Committee. The number of shares of Common Stock payable under the stock portion of a Management Incentive Award will equal the amount of such portion of the award divided by the Fair Market Value of the Common Stock on the date of payment.
SECTION 9. STOCK OPTIONS
9.1 Stock Options . The Committee is authorized to grant Stock Options, including both Incentive Stock Options and Nonqualified Stock Options, subject to the terms of the Plan. Notices will indicate whether the Stock Option is intended to be an Incentive Stock Option or a Nonqualified Stock Option, the option price, the term and the number of shares to which it pertains. To the extent that any Stock Option is not designated as an Incentive Stock Option, or, even if so designated does not qualify as an Incentive Stock Option on or subsequent to its Grant Date, it will constitute a Nonqualified Stock Option.
9.2 Option Price . The option price per share of Common Stock purchasable under a Stock Option will be determined by the Committee and will not be less than the Fair Market Value of the Common Stock subject to the Stock Option on the Grant Date, except as provided under Section 4.1.
9.3 Incentive Stock Options . The terms of the Plan addressing Incentive Stock Options and each Incentive Stock Option will be interpreted in a manner consistent with Section 422 of the Code and all valid regulations issued thereunder.
9.4 Exercise . Stock Options will be exercisable at such time or times and subject to the terms and conditions set forth in the Notice. A participant can exercise a Stock Option, in whole or in part, at any time on or after the Vesting Date and before the Expiration Date by giving written notice of exercise to the Company specifying the number of shares of Common Stock subject to the Stock Option to be purchased. Such notice will be accompanied by payment in full to the Company of the option price by certified or bank check or such other cash equivalent instrument as the Company may accept. If approved by the Committee, payment in full or in part may also be made in the form of Common Stock (by delivery of such shares or by
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attestation) already owned by the optionee of the same class as the Common Stock subject to the Stock Option, based on the Fair Market Value of the Common Stock on the date the Stock Option is exercised.
9.5 Settlement . As soon as practicable after the exercise of a Stock Option, the Company will deliver to or on behalf of the optionee certificates of Common Stock for the number of shares purchased. No shares of Common Stock will be issued until full payment therefor has been made. An optionee will have all of the rights of a stockholder of the Company holding Common Stock, including, but not limited to, the right to vote the shares and the right to receive dividends, when the optionee has given written notice of exercise, has paid in full for such shares and, if requested, has given the representation described in Section 19 General Provisions . The Committee may give optionees Dividend Equivalent Rights, provided, if a Dividend Equivalent Right is granted, such grant cannot be conditioned on the grantee exercising the underlying option.
9.6 Nontransferability . No Stock Option will be transferable by the optionee other than by will or by the laws of descent and distribution. All Stock Options will be exercisable, subject to the terms of the Plan, only by the optionee, the guardian or legal representative of the optionee, or any person to whom such Stock Option is transferred pursuant to this paragraph, it being understood that the term holder and optionee include such guardian, legal representative and other transferee. No Stock Option will be subject to execution, attachment or other similar process.
Notwithstanding anything herein to the contrary, the Committee may permit a participant at any time prior to his or her death to assign all or any portion without consideration therefor of a Nonqualified Stock Option to:
(a) | The participants spouse or lineal descendants; |
(b) | The trustee of a trust for the primary benefit of the participant and his or her spouse or lineal descendants, or any combination thereof; |
(c) | A partnership of which the participant, his or her spouse and/or lineal descendants are the only partners; |
(d) | Custodianships under the Uniform Transfers to Minors Act or any other similar statute; or |
(e) | Upon the termination of a trust by the custodian or trustee thereof, or the dissolution or other termination of the family partnership or the termination of a custodianship under the Uniform Transfers to Minor Act or any other similar statute, to the person or persons who, in accordance with the terms of such trust, partnership or custodianship are entitled to receive the Nonqualified Stock Option held in trust, partnership or custody. |
In such event, the spouse, lineal descendant, trustee, partnership or custodianship will be entitled to all of the participants rights with respect to the assigned portion of the Nonqualified Stock Option, and such portion will continue to be subject to all of the terms, conditions and restrictions applicable to the Nonqualified Stock Option.
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9.7 Cashing Out . On receipt of written notice of exercise, the Committee may elect to cash out all or part of the portion of the shares of Common Stock for which a Stock Option is being exercised by paying the optionee an amount, in cash or Common Stock, equal to the excess of the Fair Market Value of the Common Stock over the option price times the number of shares of Common Stock for which the Stock Option is being exercised on the effective date of such cash-out. In addition, notwithstanding any other provision of the Plan, the Committee, either on the Grant Date or thereafter, may give a participant the right to voluntarily cash-out the participants outstanding Stock Options during the seventy (70)-day period following a Change in Control. A participant who has such a cash-out right and elects to cash-out Stock Options may do so during the seventy (70)-day period following a Change in Control by giving notice to the Company to elect to surrender all or part of the Stock Option to the Company and to receive cash, within thirty (30) days of such election, in an amount equal to the amount by which the Change in Control Price per share of Common Stock on the date of such election exceeds the exercise price per share of Common Stock under the Stock Option multiplied by the number of shares of Common Stock granted under the Stock Option as to which this cash-out right is exercised.
9.8 Term of Options . Each Option granted to a participant shall expire at such time as the Committee shall determine at the time of grant; provided, however, no Option shall be exercisable later than the tenth (10 th ) anniversary date of its grant.
SECTION 10. STOCK APPRECIATION RIGHTS
10.1 Stock Appreciation Rights . The Committee is authorized to grant Stock Appreciation Rights, subject to the terms of the Plan. Stock Appreciation Rights granted with a Nonqualified Stock Option may be granted either on or after the Grant Date. Stock Appreciation Rights granted with an Incentive Stock Option may be granted only on the Grant Date of such Stock Option. Notices of Stock Appreciation Rights granted with Stock Options may be incorporated into the Notice of the Stock Option. Notices of Stock Appreciation Rights will indicate whether the Stock Appreciation Right is independent of any Award or granted with a Stock Option, the price, the term, the method of exercise and the form of payment. The grant of a Stock Appreciation Right shall be at a price per share that is at least equal to the Fair Market Value of a share of Common Stock as of the Grant Date of such Appreciation Right.
10.2 Exercise . A participant can exercise Stock Appreciation Rights, in whole or in part, at any time after the Vesting Date and before the Expiration Date, or, with respect to Stock Appreciation Rights granted in connection with any Stock Option, at such time or times and to the extent that the Stock Options to which they relate are exercisable, by giving written notice of exercise to the Company specifying the number of Stock Appreciation Rights to be exercised. A Stock Appreciation Right granted with a Stock Option may be exercised by an optionee by surrendering any applicable portion of the related Stock Option in accordance with procedures established by the Committee. To the extent provided by the Committee, Stock Options which have been so surrendered will no longer be exercisable to the extent the related Stock Appreciation Rights have been exercised.
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10.3 Settlement . As soon as practicable after the exercise of a Stock Appreciation Right, an optionee will be entitled to receive an amount in cash, shares of Common Stock or a combination of cash and shares of Common Stock, as determined by the Committee, in value equal to the excess of the Fair Market Value on the date of exercise of one share of Common Stock over the Stock Appreciation Right price per share multiplied by the number of shares in respect of which the Stock Appreciation Right is being exercised. Upon the exercise of a Stock Appreciation Right granted with any Stock Option, the Stock Option or part thereof to which such Stock Appreciation Right is related will be deemed to have been exercised for the purpose of the limitation set forth in Section 4 Shares on the number of shares of Common Stock to be issued under the Plan, but only to the extent of the number of shares delivered upon the exercise of the Stock Appreciation Right.
10.4 Nontransferability . Stock Appreciation Rights will be transferable only to the extent they are granted with any Stock Option, and only to permitted transferees of such underlying Stock Option in accordance with the Nontransferability provisions of Section 9.
10.5 Term of Stock Appreciation Right . Each Stock Appreciation right granted to a participant shall expire at such time as the Committee shall determine at the time of grant; however, no Stock Appreciation Right shall be exercisable later than the tenth (10 th ) anniversary date of its grant.
SECTION 11. RESTRICTED STOCK
11.1 Restricted Stock . The Committee is authorized to grant Restricted Stock, subject to the terms of the Plan. Notices for Restricted Stock may be in the form of a Notice and book-entry registration or issuance of one or more stock certificates. Any certificate issued in respect of shares of Restricted Stock will be registered in the name of such participant and will bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Award, substantially in the following form:
The transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions, including, but not limited to, forfeiture of the FMC Technologies, Inc. Incentive Compensation and Stock Plan and a Restricted Stock Notice. Copies of such Plan and Notice are on file at the offices of FMC Technologies, Inc.
The Committee may require that the certificates evidencing such shares be held in custody by the Company until the restrictions thereon will have lapsed and that, as a condition of any Award of Restricted Stock, the participant will have delivered a stock power, endorsed in blank, relating to the Common Stock covered by such Award. The Notice or certificates will indicate any applicable Performance Goals, any applicable designation of the Restricted Stock as a Qualified Performance-Based Award and the form of payment.
11.2 Participant Rights . Subject to the terms of the Plan and the Notice or certificate of Restricted Stock, the participant will not be permitted to sell, assign, transfer, pledge or otherwise encumber shares of Restricted Stock until the later of the Vesting Date and the date
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any applicable Performance Goals are satisfied. Except as provided in the Plan and the Notice or certificate of the Restricted Stock, the participant will have, with respect to the shares of Restricted Stock, Dividend Equivalent Rights, if so granted.
11.3 Settlement . As soon as practicable after the later of the Vesting Date and the date any applicable Performance Goals are satisfied and prior to the Expiration Date, unlegended certificates for such shares of Common Stock will be delivered to the participant upon surrender of any legended certificates, if applicable.
SECTION 12. PERFORMANCE UNITS, STOCK UNITS OR RESTRICTED STOCK UNITS
12.1 Performance Units, Stock Units or Restricted Stock Units . The Committee is authorized to grant Performance Units, Stock Units or Restricted Stock Units, subject to the terms of the Plan. Notices of Performance Units will indicate any applicable Performance Goals, any applicable designation of the Award as a Qualified Performance-Based Award and the form of payment.
12.2 Settlement . Except as otherwise provided in Section 14, as soon as practicable after the later of the Vesting Date and the date any applicable Performance Goals are satisfied, but in any event within seventy (70) days following the later of such events, Performance Units, Stock Units or Restricted Stock Units will be paid in the manner as provided in the Notice. Payment of Performance Units, Stock Units or Restricted Stock Units will be made in an amount of cash equal to the Fair Market Value of one share of Common Stock multiplied by the number of Performance Units, Stock Units or Restricted Stock Units earned or, if applicable, in a number of shares of Common Stock equal to the number of Performance Units, Stock Units or Restricted Stock Units earned, each as determined by the Committee.
SECTION 13. OTHER AWARDS
The Committee is authorized to make, either alone or in conjunction with other Awards, Awards of cash or Common Stock and Awards that are valued in whole or in part by reference to, or are otherwise based upon, Common Stock, including, without limitation, convertible debentures.
SECTION 14. NON-EMPLOYEE DIRECTOR AWARDS
14.1 Annual Retainer . Each Non-Employee Director will receive an Annual Retainer in such amount as will be determined from time to time by the Board. Until changed by resolution of the Board, the Grant Date of the Annual Retainer will be May 1 of each year, and the amount of the Annual Retainer will be reviewed and adjusted only by Board resolution. At least 50 percent of the retainer must be paid in the form of Stock Units or Restricted Units on the Grant Date, provided the Non-Employee Director makes an irrevocable election to receive such Stock Units or Restricted Stock Units in lieu of cash on or before December 31 of the year prior to the fiscal year in which the Annual Retainer is to be earned, and the remainder of which, if any, will be paid in cash in quarterly installments within seventy (70) days following the end
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of each calendar quarter. The number of Stock Units or Restricted Stock Units constituting the Annual Retainer for each Non-Employee Director will be equal to the number obtained by dividing the value of the retainer which the Non-Employee Director has elected to defer by the Fair Market Value of the Common Stock on the Grant Date.
14.2 Annual Award . In addition to the Annual Retainer, the Board has the authority to grant Non-Employee Directors Stock Options, Restricted Stock, Stock Units or Restricted Stock Units, subject to the terms of the Plan.
14.3 Committee Chairman Fees . Each Non-Employee Director who serves as a chairman of a committee of the Board will receive a committee chairman fee in such amount as determined by the Board for the tenure of such service. The Committee chairmen fee may vary among the committees and may only be changed upon a resolution of the Board. It is payable in cash in quarterly installments within seventy (70) days following the end of each calendar quarter.
14.4 Vesting . Awards granted to Non-Employee Directors, including the portion of the Annual Retainer paid in the form of Stock Units or Restricted Stock Units under Section 14.1, will have a Vesting Date as determined by the Board. Unless otherwise provided in the Award, such Vesting Date will be the date of the Companys annual stockholders meeting next following the Grant Date.
14.5 Separation from Service . Except as provided below, if a Non-Employee Director has a Separation from Service prior to the Vesting Date of a Stock Unit or Restricted Stock Unit, any unvested Stock Units or Restricted Stock Units are forfeited and all further rights of the Non-Employee Director to or with respect to such Stock Units or Restricted Stock Units terminate. If a Non-Employee Director dies while serving as a director of the Company, any vested Stock Units or Restricted Stock Units will be paid to the person designated in the Non-Employee Directors last will and testament or, in the absence of such designation, to his or her estate. Upon death or disability, any unvested Stock Units or Restricted Stock Units will vest and become payable in a proportionate amount, based upon the full months of service completed during the vesting period from the Grant Date to the date of death or disability. Any unvested Stock Units or Restricted Stock Units vest and become immediately payable upon a Change in Control. For purposes of this section 14.5, the term disability shall have such meaning as is set forth under Section 409A of the Internal Revenue Code of 1986, as amended (the Code).
14.6 Settlement . Payments with respect to Stock Units or Restricted Stock Units of a Non-Employee Director will be made in shares of Common Stock issued to the Non-Employee Director as soon as practicable after his or her Separation from Service, but in any event within seventy (70) days following such Separation from Service. Stock Units or Restricted Stock Units will be valued using the Fair Market Value of Common Stock on the last business day of his or her service on the Board. Notwithstanding anything herein to the contrary, payments with respect to Stock Units or Restricted Stock Units will also be made in shares of Common Stock upon the occurrence of a Change in Control.
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SECTION 15. CHANGE IN CONTROL
15.1 Impact of Change in Control . Notwithstanding any other provision of the Plan to the contrary, in the event of a Change in Control, as of the date such Change in Control is determined to have occurred, any outstanding:
(a) | Stock Options and Stock Appreciation Rights become fully exercisable and vested to the full extent of the original grant; |
(b) | Restricted Stock becomes free of all restrictions and becomes fully vested and transferable to the full extent of all or a portion of the maximum amount of the original grant as provided in the Notice, or, if not provided in the Notice, as determined by the Committee; |
(c) | Stock Units and Restricted Stock Units are considered earned and payable to the full extent of all or a portion of the maximum amount of the original grant as provided in the Notice, or, if not provided in the Notice, as determined by the Committee, any restrictions lapse and such Stock Units or Restricted Stock Units will be settled in cash or Common Stock, as determined by the Committee, as promptly as is practicable following the Change in Control; and |
(d) | Management Incentive Awards become fully vested to the full extent of all or a portion of the maximum amount of the original grant as provided in the Notice, or, if not provided in the Notice, as determined by the Committee, and such Management Incentive Awards will be settled in cash or Common Stock, as determined by the Committee, as promptly as is practicable following the Change in Control. |
The Committee may also make additional substitutions, adjustments and/or settlements of outstanding Awards as it deems appropriate and consistent with the Plans purposes.
15.2 Definition of Change in Control . For purposes of the Plan, a Change in Control means either a Change in Ownership, a Change in Effective Control, or a Change in Ownership of a Substantial Portion of Assets, as defined below:
Change in Ownership: A Change in Ownership of the Company occurs on the date that any one person, or more than one Person Acting as a Group (as defined below), acquires ownership of stock of the Company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Company. However, if any one person or more than one Person Acting as a Group, is considered to own more than 50% of the total fair market value or total voting power of the stock of the Company, the acquisition of additional stock by the same person or persons is not considered to cause a Change in Ownership of the Company (or to cause a Change in Effective Control of the Company). An increase in the percentage of stock owned by any one person, or Persons Acting as a Group, as a result of a transaction in which the Company acquires its stock in exchange for property will be treated as an acquisition of stock. This applies only when there is a transfer of stock of the Company (or issuance of stock of the Company) and stock in the Company remains outstanding after the transaction.
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Persons Acting as a Group: Persons will not be considered to be acting as a group solely because they (i) purchase or own stock of the same corporation at the same time, or as a result of the same public offering, or (ii) purchase assets of the same corporation at the same time. However, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of stock or assets, or similar business transaction with the Company. If a person, including an entity, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of stock or assets, or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a corporation only with respect to the ownership in that corporation prior to the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.
Change in Effective Control: A Change in Effective Control of the Company occurs on the date that either
(i) | Any one person, or more than one Person Acting as a Group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Company possessing 30% or more of the total voting power of the stock of the Company; or |
(ii) | a majority of members of the Board is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. |
A Change in Effective Control will have occurred only if the Covered Employee is employed by the Company or an Affiliate upon the date of the Change in Effective Control or the Company is liable for the payment of the benefits hereunder and no other corporation is a majority shareholder of the Company. Further, in the absence of an event described in paragraph (i) or (ii), a Change in Effective Control of the Company will not have occurred.
Acquisition of additional control: If any one person, or more than one Person Acting as a Group, is considered to effectively control the Company, the acquisition of additional control of the Company by the same person or persons is not considered to cause a Change in Effective Control of the Company (or to cause a Change in Ownership of the Company).
Change in Ownership of a Substantial Portion of Assets: A Change in Ownership of a Substantial Portion of Assets occurs on the date that any one person, or more than one Person Acting as a Group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Company immediately prior to such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.
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Transfers to a related person: There is no Change in Control when there is a transfer to an entity that is controlled by the shareholders of the Company immediately after the transfer. A transfer of assets by the Company is not treated as a Change of Ownership of a Substantial Portion of Assets if the assets are transferred to
(i) | A shareholder of the Company (immediately before the asset transfer) in exchange for or with respect to its stock; |
(ii) | An entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company; |
(iii) | A person, or more than one Person Acting as a Group, that owns, directly or indirectly, 50% or more of the total value or voting power of all the outstanding stock of the Company; or |
(iv) | An entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a person described in paragraph (iii). |
A persons status is determined immediately after the transfer of the assets. For example, a transfer to a corporation in which the Company has no ownership interest before the transaction, but which is a majority-owned subsidiary of the Company after the transaction is not treated as a Change in Ownership of a Substantial Portion of Assets of the Company.
15.3 Change in Control Price . For purposes of the Plan, Change in Control Price means the higher of (a) the highest reported sales price, regular way, of a share of Common Stock in any transaction reported on the New York Stock Exchange or other national exchange on which such shares are listed during the sixty (60)-day period prior to and including the date of a Change in Control; or (b) if the Change in Control is the result of a tender or exchange offer or a Corporate Transaction, the highest price per share of Common Stock paid in such tender or exchange offer or Corporate Transaction; provided, however , that in the case of Incentive Stock Options and Stock Appreciation Rights relating to Incentive Stock Options, the Change in Control Price will be in all cases the Fair Market Value of the Common Stock on the date such Incentive Stock Option or Stock Appreciation Right is exercised. To the extent that the consideration paid in any such transaction described above consists all or in part of securities or other noncash consideration, the value of such securities or other noncash consideration will be determined by the Committee.
SECTION 16. FORFEITURE OF AWARDS
Notwithstanding anything in the Plan to the contrary, the Committee may, in the event of serious misconduct by a participant (including, without limitation, any misconduct prejudicial to or in conflict with the Company or its Affiliates, or any Termination of Employment for Cause), or any activity of a participant in competition with the business of the Company or any Affiliate, (a) cancel any outstanding Award granted to such participant, in whole or in part, whether or not vested , and/or (b) if such conduct or activity occurs within one year following the exercise or payment of an Award, require such participant to repay to the Company any gain realized or payment received upon the exercise or payment of such Award (with such gain or payment
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valued as of the date of exercise or payment). In the event the Companys financial statements are restated as a result of errors, omissions or fraud, the Committee may, in good faith and to the extent an Award exceeds what would otherwise have been awarded based on the restated financial results, (a) cancel any outstanding Award granted, in whole or in part, whether or not vested or deferred, to officers of the Company who are identified as being subject to Section 16 of the Securities and Exchange Act of 1934 (Section 16 Officers), and/or (b) if such restatement occurs after the exercise or payment of such Award, require such Section 16 Officer to repay to the Company any gain realized or payment received upon the exercise or payment of such Award (with such gain or payment valued as of the date of exercise or payment). Such cancellation or repayment obligation will be effective as of the date specified by the Committee. Any repayment obligation may be satisfied in Common Stock or cash or a combination thereof (based upon the Fair Market Value of Common Stock on the day of payment), and the Committee may provide for an offset to any future payments owed by the Company or any Affiliate to the participant if necessary to satisfy the repayment obligation. The determination of whether a participant has engaged in a serious breach of conduct or any activity in competition with the business of the Company or any Affiliate will be made by the Committee in good faith. This Section 16 will have no application following a Change in Control.
SECTION 17. AMENDMENT AND TERMINATION
The Committee may amend, alter, or discontinue the Plan or any Award, prospectively or retroactively, but no amendment, alteration or discontinuation may impair the rights of a recipient of any Award without the recipients consent, except such an amendment made to comply with applicable law, stock exchange rules or accounting rules.
No amendment will be made without the approval of the Companys stockholders to the extent such approval is required by applicable law or stock exchange rules, or, to the extent such amendment increases the number of shares available for delivery under the Plan, or changes the option price after the Grant Date.
No award of Performance Units, Stock Units or Restricted Stock Units may be granted to Non-Employee Directors under Section 14.1 of this Plan after February 16, 2011 or if later, the date that is ten years from the date a majority of the stockholders of the Company approve the most version of the Plan.
SECTION 18. UNFUNDED STATUS OF PLAN
It is presently intended that the Plan constitutes an unfunded plan for incentive compensation. The Committee may authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver Common Stock or make payments; provided, however, that unless the Committee otherwise determines, the existence of such trusts or other arrangements will be consistent with the unfunded status of the Plan.
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SECTION 19. GENERAL PLAN PROVISIONS
19.1 General Provisions . The Plan will be administered in accordance with the following provisions and any other rule, guideline and practice determined by the Committee:
(a) | Each person purchasing or receiving shares pursuant to an Award may be required to represent to and agree with the Company in writing that he or she is acquiring the shares without a view to the distribution of the shares. |
(b) | The certificates for shares issued under an Award may include any legend which the Committee deems appropriate to reflect any restrictions on transfer. |
(c) | Notwithstanding any other provision of the Plan, any Award, any Notice or any other agreements made pursuant thereto, the Company is not required to issue or deliver any shares of Common Stock prior to fulfillment of all of the following conditions: |
(i) | Listing or approval for listing upon notice of issuance, of such shares on the New York Stock Exchange, or such other securities exchange as may at the time be the principal market for the Common Stock; |
(ii) | Any registration or other qualification of such shares of the Company under any state or federal law or regulation, or the maintaining in effect of any such registration or other qualification which the Committee deems necessary or advisable; and |
(iii) | Obtaining any other consents, approval, or permit from any state or federal governmental agency which the Committee deems necessary or advisable. |
(d) | The Company will not issue fractions of shares. Whenever, under the terms of the Plan, a fractional share would otherwise be required to be issued, the participant will be paid at Fair Market Value for such fractional share by rounding down the number of shares received to the nearest whole number and paying in cash the value of the fractional share. |
(e) | In the case of a grant of an Award to any Eligible Individual of an Affiliate of the Company, the Company may, if the Committee so directs, issue or transfer the shares of Common Stock, if any, covered by the Award to the Affiliate, for such lawful consideration as the Committee may specify, upon the condition or understanding that the Affiliate will transfer the shares of Common Stock to the Eligible Individual in accordance with the terms of the Award specified by the Committee pursuant to the provisions of the Plan. All shares of Common Stock underlying Awards that are forfeited or canceled revert to the Company. |
19.2 Employment . The Plan will not constitute a contract of employment, and adoption of the Plan will not confer upon any employee any right to continued employment, nor will it interfere in any way with the right of the Company or an Affiliate to terminate at any time the employment of any employee or the membership of any director on a board of directors or any consulting arrangement with any Eligible Individual.
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19.3 Tax Withholding Obligations . No later than the date as of which an amount first becomes includible in the gross income of the participant for federal income tax purposes with respect to any Award under the Plan, the participant will pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, any federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount. Unless otherwise determined by the Company, withholding obligations may be settled with Common Stock, including Common Stock that is part of the Award that gives rise to the withholding requirement; provided that not more than the legally required minimum withholding may be settled with Common Stock. The obligations of the Company under the Plan will be conditional on such payment or arrangements, and the Company and its Affiliates will, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to the participant. The Committee may establish such procedures as it deems appropriate, including making irrevocable elections, for the settlement of withholding obligations with Common Stock.
19.4 Beneficiaries . The Committee will establish such procedures as it deems appropriate for a participant to designate a beneficiary to whom any amounts payable in the event of the participants death are to be paid or by whom any rights of the participant, after the participants death, may be exercised.
19.5 Governing Law . The Plan and all Awards made and actions taken thereunder will be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws. Notwithstanding anything herein to the contrary, in the event an Award is granted to Eligible Individual who is employed or providing services outside the United States and who is not compensated from a payroll maintained in the United States, the Committee may modify the provisions of the Plan and/or any such Award as they pertain to such individual to comply with and account for the tax and accounting rules of the applicable foreign law so as to maintain the benefit intended to be provided to such participant under the Award.
19.6 409A . Except for Section 14 of the Plan, the Plan is not intended to provide for the deferral of compensation under Section 409A of the Code and, as a result, the Plan (except for Section 14) is not intended to be subject to 409A of the Code. The Plan (except for Section 14) shall, as a result, be administered and interpreted in a manner consistent with such intent. Section 14 of the Plan is intended, in part, to provide for the deferral of compensation under 409A of the Code and, as a result, is intended to be subject to 409A of the Code. Section 14 of the Plan shall therefore be administered and interpreted in a manner consistent with such intent.
19.7 Nontransferability . Except as otherwise provided in Section 9 Stock Options and Section 10 Stock Appreciation Rights , or by the Committee, Awards under the Plan are not transferable except by will or by laws of descent and distribution.
19.8 Severability . Wherever possible, each provision of the Plan and of each Award and of each Notice will be interpreted in such a manner as to be effective and valid under applicable law. If any provision of the Plan, any Award or any Notice is found to be prohibited by or invalid under applicable law, then (a) such provision will be deemed amended to and to
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have contained from the outset such language as will be necessary to accomplish the objectives of the provision as originally written to the fullest extent permitted by law; and (b) all other provisions of the Plan and any Award will remain in full force and effect.
19.9 Strict Construction . No rule of strict construction will be applied against the Company, the Committee or any other person in the interpretation of the terms of the Plan, any Award, any Notice, any other agreement or any rule or procedure established by the Committee.
19.10 Stockholder Rights . Except as otherwise provided herein, no participant will have dividend, voting or other stockholder rights by reason of a grant of an Award or a settlement of an Award in cash.
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Exhibit 10.4(a)
NONQUALIFIED STOCK OPTION AGREEMENT
PURSUANT TO THE JOHN BEAN TECHNOLOGIES CORPORATION
INCENTIVE COMPENSATION AND STOCK PLAN
This Agreement is made as of the <<Grant Date>> (the Grant Date) by JOHN BEAN TECHNOLOGIES CORPORATION, a Delaware corporation, (the Company) and <<Participant Name>> (the Employee).
In 2008, the Board of Directors of the Company (the Board) adopted the John Bean Technologies Corporation Incentive Compensation and Stock Plan (the Plan). The Plan, as it may be amended and continued, is incorporated by reference and made a part of this Agreement and will control the rights and obligations of the Company and the Employee under this Agreement. Except as otherwise expressly provided herein, all capitalized terms have the meanings provided in the Plan. To the extent there is a conflict between the Plan and this Agreement, the provisions of the Plan will control.
The Compensation Committee of the Board (the Committee) determined that it would be to the competitive advantage and interest of the Company and its stockholders to grant a stock option to the Employee as an inducement to remain in the service of the Company or one of its affiliates (collectively, the Employer), and as an incentive for increased efforts during such service.
The Committee, on behalf of the Company, grants to the Employee a nonqualified stock option (the Option) to purchase an aggregate of << # >> shares of the common stock of the Company par value of $.01 per share (the Common Stock) at a price of $<<Grant Price>> per share upon the following terms and conditions:
1. Time of Exercise of Option . Subject to its termination as provided in Section 3, below, and to the satisfaction of the requirements of Section 2 below, the Option is exercisable at any time or from time to time, in whole or in part, on or after <<January 2, 3 years after the Grant Date>> (the Vesting Date). Notwithstanding the foregoing, the Option will become immediately exercisable by the Employee or by the person or persons to whom the Employees rights under the Option pass by will or by the applicable laws of descent and distribution, in the event of the Employees death or Disability, or a Change in Control of the Company.
2. Employment . Subject to Section 3, below, it is a condition precedent to the right to exercise the Option that the Employee remain in the employ of the Employer continuously during the period from the Grant Date to the earliest of (a) the Vesting Date, (b) the date of the Employees retirement under the Companys pension plan on or after age 62, (c) the date of the Employees death or (d) the date of the Employees Disability. Any portion of the Option that is not vested will be forfeited upon the Employees termination of employment with the Employer before the Vesting Date for a reason other than the Employees death, Disability or retirement under the Companys pension plan on or after age 62.
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3. Termination of Option . The Option and all rights thereunder, to the extent such rights will not have been exercised, will terminate and become null and void on the earliest of the date (a) that is <<January 2, 10 years after the Grant Date>>, (b) that is three months after the date the Employee ceases to be an employee of an Employer for any reason other than death, Disability or retirement under the Companys pension plan on or after age 62, (c) that is five years from the date of the Employees retirement under the Companys pension plan on or after age 62 or termination due to Disability, (d) that is one year from the date of the Employees death or (e) the Employee is terminated for Cause, (such date being referred to as the Option Expiration Date).
4. Right to Exercise . The Option may be exercised at any time on or after the date on which it first becomes exercisable under Sections 1 and 2, above, to and including the Option Expiration Date by the Employee or by the person or persons to whom the Employees rights under the Option will pass by will or by the applicable laws of descent and distribution. In no event may the Option be exercised to any extent by anyone before it becomes exercisable pursuant to Sections 1 and 2, above, or after the Option Expiration Date.
5. Method of Exercise . The Employee (or other person entitled to do so) may exercise the Option with respect to all or any part of the shares then subject to such exercise (a) by giving the Company written notice of such exercise, specifying the Grant Date, the number of such shares as to which the Option is being exercised, paying by cash or check, bank draft or postal or express money order payable to the order of the Company in lawful money of the United States an amount equal to the sum of the option price of such shares and the amount of any taxes required to be withheld by the Company (the Option Payment) or by shares of Common Stock that have been held by the Employee for at least six months at the time of exercise, or, that were purchased by the Employee on the open market, having a Fair Market Value at the date of such notice equal to the Option Payment or by a combination of cash, check, draft, money order and such shares, and (b) by giving satisfactory assurance in writing that such shares will not be publicly offered for sale, other than on a national securities exchange. The Company may from time to time make available alternative methods of exercise upon notice to the Employee. As soon as practicable after receipt of such notice and payment, the Company will, without transfer or issue tax or other incidental expense to the Employee or other person exercising the Option, deliver to such Employee or other person a certificate or certificates for Common Stock. If there is a failure to accept delivery of all or any part of the upon tender of delivery thereof, the right to purchase such undelivered Common Stock may be terminated by the Company.
6. Adjustment . The Committee shall make equitable substitutions or adjustments in the Option and/or Common Stock issuable upon exercise of the Option as it determines to be appropriate in the event of any corporate event or transaction such as a stock split, merger, consolidation, separation, including a spin-off or other distribution of stock or property of the Company, reorganization or any partial or complete liquidation of the Company.
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7. Rights Prior to Exercise . The Option will during the Employees lifetime be exercisable only by the Employee, and neither the Option nor any right thereunder will be assignable or transferable by the Employee by voluntary or involuntary act, operation of law, or otherwise, other than by testamentary bequest or devise or the laws of descent and distribution. Any effort to assign or transfer a right, except as provided for herein, will be ineffective and may result in the Company terminating the Option. Neither the Employee nor any other person entitled to exercise the Option will have any of the rights of a stockholder with respect to the shares subject to the Option, except to the extent that Common Stock will have been issued upon the exercise of the Option.
8. No Limitation on Rights of the Company . The granting of the Option will not in any way affect the right or power of the Company to make adjustments, reclassifications or changes in its capital or business structure or to merge, consolidate, reincorporate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
9. Employment . Nothing in this Agreement or in the Plan will be construed as constituting a commitment, guarantee, agreement or understanding of any kind or nature that the Employer will continue to employ the Employee, or as affecting in any way the right of the Employer to terminate the employment of the Employee at any time.
10. Government Regulation . The Companys obligation to deliver Common Stock upon exercise of the Option will be subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.
11. Withholding . The Employer will comply with all applicable withholding tax laws, and will be entitled to take any action necessary to effectuate such compliance.
12. Notice . Any notice to the Company provided for in this Agreement will be addressed to it in care of its Secretary, John Bean Technologies Corporation, 200 East Randolph Drive, Chicago, Illinois 60601, and any notice to the Employee (or other person entitled to exercise the Option) will be addressed to the Employees address now on file with the Company, or to such other address as either may designate to the other in writing. Any notice will be deemed to be duly given when enclosed in a properly sealed envelope and addressed as stated above, and deposited, postage paid, in a post office or branch post office regularly maintained by the United States government.
13. Administration . The Committee administers the Plan. The Employees rights under this Agreement are expressly subject to the terms and conditions of the Plan, a copy of which is attached hereto, including any guidelines the Committee adopts from time to time.
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14. Binding Effect . This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and permitted assigns.
15. Sole Agreement . This Agreement is the entire agreement between the parties to it, and any and all prior oral and written representations are merged into this Agreement. This Agreement may only be amended by written agreement between the Company and the Employee. Employee expressly acknowledges that the form of the grant agreement that the Employee accepts electronically through the Fidelity NetBenefits website is intended to facilitate the administration of this Option award and may not be a full version of this Agreement due to limitiations inherit in such website that are imposed by Fidelity. The terms of this Agreement will govern the Employees award in the event of any inconsistency with the agreement viewed or accepted by the Employee on the Fidelity NetBenefits website.
16. Governing Law . The interpretation, performance and enforcement of this agreement will be governed by the laws of the State of Delaware.
17. Privacy . Employee acknowledges and agrees to the Employer transferring certain personal data of such Employee to the Company for purposes of implementing, performing or administering the Plan or any related benefit. Employee expressly gives his consent to the Employer and the Company to process such personal data.
Executed as of the Grant Date.
JOHN BEAN TECHNOLOGIES CORPORATION
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Exhibit 10.4(b)
NONQUALIFIED STOCK OPTION AGREEMENT
PURSUANT TO THE JOHN BEAN TECHNOLOGIES CORPORATION
INCENTIVE COMPENSATION AND STOCK PLAN
This Agreement is made as of the <<Grant Date>> (the Grant Date) by JOHN BEAN TECHNOLOGIES CORPORATION, a Delaware corporation, (the Company) and <<Participant Name>> (the Employee).
In 2008, the Board of Directors of the Company (the Board) adopted the John Bean Technologies Corporation Incentive Compensation and Stock Plan (the Plan). The Plan, as it may be amended and continued, is incorporated by reference and made a part of this Agreement and will control the rights and obligations of the Company and the Employee under this Agreement. Except as otherwise expressly provided herein, all capitalized terms have the meanings provided in the Plan. To the extent there is a conflict between the Plan and this Agreement, the provisions of the Plan will control.
The Compensation Committee of the Board (the Committee) determined that it would be to the competitive advantage and interest of the Company and its stockholders to grant a stock option to the Employee as an inducement to remain in the service of the Company or one of its affiliates (collectively, the Employer), and as an incentive for increased efforts during such service.
The Committee, on behalf of the Company, grants to the Employee a nonqualified stock option (the Option) to purchase an aggregate of << # >> shares of the common stock of the Company par value of $.01 per share (the Common Stock) at a price of $<<Grant Price>> per share upon the following terms and conditions:
1. Time of Exercise of Option . Subject to its termination as provided in Section 3, below, and to the satisfaction of the requirements of Section 2 below, the Option is exercisable at any time or from time to time, in whole or in part, on or after <<January 2, 3 years after the Grant Date>> (the Vesting Date). Notwithstanding the foregoing, the Option will become immediately exercisable by the Employee or by the person or persons to whom the Employees rights under the Option pass by will or by the applicable laws of descent and distribution, in the event of the Employees death or Disability, or a Change in Control of the Company.
2. Employment . Subject to Section 3, below, it is a condition precedent to the right to exercise the Option that the Employee remain in the employ of the Employer continuously during the period from the Grant Date to the earliest of (a) the Vesting Date, (b) the date of the Employees retirement under the Companys pension plan on or after age 62, (c) the date of the Employees death or (d) the date of the Employees Disability. Any portion of the Option that is not vested will be forfeited upon the Employees termination of employment with the Employer before the Vesting Date for a reason other than the Employees death, Disability or retirement under the Companys pension plan on or after age 62.
3. Termination of Option . The Option and all rights thereunder, to the extent such rights will not have been exercised, will terminate and become null and void on the earliest of the date (a) that is <<January 2, 10 years after the Grant Date>> , (b) that is three months after the date the Employee ceases to be an employee of an Employer for any reason other than death, Disability or retirement under the Companys pension plan
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on or after age 62, (c) that is five years from the date of the Employees retirement under the Companys pension plan on or after age 62 or termination due to Disability, (d) that is one year from the date of the Employees death or (e) the Employee is terminated for Cause, (such date being referred to as the Option Expiration Date).
4. Right to Exercise . The Option may be exercised at any time on or after the date on which it first becomes exercisable under Sections 1 and 2, above, to and including the Option Expiration Date by the Employee or by the person or persons to whom the Employees rights under the Option will pass by will or by the applicable laws of descent and distribution. In no event may the Option be exercised to any extent by anyone before it becomes exercisable pursuant to Sections 1 and 2, above, or after the Option Expiration Date.
5. Method of Exercise . The Employee (or other person entitled to do so) may exercise the Option with respect to all or any part of the shares then subject to such exercise (a) by giving the Company written notice of such exercise, specifying the Grant Date, the number of such shares as to which the Option is being exercised, paying by cash or check, bank draft or postal or express money order payable to the order of the Company in lawful money of the United States an amount equal to the sum of the option price of such shares and the amount of any taxes required to be withheld by the Company (the Option Payment) or by shares of Common Stock that have been held by the Employee for at least six months at the time of exercise, or, that were purchased by the Employee on the open market, having a Fair Market Value at the date of such notice equal to the Option Payment or by a combination of cash, check, draft, money order and such shares, and (b) by giving satisfactory assurance in writing that such shares will not be publicly offered for sale, other than on a national securities exchange. The Company may from time to time make available alternative methods of exercise upon notice to the Employee. As soon as practicable after receipt of such notice and payment, the Company will, without transfer or issue tax or other incidental expense to the Employee or other person exercising the Option, deliver to such Employee or other person a certificate or certificates for Common Stock. If there is a failure to accept delivery of all or any part of the upon tender of delivery thereof, the right to purchase such undelivered Common Stock may be terminated by the Company.
6. Adjustment . The Committee shall make equitable substitutions or adjustments in the Option and/or Common Stock issuable upon exercise of the Option as it determines to be appropriate in the event of any corporate event or transaction such as a stock split, merger, consolidation, separation, including a spin-off or other distribution of stock or property of the Company, reorganization or any partial or complete liquidation of the Company.
7. Rights Prior to Exercise . The Option will during the Employees lifetime be exercisable only by the Employee, and neither the Option nor any right thereunder will be assignable or transferable by the Employee by voluntary or involuntary act, operation of law, or otherwise, other than by testamentary bequest or devise or the laws of descent and distribution. Any effort to assign or transfer a right, except as provided for herein, will be ineffective and may result in the Company terminating the Option. Neither the Employee nor any other person entitled to exercise the Option will have any of the rights of a stockholder with respect to the shares subject to the Option, except to the extent that Common Stock will have been issued upon the exercise of the Option.
8. No Limitation on Rights of the Company . The granting of the Option will not in any way affect the right or power of the Company to make adjustments, reclassifications or changes in its capital or business structure or to merge, consolidate, reincorporate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
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9. Employment . Nothing in this Agreement or in the Plan will be construed as constituting a commitment, guarantee, agreement or understanding of any kind or nature that the Employer will continue to employ the Employee, or as affecting in any way the right of the Employer to terminate the employment of the Employee at any time.
10. Government Regulation . The Companys obligation to deliver Common Stock upon exercise of the Option will be subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.
11. Withholding . The Employer will comply with all applicable withholding tax laws, and will be entitled to take any action necessary to effectuate such compliance.
12. Notice . Any notice to the Company provided for in this Agreement will be addressed to it in care of its Secretary, John Bean Technologies Corporation, 200 East Randolph Drive, Chicago, Illinois 60601, and any notice to the Employee (or other person entitled to exercise the Option) will be addressed to the Employees address now on file with the Company, or to such other address as either may designate to the other in writing. Any notice will be deemed to be duly given when enclosed in a properly sealed envelope and addressed as stated above, and deposited, postage paid, in a post office or branch post office regularly maintained by the United States government.
13. Administration . The Committee administers the Plan. The Employees rights under this Agreement are expressly subject to the terms and conditions of the Plan, a copy of which is attached hereto, including any guidelines the Committee adopts from time to time.
14. Binding Effect . This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and permitted assigns.
15. Sole Agreement . This Agreement is the entire agreement between the parties to it, and any and all prior oral and written representations are merged into this Agreement. This Agreement may only be amended by written agreement between the Company and the Employee. Employee expressly acknowledges that the form of the grant agreement that the Employee accepts electronically through the Fidelity NetBenefits website is intended to facilitate the administration of this Option award and may not be a full version of this Agreement due to limitiations inherit in such website that are imposed by Fidelity. The terms of this Agreement will govern the Employees award in the event of any inconsistency with the agreement viewed or accepted by the Employee on the Fidelity NetBenefits website.
16. Governing Law . The interpretation, performance and enforcement of this agreement will be governed by the laws of the State of Delaware.
17. Local Law . If the Employee resides in Brazil, the Employee is responsible for complying with the terms of applicable Brazilian laws, which may, among other requirements, require the Employee to sell the Award Shares outside of Brazil.
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18. Consent to Transfer of Employee Data . If the Employee resides in Spain, the Employee acknowledges and agrees to the transfer of certain of his or her personal data by and between the Company and its subsidiaries and/or divisions for the purposes of implementing, performing or administering the Plan. The Employee further expressly gives his or her consent to the processing of such data by the Company and its subsidiaries and/or divisions.
19. Privacy . If the Employee resides in Europe, the Employee acknowledges and agrees to the Company and its transferring certain personal data of the Employee to the Company for purposes of implementing, performing or administering the Plan. The Employee expressly gives his consent to the Company to process such personal data.
20. Discretionary Nature . The employee acknowledges and agrees that this award is discretionary, and any future awards will be made in the Committees discretion; and that the plan may be terminated, amended, or canceled by the Company at any time.
Executed as of the Grant Date.
JOHN BEAN TECHNOLOGIES CORPORATION
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Exhibit 10.4(c)
LONG TERM INCENTIVE PERFORMANCE SHARE
RESTRICTED STOCK AGREEMENT
PURSUANT TO THE JOHN BEAN TECHNOLOGIES CORPORATION
INCENTIVE COMPENSATION AND STOCK PLAN
This Agreement is made as of the <<Grant Date>> (the Grant Date) by JOHN BEAN TECHNOLOGIES CORPORATION, a Delaware corporation, (the Company) and <<Participant Name>> (the Employee).
In 2008, the Board of Directors of the Company (the Board) adopted the John Bean Technologies Corporation Incentive Compensation and Stock Plan (the Plan). The Plan, as it may be amended and continued, is incorporated by reference and made a part of this Agreement and will control the rights and obligations of the Company and the Employee under this Agreement. Except as otherwise expressly provided herein, all capitalized terms have the meanings provided in the Plan. To the extent there is a conflict between the Plan and this Agreement, the provisions of the Plan will control.
The Compensation Committee of the Board (the Committee) determined that it would be to the competitive advantage and interest of the Company and its stockholders to grant an award of restricted stock to the Employee, the amount of which will vary based on the Companys performance, as an inducement to remain in the service of the Company or one of its affiliates (collectively, the Employer), and as an incentive for increased efforts during such service.
The Committee, on behalf of the Company, grants to the Employee an award of up to <<Maximum # of Shares Granted>> shares of restricted stock (the Restricted Shares) of the Companys common stock par value of $0.01 per share (the Common Stock). The number of shares ultimately earned by the Employee will depend upon the Companys <<Fiscal Year>> fiscal year performance on [ specify number of performance measures utilized for award ] << # >> performance criteria [ choose applicable performance measures and delete inapplicable ones ] [EBITDA growth] [Return on Investment] [Total Shareholder Return] [Net Contribution] [ include the following only if performance is to be measured with respect to peers ] [relative to the performance of [ specify number of peer companies utilized ] [ << # >> other companies that are designated by the Committee at the time of the Committees approval of the grant of this award]. The actual number of Restricted Shares earned by the Employee will be determined at a meeting of the Committee following the completion of the <<Fiscal Year>> fiscal year, at which time the Committee will review and approve the Companys calculation of the Companys performance on the [ specify number of performance measures utilized for award ] << # >> specified performance criteria. The total number of shares issued will vary between 0-200% of a target award amount depending on whether the Companys full year performance on the [ specify number of performance measures utilized for award ]_ << # >> performance criteria is
determined to be above average, average or below average [ include the following only if performance is to be measured with respect to peers ] [relative to the peer group of OSX companies], with [ specify applicable fraction based on the number of performance measures utilized for award ] of the total grant being tied to each of the performance measures. [ utilize the following if performance is not measured against peers: ] [The Companys performance on each of these measures will be designated above average if the Companys performance is [ specify the required performance levels ] , average if the Companys performance is and below average if the Companys performance is .] [ or include the following if performance is to be measured with respect to peers ] [The Companys performance on each of these measures will be designated above average if the Companys performance is better than the midpoint between the << # >> and << # >> ranked peer companies for such measure (1 st being the highest performance), average if the Companys performance is better than the midpoint between the << # >> and << # >> ranked peer companies for such measure and lower than the midpoint between the << # >> and << # >> ranked peer companies for such measure, and below average if the Companys performance is below the midpoint between the << # >> and << # >> ranked peer companies for such measure.] For below-average performance on any of the [ specify number of performance measures utilized for award ] << # >> performance measures, the Employee will receive 0% of the [ specify applicable fraction based on the number of performance measures utilized for award ] << # >> portion of this grant that is tied to such performance measure, for average performance, 100% of such [ specify applicable fraction based on the number of performance measures utilized for award ] << # >> portion of this grant tied to that performance measure, and for above-average performance, 200% of such [ specify applicable fraction based on the number of performance measures utilized for award ] << # >> portion of this grant. [ DRAFTING NOTE: ELIMINATE BOLD-FACE ITALICIZED DRAFTING NOTES AND INAPPLICABLE BRACKETED ALTERNATIVE PROVISIONS IN GRANT AGREEMENTS WHEN ISSUED ]
The award is made upon the following terms and conditions:
1. Vesting . The Restricted Shares ultimately earned by the Employee will vest and be immediately transferable on January 2, 3 years after the grant date (the Vesting Date). Notwithstanding the foregoing, the Restricted Shares will vest and be immediately transferable (but in any event, within 70 days) in the event of the Employees death or Disability, or a Change in Control of the Company and, for purposes of determining the amount of the resulting award, it will be assumed that the Company achieved average performance on each of the performance measures, resulting in the payment of 100% of the award amount of this grant. Notwithstanding the foregoing, in the event of the Employees retirement under the Companys pension plan on or after age 62, the
Restricted Shares will not vest and be immediately transferable until the Vesting Date (and, in any event, within 70 days thereafter), with the amount of the resulting award to be determined on the basis of the Companys achievement of the performance criteria. All Restricted Shares will be forfeited upon termination of the Employees employment with the Employer before the Vesting Date for a reason other than death, Disability or retirement under the Companys pension plan on or after age 62.
2. Adjustment . The Committee shall make equitable substitutions or adjustments in the Restricted Shares as it determines to be appropriate in the event of any corporate event or transaction such as a stock split, merger, consolidation, separation, including a spin-off or other distribution of stock or property of the Company, reorganization or any partial or complete liquidation of the Company.
3. Rights as Stockholder.
(a) The Restricted Shares will be issued in the form of a book entry registration in the amount of the maximum potential award. The Company may issue a stock certificate (the Certificate) in the Employees name representing the Restricted Shares prior to the Vesting Date, in which case, the Employee will execute a stock power in favor of the Company, the Certificate will be held by the Secretary of the Company (the Escrow Agent) and will be imprinted with a legend stating that the Restricted Shares represented by the Certificate may not be sold, exchanged, transferred, pledged, hypothecated or otherwise disposed of except in accordance with this Agreement and are subject to reduction requiring surrender or replacement of the Certificate. The Escrow Agent will hold the Certificate until the Vesting Date. As soon as practicable after the Vesting Date the Company will issue unlegended Certificates for Common Stock to the Employee in the amount of the award earned, and the Employee will surrender to the Company any legended Certificates representing the Restricted Shares, if applicable.
(b) Prior to the Vesting Date, the Employee may not vote, sell, exchange, transfer, pledge, hypothecate or otherwise dispose of any of the Restricted Shares. The Restricted Shares have Dividend Equivalent Rights.
4. No Limitation on Rights of the Company . The granting of Restricted Shares will not in any way affect the right or power of the Company to make adjustments, reclassifications or changes in its capital or business structure or to merge, consolidate, reincorporate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
5. Employment . Nothing in this Agreement or in the Plan will be construed as constituting a commitment, guarantee, agreement or understanding of any kind or nature that the Employer will continue to employ the Employee, or as affecting in any way the right of the Employer to terminate the employment of the Employee at any time.
6. Government Regulation . The Companys obligation to deliver Common Stock following the Vesting Date will be subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.
7. Withholding . The Employer will comply with all applicable withholding tax laws, and will be entitled to take any action necessary to effectuate such compliance. The Company may withhold a portion of the Common Stock to which the Employee or beneficiary otherwise would be entitled equivalent in value to the taxes required to be withheld, determined based upon the Fair Market Value of the Common Stock. For purposes of withholding, Fair Market Value shall be equal to the closing price of the amount of Common Stock earned by the Employee pursuant to this award on the Vesting Date, or, if the Vesting Date is not a business day, the next business day immediately following the Vesting Date.
8. Notice . Any notice to the Company provided for in this Agreement will be addressed to it in care of its Secretary, John Bean Technologies Corporation, 200 East Randolph, Chicago, Illinois 60601, and any notice to the Employee (or other person entitled to receive the Restricted Shares) will be addressed to such person at the Employees address now on file with the Company, or to such other address as either may designate to the other in writing. Any notice will be deemed to be duly given when enclosed in a properly sealed envelope addressed as stated above and deposited, postage paid, in a post office or branch post office regularly maintained by the United States government.
9. Administration . The Committee administers the Plan. The Employees rights under this Agreement are expressly subject to the terms and conditions of the Plan, a copy of which is attached hereto, including any guidelines the Committee adopts from time to time.
10. Binding Effect . This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and permitted assigns.
11. Sole Agreement . This Agreement is the entire agreement between the parties to it, and any and all prior oral and written representations are merged into this Agreement. This Agreement may only be amended by written agreement between the Company and the Employee. Employee expressly acknowledges that the form of the grant agreement that the Employee accepts electronically through the Fidelity NetBenefits website is intended to facilitate the administration of this restricted stock award and may not be a full version of this
Agreement due to limitation inherit in such website that are imposed by Fidelity. The terms of this Agreement will govern the Employees award in the event of any inconsistency with the agreement viewed or accepted by the Employee on the Fidelity NetBenefits website.
12. Governing Law . The interpretation, performance and enforcement of this Agreement will be governed by the laws of the State of Delaware.
13. Privacy . Employee acknowledges and agrees to the Employer transferring certain personal data of such Employee to the Company for purposes of implementing, performing or administering the Plan or any related benefit. Employee expressly gives his consent to the Employer and the Company to process such personal data.
Executed as of the Grant Date.
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This document constitutes part of a prospectus covering securities that have been registered under the Securities Act of 1933.
Exhibit 10.4(d)
KEY MANAGER RESTRICTED STOCK AGREEMENT
PURSUANT TO THE JOHN BEAN TECHNOLOGIES CORPORATION
INCENTIVE COMPENSATION AND STOCK PLAN
This Agreement is made as of the <<Grant Date>> (the Grant Date) by JOHN BEAN TECHNOLOGIES CORPORATION, a Delaware corporation, (the Company) and <<Participant Name>> (the Employee).
In 2008, the Board of Directors of the Company (the Board) adopted the John Bean Technologies Corporation Incentive Compensation and Stock Plan (the Plan). The Plan, as it may be amended and continued, is incorporated by reference and made a part of this Agreement and will control the rights and obligations of the Company and the Employee under this Agreement. Except as otherwise expressly provided herein, all capitalized terms have the meanings provided in the Plan. To the extent there is a conflict between the Plan and this Agreement, the provisions of the Plan will control.
The Compensation Committee of the Board (the Committee) determined that it would be to the competitive advantage and interest of the Company and its stockholders to grant an award of restricted stock to the Employee as an inducement to remain in the service of the Company or one of its affiliates (collectively, the Employer), and as an incentive for increased efforts during such service.
The Committee, on behalf of the Company, grants to the Employee an award of <<# of Shares Granted>> shares of restricted stock (the Restricted Shares) of the Companys common stock, par value of $.01 per share (the Common Stock) upon the following terms and conditions:
1. Vesting . The Restricted Shares will vest and be immediately transferable July 1, 48 months after the grant date (the Vesting Date). Notwithstanding the foregoing, (a) the Restricted Shares will vest and be immediately transferable (but in any event, within 70 days) in the event of the Employees death or Disability, or a Change in Control of the Company and (b) a prorated portion of the Restricted Shares (to be prorated based on the time worked after the Grant Date and prior to the Vesting Date) will vest and be immediately transferable (but in any event, within 70 days) in the event of the Employees termination of employment by the Employer prior to the Vesting Date without Cause. All Restricted Shares will be forfeited upon termination of the Employees employment with the Employer before the Vesting Date for a reason other than death, Disability or termination of employment by the Employer without Cause.
2. Adjustment . The Committee shall make equitable substitutions or adjustments in the Restricted Shares as it determines to be appropriate in the event of any corporate event or transaction such as a stock split, merger, consolidation, separation, including a spin-off or other distribution of stock or property of the Company, reorganization, or any partial or complete liquidation of the Company.
3. Rights as Stockholder.
(a) The Restricted Shares will be issued in the form of a book entry registration. The Company may issue a stock certificate (the Certificate) in the Employees name representing the Restricted Shares prior to the Vesting Date, in which case, the Employee will execute a stock power in favor of the Company, the Certificate will be held by the Secretary of the Company (the Escrow Agent) and will be imprinted with a legend stating that the
Restricted Shares represented by the Certificate may not be sold, exchanged, transferred, pledged, hypothecated or otherwise disposed of except in accordance with this Agreement. The Escrow Agent will hold the Certificate until the Vesting Date. As soon as practicable after the Vesting Date the Company will issue unlegended Certificates for Common Stock to the Employee and the Employee will surrender to the Company any legended Certificates representing the Restricted Shares, if applicable.
(b) Prior to the Vesting Date, the Employee may not vote, sell, exchange, transfer, pledge, hypothecate or otherwise dispose of any of the Restricted Shares. The Restricted Shares have Dividend Equivalent Rights.
4. No Limitation on Rights of the Company . The granting of Restricted Shares will not in any way affect the right or power of the Company to make adjustments, reclassifications or changes in its capital or business structure or to merge, consolidate, reincorporate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
5. Employment . Nothing in this Agreement or in the Plan will be construed as constituting a commitment, guarantee, agreement or understanding of any kind or nature that the Employer will continue to employ the Employee, or as affecting in any way the right of the Employer to terminate the employment of the Employee at any time.
6. Government Regulation . The Companys obligation to deliver Common Stock following the Vesting Date will be subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.
7. Withholding . The Employer will comply with all applicable withholding tax laws, and will be entitled to take any action necessary to effectuate such compliance. The Company may withhold a portion of the Common Stock to which the Employee or beneficiary otherwise would be entitled equivalent in value to the taxes required to be withheld, determined based upon the Fair Market Value of the Common Stock. For purposes of withholding, Fair Market Value shall be equal to the closing price of the Common Stock on the Vesting Date, or, if the Vesting Date is not a business day, the next business day immediately following the Vesting Date.
8. Notice . Any notice to the Company provided for in this Agreement will be addressed to it in care of its Secretary, John Bean Technologies Corporation, 200 East Randolph Drive, Chicago, Illinois 60601, and any notice to the Employee (or other person entitled to receive the Restricted Shares) will be addressed to such person at the Employees address now on file with the Company, or to such other address as either may designate to the other in writing. Any notice will be deemed to be duly given when enclosed in a properly sealed envelope addressed as stated above and deposited, postage paid, in a post office or branch post office regularly maintained by the United States government.
9. Administration . The Committee administers the Plan. The Employees rights under this Agreement are expressly subject to the terms and conditions of the Plan, a copy of which is attached hereto, including any guidelines the Committee adopts from time to time.
10. Binding Effect . This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and permitted assigns.
11. Sole Agreement . This Agreement is the entire agreement between the parties to it, and any and all prior oral and written representations are merged into this Agreement. This
Agreement may only be amended by written agreement between the Company and the Employee. Employee expressly acknowledges that the form of the grant agreement that the Employee accepts electronically through the Fidelity NetBenefits website is intended to facilitate the administration of this restricted stock award and may not be a full version of this Agreement due to limitations inherit in such website that are imposed by Fidelity. The terms of this Agreement will govern the Employees award in the event of any inconsistency with the agreement viewed or accepted by the Employee on the Fidelity NetBenefits website.
12. Governing Law . The interpretation, performance and enforcement of this Agreement will be governed by the laws of the State of Delaware.
13. Privacy . Employee acknowledges and agrees to the Employer transferring certain personal data of such Employee to the Company for purposes of implementing, performing or administering the Plan or any related benefit. Employee expressly gives his consent to the Employer and the Company to process such personal data.
Executed as of the Grant Date.
JOHN BEAN TECHNOLOGIES CORPORATION | ||||||
By: |
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Vice President, Human Resources |
(Employee) |
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(Title) |
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(Division) |
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(Address) |
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(Social Security Number) |
This document constitutes part of a prospectus covering securities that have been registered under the Securities Act of 1933.
Exhibit 10.4(e)
JOHN BEAN TECHNOLOGIES CORPORATION
RESTRICTED STOCK AGREEMENT
FOR NON-EMPLOYEE DIRECTORS
This Agreement is made as of the << Grant Date>> (the Grant Date) by and between John Bean Technologies Corporation, a Delaware corporation, (the Company) and << Participant Name >> (the Director).
In 2008, the Board of Directors of the Company (the Board) adopted the John Bean Technologies Corporation Incentive Compensation and Stock Plan (the Plan). The Plan, as it may hereafter be amended and continued, is incorporated herein by reference and made a part of this Agreement and controls the rights and obligations of the Company and the Director under this Agreement. Except as otherwise expressly provided herein, all capitalized terms have the meanings provided in the Plan. To the extent there is a conflict between the Plan and this Agreement, the provisions of the Plan will control. The Board has determined that it would be to the advantage and interest of the Company and its stockholders to grant restricted stock units to the Director as an inducement to remain in the service of the Company, and as an incentive for increased efforts during such service.
The Board, on behalf of the Company, hereby grants on the Grant Date (1) ( ) Restricted Stock Units to the Director, and (2) ( ) Annual Retainer Restricted Stock Units to the Director, both grants being subject to the terms and conditions of the Plan and the rules as may be applied by the Board. The Annual Retainer Restricted Stock Units represent [ select appropriate percentage based on Directors election: ] [fifty percent (50%)] [one hundred percent (100%)] of the Directors Annual Retainer pursuant to the Directors irrevocable election dated << Election Date>> .
Executed as of the Grant Date
JOHN BEAN TECHNOLOGIES CORPORATION
By: |
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Vice President, Human Resources |
(Director) | |||||
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(Address) | ||||||
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(Social Security Number) |
This document constitutes part of a prospectus covering securities that have been registered under the Securities Act of 1933.
Exhibit 10.4(f)
PERFORMANCE UNITS AWARD AGREEMENT
PURSUANT TO THE JOHN BEAN TECHNOLOGIES CORPORATION
INCENTIVE COMPENSATION AND STOCK PLAN
This Agreement is made as of the <<Grant Date>> (the Grant Date), by JOHN BEAN TECHNOLOGIES CORPORATION, a Delaware corporation, (the Company) and <<Participant Name>> (hereinafter called the Employee).
In 2008, the Board of Directors of the Company (the Board) adopted the John Bean Technologies Corporation Incentive Compensation and Stock Plan (the Plan). The Plan, as it may be amended and continued, is incorporated by reference and made a part of this Agreement and will control the rights and obligations of the Company and the Employee under this Agreement. Except as otherwise expressly provided herein, all capitalized terms have the meanings provided in the Plan. To the extent there is a conflict between the Plan and this Agreement, the provisions of the Plan will control.
The Compensation Committee of the Board (the Committee) determined that it would be to the competitive advantage and interest of the Company and its stockholders to grant an award of performance units to the Employee as an inducement to remain in the service of the Company or one of its affiliates (collectively, the Employer), and as an incentive for increased efforts during such service.
The Committee, on behalf of the Company, grants to the Employee an award of << # >> performance units with Dividend Equivalent Rights (the Performance Units) upon the following terms and conditions:
1. Vesting . The Performance Units will vest and be immediately payable on <<Vesting Date>> (the Vesting Date). Notwithstanding the foregoing, all Performance Units will vest and be immediately payable to Employee (or the Employees designated beneficiary or estate) in the event of the Employees death, Disability or a Change in Control of the Company. A prorated portion of the Performance Units (to be prorated based on the time worked after the Grant Date and prior to the Vesting Date) will be fully vested and deliverable to the Employee in the event of the Employees termination prior to the Vesting Date without Cause. All Performance Units will be forfeited upon termination of the Employees employment with the Employer before the Vesting Date, for a reason other than death, Disability, or termination of employment by the Employer without Cause.
2. Payment . As soon as practicable following the Vesting Date (but in any event, within 70 days), the Company will pay to the Employee an amount equal to the Fair Market Value of one share of Common Stock of the Company multiplied by the total number of Performance Units granted hereunder in the form of a check or other cash instrument. For purposes of calculating the amount payable under this Agreement, Fair Market Value shall be based on the closing price of the Common Stock on the Vesting Date, or, if the Vesting Date is not a business day, the next business day immediately following the Vesting Date.
3. Adjustment . The Committee may make equitable substitutions or adjustments in the Performance Units as it determines to be appropriate in the event of
- 1 -
any corporate event or transaction such as a stock split, merger, consolidation, separation, including a spin-off or other distribution of stock or property of the Company, reorganization, or any partial or complete liquidation of the Company.
4. Nontransferability . No interest of the Employee or any beneficiary in or under this Agreement will be assignable or transferable by voluntary or involuntary act, by operation of law, other than by testamentary bequest or devise, or the laws of descent or distribution. All rights of the Employee and his or her beneficiary in and under this Agreement will be wholly inalienable and beyond the power of any person to anticipate or in any way create a lien or encumbrance upon them. Payment of Performance Units will be made only to the Employee, or, if the Committee has been provided with evidence acceptable to it that the Employee is legally incompetent, the Employees personal representative, or, if the Employee is deceased, to the beneficiaries or personal representative that the Employee has designated, in the manner required by the Committee. The Committee may require documentation from and/or signatures of an Employees personal representative or beneficiaries. Any effort to assign or transfer a right under this Agreement in contravention of this Section 4 will be wholly ineffective, and will be grounds for termination by the Committee of all rights of the Employee and his or her personal representative or beneficiary in and under this Agreement. Neither the Employee nor his or her personal representative or beneficiary will have any of the rights of a stockholder of the Company pursuant to this Agreement.
5. No Limitation on Rights of the Company . The granting of Performance Units will not in any way affect the right or power of the Company to make adjustments, reclassifications or changes in its capital or business structure or to merge, consolidate, reincorporate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
6. Employment . Nothing in this Agreement or in the Plan will be construed as constituting a commitment, guarantee, agreement or understanding of any kind or nature that the Employer will continue to employ the Employee, or as affecting in any way the right of the Employer to terminate the employment of the Employee at any time.
7. Withholding . The Employer will comply with all applicable withholding tax laws, and will be entitled to take any action necessary to effectuate such compliance.
8. Notice . Any notice to the Company provided for in this Agreement will be addressed to it in care of its Secretary, John Bean Technologies Corporation, 200 East Randolph Drive, Chicago, Illinois 60601, and any notice to the Employee (or other person entitled to receive the Performance Units will be addressed to the Employees address now on file with the Company, or to such other address as either may designate to the other in writing. Any notice will be deemed to be duly given when enclosed in a properly sealed envelope addressed as stated above and deposited, postage paid, in a post office or branch post office regularly maintained by the United States or other applicable government.
9. Administration . The Committee administers the Plan. The Employees rights under this Agreement are expressly subject to the terms and conditions of the Plan, a copy of which is attached hereto, including any guidelines the Committee adopts from time to time.
- 2 -
10. Binding Effect . This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and permitted assigns.
11. Sole Agreement . This Agreement is the entire agreement between the parties to it, and any and all prior oral and written representations are merged into this Agreement. This Agreement may only be amended by written agreement between the Company and the Employee. Employee expressly acknowledges that the form of the grant agreement that the Employee accepts electronically through the Fidelity NetBenefits website is intended to facilitate the administration of this Performance Unit award and may not be a full version of this Agreement due to limitiations inherit in such website that are imposed by Fidelity. The terms of this Agreement will govern the Employees award in the event of any inconsistency with the agreement viewed or accepted by the Employee on the Fidelity NetBenefits website.
12. Governing Law . The interpretation, performance and enforcement of this Agreement will be governed by the laws of the State of Delaware.
13. Privacy . Employee acknowledges and agrees to the Employer transferring certain personal data of such Employee to the Company for purposes of implementing, performing or administering the Plan or any related benefit. Employee expressly gives his consent to the Employer and the Company to process such personal data.
Executed as of the Grant Date.
JOHN BEAN TECHNOLOGIES CORPORATION | ||||||
By: |
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Vice President, Human Resources |
(Employee) |
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(Title) |
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(Division) |
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(Address) |
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(Social Security Number) |
- 3 -
Exhibit 10.4(g)
LONG TERM INCENTIVE RESTRICTED STOCK AGREEMENT
PURSUANT TO THE JOHN BEAN TECHNOLOGIES CORPORATION
INCENTIVE COMPENSATION AND STOCK PLAN
This Agreement is made as of the <<Grant Date>> (the Grant Date) by JOHN BEAN TECHNOLOGIES CORPORATION, a Delaware corporation, (the Company) and <<Participant Name>> (the Employee).
In 2008, the Board of Directors of the Company (the Board) adopted the John Bean Technologies Corporation Incentive Compensation and Stock Plan (the Plan). The Plan, as it may be amended and continued, is incorporated by reference and made a part of this Agreement and will control the rights and obligations of the Company and the Employee under this Agreement. Except as otherwise expressly provided herein, all capitalized terms have the meanings provided in the Plan. To the extent there is a conflict between the Plan and this Agreement, the provisions of the Plan will control.
The Compensation Committee of the Board (the Committee) determined that it would be to the competitive advantage and interest of the Company and its stockholders to grant an award of restricted stock to the Employee as an inducement to remain in the service of the Company or one of its affiliates (collectively, the Employer), and as an incentive for increased efforts during such service.
The Committee, on behalf of the Company, grants to the Employee an award of <<# of Shares Granted>> shares of restricted stock (the Restricted Shares) of the Companys common stock, par value of $.01 per share (the Common Stock) upon the following terms and conditions:
1. Vesting . The Restricted Shares will vest and be immediately transferable on January 2, 3 years after the grant date (the Vesting Date). Notwithstanding the foregoing, the Restricted Shares will vest and be immediately transferable (but in any event, within 70 days) in the event of the Employees death or Disability, or a Change in Control of the Company. Notwithstanding the foregoing, in the event of the Employees retirement under the Companys pension plan on or after age 62, the Restricted Shares will not vest and be immediately transferable until the Vesting Date (and, in any event, within 70 days thereafter). All Restricted Shares will be forfeited upon termination of the Employees employment with the Employer before the Vesting Date for a reason other than death, Disability or retirement under the Companys pension plan on or after age 62.
2. Adjustment . The Committee shall make equitable substitutions or adjustments in the Restricted Shares as it determines to be appropriate in the event of any corporate event or transaction such as a stock split, merger, consolidation, separation, including a spin-off or other distribution of stock or property of the Company, reorganization or any partial or complete liquidation of the Company.
3. Rights as Stockholder.
(a) The Restricted Shares will be issued in the form of a book entry registration. The Company may issue a stock certificate (the Certificate) in the Employees name representing the Restricted Shares prior to the Vesting Date, in which
case, the Employee will execute a stock power in favor of the Company, the Certificate will be held by the Secretary of the Company (the Escrow Agent) and will be imprinted with a legend stating that the Restricted Shares represented by the Certificate may not be sold, exchanged, transferred, pledged, hypothecated or otherwise disposed of except in accordance with this Agreement. The Escrow Agent will hold the Certificate until the Vesting Date. As soon as practicable after the Vesting Date the Company will issue unlegended Certificates for Common Stock to the Employee and the Employee will surrender to the Company any legended Certificates representing the Restricted Shares, if applicable.
(b) Prior to the Vesting Date, the Employee may not vote, sell, exchange, transfer, pledge, hypothecate or otherwise dispose of any of the Restricted Shares. The Restricted Shares have Dividend Equivalent Rights.
4. No Limitation on Rights of the Company . The granting of Restricted Shares will not in any way affect the right or power of the Company to make adjustments, reclassifications or changes in its capital or business structure or to merge, consolidate, reincorporate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
5. Employment . Nothing in this Agreement or in the Plan will be construed as constituting a commitment, guarantee, agreement or understanding of any kind or nature that the Employer will continue to employ the Employee, or as affecting in any way the right of the Employer to terminate the employment of the Employee at any time.
6. Government Regulation . The Companys obligation to deliver Common Stock following the Vesting Date will be subject to all applicable laws, rules and regulations and to such approvals by any governmental agencies or national securities exchanges as may be required.
7. Withholding . The Employer will comply with all applicable withholding tax laws, and will be entitled to take any action necessary to effectuate such compliance. The Company may withhold a portion of the Common Stock to which the Employee or beneficiary otherwise would be entitled equivalent in value to the taxes required to be withheld, determined based upon the Fair Market Value of the Common Stock. For purposes of withholding, Fair Market Value shall be equal to the closing price of the Common Stock on the Vesting Date, or, if the Vesting Date is not a business day, the next business day immediately following the Vesting Date.
8. Notice . Any notice to the Company provided for in this Agreement will be addressed to it in care of its Secretary, John Bean Technologies Corporation, 200 East Randolph Drive, Chicago, Illinois 60601, and any notice to the Employee (or other person entitled to receive the Restricted Shares) will be addressed to such person at the Employees address now on file with the Company, or to such other address as either may designate to the other in writing. Any notice will be deemed to be duly given when enclosed in a properly sealed envelope addressed as stated above and deposited, postage paid, in a post office or branch post office regularly maintained by the United States government.
9. Administration . The Committee administers the Plan. The Employees rights under this Agreement are expressly subject to the terms and conditions of the Plan, a copy of which is attached hereto, including any guidelines the Committee adopts from time to time.
10. Binding Effect . This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective heirs, executors, administrators, successors and permitted assigns.
11. Sole Agreement . This Agreement is the entire agreement between the parties to it, and any and all prior oral and written representations are merged into this Agreement. This Agreement may only be amended by written agreement between the Company and the Employee. Employee expressly acknowledges that the form of the grant agreement that the Employee accepts electronically through the Fidelity NetBenefits website is intended to facilitate the administration of this restricted stock award and may not be a full version of this Agreement due to limitations inherit in such website that are imposed by Fidelity. The terms of this Agreement will govern the Employees award in the event of any inconsistency with the agreement viewed or accepted by the Employee on the Fidelity NetBenefits website.
12. Governing Law . The interpretation, performance and enforcement of this Agreement will be governed by the laws of the State of Delaware.
13. Privacy . Employee acknowledges and agrees to the Employer transferring certain personal data of such Employee to the Company for purposes of implementing, performing or administering the Plan or any related benefit. Employee expressly gives his consent to the Employer and the Company to process such personal data.
Executed as of the Grant Date.
JOHN BEAN TECHNOLOGIES CORPORATION | ||||||
By: |
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Vice President, Human Resources |
<<Signed Electronically>> |
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<<Social Security Number>> |
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<<Acceptance Date>> |
This document constitutes part of a prospectus covering securities that have been registered under the Securities Act of 1933.
Exhibit 10.5
John Bean Technologies Corporation
Non-Qualified Savings and Investment Plan
As Amended and Restated, Effective January 1, 2009
T ABLE OF C ONTENTS
P AGE | ||||
ARTICLE I |
INTRODUCTION |
1 | ||
Section 1.1 |
Name; Purpose |
1 | ||
Section 1.2 |
Administration of the Plan |
1 | ||
ARTICLE II |
DEFINITIONS |
2 | ||
Section 2.1 |
Account |
2 | ||
Section 2.2 |
Account Balance |
2 | ||
Section 2.3 |
Accounting Date |
2 | ||
Section 2.4 |
Adopting Affiliate |
2 | ||
Section 2.5 |
Affiliated Group |
2 | ||
Section 2.6 |
Board |
2 | ||
Section 2.7 |
Code |
2 | ||
Section 2.8 |
Committee |
2 | ||
Section 2.9 |
Company |
2 | ||
Section 2.10 |
Company Stock |
2 | ||
Section 2.11 |
Compensation |
2 | ||
Section 2.12 |
Deferral Contributions |
3 | ||
Section 2.13 |
Deferral Contributions Account |
3 | ||
Section 2.14 |
Effective Date |
3 | ||
Section 2.15 |
Employer |
3 | ||
Section 2.16 |
Employer Contributions |
3 | ||
Section 2.17 |
Employer Contributions Account |
3 | ||
Section 2.18 |
ERISA |
4 | ||
Section 2.19 |
Excess Compensation |
4 | ||
Section 2.20 |
Participant |
4 | ||
Section 2.21 |
Permitted Investment |
4 | ||
Section 2.22 |
Plan |
4 | ||
Section 2.23 |
Plan Year |
4 | ||
Section 2.24 |
Savings Plan |
4 | ||
Section 2.25 |
Year of Service |
4 |
i.
T ABLE OF C ONTENTS
( CONTINUED )
P AGE | ||||
ARTICLE III |
PLAN PARTICIPATION |
4 | ||
Section 3.1 |
Eligibility |
4 | ||
Section 3.2 |
Participation |
5 | ||
ARTICLE IV |
DEFERRAL CONTRIBUTIONS |
5 | ||
Section 4.1 |
Deferral Contributions |
5 | ||
Section 4.2 |
Deferral Contributions Account |
5 | ||
ARTICLE V |
EMPLOYER CONTRIBUTIONS |
5 | ||
Section 5.1 |
Employer Contributions |
5 | ||
Section 5.2 |
Employer Contributions Account |
5 | ||
ARTICLE VI |
DEEMED EARNINGS ON ACCOUNT BALANCES |
6 | ||
Section 6.1 |
Deemed Investments |
6 | ||
Section 6.2 |
Crediting of Deferrals and Contributions |
7 | ||
Section 6.3 |
Statement of Accounts |
7 | ||
ARTICLE VII |
ESTABLISHMENT OF TRUST |
7 | ||
Section 7.1 |
Establishment of Trust |
7 | ||
Section 7.2 |
Status of Trust |
7 | ||
ARTICLE VIII |
DISTRIBUTION OF PLAN BENEFITS |
7 | ||
Section 8.1 |
Vesting of Accounts |
7 | ||
Section 8.2 |
Payment of Account Balances |
8 | ||
Section 8.3 |
Payments in the Event of Unforeseeable Emergency |
9 | ||
Section 8.4 |
Forfeitures |
9 | ||
Section 8.5 |
Designation of Beneficiaries |
9 | ||
ARTICLE IX |
AMENDMENT AND TERMINATION |
10 | ||
Section 9.1 |
Amendment and Termination |
10 | ||
ARTICLE X |
GENERAL PROVISIONS |
10 | ||
Section 10.1 |
Non-Alienation of Benefits |
10 | ||
Section 10.2 |
Withholding for Taxes |
10 | ||
Section 10.3 |
Immunity of Committee Members |
10 | ||
Section 10.4 |
Plan Not to Affect Employment Relationship |
11 | ||
Section 10.5 |
Action by the Employers |
11 |
ii.
T ABLE OF C ONTENTS
( CONTINUED )
P AGE | ||||
Section 10.6 |
Effect on Other Employee Benefit Plans |
11 | ||
Section 10.7 |
Employer Liability |
11 | ||
Section 10.8 |
Notices |
11 | ||
Section 10.9 |
Gender, Number and Headings |
11 | ||
Section 10.10 |
Controlling Law |
12 | ||
Section 10.11 |
Successors |
12 | ||
Section 10.12 |
Severability |
12 | ||
Section 10.13 |
Subsequent Changes |
12 | ||
Section 10.14 |
Benefits Payable to Minors, Incompetents and Others |
12 | ||
Section 10.15 |
409A Compliance |
12 |
iii.
John Bean Technologies Corporation
Non-Qualified Savings and Investment Plan
Article I
Introduction
Section 1.1 Name; Purpose . The Company established the John Bean Technologies Corporation Non-Qualified Savings and Investment Plan (the Plan), originally effective as of June 1, 2008. The Plan is a spin-off of the FMC Technologies, Inc. Non-Qualified Savings and Investment Plan. Although a rabbi trust may be established in connection with it, this Plan constitutes an unfunded, non-qualified arrangement providing deferred compensation to a select group of management or highly compensated employees (as defined for purposes of Title I of ERISA) of the Company and of certain of the Companys affiliates. Effective January 1, 2009, the Plan is hereby amended and restated to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the Code); however, effective January 1, 2005, the Plan has been in operational compliance with Section 409A of the Code.
Section 1.2 Administration of the Plan . The Plan is administered by the Company or, as delegated by the Board, by the Committee. The duties and authority of the Committee include:
(a) |
interpreting and applying the Plans terms; |
(b) |
adopting any rules or regulations the Committee deems necessary or desirable to operate the Plan; |
(c) |
making whatever determinations are permitted or required to maintain or administer the Plan; and |
(d) |
taking any other actions that prove necessary to administer the Plan properly, in accordance with its terms. |
Any decision of the Committee as to any matter within its authority will be final, binding and conclusive upon the Company, any Employer and each Participant, former Participant, designated beneficiary or other person claiming under or through any Participant or designated beneficiary. No additional authorization or ratification by the Board is necessary for the Committee to act on any matter within its authority. An action taken by the Committee as to a Participant will not be binding on the Committee regarding an action to be taken as to any other Participant. A member of the Committee may be a Participant, but he or she may not participate in any decision that directly affects his or her rights under the Plan, or the computation of his or her Plan benefits. Each determination required or permitted under the Plan will be made by the Committee in its sole and absolute discretion. The Committee may delegate some or all of its duties or responsibilities.
Article II
Definitions
Section 2.1 Account . Account means a bookkeeping Account maintained by the Company for a Participant, including his or her Deferral Contributions Account and Employer Contributions Account.
Section 2.2 Account Balance . Account Balance means the value, as of a specified date, of the Account maintained by the Company on behalf of the Participants Account, Deferral Contributions Account or Employer Contributions Account.
Section 2.3 Accounting Date . Accounting Date means each business day of the Plan Year.
Section 2.4 Adopting Affiliate . Adopting Affiliate means an entity that, together with the Company, is considered as a single employer under Section 414(b), (c), (m) or (o) of the Code, and has adopted the Savings Plan for its employees.
Section 2.5 Affiliated Group . Affiliated Group the group that consists of the Company and every other entity that, together with the Company, is considered as a single employer under Section 414(b), (c), (m) or (o) of the Code.
Section 2.6 Board . Board means the Board of Directors of the Company.
Section 2.7 Code . Code means the Internal Revenue Code of 1986, as amended.
Section 2.8 Committee . Committee means the JBT Corporation Employee Welfare Benefits Plan Committee, or its delegate.
Section 2.9 Company . Company means John Bean Technologies Corporation
Section 2.10 Company Stock . Company Stock means the common stock of the Company.
Section 2.11 Compensation . Compensation means the total compensation paid by the Employer to an eligible employee for each Plan Year that is currently includible in gross income for federal income tax purposes:
(a) |
including : overtime, administrative and discretionary bonuses (including completion bonuses, gainsharing bonuses and performance related bonuses); sales incentive bonuses; field premiums; back pay and sick pay; plus the eligible employees pre-tax contributions under the Savings Plan and amounts contributed to a plan described in Code Section 125 or 132; and the incentive compensation (including management incentive bonuses paid in both cash and restricted stock and local incentive bonuses) paid during the Plan Year for services rendered in the preceding Plan Year, and the incentive compensation (of the same types) paid during the preceding Plan Year; amounts deferred under the Plan during the Plan Year; |
-2-
(b) |
but excluding : hiring bonuses; referral bonuses; stay bonuses; retention bonuses; awards (including safety awards and other recognition awards); amounts received as deferred compensation; disability payments from insurance or the Companys long-term disability plan; workers compensation benefits; state disability benefits; flexible credits ( i.e. , wellness awards and payments for opting out of benefit coverage); expatriate premiums; grievance or settlement pay; pay in lieu of notice; severance pay; incentives for reduction in force accrued (but not earned) vacation; other special payments such as reimbursements, relocation or moving expense allowances; stock options or other stock-based compensation (except as provided above); any gross-up paid by an Employer on any amount paid that is Compensation (as defined herein); other distributions that receive special tax benefits; any amounts paid by an Employer to cover an employees FICA tax obligation as to amounts deferred or accrued under any nonqualified retirement plan of an Employer; and any gross-up paid by an Employer on any amount paid that is not Compensation (as defined herein). |
Notwithstanding anything herein to the contrary, no amounts paid to a Participant more than 30 days after his or her termination of employment with the Company or a Participating Employer will be considered Compensation.
Section 2.12 Deferral Contributions . Deferral Contributions means the deferral contributions credited to a Participants Deferral Contributions Account maintained by the Company on behalf of the Participant pursuant to Section 4.1.
Section 2.13 Deferral Contributions Account . Deferral Contributions Account means the Account maintained on behalf of a Participant by the Company to represent the amount of the Deferral Contributions credited in his or her behalf, as adjusted to account for deemed gains and losses, withdrawals and distributions.
Section 2.14 Effective Date . Effective Date means January 1, 2009, the effective date of this amended and restated Plan. The Plan was originally effective June 1, 2008.
Section 2.15 Employer . Employer means the Company and/or any Adopting Affiliate.
Section 2.16 Employer Contributions . Employer Contributions means the contributions credited to a Participants Employer Contributions Account maintained by the Company on behalf of the Participant pursuant to Section 5.1.
Section 2.17 Employer Contributions Account . Employer Contributions Account means the Account maintained on behalf of a Participant by the Company to represent the amount of Employer Contributions credited in his or her behalf (including Matching Contributions credited in the Participants behalf under the Plan prior to January 1, 2009), as adjusted to account for deemed gains and losses, withdrawals and distributions.
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Section 2.18 ERISA . ERISA means the Employee Retirement Income Security Act of 1974, as amended.
Section 2.19 Excess Compensation. Excess Compensation means Compensation (excluding amounts a Participant deferred on a pre-tax basis under the Savings Plan) in excess of the annual compensation limit set forth under Section 401(a)(17) of the Code, as adjusted, for a given Plan year.
Section 2.20 Participant . Participant means any eligible employee of an Employer who participates in the Plan pursuant to Article III.
Section 2.21 Permitted Investment . Permitted Investment means a notional fund or type of notional investment approved by the Committee for Plan purposes.
Section 2.22 Plan . Plan means this John Bean Technologies Corporation Non-Qualified Savings and Investment Plan.
Section 2.23 Plan Year . Plan Year means the calendar year.
Section 2.24 Savings Plan . Savings Plan means the John Bean Technologies Corporation Savings and Investment Plan, as amended from time to time.
Section 2.25 Year of Service . Year of Service means, as to a Participant, the Participants number of calendar months of employment by the Affiliated Group (including any interruption of employment of up to 12 months) divided by 12. A partial month counts as a whole month, and any fractional year of service is ignored. A period longer than 12 months for which a Participant does not receive Compensation, including (without limitation) any unpaid leave of absence is not counted in determining the Participants Years of Service, nor does any other interruption of employment longer than 12 months.
Article III
Plan Participation
Section 3.1 Eligibility . An employee of an Employer will be eligible to participate in any Plan Year if he or she meets all of the following conditions:
(a) |
the employee is part of a select group of management or highly compensated employees, within the meaning of Title I of ERISA; |
(b) |
the employee is eligible to participate in the Savings Plan for the Plan Year; and |
(c) |
the Committee, or its delegate, designates the employee as eligible to participate in the Plan. |
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Section 3.2 Participation . An employee who meets the conditions of Section 3.1 becomes a Participant effective January 1 of the Plan Year following the Plan Year in which the employee satisfies such conditions, by executing and filing with the Company a deferral election, in the manner determined by the Company and at the time required under Article IV. Once an individual is a Participant, he or she will remain a Participant for so long as he or she has an Account Balance, although a Participant may continue to make Deferral Contributions and receive allocations under the Plan only so long as he or she remains an eligible employee.
Article IV
Deferral Contributions
Section 4.1 Deferral Contributions . Each eligible employee as defined under Section 3.1 who has made an election to defer a portion of his or her Compensation under the Savings Plan for a Plan Year may elect to defer an additional amount under this Plan for that Plan Year, as Deferral Contributions. A Deferral Contribution is an amount, between 1% and 100% of the Participants Compensation.
A Participants Deferral Contributions for a Plan Year may not exceed his or her Compensation. A Participant must make his or her deferral election for a Plan Year no later than the last day of the preceding Plan Year, and may not change his or her deferral election during the Plan Year, provided, with respect to the deferral of any Compensation representing bonus Compensation, the deferral election must be made no later than the last day of the Plan Year preceding the Plan Year in which the performance of services giving rise to the bonus commences. Notwithstanding the foregoing, when an employee first becomes an eligible employee, he or she may make a deferral election no later than thirty days after becoming an eligible employee, so long as the deferral election applies to Compensation earned during the Plan Year after the date of the deferral election.
Section 4.2 Deferral Contributions Account . The Committee will establish and maintain a Deferral Contributions Account on behalf of each Participant who elects to make Deferral Contributions. The Deferral Contributions Account will be a bookkeeping account maintained by the Company, and will reflect the Deferral Contributions the Participant has elected to make to the Plan, as adjusted pursuant to Article VI to reflect deemed gains and losses, withdrawals and distributions.
Article V
Employer Contributions
Section 5.1 Employer Contributions . Each Plan Year, a Participant will be credited with an Employer Contribution in an amount equal to 5% of the Participants Excess Compensation and 5% of Deferral Contributions for such Plan Year.
Section 5.2 Employer Contributions Account . The Committee will establish and maintain an Employer Contributions Account on behalf of each Participant who is credited with Employer Contributions. The Employer Contributions Account will be a bookkeeping account maintained by the Company, and will reflect the Employer Contributions that have been credited to the Participant (and Matching Contributions credited to the Participant under the Plan prior to January 1, 2009), as adjusted pursuant to Article VI to reflect deemed gains and losses, withdrawals and distributions.
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Article VI
Deemed Earnings on Account Balances
Section 6.1 Deemed Investments .
(a) |
Each Participant may designate from time to time, in the manner prescribed by the Committee, that all or a portion of his or her Deferral Contributions Account and Employer Contributions Account be deemed to be invested in one or more Permitted Investments. The Committee will establish rules governing the dates as of which amounts will be deemed to be invested in the Permitted Investments chosen by the Participant, and the time and manner in which amounts will be deemed to be transferred from one Permitted Investment to another, pursuant to a Participants election to change his or her deemed investments. The Committee will also establish a default Permitted Investment, in which the Deferral Contributions Account and Employer Contributions Account of a Participant who fails to make an investment election will be deemed to be invested. The Committees Plan investment election rules permit a Participant to transfer any or all of his or her Account from one investment option to another investment option. |
(b) |
Each Account will be deemed to receive all interest, dividends, earnings and other property that would be received by it if it were actually invested in the Permitted Investment in which it is deemed to be invested. Similarly, each Account will be deemed to suffer all investment losses and other diminutions it would suffer if it were actually invested in the Permitted Investment in which it is deemed to be invested. Gains and losses will be credited to or debited from each Account at the times and in the manner specified by the Committee. |
(c) |
Elections required or permitted to be made pursuant to this Article VI must be made only by the Participant. Notwithstanding the foregoing, if a Participant dies before his or her entire Account Balance is distributed, or if the Committee determines that a Participant is legally incompetent or otherwise incapable of managing his or her own affairs, the Committee may itself make Plan elections on behalf of the Participant, or may declare that the Participants designated beneficiary, legal representative or near relative will be permitted to make Plan elections on behalf of the Participant. |
(d) |
Neither the Company nor the Plan need make any Permitted Investment. If, from time to time, the Company actually makes an investment similar to a Permitted Investment, that investment will be solely for the Companys own account, and the Participant will have no right, title or |
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interest in that investment. Each Participant has only the rights of an unsecured creditor of the Company or any Employer, as to any amount owing to him or her under the Plan. |
Section 6.2 Crediting of Deferrals and Contributions . The Company will credit all deemed Deferral Contributions to a Participants Deferral Contributions Account within a reasonable period of time after the date they would have been paid to the Participant if the Participant had not elected to defer them. The Company will credit all deemed Employer Contributions made on a Participants behalf to the Participants Employer Contributions Account within a reasonable period after the end of the Plan Year.
Section 6.3 Statement of Accounts . Within a reasonable period of time after the end of each calendar quarter, the Company will provide each Participant with an electronic statement showing the value of his or her Account as of the end of that calendar quarter.
Article VII
Establishment of Trust
Section 7.1 Establishment of Trust . The Company has, in its sole discretion, established a grantor trust in order to accumulate assets to pay Plan obligations. The assets and income of any trust established under this Plan will be subject to the claims of the Companys general creditors, and the Employers general creditors, but only to the extent such assets are attributable to the contributions made on behalf of employees employed by such Employer.
The establishment or maintenance of a Plan trust will not affect the Employers liability to pay Plan benefits, except as and to the extent amounts from the trust are actually used to pay a Participants Plan benefits. If the Company does establish a trust under the Plan, the Company will determine how much will be contributed to the trust and when, and trust assets will be invested in accordance with the terms of the trust.
Section 7.2
Status of
Trust
. A Participant will have no direct or secured claim in any asset of the trust, or in specific assets of the Company or of his or her Employer, and will have the status of a general unsecured creditor of his or her
Article VIII
Distribution of Plan Benefits
Section 8.1 Vesting of Accounts . Each Participant will at all times be fully vested in his or her deemed Deferral Contributions Account. A Participants vested interest in his or her deemed Employer Contributions Account is determined according to the following schedule:
Years of Service | Percent Vested | |||||
Fewer than 2 |
0% | |||||
2 but fewer than 3 |
20% |
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3 but fewer than 4 |
40% | |||||
4 but fewer than 5 |
60% | |||||
5 or more |
100% |
Section 8.2 Payment of
(a) |
Generally, the vested portion of a Participants Account Balance will be paid to him or her (or, if the Participant has died, to his or her designated beneficiary) in cash, in a single lump sum. |
(b) |
Notwithstanding Section 8.2(a), a Participant to whom this Section 8.2 applies may elect to have the vested portion of his or her Account paid in annual, quarterly or monthly installments over a 5-year-period; provided, such election is made no later than 30 days after the Participant commences initial participation in the Plan or such election is made in accordance with the requirements of Section 8.2(d). |
(c) |
Payment to the Participant of the lump sum or installments shall commence as soon as administratively possible, but in any event no later than 90 days following separation from service for any reason. Notwithstanding a Participants election to the contrary, payment to the Participants beneficiary shall be made in a single lump sum payment, such lump sum payment to be made within 90 days following the Participants date of death. Notwithstanding the foregoing, except for payments made upon separation due to death, no payments shall he made to a Participant who is a specified employee (as defined in Code Section 409A) of the Affiliated Group until on or after the first day of the seventh calendar month following the Participants separation from service. If a separated Participants vested Account Balance is not greater than $10,000, then such Account Balance shall be paid to the Participant in a lump sum within 90 days following separation from service. |
(d) |
A Participant may change the form and time of payment that he or she previously elected, by notice filed with the Administrator provided: |
(i) |
Such election shall not take effect until at least 12 months after the date on which the election is made; |
(ii) |
The first payment with respect to such election must be deferred for a period of not less than five years from the date such payment would otherwise have been made; |
(iii) |
The new payment election shall not be effective if made less than 12 months prior to the date of the first scheduled payment; and |
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(iv) |
The Participant may file a new payment election only while employed by the Company or any other Employer. |
Notwithstanding the general distribution election rules under Code Section 409A or the above to the contrary, pursuant to the transition rules set forth in Treasury regulations promulgated pursuant to Code Section 409A and other IRS guidance issued in connection with Code Section 409A thereto, a Participant shall be permitted to make a new payment election with respect to the form of payment of the Participants Account, provided, such election (1) is made on or before December 31, 2005, December 31, 2006, December 31, 2007 or December 31, 2008, as applicable, (2) shall apply only to amounts that would not otherwise be payable in 2005, 2006, 2007 or 2008, respectively, and (3) shall not cause an amount to be paid in 2005, 2006, 2007 or 2008, respectively, that would not otherwise be payable in such year.
Section 8.3 Payments in the Event of Unforeseeable Emergency . A Participant may request, in the manner and within the time constraints established by the Committee, to receive an emergency payment of some or all of his or her vested Account Balance. The Committee will authorize an emergency payment under this Section 8.4 only if the Participant experiences an unforeseeable emergency consistent with the rules promulgated pursuant to Section 409A of the Code. An emergency payment must be limited to the amount the Participant reasonably needs to satisfy the unforeseeable emergency. An unforeseeable emergency is severe financial hardship to the Participant resulting from:
(a) |
a sudden and unexpected illness or accident to the Participant or to his or her dependent (as defined in Code Section 152(a)); or |
(b) |
the Participants losing his or her property due to casualty. |
Whether a Participant suffers an unforeseeable emergency depends upon the facts of each case; in no event, however, may the Participant receive an emergency payment if his or her hardship is or may be relieved through reimbursement or compensation by insurance or otherwise, by liquidation of the Participants assets (to the extent liquidation of those assets would not itself cause severe financial hardship) or by ceasing to make deferrals under the Plan. The need to send a Participants child to college or the desire to purchase a home are not unforeseeable emergencies.
Section 8.4 Forfeitures . The portion of a Participants Employer Contributions Account that is not fully vested will be forfeited if the requirements for vesting under Section 8.1 of the Plan are not satisfied.
Section 8.5 Designation of Beneficiaries . Each Participant may name any person or persons to whom his or her vested Account Balance will be paid if the Participant dies before they have been fully distributed. Each beneficiary designation will revoke all prior beneficiary designations made by that Participant. The Committee will designate the time and manner in which a Participant must made a beneficiary designation, but will not require a Participant to obtain the consent of his or her current beneficiary to the naming a new or
-9-
additional beneficiaries. A beneficiary designation will be effective only if it meets the requirements specified by the Committee. If a Participant fails to designate a beneficiary, or if the Participants beneficiary dies before the Participant does or before receiving the full amount to which he or she is entitled, the Committee may, in its discretion, pay the vested portion of the Participants Account Balance (or the portion that remains unpaid) to one or more of the Participants relatives by blood, adoption or marriage, in the proportions it determines, or to the legal representative of the estate of the later to die of the Participant and his or her designated beneficiary.
Article IX
Amendment and Termination
Section 9.1 Amendment and Termination . The Company has the right to amend or terminate the Plan by action of the Board, or by action of a committee authorized by the Board to amend or terminate the Plan. Any Employer may terminate its participation in the Plan at any time by appropriate action, in its discretion. The Plan will automatically terminate as to any Employer upon termination of the Employers participation in the Savings Plan. Notwithstanding the foregoing, no Plan amendment or termination may adversely affect the right of a Participant (or his or her designated beneficiary) to vested benefits already accrued in the Participants behalf under this Plan, unless the Participant (or beneficiary) consents to the amendment. Any amendment or termination of the Plan shall be done in a manner so as to comply with Section 409A of the Code, related Treasury regulations and any other IRS guidance promulgated thereunder.
Article X
General Provisions
Section 10.1 Non-Alienation of Benefits . A Participants rights to the amounts credited to his or her Account under the Plan cannot be granted, transferred, pledged or otherwise assigned, in whole or in part, by the voluntary or involuntary acts of any person, or by operation of law, and will not be liable or taken for any obligation of the Participant. Any attempted grant, transfer, pledge or assignment of a Participants rights to Plan benefits will be null and void and without any legal effect.
Section 10.2 Withholding for Taxes . Notwithstanding anything contained in this Plan to the contrary, each Employer will withhold from any distribution, deferral or accrual under the Plan whatever amount or amounts may be required to comply with the tax withholding provisions of the Code or any State income tax act for purposes of paying any income, estate, inheritance, employment or other tax attributable to any amounts distributable or creditable under the Plan.
Section 10.3 Immunity of Committee Members . The members of the Committee may rely upon any information, report or opinion supplied to them by any officer of an Employer or any legal counsel, independent public accountant or actuary, and will be fully protected in relying on any such information, report or opinion. No member of the Committee will have any liability to the Company, any Employer or any Participant, former Participant, designated beneficiary, person claiming under or through any Participant or designated
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beneficiary, or other person interested or concerned in connection with any Plan decision made by that member of the Committee, so long as the decision was based on any such information, report or opinion, and the Committee member relied on it in good faith.
Section 10.4 Plan Not to Affect Employment Relationship . Neither the adoption of the Plan nor its operation will in any way affect the right and power of an Employer to dismiss or otherwise terminate the employment, or change the terms of employment or amount of compensation, of any Participant at any time, for any reason or without cause. By accepting any payment under this Plan, each Participant, former Participant, and designated beneficiary, and each person claiming under or through a Participant, former Participant or designated beneficiary, is conclusively bound by any action or decision taken or made under the Plan by the Committee, the Company or any Employer
Section 10.5 Action by the Employers . Any action required or permitted to be taken under the Plan by an Employer must be taken by its Board of Directors, by a duly authorized committee of its Board of Directors, or by a person or persons authorized by its Board of Directors or an authorized committee.
Section 10.6 Effect on Other Employee Benefit Plans . Any compensation deferred or accrued under this Plan, and any amount credited to a Participants Account under this Plan, will not be included in the Participants compensation or earnings for purposes of computing benefits under any other employee benefit plan maintained or contributed to by the Employer, except as and to the extent required under the terms of that employee benefit plan or applicable law.
Section 10.7 Employer Liability . Each Employer is liable to pay the Plan benefits earned or accrued for its eligible employees who are Participants. With the consent of the Board (or of a duly appointed delegate of the Board), any Employer may assume any other Employers Plan liabilities and obligations. To the extent that an Employer assumes another Employers Plan liabilities or obligations, the second Employer will be released from any continuing obligation under the Plan. At the Companys request, a Participant or designated beneficiary will sign any documents reasonably required by the Company to effectuate the purposes of this Section 10.7.
Section 10.8 Notices . Any notice required to be given by the Company, any Employer or the Committee must be in writing and must be delivered in person, by registered mail, return receipt requested, or by regular mail, telecopy or electronic mail. Any notice given by mail will be deemed to have been given on the date it was mailed, correctly addressed to the last known address of the person to whom the notice is to be given.
Section 10.9 Gender, Number and Headings . Except where the context otherwise requires, in this Plan the masculine gender includes the feminine, the feminine includes the masculine, the singular includes the plural, and the plural includes the singular. Headings are inserted for convenience only, are not part of the Plan, and are not to be considered in the Plans construction.
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Section 10.10 Controlling Law . The Plan will be construed according to the internal laws of Delaware, to the extent they are not preempted by any applicable federal law.
Section 10.11 Successors . The Plan is binding on all persons entitled to benefits under it, on their respective heirs and legal representatives, on the Committee and its successor, and on any Employer and its successor, whether by way of merger, consolidation, purchase or otherwise.
Section 10.12 Severability . If any provision of the Plan is held to be illegal or invalid for any reason, that illegality or invalidity will not affect the remaining provisions of the Plan, and the Plan will be enforced and administered, from that point forward, as if the invalid provisions had never been part of it.
Section 10.13 Subsequent Changes . All benefits to which any Participant, designated beneficiary or other person is entitled under this Plan will be determined according to the terms of the Plan as in effect when the Participant ceases to be an eligible employee, and will not be affected by any subsequent change in Plan provisions, unless the Participant again becomes an eligible employee, or unless and to the extent the subsequent change expressly applies to the Participant, his or her designated beneficiary or other person claiming through or on behalf of the Participant or designated beneficiary.
Section 10.14 Benefits Payable to Minors, Incompetents and Others . If any benefit is payable to a minor, an incompetent, or a person otherwise under a legal disability, or to a person the Committee reasonably believes to be physically or mentally incapable of handling and disposing of his or her property, the Committee has the power to apply all or any part of the benefit directly to the care, comfort, maintenance, support, education or use of the person, or to pay all or any part of the benefit to the persons parent, guardian, committee, conservator or other legal representative, to the individual with whom the person is living, or to any other individual or entity having the care and control of the person. The Plan, the Committee, the Company, any Employer and their employees and agents will have fully discharged their responsibilities to the Participant or beneficiary entitled to a payment by making payment under this Section 10.14.
Section 10.15 409A Compliance . Notwithstanding any Plan provisions herein to the contrary, the Plan shall be interpreted, construed and administered in such a manner so as to comply with the provisions of Code Section 409A, Treasury Regulations and any other related Internal Revenue Service guidance promulgated thereunder.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed in its name and behalf on this 31st day of July, 2008 to be effective, as amended and restated, January 1, 2009.
JOHN BEAN TECHNOLOGIES CORPORATION |
||
By: |
/s/ Jeffrey W. Carr |
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Exhibit 10.6
THE TRUST DEED is made the |
10-July 2008 |
BETWEEN: John Bean Technologies Corporation of 200 East Randolph Drive Chicago, Illinois 60601, United States of America (the Company);
AND: FIL TRUST COMPANY LIMITED of P.O. Box 694, George Town, Grand Cayman, Cayman Islands (the Trustee)
WHEREAS:
(a) |
The Company wishes to establish a savings plan for the benefit of the Members (as defined below) in the manner hereinafter appearing, and |
(b) |
The Plan is a spin-off from the FMC Technologies, Inc. International Savings and Investment Plan, and effective as of the date FMC Technologies, Inc. distributes its interest in the company, the Trustee shall transfer accounts of the members from the FMC Technologies, Inc. International Savings and Investment Plan to this Plan; and |
(c) |
The Company will have on or before the date hereof paid to or transferred under the control of the Trustee the sum of US$100 (the Initial Property) to be held by the Trustee on the trusts and subject to the powers and provisions contained below; and |
(d) |
The Trustee acknowledges receipt of the Initial Property and has agreed to act as trustee of the Trust (as defined below) and to hold the assets comprised in the Trust Fund (as defined below) on the terms and conditions set out in the Trust Deed. |
NOW THIS DEED WITNESSES as follows:
1. | Name |
The Trust established by this Trust Deed shall be known as the JBT International Savings Plan or such other name as the Trustee and the Company may agree in writing from time to time.
2. | Definitions |
2.1 |
The following expressions shall where the context admits have the following meanings: |
(i) |
Administrator means such trust administrator, registrar or other person or entity who shall administer the Plan in accordance with the terms and provisions of the Trust Deed and who shall be appointed by the Trustee; |
(ii) |
Administration Agreement means the administration agreement to be entered into with the Administrator as may be amended from time to time in accordance with such Administration Agreement and substantially in the form attached hereto as Annex B ; |
John Bean Technologies
(iii) |
Company means the above named Company; |
(iv) |
Beneficiary means the following persons who are now living or in existence or are born after the date of this Trust, but before the Termination Date, and such other person or persons who may be nominated by the Trustee under the provisions of this Trust, but not including those who have been excluded by the Trustee or who have renounced their interest as a Beneficiary under this Trust |
(a) |
the Company; |
(b) |
the Members from time to time of the Plan; and |
(c) |
such other person or persons as the Trustee may, in accordance with the provisions of the Trust Deed, include as beneficiaries of this Trust; |
(v) |
Employer means the Company and any other Group Company admitted to participate in this Plan in accordance with the Rules, and in relation to an Employee (as such term is defined in the Rules) or Member, means his or her employer; |
(vi) |
Fee Letter means the letter containing a schedule of fees to be collected by the Trustee from the Company as therein agreed and signed on behalf of the Company prior to or contemporaneously with the execution of the Trust Deed and a copy of which is annexed hereto as Annex A; |
(vii) |
Fidelity Group means all the companies which are direct or indirect parent, subsidiary or affiliate, or subsidiary of an affiliate or parent, of Fidelity International Limited (established in Bermuda) or Fidelity Management and Research Company (established in the USA); |
(viii) |
Investment Manager means such investment counsel, investment manager, intermediary or such other investment advisors as the Trustee may from time to time engage; |
(ix) |
Investment and Administration Agreement means the investment and administration agreement to be entered into between the Trustee and the Investment Manager as may be amended from time to time in accordance with the provisions of such Investment and Administration Agreement and in substantially the form annexed hereto as Annex C, or such other investment and administration agreement as the Trustee may from time to time enter into; |
(x) |
Member means any Employee (as defined in the Rules) who from time to time has been nominated by the Company and notified to the Trustee as a member of the Plan; |
(xi) |
Participation in respect of any Member means the assets from time to time held in the Plan attributable to such Member, representing the total monies contributed |
John Bean Technologies
in respect of him and any income and gains thereon less any expenses and distributions paid therefrom; |
(xii) |
Plan means the savings plan established by the Trust Deed, the Standard Provisions and the Rules and known as the JBT International Savings Plan; |
(xiii) |
Rules means the rules of the Plan as set out in Schedule 2 of the Trust Deed, as the same may from time to time be amended; |
(xiv) |
Standard Provisions means the standard provisions for management and administration of the Trust as set forth in Schedule 1 of the Trust Deed, as the same may from time to time be amended in accordance with Clause 6 of the main part of the Trust Deed and Clause 16 of the Standard Provisions; |
(xv) |
Termination Date means the earlier of: |
(a) |
the date 150 years from the date of the Trust Deed; or |
(b) |
such earlier date as the Trustee may itself or will at the written request of the Company by deed declare to be the termination date; |
(xvi) |
Trust Fund means:- |
(a) |
the Initial Property; |
(b) |
the Company contributions as provided in the Rules; |
(c) |
the Members various contributions including but not limited to additional voluntary contributions as may be provided for by the Rules; |
(d) |
all other sums or assets of whatsoever nature received by the Trustee (including but not limited to any transfer payment or any interest or dividend payment) in relation to the Trust Fund; |
(e) |
all investment property or money for the time being or at any time being part of the Trust including but not limited to all additions and accretions made to the Trust Fund from time to time from whatever source; |
less any deductions, whether for costs or otherwise, allowed under the Trust Deed;
(xvii) |
Trust Period means the period beginning with the date of execution of the Trust Deed and ending on the Termination Date; |
John Bean Technologies
(xviii) |
Vested Share means the assets from time to time held in the Plan attributable to a Member representing the total monies contributed by such Member in accordance with the Rules together with such other monies as may have been contributed by the Members Employer that have Vested (as such term is defined in the Rules) in accordance with the Rules; |
(xix) |
Non-Vested Share means that portion of the Members Employers contributions as have not Vested (as such term is defined in the Rules) in accordance with the Rules. |
2.2 |
Where the context so admits: |
(i) |
Words importing: |
(a) |
the singular number only shall include the plural number and vice versa; |
(b) |
the masculine gender only shall include the feminine gender and vice versa; |
(c) |
the neuter gender only shall include the masculine gender and the feminine gender and vice versa; |
(ii) |
person means any individual, organisation, institution or other body of persons whether corporate or unincorporated and whether charitable or not and persons shall be construed accordingly; |
(iii) |
charitable purposes means purposes recognised as exclusively charitable under the laws of the Cayman Islands; |
(iv) |
Trust Deed means the Trust Deed including Schedule 1 setting out the Standard Provisions and Schedule 2 setting out the Rules; |
(v) |
main part of the Trust Deed means the text of the Trust Deed excluding the Standard Provisions and the Rules; |
(vi) |
unless the context otherwise requires any enactment hereunder includes a reference to the enactment as extended amended or modified by or under any other enactment including any statutory re-enactment thereof; and |
(vii) |
words and expressions used in but not defined in the main part of the Trust Deed and the Standard Provisions shall, unless the context otherwise requires, have the meaning ascribed to them in the Rules. |
2.3 |
In the event that any of the provisions set out in the main part of the Trust Deed, Standard Provisions and the Rules are found to be inconsistent then the provisions in the main part of the Trust Deed shall prevail over the provisions in the Standard Provisions but without prejudice to the Trustees ability to make amendments pursuant to Clause 16 of the Standard Provisions and the provisions in the Standard Provisions shall prevail over the provisions in the Rules. |
John Bean Technologies
2.4 |
The headings in the Trust Deed are inserted for convenience of reference only and shall have no legal effect nor shall they affect in any way the construction of any clause or paragraph herein or the schedule hereto. |
3. |
Trusts |
The Trustee shall hold the Trust Fund UPON TRUST for the benefit of the Beneficiaries with and subject to the trusts, powers and provisions of the Trust Deed (except as specified in Clause 11 of the main part of the Trust Deed in relation to change of governing law) to hold the Trust Fund UPON TRUST to invest, distribute and administer the Trust Fund in accordance with and subject to the trusts, powers and provisions of the Trust Deed. |
4. |
Management and Administration |
Notwithstanding any other provision in the Trust Deed and for the avoidance of doubt, it is hereby expressly provided that the Trustee shall in addition to any other powers and discretions vested in them: (i) subject to the provisions of the main part of the Trust Deed, have all the powers and discretions necessary to manage and administer the Trust Fund in accordance with the Standard Provisions, and where applicable the Rules; and (ii) have all the powers and discretions necessary to enter into and execute the Administration Agreement and the Investment and Administration Agreement and to monitor and evaluate the performance of the Administrator and the Investment Manager in the execution of their duties and responsibilities under the Administration Agreement and the Investment and Administration Agreement respectively. |
5. |
Distribution and Indemnities |
5.1 |
Subject to any specific provisions under the Plan set out in the Rules and relating to the Members death, in the event that a Member dies, the Members Participation shall be paid and transferred by the Trustee directly to the individual named by the Company (and the Company shall be required to name to the Trustee the individual designated to it by the Member or, in the event of prior death of the designated individual or discrepancy in or absence of designation, such other individual as the Company selects). Upon making any such payment and transfer the Trustee shall automatically (and without the need for further formality) be freed and discharged from the trusts of the same. |
John Bean Technologies
5.2 |
In the event that a Member is made bankrupt or assigns, charges, mortgages, pledges or otherwise sells his interest under the Trust the Members Vested Share shall after the expiry of 120 days following such event be paid and transferred by the Trustees directly to the Company which shall hold the same in trust for the Members trustee-in-bankruptcy, assignee, chargee, mortgagee, pledgee or purchaser (as the case may be and subject thereto for the Member himself) and upon making any such payment and transfer the Trustee shall automatically (and without the need for further formality) be freed and discharged from the trusts of the same. The Trustee shall pay the Members Non-Vested Share to the Members Employer. |
5.3 |
The Company hereby agrees to indemnify the Trustee, and covenants with it to indemnify it and keep it indemnified, against all and any losses, costs, claims and expenses (including reasonable attorneys fees) which it may suffer or incur as a result of making any transfer and payment in accordance with the provisions of clause 5.1 or 5.2 above. |
5.4 |
The Trustee hereby confirms, and the Company accepts, that the Trustee has not offered any advice to the Company on the tax or legal effect of the Trust in any jurisdiction, whether on the Trust Fund, the Trustee, the Company, any Employer, any Member or any Beneficiary of the Trust and that the Trustee shall not be liable or responsible for any loss, cost, liability, claim or expense whatsoever suffered or incurred by any person as a result of any such effect. |
6. |
Variation, Release, Consent |
6.1 |
Without prejudice to the Trustees ability to make amendments pursuant to Clause 16 of the Standard Provisions and the Companys ability to make amendments pursuant to Rule 14 of the Rules, the Trustee, with the prior written consent of the Company, may from time to time during the Trust Period by instrument in writing make any variation, addition or deletion of or to all or any of the trusts, powers and provisions of the Trust Deed (other than Clause 7 below), including any provisions incorporated by cross-reference including the Standard Provisions and the Rules, provided that no variation, addition or deletion can be made which would, if made, materially adversely affect the Vested Share of any Member. |
6.2 |
The Trustee and the Company may from time to time during the Trust Period by instrument in writing extinguish or restrict the future exercise of any of the powers conferred upon them as part of this Trust (including by law). |
6.3 |
The Company may from time to time during the Trust Period by instrument in writing release the requirement for its consent, whether generally or in relation to particular provisions of this Trust. |
John Bean Technologies
7. |
Acknowledgment |
Notwithstanding any other provision in the Trust Deed and for the avoidance of doubt, the Company hereby expressly acknowledges and accepts the terms of the Fee Letter, Administration Agreement and Investment and Administrative Agreement, copies of which are annexed to the Trust Deed as Annexes A, B and C respectively and, as evidence of such binding acknowledgement and acceptance, duly authorised signatories of the Company have signed on the face of each of the Fee Letter, Administration Agreement and Investment and Administrative Agreement annexed hereto. |
8. |
US Persons |
The Company warrants and agrees that: |
(i) |
no person shall become a Member of the Plan while such a person is a US resident or citizen; |
(ii) |
a Member who becomes a US resident will immediately cease to have any discretion over the Funds in which their Participation is invested (and for the period of their residence the Company will assume that discretion); |
(iii) |
no prospectus, marketing materials or other literature regarding the Funds is to be sent to any Member whilst resident in the US; |
(iv) |
the Company will ensure that the arrangement is not an arrangement to which the Employee Retirement Income Security Act 1974 (ERISA) applies and the Company will take full responsibility for the compliance with ERISA if and to the extent that ERISA does apply to the Plan; |
(v) |
the Company will notify the Trustee immediately before a Member becomes resident in the US and when a Member ceases to be resident in the US; |
(vi) |
the Company acknowledges that the Trustee reserves the right to take such action as it may deem appropriate in the circumstances that Members become resident in the US. |
For the purposes of this Clause residence will be deemed to be determined by the address of the Member for the purpose of delivery of benefit statements under the Plan and the Trustee will not accept the address of the Company as the address of the Member or any address of convenience designed to disguise residence in the US. |
John Bean Technologies
9. |
Canadian Persons |
The Company warrants and agrees that it will not allow the proportion of Members resident in Canada as a percentage of the total number of Members in the Plan to exceed such percentage as the Trustee may stipulate. The Company acknowledges that the Trustee reserves the right to take such action as it may deem appropriate in the circumstances if either the proportion of such Members exceeds the stipulated percentage or the Trustee reasonably believes that there will be regulatory issues if it does not take such action. |
For the purposes of this Clause residence will be deemed to be determined by the address of the Member for the purpose of delivery of benefit statements under the Plan and the Trustee will not accept the address of the Company as the address of the Member or any address of convenience designed to disguise residence in Canada. |
10. |
Irrevocable |
This Trust shall be irrevocable. |
11. |
Governing Law |
This Trust shall (subject to the provisions in the Standard Provisions relating to change of governing law) be governed by and construed in accordance with the laws of the Cayman Islands. |
12. |
Termination |
With effect from the Termination Date, the Trustee shall distribute the Trust Fund to the Beneficiaries in accordance with the provisions of the Trust Deed. |
John Bean Technologies
IN WITNESS WHEREOF the Company and the Trustee have duly executed the Trust Deed the day and year first before written
EXECUTED as a DEED by JOHN BEAN TECHNOLOGIES CORPORATION in the presence of: |
) ) ) ) |
|
||
THE COMMON SEAL of FIL TRUST COMPANY LIMITED was hereunto affixed in the presence of |
) ) ) ) |
John Bean Technologies
Exhibit 10.7
JBT Corporation.
Salaried Employees Equivalent Retirement Plan
Effective June 30, 2008
T ABLE OF C ONTENTS
P AGE | ||||
Section 1. |
Establishment and Purposes of the Plan |
1 | ||
Section 2. |
Participants |
1 | ||
Section 3. |
Excess Benefit |
1 | ||
Section 4. |
Funding |
1 | ||
Section 5. |
Establishment of Trust |
2 | ||
Section 6. |
Payment of Excess Benefit |
2 | ||
Section 7. |
Actuarial Equivalent Benefit |
3 | ||
Section 8. |
Administration of the Plan |
3 | ||
Section 9. |
Amendment and Termination |
4 | ||
Section 10. |
Employment |
4 | ||
Section 11. |
Withholding for Taxes |
4 | ||
Section 12. |
Immunity of Committee Members |
4 | ||
Section 13. |
Action by Employer |
5 | ||
Section 14. |
Effect on Other Employee Benefit Plans |
5 | ||
Section 15. |
Non-Alienation of Benefits |
5 | ||
Section 16. |
Employer Liability |
5 | ||
Section 17. |
Notices |
5 | ||
Section 18. |
Gender, Number and Headings |
5 | ||
Section 19. |
Controlling Law |
5 | ||
Section 20. |
Successors |
6 | ||
Section 21. |
Severability |
6 | ||
Section 22. |
Subsequent Changes |
6 | ||
Section 23. |
Benefits Payable to Minors, Incompetents and Others |
6 | ||
Section 24. |
409A Compliance |
6 |
i.
JBT Corporation. Salaried Employees Equivalent Retirement Plan
Section 1. Establishment and Purposes of the Plan . The JBT Corporation Salaried Employees Equivalent Retirement Plan (the Plan), as established effective June 30, 2008 in connection with a spin-off of liabilities from the FMC Technologies, Inc. Salaried Employees Equivalent Retirement Plan. The purpose of the Plan is to provide employees of the Company and its affiliated companies that have adopted the Plan (each such company an Employer) with the retirement benefits they would have received under the Part I Salaried and Non-Union Hourly Employee Retirement Plan of the JBT Corporation Employees Retirement Program (the Salaried Retirement Plan), but for the limitations of Sections 401(a)(17) and 415 of the Internal Revenue Code of 1986, as amended (the Code), and but for the fact that amounts an employee defers under the John Bean Technologies Corporation Non-Qualified Savings and Investment Plan (Non-Qualified Savings Plan) are not pensionable earnings under the Salaried Retirement Plan.
The Company intends for the Plan to comply in operation with Code Section 409A on and after January 1, 2005 and to comply in documentational form on and after January 1, 2009.
Section 2. Participants . An employee of any Employer who is an active participant in the Salaried Retirement Plan will become a Participant on the day he or she becomes entitled to an Excess Benefit under Section 3. Once an individual is a Participant, he or she will remain a Participant until his or her entire Excess Benefit has been paid.
Section 3. Excess Benefit . Each employee of an Employer who is an active participant in the Salaried Retirement Plan will be entitled to receive an Excess Benefit equal to the amount, if any, by which his or her accrued benefit under the Salaried Retirement Plan is reduced:
(a) |
to comply with the limitations of Code Section 415; |
(b) |
because his or her pensionable earnings exceed the annual compensation limit under Code Section 401(a)(17), as adjusted; and |
(c) |
because deferred compensation is not included in the definition of pensionable earnings under the Salaried Retirement Plan. |
Section 4. Funding . The amount of a Participants Excess Benefit, if any, will be determined at the time the Participant becomes entitled to receive a retirement benefit under the Salaried Retirement Plan, or at another time determined by the Committee (as defined in Section 8) in its sole discretion, according to rules of uniform application. Neither the Company nor any Employer is required to segregate on its books or elsewhere any amount to be used to pay Excess Benefits, and no accounts will be maintained for Participants under the Plan. This Plan will be unfunded, and Excess Benefits will be payable only from the general assets of the Company or any Employer. Each Participant has only the rights of an unsecured creditor of the Company or any Employer, as to his or her Excess Benefit.
Section 5. Establishment of Trust . The Company has established a rabbi trust in order to accumulate assets to pay Plan obligations, which is an irrevocable trust subject to the jurisdiction of U.S. federal courts that may hold an insurance contract or contracts and/or such other assets as determined by the Company. The assets and income of the trust will be subject to the claims of the Companys creditors in the event of the Companys bankruptcy or insolvency. The establishment or maintenance of the trust will not affect the Companys liability to pay Excess Benefits, except that the liability shall be reduced to the extent assets of the trust are used to pay Excess Benefits. A Participant will have no claim in any asset of the trust, or in specific assets of the Company or any Employer, and will have the status of a general unsecured creditor for any amounts due under this Plan.
Section 6. Payment of Excess Benefit . A Participants Excess Benefit shall be paid pursuant to this Section 6. A Participants Excess Benefit will be paid to such Participant according to the form of payment elected by such Participant, which form may be either (a) a lump sum or (b) monthly installments over a period of five (5) years, such payment(s) to commence no later than 90 days following the Participants separation from service for any reason. The actuarial factors and assumptions provided in Section 7 shall be used in determining the actuarial equivalent present value of any benefit.
Upon initial participation in the Plan, a Participant shall have until January 31 of the calendar year following the calendar year in which the Participant commences participation in the Plan pursuant to Section 2 to make an initial election with respect to the form of payment. Absent a valid form of payment election, a Participant shall receive payment of his or her Excess Benefit in the form of a lump sum as soon as administratively possible, but in any event no later than 90 days following separation from service for any reason. In the event of the Participants death prior to the commencement of payment, and notwithstanding a Participants election to the contrary, payment shall be made in the form of a lump sum, such lump sum to be paid to the Participants beneficiary as designated pursuant to a valid beneficiary designation form filed with the Plan (Beneficiary) within 90 days following death. Notwithstanding the foregoing, except for payments made upon separation from service due to death, no payments shall be made to a Participant who is a specified employee (as defined in Code Section 409A) of the Company or any Employer (regardless of whether such Employer has adopted the Plan) until on or after the first day of the seventh calendar month following the Participants separation from service.
Notwithstanding the above to the contrary, a Participant may elect to have his or her Excess Benefit paid in a form other than as initially elected above, provided that:
(a) |
Such election shall not take effect until at least 12 months after the date on which the election is made; |
-2-
(b) |
The first such payment must be deferred for a period of not less than five years from the date such payment would otherwise have commenced; and |
(c) |
Such election shall not be effective if made less than 12 months prior to the date the payment is otherwise scheduled to commence. |
With respect to payments made in installments, the balance of such installments that remain to be paid shall be credited with interest based on the interest rate used to calculate actuarial equivalent present values set forth in Section 7.
Notwithstanding the general distribution election rules under Code Section 409A or the above to the contrary, pursuant to the transition rules set forth in Treasury regulations promulgated pursuant to Code Section 409A and other IRS guidance issued in connection with Code Section 409A thereto, a Participant shall be permitted to make a new payment election with respect to the form of payment of the Participants Excess Benefit, provided, such election (1) is made on or before December 31, 2005, December 31, 2006, December 31, 2007 or December 31, 2008, as applicable, (2) shall apply only to amounts that would not otherwise be payable in 2005, 2006, 2007 or 2008, respectively, and (3) shall not cause an amount to be paid in 2005, 2006, 2007 or 2008, respectively, that would not otherwise be payable in such year.
Section 7. Actuarial Equivalent Benefit .
Conversion of a Participants Excess Benefit will be based on the 1994 Group Annuity Reserving Table (weighted 50% male and 50% female, projected to 2002 using Scale AA), or the applicable mortality table prescribed under Code Section 417(e)(3) or other guidance of general applicability issued thereunder, and the lesser of 6% interest or the 30-year Treasury rate for November of the preceding Plan Year.
Section 8. Administration of the Plan . This Plan will be administered by the Company or, as delegated by the Board, by the JBT Corporation Employee Welfare Benefits Plan Committee (the Committee). The Committee has all necessary power to administer the Plan, including the authority and duty to interpret and apply the Plans terms, adopt any rules or regulations the Committee deems necessary or desirable to operate the Plan, make whatever determinations are permitted or required to maintain or administer the Plan and take any other actions that prove necessary to administer the Plan properly, in accordance with its terms. Any decision of the Committee as to any matter within its authority will be final, binding and conclusive upon the Company, each Employer, and each Participant, former Participant, Beneficiary or other person claiming under or through any Participant or Beneficiary. An action of the Committee regarding a particular Participant will not be binding on the Committee regarding an action to be taken as to any other Participant. A member of the Committee may be a Participant, but he or she may not participate in any decision that directly affects his or her rights under the Plan, or the computation of his or her Excess Benefit. Each determination required or permitted under the Plan will be made by the Committee in its sole and absolute discretion. The Committee may delegate some or all of its Plan duties or responsibilities.
-3-
Section 9. Amendment and Termination . The Company may amend or terminate the Plan by action of its Board of Directors, or by action of a committee authorized by the Companys Board of Directors to amend the Plan. Any Employer may terminate its participation in the Plan at any time by appropriate action, in its discretion. The Plan will automatically terminate as to any Employer upon termination of the Employers participation in the Salaried Retirement Plan. No amendment or termination of the Plan shall, without the express written consent of the affected current or former Participant or Beneficiary, reduce or alter any benefit entitlement (as defined below) of such Participant or Beneficiary. The benefit entitlement of any Participant or Beneficiary whose Excess Benefit payments shall have commenced on a date prior to or coincident with the date of a Plan termination or amendment shall be the amount and form of payment hereunder in effect at the time of such termination or amendment. The benefit entitlement of any other Participant or Beneficiary at such time shall be the Participants accrued Excess Benefit as calculated pursuant to Sections 6 and 7 which may not be paid immediately but only at employment termination according to Section 6. Any amendment or termination of the Plan shall be done in a manner so as to comply with Section 409A of the Code, related Treasury regulations and any other IRS guidance promulgated thereunder.
Section 10. Employment . Nothing in this Plan will be deemed to give any person the right to remain in the employ of the Company, any Employer or any of its affiliates, or affect the right of the Company, any Employer or any of its affiliates to terminate or change the terms of any Participants employment, with or without cause. By accepting any payment under this Plan, each Participant, former Participant and Beneficiary and each person claiming under or through a Participant, former Participant or Beneficiary, is conclusively bound by any action or decision taken or made under the Plan by the Committee, the Company or any Employer.
Section 11. Withholding for Taxes . Notwithstanding anything contained in this Plan to the contrary, any Employer will withhold from any distribution or deferral under the Plan whatever amount or amounts it is required to withhold to comply with the tax withholding provisions of the Code or any state income tax act for purposes of paying any income, estate, inheritance, employment or other tax attributable to any amounts distributable under the Plan.
Section 12. Immunity of Committee Members . The members of the Committee may rely upon any information, report or opinion supplied to them by any officer of an Employer or any legal counsel, independent public accountant or actuary, and will be fully protected in relying on any such information, report or opinion. No member of the Committee will have any liability to the Company, any Employer or any Participant, former Participant, Beneficiary, person claiming under or through any Participant or Beneficiary, or other person interested or concerned in connection with any Plan decision made by that member of the Committee, so long as the decision was based on any such information, report or opinion, and the Committee member relied on it in good faith.
-4-
Section 13. Action by Employer . Any action required or permitted to be taken under the Plan by an Employer must be taken by its board of directors, by a duly authorized committee of its board of directors, or by a person or persons authorized by its board of directors or an authorized committee.
Section 14. Effect on Other Employee Benefit Plans . Benefits accrued under this Plan will not be included in the Participants compensation or earnings for purposes of computing benefits under any other employee benefit plan maintained or contributed to by the Company or any Employer, except as and to the extent required under the terms of that employee benefit plan or applicable law.
Section 15. Non-Alienation of Benefits . A Participants rights to Excess Benefits under the Plan cannot be granted, transferred, pledged or otherwise assigned, in whole or in part, by the voluntary or involuntary acts of any person, or by operation of law, and will not be liable or taken for any obligation of the Participant. Any attempted grant, transfer, pledge or assignment of a Participants rights to an Excess Benefit will be null and void and without any legal effect.
Section 16. Employer Liability . Each Employer is liable to pay the Excess Benefits earned or accrued for its eligible employees who are Participants. With the consent of the Companys Board of Directors (or of a duly appointed delegate of the Board of Directors), any Employer may assume any other Employers Plan liabilities and obligations. To the extent that an Employer assumes another Employers Plan liabilities or obligations, the second Employer will be released from any continuing obligation under the Plan. At the Companys request, a Participant, former Participant or Beneficiary will sign any documents reasonably required by the Company to effectuate the purposes of this Section 16; provided that Participants Excess Benefits are not adversely affected.
Section 17. Notices . Any notice required to be given by the Company, an Employer or the Committee must be in writing and must be delivered in person, by registered mail, return receipt requested, or by regular mail, telecopy or electronic mail. Any notice given by mail will be deemed to have been given on the date it was mailed, correctly addressed to the last known address of the person to whom the notice is to be given.
Section 18. Gender, Number and Headings . Except where the context otherwise requires, in this Plan the masculine gender includes the feminine, the feminine includes the masculine, the singular includes the plural, and the plural includes the singular. Headings are inserted for convenience only, are not part of the Plan, and are not to be considered in the Plans construction.
Section 19. Controlling Law . The Plan will be construed according to the internal Laws of Delaware to the extent they are not preempted by any applicable federal law.
-5-
Section 20. Successors . The Plan is binding on all persons entitled to Excess Benefits under it, on their respective heirs and legal representatives, on the Committee and its successor, and on the Company and any Employer and their successors, whether by way of merger, consolidation, purchase or otherwise.
Section 21. Severability . If any provision of the Plan is held to be illegal or invalid for any reason, that illegality or invalidity will not affect the remaining provisions of the Plan, and the Plan will be enforced and administered, from that point forward, as if the invalid provisions had never been part of it.
Section 22. Subsequent Changes . All Excess Benefits to which any Participant, Beneficiary or other person is entitled under this Plan will be determined according to the terms of the Plan as in effect when the Participant ceases to be an employee for purposes of the Salaried Retirement Plan, and will not be affected by any subsequent changes in Plan provisions, unless the Participant again becomes an employee, or unless and to the extent the subsequent change expressly applies to the Participant, his or her Beneficiary, or other person claiming through or on behalf of the Participant or Beneficiary.
Section 23. Benefits Payable to Minors, Incompetents and Others . If any Excess Benefit is payable to a minor, an incompetent, or a person otherwise under a legal disability, or to a person the Committee reasonably believes to be physically or mentally incapable of handling and disposing of his or her property, the Committee has the power to apply all or any part of the Excess Benefit directly to the care, comfort, maintenance, support, education or use of the person, or to pay all or any part of the Excess Benefit to the persons parent, guardian, committee, conservator or other legal representative, to the individual with whom the person is living, or to any other individual or entity having the care and control of the person. The Plan, the Committee, the Company and any Employer and their employees and agents will have fully discharged their responsibilities to the Participant or Beneficiary entitled to a payment by making payment under this Section 23.
Section 24. 409A Compliance . Notwithstanding any Plan provisions herein to the contrary, the Plan shall be interpreted, construed and administered in such a manner so as to comply with the provisions of Code Section 409A, Treasury Regulations and any other related Internal Revenue Service guidance promulgated thereunder.
IN WITNESS WHEREOF, the Company has caused this Plan to be executed in its name and behalf on this 31st day of July, 2008.
John Bean Technologies Corporation. |
||
By: |
/s/ Jeffrey W. Carr |
-6-
Exhibit 10.8
EXECUTION COPY
CREDIT AGREEMENT
dated as of
July 31, 2008
among
JOHN BEAN TECHNOLOGIES CORPORATION
JOHN BEAN TECHNOLOGIES B.V.
The Lenders Party Hereto
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. and U.S. BANK NATIONAL ASSOCIATION
as Co-Documentation Agents
WELLS FARGO BANK, N.A.
as Syndication Agent
and
JPMORGAN CHASE BANK, N.A.
as Administrative Agent
J.P. MORGAN SECURITIES INC.
and
WELLS FARGO BANK, N.A.
as Joint Bookrunners and Joint Lead Arrangers
TABLE OF CONTENTS
Page | ||
ARTICLE I Definitions | ||
Defined Terms |
1 | |
SECTION 1.02. Classification of Loans and Borrowings |
20 | |
SECTION 1.03. Terms Generally |
20 | |
SECTION 1.04. Accounting Terms; GAAP |
21 | |
ARTICLE II The Credits |
21 | |
SECTION 2.01. Commitments |
21 | |
SECTION 2.02. Loans and Borrowings |
21 | |
SECTION 2.03. Requests for Revolving Borrowings |
22 | |
SECTION 2.04. Determination of Dollar Amounts |
23 | |
SECTION 2.05. Swingline Loans |
23 | |
SECTION 2.06. Letters of Credit |
25 | |
SECTION 2.07. Funding of Borrowings |
29 | |
SECTION 2.08. Interest Elections |
30 | |
SECTION 2.09. Termination and Reduction of Commitments |
31 | |
SECTION 2.10. Repayment of Loans; Evidence of Debt |
32 | |
SECTION 2.11. Prepayment of Loans. |
33 | |
SECTION 2.12. Fees |
33 | |
SECTION 2.13. Interest |
34 | |
SECTION 2.14. Alternate Rate of Interest |
35 | |
SECTION 2.15. Increased Costs |
35 | |
SECTION 2.16. Break Funding Payments |
37 | |
SECTION 2.17. Taxes |
37 | |
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs |
39 | |
SECTION 2.19. Mitigation Obligations; Replacement of Lenders |
40 | |
SECTION 2.20. Expansion Option |
41 | |
SECTION 2.21. Market Disruption |
42 | |
SECTION 2.22. Judgment Currency |
43 | |
SECTION 2.23. Senior Debt |
43 | |
ARTICLE III Representations and Warranties |
43 | |
SECTION 3.01. Organization; Powers; Subsidiaries |
43 | |
SECTION 3.02. Authorization; Enforceability |
44 | |
SECTION 3.03. Governmental Approvals; No Conflicts |
44 | |
SECTION 3.04. Financial Condition; No Material Adverse Change |
44 | |
SECTION 3.05. Properties |
44 | |
SECTION 3.06. Litigation and Environmental Matters |
45 | |
SECTION 3.07. Compliance with Laws and Agreements |
45 | |
SECTION 3.08. Investment Company Status |
45 |
Table of Contents
(continued)
Page | ||
SECTION 3.09. Taxes |
45 | |
SECTION 3.10. ERISA |
45 | |
SECTION 3.11. Disclosure |
45 | |
SECTION 3.12. Federal Reserve Regulations |
46 | |
SECTION 3.13. Liens |
46 | |
SECTION 3.14. No Default |
46 | |
SECTION 3.15. No Burdensome Restrictions |
46 | |
SECTION 3.16. Solvency |
46 | |
ARTICLE IV Conditions |
46 | |
SECTION 4.01. Effective Date |
46 | |
SECTION 4.02. Each Credit Event |
48 | |
ARTICLE V Affirmative Covenants |
48 | |
SECTION 5.01. Financial Statements and Other Information |
49 | |
SECTION 5.02. Notices of Material Events |
50 | |
SECTION 5.03. Existence; Conduct of Business |
50 | |
SECTION 5.04. Payment of Obligations |
50 | |
SECTION 5.05. Maintenance of Properties; Insurance |
50 | |
SECTION 5.06. Books and Records; Inspection Rights |
51 | |
SECTION 5.07. Compliance with Laws and Material Contractual Obligations |
51 | |
SECTION 5.08. Use of Proceeds |
51 | |
SECTION 5.09. Subsidiary Guaranty |
51 | |
ARTICLE VI Negative Covenants |
51 | |
SECTION 6.01. Subsidiary Indebtedness |
51 | |
SECTION 6.02. Liens |
53 | |
SECTION 6.03. Fundamental Changes and Asset Sales |
53 | |
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions |
54 | |
SECTION 6.05. Swap Agreements |
55 | |
SECTION 6.06. Transactions with Affiliates |
56 | |
SECTION 6.07. Restricted Payments |
56 | |
SECTION 6.08. Restrictive Agreements |
56 | |
SECTION 6.09. Subordinated Indebtedness and Amendments to Subordinated Indebtedness Documents |
56 | |
SECTION 6.10. Sale and Leaseback Transactions |
57 | |
SECTION 6.11. Capital Expenditures |
57 | |
SECTION 6.12. Financial Covenants |
58 |
ii
Table of Contents
(continued)
Page | ||
ARTICLE VII Events of Default |
58 | |
ARTICLE VIII The Administrative Agent |
60 | |
ARTICLE IX Miscellaneous |
62 | |
SECTION 9.01. Notices |
62 | |
SECTION 9.02. Waivers; Amendments |
63 | |
SECTION 9.03. Expenses; Indemnity; Damage Waiver |
64 | |
SECTION 9.04. Successors and Assigns |
65 | |
SECTION 9.05. Survival |
68 | |
SECTION 9.06. Counterparts; Integration; Effectiveness |
69 | |
SECTION 9.07. Severability |
69 | |
SECTION 9.08. Right of Setoff |
69 | |
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process |
69 | |
SECTION 9.10. WAIVER OF JURY TRIAL |
70 | |
SECTION 9.11. Headings |
70 | |
SECTION 9.12. Confidentiality |
71 | |
SECTION 9.13. USA PATRIOT Act |
71 |
ARTICLE X
Company Guarantee
iii
Table of Contents
(continued)
Page | ||||||
SCHEDULES : |
||||||
Schedule 2.01 |
Commitments |
|||||
Schedule 2.02 |
Mandatory Cost |
|||||
Schedule 2.06 |
Existing Letters of Credit |
|||||
Schedule 3.01 |
Subsidiaries |
|||||
Schedule 6.01 |
Existing Indebtedness |
|||||
Schedule 6.02 |
Existing Liens |
|||||
Schedule 6.04 |
Existing Intercompany Investments, Loans and Advances |
|||||
EXHIBITS : |
||||||
Exhibit A |
|
Form of Assignment and Assumption |
||||
Exhibit B-1 |
|
Form of Opinion of Loan Parties Special US Counsel |
||||
Exhibit B-2 |
|
Form of Opinion of Loan Parties In-House Counsel |
||||
Exhibit B-3 |
|
Form of Opinion of Loan Parties Special Dutch Counsel |
||||
Exhibit C |
|
Form of Increasing Lender Supplement |
||||
Exhibit D |
|
Form of Augmenting Lender Supplement |
||||
Exhibit E |
|
List of Closing Documents |
||||
Exhibit F |
|
Form of Subsidiary Guaranty |
||||
Exhibit G |
|
Form of Compliance Certificate |
iv
CREDIT AGREEMENT (this Agreement ) dated as of July 31, 2008 among JOHN BEAN TECHNOLOGIES CORPORATION, JOHN BEAN TECHNOLOGIES B.V., the LENDERS from time to time party hereto, WELLS FARGO BANK, N.A. as Syndication Agent and THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. and U.S. BANK NATIONAL ASSOCIATION as Co-Documentation Agents and JPMORGAN CHASE BANK, N.A., as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
Defined Terms . .As used in this Agreement, the following terms have the meanings specified below:
ABR , when used in reference to any Loan or Borrowing, refers to a Loan, or the Loans comprising such Borrowing, bearing interest at a rate determined by reference to the Alternate Base Rate.
Adjusted LIBO Rate means, with respect to any Eurocurrency Borrowing for any Interest Period, an interest rate per annum equal to the sum of (i) (a) the LIBO Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate, plus , without duplication and if applicable, (ii) in the case of Loans by a Lender from its office or branch in the United Kingdom, the Mandatory Cost.
Administrative Agent means JPMorgan Chase Bank, N.A. (including its branches and affiliates), in its capacity as administrative agent for the Lenders hereunder.
Administrative Questionnaire means an Administrative Questionnaire in a form supplied by the Administrative Agent.
Affected Foreign Subsidiary means any Foreign Subsidiary to the extent such Foreign Subsidiary acting as a Subsidiary Guarantor of the Obligations of either Borrower would cause a Deemed Dividend Problem or Financial Assistance Problem.
Affiliate means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.
Aggregate Commitment means the aggregate of the Commitments of all of the Lenders, as reduced or increased from time to time pursuant to the terms and conditions hereof. As of the Effective Date, the Aggregate Commitment is $225,000,000.
Agreed Currencies means (i) Dollars, (ii) euro, (iii) Pounds Sterling and (iv) any other Foreign Currency agreed to by the Administrative Agent and each of the Lenders.
Alternate Base Rate means, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 1 / 2 of 1%. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective from and including the effective date of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.
Applicable Percentage means, with respect to any Lender, the percentage of the Aggregate Commitment represented by such Lenders Commitment. If the Commitments have terminated or expired, the Applicable Percentages shall be determined based upon the Commitments most recently in effect, giving effect to any assignments.
Applicable Rate means, for any day, with respect to any Eurocurrency Revolving Loan, any ABR Revolving Loan or with respect to the facility fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption Eurocurrency Spread, ABR Spread or Facility Fee Rate, as the case may be, based upon the Leverage Ratio applicable on such date:
Leverage Ratio: |
Eurocurrency Spread
|
ABR Spread | Facility Fee Rate | |||||
Category 1:
|
< 1.00 to 1.00
|
0.825%
|
0%
|
0.175%
|
||||
Category 2: |
> 1.00 to 1.00 but < 1.50 to 1.00 |
1.05% | 0% | 0.20% | ||||
Category 3: |
> 1.50 to 1.00 but < 2.00 to 1.00 |
1.25% | 0% | 0.25% | ||||
Category 4: |
> 2.00 to 1.00 but < 2.50 to 1.00 |
1.45% | 0.20% | 0.30% | ||||
Category 5: | > 2.50 to 1.00 | 1.65% | 0.40% | 0.35% | ||||
For purposes of the foregoing,
(i) if at any time the Company fails to deliver the Financials on or before the date the Financials are due pursuant to Section 5.01, Category 5 shall be deemed applicable for the period commencing three (3) Business Days after the required date of delivery and ending on the date on which the Financials are actually delivered, after which the Category shall be determined in accordance with the table above as applicable;
(ii) adjustments, if any, to the Category then in effect shall be effective three (3) Business Days after the Administrative Agent has received the applicable Financials (it being understood and agreed that each change in Category shall apply during the period commencing on the effective date of such change and ending on the date immediately preceding the effective date of the next such change); and
(iii) notwithstanding the foregoing, Category 4 shall be deemed to be applicable until the Administrative Agents receipt of the applicable Financials for the Companys first fiscal quarter ending after the Effective Date (unless such Financials demonstrate that Category 5 should have been applicable during such period, in which case such other Category shall be deemed to be applicable during such period) and adjustments to the Category then in effect shall thereafter be effected in accordance with the preceding paragraphs.
Approved Fund has the meaning assigned to such term in Section 9.04.
Approximate Equivalent Amount of any currency with respect to any amount of Dollars shall mean the Equivalent Amount of such currency with respect to such amount of Dollars on or as of such date, rounded up to the nearest amount of such currency as determined by the Administrative Agent from time to time.
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Assignment and Assumption means an assignment and assumption agreement entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.04), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.
Augmenting Lender has the meaning assigned to such term in Section 2.20.
AutoBorrow Agreement means any agreement providing for automatic borrowing services between the Company and a Swingline Lender.
Availability Period means the period from and including the Effective Date to but excluding the earlier of the Maturity Date and the date of termination of the Commitments.
Banking Services means each and any of the following bank services provided to the Company or any Subsidiary by any Lender or any of its Affiliates: (a) commercial credit cards, (b) stored value cards and (c) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services).
Banking Services Agreement means any agreement entered into by the Company or any Subsidiary in connection with Banking Services.
Banking Services Obligations means any and all obligations of the Company or any Subsidiary, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.
Board means the Board of Governors of the Federal Reserve System of the United States of America.
Borrower means the Company and/or the Dutch Borrower, as the context may require.
Borrowing means (a) Revolving Loans of the same Type, made, converted or continued on the same date and, in the case of Eurocurrency Loans, as to which a single Interest Period is in effect or (b) a Swingline Loan.
Borrowing Request means a request by any Borrower for a Revolving Borrowing in accordance with Section 2.03.
Burdensome Restrictions means any consensual encumbrance or restriction of the type described in clause (a) or (b) of Section 6.08 (without giving effect to any exceptions described in clauses (i) through (iv) of such Section 6.08).
Business Day means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by law to remain closed; provided that, when used in connection with a Eurocurrency Loan, the term Business Day shall also exclude any day on which banks are not open for dealings in Agreed Currencies in the London interbank market or the principal financial center of the country in which payment or purchase of such Agreed Currency can be made (and, if the Borrowings or LC Disbursements which are the subject of a borrowing, drawing, payment, reimbursement or rate selection are denominated in euro, the term Business Day shall also exclude any day on which the TARGET payment system is not open for the settlement of payments in euro).
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Capital Expenditures means, without duplication, any expenditures for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a consolidated balance sheet of the Company and its Subsidiaries prepared in accordance with GAAP.
Capital Lease Obligations of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
Change in Control means (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Securities Exchange Act of 1934 and the rules of the Securities and Exchange Commission thereunder as in effect on the date hereof), of Equity Interests representing more than 30% of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of the Company; (b) occupation of a majority of the seats (other than vacant seats) on the board of directors of the Company by Persons who were neither (i) nominated by the board of directors of the Company nor (ii) appointed by directors so nominated; (c) the acquisition of direct or indirect Control of the Company by any Person or group; (d) the occurrence of a change in control, or other similar provision, as defined in any agreement or instrument evidencing any Material Indebtedness (triggering a default or mandatory prepayment, which default or mandatory prepayment has not been waived in writing); or (e) the Company ceases to own, directly or indirectly, and Control 100% of the ordinary voting and economic power of the Dutch Borrower.
Change in Law means (a) the adoption of any law, rule or regulation after the date of this Agreement, (b) any change in any law, rule or regulation or in the official interpretation or application thereof by any Governmental Authority after the date of this Agreement or (c) compliance by any Lender or any Issuing Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender or by such Lenders or such Issuing Banks holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement.
Class , when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans or Swingline Loans.
Code means the Internal Revenue Code of 1986, as amended from time to time.
Co-Documentation Agent means each of The Bank Of Tokyo-Mitsubishi UFJ, Ltd. and U.S. Bank National Association in its capacity as co-documentation agent for the credit facility evidenced by this Agreement.
Commitment means, with respect to each Lender, the commitment of such Lender to make Revolving Loans and to acquire participations in Letters of Credit and Swingline Loans hereunder, expressed as an amount representing the maximum aggregate amount of such Lenders Revolving Credit Exposure hereunder, as such commitment may be (a) reduced or terminated from time to time pursuant to Section 2.09, (b) increased from time to time pursuant to Section 2.20 and (c) reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04. The initial amount of each Lenders Commitment is set forth on Schedule 2.01 , or in the Assignment and Assumption pursuant to which such Lender shall have assumed its Commitment, as applicable.
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Company means John Bean Technologies Corporation, a Delaware corporation.
Computation Date is defined in Section 2.04.
Consolidated EBITDA means Consolidated Net Income plus , to the extent deducted from revenues in determining Consolidated Net Income and without duplication, (i) Consolidated Interest Expense, (ii) expense for taxes paid or accrued, (iii) depreciation, (iv) amortization, (v) extraordinary, unusual or non-recurring non-cash expenses or losses incurred other than in the ordinary course of business, (vi) non-cash expenses, including those related to stock based compensation, (vii) extraordinary, unusual or non-recurring cash, income or gain realized other than in the ordinary course of business to the extent such income had previously been deducted from Consolidated EBITDA as non-cash income or gain under clause (xi) below, (viii) amounts representing non-cash adjustments arising by reason of the application of certain accounting principles including with respect to FASB Statement 142 (relating to changes in accounting for the amortization of goodwill and certain other intangibles), minus, to the extent included in Consolidated Net Income, (ix) income tax credits and refunds (to the extent not netted from tax expense), (x) any cash payments made during such period in respect of items described in clauses (v) or (vi) above subsequent to the fiscal quarter in which the relevant non-cash expenses or losses were incurred and (xi) extraordinary, unusual or non-recurring non-cash income or gains realized other than in the ordinary course of business, all calculated for the Company and its Subsidiaries in accordance with GAAP on a consolidated basis. For the purposes of calculating Consolidated EBITDA for any period of four consecutive fiscal quarters (each, a Reference Period ), (i) if during such Reference Period the Company or any Subsidiary shall have made any Material Disposition, the Consolidated EBITDA for such Reference Period shall be reduced by an amount equal to the Consolidated EBITDA (if positive) attributable to the property that is the subject of such Material Disposition for such Reference Period or increased by an amount equal to the Consolidated EBITDA (if negative) attributable thereto for such Reference Period, and (ii) if during such Reference Period the Company or any Subsidiary shall have made a Material Acquisition, Consolidated EBITDA for such Reference Period shall be calculated after giving pro forma effect thereto as if such Material Acquisition occurred on the first day of such Reference Period. As used in this definition, Material Acquisition means any acquisition of property or series of related acquisitions of property (including Permitted Acquisitions) that (a) constitutes (i) assets comprising all or substantially all or any significant portion of a business or operating unit of a business, or (ii) all or substantially all of the common stock or other Equity Interests of a Person, and (b) involves the payment of consideration by the Company and its Subsidiaries in excess of $20,000,000; and Material Disposition means any sale, transfer or disposition of property or series of related sales, transfers, or dispositions of property that yields gross proceeds to the Company or any of its Subsidiaries in excess of $20,000,000.
Consolidated Interest Expense means, with reference to any period, the interest expense (including without limitation interest expense under Capital Lease Obligations that is treated as interest in accordance with GAAP) of the Company and its Subsidiaries calculated on a consolidated basis for such period with respect to all outstanding Indebtedness of the Company and its Subsidiaries allocable to such period in accordance with GAAP (including, without limitation, all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers acceptance financing and net costs under interest rate Swap Agreements to the extent such net costs are allocable to such period in accordance with GAAP).
Consolidated Net Income means, with reference to any period, the net income (or loss) of the Company and its Subsidiaries calculated in accordance with GAAP on a consolidated basis (without duplication) for such period.
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Consolidated Total Assets means, as of the date of any determination thereof, total assets of the Company and its Subsidiaries calculated in accordance with GAAP on a consolidated basis as of such date.
Consolidated Total Indebtedness means at any time the sum, without duplication, of (a) the aggregate Indebtedness of the Company and its Subsidiaries calculated on a consolidated basis as of such time in accordance with GAAP, (b) the aggregate amount of Indebtedness of the Company and its Subsidiaries relating to the maximum drawing amount of all letters of credit outstanding and bankers acceptances and (c) Indebtedness of the type referred to in clauses (a) or (b) hereof of another Person guaranteed by the Company or any of its Subsidiaries; provided that Consolidated Total Indebtedness shall exclude (i) the aggregate principal amount of Indebtedness of the Company and its Subsidiaries in respect of undrawn performance and commercial letters of credit and Guarantees related thereto and (ii) no more than $10,000,000 of the aggregate principal amount of Indebtedness of the Company and its Subsidiaries in respect of undrawn letters of credit posted to support or secure surety bonds posted for the Company or any of its Subsidiaries in the ordinary course of business.
Control means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. Controlling and Controlled have meanings correlative thereto.
Country Risk Event means:
(i) any law, action or failure to act by any Governmental Authority in any Borrowers or Letter of Credit beneficiarys country which has the effect of:
(a) changing the obligations under the relevant Letter of Credit, this Agreement or any of the other Loan Documents as originally agreed or otherwise creating any additional liability, cost or expense to the relevant Issuing Bank, the Lenders or the Administrative Agent,
(b) changing the ownership or control by such Borrower or Letter of Credit beneficiary of its business, or
(c) preventing or restricting the conversion into or transfer of the applicable Agreed Currency;
(ii) force majeure; or
(iii) any similar event
which, in relation to (i), (ii) and (iii), directly or indirectly, prevents or restricts the payment or transfer of any amounts owing under the relevant Letter of Credit in the applicable Agreed Currency into an account designated by the Administrative Agent or the relevant Issuing Bank and freely available to the Administrative Agent or such Issuing Bank.
Credit Event means a Borrowing, the issuance of a Letter of Credit, an LC Disbursement or any of the foregoing.
Deemed Dividend Problem means, with respect to any Foreign Subsidiary, such Foreign Subsidiarys current or accumulated and undistributed earnings and profits being deemed to be repatriated to the Company or the applicable parent Domestic Subsidiary under Section 956 of the Code and the effect of such repatriation causing adverse tax consequences to the Company, such parent
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Domestic Subsidiary or any member of the affiliated group within the meaning of Section 1504(a) of the Code in which the Company is a part, in each case as determined by the Company in its commercially reasonable judgment acting in good faith and in consultation with its legal and tax advisors.
Default means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.
Dollar Amount of any currency at any date shall mean (i) the amount of such currency if such currency is Dollars or (ii) the equivalent in such currency of Dollars if such currency is a Foreign Currency, calculated on the basis of the Exchange Rate for such currency, on or as of the most recent Computation Date provided for in Section 2.04.
Dollars or $ refers to lawful money of the United States of America.
Domestic Lender means a Lender organized under the laws of a jurisdiction located in the United States of America.
Domestic Subsidiary means a Subsidiary organized under the laws of a jurisdiction located in the United States of America.
Dutch Borrower means John Bean Technologies B.V. (formerly known as FoodTech B.V.), a besloten vennootschap met beperkte aansprakelijkheid incorporated under the laws of The Netherlands having its corporate seat ( statutaire zetel ) in Schoonebeek, The Netherlands.
Dutch Borrower Sublimit means $100,000,000.
Dutch Financial Supervision Act means the Dutch Financial Supervision Act 2007 ( Wet op het Financieel Toezicht 2007 ), as amended from time to time.
Effective Date means the date on which the conditions specified in Section 4.01 are satisfied (or waived in accordance with Section 9.02).
Environmental Laws means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the management, release or threatened release of any Hazardous Material.
Environmental Liability means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Company or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
Equity Interests means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any such equity interest.
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Equivalent Amount of any currency with respect to any amount of Dollars at any date shall mean the equivalent in such currency of such amount of Dollars, calculated on the basis of the Exchange Rate for such other currency at 11:00 a.m., London time, on the date on or as of which such amount is to be determined.
ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time.
ERISA Affiliate means any trade or business (whether or not incorporated) that, together with the Company, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.
ERISA Event means (a) any reportable event, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any Plan of an accumulated funding deficiency (as defined in Section 412 of the Code (with respect to the Plan years commencing on or before December 31, 2007), Section 430 of the Code (with respect to Plan years commencing on or after January 1, 2008) or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(c) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Company or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Company or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Company or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal of the Company or any of its ERISA Affiliates from any Plan or Multiemployer Plan; (g) the receipt by the Company or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Company or any ERISA Affiliate of any notice, concerning the imposition upon the Company or any of its ERISA Affiliates of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.
EU means the European Union.
euro and/or EUR means the single currency of the participating member states of the EU.
Eurocurrency , when used in reference to a currency means an Agreed Currency and when used in reference to any Loan or Borrowing, means that such Loan, or the Loans comprising such Borrowing, bears interest at a rate determined by reference to the Adjusted LIBO Rate.
Eurocurrency Payment Office of the Administrative Agent shall mean, for each Foreign Currency, the office, branch, affiliate or correspondent bank of the Administrative Agent for such currency as specified from time to time by the Administrative Agent to the Company and each Lender.
Event of Default has the meaning assigned to such term in Article VII.
Exchange Rate means, on any day, with respect to any Foreign Currency, the rate at which such Foreign Currency may be exchanged into Dollars, as set forth at approximately 11:00 a.m., Local Time, on such date on the Reuters World Currency Page for such Foreign Currency. In the event that such rate does not appear on any Reuters World Currency Page, the Exchange Rate with respect to such Foreign Currency shall be determined by reference to such other publicly available service for displaying exchange rates as may be reasonably selected by the Administrative Agent or, in the event no such service is selected, such Exchange Rate shall instead be calculated on the basis of the arithmetical
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mean of the buy and sell spot rates of exchange of the Administrative Agent for such Foreign Currency on the London market at 11:00 a.m., Local Time, on such date for the purchase of Dollars with such Foreign Currency, for delivery two Business Days later; provided , that if at the time of any such determination, for any reason, no such spot rate is being quoted, the Administrative Agent, after consultation with the Company, may use any reasonable method it deems appropriate to determine such rate, and such determination shall be conclusive absent manifest error.
Excluded Taxes means, with respect to the Administrative Agent, any Lender, any Issuing Bank or any other recipient of any payment to be made by or on account of any obligation of the Company or any other Loan Party hereunder or under any other Loan Document, (a) income or franchise Taxes (or Taxes imposed in lieu thereof) imposed on (or measured by) its net income by the United States of America (or any jurisdiction therein), or by the jurisdiction under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable lending office is located, (b) any branch profits taxes imposed by the United States of America or any similar Tax imposed by any other jurisdiction in which the Company, Administrative Agent, or applicable Lender is located, (c) in the case of a Lender (other than an assignee pursuant to a request by the Company under Section 2.19(b)), any withholding Tax that is imposed on amounts payable to such Lender at the time such Lender becomes a party to this Agreement (or designates a new lending office) or is attributable to such Lenders failure to comply with Section 2.17(e), except to the extent that such Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from the Company with respect to such withholding Tax pursuant to Section 2.17(a).
Existing Letters of Credit are described in Section 2.06(m).
Federal Funds Effective Rate means, for any day, the weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average (rounded upwards, if necessary, to the next 1 / 100 of 1%) of the quotations for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing selected by it.
Financial Assistance Problem means, with respect to any Foreign Subsidiary, the inability (whether due to an absolute prohibition or adverse legal or financial requirements) of such Foreign Subsidiary to become a Subsidiary Guarantor on account of legal or financial limitations imposed by the jurisdiction of organization of such Foreign Subsidiary or other relevant jurisdictions having authority over such Foreign Subsidiary, in each case as determined by the Company in its commercially reasonable judgment acting in good faith and in consultation with its legal and tax advisors.
Financial Officer means the chief financial officer, principal accounting officer, treasurer, assistant treasurer or controller of the Company.
Financials means the annual or quarterly financial statements, and accompanying certificates and other documents, of the Company and its Subsidiaries required to be delivered pursuant to Section 5.01(a) or 5.01(b).
Foreign Currencies means Agreed Currencies other than Dollars.
Foreign Currency LC Exposure means, at any time, the sum of (a) the Dollar Amount of the aggregate undrawn and unexpired amount of all outstanding Foreign Currency Letters of Credit at such time plus (b) the aggregate principal Dollar Amount of all LC Disbursements in respect of Foreign Currency Letters of Credit that have not yet been reimbursed at such time.
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Foreign Currency Letter of Credit means a Letter of Credit denominated in a Foreign Currency.
Foreign Lender means any Lender that is organized under the laws of a jurisdiction other than that in which the Company is located. For purposes of this definition, the United States of America, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.
Foreign Subsidiary means any Subsidiary which is not a Domestic Subsidiary.
FTI means FMC Technologies Inc., a Delaware corporation.
GAAP means generally accepted accounting principles in the United States of America.
Governmental Authority means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
Guarantee of or by any Person (the guarantor ) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the primary obligor ) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided, that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business and shall not include obligations under or with respect to surety bonds posted by or for the benefit of any Person in the ordinary course of such Persons business.
Hazardous Materials means all explosive or radioactive substances and all hazardous or toxic substances or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes.
Hostile Acquisition means (a) the acquisition of the Equity Interests of a Person through a tender offer or similar solicitation of the owners of such Equity Interests which has not been approved (prior to such acquisition) by the board of directors (or any other applicable governing body) of such Person or by similar action if such Person is not a corporation and (b) any such acquisition as to which such approval has been withdrawn.
Increasing Lender has the meaning assigned to such term in Section 2.20.
Incremental Term Loan has the meaning assigned to such term in Section 2.20.
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Incremental Term Loan Amendment has the meaning assigned to such term in Section 2.20.
Indebtedness of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of bankers acceptances and (k) all obligations (excluding rents under operating leases) of such Person under Sale and Leaseback Transactions. For the avoidance of doubt, Indebtedness will not include obligations under or with respect to surety bonds posted by or for the benefit of any Person in the ordinary course of such Persons business. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Persons ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.
Indemnified Taxes means Taxes other than Excluded Taxes and Other Taxes.
Information Memorandum means the Confidential Information Memorandum dated June 2008 relating to the Company and the Transactions.
Intercreditor Agreement means that certain Intercreditor Agreement dated as of the Effective Date by and among the Administrative Agent and the lenders party to the Permitted Private Placement Financing, as amended, restated, supplemented or otherwise modified from time to time.
Interest Coverage Ratio has the meaning assigned to such term in Section 6.12(b).
Interest Election Request means a request by the applicable Borrower to convert or continue a Revolving Borrowing in accordance with Section 2.08.
Interest Payment Date means (a) with respect to any ABR Loan (other than a Swingline Loan), the last day of each March, June, September and December and the Maturity Date, (b) with respect to any Eurocurrency Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a Eurocurrency Borrowing with an Interest Period of more than three months duration, each day prior to the last day of such Interest Period that occurs at intervals of three months duration after the first day of such Interest Period and the Maturity Date and (c) with respect to any Swingline Loan, the day that such Loan is required to be repaid and the Maturity Date.
Interest Period means with respect to any Eurocurrency Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one, two, three or six months thereafter, as the applicable Borrower (or the Company on behalf of the applicable Borrower) may elect; provided , that (i) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding
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Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day and (ii) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and, in the case of a Revolving Borrowing, thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.
Issuing Bank means, as the context may require, (a) JPMorgan Chase Bank, N.A., with respect to Letters of Credit issued by it, (b) U.S. Bank National Association, with respect to Letters of Credit issued by it, (c) Wells Fargo Bank, N.A., with respect to Letters of Credit issued by it or (d) any other Lender selected by the Company and approved by the Administrative Agent (such approval not to be unreasonably withheld) which agrees to act as an Issuing Bank hereunder, with respect to Letters of Credit issued by it, and in each case, in its capacity as an issuer of Letters of Credit hereunder and its successors in such capacity as provided in Section 2.06(i). Each Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of such Issuing Bank, in which case the term Issuing Bank shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.
LC Collateral Account has the meaning assigned to such term in Section 2.06(j).
LC Disbursement means a payment made by an Issuing Bank pursuant to a Letter of Credit.
LC Exposure means, at any time, the sum of (a) the aggregate undrawn Dollar Amount of all outstanding Letters of Credit at such time plus (b) the aggregate Dollar Amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Company at such time. The LC Exposure of any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.
Lenders means the Persons listed on Schedule 2.01 and any other Person that shall have become a Lender hereunder pursuant to Section 2.20 or pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption. Unless the context otherwise requires, the term Lenders includes the Swingline Lenders.
Letter of Credit means any letter of credit issued pursuant to this Agreement.
Leverage Ratio has the meaning assigned to such term in Section 6.12(a).
LIBO Rate means, with respect to any Eurocurrency Borrowing for any Interest Period, the rate appearing on, in the case of Dollars, Reuters Screen LIBOR01 Page and, in the case of any Foreign Currency, the appropriate page of such service which displays British Bankers Association Interest Settlement Rates for deposits in such Foreign Currency (or, in each case, on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page of such service, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to deposits in the relevant Agreed Currency in the London interbank market) at approximately 11:00 a.m., London time, two (2) Business Days prior to (or, in the case of Loans denominated in Pounds Sterling, on the day of) the commencement of such Interest Period, as the rate for deposits in the relevant Agreed Currency with a maturity comparable to such Interest Period. In the event that such rate is not available at such time for any reason, then the LIBO Rate with respect to such Eurocurrency Borrowing for such
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Interest Period shall be the rate at which deposits in the relevant Agreed Currency in an Equivalent Amount of $5,000,000 and for a maturity comparable to such Interest Period are offered by the principal London office of the Administrative Agent in immediately available funds in the London interbank market at approximately 11:00 a.m., London time, two (2) Business Days prior to the commencement of such Interest Period.
Lien means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
Loan Documents means this Agreement, the Subsidiary Guaranty, any AutoBorrow Agreement, any promissory notes executed and delivered pursuant to Section 2.10(e) and any and all other instruments and documents executed and delivered in connection with any of the foregoing.
Loan Parties means, collectively, the Borrowers and the Subsidiary Guarantors.
Loans means the loans made by the Lenders to the Borrowers pursuant to this Agreement.
Local Time means (i) New York City time in the case of a Loan, Borrowing or LC Disbursement denominated in Dollars to, or for the account of, the Company and (ii) local time at the place of the relevant Loan, Borrowing or LC Disbursement (or such earlier local time as is necessary for the relevant funds to be received and transferred to the Administrative Agent for same day value on the date the relevant reimbursement obligation is due) in the case of a Loan, Borrowing or LC Disbursement which is denominated in a Foreign Currency or which is to, or for the account of, the Dutch Borrower.
Mandatory Cost is described in Schedule 2.02 .
Material Adverse Effect means a material adverse effect on (a) the business, financial condition or operations of the Company and the Subsidiaries taken as a whole or (b) the validity or enforceability of the Loan Documents taken as a whole.
Material Indebtedness means any Indebtedness (other than the Loans and Letters of Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the Company and its Subsidiaries in an aggregate principal amount exceeding $15,000,000. For purposes of determining Material Indebtedness, the principal amount of the obligations of the Company or any Subsidiary in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that the Company or such Subsidiary would be required to pay if such Swap Agreement were terminated at such time.
Material Subsidiary means each Subsidiary (i) which, as of the most recent fiscal quarter of the Company, for the period of four consecutive fiscal quarters then ended, for which financial statements have been delivered pursuant to Section 5.01, contributed (by itself and not through one or more of its Subsidiaries) greater than five percent (5%) of the Companys Consolidated EBITDA for such period or (ii) which contributed (by itself and not through one or more of its Subsidiaries) greater than five percent (5%) of the Companys Consolidated Total Assets as of such date.
Maturity Date means July 31, 2013.
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Moodys means Moodys Investors Service, Inc.
Multiemployer Plan means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
New Money Credit Event means with respect to any Issuing Bank, any increase (directly or indirectly) in such Issuing Banks exposure (whether by way of additional credit or banking facilities or otherwise, including as part of a restructuring) to any Borrower or any Governmental Authority in any Borrowers or any applicable Letter of Credit beneficiarys country occurring by reason of (i) any law, action or requirement of any Governmental Authority in such Borrowers or such Letter of Credit beneficiarys country, or (ii) any request in respect of external indebtedness of borrowers in such Borrowers or such Letter of Credit beneficiarys country applicable to banks generally which conduct business with such borrowers, or (iii) any agreement in relation to clause (i) or (ii), in each case to the extent calculated by reference to the aggregate Revolving Credit Exposures outstanding prior to such increase.
Obligations means all unpaid principal of and accrued and unpaid interest on the Loans, all LC Exposure, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations and indebtedness (including interest accruing during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding), obligations and liabilities of any of the Company and its Subsidiaries to any of the Lenders, the Administrative Agent, the Issuing Banks or any indemnified party, individually or collectively, existing on the Effective Date or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, in each case arising or incurred under this Credit Agreement or any of the other Loan Documents or to the Lenders or any of their Affiliates under any Swap Agreement (including Swap Obligations) or any Banking Services Agreement (including Banking Services Obligations) or in respect of any of the Loans made or reimbursement or other obligations incurred or any of the Letters of Credit or other instruments at any time evidencing any thereof.
Other Taxes means any and all present or future stamp or documentary taxes or any other similar excise or property taxes, charges or similar levies arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.
Overnight Foreign Currency Rate means, for any amount payable in a Foreign Currency, the rate of interest per annum as determined by the Administrative Agent at which overnight or weekend deposits in the relevant currency (or if such amount due remains unpaid for more than three (3) Business Days, then for such other period of time as the Administrative Agent may elect) for delivery in immediately available and freely transferable funds would be offered by the Administrative Agent to major banks in the interbank market upon request of such major banks for the relevant currency as determined above and in an amount comparable to the unpaid principal amount of the related Credit Event, plus any taxes, levies, imposts, duties, deductions, charges or withholdings imposed upon, or charged to, the Administrative Agent by any relevant correspondent bank in respect of such amount in such relevant currency.
Participant has the meaning set forth in Section 9.04.
PBGC means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.
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Permitted Acquisition means any acquisition (whether by purchase, merger, consolidation or otherwise but excluding in any event a Hostile Acquisition) or series of related acquisitions by the Company or any Subsidiary of (i) all or substantially all the assets of or (ii) all or substantially all the Equity Interests in, a Person or division or line of business of a Person, if, at the time of and immediately after giving effect thereto, (a) no Default has occurred and is continuing or would arise after giving effect thereto, (b) such Person or division or line of business is engaged in the same or a similar line of business as the Company and the Subsidiaries or business reasonably related thereto, (c) all actions required to be taken with respect to such acquired or newly formed Subsidiary under Section 5.09 shall have been taken, (d) the Company and the Subsidiaries are in compliance, on a pro forma basis reasonably acceptable to the Administrative Agent after giving effect to such acquisition (but without giving effect to any synergies or cost savings), with the covenants contained in Section 6.12 recomputed as of the last day of the most recently ended fiscal quarter of the Company for which financial statements are available, as if such acquisition (and any related incurrence or repayment of Indebtedness, with any new Indebtedness being deemed to be amortized over the applicable testing period in accordance with its terms) had occurred on the first day of each relevant period for testing such compliance and, if the aggregate consideration paid in respect of such acquisition exceeds $25,000,000, the Company shall have delivered to the Administrative Agent a certificate of a Financial Officer of the Company to such effect, together with all relevant financial information, statements and projections requested by the Administrative Agent and (e) in the case of an acquisition or merger involving the Company or a Subsidiary, the Company or such Subsidiary is the surviving entity of such merger and/or consolidation.
Permitted Encumbrances means:
(a) Liens imposed by law for Taxes and other governmental charges that are not yet due or are being contested in compliance with Section 5.04;
(b) carriers, warehousemens, mechanics, materialmens, repairmens and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than thirty (30) days or are being contested in compliance with Section 5.04;
(c) pledges and deposits made in the ordinary course of business in compliance with workers compensation, unemployment insurance and other social security laws or regulations;
(d) deposits or letters of credit to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;
(e) judgment liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII;
(f) Liens incidental to the conduct of a Persons business or the ownership of its assets which arise in the ordinary course of business and do not materially detract from the value of the affected property or interfere or impair with the ordinary conduct of its business;
(g) Liens in favor of the Company or any other Loan Party;
(h) customary Liens in favor of a Governmental Authority to secure payments under any contract or statute, or Liens to secure any Indebtedness incurred in financing the acquisition, construction or improvement of property subject thereto to the extent created or arising in connection with the tax-exempt financing of the acquisition, construction or improvement of, any facility used or to be used in the business of the Company or any Subsidiary through the issuance of obligations, the income from which shall be excludable from gross income by virtue of Section 103 of the Code (or any subsequently adopted provisions thereof providing for a specific exclusion from gross income);
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(i) licenses, sublicenses, leases or subleases granted to third parties in the ordinary course of business not interfering with the business of the Company or any Subsidiary;
(j) rights of setoff or bankers Liens upon deposits of cash and/or credit balances of bank accounts in favor of banks or other depository institutions and Liens associated with overdraft protection and netting services;
(k) Liens on goods in the possession of customs authorities in favor of such customs authorities which secure payment of customs duties in connection with importation of goods;
(l) Liens deemed to exist in connection with permitted repurchase obligations or set-off rights;
(m) Liens in favor of collecting banks arising under Section 4-210 of the Uniform Commercial Code;
(n) financing statements filed in connection with operating leases; and
(o) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Company or any Subsidiary;
provided that except as provided in clause (h) above, the term Permitted Encumbrances shall not include any Lien securing Indebtedness.
Permitted Investments means:
(a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moodys;
(c) investments in certificates of deposit, bankers acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic or foreign commercial bank which has a combined capital and surplus and undivided profits of not less than $500,000,000;
(d) fully collateralized repurchase agreements with a term of not more than thirty (30) days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above;
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(e) money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moodys and (iii) have portfolio assets of at least $5,000,000,000; and
(f) other investments made in accordance with the Companys investment policy previously delivered to the Administrative Agent and as in effect on the Effective Date, and as amended, modified or supplemented by the Company from time to time with the consent of the Administrative Agent.
In the case of investments by any Foreign Subsidiary or investments made in a country outside the United States of America, Permitted Investments shall also include (i) investments of the type and maturity described in clauses (a) through (f) above of foreign obligors, which investments or obligors (or the parents of such obligors) have ratings described in such clauses or equivalent ratings from comparable foreign rating agencies and (ii) other short-term investments of similar quality and liquidity utilized in accordance with normal investment practices for cash management in investments analogous to the foregoing investments in clauses (a) through (f) and in this paragraph.
Permitted Private Placement Financing means unsecured Indebtedness incurred by the Company and guaranteed by one or more of the Subsidiary Guarantors in an aggregate principal amount not less than $75,000,000 pursuant to privately placed notes and related documents in form and substance reasonably satisfactory to the Administrative Agent.
Person means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
Plan means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Company or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an employer as defined in Section 3(5) of ERISA.
Pounds Sterling means the lawful currency of the United Kingdom.
Prime Rate means the rate of interest per annum publicly announced from time to time by JPMorgan Chase Bank, N.A. as its prime rate in effect at its principal office in New York City; each change in the Prime Rate shall be effective from and including the date such change is publicly announced as being effective.
Register has the meaning set forth in Section 9.04.
Related Parties means, with respect to any specified Person, such Persons Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Persons Affiliates.
Required Lenders means, at any time, Lenders having Revolving Credit Exposures and unused Commitments representing more than 50% of the sum of the total Revolving Credit Exposures and unused Commitments at such time.
Required Subsidiary means (i) each Domestic Subsidiary, (ii) with respect to the Obligations of the Company, each Material Subsidiary which is a Foreign Subidiary (other than Affected Foreign Subsidiaries) and (iii) with respect to the Obligations of the Dutch Borrower, each Subsidiary of the Dutch Borrower (other than Affected Foreign Subsidiaries).
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Restricted Payment means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in the Company or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in the Company or any option, warrant or other right to acquire any such Equity Interests in the Company.
Revolving Credit Exposure means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lenders Revolving Loans and its LC Exposure and Swingline Exposure at such time.
Revolving Loan means a Loan made pursuant to Section 2.01.
S&P means Standard & Poors.
Sale and Leaseback Transaction means any sale or other transfer of any property or asset by any Person with the intent to lease such property or asset as lessee.
Solvent means, in reference to the Company and its Subsidiaries, (i) the fair value of the assets of such Persons, taken as a whole, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (ii) the present fair saleable value of the property of such Persons, taken as a whole, will be greater than the amount that will be required to pay the probable liability of their debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) such Persons, taken as a whole, will be able to pay their debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) such Persons, taken as a whole, will not have unreasonably small capital with which to conduct the business in which they are engaged as such business is now conducted and is proposed to be conducted after the Effective Date.
Spin-Off Dividend means the payment by the Company of a dividend and a related adjustment payment to FTI in an aggregate amount not to exceed $225,000,000, a portion of which will be payable on the Effective Date and a portion of which will be payable within 100 days (subject to extension in the event of a dispute as to the amount of such payment) after the Effective Date pursuant to the terms of that certain Separation and Distribution Agreement dated as of the Effective Date.
Spin-Off Transaction means the tax-free distribution by FTI to its shareholders of the common stock of the Company following the transfer of FTIs FoodTech and Airport Systems businesses to the Company and its Subsidiaries (i) pursuant to which the Company will emerge as a separate publicly traded company, (ii) which will be effected by way of a dividend of the common stock and accompanying preferred share purchase rights (which will constitute all of the outstanding shares of the Companys common stock immediately after such transaction) and (iii) in connection with which the Company shall pay the Spin-Off Dividend.
Spin-Off Adjustment Payment means the portion of the Spin-Off Dividend that will be paid after the Effective Date.
Statutory Reserve Rate means, with respect to any currency, a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve, liquid asset, fees or similar requirements (including any marginal, special, emergency or supplemental reserves or other requirements) established by any central bank, monetary authority, the Board, the Financial Services Authority, the European Central Bank or
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other Governmental Authority for any category of deposits or liabilities customarily used to fund loans in such currency, expressed in the case of each such requirement as a decimal. Such reserve, liquid asset, fees or similar requirements shall, in the case of Dollar denominated Loans, include those imposed pursuant to Regulation D of the Board. Eurocurrency Loans shall be deemed to be subject to such reserve, liquid asset, fee or similar requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under any applicable law, rule or regulation, including Regulation D of the Board. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve, liquid asset or similar requirement.
Subordinated Indebtedness means any Indebtedness of the Company or any Subsidiary the payment of which is subordinated to payment of the obligations under the Loan Documents.
Subordinated Indebtedness Documents means any document, agreement or instrument evidencing any Subordinated Indebtedness or entered into in connection with any Subordinated Indebtedness.
subsidiary means, with respect to any Person (the parent) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parents consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.
Subsidiary means any subsidiary of the Company.
Subsidiary Guarantor means each Subsidiary that executes and delivers a Subsidiary Guaranty to the Administrative Agent. The Subsidiary Guarantors on the Effective Date are identified as such in Schedule 3.01 hereto.
Subsidiary Guaranty means that certain Guaranty dated as of the Effective Date in the form of Exhibit F (including any and all supplements thereto) and executed by each Subsidiary Guarantor party thereto, and, in the case of any guaranty by a Foreign Subsidiary, any other guaranty agreements in such forms as are reasonably requested by the Administrative Agent and its counsel, in each case as amended, restated, supplemented or otherwise modified from time to time.
Swap Agreement means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Company or the Subsidiaries shall be a Swap Agreement.
Swap Obligations means any and all obligations of the Company or any Subsidiary, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all Swap Agreements permitted hereunder with a Lender or an affiliate of a Lender, and (b) any and all cancellations, buy backs, reversals, terminations or assignments of any such Swap Agreement transaction.
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Swingline Exposure means, at any time, the aggregate principal amount of all Swingline Loans outstanding at such time. The Swingline Exposure of any Lender at any time shall be its Applicable Percentage of the total Swingline Exposure at such time.
Swingline Lender means, as the context may require, (a) JPMorgan Chase Bank, N.A., with respect to Swingline Loans made by it, (b) Wells Fargo Bank, N.A., with respect to Swingline Loans made by it, and (c) any replacement of either of the foregoing pursuant to Section 2.05(d), and in each case, in its capacity as a lender of Swingline Loans hereunder.
Swingline Loan means a Loan made pursuant to Section 2.05.
Swingline Sublimit means $20,000,000.
Syndication Agent means Wells Fargo Bank, N.A. in its capacity as syndication agent for the credit facility evidenced by this Agreement.
TARGET means the Trans-European Automated Real-time Gross Settlement Express Transfer (TARGET) payment system (or, if such payment system ceases to be operative, such other payment system (if any) reasonably determined by the Administrative Agent to be a suitable replacement) for the settlement of payments in euro.
Taxes means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings imposed by any Governmental Authority.
Transactions means the execution, delivery and performance by the Loan Parties of this Agreement and the other Loan Documents, the borrowing of Loans and other credit extensions, the use of the proceeds thereof and the issuance of Letters of Credit hereunder and the consummation of the Spin-Off Transaction.
Type , when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.
Withdrawal Liability means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings . For purposes of this Agreement, Loans may be classified and referred to by Class ( e.g. , a Revolving Loan) or by Type ( e.g. , a Eurocurrency Loan) or by Class and Type ( e.g. , a Eurocurrency Revolving Loan). Borrowings also may be classified and referred to by Class ( e.g. , a Revolving Borrowing) or by Type ( e.g. , a Eurocurrency Borrowing) or by Class and Type ( e.g. , a Eurocurrency Revolving Borrowing).
SECTION 1.03. Terms Generally . (a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words include, includes and including shall be deemed to be followed by the phrase without limitation. The word will shall be construed to have the same meaning and effect as the word shall. Unless the context
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requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Persons successors and assigns, (c) the words herein, hereof and hereunder, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words asset and property shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
(b) In this agreement, where it relates to a Dutch entity, a reference to: (i) a lien or security interest includes any mortgage ( hypotheek ), pledge ( pandrecht ), retention of title arrangement ( eigendomsvoorbehoud ), privilege ( voorrecht ), right of retention ( recht van retentie ), right to reclaim goods ( recht van reclame ), and, in general, any right in rem ( beperkte recht ) created for the purpose of granting security ( goederenrechtelijk zekerheidsrecht ), (ii) a bankruptcy or insolvency (and any of those terms) includes a Dutch entity being declared bankrupt ( failliet verklaard ) or dissolved ( ontbonden ), (iii) a moratorium includes surseance van betaling and granted a moratorium includes surseance verleend , (iv) any step or procedure taken in connection with insolvency proceedings includes a Dutch entity having filed a notice under section 36 of the Dutch Tax Collection Act ( Invorderingswet 1990 ), (v) a receiver includes a curator and (vi) a custodian includes a bewindvoerder .
SECTION 1.04. Accounting Terms; GAAP . Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Company notifies the Administrative Agent that the Company requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Company that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.
ARTICLE II
The Credits
SECTION 2.01. Commitments . Subject to the terms and conditions set forth herein, each Lender agrees to make Revolving Loans to the Borrowers in Agreed Currencies from time to time during the Availability Period in an aggregate principal amount that will not result in (a) subject to Sections 2.04 and 2.11(b), the Dollar Amount of such Lenders Revolving Credit Exposure exceeding such Lenders Commitment, (b) subject to Sections 2.04 and 2.11(b), the sum of the Dollar Amount of the total Revolving Credit Exposures exceeding the Aggregate Commitment or (c) subject to Section 2.04, the Dollar Amount of the total outstanding Revolving Loans made to the Dutch Borrower exceeding the Dutch Borrower Sublimit. Within the foregoing limits and subject to the terms and conditions set forth herein, the Borrowers may borrow, prepay and reborrow Revolving Loans.
SECTION 2.02. Loans and Borrowings . (a) Each Revolving Loan (other than a Swingline Loan) shall be made as part of a Borrowing consisting of Revolving Loans made by the
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Lenders ratably in accordance with their respective Commitments. The failure of any Lender to make any Loan required to be made by it shall not relieve any other Lender of its obligations hereunder; provided that the Commitments of the Lenders are several and no Lender shall be responsible for any other Lenders failure to make Loans as required. Any Swingline Loan shall be made in accordance with the procedures set forth in Section 2.05.
(b) Subject to Section 2.14, each Revolving Borrowing shall be comprised entirely of ABR Loans or Eurocurrency Loans as the relevant Borrower may request in accordance herewith; provided that each ABR Loan shall only be made in Dollars and shall only be made to the Company. Each Swingline Loan shall be an ABR Loan. Each Lender at its option may make any Eurocurrency Loan, to the extent it is obligated to make the same hereunder, by causing any domestic or foreign branch or Affiliate of such Lender to make such Loan (and in the case of an Affiliate, the provisions of Sections 2.14, 2.15, 2.16 and 2.17 shall apply to such Affiliate to the same extent as to such Lender); provided that any exercise of such option shall not affect the obligation of the relevant Borrower to repay such Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurocurrency Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an integral multiple of $500,000 and not less than $1,000,000 (or the Approximate Equivalent Amount of each such amount if such Borrowing is denominated in a Foreign Currency). At the time that each ABR Revolving Borrowing is made, such Borrowing shall be in an aggregate amount that is an integral multiple of $100,000 and not less than $500,000; provided that an ABR Revolving Borrowing may be in an aggregate amount that is equal to the entire unused balance of the Aggregate Commitment or that is required to finance the reimbursement of an LC Disbursement as contemplated by Section 2.06(e). Each Swingline Loan shall be in an amount that is an integral multiple of $100,000 and not less than $500,000. Borrowings of more than one Type and Class may be outstanding at the same time; provided that there shall not at any time be more than a total of nine (9) Eurocurrency Revolving Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, no Borrower shall be entitled to request, or to elect to convert or continue, any Borrowing if the Interest Period requested with respect thereto would end after the Maturity Date.
(e) The initial Loan from any Lender or Affiliate to the Dutch Borrower shall at all times be at least 50,000 (or its equivalent in another Agreed Currency).
SECTION 2.03. Requests for Revolving Borrowings . To request a Revolving Borrowing, the applicable Borrower, or the Company on behalf of the applicable Borrower, shall notify the Administrative Agent of such request (a) in the case of a Eurocurrency Borrowing, by telephone (or in the case of a Eurocurrency Borrowing denominated in a Foreign Currency or a Eurocurrency Borrowing to the Dutch Borrower, by irrevocable written notice (via a written Borrowing Request in a form approved by the Administrative Agent and signed by such Borrower, or the Company on its behalf)) not later than 11:00 a.m., Local Time, three (3) Business Days before the date of the proposed Borrowing or (b) by telephone in the case of an ABR Borrowing, not later than 11:00 a.m., New York City time, on the date of the proposed Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Borrowing Request in a form approved by the Administrative Agent and signed by the applicable Borrower, or the Company on behalf of the applicable Borrower. Each such telephonic and written Borrowing Request shall specify the following information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
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(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing;
(iv) in the case of a Eurocurrency Borrowing, the Agreed Currency and initial Interest Period to be applicable thereto, which shall be a period contemplated by the definition of the term Interest Period; and
(v) the location and number of the applicable Borrowers account to which funds are to be disbursed, which shall comply with the requirements of Section 2.07.
If no election as to the Type of Revolving Borrowing is specified, then, in the case of a Borrowing denominated in Dollars to the Company, the requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period is specified with respect to any requested Eurocurrency Revolving Borrowing, then the relevant Borrower shall be deemed to have selected an Interest Period of one months duration. Promptly following receipt of a Borrowing Request in accordance with this Section, the Administrative Agent shall advise each Lender of the details thereof and of the amount of such Lenders Loan to be made as part of the requested Borrowing.
SECTION 2.04. Determination of Dollar Amounts . The Administrative Agent will determine the Dollar Amount of:
(a) each Eurocurrency Borrowing as of the date three (3) Business Days prior to the date of such Borrowing or, if applicable, the date of conversion/continuation of any Borrowing as a Eurocurrency Borrowing,
(b) the LC Exposure as of the date of each request for the issuance, amendment, renewal or extension of any Letter of Credit, and
(c) all outstanding Credit Events on and as of the last Business Day of each calendar quarter and, during the continuation of an Event of Default, on any other Business Day elected by the Administrative Agent in its discretion or upon instruction by the Required Lenders.
Each day upon or as of which the Administrative Agent determines Dollar Amounts as described in the preceding clauses (a), (b) and (c) is herein described as a Computation Date with respect to each Credit Event for which a Dollar Amount is determined on or as of such day.
SECTION 2.05. Swingline Loans . (a) Subject to the terms and conditions set forth herein (and if an AutoBorrow Agreement is in effect with respect to any Swingline Lender, subject to the terms and conditions of such AutoBorrow Agreement), each Swingline Lender agrees to make Swingline Loans in Dollars to the Company from time to time during the Availability Period, in an aggregate principal amount at any time outstanding that will not result in (i) the aggregate principal amount of outstanding Swingline Loans exceeding the Swingline Sublimit or (ii) the Dollar Amount of the total Revolving Credit Exposures exceeding the Aggregate Commitment; provided that the Swingline Lender shall not be required to make a Swingline Loan to refinance an outstanding Swingline Loan. Within the foregoing limits and subject to the terms and conditions set forth herein (and if an AutoBorrow Agreement is in effect with respect to any Swingline Lender, subject to the terms and conditions of such AutoBorrow Agreement), the Company may borrow, prepay and reborrow Swingline Loans. No Lender shall have any rights under any AutoBorrow Agreement, but each Lender shall have the obligation to purchase and fund participations in the Swingline Loans as provided below.
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(b) To request a Swingline Loan, (i) if an AutoBorrow Agreement is in effect with respect to a Swingline Lender, each Swingline Loan from such Swingline Lender and each prepayment thereof shall be made as provided in such AutoBorrow Agreement and (ii) in all other cases, the Company shall notify the applicable Swingline Lender of such request by telephone (confirmed by telecopy), not later than 12:00 noon, New York City time, on the day of a proposed Swingline Loan. Each such notice shall be irrevocable and shall specify the requested date (which shall be a Business Day) and amount of the requested Swingline Loan. The applicable Swingline Lender shall make each Swingline Loan available to the Company (i) if an AutoBorrow Agreement is in effect with respect to such Swingline Lender, as provided in such AutoBorrow Agreement and (ii) in all other cases, by means of a credit to the general deposit account of the Company with the Swingline Lender (or, in the case of a Swingline Loan made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(e), by remittance to the relevant Issuing Bank) by 3:00 p.m., New York City time, on the requested date of such Swingline Loan.
(c) Any Swingline Lender may by written notice given to the Administrative Agent not later than 10:00 a.m., New York City time, on any Business Day require the Lenders to acquire participations on such Business Day in all or a portion of the Swingline Loans outstanding. Such notice shall specify the aggregate amount of Swingline Loans in which Lenders will participate. Promptly upon receipt of such notice, the Administrative Agent will give notice thereof to each Lender, specifying in such notice such Lenders Applicable Percentage of such Swingline Loan or Loans. Each Lender hereby absolutely and unconditionally agrees, upon receipt of notice as provided above, to pay to the Administrative Agent, for the account of the applicable Swingline Lender, such Lenders Applicable Percentage of such Swingline Loan or Loans. Each Lender acknowledges and agrees that its obligation to acquire participations in Swingline Loans pursuant to this paragraph is absolute and unconditional and shall not be affected by any circumstance whatsoever, including the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever. Each Lender shall comply with its obligation under this paragraph by wire transfer of immediately available funds, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis, to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to the applicable Swingline Lender the amounts so received by it from the Lenders. The Administrative Agent shall notify the Company of any participations in any Swingline Loan acquired pursuant to this paragraph, and thereafter payments in respect of such Swingline Loan shall be made to the Administrative Agent and not to the applicable Swingline Lender. Any amounts received by any Swingline Lender from the Company (or other party on behalf of the Company) in respect of a Swingline Loan after receipt by such Swingline Lender of the proceeds of a sale of participations therein shall be promptly remitted to the Administrative Agent; any such amounts received by the Administrative Agent shall be promptly remitted by the Administrative Agent to the Lenders that shall have made their payments pursuant to this paragraph and to such Swingline Lender, as their interests may appear; provided that any such payment so remitted shall be repaid to such Swingline Lender or to the Administrative Agent, as applicable, if and to the extent such payment is required to be refunded to the Company for any reason. The purchase of participations in a Swingline Loan pursuant to this paragraph shall not relieve the Company of any default in the payment thereof.
(d) Each Swingline Lender may (if an AutoBorrow Agreement is in effect with respect to such Swingline Lender) terminate and/or suspend its agreement to make Swingline Loans in accordance with such AutoBorrow Agreement. Furthermore, any Swingline Lender may be replaced at any time by written agreement among the Company, the Administrative Agent, the replaced Swingline Lender and the successor Swingline Lender. The Administrative Agent shall notify the Lenders of any such replacement of a Swingline Lender. At the time any such replacement shall become effective, the Company shall pay all unpaid interest accrued for the account of the replaced Swingline Lender. From
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and after the effective date of any such replacement, (i) the successor Swingline Lender shall have all the rights and obligations of a Swingline Lender under this Agreement with respect to Swingline Loans to be made thereafter and (ii) references herein to the term Swingline Lender shall be deemed to refer to such successor or to any previous Swingline Lender, or to such successor and all previous Swingline Lenders, as the context shall require. After the replacement of a Swingline Lender hereunder, the replaced Swingline Lender shall remain a party hereto and shall continue to have all the rights and obligations of a Swingline Lender under this Agreement with respect to Swingline Loans then outstanding and made by it prior to such replacement, but shall not be required to make additional Swingline Loans.
(e) Each Swingline Lender agrees that, unless otherwise requested by the Administrative Agent, such Swingline Lender shall report in writing to the Administrative Agent (i) by 10:00 a.m. (Chicago time) on each Business Day, the aggregate outstanding amount of Swingline Loans made by such Swingline Lender as of the preceding Business Day (it being understood and agreed that no such notice shall be required to the extent no such amount exists), and (ii) on any Business Day, such other information as the Administrative Agent shall reasonably request.
SECTION 2.06. Letters of Credit . (a) General . Subject to the terms and conditions set forth herein, the Company may request of any Issuing Bank the issuance of Letters of Credit denominated in Agreed Currencies for the Companys own account or the account of a Subsidiary, in a form reasonably acceptable to the Administrative Agent and the relevant Issuing Bank, at any time and from time to time during the Availability Period. In the event of any inconsistency between the terms and conditions of this Agreement and the terms and conditions of any form of letter of credit application or other agreement submitted by the Company to, or entered into by the Company with, the relevant Issuing Bank relating to any Letter of Credit, the terms and conditions of this Agreement shall control; provided , however, if such Issuing Bank is requested to issue Letters of Credit with respect to a jurisdiction such Issuing Bank deems, in its reasonable judgment, may at any time subject it to a New Money Credit Event or a Country Risk Event, the Company shall, at the request of such Issuing Bank, guaranty and indemnify such Issuing Bank against any and all costs, liabilities and losses resulting from such New Money Credit Event or Country Risk Event, in each case in a form and substance reasonably satisfactory to such Issuing Bank.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions . To request the issuance of a Letter of Credit (or the amendment, renewal or extension of an outstanding Letter of Credit), the Company shall hand deliver or telecopy (or transmit by electronic communication, if arrangements for doing so have been approved by the relevant Issuing Bank) to an Issuing Bank and the Administrative Agent (reasonably in advance of the requested date of issuance, amendment, renewal or extension) a notice requesting the issuance of a Letter of Credit, or identifying the Letter of Credit to be amended, renewed or extended, and specifying the date of issuance, amendment, renewal or extension (which shall be a Business Day), the date on which such Letter of Credit is to expire (which shall comply with paragraph (c) of this Section), the amount of such Letter of Credit, the Agreed Currency applicable thereto, the name and address of the beneficiary thereof and such other information as shall be necessary to prepare, amend, renew or extend such Letter of Credit. If requested by the relevant Issuing Bank, the Company also shall submit a letter of credit application on such Issuing Banks standard form in connection with any request for a Letter of Credit. A Letter of Credit shall be issued, amended, renewed or extended only if (and upon issuance, amendment, renewal or extension of each Letter of Credit the Company shall be deemed to represent and warrant that), after giving effect to such issuance, amendment, renewal or extension (i) subject to Sections 2.04 and 2.11(b), the Dollar Amount of the LC Exposure shall not exceed $100,000,000 and (ii) subject to Sections 2.04 and 2.11(b), the sum of the Dollar Amount of the total Revolving Credit Exposures shall not exceed the Aggregate Commitment.
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(c) Expiration Date . Each Letter of Credit shall expire at or prior to the close of business on the earlier of (i) the date one year after the date of the issuance of such Letter of Credit (or, in the case of any renewal or extension thereof, one year after such renewal or extension) and (ii) the date that is five (5) Business Days prior to the Maturity Date.
(d) Participations . By the issuance of a Letter of Credit (or an amendment to a Letter of Credit increasing the amount thereof) and without any further action on the part of the relevant Issuing Bank or the Lenders, such Issuing Bank hereby grants to each Lender, and each Lender hereby acquires from such Issuing Bank, a participation in such Letter of Credit equal to such Lenders Applicable Percentage of the aggregate Dollar Amount available to be drawn under such Letter of Credit. In consideration and in furtherance of the foregoing, each Lender hereby absolutely and unconditionally agrees to pay to the Administrative Agent, for the account of the relevant Issuing Bank, such Lenders Applicable Percentage of each LC Disbursement made by such Issuing Bank and not reimbursed by the Company on the date due as provided in paragraph (e) of this Section, or of any reimbursement payment required to be refunded to the Company for any reason. Each Lender acknowledges and agrees that its obligation to acquire participations pursuant to this paragraph in respect of Letters of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including any amendment, renewal or extension of any Letter of Credit or the occurrence and continuance of a Default or reduction or termination of the Commitments, and that each such payment shall be made without any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement . If any Issuing Bank shall make any LC Disbursement in respect of a Letter of Credit, the Company shall reimburse such LC Disbursement by paying to the Administrative Agent in Dollars the Dollar Amount equal to such LC Disbursement, calculated as of the date such Issuing Bank made such LC Disbursement (or if such Issuing Bank shall so elect in its sole discretion by notice to the Company, in such other Agreed Currency which was paid by such Issuing Bank pursuant to such LC Disbursement in an amount equal to such LC Disbursement) not later than 12:00 noon, Local Time, on the date that such LC Disbursement is made, if the Company shall have received notice of such LC Disbursement prior to 10:00 a.m., Local Time, on such date, or, if such notice has not been received by the Company prior to such time on such date, then not later than 12:00 noon, Local Time, on (i) the Business Day that the Company receives such notice, if such notice is received prior to 10:00 a.m., Local Time, on the day of receipt, or (ii) the Business Day immediately following the day that the Company receives such notice, if such notice is not received prior to such time on the day of receipt; provided that, if such LC Disbursement is not less than the Dollar Amount of $1,000,000, the Company may, subject to the conditions to borrowing set forth herein, request in accordance with Section 2.03 or 2.05 that such payment be financed with an ABR Revolving Borrowing or Swingline Loan in an equivalent Dollar Amount of such LC Disbursement and, to the extent so financed, the Companys obligation to make such payment shall be discharged and replaced by the resulting ABR Revolving Borrowing or Swingline Loan. If the Company fails to make such payment when due (whether through an ABR Revolving Borrowing or otherwise), the Administrative Agent shall notify each Lender of the applicable LC Disbursement, the payment then due from the Company in respect thereof and such Lenders Applicable Percentage thereof. Promptly following receipt of such notice, each Lender shall pay to the Administrative Agent its Applicable Percentage of the payment then due from the Company, in the same manner as provided in Section 2.07 with respect to Loans made by such Lender (and Section 2.07 shall apply, mutatis mutandis , to the payment obligations of the Lenders), and the Administrative Agent shall promptly pay to such Issuing Bank the amounts so received by it from the Lenders. Promptly following receipt by the Administrative Agent of any payment from the Company pursuant to this paragraph, (whether through an ABR Revolving Borrowing or otherwise), the Administrative Agent shall distribute such payment to the relevant Issuing Bank or, to the extent that Lenders have made payments pursuant to this paragraph to reimburse such Issuing Bank, then to such Lenders and such Issuing Bank as their interests may appear. Any payment made by a Lender pursuant to this paragraph to reimburse any Issuing Bank for any LC
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Disbursement (other than the funding of ABR Revolving Loans or a Swingline Loan as contemplated above) shall not constitute a Loan and shall not relieve the Company of its obligation to reimburse such LC Disbursement. If the Companys reimbursement of, or obligation to reimburse, any amounts in any Foreign Currency would subject the Administrative Agent, any Issuing Bank or any Lender to any stamp duty, ad valorem charge or similar tax that would not be payable if such reimbursement were made or required to be made in Dollars, the Company shall, at its option, either (x) pay the amount of any such tax requested by the Administrative Agent, the relevant Issuing Bank or the relevant Lender or (y) reimburse each LC Disbursement made in such Foreign Currency in Dollars, in an amount equal to the Equivalent Amount, calculated using the applicable exchange rates, on the date such LC Disbursement is made, of such LC Disbursement.
(f) Obligations Absolute . The Companys obligation to reimburse LC Disbursements as provided in paragraph (e) of this Section shall be absolute, unconditional and irrevocable, and shall be performed strictly in accordance with the terms of this Agreement under any and all circumstances whatsoever and irrespective of (i) any lack of validity or enforceability of any Letter of Credit or this Agreement, or any term or provision therein, (ii) any draft or other document presented under a Letter of Credit proving to be forged, fraudulent or invalid in any respect or any statement therein being untrue or inaccurate in any respect, (iii) payment by an Issuing Bank under a Letter of Credit against presentation of a draft or other document that does not comply with the terms of such Letter of Credit, or (iv) any other event or circumstance whatsoever, whether or not similar to any of the foregoing, that might, but for the provisions of this Section, constitute a legal or equitable discharge of, or provide a right of setoff against, the Companys obligations hereunder. Neither the Administrative Agent, the Lenders nor the Issuing Banks, nor any of their Related Parties, shall have any liability or responsibility by reason of or in connection with the issuance or transfer of any Letter of Credit or any payment or failure to make any payment thereunder (irrespective of any of the circumstances referred to in the preceding sentence), or any error, omission, interruption, loss or delay in transmission or delivery of any draft, notice or other communication under or relating to any Letter of Credit (including any document required to make a drawing thereunder), any error in interpretation of technical terms or any consequence arising from causes beyond the control of the relevant Issuing Bank; provided that the foregoing shall not be construed to excuse any Issuing Bank from liability to the Company to the extent of any direct damages (as opposed to consequential damages, claims in respect of which are hereby waived by the Company to the extent permitted by applicable law) suffered by the Company that are caused by such Issuing Banks failure to exercise care when determining whether drafts and other documents presented under a Letter of Credit comply with the terms thereof. The parties hereto expressly agree that, in the absence of gross negligence or willful misconduct on the part of any Issuing Bank (as finally determined by a court of competent jurisdiction), such Issuing Bank shall be deemed to have exercised care in each such determination. In furtherance of the foregoing and without limiting the generality thereof, the parties agree that, with respect to documents presented which appear on their face to be in substantial compliance with the terms of a Letter of Credit, each Issuing Bank may, in its sole discretion, either accept and make payment upon such documents without responsibility for further investigation, regardless of any notice or information to the contrary, or refuse to accept and make payment upon such documents if such documents are not in strict compliance with the terms of such Letter of Credit.
(g) Disbursement Procedures . Each Issuing Bank shall, promptly following its receipt thereof, examine all documents purporting to represent a demand for payment under a Letter of Credit. Such Issuing Bank shall promptly notify the Administrative Agent and the Company by telephone (confirmed by telecopy) of such demand for payment and whether such Issuing Bank has made or will make an LC Disbursement thereunder; provided that any failure to give or delay in giving such notice shall not relieve the Company of its obligation to reimburse such Issuing Bank and the Lenders with respect to any such LC Disbursement.
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(h) Interim Interest . If any Issuing Bank shall make any LC Disbursement, then, unless the Company shall reimburse such LC Disbursement in full on the date such LC Disbursement is made, the unpaid amount thereof shall bear interest, for each day from and including the date such LC Disbursement is made to but excluding the date that the Company reimburses such LC Disbursement, at the rate per annum then applicable to ABR Revolving Loans (or in the case such LC Disbursement is denominated in a Foreign Currency, at the Overnight Foreign Currency Rate for such Agreed Currency plus the then effective Applicable Rate with respect to Eurocurrency Revolving Loans); provided that, if the Company fails to reimburse such LC Disbursement when due pursuant to paragraph (e) of this Section, then Section 2.13(c) shall apply. Interest accrued pursuant to this paragraph shall be for the account of the relevant Issuing Bank, except that interest accrued on and after the date of payment by any Lender pursuant to paragraph (e) of this Section to reimburse such Issuing Bank shall be for the account of such Lender to the extent of such payment.
(i) Replacement of the Issuing Bank . Any Issuing Bank may be replaced at any time by written agreement among the Company, the Administrative Agent, the replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent shall notify the Lenders of any such replacement of an Issuing Bank. At the time any such replacement shall become effective, the Company shall pay all unpaid fees accrued for the account of the replaced Issuing Bank pursuant to Section 2.12(b). From and after the effective date of any such replacement, (i) the successor Issuing Bank shall have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit to be issued thereafter and (ii) references herein to the term Issuing Bank shall be deemed to refer to such successor or to any previous Issuing Bank, or to such successor and all previous Issuing Banks, as the context shall require. After the replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain a party hereto and shall continue to have all the rights and obligations of an Issuing Bank under this Agreement with respect to Letters of Credit then outstanding and issued by it prior to such replacement, but shall not be required to issue additional Letters of Credit.
(j) Cash Collateralization . If any Event of Default shall occur and be continuing, on the Business Day that the Company receives notice from the Administrative Agent or the Required Lenders (or, if the maturity of the Loans has been accelerated, Lenders with LC Exposure representing greater than 50% of the total LC Exposure) demanding the deposit of cash collateral pursuant to this paragraph, the Company shall deposit in an account with the Administrative Agent, in the name of the Administrative Agent and for the benefit of the Lenders (the LC Collateral Account ), an amount in cash equal to 105% of the Dollar Amount of the LC Exposure as of such date plus any accrued and unpaid interest thereon; provided that (i) the portions of such amount attributable to undrawn Foreign Currency Letters of Credit or LC Disbursements in a Foreign Currency that the Company is not late in reimbursing shall be deposited in the applicable Foreign Currencies in the actual amounts of such undrawn Letters of Credit and LC Disbursements and (ii) the obligation to deposit such cash collateral shall become effective immediately, and such deposit shall become immediately due and payable, without demand or other notice of any kind, upon the occurrence of any Event of Default with respect to the Company described in clause (h) or (i) of Article VII. For the purposes of this paragraph, the Foreign Currency LC Exposure shall be calculated using the applicable exchange rates of the Administrative Agent on the date notice demanding cash collateralization is delivered to the Company. The Company also shall deposit cash collateral pursuant to this paragraph as and to the extent required by Section 2.11(b). Such deposit shall be held by the Administrative Agent as collateral for the payment and performance of the Obligations. The Administrative Agent shall have exclusive dominion and control, including the exclusive right of withdrawal, over such account and the Company shall grant the Administrative Agent a security interest in the LC Collateral Account. Other than any interest earned on the investment of such deposits, which investments shall be made at the option and sole discretion of the Administrative Agent and at the Companys risk and expense, such deposits shall not bear interest. Interest or profits, if any, on such investments shall accumulate in such account. Moneys in such account shall be applied by the
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Administrative Agent to reimburse the relevant Issuing Bank for LC Disbursements for which it has not been reimbursed and, to the extent not so applied, shall be held for the satisfaction of the reimbursement obligations of the Company for the LC Exposure at such time or, if the maturity of the Loans has been accelerated (but subject to the consent of Lenders with LC Exposure representing greater than 50% of the total LC Exposure), be applied to satisfy other obligations of the Company under this Agreement. If the Company is required to provide an amount of cash collateral hereunder as a result of the occurrence of an Event of Default, such amount (to the extent not applied as aforesaid) shall be returned to the Company within three (3) Business Days after all Events of Default have been cured or waived. Further, such amount shall be returned to the Company at such time as the LC Exposure is reduced to zero.
(k) Conversion . In the event that the Loans become immediately due and payable on any date pursuant to Article VII, all amounts (i) that the Company is at the time or thereafter becomes required to reimburse or otherwise pay to the Administrative Agent in respect of LC Disbursements made under any Foreign Currency Letter of Credit (other than amounts in respect of which the Company has deposited cash collateral pursuant to paragraph (j) above, if such cash collateral was deposited in the applicable Foreign Currency to the extent so deposited or applied), (ii) that the Lenders are at the time or thereafter become required to pay to the Administrative Agent and the Administrative Agent is at the time or thereafter becomes required to distribute to the relevant Issuing Bank pursuant to paragraph (e) of this Section in respect of unreimbursed LC Disbursements made under any Foreign Currency Letter of Credit and (iii) of each Lenders participation in any Foreign Currency Letter of Credit under which an LC Disbursement has been made shall, automatically and with no further action required, be converted into the Dollar Amount, calculated using the Administrative Agents currency exchange rates on such date (or in the case of any LC Disbursement made after such date, on the date such LC Disbursement is made), of such amounts. On and after such conversion, all amounts accruing and owed to the Administrative Agent, any Issuing Bank or any Lender in respect of the obligations described in this paragraph shall accrue and be payable in Dollars at the rates otherwise applicable hereunder.
(l) Issuing Bank Agreements . Each Issuing Bank agrees that, unless otherwise requested by the Administrative Agent, such Issuing Bank shall report in writing to the Administrative Agent (i) on the first Business Day of each week, the daily activity (set forth by day) in respect of Letters of Credit during the immediately preceding week, including all issuances, extensions, amendments and renewals, all expirations and cancellations and all disbursements and reimbursements, (ii) on or prior to each Business Day on which such Issuing Bank expects to issue, amend, renew or extend any Letter of Credit, the date of such issuance, amendment, renewal or extension, and the aggregate face amount of the Letters of Credit to be issued, amended, renewed or extended by it and outstanding after giving effect to such issuance, amendment, renewal or extension occurred (and whether the amount thereof changed), it being understood that such Issuing Bank shall not permit any issuance, renewal, extension or amendment resulting in an increase in the amount of any Letter of Credit to occur without first obtaining written confirmation from the Administrative Agent that it is then permitted under this Agreement, (iii) on each Business Day on which such Issuing Bank makes any LC Disbursement, the date of such LC Disbursement and the amount of such LC Disbursement, (iv) on any Business Day on which the Company fails to reimburse an LC Disbursement required to be reimbursed to such Issuing Bank on such day, the date of such failure and the amount and currency of such LC Disbursement and (v) on any other Business Day, such other information as the Administrative Agent shall reasonably request.
(m) So long as the issuer thereof is a Lender hereunder, the letters of credit issued prior to the Effective Date and identified on Schedule 2.06 shall be deemed to be Letters of Credit issued hereunder on the Effective Date for all purposes of the Loan Documents.
SECTION 2.07. Funding of Borrowings . (a) Each Lender shall make each Loan to be made by it hereunder on the proposed date thereof by wire transfer of immediately available funds (i) in
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the case of Loans denominated in Dollars to the Company, by 12:00 noon, New York City time, to the account of the Administrative Agent most recently designated by it for such purpose by notice to the Lenders and (ii) in the case of each Loan denominated in a Foreign Currency or to the Dutch Borrower, by 12:00 noon, Local Time, in the city of the Administrative Agents Eurocurrency Payment Office for such currency and Borrower and at such Eurocurrency Payment Office for such currency and Borrower; provided that Swingline Loans shall be made as provided in Section 2.05. The Administrative Agent will make such Loans available to the relevant Borrower by promptly crediting the amounts so received, in like funds, to an account of the relevant Borrower in the relevant jurisdiction and designated by such Borrower in the applicable Borrowing Request; provided that ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as provided in Section 2.06(e) shall be remitted by the Administrative Agent to the relevant Issuing Bank.
(b) Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender will not make available to the Administrative Agent such Lenders share of such Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with paragraph (a) of this Section and may, in reliance upon such assumption, make available to the relevant Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the Administrative Agent, then the applicable Lender and such Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to such Borrower to but excluding the date of payment to the Administrative Agent, at (i) in the case of such Lender, the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation (including without limitation the Overnight Foreign Currency Rate in the case of Loans denominated in a Foreign Currency) or (ii) in the case of such Borrower, the interest rate applicable to such Borrowing. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such Lenders Loan included in such Borrowing.
SECTION 2.08. Interest Elections . (a) Each Revolving Borrowing initially shall be of the Type specified in the applicable Borrowing Request and, in the case of a Eurocurrency Revolving Borrowing, shall have an initial Interest Period as specified in such Borrowing Request. Thereafter, the relevant Borrower may elect to convert such Borrowing to a different Type or to continue such Borrowing and, in the case of a Eurocurrency Revolving Borrowing, may elect Interest Periods therefor, all as provided in this Section. A Borrower may elect different options with respect to different portions of the affected Borrowing, in which case each such portion shall be allocated ratably among the Lenders holding the Loans comprising such Borrowing, and the Loans comprising each such portion shall be considered a separate Borrowing. This Section shall not apply to Swingline Borrowings, which may not be converted or continued.
(b) To make an election pursuant to this Section, a Borrower, or the Company on its behalf, shall notify the Administrative Agent of such election (by telephone in the case of a Borrowing denominated in Dollars or by irrevocable written notice (via an Interest Election Request in a form approved by the Administrative Agent and signed by such Borrower, or the Company on its behalf) in the case of a Borrowing denominated in a Foreign Currency by the time that a Borrowing Request would be required under Section 2.03 if such Borrower were requesting a Revolving Borrowing of the Type resulting from such election to be made on the effective date of such election. Each such telephonic Interest Election Request shall be irrevocable and shall be confirmed promptly by hand delivery or telecopy to the Administrative Agent of a written Interest Election Request in a form approved by the Administrative Agent and signed by the relevant Borrower, or the Company on its behalf. Notwithstanding any contrary provision herein, this Section shall not be construed to permit any Borrower to (i) change the currency of any Borrowing, (ii) elect an Interest Period for Eurocurrency Loans that does not comply with Section 2.02(d) or (iii) convert any Borrowing to a Borrowing of a Type not available under the Class of Commitments pursuant to which such Borrowing was made.
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(c) Each telephonic and written Interest Election Request shall specify the following information in compliance with Section 2.02:
(i) the Borrowing to which such Interest Election Request applies and, if different options are being elected with respect to different portions thereof, the portions thereof to be allocated to each resulting Borrowing (in which case the information to be specified pursuant to clauses (iii) and (iv) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a Eurocurrency Borrowing; and
(iv) if the resulting Borrowing is a Eurocurrency Borrowing, the Interest Period and Agreed Currency to be applicable thereto after giving effect to such election, which Interest Period shall be a period contemplated by the definition of the term Interest Period.
If any such Interest Election Request requests a Eurocurrency Borrowing but does not specify an Interest Period, then the applicable Borrower shall be deemed to have selected an Interest Period of one months duration.
(d) Promptly following receipt of an Interest Election Request, the Administrative Agent shall advise each Lender of the details thereof and of such Lenders portion of each resulting Borrowing.
(e) If the relevant Borrower fails to deliver a timely Interest Election Request with respect to a Eurocurrency Revolving Borrowing prior to the end of the Interest Period applicable thereto, then, unless such Borrowing is repaid as provided herein, at the end of such Interest Period (i) in the case of a Borrowing denominated in Dollars borrowed by the Company, such Borrowing shall be converted to an ABR Borrowing and (ii) in the case of a Borrowing denominated in a Foreign Currency (or in Dollars by the Dutch Borrower) in respect of which the applicable Borrower shall have failed to deliver an Interest Election Request prior to the third (3 rd ) Business Day preceding the end of such Interest Period, such Borrowing shall automatically continue as a Eurocurrency Borrowing in the same Agreed Currency with an Interest Period of one month unless such Eurocurrency Borrowing is or was repaid in accordance with Section 2.11. Notwithstanding any contrary provision hereof, if an Event of Default has occurred and is continuing and the Administrative Agent, at the request of the Required Lenders, so notifies the Company, then, so long as an Event of Default is continuing (i) no outstanding Revolving Borrowing borrowed by the Company may be converted to or continued as a Eurocurrency Borrowing, (ii) unless repaid, each Eurocurrency Revolving Borrowing borrowed by the Company shall be converted to an ABR Borrowing (and any such Eurocurrency Revolving Borrowing in a Foreign Currency shall be redenominated in Dollars at the time of such conversion) at the end of the Interest Period applicable thereto and (iii) unless repaid, each Eurocurrency Revolving Borrowing by the Dutch Borrower shall automatically be continued as a Eurocurrency Borrowing with an Interest Period of one month.
SECTION 2.09. Termination and Reduction of Commitments . (a) Unless previously terminated, the Commitments shall terminate on the Maturity Date.
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(b) The Company may at any time terminate, or from time to time reduce, the Commitments; provided that (i) each reduction of the Commitments shall be in an amount that is an integral multiple of $1,000,000 and not less than $5,000,000 and (ii) the Company shall not terminate or reduce the Commitments if, after giving effect to any concurrent prepayment of the Loans in accordance with Section 2.11, the Dollar Amount of the sum of the Revolving Credit Exposures would exceed the Aggregate Commitment.
(c) The Company shall notify the Administrative Agent of any election to terminate or reduce the Commitments under paragraph (b) of this Section at least three Business Days prior to the effective date of such termination or reduction, specifying such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Lenders of the contents thereof. Each notice delivered by the Company pursuant to this Section shall be irrevocable; provided that a notice of termination of the Commitments delivered by the Company may state that such notice is conditioned upon the effectiveness of other credit facilities, in which case such notice may be revoked by the Company (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or reduction of the Commitments shall be permanent. Each reduction of the Commitments shall be made ratably among the Lenders in accordance with their respective Commitments.
SECTION 2.10. Repayment of Loans; Evidence of Debt . (a) Each Borrower hereby unconditionally promises to pay (i) to the Administrative Agent for the account of each Lender the then unpaid principal amount of each Revolving Loan made to such Borrower on the Maturity Date in the currency of such Loan and (ii) in the case of the Company, to the relevant Swingline Lender the then unpaid principal amount of each Swingline Loan made by such Swingline Lender on the earlier of the Maturity Date and the first date after such Swingline Loan is made that is the 15 th or last day of a calendar month and is at least two Business Days after such Swingline Loan is made; provided that (x) on each date that a Revolving Borrowing is made, the Company shall repay all Swingline Loans then outstanding and (y) if an AutoBorrow Agreement is in effect with respect to any Swingline Lender, the Company shall repay the Swingline Loans owing to such Swingline Lender on the earlier to occur of the Maturity Date and the date required by such AutoBorrow Agreement.
(b) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of each Borrower to such Lender resulting from each Loan made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, the Class, Agreed Currency and Type thereof and the Interest Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from each Borrower to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder for the account of the Lenders and each Lenders share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph (b) or (c) of this Section shall be prima facie evidence of the existence and amounts of the obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or any error therein shall not in any manner affect the obligation of any Borrower to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it to any Borrower be evidenced by a promissory note. In such event, the relevant Borrower shall prepare, execute and deliver to such Lender a promissory note payable to the order of such Lender (or, if requested by such Lender, to such Lender and
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its registered assigns) and in a form approved by the Administrative Agent. Thereafter, the Loans evidenced by such promissory note and interest thereon shall at all times (including after assignment pursuant to Section 9.04) be represented by one or more promissory notes in such form payable to the order of the payee named therein (or, if any such promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.11. Prepayment of Loans .
(a) Any Borrower shall have the right at any time and from time to time to prepay any Borrowing in whole or in part, subject to prior notice in accordance with the provisions of this Section 2.11(a). The applicable Borrower, or the Company on behalf of the applicable Borrower, shall notify the Administrative Agent (and, in the case of prepayment of a Swingline Loan, the relevant Swingline Lender) by telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case of prepayment of a Eurocurrency Revolving Borrowing, not later than 11:00 a.m., Local Time, three (3) Business Days before the date of prepayment, (ii) in the case of prepayment of an ABR Revolving Borrowing, not later than 11:00 a.m., New York City time, on the date of prepayment or (iii) in the case of prepayment of a Swingline Loan, not later than 12:00 noon, New York City time, on the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date and the principal amount of each Borrowing or portion thereof to be prepaid; provided that, if a notice of prepayment is given in connection with a conditional notice of termination of the Commitments as contemplated by Section 2.09, then such notice of prepayment may be revoked if such notice of termination is revoked in accordance with Section 2.09. Promptly following receipt of any such notice relating to a Revolving Borrowing, the Administrative Agent shall advise the Lenders of the contents thereof. Each partial prepayment of any Revolving Borrowing shall be in an amount that would be permitted in the case of an advance of a Revolving Borrowing of the same Type as provided in Section 2.02. Each prepayment of a Revolving Borrowing shall be applied ratably to the Loans included in the prepaid Borrowing. Prepayments shall be accompanied by (i) accrued interest to the extent required by Section 2.13 and (ii) break funding payments pursuant to Section 2.16.
(b) If at any time, (i) other than as a result of fluctuations in currency exchange rates, the sum of the aggregate principal Dollar Amount of all of the Revolving Credit Exposures (calculated, with respect to those Credit Events denominated in Foreign Currencies, as of the most recent Computation Date with respect to each such Credit Event) exceeds the Aggregate Commitment or such sum in respect of the Dutch Borrower exceeds the Dutch Borrower Sublimit or the aggregate principal outstanding amount of Swingline Loans exceeds the Swingline Sublimit and (ii) solely as a result of fluctuations in currency exchange rates, the sum of the aggregate principal Dollar Amount of all of the outstanding Revolving Credit Exposures (so calculated), in each case in respect of the Dutch Borrower (the Dutch Borrower Exposure ), as of the most recent Computation Date with respect to each such Credit Event, exceeds 105% of the Dutch Borrower Sublimit, the Borrowers shall immediately repay Borrowings or cash collateralize LC Exposure in an account with the Administrative Agent pursuant to Section 2.06(j), as applicable, in an aggregate principal amount sufficient to cause (x) the aggregate Dollar Amount of all Revolving Credit Exposures (so calculated) to be less than or equal to the Aggregate Commitment, (y) the Dutch Borrower Exposure to be less than or equal to the Dutch Borrower Sublimit and (z) the aggregate principal outstanding amount of Swingline Loans to be less than or equal to the Swingline Sublimit.
SECTION 2.12. Fees . (a) The Company agrees to pay to the Administrative Agent for the account of each Lender a facility fee, which shall accrue at the Applicable Rate on the daily amount of the Commitment of such Lender (whether used or unused) during the period from and including the Effective Date to but excluding the date on which such Commitment terminates; provided that, if such Lender continues to have any Revolving Credit Exposure after its Commitment terminates, then such facility fee shall continue to accrue on the daily amount of such Lenders Revolving Credit Exposure
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from and including the date on which its Commitment terminates to but excluding the date on which such Lender ceases to have any Revolving Credit Exposure. Accrued facility fees shall be payable in arrears on the last day of March, June, September and December of each year and on the date on which the Commitments terminate, commencing on the first such date to occur after the date hereof; provided that any facility fees accruing after the date on which the Commitments terminate shall be payable on demand. All facility fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).
(b) The Company agrees to pay (i) to the Administrative Agent for the account of each Lender a participation fee with respect to its participations in Letters of Credit, which shall accrue at the same Applicable Rate used to determine the interest rate applicable to Eurocurrency Revolving Loans on the average daily Dollar Amount of such Lenders LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) during the period from and including the Effective Date to but excluding the later of the date on which such Lenders Commitment terminates and the date on which such Lender ceases to have any LC Exposure, and (ii) to the relevant Issuing Bank a fronting fee, which shall accrue at the rate of 0.125% per annum on the average daily Dollar Amount of the LC Exposure (excluding any portion thereof attributable to unreimbursed LC Disbursements) attributable to Letters of Credit issued by such Issuing Bank during the period from and including the Effective Date to but excluding the later of the date of termination of the Commitments and the date on which there ceases to be any LC Exposure, as well as such Issuing Banks standard fees and commissions (including, without limitation, standard commissions with respect to commercial or performance Letters of Credit, payable at the time of invoice of such amounts) with respect to the issuance, amendment, cancellation, negotiation, transfer, presentment, renewal or extension of any Letter of Credit or processing of drawings thereunder. Unless otherwise specified above, participation fees and fronting fees accrued through and including the last day of March, June, September and December of each year shall be payable on the third (3 rd ) Business Day following such last day, commencing on the first such date to occur after the Effective Date; provided that all such fees shall be payable on the date on which the Commitments terminate and any such fees accruing after the date on which the Commitments terminate shall be payable on demand. Any other fees payable to any Issuing Bank pursuant to this paragraph shall be payable within ten (10) days after written demand. All participation fees and fronting fees shall be computed on the basis of a year of 360 days and shall be payable for the actual number of days elapsed (including the first day but excluding the last day).
(c) The Company agrees to pay to the Administrative Agent, for its own account, fees payable in the amounts and at the times separately agreed upon between the Company and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in Dollars (except as otherwise expressly provided in this Section 2.12) and immediately available funds, to the Administrative Agent (or to the relevant Issuing Bank, in the case of fees payable to it) for distribution, in the case of facility fees and participation fees, to the Lenders. Fees paid shall not be refundable under any circumstances.
SECTION 2.13. Interest . (a) The Loans comprising each ABR Borrowing (including each Swingline Loan) shall bear interest at the Alternate Base Rate plus the Applicable Rate.
(b) The Loans comprising each Eurocurrency Borrowing shall bear interest at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or interest on any Loan or any fee or other amount payable by any Borrower hereunder is not paid when due, whether at stated maturity,
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upon acceleration or otherwise, such overdue amount shall bear interest, after as well as before judgment, at a rate per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the rate otherwise applicable to such Loan as provided in the preceding paragraphs of this Section or (ii) in the case of any other amount, 2% plus the rate applicable to ABR Loans as provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on each Interest Payment Date for such Loan and, in the case of Revolving Loans, upon termination of the Commitments; provided that (i) interest accrued pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in the event of any repayment or prepayment of any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of the Availability Period), accrued interest on the principal amount repaid or prepaid shall be payable on the date of such repayment or prepayment and (iii) in the event of any conversion of any Eurocurrency Revolving Loan prior to the end of the current Interest Period therefor, accrued interest on such Loan shall be payable on the effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a year of 360 days, except that interest (i) computed by reference to the Alternate Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall be computed on the basis of a year of 365 days (or 366 days in a leap year) and (ii) for Borrowings denominated in Pounds Sterling shall be computed on the basis of a year of 365 days, and in each case shall be payable for the actual number of days elapsed (including the first day but excluding the last day). The applicable Alternate Base Rate, Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent, and such determination shall be conclusive absent manifest error.
SECTION 2.14. Alternate Rate of Interest . If prior to the commencement of any Interest Period for a Eurocurrency Borrowing:
(a) the Administrative Agent determines (which determination shall be conclusive absent manifest error) that adequate and reasonable means do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period; or
(b) the Administrative Agent is advised by the Required Lenders that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period will not adequately and fairly reflect the cost to such Lenders (or Lender) of making or maintaining their Loans (or its Loan) included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the applicable Borrower and the Lenders by telephone or telecopy as promptly as practicable thereafter and, until the Administrative Agent notifies the applicable Borrower and the Lenders that the circumstances giving rise to such notice no longer exist, (i) any Interest Election Request that requests the conversion of any Revolving Borrowing to, or continuation of any Revolving Borrowing as, a Eurocurrency Borrowing shall be ineffective and any such Eurocurrency Borrowing shall be repaid on the last day of the then current Interest Period applicable thereto, (ii) any Eurocurrency Borrowing by the Dutch Borrower that is requested to be continued shall be repaid on the last day of the then current Interest Period applicable thereto and (iii) if any Borrowing Request by the Company requests a Eurocurrency Revolving Borrowing in Dollars, such Borrowing shall be made as an ABR Borrowing (and if any Borrowing Request requests a Eurocurrency Revolving Borrowing by the Dutch Borrower or denominated in a Foreign Currency, such Borrowing Request shall be ineffective); provided that if the circumstances giving rise to such notice affect only one Type of Borrowings, then the other Type of Borrowings shall be permitted.
SECTION 2.15. Increased Costs . (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender (except any such reserve requirement reflected in the Adjusted LIBO Rate) or any Issuing Bank; or
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(ii) impose on any Lender or any Issuing Bank or the London interbank market any other condition affecting this Agreement or Eurocurrency Loans made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such Lender of making or maintaining any Eurocurrency Loan or of maintaining its obligation to make any such Loan (including, without limitation, pursuant to any conversion of any Borrowing denominated in an Agreed Currency into a Borrowing denominated in any other Agreed Currency) or to increase the cost to such Lender or such Issuing Bank of participating in, issuing or maintaining any Letter of Credit (including, without limitation, pursuant to any conversion of any Borrowing denominated in an Agreed Currency into a Borrowing denominated in any other Agreed Currency) or to reduce the amount of any sum received or receivable by such Lender or such Issuing Bank hereunder, whether of principal, interest or otherwise (including, without limitation, pursuant to any conversion of any Borrowing denominated in an Agreed Currency into a Borrowing denominated in any other Agreed Currency), then the applicable Borrower will pay to such Lender or such Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or such Issuing Bank, as the case may be, for such additional costs incurred or reduction suffered.
(b) If any Lender or any Issuing Bank determines that any Change in Law regarding capital requirements has or would have the effect of reducing the rate of return on such Lenders or such Issuing Banks capital or on the capital of such Lenders or such Issuing Banks holding company, if any, as a consequence of this Agreement or the Loans made by, or participations in Letters of Credit held by, such Lender, or the Letters of Credit issued by such Issuing Bank, to a level below that which such Lender or such Issuing Bank or such Lenders or such Issuing Banks holding company could have achieved but for such Change in Law (taking into consideration such Lenders or such Issuing Banks policies and the policies of such Lenders or such Issuing Banks holding company with respect to capital adequacy), then from time to time the applicable Borrower will pay to such Lender or such Issuing Bank, as the case may be, such additional amount or amounts as will compensate such Lender or such Issuing Bank or such Lenders or such Issuing Banks holding company for any such reduction suffered.
(c) A certificate of a Lender or an Issuing Bank setting forth the amount or amounts necessary to compensate such Lender or such Issuing Bank or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section shall be delivered to the Company and shall be conclusive absent manifest error. The Company shall pay, or cause the other Borrowers to pay, such Lender or such Issuing Bank, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender or any Issuing Bank to demand compensation pursuant to this Section shall not constitute a waiver of such Lenders or such Issuing Banks right to demand such compensation; provided that the Company shall not be required to compensate a Lender or an Issuing Bank pursuant to this Section for any increased costs or reductions incurred more than 180 days prior to the date that such Lender or such Issuing Bank, as the case may be, notifies the Company of the Change in Law giving rise to such increased costs or reductions and of such Lenders or such Issuing Banks intention to claim compensation therefor; provided further that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the 180-day period referred to above shall be extended to include the period of retroactive effect thereof.
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SECTION 2.16. Break Funding Payments . In the event of (a) the payment of any principal of any Eurocurrency Loan other than on the last day of an Interest Period applicable thereto (including as a result of an Event of Default or as a result of any prepayment pursuant to Section 2.11), (b) the conversion of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto, (c) the failure to borrow, convert, continue or prepay any Eurocurrency Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be revoked under Section 2.11(a) and is revoked in accordance therewith) or (d) the assignment of any Eurocurrency Loan other than on the last day of the Interest Period applicable thereto as a result of a request by the Company pursuant to Section 2.19, then, in any such event, the Borrowers shall compensate each Lender for the loss, cost and expense (but not lost profits) attributable to such event. Such loss, cost or expense to any Lender shall be deemed to include an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such Loan had such event not occurred, at the Adjusted LIBO Rate that would have been applicable to such Loan, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a failure to borrow, convert or continue, for the period that would have been the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the interest rate which such Lender would bid were it to bid, at the commencement of such period, for deposits in the relevant currency of a comparable amount and period from other banks in the eurocurrency market. A certificate of any Lender setting forth any amount or amounts that such Lender is entitled to receive pursuant to this Section shall be delivered to the applicable Borrower and shall be conclusive absent manifest error. The applicable Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.
SECTION 2.17. Taxes . (a) Any and all payments by or on account of any obligation of each Borrower hereunder shall be made free and clear of and without deduction for any Indemnified Taxes or Other Taxes; provided that if any Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or Issuing Bank (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (ii) such Borrower shall make such deductions and (iii) such Borrower shall pay the full amount deducted to the relevant Governmental Authority in accordance with applicable law.
(b) In addition, each Borrower shall pay any Other Taxes related to such Borrower and imposed on or incurred by the Administrative Agent, a Lender or any Issuing Bank to the relevant Governmental Authority in accordance with applicable law.
(c) The relevant Borrower shall indemnify the Administrative Agent, each Lender and any Issuing Bank, within thirty (30) days after written demand therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent, such Lender or such Issuing Bank, as the case may be, on or with respect to any payment by or on account of any obligation of such Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Company by a Lender or an Issuing Bank, or by the Administrative Agent on its own behalf or on behalf of a Lender or an Issuing Bank, shall be conclusive absent demonstrable error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes by any Borrower to a Governmental Authority, such Borrower shall deliver to the Administrative Agent the
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original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(e) Any Lender that is entitled to an exemption from or reduction of withholding tax under the law of the jurisdiction in which a Borrower is located, or any treaty to which such jurisdiction is a party, with respect to payments under this Agreement shall deliver to such Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law or reasonably requested by such Borrower as will permit such payments to be made without withholding or at a reduced rate. Without limiting the generality of the foregoing, in the event that a Borrower is resident for tax purposes in the United States of America, any Foreign Lender shall deliver to such Borrower and Administrative Agent (in such number of copies as shall be reasonably requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the request of Borrower or Administrative Agent), whichever of the following is applicable:
(i) if such Foreign Lender is entitled to claim an exemption from United States withholding tax pursuant to its portfolio interest exception, (A) a statement of the Lender signed under penalty of perjury, that it is not a (I) a bank as described in Section 881(c)(3)(A) of the Code, (II) a 10% shareholder of a Borrower (within the meaning of Section 871(h)(3)(B) of the Code), or (III) a controlled foreign corporation related to a Borrower within the meaning of Section 864(d)(4) of the Code, and (B) a properly completed and executed IRS Form W-8BEN or Form W-8IMY (with proper attachments);
(ii) if such Foreign Lender is entitled to claim an exemption from, or a reduction of, withholding tax under a United States tax treaty, a properly completed and executed copy of IRS Form W-8BEN;
(iii) if such Foreign Lender is entitled to claim that income under this Agreement is exempt from United States withholding tax because it is effectively connected with a United States trade or business of such Foreign Lender, a properly completed and executed copy of IRS Form W-8ECI;
(iv) if such Foreign Lender is entitled to claim that income under this Agreement is exempt from United States withholding tax because such Lender serves as an intermediary, a properly completed and executed copy of IRS Form W-8IMY (with proper attachments).
Furthermore, any Lender that is a Domestic Lender and is not an exempt recipient (within the meaning of Section 1.6049-4(c)(1)(ii) of the regulations promulgated under the Internal Revenue Code, but without regard to the third sentence thereof) shall deliver to Company and Administrative Agent, a properly completed and executed IRS Form W-9 or such other form as may be required under the Code or other laws of the United States as a condition to exemption from, or reduction of, United States withholding or backup withholding tax.
(f) Each Lender, Issuing Bank and Administrative Agent shall provide new forms (or successor forms) required under Section 2.17(e) upon the expiration or obsolescence of any previously delivered forms and to promptly notify Administrative Agent and the Company of any change in circumstances which would modify or render invalid any claimed exemption or reduction.
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(g) If the Administrative Agent or a Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrowers or with respect to which a Borrower has paid additional amounts pursuant to this Section 2.17, it shall pay over such refund to such Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by such Borrower under this Section 2.17 with respect to the Indemnified Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided , that such Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to such Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This Section shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its Taxes which it deems confidential) to any Borrower or any other Person.
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs .
(a) Each Borrower shall make each payment required to be made by it hereunder (whether of principal, interest, fees or reimbursement of LC Disbursements, or of amounts payable under Section 2.15, 2.16 or 2.17, or otherwise) prior to (i) in the case of payments denominated in Dollars by the Company, 12:00 noon, New York City time and (ii) in the case of payments denominated in a Foreign Currency or by the Dutch Borrower, 12:00 noon, Local Time, in the city of the Administrative Agents Eurocurrency Payment Office for such currency, in each case on the date when due, in immediately available funds, without set-off or counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made (i) in the same currency in which the applicable Credit Event was made (or where such currency has been converted to euro, in euro) and (ii) to the Administrative Agent at its offices at 10 South Dearborn Street, Chicago, Illinois 60603 or, in the case of a Credit Event denominated in a Foreign Currency or to the Dutch Borrower, the Administrative Agents Eurocurrency Payment Office for such currency, except payments to be made directly to an Issuing Bank or a Swingline Lender as expressly provided herein and except that payments pursuant to Sections 2.15, 2.16, 2.17 and 9.03 shall be made directly to the Persons entitled thereto. The Administrative Agent shall distribute any such payments denominated in the same currency received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the case of any payment accruing interest, interest thereon shall be payable for the period of such extension. Notwithstanding the foregoing provisions of this Section, if, after the making of any Credit Event in any Foreign Currency, currency control or exchange regulations are imposed in the country which issues such currency with the result that the type of currency in which the Credit Event was made (the Original Currency ) no longer exists or any Borrower is not able to make payment to the Administrative Agent for the account of the Lenders in such Original Currency, then all payments to be made by such Borrower hereunder in such currency shall instead be made when due in Dollars in an amount equal to the Dollar Amount (as of the date of repayment) of such payment due, it being the intention of the parties hereto that the Borrowers take all risks of the imposition of any such currency control or exchange regulations.
(b) If at any time insufficient funds are received by and available to the Administrative Agent to pay fully all amounts of principal, unreimbursed LC Disbursements, interest and fees then due hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and (ii) second, towards payment of principal and unreimbursed LC Disbursements then due hereunder, ratably among the parties entitled thereto in accordance with the amounts of principal and unreimbursed LC Disbursements then due to such parties.
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(c) If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Revolving Loans or participations in LC Disbursements or Swingline Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Revolving Loans and participations in LC Disbursements and Swingline Loans and accrued interest thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value) participations in the Revolving Loans and participations in LC Disbursements and Swingline Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Revolving Loans and participations in LC Disbursements and Swingline Loans; provided that (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and (ii) the provisions of this paragraph shall not be construed to apply to any payment made by any Borrower pursuant to and in accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in LC Disbursements and Swingline Loans to any assignee or participant, other than to the Company or any Subsidiary or Affiliate thereof (as to which the provisions of this paragraph shall apply). Each Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Borrower rights of set-off and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from the relevant Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the Issuing Banks hereunder that such Borrower will not make such payment, the Administrative Agent may assume that such Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the Issuing Banks, as the case may be, the amount due. In such event, if such Borrower has not in fact made such payment, then each of the Lenders or each Issuing Bank, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or such Issuing Bank with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Effective Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation (including without limitation the Overnight Foreign Currency Rate in the case of Loans denominated in a Foreign Currency).
(e) If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.05(c), 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c), then the Administrative Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the account of such Lender to satisfy such Lenders obligations under such Sections until all such unsatisfied obligations are fully paid.
SECTION 2.19. Mitigation Obligations; Replacement of Lenders . (a) If any Lender requests compensation under Section 2.15, or if any Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or
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reduce amounts payable pursuant to Section 2.15 or 2.17, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Company hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.15, or if any Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.17, or if any Lender defaults in its obligation to fund Loans hereunder, then the Company may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in Section 9.04), all its interests, rights and obligations under the Loan Documents to an assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that (i) the Company shall have received the prior written consent of the Administrative Agent, which consent shall not unreasonably be withheld, (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and funded participations in LC Disbursements and Swingline Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Company (in the case of all other amounts) and (iii) in the case of any such assignment resulting from a claim for compensation under Section 2.15 or payments required to be made pursuant to Section 2.17, such assignment will result in a reduction in such compensation or payments. A Lender shall not be required to make any such assignment and delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Company to require such assignment and delegation cease to apply.
SECTION 2.20. Expansion Option . The Company may from time to time elect to increase the Commitments or enter into one or more tranches of term loans (each an Incremental Term Loan ), in each case in a minimum amount of $20,000,000 and in integral multiples of $5,000,000 in excess thereof so long as, after giving effect thereto, the aggregate amount of such increases and all such Incremental Term Loans does not exceed $100,000,000. The Company may arrange for any such increase or tranche to be provided by one or more Lenders (each Lender so agreeing to an increase in its Commitment, or to participate in such Incremental Term Loans, an Increasing Lender ), or by one or more new banks, financial institutions or other entities (each such new bank, financial institution or other entity, an Augmenting Lender ), to increase their existing Commitments, or to participate in such Incremental Term Loans, or extend Commitments, as the case may be; provided that (i) each Augmenting Lender, shall be subject to the approval of the Company and the Administrative Agent and (ii) (x) in the case of an Increasing Lender, the Company and such Increasing Lender execute an agreement substantially in the form of Exhibit C hereto, and (y) in the case of an Augmenting Lender, the Company and such Augmenting Lender execute an agreement substantially in the form of Exhibit D hereto. No consent of any Lender (other than the Lenders participating in the increase or any Incremental Term Loan) shall be required for any increase in Commitments or Incremental Term Loan pursuant to this Section 2.20. Increases and new Commitments and Incremental Term Loans created pursuant to this Section 2.20 shall become effective on the date agreed by the Company, the Administrative Agent and the relevant Increasing Lenders or Augmenting Lenders and the Administrative Agent shall notify each Lender thereof. Notwithstanding the foregoing, no increase in the Commitments (or in the Commitment of any Lender) or tranche of Incremental Term Loans shall become effective under this paragraph unless, (i) on the proposed date of the effectiveness of such increase or Incremental Term Loans, (A) the conditions set forth in paragraphs (a) and (b) of Section 4.02 shall be satisfied or waived by the Required Lenders and the Administrative Agent shall have received a certificate to that effect dated such date and executed by a Financial Officer of the Company and (B) the Company shall be in compliance (on a pro forma basis reasonably acceptable to the Administrative Agent) with the covenants contained in Section 6.12 and (ii) the Administrative Agent shall have received documents consistent with those delivered on
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the Effective Date as to the corporate power and authority of the Borrowers to borrow hereunder after giving effect to such increase. On the effective date of any increase in the Commitments or any Incremental Term Loans being made, (i) each relevant Increasing Lender and Augmenting Lender shall make available to the Administrative Agent such amounts in immediately available funds as the Administrative Agent shall determine, for the benefit of the other Lenders, as being required in order to cause, after giving effect to such increase and the use of such amounts to make payments to such other Lenders, each Lenders portion of the outstanding Revolving Loans of all the Lenders to equal its Applicable Percentage of such outstanding Revolving Loans, and (ii) except in the case of any Incremental Term Loans, the Borrowers shall be deemed to have repaid and reborrowed all outstanding Revolving Loans as of the date of any increase in the Commitments (with such reborrowing to consist of the Types of Revolving Loans, with related Interest Periods if applicable, specified in a notice delivered by the applicable Borrower, or the Company on behalf of the applicable Borrower, in accordance with the requirements of Section 2.03). The deemed payments made pursuant to clause (ii) of the immediately preceding sentence shall be accompanied by payment of all accrued interest on the amount prepaid and, in respect of each Eurocurrency Loan, shall be subject to indemnification by the Borrowers pursuant to the provisions of Section 2.16 if the deemed payment occurs other than on the last day of the related Interest Periods. The Incremental Term Loans (a) shall rank pari passu in right of payment with the Revolving Loans, (b) shall not mature earlier than the Maturity Date (but may have amortization prior to such date) and (c) shall be treated substantially the same as (and in any event no more favorably than) the Revolving Loans; provided that (i) the terms and conditions applicable to any tranche of Incremental Term Loans maturing after the Maturity Date may provide for material additional or different financial or other covenants or prepayment requirements applicable only during periods after the Maturity Date and (ii) the Incremental Term Loans may be priced differently than the Revolving Loans. Incremental Term Loans may be made hereunder pursuant to an amendment or restatement (an Incremental Term Loan Amendment ) of this Agreement and, as appropriate, the other Loan Documents, executed by the Borrowers, each Augmenting Lender participating in such tranche, if any, and the Administrative Agent. The Incremental Term Loan Amendment may, without the consent of any other Lenders, effect such amendments to this Agreement (other than Section 6.12) and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent, to effect the provisions of this Section 2.20.
SECTION 2.21. Market Disruption . Notwithstanding the satisfaction of all conditions referred to in Article II and Article IV with respect to any Credit Event to be effected in any Foreign Currency, if (i) there shall occur on or prior to the date of such Credit Event any change in national or international financial, political or economic conditions or currency exchange rates or exchange controls which would in the reasonable opinion of the Administrative Agent, the relevant Issuing Bank (if such Credit Event is a Letter of Credit) or the Required Lenders make it impracticable for the Eurocurrency Borrowings or Letters of Credit comprising such Credit Event to be denominated in the Agreed Currency specified by the applicable Borrower or (ii) an Equivalent Amount of such currency is not readily calculable, then the Administrative Agent shall forthwith give notice thereof to such Borrower, the Lenders and, if such Credit Event is a Letter of Credit, the relevant Issuing Bank, and such Credit Events shall not be denominated in such Agreed Currency but shall, except as otherwise set forth in Section 2.07, be made on the date of such Credit Event in Dollars, (a) if such Credit Event is a Borrowing, in an aggregate principal amount equal to the Dollar Amount of the aggregate principal amount specified in the related request for a Credit Event or Interest Election Request, as the case may be, as ABR Loans, unless such Borrower notifies the Administrative Agent at least one Business Day before such date that (i) it elects not to borrow on such date or (ii) it elects to borrow on such date in a different Agreed Currency, as the case may be, in which the denomination of such Loans would in the reasonable opinion of the Administrative Agent and the Required Lenders be practicable and in an aggregate principal amount equal to the Dollar Amount of the aggregate principal amount specified in the related request for a Credit Event or Interest Election Request, as the case may be or (b) if such Credit Event is a Letter of Credit, in a
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face amount equal to the Dollar Amount of the face amount specified in the related request or application for such Letter of Credit, unless such Borrower notifies the Administrative Agent at least one (1) Business Day before such date that (i) it elects not to request the issuance of such Letter of Credit on such date or (ii) it elects to have such Letter of Credit issued on such date in a different Agreed Currency, as the case may be, in which the denomination of such Letter of Credit would in the reasonable opinion of the relevant Issuing Bank, the Administrative Agent and the Required Lenders be practicable and in face amount equal to the Dollar Amount of the face amount specified in the related request or application for such Letter of Credit, as the case may be.
SECTION 2.22. Judgment Currency . If for the purposes of obtaining judgment in any court it is necessary to convert a sum due from any Borrower hereunder in the currency expressed to be payable herein (the specified currency ) into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the specified currency with such other currency at the Administrative Agents main New York City office on the Business Day preceding that on which final, non-appealable judgment is given (which exchange rate may be the Exchange Rate). The obligations of each Borrower in respect of any sum due to any Lender or the Administrative Agent hereunder shall, notwithstanding any judgment in a currency other than the specified currency, be discharged only to the extent that on the Business Day following receipt by such Lender or the Administrative Agent (as the case may be) of any sum adjudged to be so due in such other currency such Lender or the Administrative Agent (as the case may be) may in accordance with normal, reasonable banking procedures purchase the specified currency with such other currency. If the amount of the specified currency so purchased is less than the sum originally due to such Lender or the Administrative Agent, as the case may be, in the specified currency, each Borrower agrees, to the fullest extent that it may effectively do so, as a separate obligation and notwithstanding any such judgment, to indemnify such Lender or the Administrative Agent, as the case may be, against such loss, and if the amount of the specified currency so purchased exceeds (a) the sum originally due to any Lender or the Administrative Agent, as the case may be, in the specified currency and (b) any amounts shared with other Lenders as a result of allocations of such excess as a disproportionate payment to such Lender under Section 2.18, such Lender or the Administrative Agent, as the case may be, agrees to remit such excess to such Borrower.
SECTION 2.23. Senior Debt . The Company hereby designates all Obligations now or hereinafter incurred or otherwise outstanding, and agrees that the Obligations shall at all times constitute, senior indebtedness and designated senior indebtedness, or terms of similar import, which are entitled to the benefits of the subordination provisions of all Subordinated Indebtedness.
ARTICLE III
Representations and Warranties
Each Borrower represents and warrants to the Lenders that:
SECTION 3.01. Organization; Powers; Subsidiaries . Each of the Company and its Subsidiaries is duly organized, validly existing and in good standing (to the extent such concept is applicable in the relevant jurisdiction) under the laws of the jurisdiction of its organization, has all requisite organizational power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing (to the extent such concept is applicable) in, every jurisdiction where such qualification is required. Schedule 3.01 hereto (as
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supplemented from time to time) identifies each Subsidiary, noting whether such Subsidiary is a Material Subsidiary as of the Effective Date, the jurisdiction of its incorporation or organization, as the case may be, the percentage of issued and outstanding shares of each class of its capital stock or other equity interests owned by the Company and the other Subsidiaries and, if such percentage is not 100% (excluding directors qualifying shares and other nominal shares, in each case as required by law), a description of each class issued and outstanding. All of the outstanding shares of capital stock and other equity interests of each Subsidiary are validly issued and outstanding and fully paid and nonassessable (to the extent that such concept is applicable in the relevant jurisdiction) and all such shares and other equity interests indicated on Schedule 3.01 as owned by the Company or another Subsidiary are owned, beneficially and of record, by the Company or any Subsidiary free and clear of all Liens. There are no outstanding commitments or other obligations of the Company or any Subsidiary to issue, and no options, warrants or other rights of any Person to acquire, any shares of any class of capital stock or other equity interests of the Company or any Subsidiary, except pursuant to the Companys Rights Agreement as in effect on the Effective Date.
SECTION 3.02. Authorization; Enforceability . The Transactions are within each Loan Partys corporate powers and have been duly authorized by all necessary corporate and, if required, shareholder action. The Loan Documents to which each Loan Party is a party have been duly executed and delivered by such Loan Party and constitute a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts . The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect, (b) will not violate any applicable law or regulation or the charter, by-laws or other organizational documents of the Company or any of its Subsidiaries or any order of any Governmental Authority, (c) will not violate or result in a default under any indenture, material agreement or other material instrument binding upon the Company or any of its Subsidiaries or its assets, or give rise to a right thereunder to require any payment to be made by the Company or any of its Subsidiaries, and (d) will not result in the creation or imposition of any Lien on any asset of the Company or any of its Subsidiaries.
SECTION 3.04. Financial Condition; No Material Adverse Change . (a) The Company has heretofore furnished to the Lenders its combined balance sheet and statements of income, stockholders equity and cash flows (i) as of and for the fiscal year ended December 31, 2007 reported on by KPMG LLP, independent public accountants, and (ii) as of and for the fiscal quarter and the portion of the fiscal year ended March 31, 2008, certified by its chief financial officer. Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of the Company and its consolidated Subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes in the case of the statements referred to in clause (ii) above.
(b) Since December 31, 2007, there has been no event, development or circumstance that has resulted in or caused a Material Adverse Effect.
SECTION 3.05. Properties . (a) Each of the Company and its Subsidiaries has good title to, or valid leasehold interests in, all its real and personal property material to its business, except for defects in title that do not interfere with its ability to conduct its business as currently conducted or to utilize such properties for their intended purposes.
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(b) Each of the Company and its Subsidiaries owns, or is licensed to use, all trademarks, trade names, copyrights, patents and other intellectual property necessary to its business, and the use thereof by the Company and its Subsidiaries does not infringe upon the rights of any other Person, except for any such infringements that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.06. Litigation and Environmental Matters . (a) There are no actions, suits, proceedings or investigations by or before any arbitrator or Governmental Authority pending against or, to the knowledge of any Borrower, threatened against or affecting the Company or any of its Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) that involve this Agreement or the Transactions. There are no labor controversies pending against or, to the knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries (i) which could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect, or (ii) that involve this Agreement or the Transactions.
(b) Except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, neither the Company nor any of its Subsidiaries (i) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law, (ii) has become subject to any Environmental Liability, (iii) has received notice of any claim with respect to any Environmental Liability or (iv) knows of any basis for any Environmental Liability.
SECTION 3.07. Compliance with Laws and Agreements . Each of the Company and its Subsidiaries is in compliance with all laws, regulations and orders of any Governmental Authority applicable to it or its property and all indentures, material agreements and other material instruments binding upon it or its property, except where in any such case the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. Furthermore, to the extent that the Dutch Borrower would qualify as a credit institution ( kredietinstelling ) under the Dutch Financial Supervision Act, it is in compliance therewith.
SECTION 3.08. Investment Company Status . Neither the Company nor any of its Subsidiaries is an investment company as defined in, or subject to regulation under, the Investment Company Act of 1940.
SECTION 3.09. Taxes . Each of the Company and its Subsidiaries has timely filed or caused to be filed all Tax returns and reports required to have been filed and has paid or caused to be paid all Taxes required to have been paid by it, except (a) Taxes that are being contested in good faith by appropriate proceedings and for which the Company or such Subsidiary, as applicable, has set aside on its books adequate reserves or (b) to the extent that the failure to do so could not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.10. ERISA . No ERISA Event has occurred or is reasonably expected to occur that, when taken together with all other such ERISA Events for which liability is reasonably expected to occur, could reasonably be expected to result in a Material Adverse Effect.
SECTION 3.11. Disclosure . As of the Effective Date, the Company has disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which it or any of its Subsidiaries is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. Neither the Information Memorandum nor any of the other reports, financial statements, certificates or other information furnished by or on behalf of
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the Company or any Subsidiary to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Borrowers represent only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time.
SECTION 3.12. Federal Reserve Regulations . No part of the proceeds of any Loan have been used or will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.
SECTION 3.13. Liens . There are no Liens on any of the real or personal properties of the Company or any Subsidiary except for Liens permitted by Section 6.02.
SECTION 3.14. No Default . Each Borrower is in full compliance with this Agreement and no Default or Event of Default has occurred and is continuing.
SECTION 3.15. No Burdensome Restrictions . No Borrower is subject to any Burdensome Restrictions except Burdensome Restrictions permitted under Section 6.08.
SECTION 3.16. Solvency .
(a) Immediately after the consummation of the Transactions to occur on the Effective Date, the Company and its Subsidiaries, taken as a whole, are and will be Solvent.
(b) The Company does not intend to, nor will it permit any of its Subsidiaries to, and the Company does not believe that it or any of its Subsidiaries will, incur debts beyond its ability to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by it or any such Subsidiary and the timing of the amounts of cash to be payable on or in respect of its Indebtedness or the Indebtedness of any such Subsidiary.
ARTICLE IV
Conditions
SECTION 4.01. Effective Date . The obligations of the Lenders to make the initial Loans and of any Issuing Bank to issue the initial Letters of Credit hereunder shall not become effective until the date on which each of the following conditions is satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received from (i) each party hereto either (A) a counterpart of this Agreement signed on behalf of such party or (B) written evidence satisfactory to the Administrative Agent (which may include telecopy or electronic transmission of a signed signature page of this Agreement) that such party has signed a counterpart of this Agreement and (ii) each initial Subsidiary Guarantor either (A) a counterpart of the Subsidiary Guaranty signed on behalf of such Subsidiary Guarantor or (B) written evidence satisfactory to the Administrative Agent (which may include telecopy or electronic transmission of a signed signature page of the Subsidiary Guaranty) that such Subsidiary Guarantor has signed a counterpart of the Subsidiary Guaranty.
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(b) The Administrative Agent shall have received a favorable written opinion (addressed to the Administrative Agent and the Lenders and dated the Effective Date) of each of (i) Goldberg Kohn, special U.S. counsel for the Loan Parties, substantially in the form of Exhibit B-1 , (ii) in-house counsel for the Loan Parties, substantially in the form of Exhibit B-2 and (iii) Houthoff Buruma London B.V., special Dutch counsel for the Loan Parties, substantially in the form of Exhibit B-3 , and, in each case, covering such other customary matters relating to the Loan Parties, the Loan Documents or the Transactions as the Administrative Agent shall reasonably request. The Company hereby requests such counsels to deliver such opinions.
(c) The Lenders shall have received (i) satisfactory unaudited interim consolidated financial statements of the Company for each quarterly period ended subsequent to December 31, 2007 to the extent such financial statements are available and (ii) satisfactory financial statement projections (giving effect to the Spin-Off Transaction) through and including the Companys 2013 fiscal year, together with such information pertaining thereto as the Administrative Agent and the Lenders shall reasonably request (including, without limitation, a detailed description of the assumptions used in preparing such projections).
(d) The Administrative Agent shall have received such documents and certificates as the Administrative Agent or its counsel may reasonably request relating to the organization, existence and good standing of the initial Loan Parties, the authorization of the Transactions and any other legal matters relating to such Loan Parties, the Loan Documents or the Transactions, all in form and substance satisfactory to the Administrative Agent and its counsel and as further described in the list of closing documents attached as Exhibit E .
(e) The Administrative Agent shall have received a certificate, dated the Effective Date and signed by the President, a Vice President or a Financial Officer of the Company, confirming compliance with the conditions set forth in paragraphs (a) and (b) of Section 4.02.
(f) The Administrative Agent shall have received evidence reasonably satisfactory to it that all corporate, governmental, regulatory and third party approvals necessary or, in the reasonable discretion of the Administrative Agent, advisable in connection with the Transactions and the continuing operations of the Company and its Subsidiaries have been obtained and are in full force and effect.
(g) The Administrative Agent shall have received evidence reasonably satisfactory to it that FTIs and the Companys directors and, if required, FTIs and the Companys shareholders, shall have approved the Spin-Off Transaction.
(h) The capitalization and structure of the Company and its Subsidiaries after the Spin-Off Transaction shall be consistent in all material respects with the Form 10 filed by FTI on or prior to the Effective Date.
(i) The Administrative Agent shall have received a compliance certificate, substantially in the form of Exhibit G , demonstrating, to the Administrative Agents reasonable satisfaction, pro forma compliance with all financial covenants set forth in Section 6.12.
(j) The Administrative Agent shall have received all fees and other amounts due and payable on or prior to the Effective Date, including, to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Company hereunder.
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(k) The Administrative Agent shall have received from the Dutch Borrower a confirmation by an authorized signatory of the Dutch Borrower that there is no works council with jurisdiction over the transactions as envisaged by any Loan Document, or, if a works council is established, a confirmation that all consultation obligations in respect of such works council have been complied with and that positive unconditional advice has been obtained, attaching a copy of such advice and a copy of the request for such advice.
(l) The Administrative Agent shall have received evidence reasonably satisfactory to it that the Spin-Off Transaction shall have been substantially completed, but for the payment of the Spin-Off Dividend and the distribution of Company common stock to FTI shareholders, consistent with the description thereof provided to the Administrative Agent, in accordance with the terms of the documents evidencing the Spin-Off Transaction (which terms shall be reasonably acceptable to the Administrative Agent), which documents shall not have been altered, amended or otherwise changed or supplemented or any condition therein waived in any manner which could materially adversely affect the Lenders without the prior written consent of the Administrative Agent, and in compliance with all applicable laws or approvals, consents and waivers from any Governmental Authority or otherwise.
The Administrative Agent shall notify the Company and the Lenders of the Effective Date, and such notice shall be conclusive and binding.
SECTION 4.02. Each Credit Event . The obligation of each Lender to make a Loan on the occasion of any Borrowing, and of any Issuing Bank to issue, amend, renew or extend any Letter of Credit, is subject to the satisfaction of the following conditions:
(a) The representations and warranties of the Borrowers set forth in this Agreement shall be true and correct in all material respects on and as of the date of such Borrowing or the date of issuance, amendment, renewal or extension of such Letter of Credit, as applicable, except to the extent that any such representation and warranty is made as of a specific date in which case such representation and warranty shall have been true and correct in all material respects as of such date.
(b) At the time of and immediately after giving effect to such Borrowing or the issuance, amendment, renewal or extension of such Letter of Credit, as applicable, no Default shall have occurred and be continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of Credit shall be deemed to constitute a representation and warranty by the Borrowers on the date thereof as to the matters specified in paragraphs (a) and (b) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the principal of and interest on each Loan and all fees payable hereunder shall have been paid in full and all Letters of Credit shall have expired or terminated and all LC Disbursements shall have been reimbursed, the Company covenants and agrees with the Lenders that:
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SECTION 5.01. Financial Statements and Other Information . The Company will furnish to the Administrative Agent and each Lender:
(a) within ninety (90) days after the end of each fiscal year of the Company, its audited consolidated balance sheet and related statements of operations, stockholders equity and cash flows as of the end of and for such year, setting forth in each case in comparative form the figures for the previous fiscal year, all reported on by KPMG LLP or other independent public accountants of recognized national standing (without a going concern or like qualification or exception and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the financial condition and results of operations of the Company and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied;
(b) within forty-five (45) days after the end of each of the first three fiscal quarters of each fiscal year of the Company, its consolidated balance sheet and related statements of operations, stockholders equity and cash flows as of the end of and for such fiscal quarter and the then elapsed portion of the fiscal year, setting forth in each case in comparative form the figures for the corresponding period or periods of (or, in the case of the balance sheet, as of the end of) the previous fiscal year, all certified by one of its Financial Officers as presenting fairly in all material respects the financial condition and results of operations of the Company and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied, subject to normal year-end audit adjustments and the absence of footnotes;
(c) concurrently with any delivery of financial statements under clause (a) or (b) above, a certificate of a Financial Officer of the Company (i) certifying as to whether a Default has occurred and, if a Default has occurred, specifying the details thereof and any action taken or proposed to be taken with respect thereto, (ii) setting forth reasonably detailed calculations demonstrating compliance with Section 6.12 and (iii) stating whether any change in GAAP or in the application thereof has occurred since the date of the audited financial statements referred to in Section 3.04 and, if any such change has occurred, specifying the effect of such change on the financial statements accompanying such certificate;
(d) unless waived by the Administrative Agent, concurrently with any delivery of financial statements under clause (a) above, a certificate of the accounting firm that reported on such financial statements stating whether they obtained knowledge during the course of their examination of such financial statements of any Default (which certificate may be limited to the extent required by accounting rules or guidelines);
(e) as soon as available, but in any event not more than sixty (60) days after the end of each fiscal year of the Company, a copy of the plan and forecast (including a projected consolidated and consolidating balance sheet, statement of operation and funds flow statement) of the Company for each month of the upcoming fiscal year in form reasonably satisfactory to the Administrative Agent;
(f) promptly after the same become publicly available, copies of all periodic and other reports, proxy statements and other materials filed by the Company or any Subsidiary with the Securities and Exchange Commission, or any Governmental Authority succeeding to any or all of the functions of said Commission, or with any national securities exchange, or distributed by the Company to its shareholders generally, as the case may be; and
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(g) promptly following any request therefor, such other information regarding the operations, business affairs and financial condition of the Company or any Subsidiary, or compliance with the terms of this Agreement, as the Administrative Agent or any Lender may reasonably request.
SECTION 5.02. Notices of Material Events . The Company will furnish to the Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or before any arbitrator or Governmental Authority against or affecting the Company or any Affiliate thereof that, if adversely determined, could reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect; and
(d) any other development that results in, or could reasonably be expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of a Financial Officer or other executive officer of the Company setting forth the details of the event or development requiring such notice and any action taken or proposed to be taken with respect thereto.
SECTION 5.03. Existence; Conduct of Business . The Company will, and will cause each of its Subsidiaries to, do or cause to be done all things necessary to preserve, renew and keep in full force and effect its legal existence and the rights, qualifications, licenses, permits, privileges, franchises, governmental authorizations and intellectual property rights necessary to the conduct of its business, and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted to the extent the failure to maintain such authority could reasonably be expected to result in a Material Adverse Effect; provided that the foregoing shall not prohibit any merger, consolidation, liquidation or dissolution permitted under Section 6.03.
SECTION 5.04. Payment of Obligations . The Company will, and will cause each of its Subsidiaries to, pay its obligations, including Tax liabilities, that, if not paid, could reasonably be expected to result in a Material Adverse Effect before the same shall become delinquent or in default, except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings, (b) the Company or such Subsidiary has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (c) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.05. Maintenance of Properties; Insurance . The Company will, and will cause each of its Subsidiaries to, (a) keep and maintain all property material to the conduct of its business in good working order and condition, ordinary wear and tear excepted, and (b) maintain, with financially sound and reputable insurance companies, insurance in such amounts and against such risks as are customarily maintained by companies engaged in the same or similar businesses operating in the same or similar locations, it being agreed that the insurance maintained as of the date hereof is sufficient for the business currently maintained by the Company and its Subsidiaries.
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SECTION 5.06. Books and Records; Inspection Rights . The Company will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries are made of all dealings and transactions in relation to its business and activities. The Company will, and will cause each of its Subsidiaries to, permit any representatives designated by the Administrative Agent or any Lender, upon reasonable prior notice, to visit and inspect its properties, to examine and make extracts from its books and records, and to discuss its affairs, finances and condition with its officers and independent accountants, all at such reasonable times and as often as reasonably requested, but in the absence of a Default no more than once per calendar year.
SECTION 5.07. Compliance with Laws and Material Contractual Obligations . The Company will, and will cause each of its Subsidiaries to, (i) comply in all material respects with all laws, rules, regulations and orders of any Governmental Authority applicable to it or its property (including without limitation Environmental Laws) and (ii) perform in all material respects its obligations under material agreements to which it is a party, in each case except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.08. Use of Proceeds . The proceeds of the Loans will be used only to finance the Spin-Off Transaction, working capital needs, and for general corporate purposes (including Permitted Acquisitions and the payment of fees and expenses associated with this Agreement and the Spin-Off Transaction), of the Company and its Subsidiaries in the ordinary course of business. No part of the proceeds of any Loan will be used, whether directly or indirectly, for any purpose that entails a violation of any of the Regulations of the Board, including Regulations T, U and X.
SECTION 5.09. Subsidiary Guaranty . As promptly as possible but in any event within thirty (30) days (or such later date as may be agreed upon by the Administrative Agent) after any Person (other than an Affected Foreign Subsidiary) becomes a Subsidiary or any Subsidiary qualifies independently as a Required Subsidiary, the Company shall (i) provide the Administrative Agent with written notice thereof setting forth information in reasonable detail describing the material assets of such Person and (ii) shall cause each such Subsidiary which also qualifies as a Required Subsidiary (other than an Affected Foreign Subsidiary) to deliver to the Administrative Agent a Subsidiary Guaranty or a joinder to the relevant Subsidiary Guaranty (in the form contemplated thereby) pursuant to which such Subsidiary agrees to be bound by the terms and provisions thereof, such Subsidiary Guaranty (or joinder thereto) to be accompanied by appropriate corporate resolutions, other corporate documentation and legal opinions, to the extent required by (and in form and substance reasonably satisfactory to) the Administrative Agent and its counsel. Notwithstanding the foregoing, no Subsidiary Guaranty by a Foreign Subsidiary shall be required hereunder until September 30, 2008 or such later date as the Administrative Agent may agree in the exercise of its reasonable discretion with respect thereto.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full and all Letters of Credit have expired or terminated and all LC Disbursements shall have been reimbursed, the Company covenants and agrees with the Lenders that:
SECTION 6.01. Subsidiary Indebtedness . The Company will not permit any Subsidiary to create, incur, assume or permit to exist any Indebtedness, except:
(a) the Obligations;
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(b) Indebtedness existing on the date hereof and set forth in Schedule 6.01 and extensions, renewals and replacements of any such Indebtedness with Indebtedness of a similar type that does not increase the outstanding principal amount thereof;
(c) Indebtedness of any Subsidiary to the Company or any other Subsidiary; provided that Indebtedness of any Subsidiary that is not a Loan Party to any Loan Party shall be subject to the limitations set forth in Section 6.04(d);
(d) Guarantees by any Subsidiary of Indebtedness of the Company or any other Subsidiary;
(e) Indebtedness of any Subsidiary incurred to finance the acquisition, construction or improvement of any fixed or capital assets, including Capital Lease Obligations and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof; provided that (i) such Indebtedness is incurred prior to or within ninety (90) days after such acquisition or the completion of such construction or improvement and (ii) the aggregate principal amount of Indebtedness permitted by this clause (e), when aggregated with the aggregate principal amount of similar purchase money Indebtedness of the Company, shall not exceed $30,000,000 at any time outstanding;
(f) Indebtedness of any Subsidiary as an account party in respect of trade letters of credit;
(g) Guarantees under the Permitted Private Placement Financing;
(h) Indebtedness under Sale and Leaseback Transactions permitted under Section 6.10;
(i) Indebtedness consisting of deferred purchase price or notes issued to officers, directors and employees to purchase or redeem Equity Interests to the extent that such purchases or redemptions are otherwise permitted hereunder;
(j) Indebtedness arising from agreements providing for indemnification, adjustment of purchase price (excluding earn-out obligations and deferred purchase price payment obligations in respect of Permitted Acquisitions) or similar obligations, or from guarantees or letters of credit, securing the performance of such Subsidiary pursuant to such agreements, in connection with Permitted Acquisitions;
(k) obligations under incentive, non-compete, consulting, deferred compensation, or other similar arrangements;
(l) Indebtedness incurred in connection with the financing of insurance premiums so long as such Indebtedness shall not exceed the amount of the unpaid cost of, and shall be incurred only to defer the cost of, such insurance premiums for the period in which such Indebtedness is incurred;
(m) Indebtedness incurred in the ordinary course of business in respect of netting services, overdraft protections and deposit accounts;
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(n) Indebtedness consisting of earn-out obligations and unsecured deferred purchase price obligations in respect of Permitted Acquisitions in an aggregate principal amount not exceeding $10,000,000 at any time outstanding; and
(o) Indebtedness of any Subsidiary in an aggregate principal amount not exceeding $15,000,000 at any time outstanding; provided that any such Indebtedness secured by any assets of the Company or any Subsidiary is permitted under Section 6.02(e).
SECTION 6.02. Liens . The Company will not, and will not permit any Subsidiary to, create, incur, assume or permit to exist any Lien on any property or asset now owned or hereafter acquired by it, or assign or sell any income or revenues (including accounts receivable) or rights in respect of any thereof, except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of the Company or any Subsidiary existing on the date hereof and set forth in Schedule 6.02 ; provided that (i) such Lien shall not apply to any other property or asset of the Company or any Subsidiary and (ii) such Lien shall secure only those obligations which it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;
(c) any Lien existing on any property or asset prior to the acquisition thereof by the Company or any Subsidiary or existing on any property or asset of any Person that becomes a Subsidiary after the date hereof prior to the time such Person becomes a Subsidiary; provided that (i) such Lien is not created in contemplation of or in connection with such acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not apply to any other property or assets of the Company or any Subsidiary and (iii) such Lien shall secure only those obligations which it secures on the date of such acquisition or the date such Person becomes a Subsidiary, as the case may be, and extensions, renewals and replacements thereof that do not increase the outstanding principal amount thereof;
(d) Liens on fixed or capital assets acquired, constructed or improved by the Company or any Subsidiary; provided that (i) such security interests secure Indebtedness in an aggregate outstanding principal amount not in excess of $30,000,000, (ii) such security interests and the Indebtedness secured thereby are incurred prior to or within ninety (90) days after such acquisition or the completion of such construction or improvement, (iii) the Indebtedness secured thereby does not exceed the cost of acquiring, constructing or improving such fixed or capital assets and (iv) such security interests shall not apply to any other property or assets of the Company or any Subsidiary;
(e) Liens on assets of the Company and its Subsidiaries not otherwise permitted above so long as the aggregate principal amount of the Indebtedness subject to such Liens does not at any time exceed $15,000,000.
SECTION 6.03. Fundamental Changes and Asset Sales . (a) The Company will not, and will not permit any Subsidiary to, merge into or consolidate with any other Person, or permit any other Person to merge into or consolidate with it, or sell, transfer, lease or otherwise dispose of (in one transaction or in a series of transactions) any of its assets, (including pursuant to a Sale and Leaseback Transaction), or any of the Equity Interests of any of its Subsidiaries (in each case, whether now owned or hereafter acquired), or liquidate or dissolve, except that, if at the time thereof and immediately after giving effect thereto no Default shall have occurred and be continuing:
(i) any Person may merge into the Company in a transaction in which the Company is the surviving corporation;
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(ii) any Subsidiary may merge into a Loan Party in a transaction in which the surviving entity is such Loan Party (provided that any such merger involving the Company must result in the Company as the surviving entity);
(iii) (A) the Company or any Subsidiary may sell, transfer, lease or otherwise dispose of its assets to the Company or any Subsidiary (provided that no more than an aggregate amount of $10,000,000 may be sold, transferred, leased or otherwise disposed by Loan Parties during any fiscal year of the Company to Subsidiaries which are not Loan Parties) and (B) any Subsidiary that is not a Loan Party may sell, transfer, lease or otherwise dispose of its assets to another Subsidiary that is not a Loan Party;
(iv) the Company and its Subsidiaries may (A) sell inventory in the ordinary course of business, (B) effect sales, trade-ins or dispositions of used equipment for value in the ordinary course of business consistent with past practice, (C) enter into licenses of technology in the ordinary course of business, and (D) grant discounts or forgive accounts receivable in the ordinary course of business consistent with past practice, (E) dispose of cash and Permitted Investments, (F) make investments permitted hereunder, (G) make Restricted Payments permitted hereunder, (H) grant Liens permitted hereunder, and (I) make any other sales, transfers, leases or dispositions that, together with all other property of the Company and its Subsidiaries previously leased, sold or disposed of as permitted by this clause (I) during any fiscal year of the Company, does not exceed $40,000,000;
(v) subject to Sections 6.03(a)(i) and 6.03(a)(ii), any Person may merge into another Person to consummate a Permitted Acquisition;
(vi) any Person may enter into a Sale and Leaseback Transaction permitted under Section 6.10;
(vii) the Company may consummate the Spin-Off Transaction; and
(viii) any Subsidiary that is not a Loan Party may liquidate or dissolve if the Company determines in good faith that such liquidation or dissolution is in the best interests of the Company and is not materially disadvantageous to the Lenders.
(b) The Company will not, and will not permit any of its Subsidiaries to, engage to any material extent in any business other than businesses of the type conducted by the Company and its Subsidiaries on the date of execution of this Agreement and businesses reasonably related thereto.
(c) The Company will not, nor will it permit any of its Subsidiaries to, change its fiscal year from the basis in effect on the Effective Date.
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions . The Company will not, and will not permit any of its Subsidiaries to, purchase, hold or acquire (including pursuant to any merger with any Person that was not a wholly owned Subsidiary prior to such merger) any capital stock, evidences of indebtedness or other securities (including any option, warrant or other right to acquire any of the foregoing) of, make or permit to exist any loans or advances to, Guarantee any obligations of, or make or permit to exist any investment or any other interest in, any other Person, or purchase or otherwise acquire (in one transaction or a series of transactions) any Person or any assets of any other Person constituting a business unit, except:
(a) Permitted Investments;
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(b) Permitted Acquisitions (including any intercompany investments, loans and advances used to consummate Permitted Acquisitions);
(c) (i) investments by the Company and its Subsidiaries existing on the date hereof in the capital stock of its Subsidiaries and (ii) investments, loans and advances by the Company or any Subsidiary in and to any Subsidiary to the extent existing on the date hereof and set forth in Schedule 6.04 ;
(d) investments, loans or advances made by the Company in or to any Subsidiary and made by any Subsidiary in or to the Company or any other Subsidiary (provided that not more than an aggregate amount of $25,000,000 in investments, loans or advances or capital contributions (exclusive of those permitted elsewhere in this Section 6.04) may be outstanding, at any time, by Loan Parties to Subsidiaries which are not Loan Parties);
(e) Indebtedness permitted by Section 6.01 and Guarantees constituting Indebtedness permitted by Section 6.01;
(f) investments in securities of account debtors received pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of such account debtors;
(g) loans and investments that could otherwise be made as a permitted Restricted Payment under Section 6.07;
(h) investments solely to the extent such investments reflect an accretive increase in the value of the original amount of such investments;
(i) (A) travel and moving advances given to employees and directors in the ordinary course of business and (B) other emergency or special circumstance advances given to employees not to exceed in the case of (A) and (B) taken together $5,000,000 in the aggregate outstanding at any time;
(j) the non-cash portion of consideration received in connection with dispositions permitted under Section 6.03; and
(k) any other investment, loan or advance (other than acquisitions) so long as the aggregate outstanding amount of all such investments, loans and advances does not exceed $20,000,000 at any time.
SECTION 6.05. Swap Agreements . The Company will not, and will not permit any of its Subsidiaries to, enter into any Swap Agreement, except (a) Swap Agreements entered into to hedge or mitigate risks to which the Company or any Subsidiary has actual exposure (other than those in respect of Equity Interests of the Company or any of its Subsidiaries), and (b) Swap Agreements entered into in order to effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating rate to another floating rate or otherwise) with respect to any interest-bearing liability or investment of the Company or any Subsidiary.
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SECTION 6.06. Transactions with Affiliates . The Company will not, and will not permit any of its Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or purchase, lease or otherwise acquire any property or assets from, or otherwise engage in any other transactions with, any of its Affiliates, except (a) in the ordinary course of business at prices and on terms and conditions not less favorable to the Company or such Subsidiary than could be obtained on an arms-length basis from unrelated third parties, (b) transactions between or among the Company and its wholly owned Subsidiaries not involving any other Affiliate, (c) any Restricted Payment permitted by Section 6.07 and (d) the making of equity distributions to consummate the Spin-Off Transaction and other transactions and documents (which documents have been described in or publicly filed as exhibits to the F-10 filing of the Company prior to the Effective Date) evidencing the Spin-Off Transaction.
SECTION 6.07. Restricted Payments . The Company will not, and will not permit any of its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, except (a) the Company may declare and pay dividends with respect to its Equity Interests payable solely in additional shares of its common stock, (b) Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests, (c) the Company may make Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for management or employees of the Company and its Subsidiaries, (d) the Company may consummate the Spin-Off Transaction, (e) the Company and its subsidiaries may pay their Tax liabilities and (f) the Company and its Subsidiaries may make any other Restricted Payment so long as no Default or Event of Default has occurred and is continuing prior to making such Restricted Payment or would arise after giving effect (including pro forma effect) thereto and the aggregate amount of all such Restricted Payments during any fiscal year of the Company does not exceed $20,000,000.
SECTION 6.08. Restrictive Agreements . The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, enter into, incur or permit to exist any agreement or other arrangement (other than as required pursuant to applicable law) that prohibits, restricts or imposes any condition upon (a) the ability of the Company or any Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets, or (b) the ability of any Subsidiary to pay dividends or other distributions to holders of its Equity Interests or to make or repay loans or advances to the Company or any other Subsidiary or to Guarantee Indebtedness of the Company or any other Subsidiary; provided that (i) the foregoing shall not apply to restrictions and conditions imposed by law or by any Loan Document or by any document evidencing the Permitted Private Placement Financing, (ii) the foregoing shall not apply to customary restrictions on then-market terms for the applicable Indebtedness under any Indebtedness permitted by Section 6.01 (so long as, in the case of Indebtedness permitted under Section 6.01(b), the conditions imposed by any such Indebtedness which constitutes extended, renewed or replaced Indebtedness are no more restrictive than the applicable original Indebtedness) or for any other Indebtedness not prohibited hereunder, (iii) the foregoing shall not apply to customary restrictions and conditions contained in agreements relating to the sale of assets or a Subsidiary pending such sale, provided such restrictions and conditions apply only to the assets or Subsidiary that are to be sold and such sale is permitted hereunder, (iv) clause (a) of the foregoing shall not apply to restrictions or conditions imposed by any agreement relating to secured Indebtedness permitted by this Agreement if such restrictions or conditions apply only to the property or assets securing such Indebtedness and (v) clause (a) of the foregoing shall not apply to customary provisions in leases and other contracts restricting the assignment thereof.
SECTION 6.09. Subordinated Indebtedness and Amendments to Subordinated Indebtedness Documents . The Company will not, and will not permit any Subsidiary to, directly or indirectly voluntarily prepay, defease or in substance defease, purchase, redeem, retire or otherwise acquire, any Subordinated Indebtedness except to the extent approved by the Administrative Agent. Furthermore, unless approved by the Administrative Agent, the Company will not, and will not permit any Subsidiary to, amend the Subordinated Indebtedness Documents where such amendment, modification or supplement provides for the following or which has any of the following effects:
(a) increases the overall principal amount of any such Indebtedness or increases the amount of any single scheduled installment of principal or interest;
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(b) shortens or accelerates the date upon which any installment of principal or interest becomes due or adds any additional mandatory redemption provisions;
(c) shortens the final maturity date of such Indebtedness or otherwise accelerates the amortization schedule with respect to such Indebtedness;
(d) increases the rate of interest accruing on such Indebtedness;
(e) provides for the payment of additional fees or increases existing fees;
(f) amends or modifies any financial or negative covenant (or covenant which prohibits or restricts the Company or any Subsidiary from taking certain actions) in a manner which is more onerous or more restrictive in any material respect to the Company or such Subsidiary or which is otherwise materially adverse to the Company, any Subsidiary and/or the Lenders or, in the case of any such covenant, which places material additional restrictions on the Company or such Subsidiary or which requires the Company or such Subsidiary to comply with more restrictive financial ratios or which requires the Company to better its financial performance, in each case from that set forth in the existing applicable covenants in the Subordinated Indebtedness Documents or the applicable covenants in this Agreement; or
(g) amends, modifies or adds any affirmative covenant in a manner which (i) when taken as a whole, is materially adverse to the Company, any Subsidiary and/or the Lenders or (ii) is more onerous than the existing applicable covenant in the Subordinated Indebtedness Documents or the applicable covenant in this Agreement.
Notwithstanding the foregoing, this Section 6.09 shall not be applicable so long as the Leverage Ratio is not greater than a ratio equal to (x) the numerator of the Maximum Leverage Ratio permitted under Section 6.12(a) minus 0.50 to (y) 1.0.
SECTION 6.10. Sale and Leaseback Transactions . The Company shall not, nor shall it permit any Subsidiary to, enter into any Sale and Leaseback Transaction, other than Sale and Leaseback Transactions in respect of which the net cash proceeds received in connection therewith does not exceed $25,000,000 in the aggregate during any fiscal year of the Company, determined on a consolidated basis for the Company and its Subsidiaries.
SECTION 6.11. Capital Expenditures . The Company will not, nor will it permit any Subsidiary to, expend in excess of $30,000,000 (in the aggregate for the Company and its Subsidiaries) for Capital Expenditures during any fiscal year of the Company. If the Company and its Subsidiaries do not utilize the entire amount of Capital Expenditures permitted in any fiscal year, so long as no Event of Default exists or would be caused thereby, the Company and its Subsidiaries may carry forward to the immediately succeeding fiscal year only, 50% of such unutilized amount (with Capital Expenditures made by in such succeeding fiscal year applied last to such unutilized amount).
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SECTION 6.12. Financial Covenants .
(a) Maximum Leverage Ratio . The Company will not permit the ratio (the Leverage Ratio ), determined as of the end of each of its fiscal quarters ending on and after September 30, 2008, of (i) Consolidated Total Indebtedness to (ii) Consolidated EBITDA for the period of four (4) consecutive fiscal quarters ending with the end of such fiscal quarter, all calculated for the Company and its Subsidiaries on a consolidated basis, to be greater than 3.00 to 1.00.
(b) Minimum Interest Coverage Ratio . The Company will not permit the ratio (the Interest Coverage Ratio ), determined as of the end of each of its fiscal quarters ending on and after September 30, 2008, of (i) Consolidated EBITDA to (ii) Consolidated Interest Expense, in each case for the period of four (4) consecutive fiscal quarters ending with the end of such fiscal quarter, all calculated for the Company and its Subsidiaries on a consolidated basis, to be less than 3.50 to 1.00.
ARTICLE VII
Events of Default
If any of the following events ( Events of Default ) shall occur:
(a) any Borrower shall fail to pay any principal of any Loan or any reimbursement obligation in respect of any LC Disbursement when and as the same shall become due and payable, whether at the due date thereof or at a date fixed for prepayment thereof or otherwise;
(b) any Borrower shall fail to pay any interest on any Loan or any fee or any other amount (other than an amount referred to in clause (a) of this Article) payable under this Agreement, when and as the same shall become due and payable, and such failure shall continue unremedied for a period of five (5) Business Days;
(c) any representation or warranty made or deemed made by or on behalf of any Borrower or any Subsidiary in or in connection with this Agreement or any other Loan Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder, or in any report, certificate, financial statement or other document furnished pursuant to or in connection with this Agreement or any other Loan Document or any amendment or modification thereof or waiver thereunder, shall prove to have been incorrect in any material respect when made or deemed made;
(d) any Borrower shall fail to observe or perform any covenant, condition or agreement contained in Section 5.02, 5.03 (with respect to any Borrowers existence), 5.08 or 5.09, in Article VI or in Article X;
(e) any Borrower or any Subsidiary Guarantor, as applicable, shall fail to observe or perform any covenant, condition or agreement contained in this Agreement (other than those specified in clause (a), (b) or (d) of this Article) or any other Loan Document, and such failure shall continue unremedied for a period of thirty (30) days after notice thereof from the Administrative Agent to the Company (which notice will be given at the request of any Lender);
(f) the Company or any Subsidiary shall fail to make any payment (whether of principal or interest and regardless of amount) in respect of any Material Indebtedness, when and as the same shall become due and payable, and all notice and cure periods with respect thereto have expired;
(g) any event or condition occurs that results in any Material Indebtedness becoming due prior to its scheduled maturity or that enables or permits the holder or holders of any Material
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Indebtedness or any trustee or agent on its or their behalf to cause any Material Indebtedness to become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled maturity, and all notice and cure periods with respect thereto have expired; provided that this clause (g) shall not apply to secured Indebtedness that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary petition shall be filed seeking (i) liquidation, reorganization or other relief in respect of any Borrower or any Material Subsidiary or its debts, or of a substantial part of its assets, under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (ii) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Borrower or any Material Subsidiary or for a substantial part of its assets, and, in any such case, such proceeding or petition shall continue undismissed for 60 days or can no longer be dismissed ( in kracht van gewijsde gegaan ) or an order or decree approving or ordering any of the foregoing shall be entered;
(i) any Borrower or any Material Subsidiary shall (i) voluntarily commence any proceeding or file any petition seeking liquidation, reorganization or other relief under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law now or hereafter in effect, (ii) consent to the institution of, or fail to contest in a timely and appropriate manner, any proceeding or petition described in clause (h) of this Article, (iii) apply for or consent to the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for any Borrower or any Material Subsidiary or for a substantial part of its assets, (iv) file an answer admitting the material allegations of a petition filed against it in any such proceeding, (v) make a general assignment for the benefit of creditors or (vi) take any action for the purpose of effecting any of the foregoing;
(j) any Borrower or any Material Subsidiary shall become unable, admit in writing its inability or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate amount in excess of $15,000,000 shall be rendered against the Company, any Subsidiary or any combination thereof and the same shall remain undischarged for a period of thirty (30) consecutive days during which execution shall not be effectively stayed, or any action shall be legally taken by a judgment creditor to attach or levy upon any assets of the Company or any Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, when taken together with all other ERISA Events that have occurred, could reasonably be expected to result in a Material Adverse Effect;
(m) a Change in Control shall occur;
(n) any material provision of any Loan Document for any reason ceases to be valid, binding and enforceable in accordance with its terms (or the Company or any Subsidiary shall challenge the enforceability of any Loan Document or shall assert in writing, or engage in any action or inaction based on any such assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms); or
(o) The Spin-Off Transaction shall fail to have been fully and completely completed and consummated (including, without limitation, the payment of the Spin-Off Dividend (exclusive of the Spin-Off Adjustment Payment) and the distribution of Company common stock to FTI shareholders) by 9:00 a.m. Chicago time on the Business Day following the Effective Date;
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then, and in every such event (other than an event with respect to the Company described in clause (h) or (i) of this Article), and at any time thereafter during the continuance of such event, the Administrative Agent may, and at the request of the Required Lenders shall, by written notice to the Company, take either or both of the following actions, at the same or different times: (i) terminate the Commitments, and thereupon the Commitments shall terminate immediately, and (ii) declare the Loans then outstanding to be due and payable in whole (or in part, in which case any principal not so declared to be due and payable may thereafter be declared to be due and payable), and thereupon the principal of the Loans so declared to be due and payable, together with accrued interest thereon and all fees and other Obligations of the Borrowers accrued hereunder and under the other Loan Documents, shall become due and payable immediately, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers; and in case of any event with respect to any Borrower described in clause (h) or (i) of this Article, the Commitments shall automatically terminate and the principal of the Loans then outstanding, together with accrued interest thereon and all fees and other Obligations accrued hereunder and under the other Loan Documents, shall automatically become due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers.
ARTICLE VIII
The Administrative Agent
Each of the Lenders and the Issuing Banks hereby irrevocably appoints the Administrative Agent as its agent and authorizes the Administrative Agent to take such actions on its behalf, including execution of the other Loan Documents, and to exercise such powers as are delegated to the Administrative Agent by the terms of the Loan Documents, together with such actions and powers as are reasonably incidental thereto. Without limiting the generality of the foregoing, each of the Lenders and the Issuing Banks hereby irrevocably appoints the Administrative Agent to enter into the Intercreditor Agreement on behalf of the Lenders and the Issuing Banks and agrees to be bound by the terms thereof as if it were a party thereto. The Administrative Agent agrees to provide the Lenders copies of the Intercreditor Agreement on a timely basis.
The bank serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent, and such bank and its Affiliates may accept deposits from, lend money to and generally engage in any kind of business with Company or any Subsidiary or other Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations except those expressly set forth in the Loan Documents. Without limiting the generality of the foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing, (b) the Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated by the Loan Documents that the Administrative Agent is required to exercise in writing as directed by the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02), and (c) except as expressly set forth in the Loan Documents, the Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Company or any of its Subsidiaries that is communicated to or obtained by the bank serving as Administrative Agent or any of its Affiliates in any capacity. The Administrative Agent shall not be liable for any action taken or not taken by it with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary under the circumstances as provided in Section 9.02) or in the absence of its own gross
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negligence or willful misconduct. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until written notice thereof is given to the Administrative Agent by the Company or a Lender, and the Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with any Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or in connection with any Loan Document, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth in any Loan Document, (iv) the validity, enforceability, effectiveness or genuineness of any Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article IV or elsewhere in any Loan Document, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing believed by it to be genuine and to have been signed or sent by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to be made by the proper Person, and shall not incur any liability for relying thereon. The Administrative Agent may consult with legal counsel (who may be counsel for the Company), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise its rights and powers by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all its duties and exercise its rights and powers through their respective Related Parties. The exculpatory provisions of the preceding paragraphs shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative Agent as provided in this paragraph, the Administrative Agent may resign at any time by notifying the Lenders, the Issuing Banks and the Company. Upon any such resignation, the Required Lenders shall have the right, in consultation with the Company, to appoint a successor, such appointment to be subject to the approval of the Company at all times other than during the existence of an Event of Default (which approval of the Company shall not be unreasonably withheld or delayed). If no successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent gives notice of its resignation, then the retiring Administrative Agent may, on behalf of the Lenders and the Issuing Banks, appoint a successor Administrative Agent which shall be a bank with an office in New York, New York, or an Affiliate of any such bank. Upon the acceptance of its appointment as Administrative Agent hereunder by a successor, such successor shall succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations hereunder. The fees payable by any Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between such Borrower and such successor. After the Administrative Agents resignation hereunder, the provisions of this Article and Section 9.03 shall continue in effect for the benefit of such retiring Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while it was acting as Administrative Agent.
Each Lender (and each Issuing Bank) acknowledges 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 credit analysis and decision to enter into this
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Agreement. Each Lender also acknowledges 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 from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.
None of the Lenders, if any, identified in this Agreement as a Syndication Agent or Co-Documentation Agent shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such. Without limiting the foregoing, none of such Lenders shall have or be deemed to have a fiduciary relationship with any Lender. Each Lender hereby makes the same acknowledgments with respect to the relevant Lenders in their respective capacities as Syndication Agent or Co-Documentation Agents, as applicable, as it makes with respect to the Administrative Agent in the preceding paragraph.
Except with respect to the exercise of setoff rights of any Lender, in accordance with Section 9.08, the proceeds of which are applied in accordance with this Agreement, each Lender agrees that it will not take any action, nor institute any actions or proceedings, against any Borrower or with respect to any Loan Document, without the prior written consent of the Required Lenders or, as may be provided in this Agreement or the other Loan Documents, with the consent of the Administrative Agent.
The Lenders are not partners or co-venturers, and no Lender shall be liable for the acts or omissions of, or (except as otherwise set forth herein in case of the Administrative Agent) authorized to act for, any other Lender. The Administrative Agent shall have the exclusive right on behalf of the Lenders to enforce the payment of the principal of and interest on any Loan after the date such principal or interest has become due and payable pursuant to the terms of this Agreement.
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices . (a) Except in the case of notices and other communications expressly permitted to be given by telephone (and subject to paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopy or (subject to paragraph (b) below) electronic communication, as follows:
(i) if to any Borrower, to it c/o John Bean Technologies Corporation, 200 East Randolph Drive, Chicago, Illinois 60601, Attention of Joseph Meyer, Assistant Treasurer (Telecopy No. (312) 861-5973; Telephone No. (312) 861-6146; all notices and other communications sent to any Borrower by telecopy shall also be sent to such Borrower by e-mail at: joseph.meyer@jbtc.com);
(ii) if to the Administrative Agent, (A) in the case of Borrowings by the Company denominated in Dollars, to JPMorgan Chase Bank, N.A., 10 South Dearborn, Chicago, Illinois 60603, Attention of Malgorzata Mamani (Telecopy No. (312) 385-7098) and (B) in the case of Borrowings by the Dutch Borrower or Borrowings denominated in Foreign Currencies, to J.P. Morgan Europe Limited, 125 London Wall, London EC2Y 5AJ, Attention of Lesley Pluck (Telecopy No. 44 207 777 2360), and in each case with a copy to JPMorgan Chase Bank, N.A., 10 South Dearborn, Chicago, Illinois 60603, Attention of Michael B. Kelly (Telecopy No. (312) 325-3239);
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(iii) if to an Issuing Bank, to it at (A) JPMorgan Chase Bank, N.A., 10 South Dearborn, Chicago, Illinois 60603, Attention of Malgorzata Mamani (Telecopy No. (312) 385-7098), (B) U.S. Bank National Association, 777 East Wisconsin Avenue, Standby Letters of Credit MK-WI-J6NI, Milwaukee, Wisconsin 53202, Attention of Margie Greiner and Kay Bremser (Telecopy No. (414) 765-4485), (C) Wells Fargo Bank, N.A., 1700 Lincoln, 3 rd Floor, Denver, Colorado 80203, Attention of Sandra L. Mailloux (Telecopy No. (303) 863-2729) and (D) in the case of any other Issuing Bank, to it at the address and telecopy number specified from time to time by such Issuing Bank to the Company ad the Administrative Agent;
(iv) if to a Swingline Lender, to it at (A) JPMorgan Chase Bank, N.A., 10 South Dearborn, Chicago, Illinois 60603, Attention of Malgorzata Mamani (Telecopy No. (312) 385-7098) and (B) Wells Fargo Bank, N.A., 1700 Lincoln, 3 rd Floor, Denver, Colorado 80203, Attention of Sandra L. Mailloux and Tanya Ivie (Telecopy No. (303) 863-2729); and
(v) if to any other Lender, to it at its address (or telecopy number) set forth in its Administrative Questionnaire, provided if such Administrative Questionnaire has not been delivered to Company, then Company may send any notice to Administrative Agent instead of such Lender.
(b) Notices and other communications to the Lenders (including any Issuing Bank) hereunder may be delivered or furnished by electronic communications pursuant to procedures approved by the Administrative Agent; provided that the foregoing shall not apply to notices pursuant to Article II unless otherwise agreed by the Administrative Agent and the applicable Lender. The Administrative Agent or the Company may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it; provided that approval of such procedures may be limited to particular notices or communications.
(c) Any party hereto may change its address or telecopy number for notices and other communications hereunder by notice to the other parties hereto. All notices and other communications given to any party hereto in accordance with the provisions of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments . (a) No failure or delay by the Administrative Agent, any Issuing Bank or any Lender in exercising any right or power hereunder or under any other Loan Document shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such a right or power, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Administrative Agent, the Issuing Banks and the Lenders hereunder and under the other Loan Documents are cumulative and are not exclusive of any rights or remedies that they would otherwise have. No waiver of any provision of any Loan Document or consent to any departure by any Borrower therefrom shall in any event be effective unless the same shall be permitted by paragraph (b) of this Section, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. Without limiting the generality of the foregoing, the making of a Loan or issuance of a Letter of Credit shall not be construed as a waiver of any Default, regardless of whether the Administrative Agent, any Lender or any Issuing Bank may have had notice or knowledge of such Default at the time.
(b) Except as provided in Section 2.20 with respect to an Incremental Term Loan Amendment, neither this Agreement nor any provision hereof may be waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Borrowers and the Required Lenders or by the Borrowers and the Administrative Agent with the consent of the Required Lenders;
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provided that no agreement shall (i) increase the Commitment of any Lender without the written consent of such Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce any fees payable hereunder, without the written consent of each Lender directly affected thereby, (iii) postpone the scheduled date of final maturity of the principal amount of any Loan or LC Disbursement, or any interest thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse any such payment, or postpone the scheduled date of expiration of any Commitment, without the written consent of each Lender directly affected thereby, (iv) change Section 2.18(b) or (c) in a manner that would alter the pro rata sharing of payments required thereby, without the written consent of each Lender, (v) change any of the provisions of this Section or the definition of Required Lenders or any other provision hereof specifying the number or percentage of Lenders required to waive, amend or modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender (it being understood that, solely with the consent of the parties prescribed by Section 2.20 to be parties to an Incremental Term Loan Amendment, Incremental Term Loans may be included in the determination of Required Lenders on substantially the same basis as the Commitments and the Revolving Loans are included on the Effective Date) or (vi) release the Company or all or substantially all of the Subsidiary Guarantors from their obligations under Article X or the Subsidiary Guaranty without the written consent of each Lender; provided further that no such agreement shall amend, modify or otherwise affect the rights or duties of the Administrative Agent, any Issuing Bank or any Swingline Lender hereunder without the prior written consent of the Administrative Agent, such Issuing Bank or such Swingline Lender, as the case may be.
(c) Notwithstanding the foregoing, this Agreement and any other Loan Document may be amended (or amended and restated) with the written consent of the Required Lenders, the Administrative Agent and the Borrowers (x) to add one or more credit facilities (in addition to the Incremental Term Loans pursuant to an Incremental Term Loan Amendment) to this Agreement and to permit extensions of credit from time to time outstanding thereunder and the accrued interest and fees in respect thereof to share ratably in the benefits of this Agreement and the other Loan Documents with the Revolving Loans, Incremental Term Loans and the accrued interest and fees in respect thereof and (y) to include appropriately the Lenders holding such credit facilities in any determination of the Required Lenders and Lenders.
SECTION 9.03. Expenses; Indemnity; Damage Waiver . (a) The Borrowers shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, including the reasonable fees, charges and disbursements of counsel for the Administrative Agent, in connection with the syndication and distribution (including, without limitation, via the internet or through a service such as Intralinks) of the credit facilities provided for herein, the preparation and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by any Issuing Bank in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all reasonable out-of-pocket expenses incurred by the Administrative Agent, any Issuing Bank or any Lender (limited to the reasonable fees, charges and disbursements of one primary counsel and one additional local counsel in each applicable jurisdiction for the Administrative Agent and any Issuing Bank and one additional counsel for all the Lenders (other than the Administrative Agent) and additional counsel in light of actual or potential conflicts of interest or the availability of different claims of defenses) in connection with the enforcement or protection of its rights in connection with (x) this Agreement and any other Loan Document, including its rights under this Section or (y) the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred after an Event of Default has occurred and is continuing during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.
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(b) The Borrowers shall indemnify the Administrative Agent, each Issuing Bank and each Lender, and each Related Party of any of the foregoing Persons (each such Person being called an Indemnitee) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of any counsel for any Indemnitee) incurred by or asserted against any Indemnitee arising out of, in connection with, or as a result of (i) the execution or delivery of any Loan Document or any agreement or instrument contemplated thereby, the performance by the parties hereto of their respective obligations thereunder or the consummation of the Transactions or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom (including any refusal by any Issuing Bank to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by the Company or any of its Subsidiaries, or any Environmental Liability related in any way to the Company or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the bad faith, gross negligence or willful misconduct of such Indemnitee or resulting from disputes among Indemnitees (unless such disputes arise as a result of a Default or other action or inaction by the Company or any of its Subsidiaries)).
(c) To the extent that the Company fails to pay any amount required to be paid by it to the Administrative Agent, any Issuing Bank or any Swingline Lender under paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the Administrative Agent, the relevant Issuing Bank or the relevant Swingline Lender, as the case may be, such Lenders Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount (it being understood that the Companys failure to pay any such amount shall not relieve the Company of any default in the payment thereof); provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent, the relevant Issuing Bank or the relevant Swingline Lender in its capacity as such.
(d) To the extent permitted by applicable law, no Borrower shall assert, and each Borrower hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable not later than fifteen (15) days after written demand therefor.
(f) This Section 9.03 shall not apply to any expenses, costs, claims or damages with respect to Taxes, including Indemnified Taxes or Other Taxes, that are, and shall be, exclusively governed by Section 2.17 hereof.
SECTION 9.04. Successors and Assigns . (a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of an Issuing Bank that issues any Letter of Credit), except that (i) no Borrower may assign or otherwise transfer any of its rights or obligations hereunder without the
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prior written consent of each Lender (and any attempted assignment or transfer by any Borrower without such consent shall be null and void) and (ii) no Lender (or any Issuing Bank) may assign or otherwise transfer its rights or obligations hereunder except in accordance with this Section. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby (including any Affiliate of the relevant Issuing Bank that issues any Letter of Credit), Participants (to the extent provided in paragraph (c) of this Section) and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the Issuing Banks and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.
(b)(i) Subject to the conditions set forth in paragraph (b)(ii) below, any Lender may assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it) with the prior written consent (such consent not to be unreasonably withheld) of:
(A) the Company, provided that no consent of the Company shall be required for an assignment to a Lender, an Affiliate of a Lender, an Approved Fund or, if an Event of Default has occurred and is continuing, any other assignee (it being understood and agreed that it will be reasonable for the Company to withhold its consent if an assignment would result in greater payments under Section 2.15 or 2.17 than had been applicable to the assignor of such Loans); and
(B) the Administrative Agent.
(ii) Assignments shall be subject to the following additional conditions:
(A) except in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund or an assignment of the entire remaining amount of the assigning Lenders Commitment or Loans of any Class, the amount of the Commitment or Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent) shall not be less than $5,000,000 unless each of the Company and the Administrative Agent otherwise consent, provided that no such consent of the Company shall be required if an Event of Default has occurred and is continuing;
(B) each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lenders rights and obligations under this Agreement, provided that this clause shall not be construed to prohibit the assignment of a proportionate part of all the assigning Lenders rights and obligations in respect of one Class of Commitments or Loans;
(C) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500, such fee to be paid by either the assigning Lender or the assignee Lender or shared between such Lenders;
(D) the assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire; and
(E) except in the case of an assignment to an existing Lender that has advanced a Loan to the Dutch Borrower, the amount of any assignment with respect to a Borrowing to the Dutch Borrower shall always be at least 50,000 (or its equivalent in another Agreed Currency).
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For the purposes of this Section 9.04(b), the term Approved Fund has the following meaning:
Approved Fund means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
(iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(v) of this Section, from and after the effective date specified in each Assignment and Assumption the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lenders rights and obligations under this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.03). An assignee of Loans shall not be entitled to receive any greater payment under Section 2.15 or 2.17 than the applicable assignor would have been entitled to receive at the time of the assignment with respect to the Loans and Commitment assigned by such assignor to such assignee, unless the assignment giving rise to such assignee is made with the consent of the Company. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 9.04 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (c) of this Section.
(iv) The Administrative Agent, acting for this purpose as an agent of each Borrower, shall maintain at one of its offices in the United States a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amount of the Loans and LC Disbursements owing to, each Lender pursuant to the terms hereof from time to time (the Register ). The entries in the Register shall be conclusive, and the Borrowers, the Administrative Agent, the Issuing Banks and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Company, any Issuing Bank and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning Lender and an assignee, the assignees completed Administrative Questionnaire (unless the assignee shall already be a Lender hereunder), the processing and recordation fee referred to in paragraph (b) of this Section and any written consent to such assignment required by paragraph (b) of this Section, the Administrative Agent shall accept such Assignment and Assumption and record the information contained therein in the Register; provided that if either the assigning Lender or the assignee shall have failed to make any payment required to be made by it pursuant to Section 2.05(c), 2.06(d) or (e), 2.07(b), 2.18(d) or 9.03(c), the Administrative Agent shall have no obligation to accept such Assignment and Assumption and record the information therein in the Register unless and until such payment shall have been made in full, together with all accrued interest thereon. No assignment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in this paragraph.
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(c) (i) Any Lender may, without the consent of the Company, the Administrative Agent, any Issuing Bank or any Swingline Lender, sell participations to one or more banks or other entities (a Participant ) in all or a portion of such Lenders rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans owing to it); provided that (A) such Lenders obligations under this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (C) the Borrowers, the Administrative Agent, the Issuing Banks and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lenders rights and obligations under this Agreement. Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver described in the first proviso to Section 9.02(b) that affects such Participant. In the event that a Lender sells a participation in any Loan, such Lender, as an agent, and on behalf, of each Borrower, shall maintain a register in the United States on which it enters the name and addresses and other information as may be required by Code section 163(f), the Treasury Regulations promulgated thereunder or other applicable tax law, of each Participant to whom it transferred an interest in each such Loan. Any Participation may be effected only by the registration of such Participation on the Participant Register. Subject to paragraph (c)(ii) of this Section, each Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 9.08 as though it were a Lender, provided such Participant agrees to be subject to Section 2.18(c) as though it were a Lender.
(ii) A Participant shall not be entitled to receive any greater payment under Section 2.15 or 2.17 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation to such Participant is made with the Companys prior written consent. A Participant shall not be entitled to the benefits of Section 2.17 unless the Company is notified of the participation sold to such Participant and such Participant agrees, for the benefit of the Company, to comply with Section 2.17(e) and (f) as though it were a Lender. Any Participant entitled to benefits of Section 2.17 as the result of this Section shall be subject to, and shall comply with, Section 2.17(g) as if such Participant were a Lender as stated therein.
(d) Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any such pledge or assignment of a security interest; provided that no such pledge or assignment of a security interest shall release a Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 9.05. Survival . All covenants, agreements, representations and warranties made by the Loan Parties in the Loan Documents and in the certificates or other instruments delivered in connection with or pursuant to this Agreement or any other Loan Document shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of the Loan Documents and the making of any Loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that the Administrative Agent, any Issuing Bank or any Lender may have had notice or knowledge of any Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of or any accrued interest on any Loan or any fee or any other amount payable under this Agreement or any other Loan Document is outstanding and unpaid or any Letter of Credit is outstanding and so long as the Commitments have not expired or terminated. The provisions of
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Sections 2.15, 2.16, 2.17 and 9.03 and Article VIII shall survive and remain in full force and effect regardless of the consummation of the transactions contemplated hereby, the repayment of the Loans, the expiration or termination of the Letters of Credit and the Commitments or the termination of this Agreement or any other Loan Document or any provision hereof or thereof.
SECTION 9.06. Counterparts; Integration; Effectiveness . This Agreement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement, the other Loan Documents and any separate letter agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Agreement by telecopy shall be effective as delivery of a manually executed counterpart of this Agreement.
SECTION 9.07. Severability . Any provision of any Loan Document held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions thereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.
SECTION 9.08. Right of Setoff . If an Event of Default shall have occurred and be continuing, each Lender and each of its Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by law, to set off and apply any and all deposits (general or special, time or demand, provisional or final and in whatever currency denominated) at any time held and other obligations at any time owing by such Lender or Affiliate to or for the credit or the account of any Borrower or any Subsidiary Guarantor against any of and all the Obligations held by such Lender, irrespective of whether or not such Lender shall have made any demand under the Loan Documents and although such obligations may be unmatured. The rights of each Lender under this Section are in addition to other rights and remedies (including other rights of setoff) which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process . (a) This Agreement shall be construed in accordance with and governed by the internal laws of the State of Illinois.
(b) Each Borrower hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any United States Federal or Illinois State Court sitting in Chicago, Illinois, and any appellate court from any thereof, in any action or proceeding arising out of or relating to any Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such Illinois State or, to the extent permitted by law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or any other Loan Document shall affect any right that the Administrative Agent, any Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against any Loan Party or its properties in the courts of any jurisdiction.
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(c) Each Borrower hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 9.01. The Dutch Borrower irrevocably designates and appoints the Company, as its authorized agent, to accept and acknowledge on its behalf, service of any and all process which may be served in any suit, action or proceeding of the nature referred to in Section 9.09(b) in any federal or Illinois State court sitting in Chicago. The Company hereby represents, warrants and confirms that the Company has agreed to accept such appointment (and any similar appointment by a Subsidiary Guarantor which is a Foreign Subsidiary). Said designation and appointment shall be irrevocable by the Dutch Borrower until all Loans, all reimbursement obligations, interest thereon and all other amounts payable by the Dutch Borrower hereunder and under the other Loan Documents shall have been paid in full in accordance with the provisions hereof and thereof. The Dutch Borrower hereby consents to process being served in any suit, action or proceeding of the nature referred to in Section 9.09(b) in any federal or Illinois State court sitting in Chicago by service of process upon the Company as provided in this Section 9.09(d); provided that, to the extent lawful and possible, notice of said service upon such agent shall be mailed by registered or certified air mail, postage prepaid, return receipt requested, to the Company and (if applicable to) the Dutch Borrower to the address of which the Dutch Borrower shall have given written notice to the Administrative Agent (with a copy thereof to the Company). The Dutch Borrower irrevocably waives, to the fullest extent permitted by law, all claim of error by reason of any such service in such manner and agrees that such service shall be deemed in every respect effective service of process upon the Dutch Borrower in any such suit, action or proceeding and shall, to the fullest extent permitted by law, be taken and held to be valid and personal service upon and personal delivery to the Dutch Borrower. To the extent the Dutch Borrower has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether from service or notice, attachment prior to judgment, attachment in aid of execution of a judgment, execution or otherwise), the Dutch Borrower hereby irrevocably waives such immunity in respect of its obligations under the Loan Documents. Nothing in this Agreement or any other Loan Document will affect the right of any party to this Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings . Article and Section headings and the Table of Contents used herein are for convenience of reference only, are not part of this Agreement and shall not affect the construction of, or be taken into consideration in interpreting, this Agreement.
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SECTION 9.12. Confidentiality . Each of the Administrative Agent, the Issuing Banks and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent requested by any regulatory authority, (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to any Borrower and its obligations, (g) with the written consent of the Company or (h) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, any Issuing Bank or any Lender on a nonconfidential basis from a source other than the Company. For the purposes of this Section, Information means all information received from the Company relating to the Company or any of its Subsidiaries or its or their business, other than any such information that is available to the Administrative Agent, any Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by the Company. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
SECTION 9.13. USA PATRIOT Act . Each Lender that is subject to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the Act ) hereby notifies each Loan Party that pursuant to the requirements of the Act, it is required to obtain, verify and record information that identifies such Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender to identify such Loan Party in accordance with the Act.
ARTICLE X
Company Guarantee
In order to induce the Lenders to extend credit to the Dutch Borrower hereunder, the Company hereby irrevocably and unconditionally guarantees, as a primary obligor and not merely as a surety, the payment when and as due of the Obligations of the Dutch Borrower. The Company further agrees that the due and punctual payment of such Obligations may be extended or renewed, in whole or in part, and in accordance with the terms of this Agreement, without notice to or further assent from it, and that it will remain bound upon its guarantee hereunder notwithstanding any such extension or renewal of any such Obligation.
The Company waives presentment to, demand of payment from and protest to the Dutch Borrower of any of the Obligations, and also waives notice of acceptance of its obligations and notice of protest for nonpayment. The obligations of the Company hereunder shall not be affected by (a) the failure of the Administrative Agent, any Issuing Bank or any Lender to assert any claim or demand or to enforce any right or remedy against the Dutch Borrower under the provisions of this Agreement, any other Loan Document or otherwise; (b) any extension or renewal of any of the Obligations; (c) any rescission, waiver, amendment or modification of, or release from, any of the terms or provisions of this Agreement,
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or any other Loan Document or agreement; (d) any default, failure or delay, willful or otherwise, in the performance of any of the Obligations; (e) the failure of the Administrative Agent to take any steps to perfect and maintain any security interest in, or to preserve any rights to, any security or collateral for the Obligations, if any; (f) any change in the corporate, partnership or other existence, structure or ownership of the Dutch Borrower or any other guarantor of any of the Obligations; (g) the enforceability or validity of the Obligations or any part thereof or the genuineness, enforceability or validity of any agreement relating thereto or with respect to any collateral securing the Obligations or any part thereof, or any other invalidity or unenforceability relating to or against the Dutch Borrower or any other guarantor of any of the Obligations, for any reason related to this Agreement, any Swap Agreement, any other Loan Document, or any provision of applicable law, decree, order or regulation of any jurisdiction purporting to prohibit the payment by the Dutch Borrower or any other guarantor of the Obligations, of any of the Obligations or otherwise affecting any term of any of the Obligations; or (h) any other act, omission or delay to do any other act which may or might in any manner or to any extent vary the risk of the Dutch Borrower or otherwise operate as a discharge of a guarantor as a matter of law or equity or which would impair or eliminate any right of the Dutch Borrower to subrogation.
The Company further agrees that its agreement hereunder constitutes a guarantee of payment when due (whether or not any bankruptcy or similar proceeding shall have stayed the accrual or collection of any of the Obligations or operated as a discharge thereof) and not merely of collection, and waives any right to require that any resort be had by the Administrative Agent, any Issuing Bank or any Lender to any balance of any deposit account or credit on the books of the Administrative Agent, any Issuing Bank or any Lender in favor of the Dutch Borrower or any other Person.
Except as a result of the payment in full in cash of the Obligations of the Dutch Borrower, the obligations of the Company hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, and shall not be subject to any defense or set-off, counterclaim, recoupment or termination whatsoever, by reason of the invalidity, illegality or unenforceability of any of the Obligations, any impossibility in the performance of any of the Obligations or otherwise.
The Company further agrees that its obligations hereunder shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of any Obligation is rescinded or must otherwise be restored by the Administrative Agent, any Issuing Bank or any Lender upon the bankruptcy or reorganization of the Dutch Borrower or otherwise.
In furtherance of the foregoing and not in limitation of any other right which the Administrative Agent, any Issuing Bank or any Lender may have at law or in equity against the Dutch Borrower by virtue hereof, upon the failure of the Dutch Borrower to pay any Obligation when and as the same shall become due, whether at maturity, by acceleration, after notice of prepayment or otherwise, the Company hereby promises to and will, upon receipt of written demand by the Administrative Agent, any Issuing Bank or any Lender, forthwith pay, or cause to be paid, to the Administrative Agent, any Issuing Bank or any Lender in cash an amount equal to the unpaid principal amount of such Obligations then due, together with accrued and unpaid interest thereon. The Company further agrees that if payment in respect of any Obligation shall be due in a currency other than Dollars and/or at a place of payment other than New York or any other Eurocurrency Payment Office and if, by reason of any Change in Law, disruption of currency or foreign exchange markets, war or civil disturbance or other event, payment of such Obligation in such currency or at such place of payment shall be impossible or, in the reasonable judgment of the Administrative Agent, any Issuing Bank or any Lender, disadvantageous to the Administrative Agent, any Issuing Bank or any Lender in any material respect, then, at the election of the Administrative Agent, the Company shall make payment of such Obligation in Dollars (based upon the applicable Equivalent Amount in effect on the date of payment) and/or in New York or such other Eurocurrency Payment Office as is designated by the Administrative Agent and, as a separate and
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independent obligation, shall indemnify the Administrative Agent, any Issuing Bank and any Lender against any losses or reasonable out-of-pocket expenses that it shall sustain as a result of such alternative payment.
Upon payment by the Company of any sums as provided above, all rights of the Company against the Dutch Borrower arising as a result thereof by way of right of subrogation or otherwise shall in all respects be subordinated and junior in right of payment to the prior indefeasible payment in full in cash of all the Obligations owed by the Dutch Borrower to the Administrative Agent, the Issuing Banks and the Lenders.
Nothing shall discharge or satisfy the liability of the Company hereunder except the full performance and payment in cash of the Obligations.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
JOHN BEAN TECHNOLOGIES CORPORATION, as the Company |
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By |
/s/ Joseph Meyer |
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Name: |
Joseph Meyer |
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Title: |
Assistant Treasurer |
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JOHN BEAN TECHNOLOGIES B.V. (formerly known as FoodTech B.V.), as the Dutch Borrower |
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By |
/s/ Joseph Meyer |
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Name: |
Joseph Meyer |
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Title: |
Director |
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JPMORGAN CHASE BANK, N.A., individually as a Lender, as a Swingline Lender, as an Issuing Bank and as Administrative Agent |
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By |
/s/ Mike Kelly |
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Name: |
Mike Kelly |
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Title: |
V.P. |
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WELLS FARGO BANK, N.A., individually as a Lender, as a Swingline Lender, as an Issuing Bank and as Syndication Agent |
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By |
/s/ Eric R. Hollingsworth |
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Name: |
Eric R. Hollingsworth |
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Title: |
Senior Vice President |
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THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., Individually as a Lender and as a Co-Documentation Agent |
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By |
/s/ Victor Pierzchalski |
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Name: |
Victor Pierzchalski |
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Title: |
Authorized Signatory |
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U.S. BANK NATIONAL ASSOCIATION, Individually as a Lender, as an Issuing Bank and as a Co-Documentation Agent |
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By |
/s/ James N. DeVries |
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Name: |
James N. DeVries |
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Title: |
Senior Vice President |
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FIFTH THIRD BANK, As a Lender |
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By |
/s/ Joseph A. Wemhoff |
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Name: |
Joseph A. Wemhoff |
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Title: |
Vice President |
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HSBC BANK USA, NATIONAL ASSOCIATION, as a Lender |
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By |
/s/ Graeme Robenson |
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Name: |
Graeme Robenson |
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Title: |
Vice President |
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NATIONAL CITY BANK, as a Lender |
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By |
/s/ Jon R. Hinard |
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Name: |
Jon R. Hinard |
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Title: |
Senior Vice President |
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THE NORTHERN TRUST COMPANY, as a Lender |
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By |
/s/ Lisa McDermott |
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Name: |
Lisa McDermott |
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Title: |
VP |
Signature Page to Credit Agreement
John Bean Technologies Corporation and John Bean Technologies B.V.
EXHIBIT F
[FORM OF]
SUBSIDIARY GUARANTY
GUARANTY
THIS GUARANTY (this Guaranty ) is made as of July 31, 2008, by and among each of the undersigned (the Initial Guarantors and along with any additional Subsidiaries of the Company which become parties to this Guaranty by executing a supplement hereto in the form attached as Annex I, the Guarantors ) in favor of the Administrative Agent, for the ratable benefit of the Holders of Guaranteed Obligations (as defined below), under the Credit Agreement referred to below.
WITNESSETH
WHEREAS, John Bean Technologies, a Delaware corporation (the Company ), John Bean Technologies B.V. a besloten vennootschap met beperkte aansprakelijkheid (the Dutch Borrower and, together with the Company, the Borrowers ), the institutions from time to time parties thereto as lenders (the Lenders ), and JPMorgan Chase Bank, N.A., as administrative agent (the Administrative Agent ) have entered into a certain Credit Agreement dated as of July 31, 2008 (as the same may be amended, modified, supplemented and/or restated, and as in effect from time to time, the Credit Agreement ), providing, subject to the terms and conditions thereof, for extensions of credit and other financial accommodations to be made by the Lenders to the Borrowers;
WHEREAS, it is a condition precedent to the extensions of credit by the Lenders under the Credit Agreement that each of the Guarantors execute and deliver this Guaranty, whereby each of the Guarantors shall guarantee the payment when due of all Obligations; and
WHEREAS, in consideration of the direct and indirect financial and other support that the Borrowers have provided, and such direct and indirect financial and other support as the Borrowers may in the future provide, to the Guarantors, and in order to induce the Lenders and the Administrative Agent to enter into the Credit Agreement, each of the Guarantors is willing to guarantee the Obligations of the Borrowers;
NOW, THEREFORE, in consideration of the foregoing premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Definitions . Terms defined in the Credit Agreement and not otherwise defined herein have, as used herein, the respective meanings provided for therein.
SECTION 2. Representations, Warranties and Covenants . Each of the Guarantors represents and warrants (which representations and warranties shall be deemed to have been renewed at the time of the making, conversion or continuation of any Loan or issuance of any Letter of Credit) that:
(A) It is a corporation, partnership or limited liability company duly and properly incorporated or organized, as the case may be, validly existing and (to the extent such concept applies to such entity) in good standing under the laws of its jurisdiction of incorporation,
organization or formation and has all requisite authority to conduct its business in each jurisdiction in which its business is conducted, except to the extent that the failure to have such authority could not reasonably be expected to have a Material Adverse Effect.
(B) It (to the extent applicable) has the requisite organizational power and authority and legal right to execute and deliver this Guaranty and to perform its obligations hereunder. The execution and delivery by each Guarantor of this Guaranty and the performance by each of its obligations hereunder have been duly authorized by proper proceedings, and this Guaranty constitutes a legal, valid and binding obligation of such Guarantor, respectively, enforceable against such Guarantor, respectively, in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors rights generally.
(C) Neither the execution and delivery by it of this Guaranty, nor the consummation by it of the transactions herein contemplated, nor compliance by it with the provisions hereof will (i) violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on it or its articles or certificate of incorporation (or equivalent charter documents), limited liability company or partnership agreement, certificate of partnership, articles or certificate of organization, by-laws, or operating agreement or other management agreement, as the case may be, or the provisions of any indenture, instrument or agreement to which any of the Borrowers or any of its Subsidiaries is a party or is subject, or by which it, or its property, is bound, or (ii) conflict with, or constitute a default under, or result in, or require, the creation or imposition of any Lien in, of or on its property pursuant to the terms of, any such indenture, material instrument or material agreement (other than any Loan Document). No order, consent, adjudication, approval, license, authorization, or validation of, or filing, recording or registration with, or exemption by, or other action in respect of any governmental or public body or authority, or any subdivision thereof, which has not been obtained by it, is required to be obtained by it in connection with the execution, delivery and performance by it of, or the legality, validity, binding effect or enforceability against it of, this Guaranty.
In addition to the foregoing, each of the Guarantors covenants that, so long as any Lender has any Commitment outstanding under the Credit Agreement or any amount payable under the Credit Agreement or any other Guaranteed Obligations shall remain unpaid, it will, and, if necessary, will enable each of the Borrowers to, fully comply with those covenants and agreements of such Borrower applicable to such Guarantor set forth in the Credit Agreement.
SECTION 3. The Guaranty . Each of the Guarantors hereby unconditionally guarantees, jointly with the other Guarantors and severally, the full and punctual payment and performance when due (whether at stated maturity, upon acceleration or otherwise) of the Obligations, including, without limitation, (i) the principal of and interest on each Loan made to any Borrower pursuant to the Credit Agreement, (ii) any obligations of any Borrower to reimburse LC Disbursements ( Reimbursement Obligations ), (iii) all obligations of any Borrower owing to any Lender or any affiliate of any Lender under any Swap Agreement or Banking Services Agreement, (iv) all other amounts payable by any Borrower or any of its Subsidiaries under the Credit Agreement, any Swap Agreement, any Banking Services Agreement and the other Loan Documents and (v) the punctual and faithful performance, keeping, observance, and fulfillment by any Borrower of all of the agreements, conditions, covenants, and obligations of such Borrower contained in the Loan Documents (all of the foregoing being referred to collectively as the Guaranteed Obligations and the holders from time to time of the Guaranteed Obligations being referred to collectively as the Holders of Guaranteed Obligations ). Upon (x) the failure by any Borrower to pay punctually any such amount or perform such obligation, and (y) such failure continuing beyond any applicable grace or notice and cure period, each of the Guarantors agrees
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that it shall forthwith on demand pay such amount or perform such obligation at the place and in the manner specified in the Credit Agreement, any Swap Agreement, any Banking Services Agreement or the relevant Loan Document, as the case may be. Each of the Guarantors hereby agrees that this Guaranty is an absolute, irrevocable and unconditional guaranty of payment and is not a guaranty of collection.
SECTION 4. Guaranty Unconditional . The obligations of each of the Guarantors hereunder shall be unconditional and absolute and, without limiting the generality of the foregoing, shall not be released, discharged or otherwise affected by:
(A) any extension, renewal, settlement, indulgence, compromise, waiver or release of or with respect to the Guaranteed Obligations or any part thereof or any agreement relating thereto, or with respect to any obligation of any other guarantor of any of the Guaranteed Obligations, whether (in any such case) by operation of law or otherwise, or any failure or omission to enforce any right, power or remedy with respect to the Guaranteed Obligations or any part thereof or any agreement relating thereto, or with respect to any obligation of any other guarantor of any of the Guaranteed Obligations;
(B) any modification or amendment of or supplement to the Credit Agreement, any Swap Agreement, any Banking Services Agreement or any other Loan Document, including, without limitation, any such amendment which may increase the amount of, or the interest rates applicable to, any of the Obligations guaranteed hereby;
(C) any release, surrender, compromise, settlement, waiver, subordination or modification, with or without consideration, of any collateral securing the Guaranteed Obligations or any part thereof, any other guaranties with respect to the Guaranteed Obligations or any part thereof, or any other obligation of any person or entity with respect to the Guaranteed Obligations or any part thereof, or any nonperfection or invalidity of any direct or indirect security for the Guaranteed Obligations;
(D) any change in the corporate, partnership or other existence, structure or ownership of any Borrower or any other guarantor of any of the Guaranteed Obligations, or any insolvency, bankruptcy, reorganization or other similar proceeding affecting such Borrower or any other guarantor of the Guaranteed Obligations, or any of their respective assets or any resulting release or discharge of any obligation of such Borrower or any other guarantor of any of the Guaranteed Obligations;
(E) the existence of any claim, setoff or other rights which the Guarantors may have at any time against any Borrower, any other guarantor of any of the Guaranteed Obligations, the Administrative Agent, any Holder of Guaranteed Obligations or any other Person, whether in connection herewith or in connection with any unrelated transactions; provided that nothing herein shall prevent the assertion of any such claim by separate suit or compulsory counterclaim;
(F) the enforceability or validity of the Guaranteed Obligations or any part thereof or the genuineness, enforceability or validity of any agreement relating thereto or with respect to any collateral securing the Guaranteed Obligations or any part thereof, or any other invalidity or unenforceability relating to or against any Borrower or any other guarantor of any of the Guaranteed Obligations, for any reason related to the Credit Agreement, any Swap Agreement, any Banking Services Agreement, any other Loan Document, or any provision of applicable law decree, order or regulation of any jurisdiction purporting to prohibit the payment by such Borrower or any other guarantor of the Guaranteed Obligations, of any of the Guaranteed Obligations or otherwise affecting any term of any of the Guaranteed Obligations;
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(G) the failure of the Administrative Agent to take any steps to perfect and maintain any security interest in, or to preserve any rights to, any security or collateral for the Guaranteed Obligations, if any;
(H) the election by, or on behalf of, any one or more of the Holders of Guaranteed Obligations, in any proceeding instituted under Chapter 11 of Title 11 of the United States Code (11 U.S.C. 101 et seq.) (the Bankruptcy Code ), of the application of Section 1111(b)(2) of the Bankruptcy Code;
(I) any borrowing or grant of a security interest by any Borrower, as debtor-in-possession, under Section 364 of the Bankruptcy Code;
(J) the disallowance, under Section 502 of the Bankruptcy Code, of all or any portion of the claims of the Holders of Guaranteed Obligations or the Administrative Agent for repayment of all or any part of the Guaranteed Obligations;
(K) the failure of any other guarantor to sign or become party to this Guaranty or any amendment, change, or reaffirmation hereof; or
(L) any other act or omission to act or delay of any kind by any Borrower, any other guarantor of the Guaranteed Obligations, the Administrative Agent, any Holder of Guaranteed Obligations or any other Person or any other circumstance whatsoever which might, but for the provisions of this Section 4, constitute a legal or equitable discharge of any Guarantors obligations hereunder except as provided in Section 5.
SECTION 5. Discharge Only Upon Payment In Full: Reinstatement In Certain Circumstances . Each of the Guarantors obligations hereunder shall remain in full force and effect until all Guaranteed Obligations shall have been paid in full in cash and the Commitments and all Letters of Credit issued under the Credit Agreement shall have terminated or expired. If at any time any payment of the principal of or interest on any Loan, any Reimbursement Obligation or any other amount payable by any Borrower or any other party under the Credit Agreement, any Swap Agreement, any Banking Services Agreement or any other Loan Document is rescinded or must be otherwise restored or returned upon the insolvency, bankruptcy or reorganization of any Borrower or otherwise, each of the Guarantors obligations hereunder with respect to such payment shall be reinstated as though such payment had been due but not made at such time. The parties hereto acknowledge and agree that each of the Guaranteed Obligations shall be due and payable in the same currency as such Guaranteed Obligation is denominated but if currency control or exchange regulations are imposed in the country which issues such currency with the result that such currency (the Original Currency ) no longer exists or the relevant Guarantor is not able to make payment in such Original Currency, then all payments to be made by such Guarantor hereunder in such currency shall instead be made when due in Dollars in an amount equal to the Dollar Amount (as of the date of payment) of such payment due, it being the intention of the parties hereto that each Guarantor takes all risks of the imposition of any such currency control or exchange regulations.
SECTION 6. General Waivers; Additional Waivers .
(A) General Waivers. Each of the Guarantors irrevocably waives acceptance hereof, presentment, demand or action on delinquency, protest, the benefit of any statutes of limitations and, to the fullest extent permitted by law, any notice not provided for herein, as well as any requirement that at any time any action be taken by any Person against any Borrower, any other guarantor of the Guaranteed Obligations, or any other Person.
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(B) Additional Waivers. Notwithstanding anything herein to the contrary, each of the Guarantors hereby absolutely, unconditionally, knowingly, and expressly waives:
(i) any right it may have to revoke this Guaranty as to future indebtedness or notice of acceptance hereof;
(ii) (a) notice of acceptance hereof; (b) notice of any loans or other financial accommodations made or extended under the Loan Documents or the creation or existence of any Guaranteed Obligations; (c) notice of the amount of the Guaranteed Obligations, subject, however, to each Guarantors right to make inquiry of Administrative Agent and Holders of Guaranteed Obligations to ascertain the amount of the Guaranteed Obligations at any reasonable time; (d) notice of any adverse change in the financial condition of any Borrower or of any other fact that might increase such Guarantors risk hereunder; (e) notice of presentment for payment, demand, protest, and notice thereof as to any instruments among the Loan Documents; (f) notice of any Default or Event of Default; and (g) all other notices (except if such notice is specifically required to be given to such Guarantor hereunder or under the Loan Documents) and demands to which each Guarantor might otherwise be entitled;
(iii) its right, if any, to require the Administrative Agent and the other Holders of Guaranteed Obligations to institute suit against, or to exhaust any rights and remedies which the Administrative Agent and the other Holders of Guaranteed Obligations has or may have against, the other Guarantors or any third party; and each Guarantor further waives any defense arising by reason of any disability or other defense (other than the defense that the Guaranteed Obligations shall have been fully and finally performed and indefeasibly paid) of the other Guarantors or by reason of the cessation from any cause whatsoever of the liability of the other Guarantors in respect thereof;
(iv) (a) any rights to assert against the Administrative Agent and the other Holders of Guaranteed Obligations any defense (legal or equitable), set-off, counterclaim, or claim which such Guarantor may now or at any time hereafter have against the other Guarantors or any other party liable to the Administrative Agent and the other Holders of Guaranteed Obligations; (b) any defense, set-off, counterclaim, or claim, of any kind or nature, arising directly or indirectly from the present or future lack of perfection, sufficiency, validity, or enforceability of the Guaranteed Obligations or any security therefor; (c) any defense such Guarantor has to performance hereunder, and any right such Guarantor has to be exonerated, arising by reason of: the impairment or suspension of the Administrative Agents and the other Holders of Guaranteed Obligations rights or remedies against the other Guarantors; the alteration by the Administrative Agent and the other Holders of Guaranteed Obligations of the Guaranteed Obligations; any discharge of the other Guarantors obligations to the Administrative Agent and the other Holders of Guaranteed Obligations by operation of law as a result of the Administrative Agents and the other Holders of Guaranteed Obligations intervention or omission; or the acceptance by the Administrative Agent and the other Holders of Guaranteed Obligations of anything in partial satisfaction of the Guaranteed Obligations; and (d) the benefit of any statute of limitations affecting such Guarantors liability hereunder or the enforcement thereof, and any act which shall defer or delay the operation of any statute of limitations applicable to the Guaranteed Obligations shall similarly operate to defer or delay the operation of such statute of limitations applicable to such Guarantors liability hereunder; and
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(v) any defense arising by reason of or deriving from (a) any claim or defense based upon an election of remedies by the Administrative Agent and the other Holders of Guaranteed Obligations; or (b) any election by the Administrative Agent and the other Holders of Guaranteed Obligations under Section 1111(b) of Title 11 of the United States Code entitled Bankruptcy, as now and hereafter in effect (or any successor statute), to limit the amount of, or any collateral securing, its claim against the Guarantors.
SECTION 7. Subordination of Subrogation; Subordination of Intercompany Indebtedness .
(A) Subordination of Subrogation . Until the Guaranteed Obligations have been fully and finally performed and indefeasibly paid in full in cash, the Guarantors (i) shall have no right of subrogation with respect to such Guaranteed Obligations (ii) waive any right to enforce any remedy which the Holders of Guaranteed Obligations, the Issuing Banks or the Administrative Agent now have or may hereafter have against any Borrower, any endorser or any guarantor of all or any part of the Guaranteed Obligations or any other Person, and (iii) waive any benefit of, and any right to participate in, any security or collateral given to the Holders of Guaranteed Obligations, the Issuing Banks and the Administrative Agent to secure the payment or performance of all or any part of the Guaranteed Obligations or any other liability of any Borrower to the Holders of Guaranteed Obligations or the Issuing Banks. Should any Guarantor have the right, notwithstanding the foregoing, to exercise its subrogation rights, each Guarantor hereby expressly and irrevocably (A) subordinates any and all rights at law or in equity to subrogation, reimbursement, exoneration, contribution, indemnification or set off that such Guarantor may have to the indefeasible payment in full in cash of the Guaranteed Obligations and (B) waives any and all defenses available to a surety, guarantor or accommodation co-obligor until the Guaranteed Obligations are indefeasibly paid in full in cash. Each Guarantor acknowledges and agrees that this subordination is intended to benefit the Administrative Agent and the other Holders of Guaranteed Obligations and shall not limit or otherwise affect such Guarantors liability hereunder or the enforceability of this Guaranty, and that the Administrative Agent, the other Holders of Guaranteed Obligations and their respective successors and assigns are intended third party beneficiaries of the waivers and agreements set forth in this Section 7(A).
(B) Subordination of Intercompany Indebtedness . Each Guarantor agrees that any and all claims of such Guarantor against any Borrower or any other Guarantor hereunder (each an Obligor ) with respect to any Intercompany Indebtedness (as hereinafter defined), any endorser, obligor or any other guarantor of all or any part of the Guaranteed Obligations, or against any of its properties shall be subordinate and subject in right of payment to the prior payment, in full and in cash, of all Guaranteed Obligations; provided that, as long as the Obligations have not been accelerated, such Guarantor may receive payments of principal and interest from any Obligor with respect to Intercompany Indebtedness. Notwithstanding any right of any Guarantor to ask, demand, sue for, take or receive any payment from any Obligor, all rights, liens and security interests of such Guarantor, if any, whether now or hereafter arising and howsoever existing, in any assets of any other Obligor shall be and are subordinated to the rights of the Holders of Guaranteed Obligations and the Administrative Agent in those assets. No Guarantor shall have any right to possession of any such asset or to foreclose upon any such asset, whether by judicial action or otherwise, unless and until all of the Guaranteed Obligations shall have been fully paid and satisfied (in cash) and all financing arrangements pursuant to any Loan Document, any Swap Agreement or any Banking Services Agreement have been terminated; provided that , as long as the Obligations have not been accelerated, such Guarantor may exercise any such rights. Following acceleration of the Obligations, if all or any part of the assets of any Obligor, or the proceeds thereof, are subject to any distribution, division or application to the
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creditors of such Obligor, whether partial or complete, voluntary or involuntary, and whether by reason of liquidation, bankruptcy, arrangement, receivership, assignment for the benefit of creditors or any other action or proceeding, or if the business of any such Obligor is dissolved or if substantially all of the assets of any such Obligor are sold, then, and in any such event (such events being herein referred to as an Insolvency Event ), any payment or distribution of any kind or character, either in cash, securities or other property, which shall be payable or deliverable upon or with respect to any indebtedness of any Obligor to any Guarantor ( Intercompany Indebtedness ) shall be paid or delivered directly to the Administrative Agent for application on any of the Guaranteed Obligations, due or to become due, until such Guaranteed Obligations shall have first been fully paid and satisfied (in cash). Following acceleration of the Obligations, should any payment, distribution, security or instrument or proceeds thereof be received by the applicable Guarantor upon or with respect to the Intercompany Indebtedness after any Insolvency Event and prior to the satisfaction of all of the Guaranteed Obligations and the termination of all financing arrangements pursuant to any Loan Document among any Borrower and the Holders of Guaranteed Obligations, such Guarantor shall receive and hold the same in trust, as trustee, for the benefit of the Holders of Guaranteed Obligations and shall forthwith deliver the same to the Administrative Agent, for the benefit of the Holders of Guaranteed Obligations, in precisely the form received (except for the endorsement or assignment of the Guarantor where necessary), for application to any of the Guaranteed Obligations, due or not due, and, until so delivered, the same shall be held in trust by the Guarantor as the property of the Holders of Guaranteed Obligations. If any such Guarantor fails to make any such endorsement or assignment to the Administrative Agent, the Administrative Agent or any of its officers or employees is irrevocably authorized to make the same. Each Guarantor agrees that until the Guaranteed Obligations (other than the contingent indemnity obligations) have been paid in full (in cash) and satisfied and all financing arrangements pursuant to any Loan Document among any Borrower and the Holders of Guaranteed Obligations have been terminated, no Guarantor will assign or transfer to any Person (other than the Administrative Agent) any claim any such Guarantor has or may have against any Obligor.
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SECTION 8. Contribution with Respect to Guaranteed Obligations .
(A) To the extent that any Guarantor shall make a payment under this Guaranty (a Guarantor Payment ) which, taking into account all other Guarantor Payments then previously or concurrently made by any other Guarantor, exceeds the amount which otherwise would have been paid by or attributable to such Guarantor if each Guarantor had paid the aggregate Guaranteed Obligations satisfied by such Guarantor Payment in the same proportion as such Guarantors Allocable Amount (as defined below) (as determined immediately prior to such Guarantor Payment) bore to the aggregate Allocable Amounts of each of the Guarantors as determined immediately prior to the making of such Guarantor Payment, then, following indefeasible payment in full in cash of the Guaranteed Obligations and termination of the Credit Agreement, the Swap Agreements and the Banking Services Agreements, such Guarantor shall be entitled to receive contribution and indemnification payments from, and be reimbursed by, each other Guarantor for the amount of such excess, pro rata based upon their respective Allocable Amounts in effect immediately prior to such Guarantor Payment.
(B) As of any date of determination, the Allocable Amount of any Guarantor shall be equal to the maximum amount of the claim which could then be recovered from such Guarantor under this Guaranty without rendering such claim voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or common law.
(C) This Section 8 is intended only to define the relative rights of the Guarantors, and nothing set forth in this Section 8 is intended to or shall impair the obligations of the Guarantors, jointly and severally, to pay any amounts as and when the same shall become due and payable in accordance with the terms of this Guaranty.
(D) The parties hereto acknowledge that the rights of contribution and indemnification hereunder shall constitute assets of the Guarantor or Guarantors to which such contribution and indemnification is owing.
(E) The rights of the indemnifying Guarantors against other Guarantors under this Section 8 shall be exercisable upon the full and indefeasible payment of the Guaranteed Obligations in cash and the termination of the Credit Agreement, the Swap Agreements and the Banking Services Agreements.
SECTION 9. Stay of Acceleration . If acceleration of the time for payment of any amount payable by any Borrower under the Credit Agreement, any Swap Agreement, any Banking Services Agreement or any other Loan Document is stayed upon the insolvency, bankruptcy or reorganization of such Borrower, all such amounts otherwise subject to acceleration under the terms of the Credit Agreement, any Swap Agreement, any Banking Services Agreement or any other Loan Document shall nonetheless be payable by each of the Guarantors hereunder forthwith on demand by the Administrative Agent.
SECTION 10. Notices . All notices, requests and other communications to any party hereunder shall be given in the manner prescribed in Article IX of the Credit Agreement with respect to the Administrative Agent at its notice address therein and with respect to any Guarantor, in care of the Company at the address of the Company set forth in the Credit Agreement or such other address or telecopy number as such party may hereafter specify for such purpose by notice to the Administrative Agent in accordance with the provisions of such Article IX.
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SECTION 11. No Waivers . No failure or delay by the Administrative Agent or any other Holder of Guaranteed Obligations in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies provided in this Guaranty, the Credit Agreement, any Swap Agreement, any Banking Services Agreement and the other Loan Documents shall be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 12. Successors and Assigns . This Guaranty is for the benefit of the Administrative Agent and the other Holders of Guaranteed Obligations and their respective successors and permitted assigns; provided , that no Guarantor shall have any right to assign its rights or obligations hereunder without the consent of all of the Lenders, and any such assignment in violation of this Section 12 shall be null and void; and in the event of an assignment of any amounts payable under the Credit Agreement, any Swap Agreement, any Banking Services Agreement or the other Loan Documents in accordance with the respective terms thereof, the rights hereunder, to the extent applicable to the indebtedness so assigned, may be transferred with such indebtedness. This Guaranty shall be binding upon each of the Guarantors and their respective successors and assigns.
SECTION 13. Changes in Writing . Other than in connection with the addition of additional Subsidiaries, which become parties hereto by executing a supplement hereto in the form attached as Annex I, neither this Guaranty nor any provision hereof may be changed, waived, discharged or terminated orally, but only in writing signed by each of the Guarantors and the Administrative Agent with the consent of the Required Lenders under the Credit Agreement.
SECTION 14. GOVERNING LAW . THIS GUARANTY SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE INTERNAL LAWS OF THE STATE OF ILLINOIS.
SECTION 15. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL; IMMUNITY .
(A) CONSENT TO JURISDICTION. EACH GUARANTOR HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE COURT SITTING IN THE CITY OF CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY AND EACH GUARANTOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT, ANY ISSUING BANK OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY GUARANTOR AGAINST THE ADMINISTRATIVE AGENT, ANY ISSUING BANK OR ANY LENDER OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENT, ANY ISSUING BANK OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS GUARANTY OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN THE CITY OF CHICAGO.
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(B) EACH GUARANTOR WHICH IS A FOREIGN SUBSIDIARY (A FOREIGN GUARANTOR) IRREVOCABLY DESIGNATES AND APPOINTS THE COMPANY, AS ITS AUTHORIZED AGENT, TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF, SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUIT, ACTION OR PROCEEDING OF THE NATURE REFERRED TO IN CLAUSE (A) ABOVE. SAID DESIGNATION AND APPOINTMENT SHALL BE IRREVOCABLE BY EACH SUCH FOREIGN GUARANTOR UNTIL ALL GUARANTEED OBLIGATIONS PAYABLE BY SUCH FOREIGN GUARANTOR HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS SHALL HAVE BEEN PAID IN FULL IN ACCORDANCE WITH THE PROVISIONS HEREOF AND THEREOF. EACH FOREIGN GUARANTOR HEREBY CONSENTS TO PROCESS BEING SERVED IN ANY SUIT, ACTION OR PROCEEDING OF THE NATURE REFERRED TO IN CLAUSE (A) ABOVE BY SERVICE OF PROCESS UPON THE COMPANY AS PROVIDED IN THIS CLAUSE (B); PROVIDED THAT, TO THE EXTENT LAWFUL AND POSSIBLE, NOTICE OF SAID SERVICE UPON SUCH AGENT SHALL BE MAILED BY REGISTERED OR CERTIFIED AIR MAIL, POSTAGE PREPAID, RETURN RECEIPT REQUESTED, TO THE COMPANY OR TO ANY OTHER ADDRESS OF WHICH SUCH FOREIGN GUARANTOR SHALL HAVE GIVEN WRITTEN NOTICE TO THE ADMINISTRATIVE AGENT (WITH A COPY THEREOF TO THE COMPANY). EACH FOREIGN GUARANTOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL CLAIM OF ERROR BY REASON OF ANY SUCH SERVICE IN SUCH MANNER AND AGREES THAT SUCH SERVICE SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON SUCH FOREIGN GUARANTOR IN ANY SUCH SUIT, ACTION OR PROCEEDING AND SHALL, TO THE FULLEST EXTENT PERMITTED BY LAW, BE TAKEN AND HELD TO BE VALID AND PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO SUCH FOREIGN GUARANTOR. NOTHING HEREIN WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
(C) WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER AND FURTHER WAIVES ANY RIGHT TO INTERPOSE ANY COUNTERCLAIM RELATED TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY IN SUCH ACTION.
(D) TO THE EXTENT THAT ANY GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER FROM SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OF A JUDGMENT, EXECUTION OR OTHERWISE), EACH GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY.
SECTION 16. No Strict Construction . The parties hereto have participated jointly in the negotiation and drafting of this Guaranty. In the event an ambiguity or question of intent or interpretation arises, this Guaranty shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Guaranty.
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SECTION 17. Taxes, Expenses of Enforcement, etc .
(A) Taxes.
(i) All payments by any Guarantor to or for the account of any Lender, any Issuing Bank, the Administrative Agent or any other Holder of Guaranteed Obligations hereunder or under any promissory note or application for a Letter of Credit shall be made free and clear of and without deduction for any and all Indemnified Taxes. If any Guarantor shall be required by law to deduct any Indemnified Taxes from or in respect of any sum payable hereunder to any Lender, any Issuing Bank, the Administrative Agent or any other Holder of Guaranteed Obligations, (a) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 17(A)) such Lender, any Issuing Bank, the Administrative Agent or any other Holder of Guaranteed Obligations (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (b) such Guarantor shall make such deductions, (c) such Guarantor shall pay the full amount deducted to the relevant authority in accordance with applicable law and (d) such Guarantor shall furnish to the Administrative Agent the original or certified copy of a receipt from the Governmental Authority, if any, evidencing payment thereof within ten (10) days after such payment is made.
(ii) In addition, the Guarantors hereby agree to pay any present or future stamp or documentary taxes and any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or under any promissory note or application for a Letter of Credit or from the execution or delivery of, or otherwise with respect to, this Guaranty or any promissory note or application for a Letter of Credit ( Other Taxes ).
(iii) The Guarantors hereby agree to indemnify the Administrative Agent, each Issuing Bank, each Lender and any other Holder of Guaranteed Obligations for the full amount of Indemnified Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed on amounts payable under this Section 17(A)) paid by the Administrative Agent, such Issuing Bank, such Lender or such other Holder of Guaranteed Obligations and any liability (including penalties, interest and reasonable expenses) arising therefrom or with respect thereto. Payments due under this indemnification shall be made within thirty (30) days of the date the Administrative Agent, such Issuing Bank, such Lender or such other Holder of Guaranteed Obligations makes demand therefore along with a certificate showing in reasonable detail the calculation of the Indemnified Taxes or Other Taxes and other claimed amounts.
(iv) By accepting the benefits hereof, each Lender agrees that it will comply with Section 2.17 of the Credit Agreement.
(B) Expenses of Enforcement, Etc. Subject to the terms of the Credit Agreement, after the occurrence of an Event of Default under the Credit Agreement, the Lenders shall have the right at any time to direct the Administrative Agent to commence enforcement proceedings with respect to the Guaranteed Obligations. The Guarantors agree to reimburse the Administrative Agent and the other Holders of Guaranteed Obligations for any reasonable costs and out-of-pocket expenses (including attorneys fees) paid or incurred by the Administrative Agent or any other Holder of Guaranteed Obligations in connection with the collection and enforcement of amounts due under the Loan Documents, including without limitation this Guaranty. The Administrative Agent agrees to distribute payments received from any of the Guarantors hereunder to the other Holders of Guaranteed Obligations on a pro rata basis for application in accordance with the terms of the Credit Agreement.
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SECTION 18. Setoff . At any time after all or any part of the Guaranteed Obligations have become due and payable (by acceleration or otherwise), each Holder of Guaranteed Obligations (including the Administrative Agent) may, without notice to any Guarantor and regardless of the acceptance of any security or collateral for the payment hereof, appropriate and apply in accordance with the terms of the Credit Agreement toward the payment of all or any part of the Guaranteed Obligations (i) any indebtedness due or to become due from such Holder of Guaranteed Obligations or the Administrative Agent to any Guarantor, and (ii) any moneys, credits or other property belonging to any Guarantor, at any time held by or coming into the possession of such Holder of Guaranteed Obligations (including the Administrative Agent) or any of their respective affiliates.
SECTION 19. Financial Information . Each Guarantor hereby assumes responsibility for keeping itself informed of the financial condition of each of the Borrowers and any and all endorsers and/or other Guarantors of all or any part of the Guaranteed Obligations, and of all other circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations, or any part thereof, that diligent inquiry would reveal, and each Guarantor hereby agrees that none of the Holders of Guaranteed Obligations (including the Administrative Agent) shall have any duty to advise such Guarantor of information known to any of them regarding such condition or any such circumstances. In the event any Holder of Guaranteed Obligations (including the Administrative Agent), in its sole discretion, undertakes at any time or from time to time to provide any such information to a Guarantor, such Holder of Guaranteed Obligations (including the Administrative Agent) shall be under no obligation (i) to undertake any investigation not a part of its regular business routine, (ii) to disclose any information which such Holder of Guaranteed Obligations (including the Administrative Agent), pursuant to accepted or reasonable commercial finance or banking practices, wishes to maintain confidential or (iii) to make any other or future disclosures of such information or any other information to such Guarantor.
SECTION 20. Severability . Wherever possible, each provision of this Guaranty shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Guaranty shall be prohibited by or invalid under such law, such provision shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Guaranty.
SECTION 21. Merger . This Guaranty represents the final agreement of each of the Guarantors with respect to the matters contained herein and may not be contradicted by evidence of prior or contemporaneous agreements, or subsequent oral agreements, between the Guarantor and any Holder of Guaranteed Obligations (including the Administrative Agent).
SECTION 22. Headings . Section headings in this Guaranty are for convenience of reference only and shall not govern the interpretation of any provision of this Guaranty.
SECTION 23. Judgment Currency . If for the purposes of obtaining judgment in any court it is necessary to convert a sum due from any Guarantor hereunder in the currency expressed to be payable herein (the specified currency ) into another currency, the parties hereto agree, to the fullest extent that they may effectively do so, that the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the specified currency with such other currency at the Administrative Agents main New York City office on the Business Day preceding that on which final, non-appealable judgment is given (which exchange rate may be the Exchange Rate). The obligations of each Guarantor in respect of any sum due hereunder shall, notwithstanding any judgment in a currency other than the specified currency, be discharged only to the extent that on the Business Day following receipt by any Holder of Guaranteed Obligations (including the Administrative Agent), as the case may be, of any sum adjudged to be so due in such other currency such Holder of Guaranteed Obligations (including the Administrative Agent), as the case may be, may in
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accordance with normal, reasonable banking procedures purchase the specified currency with such other currency. If the amount of the specified currency so purchased is less than the sum originally due to such Holder of Guaranteed Obligations (including the Administrative Agent), as the case may be, in the specified currency, each Guarantor agrees, to the fullest extent that it may effectively do so, as a separate obligation and notwithstanding any such judgment, to indemnify such Holder of Guaranteed Obligations (including the Administrative Agent), as the case may be, against such loss, and if the amount of the specified currency so purchased exceeds (a) the sum originally due to any Holder of Guaranteed Obligations (including the Administrative Agent), as the case may be, in the specified currency and (b) amounts shared with other Holders of Guaranteed Obligations as a result of allocations of such excess as a disproportionate payment to such other Holder of Guaranteed Obligations under Section 2.18 of the Credit Agreement, such Holder of Guaranteed Obligations (including the Administrative Agent), as the case may be, agrees, by accepting the benefits hereof, to remit such excess to such Guarantor.
Remainder of Page Intentionally Blank.
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IN WITNESS WHEREOF, each of the Initial Guarantors has caused this Guaranty to be duly executed by its authorized officer as of the day and year first above written.
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Acknowledged and Agreed as of the date first written above: |
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JPMORGAN CHASE BANK, N.A., as Administrative Agent |
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ANNEX I TO GUARANTY
Reference is hereby made to the Guaranty (the Guaranty ) made as of July 31, 2008, by and among [GUARANTORS TO COME] (the Initial Guarantors and along with any additional Subsidiaries of the Company, which become parties thereto and together with the undersigned, the Guarantors ) in favor of the Administrative Agent, for the ratable benefit of the Holders of Guaranteed Obligations, under the Credit Agreement. Capitalized terms used herein and not defined herein shall have the meanings given to them in the Guaranty. By its execution below, the undersigned [NAME OF NEW GUARANTOR], a [corporation] [partnership] [limited liability company] (the New Guarantor ), agrees to become, and does hereby become, a Guarantor under the Guaranty and agrees to be bound by such Guaranty as if originally a party thereto. By its execution below, the undersigned represents and warrants as to itself that all of the representations and warranties contained in Section 2 of the Guaranty are true and correct in all respects as of the date hereof.
IN WITNESS WHEREOF, New Guarantor has executed and delivered this Annex I counterpart to the Guaranty as of this day of , 20 .
[NAME OF NEW GUARANTOR] |
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