EXHIBIT 10.3
AGREEMENT AND LEASE
dated as of April 12, 1995
between
MELLON FINANCIAL SERVICES CORPORATION #3, Lessor
and
ESSEX GROUP, INC., Lessee
TABLE OF CONTENTS
ARTICLE I. Certain Definitions . . . . . . . . . . . . . . . 1
ARTICLE II. Agreement to Lease . . . . . . . . . . . . . . . . 4
ARTICLE III. Delivery and Acceptance . . . . . . . . . . . . . 4
ARTICLE IV. Base Lease Term and Rent . . . . . . . . . . . . . 4
4.1. Term . . . . . . . . . . . . . . . . . . . . . . . 4
4.2. Basic Rent . . . . . . . . . . . . . . . . . . . 4
4.3. Additional Rent . . . . . . . . . . . . . . . . . 4
4.4. Payment of Rent . . . . . . . . . . . . . . . . . 5
4.5. No Set-Off . . . . . . . . . . . . . . . . . . . . 5
ARTICLE V. Representations and Warranties . . . . . . . . . . 5
5.1. Lessor's Representations and Warranties . . . . . 5
5.2. Lessee's Representations and Warranties . . . . . 6
5.3. Lessee's Business Covenants . . . . . . . . . . . 10
ARTICLE VI. Conditions Precedent . . . . . . . . . . . . . . . 11
6.1. Conditions to Effectiveness . . . . . . . . . . . 11
6.2. Conditions to Lessor's Duties and
Obligations . . . . . . . . . . . . . . . . . . 12
ARTICLE VII. Reports . . . . . . . . . . . . . . . . . . . . . 13
7.1. Financial Reports . . . . . . . . . . . . . . . . 13
7.2. Annual Certificate . . . . . . . . . . . . . . . . 14
7.3. Inspection . . . . . . . . . . . . . . . . . . . . 15
7.4. Accidents . . . . . . . . . . . . . . . . . . . . 15
7.5. Tax Liens . . . . . . . . . . . . . . . . . . . . 15
7.6. Movement of Equipment . . . . . . . . . . . . . . 15
ARTICLE VIII. Maintenance, Use and Operation . . . . . . . . . . 15
8.1. Maintenance and Operation . . . . . . . . . . . . 15
8.2. Insignia . . . . . . . . . . . . . . . . . . . . . 15
8.3. Supplies . . . . . . . . . . . . . . . . . . . . . 16
8.4. Accessories . . . . . . . . . . . . . . . . . . . 16
8.5. Personal Property . . . . . . . . . . . . . . . . 16
8.6. Sublease and Assignment . . . . . . . . . . . . . 16
8.7. Substitution of Units . . . . . . . . . . . . . . 16
ARTICLE IX. Liens . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE X. Insurance . . . . . . . . . . . . . . . . . . . . 17
10.1. Physical Damage Insurance . . . . . . . . . . . . 17
10.2. Liability Insurance . . . . . . . . . . . . . . . 17
10.3. General Insurance Provisions . . . . . . . . . . . 17
10.4. Payment of Premium by Lessor . . . . . . . . . . . 17
ARTICLE XI. Assumption of Risk; Indemnification;
Survival . . . . . . . . . . . . . . . . . . . . . 17
11.1. Assumption of Risk and Indemnification . . . . . . 17
11.2. Survival of Obligations . . . . . . . . . . . . . 18
ARTICLE XII. Damage to Property . . . . . . . . . . . . . . . . 19
12.1. Duty to Notify . . . . . . . . . . . . . . . . . . 19
12.2. Termination Value . . . . . . . . . . . . . . . . 19
12.3. Insurance and Condemnation Proceeds . . . . . . . 19
ARTICLE XIII. Return of Property . . . . . . . . . . . . . . . . 19
ARTICLE XIV. Defaults; Remedies . . . . . . . . . . . . . . . . 19
14.1. Defaults; Remedies . . . . . . . . . . . . . . . . 19
14.2. Additional Remedies . . . . . . . . . . . . . . . 23
14.3. Remedies Cumulative; Waiver of
Requirements . . . . . . . . . . . . . . . . . . 23
ARTICLE XV. Participation and Assignment by Lessor . . . . . . 23
ARTICLE XVI. Quiet Possession . . . . . . . . . . . . . . . . . 24
ARTICLE XVII. Further Assurances . . . . . . . . . . . . . . . . 24
ARTICLE XVIII. Lessee Options . . . . . . . . . . . . . . . . . . 24
18.1. Purchase Option . . . . . . . . . . . . . . . . . 24
18.2. Early Termination Option . . . . . . . . . . . . . 24
18.3. Conveyance Upon Termination . . . . . . . . . . . 25
ARTICLE XIX. Intention of Parties: Security
Agreement . . . . . . . . . . . . . . . . . . . . 25
19.1. Security Agreement . . . . . . . . . . . . . . . . 25
19.2. Tax Benefits . . . . . . . . . . . . . . . . . . . 25
ARTICLE XX. Miscellaneous . . . . . . . . . . . . . . . . . . 25
ARTICLE XXI. Notices . . . . . . . . . . . . . . . . . . . . . 26
Attachments:
Schedule 5.2(t) -- Financing Statements relating to
Chemical Liens
Schedule 5.2(w) -- Lessee's Offices
Lease Schedule
Exhibit A -- Form of Certificate of Acceptance
Exhibit B -- Form of Opinion
Exhibit C -- Form of Bill of Sale
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AGREEMENT AND LEASE
THIS AGREEMENT AND LEASE (this "Agreement"), dated as of April 12,
1995, between MELLON FINANCIAL SERVICES CORPORATION #3, a Pennsylvania
corporation ("Lessor"), and ESSEX GROUP, INC., a Michigan corporation
("Lessee");
W I T N E S S E T H T H A T :
WHEREAS, Lessee has requested that Lessor purchase and lease to
Lessee the personal property described herein, and Lessor is willing to do
so upon the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto, in consideration of their
mutual covenants hereinafter set forth and intending to be legally bound
hereby, agree as follows:
ARTICLE I. Certain Definitions
In addition to the words and terms defined elsewhere in this
Agreement, the following words and terms shall have the following
meanings, respectively, unless the context hereof clearly otherwise
requires:
"Additional Rent" shall mean any and all amounts,
liabilities and obligations which Lessee assumes or agrees to pay
hereunder pursuant to Section 4.3 of this Agreement or otherwise,
other than Basic Rent.
"Agreement" shall mean this Agreement and Lease, as amended
or supplemented from time to time, and shall include the Lease
Schedule executed and delivered concurrently herewith and the
Certificate of Acceptance executed and delivered on the Closing
Date pursuant to this Agreement, in each case as so amended or
supplemented. Each reference herein to "this Agreement",
"herein", "hereunder", "hereof" or other like words shall include
this Agreement, the Lease Schedule, the Certificate of Acceptance
and any annex, exhibit or schedule attached hereto or thereto.
"Base Lease Term" and "Base Lease Term Commencement Date"
shall have the meanings assigned to such terms in the Lease
Schedule.
"Basic Rent" shall mean the amount payable as Basic Rent by
Lessee pursuant to Section 4.2 of this Agreement.
"Business Day" shall mean a day other than a Saturday,
Sunday or other day on which banks in Pittsburgh, Pennsylvania, or
Fort Wayne, Indiana, are required or authorized to close.
"Certificate of Acceptance" shall mean the certificate of
Lessee substantially in the form of Exhibit A hereto executed and
delivered under this Agreement.
"Chemical Liens" shall have the meaning assigned thereto in
Section 5.2(t).
"Closing Date" shall have the meaning assigned thereto in
Section 6.2 of this Agreement.
"Control Affiliate" as to any Person shall mean any other
Person which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes hereof, "control" of a Person means the power, directly
or indirectly, to direct or cause the direction of the management
and policies of such Person whether by contract or otherwise.
"Credit Agreement" shall mean the Credit Agreement dated as
of April 12, 1995, among Lessee, Holdings, the Lenders named
therein and Chemical Bank, as Agent, as amended, supplemented or
otherwise modified from time to time in accordance with the terms
thereof.
"Effective Date" shall mean the date on which the conditions
specified in Section 6.1 have been satisfied.
"Equipment" shall mean all the Units described in the Lease
Schedule and Certificate of Acceptance executed and delivered
under this Agreement. The Equipment generally shall consist of
enamel ovens, wire drawing equipment and related equipment located
on the Premises.
"Event of Default" shall mean any of the events described in
Section 14.1 hereof.
"GAAP" shall mean generally accepted accounting principles
set forth in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the accounting
profession), or in such other statements by such other entity as
may be in general use by significant segments of the accounting
profession, as in effect from time to time.
"Holdings" shall mean BCP/Essex Holdings, Inc., a Delaware
corporation.
"Late Payment Rate" with respect to any Rent payable
hereunder shall mean the lesser of the rate per annum identified
as such in the Lease Schedule or the maximum rate permitted by
law.
"Law" shall mean any law, constitution, statute, treaty,
regulation, rule, ordinance, order, injunction, writ, decree or
award of any Official Body.
"Lease Schedule" shall mean the Lease Schedule attached
hereto executed and delivered by Lessor and Lessee pursuant to,
currently with and as a part of this Agreement.
"Lessor's Cost" shall mean the purchase price of each Unit
to Lessor (which shall not exceed the amount set forth in the
Lease Schedule for such Unit and which shall be the invoice price
therefor) plus any excise, sales and use taxes paid or payable by
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Lessor with respect to the purchase thereof. Lessor's Cost shall
be allocated among the Units in direct proportion to the book
value thereof on the books of Lessee immediately prior to their
transfer to Lessor.
"Lien" shall mean any lien, security interest, mortgage,
option or other charge, encumbrance or right of others.
"Material Adverse Effect" shall mean a material adverse
effect on (a) the business, assets, liabilities (actual or
contingent), operations, condition (financial or otherwise) or
prospects of Holdings, Lessee and its Subsidiaries taken as a
whole, (b) the ability of Lessee to perform its obligations under
this Agreement or (c) the validity or enforceability of this
Agreement or the rights or remedies of Lessor hereunder.
"Official Body" shall mean any government or political
subdivision or any agency, authority, bureau, central bank,
commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign
or domestic.
"Permitted Liens" shall have the meaning assigned thereto in
Article IX.
"Person" shall mean an individual, partnership, operation,
business trust, joint stock company, trust, unincorporated
association, joint venture or other entity of any nature.
"Premises" shall mean the locations described in Annex 3 to
the Lease Schedule.
"Rent" shall mean Additional Rent and Basic Rent,
collectively.
"Rental Payment Date" shall mean each date on which Basic
Rent is payable hereunder.
"Significant Subsidiary" of Lessee shall mean any Subsidiary
that would be a "significant subsidiary" of Lessee within the
meaning of Rule 1-02 under Regulation S-X promulgated by the
Securities and Exchange Commission.
"Subsidiary" of any Person shall mean any corporation,
partnership, joint venture, trust or estate of which (or in which)
more than 50% of (a) the issued and outstanding voting stock,
(b) the interest in the capital or profits of such partnership or
joint venture or (c) the beneficial interest in such trust or
estate, is at the time directly or indirectly owned or controlled
by such Person and/or by one or more of such Person's other
Subsidiaries.
"Termination Value" shall mean, as of a date, with respect
to each Unit the amount equal to the Lessor's Cost of such Unit
less the aggregate amount of the Principal Component of all
payments of Basic Rent made on or before such date in respect of
such Unit.
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"Term" shall mean the total period of time for which any one
or more of the Units is leased hereunder.
"UCC" shall have the meaning assigned thereto in
Section 14.2.
"Unit" shall mean each individual item of personal property
described in the Lease Schedule and Certificate of Acceptance
executed and delivered under this Agreement.
"Unmatured Default" shall mean an event, act or condition
which with notices or lapse of time or both would constitute an
Event of Default.
Capitalized terms used herein which are defined in the Credit
Agreement and not otherwise defined herein are used herein as so defined.
ARTICLE II. Agreement to Lease
Lessor hereby agrees to lease the Units to Lessee and Lessee
hereby agrees to lease same from Lessor, all upon the terms and subject to
the conditions of this Agreement.
ARTICLE III. Delivery and Acceptance
Lessee hereby acknowledges and represents and warrants to Lessor
with respect to each Unit that (i) such Unit is of a size, design,
capacity and manufacture selected by Lessee, (ii) such Unit conforms to
the applicable description set forth in the Lease Schedule, and (iii)
Lessee is satisfied that such Unit is suitable for its purposes.
ARTICLE IV. Base Lease Term and Rent
4.1. Base Lease Term. The Base Lease Term shall commence on the
Base Lease Term Commencement Date, as evidenced by the execution and
delivery by Lessee of the Certificate of Acceptance. Unless earlier
terminated in accordance with the express provisions hereof, the Base
Lease Term shall expire on the date determined in accordance with the
Lease Schedule.
4.2. Basic Rent. Lessee shall pay to Lessor Basic Rent in the
aggregate amount and in the installments and on the Rental Payment Dates
as specified in the Lease Schedule.
4.3. Additional Rent. The lease created pursuant to this
Agreement is a "net" lease. Lessee shall pay as Additional Rent all
amounts (in addition to Basic Rent) required to be paid under this
Agreement and (except as expressly provided herein) all costs, taxes,
assessments and other expenses of every character (whether seen or
unforeseen and whether or not expressly provided for herein) relating to
or arising in connection with the use, occupancy, ownership, maintenance,
repair, replacement or reconstruction of any Unit during the Term and, to
the extent expressly provided herein, thereafter. Lessee shall also pay to
Lessor as Additional Rent interest at the Late Payment Rate on each
overdue installment of Basic Rent and on each overdue payment of
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Additional Rent (other than Additional Rent paid pursuant to this
sentence).
4.4. Payment of Rent. Each installment of Basic Rent shall be
paid to Lessor at its office at 4444 One Mellon Bank Center, Pittsburgh,
Pennsylvania 15258, or as directed by Lessor, and all Additional Rent
shall be paid directly to the Person entitled thereto and, if such Person
is Lessor, at its office or as it directs as aforesaid. All payments of
Rent shall be made in funds immediately available on the due date and
shall become due at 2:00 P.M. Pittsburgh time on the date when due.
4.5. No Set-Off. Lessee shall not be entitled to any abatement
of Rent, reduction thereof or set-off, counterclaim, recoupment or defense
against Rent, including, but not limited to, abatements, reductions,
set-offs, counterclaims, recoupments or defenses due or alleged to be due
by reason of any past, present or future claims of Lessee against Lessor
or any other Person for any reason whatsoever; nor except as otherwise
expressly provided herein, shall this Agreement terminate or the
obligations of Lessee be otherwise affected by reason of any defect in the
title, condition, design, operation or fitness for use of any Unit or
damage to or loss of possession or loss of use or destruction of all or
any of such Units from whatsoever cause and of whatever duration or any
presently existing or hereafter created liens, encumbrances or rights of
others with respect to any Unit or the prohibition of or other restriction
against Lessee's use of all or any of such Unit or the interference with
such use by any Person or the invalidity or unenforceability or lack of
due authorization of this Agreement or any insolvency of or the
bankruptcy, reorganization or similar proceeding against Lessee, or for
any combination of such cause or any other cause whether similar or
dissimilar to the foregoing, any present or future Law to the contrary
notwithstanding, it being the intention of the parties hereto that the
Rent payable by Lessee hereunder shall continue to be payable in all
events in the manner and at the times herein provided unless the
obligation to pay the same shall be terminated pursuant to the express
provisions of this Agreement. To the extent permitted by applicable Law,
Lessee hereby waives any and all rights which it may now have or which at
any time hereafter may be conferred upon it, by statute or otherwise, to
terminate, cancel, quit or surrender the lease of any of the Units except
in accordance with the express terms hereof. Each payment of Rent made by
Lessee hereunder shall be final, and Lessee shall not seek to recover all
or any part of such payment from Lessor for any reason whatsoever.
Notwithstanding the foregoing, Lessee does not waive any remedies existing
at law or in equity in its favor relating to the breach by Lessor of its
representations, warranties or agreements hereunder.
ARTICLE V. Representations and Warranties
5.1. Lessor's Representations and Warranties. Lessor represents
and warrants to Lessee that Lessor has received whatever title was
conveyed to it by Lessee and that the Equipment is free of Liens which may
result from any claims in favor of any Person claiming by, through or
under Lessor, except to the extent that such Liens arise from the failure
of Lessee to perform any of Lessee's obligations hereunder. Lessor further
represents and warrants that it has full power, legal right and authority
to lease the Equipment to Lessee in accordance with the terms hereof. TO
THE EXTENT PERMITTED BY APPLICABLE LAW, THE WARRANTIES OF LESSOR SET FORTH
IN THIS SECTION 5.1 ARE EXCLUSIVE AND IN LIEU OF ALL OTHER REPRESENTATIONS
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OR WARRANTIES OF LESSOR WHETHER STATUTORY, WRITTEN, ORAL OR IMPLIED, AND
LESSOR HAS NOT MADE AND DOES NOT HEREBY MAKE, NOR SHALL IT BE DEEMED BY
VIRTUE OF HAVING LEASED THE EQUIPMENT PURSUANT TO THIS AGREEMENT TO HAVE
MADE, ANY REPRESENTATION OR WARRANTY AS TO THE MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, DESIGN OR CONDITION OF, OR AS TO THE QUALITY OF
THE WORKMANSHIP IN, THE EQUIPMENT, but Lessor authorizes Lessee, at
Lessee's expense, to assert during the Term all of Lessor's rights under
any manufacturer's, vendor's or dealer's warranty with respect to the
Equipment, if any, and Lessor agrees to cooperate with Lessee in asserting
such rights or, at Lessee's request, to assert such rights on Lessee's
behalf at Lessee's sole cost and expense; provided, however, that Lessee
shall not attempt to enforce such rights unless (i) Lessee shall first
notify Lessor of Lessee's intention to enforce such rights and shall
furnish to Lessor such information with respect thereto as Lessor may
reasonably request and (ii) the enforcement of such rights does not, in
Lessor's reasonable judgment, involve any danger of sale, forfeiture or
loss of any Unit or create the danger of Lessor incurring criminal
liability or other liability for which indemnification by Lessee,
satisfactory to Lessor and its counsel, of Lessor and its successors,
assigns, representatives, directors, officers, employees, agents and
servants is not provided. Any amount received by Lessee as payment under
any warranty pursuant to the above authorization shall be applied to
restore the Equipment to as good a condition as it was or should have been
(but for defects giving rise to such payment under warranty) when
delivered to Lessee hereunder, ordinary and reasonable wear and tear
excepted, with the balance of such amount, if any, to be paid over to
Lessee unless an Event of Default or Unmatured Default shall have occurred
and be continuing, in which event such balance shall be paid over to
Lessee as soon as all Events of Default and Unmatured Defaults have been
cured by Lessee or waived by Lessor. The provisions of this Section 5.1
have been negotiated and agreed to by the parties hereto and, except to
the extent otherwise expressly provided in this Section 5.1 or not
permitted by applicable Law, are intended to be a complete negation and
exclusion of any representations or warranties by Lessor, express or
implied, whether arising pursuant to the UCC or any similar Law now or
hereafter in effect, or otherwise.
5.2. Lessee's Representations and Warranties. Lessee represents
and warrants that:
(a) Lessee and each of its Subsidiaries is a corporation duly
organized and existing in good standing under the laws of the state of its
incorporation, and is duly qualified to do business in those jurisdictions
(including, in the case of Lessee, each of those where the Equipment will
be located) where such qualification is necessary except where the failure
to comply therewith could not, in the aggregate, reasonably be expected to
have a Material Adverse Effect.
(b) Lessee and each of its Subsidiaries has full power and
authority to own, pledge, mortgage and operate its property and to conduct
the business in which it is currently engaged and Lessee has full power,
authority and legal right to execute, deliver and perform its obligations
under this Agreement. This Agreement has been duly authorized by all
necessary corporate action on the part of Lessee; does not require the
approval of, or the giving of notice to, any Official Body (except such as
has already been given or obtained); does not contravene any Law binding
on Lessee; and does not contravene Lessee's charter or by-laws or any
indenture or agreement to which Lessee is a party or by which it or its
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property is bound except where the failure to comply therewith could not,
in the aggregate, reasonably be expected to have a Material Adverse
Effect.
(c) This Agreement constitutes a legal, valid and binding
obligation of Lessee, enforceable in accordance with its terms except as
enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other laws affecting
the enforcement of creditors' rights generally and by equitable principles
(whether enforcement is sought by proceedings in equity or at law).
(d) There are no pending or, to the knowledge of Lessee,
threatened actions or proceedings against Holdings, Lessee or any of its
Subsidiaries before any Official Body which have had or could reasonably
be expected to have a Material Adverse Effect.
(e) The consolidated balance sheets of Holdings and its
consolidated Subsidiaries and of the Lessee and its consolidated
Subsidiaries as at December 31, 1993 and December 31, 1994 and the related
consolidated statements of income and stockholders' equity and cash flows
for the fiscal years ended on such dates, reported on by Ernst & Young,
copies of which have heretofore been furnished to Lessor, present fairly
the consolidated financial condition of Holdings and its consolidated
Subsidiaries or Lessee and its consolidated Subsidiaries, as the case may
be, as at such dates, and the consolidated results of their operations and
cash flows for the fiscal years then ended. All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the
periods involved (except as approved by such accountants and as disclosed
therein). Neither Holdings, Lessee nor any of their respective
consolidated Subsidiaries had, at the date of the most recent balance
sheet referred to above, any material Guarantee Obligation (as defined in
the Credit Agreement), contingent liability or liability for taxes, or any
long-term lease or unusual forward or long-term commitment, including,
without limitation, any interest rate or foreign currency swap or exchange
transaction, which is not reflected in the foregoing statements or in the
notes thereto other than such obligations which are not required to be
disclosed under GAAP. During the period from December 31, 1994 to and
including the Closing Date, there has been no sale, transfer or other
disposition by Holdings, Lessee or any of their respective consolidated
Subsidiaries of any material part of its business or property and no
purchase or other acquisition of any business or property (including any
Capital Stock (as defined in the Credit Agreement) of any other Person)
material in relation to the consolidated financial condition of Holdings
and its consolidated Subsidiaries or Lessee and its consolidated
Subsidiaries, as the case may be, at December 31, 1994, except for any
transaction expressly permitted under this Agreement or the Credit
Agreement.
(f) Since December 31, 1994, there has been no development or
event, which has had or could reasonably be expected to have a Material
Adverse Effect (as defined in the Credit Agreement).
(g) Neither Holdings, Lessee nor any of its Subsidiaries is in
default or has received any notice of default under or with respect to any
of its Contractual Obligations (as defined in the Credit Agreement) in any
respect which could reasonably be expected to have a Material Adverse
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Effect. No Unmatured Default or Event of Default has occurred and is
continuing.
(h) No requirement of Law or Contractual Obligation applicable
to Holdings, Lessee or any of its Subsidiaries could reasonably be
expected to have a Material Adverse Effect.
(i) Each of Holdings, Lessee and its Subsidiaries has filed or
caused to be filed all tax returns which are required to be filed and has
paid all taxes shown to be due and payable on said returns or on any
assessments made against it or any of its property and all other taxes,
fees or other charges imposed on it or any of its property by any Official
Body (other than any the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to
which reserves in conformity with GAAP have been provided on the books of
Holdings, Lessee or its Subsidiaries, as the case may be, and the
nonpayment of which does not have a reasonable likelihood of having a
Material Adverse Effect); no tax Lien has been filed with respect to any
material tax liability on the part of Holdings, Lessee or any of its
Subsidiaries; and, to the knowledge of Holdings or Lessee, no proposed
material tax assessments is pending against Holdings, Lessee or any of its
Subsidiaries and all potential tax liabilities are adequately provided for
on the books of Holdings, Lessee or its Subsidiaries, as the case may be.
(j) No Reportable Event (as defined in the Credit Agreement) has
occurred since March 1, 1988 with respect to any Plan (as defined in the
Credit Agreement) which, if then terminated, has had or could reasonably
be expected to have a Material Adverse Effect, and each Plan has complied
in all respects with the applicable provisions of ERISA (as defined in the
Credit Agreement) and the Code (as defined in the Credit Agreement) except
where such failure to comply could not reasonably be expected to have a
Material Adverse Effect.
(k) The Premises do not contain any Hazardous Materials (as
defined in the Credit Agreement) in amounts or concentrations which
(i) constitute or constituted a violation of, or (ii) could reasonably
give rise to liability under, Environmental Laws (as defined in the Credit
Agreement), except to the extent that such violations and liabilities, in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(l) The Premises and all operations at the Premises are in
compliance in all material respects and in the last three years have been
in compliance in all material respects with all Environmental Laws, and
there is no contamination at or under the Premises, or violation of any
Environmental Law with respect to the Premises or the business of
Holdings, Lessee or any of its Subsidiaries, except to the extent that
such contamination and violations, in the aggregate, could not reasonably
be expected to have a Material Adverse Effect.
(m) Neither Holdings, Lessee nor any of its Subsidiaries has
received any notice of violation, alleged violation, noncompliance,
liability or potential liability regarding environmental matters or
compliance with Environmental Laws with regard to the Premises or the
business of Holdings, Lessee or any of its Subsidiaries or with regard to
any Person whose liabilities for environmental matters Holdings, Lessee or
any of its Subsidiaries has retrained or assumed, in whole or in part,
contractually, by operation of law or otherwise, which, in the aggregate,
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could reasonably be expected to have a Material Adverse Effect, nor does
Holdings or Lessee have knowledge or reason to believe that any such
notice will be received or is being threatened.
(n) Hazardous Materials have not been transported or disposed of
from the Premises, nor have Hazardous Materials been generated, treated,
stored or disposed of at, on or under any of the Premises, in violation of
any Environmental Law or in a manner that could reasonably give rise to
liability under any Environmental Law, nor do Holdings, Lessee or any of
its Subsidiaries reasonably believe that they have retained or assumed any
liability, contractually, by operation of law or otherwise, with respect
to the generation, treatment, storage or disposal of Hazardous Materials,
except to the extent that the foregoing, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
(o) No material judicial proceedings or governmental or
administrative action is pending, or, to the knowledge of Holdings or
Lessee, threatened, under any Environmental Law to which Holdings, Lessee
or any of its Subsidiaries is or will be named a party with respect to
(x) the Premises, (y) the business of Holdings, Lessee or any of its
Subsidiaries or (z) any liabilities pursuant to Environmental Laws
reasonably believed by Holdings, Lessee or any of its Subsidiaries to be
retained or assumed by Holdings, Lessee or any of its Subsidiaries,
contractually, by operation of law or otherwise.
(p) There are no material consent decrees or other decrees,
consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any
Environmental Law with respect to (x) the Premises, (y) the business of
Holdings, Lessee or any of its Subsidiaries or (z) any liabilities
pursuant to Environmental Laws reasonably believed by Holdings, Lessee or
any of its Subsidiaries to be retained or assumed by Holdings, Lessee or
any of its Subsidiaries, contractually, by operation of law or otherwise.
(q) There has been no Release (as defined in the Credit
Agreement) or threat of Release of Hazardous Materials at or from the
Premises, or arising from or in connection with the Premises or otherwise
in connection with the business of Holdings, Lessee or its Subsidiaries in
violation of any Environmental Law in a matter that, in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(r) Lessee is, and after giving effect to the consummation of
the transactions contemplated hereby and the application of the proceeds
of the sale of the Equipment by Lessee and to the incurrence or assumption
of all indebtedness, liabilities and obligations being incurred or assumed
in connection herewith will be and will continue to be, Solvent (as
defined in the Credit Agreement).
(s) Lessee maintains with financially sound and reputable
insurance companies insurance which meets the requirement of Article X
hereof.
(t) Prior to conveyance of the Equipment to Lessor, Lessee had,
and on the Closing Date Lessee will have conveyed to Lessor, good and
marketable title to the Equipment, free and clear of any Lien, except for
Permitted Liens and Liens in favor of the Lenders party to, and created
pursuant to, that certain Credit Agreement dated as of September 25,
1992, as amended and restated as of April 22, 1993, among Holdings, the
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Company, the Lenders named therein and Chemical Bank, as Agent (the
"Chemical Liens"). No effective financing statement or other item similar
in effect covering any Equipment is on file in any recording office,
except (1) those listed on Schedule 5.2(t) hereto relating to the Chemical
Liens and (2) such as may be filed in favor of Lessor relating to this
Agreement.
(u) This Agreement creates a valid security interest in the
Equipment in favor of Lessor securing the obligations of Lessee hereunder,
including without limitation the payment of Rent, which security interest
has been duly perfected and is prior to all other Liens other than the
Chemical Liens. All filings and other actions necessary or desirable to
perfect and protect such security interest in favor of Lessor have been
duly made and taken.
(v) No authorization, approval or other action by, and no notice
to or filing with, any Official Body is or will be necessary (i) for the
grant by Lessee of the security interest in the Equipment hereunder or for
the execution, delivery or performance of this Agreement by Lessee,
(ii) to ensure the validity, perfection or priority of the security
interest in the Equipment granted hereunder, or (iii) for the exercise by
Lessor of any of its rights or remedies hereunder, except for the filing
of (1) termination statements relating to the UCC financing statements
described in clause (1) of the second sentence of Section 5.2(t) above and
(2) UCC financing statements and continuation statements in appropriate
jurisdictions in favor of Lessor in connection with the security interest
granted hereunder.
(w) Schedule 5.2(w) identifies as of the date hereof the address
of the chief executive office of Lessee and of each office (whether
maintained by Lessee or otherwise) where books and records relating to the
Equipment are kept.
(x) Annex 3 to the Lease Schedule identifies as of the date
hereof the address of each Premises at which Equipment is located. Lessee
holds good and marketable fee simple title to each of the Premises,
subject only to the Chemical Liens.
(y) Lessee has exclusive possession and control of the Equipment.
5.3. Lessee's Business Covenants. (a) Lessee hereby covenants
and agrees that Lessee shall not convey title to any of the Premises to
any other Person unless Lessee shall have first obtained from such Person
an easement in form and substance satisfactory to Lessor granting to
Lessor the right to locate and keep at such Premises such of the Equipment
as is then or may thereafter be located on or at such Premises and
granting to Lessor the right to enter onto such Premises for the purpose
of operating, maintaining, replacing, removing or otherwise dealing with
the Equipment located thereon.
(b) The covenants and agreements contained in Sections 7.1(b) and
(c) of the Credit Agreement are hereby incorporated herein by reference,
and Lessee agrees with and for the benefit of Lessor from the date hereof
until the end of the Term to perform such covenants and agreements and to
comply therewith (it being understood and agreed, however, that Lessor is
subject to and bound by any amendment, modification or waiver of Section
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7.1(b) or (c) of the Credit Agreement made pursuant to Section 11.1(c) of
the Credit Agreement). References herein to the provisions of the Credit
Agreement include the definitions of terms used therein, references to
sections thereof and references to schedules thereto, except that
references therein to the "Company" shall be deemed to be references to
the Lessee hereunder and references therein to the "Effective Date" shall
be deemed to be references to the Effective Date hereunder.
ARTICLE VI. Conditions Precedent
6.1. Conditions to Effectiveness. The effectiveness of this
Agreement is subject to the satisfaction of the following conditions
precedent on or prior to the Effective Date, in each case in form,
substance and manner satisfactory to Lessor and its counsel.
(a) Each of the representations and warranties made by Lessee in
or pursuant to this Agreement shall be true and correct on and as of the
Effective Date.
(b) No Event of Default or Unmatured Default shall have occurred
and be continuing on the Effective Date.
(c) Lessor shall have received a copy of the resolutions of the
Board of Directors (and if applicable the shareholders) of Lessee, and a
copy of each of the articles of incorporation and the by-laws of Lessee,
each certified as of the Effective Date by the Secretary or an Assistant
Secretary of Lessee, duly authorizing the execution, delivery and
performance of this Agreement.
(d) Lessor shall have received a certificate of the Secretary or
an Assistant Secretary of Lessee dated the Effective Date as to the
incumbency and signatures of the person or persons authorized to execute
this Agreement and the other documents contemplated hereby on behalf of
Lessee.
(e) Lessor shall have received an opinion of counsel for Lessee
dated the Effective Date in substantially the form attached hereto as
Exhibit B.
(f) Lessor shall have received evidence satisfactory to Lessor
that Lessee has obtained insurance with respect to each Unit as required
by Article X.
(g) Lessor shall have received, with respect to each Unit to be
identified on Attachment 1 to the Certificate of Acceptance as exempt for
sales tax purposes, an exemption certificate.
(h) Lessor shall have received evidence reasonably satisfactory
to Lessor in Lessor's sole discretion that (i) the fair market value of
the Equipment on the Base Lease Term Commencement Date is not less than
$35,000,000 and (ii) the fair market value of the Equipment at the
expiration of the Base Lease Term is reasonably expected to be not less
than $15,000,000; provided, however, that the Lessee makes no
representation or warranty as to such fair market value.
(i) Lessor shall have received all documents, recordings and
filings as may be necessary or, in the opinion of Lessor, desirable to,
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and which, when recorded or filed will, create and perfect the security
interest created or purported to be created hereby as a valid, continuing
and perfected security interest in favor of Lessor securing the
obligations of Lessee hereunder, prior to all other Liens, evidence of the
taking of all other actions and evidence that any necessary fee, tax or
expense relating to such recordings or filings has been or will be paid.
Without limitation of the foregoing, Lessor shall receive executed
originals of all proper financing statements and all termination
statements required to be filed under the UCC as may be necessary or, in
the opinion of Lessor, desirable to create and perfect such security
interest in favor of Lessor.
(j) Lessor shall have received a search of UCC, real property,
tax, judgment and litigation dockets and records and other appropriate
registers revealing no filings or recordings in effect with respect to the
Equipment, except for filings relating to the Chemical Liens with respect
to which Lessor shall have received executed termination statements as
provided in Section 6.1(i) above, and such others as are acceptable to the
Lessor (it being understood that such acceptance does not limit the
obligations of Lessee with respect to the priority of the security
interest created hereby in favor of Lessor).
(k) Lessor shall have received a waiver, in form and substance
satisfactory to Lessor, from each Person having an interest, as a
mortgagee, in any of the Premises, pursuant to which such Person shall
have waived any interest such Person may have in and to any of the
Equipment.
(l) Lessor shall have received an executed Certificate of
Acceptance substantially in the form of Exhibit A hereto.
(m) Lessor shall have received an executed bill of sale for each
Unit substantially in the form of Exhibit C hereto.
(n) All other legal proceedings and details relative to this
Agreement shall be reasonably satisfactory to Lessor and its counsel, and
Lessor shall have been furnished with original or certified copies of such
other documents as it or its counsel may reasonably request.
All documents delivered by Lessee pursuant to this Section 6.1
shall be held by Lessor in escrow until the Closing Date and, in the event
that the Closing Date does not occur, such documents shall be returned to
Lessee.
6.2. Conditions to Lessor's Duties and Obligations. Lessor's
duties and obligations under this Agreement are subject, as of the date of
acceptance by Lessee of the Equipment (the "Closing Date"), of the
following conditions precedent:
(a) No order, judgment or decree shall purport to enjoin or
restrain (i) any Lender (as defined in the Credit Agreement) from making
its portion of the Redemption Loans (as defined in the Credit Agreement)
on such date, (ii) Lessor from purchasing the Equipment from Lessee for
Lessor's Cost and leasing the same to Lessee pursuant hereto on such date
or (iii) Holdings from redeeming on such date a portion of the 16%
Debentures (as defined in the Credit Agreement) having an aggregate face
amount equal to the aggregate amount of such Lessor's Cost.
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(b) There shall not have occurred (i) any Event of Default
pursuant to Section 14.1(a), (e) or (f) hereof, (ii) any payment default
in respect of the Senior Notes (as defined in the Credit Agreement) or
(iii) the declaration by any Person of any indebtedness described in
Section 14.1(g) (and having the minimum principal amount specified
therein) to be due and payable, in whole or in part, prior to the stated
maturity of such indebtedness.
The release by Lessee of the documents being held by Lessor in
escrow pursuant to Section 6.1 above shall constitute a representation and
warranty by Lessee as of the date of such acceptance that the conditions
contained in this Section 6.2 have been satisfied.
ARTICLE VII. Reports
7.1. Financial Reports.
(a) As soon as available, but in any event within 90 days after
the end of each fiscal year of Holdings or Lessee, as the case may be,
Lessee shall furnish to Lessor a copy of the consolidated balance sheet of
Holdings and its consolidated Subsidiaries and of Lessee and its
consolidated Subsidiaries as at the end of such year and the related
consolidated statements of income and stockholders' equity and cash flows
for such year, setting forth in each case in comparative form the figures
for the previous year, reported on by Ernst & Young or other independent
certified public accountants acceptable to Lessor (which report shall not
be qualified in any material respect); and
(b) As soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of Holdings or Lessee, as the case may be, Lessee shall furnish to
Lessor the unaudited consolidated balance sheet of Holdings and its
consolidated Subsidiaries and of Lessee and its consolidated Subsidiaries
as at the end of such quarter and the related unaudited consolidated
statements of income and stockholders' equity and cash flows for such
quarter and the portion of the fiscal year through the end of such
quarter, setting forth in each case in comparative form the figures for
the previous year, certified by a Responsible Officer (as defined in the
Credit Agreement) of Holdings or Lessee, as the case may be, as fairly
presenting the financial condition and results of operations of Holdings
or Lessee, as the case may be, on a consolidated basis in accordance with
GAAP (subject to normal year-end audit adjustments);
All such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with
GAAP applied consistently throughout the periods reflected therein and
with prior periods (except as approved by such accountants or officer, as
the case may be, and disclosed therein). It is understood that the
obligation to deliver any items described above which are contained in
Holdings' Form 10-K, as filed with the Securities and Exchange Commission
(in the case of Section 7.1(a)) or Holdings' Form 10-Q, as filed with the
Securities and Exchange Commission (in the case of Section 7.1(b)), may be
satisfied by delivery of such Form 10-K or Form 10-Q, as the case may be.
(c) Concurrently with the delivery of the financial statements
referred to in Section 7.1(a), Lessee shall deliver to Lessor (i) a
certificate of the independent certified public accountants reporting on
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such financial statements stating that in making the examination necessary
therefor no knowledge was obtained of any Event of Default or Unmatured
Default, except as specified in such certificate and (ii) copies of any
management letters delivered to Holdings or Lessee in connection with such
examination;
(d) Concurrently with the delivery of the financial statements
referred to in Sections 7.1(a) and 7.1(b), Lessee shall deliver to Lessor
(i) a certificate of a Responsible Officer of each of Holdings and Lessee
stating that such Responsible Officer has obtained no knowledge of any
Event of Default or Unmatured Default except as specified in such
certificate and (ii) a copy of the Compliance Certificate (as defined in
the Credit Agreement) delivered to the Lenders (as defined in the Credit
Agreement) pursuant to Section 6.2(b) of the Credit Agreement.
(e) Within five days after the same are sent, Lessee shall
deliver to Lessor copies of all financial statements and reports which
Holdings or Lessee sends to holders of any issue of its equity securities
or debt securities generally, and within five days after the same are
filed, copies of all financial statements and reports which Holdings or
Lessee may make to, or file with, the Securities and Exchange Commission
or any successor or analogous government authority or any national
securities exchange; and
(f) Lessee shall promptly furnish to Lessor such additional
financial and other information as Lessor shall reasonably request.
7.2. Annual Certificate. Lessee shall furnish to Lessor,
concurrently with the delivery of the annual financial statements of
Lessee required by Section 7.1 hereof, a certificate signed on behalf of
Lessee by a Responsible Officer of Lessee stating as of a recent date (but
not more than three months prior thereto):
(a) Information with respect to each Unit comparable to the
information set forth on Annex 2 to the Lease Schedule;
(b) The "RFA" number and "asset number" of any Unit that has
become lost, destroyed, irreparably damaged or otherwise permanently
rendered unfit or unavailable for use since the date of the previous
report delivered pursuant to this Section 7.2 (or since the commencement
of the Term in the case of the first such report);
(c) That the Equipment has been kept in good order and repair or
is then being repaired in accordance with Section 8.1 hereof;
(d) That the location requirements of Section 7.6 and
identification requirements of Section 8.2 hereof have been complied with
in the case of each Unit;
(e) That Lessee has filed all personal property tax returns in
respect of the Equipment required to be filed and has paid all taxes shown
thereon to be due; and
(f) That the signer of the certificate has made, or caused to be
made by persons under his authority and direction, a reasonable
investigation concerning the Equipment and Lessee's compliance with its
obligations hereunder, and that no Event of Default and no Unmatured
Default has occurred and is continuing or, if any Event of Default or
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Unmatured Default has occurred and is continuing, the nature thereof and
the steps which Lessee has taken or is taking to cure the same.
7.3. Inspection. Lessee shall permit any person designated by
Lessor to visit and inspect the Equipment and the records maintained in
connection therewith and to discuss the affairs, finances and accounts of
Lessee with the principal officers of Lessee, all at such reasonable times
and as often as Lessor may reasonably request.
7.4. Accidents. In the event of an accident arising out of
alleged or apparent defective design or manufacture or out of the use or
operation of any Unit, Lessee shall promptly file with the appropriate
governmental agencies all notices required by Law and shall promptly
deliver to its insurance carriers all notices called for under each policy
of insurance relating to such Unit. Concurrently with such filing or
delivery, Lessee shall deliver to Lessor a copy of the notice so filed or
delivered unless Lessee determines that the loss or liability as a result
of such accident is not reasonably expected to exceed $500,000. Lessee
shall also deliver to Lessor any additional information with respect to
such accident which Lessor shall reasonably request and shall promptly
make available to Lessor all correspondence, papers, notices and documents
whatsoever received by Lessee in connection with any claim or demand
involving or relating to any such accident, except for information which
is subject to the attorney client privilege or the work product doctrine.
7.5. Tax Liens. Lessee shall notify Lessor in writing, within 30
days after any day on which any Lien for taxes which are due and unpaid
shall attach to any Unit, of such Lien and of the location of such Unit on
such day.
7.6. Movement of Equipment. Lessee shall not move any Unit from
the Premises therefor specified in the Lease Schedule without the prior
written consent of Lessor, which shall not be unreasonably withheld.
ARTICLE VIII. Maintenance, Use and Operation
8.1. Maintenance and Operation. Lessee, at its own cost and
expense, shall service, repair, maintain and overhaul each Unit in
accordance with the procedures recommended or required by any service and
maintenance manuals and any subsequent bulletins or releases issued by any
manufacturer or dealer of the Units (and maintain complete records
relative thereto) and keep the same (i) in as good, safe and reliable
operating condition, repair and appearance as it was when delivered to
Lessee hereunder, ordinary and reasonable wear and tear excepted, and (ii)
in such condition as shall meet all applicable federal, state or local
Laws. Without limiting the foregoing, Lessee agrees to maintain each Unit
to the same extent as a prudent individual would in the management of its
own properties for the full useful life of a similar unit as if owned by
Lessee and without reference to the remaining Term hereof. Lessee shall
not use, operate or store any Unit in violation of this Agreement, of any
instructions therefor furnished by the manufacturer or vendor thereof or
of any applicable federal, state or local Law; nor use or operate any Unit
other than in a manner and for the use contemplated by the manufacturer
thereof.
8.2. Insignia. Lessee shall maintain on each Unit an insignia or
identification reasonably requested by Lessor and shall not remove, or
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permit the removal of, such insignia or identification without the prior
written consent of Lessor.
8.3. Supplies. Lessee shall pay for and provide all power, fuel
and supplies consumed by and required for each Unit and all repairs, parts
and supplies necessary therefor.
8.4. Accessories. Lessee shall not, without the prior written
consent of Lessor (which consent shall not be unreasonably withheld),
affix or install any accessory, equipment or device on any Unit if such
addition will materially impair the value or the originally intended
function or use of such Unit. All repairs, parts, supplies, accessories,
equipment and devices furnished or affixed to the Equipment shall
thereupon become the property of Lessor (except such as may be removed
without in any way materially affecting or impairing the value or the
originally intended function or use of the Equipment) and subject to the
Lien of, and security interest created in favor of Lessor under, this
Agreement. Immediately upon any replacement part becoming incorporated or
installed in or attached to the Equipment, without further act, title to
the removed part shall thereon vest in Lessee, free and clear of all
rights of Lessor.
8.5. Personal Property. Lessee shall not, without the prior
written consent of Lessor (which consent shall not be unreasonably
withheld) and subject to such conditions as Lessor may impose for its
protection, affix or install any Unit to or in any real property in such a
manner that it shall be or become real property or subject to any Lien or
other right in favor of any Person holding a Lien on any of the Premises,
it being the mutual intention of the parties that the Equipment at all
times shall be and remain personal property of Lessor. Lessee shall take
such steps as may be necessary to prevent any Person from acquiring any
rights in any Unit by reason of such Unit being claimed or deemed to be
real property.
8.6. Sublease and Assignment. Lessee shall not assign this
Agreement or sublease or let any Unit without the prior written consent of
Lessor, which consent shall not be unreasonably withheld.
8.7. Substitution of Units. At the request of Lessee, Lessor
shall permit Lessee to substitute replacement equipment (the "Replacement
Unit") for any Unit; provided that (i) the Replacement Unit shall be of at
least equal value, utility, salability and useful life of the Unit being
replaced, which determination shall be made by agreement between Lessee
and Lessor or, at the option of Lessor and the expense of Lessee, shall be
based upon an appraisal made by an appraiser selected by Lessor and
(ii) Lessee shall have taken all steps reasonably required by Lessor to
assure that title to the Replacement Unit has been duly transferred to
Lessor, that such Replacement Unit has been subjected to this Agreement
and that Lessor has a perfected security interest therein under the UCC
prior to the interest of any other Person.
ARTICLE IX. Liens
Lessee will not permit any Unit to be subject to any Lien
whatsoever except (i) the respective rights of Lessor and Lessee as herein
provided, (ii) Liens asserted by any person claiming by, through or under
Lessor and resulting from acts or omissions of Lessor, except to the
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extent that such Liens arise from the failure of Lessee to perform any of
Lessee's obligations hereunder, (iii) Liens for taxes not yet due, or so
long as any Event of Default shall not have occurred and remain continuing
hereunder, which taxes are being contested in good faith by appropriate
proceedings diligently pursued and as to which taxes any appropriate
reserves required by GAAP have been made on the books of the Lessee, and
(iv) inchoate, materialmen's, mechanics', workmen's, repairmen's,
employees' or other like Liens arising in the ordinary course of business
and not delinquent ("Permitted Liens").
ARTICLE X. Insurance
10.1. Physical Damage Insurance. At its own expense, Lessee
shall maintain physical damage insurance on each Unit against fire and
such other perils and in such amounts as are usually carried by
corporations engaged in the same or a similar business and similarly
situated to Lessee; provided, however, that in no event shall the amount
of such insurance at any time be less than the aggregate Termination Value
of all Units then leased hereunder.
10.2. Liability Insurance. At its own expense, Lessee shall
maintain insurance protecting the interests of both Lessor and Lessee
against liability for property damage to third persons and personal injury
or death arising out of the maintenance, use, operation and ownership of
the Equipment, in such amounts as are usually carried by corporations
engaged in the same or similar businesses and similarly situated to
Lessee.
10.3. General Insurance Provisions. All insurance required by
Sections 10.1 and 10.2 of this Agreement shall name the Lessor and Lessee
as insured parties, shall be maintained with responsible insurance
companies rated A or better by Best's and shall provide that the coverage
thereunder may be altered or cancelled only after not less than 30 days'
prior written notice to Lessor.
10.4. Payment of Premium by Lessor. In the event that Lessee
shall fail to obtain or maintain insurance in accordance with the
provisions of this Agreement, Lessor shall have the right, following not
less than 10 Business Days notice to Lessee, to obtain, and pay the
premiums on, such insurance as Lessor deems necessary and Lessee shall,
upon demand, reimburse Lessor in an amount equal to the amount of such
premiums paid plus interest at the Late Payment Rate from the date of such
payment to the date of such reimbursement.
ARTICLE XI. Assumption of Risk; Indemnification; Survival
11.1. Assumption of Risk and Indemnification. Lessee does hereby
assume liability for, and does hereby agree to indemnify, protect, save
and keep harmless Lessor and its successors, assigns, representatives,
directors, officers, employees, agents and servants (each such party
herein, for purposes of this Section 11.1, called an "Indemnitee") from
and against, and does hereby agree to pay, when due, as Additional Rent,
all liabilities, obligations, losses, damages, penalties, claims, actions,
suits, costs, expenses and disbursements, including reasonable legal fees
and expenses, of whatsoever kind or nature, whether seen or unforeseen,
imposed upon, incurred by or with respect to or asserted against any Unit
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or any Indemnitee, in any way relating to or arising out of the
manufacture, purchase, acceptance or rejection, ownership, delivery,
lease, use, possession, operation, condition, repair, replacement,
reconstruction, return or other disposition of any Unit, including without
limitation those in any way relating to or arising out of or alleged to
arise out of (i) any latent or other defects whether or not discoverable
by Lessor or Lessee, (ii) any claim for patent, trademark or copyright
infringement, (iii) any claim based on strict liability in tort and (iv)
any and all license fees, assessments and sales, use, rent, property and
other taxes now or hereafter imposed by any federal, state or local
government upon any Unit or its use or payments hereunder, or upon this
Agreement (excluding, however, taxes, fees and other charges (x) based
upon or measured by an Indemnitee's net income or its overall gross
receipts, (y) imposed by reason of the fact that an Indemnitee is not a
person organized under the Laws of the United States of America, any State
thereof or the District of Columbia or (z) imposed in connection with any
transfer, assignment or participation of all or any part of an
Indemnitee's interest in a Unit or in this Agreement to a Person other
than the Lessee prior to the occurrence and continuance of an Event of
Default, in each case together with interest and penalties with respect to
any such excluded taxes), whether the same shall be payable by or billed
or assessed to Lessor or Lessee, together with any penalties or interest
in connection therewith; provided, however, that nothing in this
Section 11.1 shall be construed so as to require Lessee to indemnify an
Indemnitee for its own gross negligence or willful misconduct or for any
material breach by Lessor of this Agreement. Lessee shall be obligated
under this Section 11.1 irrespective of whether an Indemnitee shall also
be indemnified with respect to the same matter under any other agreement
by any other person, except to the extent such Indemnitee recovers under
any insurance policies provided by Lessee hereunder. In the event Lessee
is required to make any payment under this Section 11.1, Lessee shall pay
to the Indemnitee an amount which after deduction of all taxes required to
be paid by the Indemnitee in respect of the receipt of such payment (after
giving credit for any savings in respect of any such taxes by reason of
deductions, credits or allowances in respect of the payment of the expense
indemnified against, and of such other taxes) shall be equal to the amount
of such payment. Lessee and Lessor each agree to give the other promptly
upon obtaining knowledge thereof written notice of any claim or liability
hereunder indemnified against; provided, however, that the failure to give
such notice shall affect, impair or diminish Lessee's obligations under
this Section 11.1 only and only to the extent of any damage or prejudice
caused to Lessee by such failure. Lessee shall not have any obligation to
indemnify any Indemnitee for any matter occurring subsequent to the
termination of this Agreement except to the extent that it relates to or
results from an act or event occurring prior to such termination or a
breach by Lessee of its obligations hereunder. Lessor shall permit
Lessee, at Lessee's expense, to contest any taxes, fees or other charges
or related penalties for which indemnification is provided hereunder so
long as Lessor, in its reasonable judgment, does not, as a result thereof,
risk criminal on other liability for which adequate indemnification may
not be provided. Lessee will keep Lessor fully informed as to the status
of any such contest.
11.2. Survival of Obligations. This Article XI shall remain in
effect notwithstanding the expiration or other termination of the Term
insofar as it relates to an event or state of facts which occurred or
existed or which is alleged to have occurred or existed prior to such
expiration or termination.
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ARTICLE XII. Damage to Property
12.1. Duty to Notify. In the event any Unit shall be lost,
stolen, destroyed, damaged beyond repair or permanently rendered unfit for
use for any reason whatsoever, or title thereto shall be requisitioned or
taken by any governmental authority under the power of eminent domain or
otherwise (herein referred to as an "Event of Loss"), Lessee shall
promptly notify Lessor as to the circumstances and time of such event.
12.2. Termination Value. Effective upon the happening of an
Event of Loss with respect to any Unit, Lessee shall become obligated,
without demand or notice, to pay to Lessor on the next Rental Payment Date
occurring more than 30 days following such Event of Loss an amount equal
to the Termination Value for such Unit as of such Rental Payment Date
together with all Basic Rent due on such Rental Payment Date. The
obligation of Lessee to pay Basic Rent for such Unit shall cease when such
payments have been made and such Unit shall cease to be part of the
Equipment leased hereunder effective as of such payment. Promptly
following receipt of such payments, Lessor will execute and deliver an
appropriate document amending the Certificate of Acceptance, but Lessor's
failure so to do shall not affect Lessee's obligations under this
Agreement, and Lessor will transfer to Lessee, without recourse or
warranty, all of Lessor's right, title and interest, if any, in and to
such Unit.
12.3. Insurance and Condemnation Proceeds. Any and all insurance
or other payments received by Lessor or Lessee (except under any insurance
policy maintained pursuant to Section 10.2 hereof) as a result of any
Event of Loss of a Unit shall be paid to or retained by Lessor and applied
against Lessee's obligation to pay the Termination Value. So long as no
Event of Default or Unmatured Default shall have occurred and be
continuing, any excess over such amount shall be paid by Lessor to Lessee.
If an Event of Default or Unmatured Default exists and is continuing, any
such excess shall be retained by Lessor and applied against Lessee's
obligation to pay the Termination Value until such Event of Default or
Unmatured Default shall be cured or waived, at which time any such excess
not so applied shall be paid to Lessee.
ARTICLE XIII. Return of Property
Upon the termination of the Base Lease Term prior to the scheduled
expiration thereof, if Lessor elects to retake possession of the
Equipment pursuant to Article XIV, Lessee shall return the Equipment to
Lessor in the condition required by Section 8.1 hereof. Lessee shall pay
or reimburse Lessor for the cost of all repairs reasonably necessary to
restore each Unit to such condition.
Notwithstanding any other provision hereof, upon termination of
the Base Lease Term, Lessor may, by written notice to Lessee, abandon the
Equipment to Lessee, whereupon title thereto and all liability and
responsibility therefor shall revert to Lessee.
ARTICLE XIV. Defaults; Remedies
14.1. Defaults; Remedies. If during the Term of this Agreement
one or more of the following events ("Events of Default") shall occur:
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(a) Default shall be made in the payment when due of any Rent
herein provided and such default shall continue until 2:00 P.M.,
Pittsburgh time on the third Business Day following the date upon which
such Rent is due; or
(b) Lessee shall attempt to remove, sell, transfer, encumber or
sublet any Unit without the prior written consent of the Lessor; or
(c) Default shall be made in the observance or performance of
any covenants, conditions or agreements on the part of Lessee contained or
incorporated by reference in Section 5.3 hereof;
(d) Default shall be made in the observance or performance of
any other covenants, conditions and agreements on the part of Lessee
contained herein and such Default shall continue for 30 days after written
notice from the Lessor to the Lessee specifying the Default and demanding
the same to be remedied; or
(e) A proceeding shall have been instituted in a court having
jurisdiction seeking a decree or order (i) for relief in respect of
Lessee, Holdings or any Significant Subsidiary of either in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect or (ii) for the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of Lessee, Holdings or any Significant Subsidiary of either or of the
property of any of the foregoing, or (iii) for the winding up or
liquidation of the affairs of Lessee, Holdings or any Significant
Subsidiary of either; and either (I) any such proceeding shall remain
undismissed or unstayed and in effect for a period of 60 consecutive days
or (II) such court shall enter a decree or order granting the relief
sought in such proceeding; or
(f) Lessee, Holdings or any Significant Subsidiary of either
shall commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, shall consent
to the entry of an order for relief in an involuntary case under any such
law, or shall consent to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of Lessee, Holdings or any Significant Subsidiary of
either or for any substantial part of the property of any of the
foregoing, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due, or
shall take any corporate action in furtherance of any of the foregoing; or
(g) Any material indebtedness of Lessee, Holdings or any
Subsidiary of either is not paid when due or within any applicable grace
period provided for in the agreement relating thereto or Lessee, Holdings
or any Subsidiary of either shall default in the performance of any
provision relating to any material indebtedness or contained in any
agreement pursuant to which such indebtedness is issued and as a result
thereof the holder of such indebtedness (or a trustee or agent on its
behalf) shall cause any material indebtedness of Lessee, Holdings or any
Subsidiary of either to be or become due and payable prior to its
specified maturity; for this purpose "material indebtedness" means any
indebtedness for borrowed money or for the deferred purchase price of
property or any capitalized lease obligation the aggregate amount of which
exceeds $5,000,000 or its equivalent; or
-20-
(h) A Responsible Officer of Lessee shall have determined that
there has occurred and is continuing any condition, event, act or omission
which it reasonably believes constitutes an Event of Default or an
Unmatured Default, and shall fail promptly to notify Lessor of such
condition, event, act or omission; or
(i) Any representation or warranty made by Lessee in this
Agreement, or in the Certificate of Acceptance, or any information
furnished by Lessee in any instrument, certificate or other document
delivered by or on behalf of Lessee pursuant hereto or thereto, shall
prove to have been false and misleading in any material respect when
made;
(j) The Bessemer Group (as defined in the Credit Agreement)
shall cease to own in the aggregate, of record and beneficially, free and
clear of all Liens (other than Liens created by any provision of any
agreement entered into among any holders of the Capital Stock of Holdings,
as in effect on the Effective Date (as defined in the Credit Agreement)),
directly, that percentage of the common stock of Holdings representing at
least 70% of the common stock of Holdings owned by the Bessemer Group on
the Effective Date; or (ii) the Investors, collectively, shall cease to
have the power to vote or direct the voting of securities having at least
51% of the ordinary voting power for the election of directors of Holdings
unless (x) the failure to have such power occurs solely as a result of the
primary sale of shares of common stock of Holdings pursuant to any one or
more public offerings thereof and (y) no Person or group (within the
meaning of Rule 13d-5 of the Securities and Exchange Commission as in
effect on the Effective Date), other than any Person or group consisting
solely of one or more Investors, shall, directly or indirectly, have the
power to vote or direct the voting of securities representing more than
20% of the ordinary voting power for the election of directors of
Holdings; or (iii) Holdings shall cease to own and control, of record and
beneficially, directly, 100% of each class of outstanding Capital Stock of
the Company free and clear of all Liens (except Liens created by the
Holdings Pledge Agreement); or (iv) a "Change of Control" (as defined in
the Senior Note Indenture) shall occur (for purposes of this
Section 14.1(i), the terms "Liens", "Capital Stock", "Effective Date",
"Investors", "Holdings Pledge Agreement", "Senior Note Indenture", "Agent"
and "Lenders" shall have the respective meanings assigned to such terms in
the Credit Agreement);
(k) The validity or enforceability of this Agreement shall be
contested by Lessee, or any of the Liens intended to be created hereunder
shall cease to be or shall not be a valid and perfected Lien having the
priority contemplated hereby or Lessee shall so assert in writing;
then, in any such case, the Lessor at its option may:
A. Proceed by appropriate court action or actions either at law
or in equity to enforce performance by Lessee of the applicable duties and
obligations of Lessee under this Agreement or to recover from Lessee any
and all damages or expenses, including reasonable attorneys' fees, which
Lessor shall have sustained by reason of Lessee's Default or on account of
Lessor's enforcement of its remedies hereunder; or
B. By notice in writing to Lessee, terminate this Agreement,
whereupon all right of Lessee to the use of the Equipment shall absolutely
cease and terminate as though this Agreement had never been made, but
-21-
Lessee shall deliver possession of the Equipment to Lessor in accordance
with, and in the condition required by, Article XIII hereof and Lessee
shall remain liable as hereinafter provided; and thereupon, Lessor may by
its agents and without notice to Lessee enter upon the Premises or other
premises where the Units may be located and take possession of all or any
such Units and thenceforth hold, possess and enjoy the same free from any
right of Lessee, or its successors or assigns, to use the Units for any
purpose whatever.
C. Whether or not this Agreement is terminated, take immediate
possession of and remove any or all of the Equipment, wherever situated,
and for such purpose, enter upon the Premises without liability to the
Lessee for so doing, or may cause Lessee, at Lessee's expense, to
surrender and deliver possession of the Equipment in the same manner as
provided in Article XIII hereof;
D. Whether or not any action has been taken under A, B or C
above, sell any of the Equipment (with or without the concurrence or
request of Lessee) at public or private sale as Lessor may determine, free
and clear of any rights of Lessee;
E. Hold, use, occupy, operate, remove, lease or keep idle any
or all of the Equipment as Lessor in its sole discretion may determine,
without any duty to account to Lessee with respect to any such action or
inaction or for any proceeds thereof; and
F. Exercise any other right or remedy which may be available
under applicable Law and in general proceed by appropriate judicial
proceedings, either at law or in equity, to enforce the terms hereof or to
recover from Lessee or its damages for the breach hereof.
Upon termination of this Agreement, Lessor shall have the right to
recover forthwith from Lessee as damages for loss of the bargain and not
as a penalty and as reasonable rent for the use of the Equipment and for
the depreciation thereof, the sum of the following (without duplication):
(1) an amount equal to the Termination Value of the Equipment on
the date of termination;
(2) all due and unpaid Rent for the Equipment to the date of
termination;
(3) an amount equal to accrued taxes and other amounts payable
hereunder by Lessee with respect to the Equipment through the date of
termination;
(4) all reasonable costs, expenses, losses and damages incurred
or sustained by Lessor by reason of such Default; and
(5) interest at the Late Payment Rate on each of the foregoing
from the date upon which such amounts were first payable which date, in
the case of the amounts payable pursuant to clause (1) above, shall be the
termination date of this Agreement.
If on the date of such termination or repossession, any Unit be
damaged, lost, stolen or destroyed, or be subject to any levy, seizure,
assignment, application or sale for or by any creditor or governmental
agency, Lessee shall remain liable for the Termination Value pertaining to
-22-
such Unit less the amount of any insurance recovery received by Lessor in
connection therewith from insurance carried by Lessee in accordance with
Section 10.1 hereof.
14.2. Additional Remedies. It is Lessee's intention to grant to
and create in favor of Lessor a security interest under the Uniform
Commercial Code of the State of Indiana (the "UCC") in the Equipment as
security for the performance of the obligations hereunder and in lieu of
the remedies of Lessor set forth above, upon the occurrence of any Event
of Default, Lessor, at its option, may declare all sums deemed secured
hereby to be immediately due and payable, and in the event a voluntary or
involuntary case is commenced under any bankruptcy law by or against
Lessee as a debtor, all such obligations automatically will be due and
payable without any notice or declaration by Lessor, whereupon the same
shall become immediately due and payable without presentment, demand,
protest, notice of nonpayment or any other notice required by Law relative
thereto, all of which are expressly waived by Lessee. Lessor shall
thereupon have the rights and remedies of a secured party under the UCC,
including, without limitation, the right to take the Equipment or any
portion thereof into its possession by such means (without breach of the
peace) and through agents or otherwise as it may elect (and, in connection
therewith, demand that Lessee assemble the Equipment at a place or places
and in such manner as Lessor shall prescribe), and sell, lease or
otherwise dispose of the Equipment or any portion thereof in its then
condition or following any commercially reasonable preparation or
processing, which disposition may be by public or private proceedings, by
one or more contracts, as a unit or in parcels, at any time and place and
on any terms, so long as the same are commercially reasonable.
14.3. Remedies Cumulative; Waiver of Requirements. The remedies
in this Agreement provided in favor of Lessor shall not be deemed
exclusive, but shall be cumulative and shall be in addition to all other
remedies in its favor existing at law or in equity. TO THE EXTENT THAT
SUCH WAIVER IS PERMITTED BY LAW, LESSEE HEREBY WAIVES ANY MANDATORY
REQUIREMENTS OF LAW, NOW OR HEREAFTER IN EFFECT, WHICH MIGHT LIMIT OR
MODIFY ANY OF THE REMEDIES HEREIN PROVIDED, INCLUDING WITHOUT LIMITATION
ANY RIGHT WHICH LESSEE MAY HAVE TO NOTICE AND HEARING PRIOR TO THE
REPOSSESSION AND SALE OR LEASING OF ANY UNIT.
ARTICLE XV. Participation and Assignment by Lessor
Lessor shall have the right to participate its interest under this
Agreement and in and to the Equipment leased hereunder to a bank or other
lending institution or to others having an interest in the Equipment or
this transaction; provided, however, that (i) Lessor's obligations under
this Agreement shall remain unchanged, (ii) Lessor shall remain solely
responsible to Lessee for the performance of such obligations, (iii)
Lessee shall continue to deal solely and directly with Lessor in
connection with Lessor's rights and obligations under this Agreement and
(iv) no participant under any such participation shall have any right to
approve any amendment or waiver of any provision of this Agreement, or any
consent to any departure by Lessee therefrom, except to the extent that
such amendment, waiver or consent would reduce the Rent payable hereunder,
to the extent subject to such participation, or postpone the termination
date, or any Rental Payment Date, to the extent subject to such
participation. Notwithstanding the foregoing, Lessee agrees that each
such participant shall, to the extent provided in its participation, be
-23-
entitled to the rights and benefits under Section 11.1 hereof and Section
(b)(v) of Annex 1 attached hereto, and all rights to, or rights to
request, information under this Agreement with respect to its
participating interest, in each case as if such participant were the
Lessor and in each case with effect as from the date of effectiveness of
the applicable participation.
In addition, Lessor may, with the written consent of Lessee (which
consent shall not be unreasonably withheld) assign all, but not less than
all, of its interest in this Agreement to a bank or other entity. Upon
such assignment, the assignee shall be a party hereto and shall have the
rights and obligations of Lessor hereunder and Lessor shall relinquish its
rights and be released from its obligations under this Agreement and shall
cease to be a party hereto.
ARTICLE XVI. Quiet Possession
So long as no Event of Default hereunder shall have occurred and
be continuing, Lessor shall not do (nor suffer to be done by any Person
claiming by, through or under Lessor with respect to any claim resulting
from acts or omissions of Lessor, including without limitation permitting
any Lien of the type described in clause (ii) of Article IX, except to the
extent that such claim arises from the failure of Lessee to perform any of
Lessee's obligations hereunder) any act which will interfere with the
right of Lessee peaceably and quietly to hold, possess and use the
Equipment during the Term and in accordance with the provisions of this
Agreement.
ARTICLE XVII. Further Assurances
Lessee and Lessor will promptly and duly execute and deliver to
the other party hereto such further documents and assurances and take such
further action as Lessor or Lessee may from time to time reasonably
request in order to carry out more effectively the intent and purpose of
this Agreement and to establish and protect the rights and remedies
created or intended to be created in favor of Lessor or Lessee hereunder,
including, without limitation, if requested by Lessor or Lessee, in either
case at the expense of Lessee, the execution and delivery of supplements
or amendments hereto, in recordable form subjecting to this Agreement any
replacement property and the recording or filing of counterparts hereof,
or of financing statements with respect thereto in accordance with the
laws of such jurisdiction as Lessor or Lessee may from time to time deem
advisable, and the execution, delivery and filing or recording of all
continuation statements necessary to continue the perfection of the
security interest granted hereunder in favor of Lessor.
ARTICLE XVIII. Lessee Options
18.1. Purchase Option. So long as no Event of Default or
Unmatured Default shall have occurred and be continuing at the end of the
Base Lease Term, Lessee shall have the option to acquire the Equipment
from Lessor for the sum of $1.00.
18.2. Early Termination Option. Lessee shall have the option on
any Rental Payment Date, by delivery to Lessor of written notice not less
-24-
than 15 days prior thereto, which notice shall be irrevocable, to
terminate this Agreement and purchase all, but not less than all, of the
Equipment then subject hereto, by payment to Lessor on such Rental Payment
Date the sum of the Termination Value of such Equipment plus all Rent due
to Lessor on such Rental Payment Date. Notice having been given as
aforesaid, the amount payable pursuant to this Section 18.2 shall be due
and payable on such Rental Payment Date without further notice or action
from or by Lessor or Lessee.
18.3. Conveyance Upon Termination. Upon termination of this
Agreement and payment by Lessee to Lessor of all amounts required to be
paid by Lessee in connection therewith, Lessor shall deliver to Lessee a
bill of sale transferring the Equipment to Lessee as is, where is, and
with all faults, except that Lessor shall warrant that it is delivering to
Lessee whatever title was delivered to Lessor free and clear of Liens in
favor of any Person claiming by, through or under Lessor other than Liens
Lessee is required to remove pursuant to the terms hereof.
ARTICLE XIX. Intention of Parties; Security Agreement
19.1. Security Agreement. The lease created by this Agreement is
intended to be a lease intended as security in order to permit the Lessee
to obtain funds and to secure the repayment of such funds. Accordingly,
it is the intention of the parties hereto that this Agreement has the
purpose and function of creating a security interest in the Equipment,
rather than that of creating a true leasehold interest in the Equipment.
Consequently, this Agreement constitutes a "security agreement" within the
meaning of Section 9-105 of the UCC, and the Equipment includes all rights
and interests, whether tangible or intangible, of Lessee in the Equipment.
Lessee, by executing and delivering this Agreement, has created, and does
hereby create, in favor of Lessor a security interest in and to the
Equipment under the UCC.
19.2. Tax Benefits. It is also the intention of the parties to
this Agreement that any and all federal, state and local income tax
benefits associated with the ownership of the Equipment be solely for the
benefit of Lessee. Lessor agrees that it will not claim or attempt to
claim (nor suffer to be claimed by any Person claiming through or under
Lessor) any such benefits for its own account. Notwithstanding the
foregoing, Lessee understands and agrees that Lessor makes no
representations or warranties regarding either the effect of this
Agreement in light of any relevant tax laws affecting either Lessee or
Lessor, or the availability of any federal, state and local income tax
benefits associated with the ownership of the Equipment.
ARTICLE XX. Miscellaneous
Any cancellation or termination by Lessor pursuant to the
provisions of this Agreement shall not release Lessee from any then
outstanding obligations to Lessor hereunder. This Agreement constitutes
the entire agreement between the parties and there are no warranties (in
respect of the Equipment or otherwise), express or implied, or collateral
or contemporaneous agreements that affect its import other than such as
are contained herein. This Agreement may be modified, amended or mutually
rescinded only by a written instrument executed by each of the parties
hereto. This Agreement shall be binding upon and shall inure to the
-25-
benefit of the parties hereto and, subject to Section 8.6 hereof, their
respective successors and permitted assigns. Lessee agrees to pay the
out-of-pocket expenses of Lessor, including the reasonable fees and
expenses of counsel for Lessor, incurred in connection with the
negotiation, execution, delivery and closings under this Agreement, any
amendments or supplements hereto and the enforcement of Lessor's rights
hereunder. Time is of the essence of this Agreement. This Agreement shall
be governed by, and construed and enforced in accordance with, the laws of
the Commonwealth of Pennsylvania. Any document required to be delivered
hereunder in executed form or otherwise may be delivered by telecopier.
ARTICLE XXI. Notices
Any notices required or permitted under this Agreement, or by law
in respect of this Agreement, shall be in writing and shall be deemed to
have been duly given when personally delivered or when deposited in the
mail, first class, postage prepaid, or when sent by telex, telecopy,
courier or prepaid telegraph, addressed to the party required to receive
the same at the address set forth below such party's signature hereto, or
to such other address as such party shall specify by like notice.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed as of the date first above written.
MELLON FINANCIAL SERVICES CORPORATION #3,
Lessor
By: /s/ Joan L. Balada
------------------------------------
Title: Vice President
---------------------------------
Address: 4444 One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Attention: President
Telex Number: 199103
Telecopy Number: 412/234-3948
ESSEX GROUP, INC., Lessee
By: /s/ David A. Owen
------------------------------------
Title: Executive Vice President
---------------------------------
Address: 1601 Wall Street
Fort Wayne, IN 46801-1601
Attention: David A. Owen
Executive Vice
President and Chief
Financial Officer
Telecopy Number: 219/461-4762
-26-
SCHEDULE 5.2(t)
Jurisdiction/ Secured Party/ Date of
Item Creditor Filing No. Filing Collateral
------------- -------------- ---------- ------- ----------
1. Johnson Chemical Bank, 1499 10/14/92 Fixtures, machinery, equipment,
County, IN: as Agent etc., leases, intellectual
UCCs property, insurance premiums,
contracts, deposits, proceeds
(typical security agreement
language) relating to real
property described therein
2. Knox Chemical Bank, 1415 10/14/92 Fixtures, machinery, equipment,
County, IN: as Agent etc., leases, intellectual
UCCs property, insurance premiums,
contracts, deposits, proceeds
(typical security agreement
language) relating to real
property described therein
3. Tippecanoe Chemical Bank, 8868; 10/15/92; Fixtures, machinery, equipment,
County, IN: as Agent partial 12/5/94 etc., leases, intellectual
UCCs release property, insurance premiums,
2870 contracts, deposits, proceeds
(typical security agreement
language) relating to real
property described therein;
released telephone system
4. Whitley Chemical Bank, 1046-29 10/14/92 Fixtures, machinery, equipment,
County, IN: as Agent etc., leases, intellectual
UCCs property, insurance premiums,
contracts, deposits, proceeds
(typical security agreement
language) relating to real
property described therein
5. Orange Chemical Bank, 92-534 10/13/92 Fixtures, machinery, equipment,
County, IN: as Agent etc., leases, intellectual
UCCs property, insurance premiums,
contracts, deposits, proceeds
(typical security agreement
language) relating to real
property described therein
6. Secretary
of State of
IN:
UCCs Storage 1639753; 3/20/90; Data processing equipment
Technology 1675321 10/1/90
Corporation;
assigned to
Highline
Financial
Services
Jurisdiction/ Secured Party/ Date of
Item Creditor Filing No. Filing Collateral
------------- -------------- ---------- ------- ----------
Chemical Bank, 1807423; 10/13/92; Accounts, chattel paper,
as Agent partial 11/17/94 contracts, documents, equipment,
release general intangibles, instruments,
1950698 intellectual property, inventory;
released telephone system
Chemical Bank, 1807894; 10/14/94; Fixtures, machinery, equipment,
as Agent partial 11/17/94 etc., leases, intellectual
release property, insurance premiums,
1950699 contracts, deposits, proceeds
(typical security agreement
language) relating to real
property described therein;
released telephone system
-2-
SCHEDULE 5.2(w)
1601 Wall Street
Ft. Wayne, IN 46801-1601
-1-
LEASE SCHEDULE
Dated as of the 12th day of April, 1995
to Agreement and Lease (the "Agreement")
dated as of April 12, 1995 between
MELLON FINANCIAL SERVICES CORPORATION #3 ("Lessor") and
ESSEX GROUP, INC. ("Lessee")
Lessor and Lessee hereby confirm that, pursuant to the Agreement,
the following shall apply to the Equipment specified below:
Base Lease Term Commencement Date: May 12, 1995
Base Lease Term: Seven (7) years
Equipment: Units covered by the Certificate of Acceptance,
which shall consist of enamel ovens, wire drawing
equipment and other personal property of the nature
described on Annex 2 hereto located at the premises
(the "Premises") described on Annex 3 hereto
Basic Rent: Per Annex 1 attached hereto
Rental Payment Dates: The last day of each Euro-Rate Funding Period
during the period that the Interest Component is
based upon the Euro-Rate and each August 12,
November 12, February 12 and May 12 during any
other period; provided, however, that in any event
a Rental Payment Date shall occur on May 12, 2002
or, if any such day is not a Business Day, the next
following Business Day.
Late Payment Rate: The sum of the Applicable Rate plus 2%
WITNESS the due execution hereof as of the day and year first
above written.
LESSOR:
MELLON FINANCIAL SERVICES
CORPORATION #3
By: /s/ Joan L. Balada
--------------------------
Title: Vice President
-------------------------
LESSEE:
ESSEX GROUP, INC.
By: /s/ David A. Owen
----------------------------
Title: Executive Vice President
-------------------------
ANNEX 1
TO
LEASE SCHEDULE
Basic Rent
(a) Basic Rent. Basic Rent shall be payable on each Rental
Payment Date in an amount equal to the sum of the Principal Component and
the Interest Component.
The Principal Component payable on each of the first 27 Rental
Payment Dates shall equal 2.5% of the initial Lessor's Cost of the
Equipment and the Principal Component payable on the final Rental Payment
Date shall be the unpaid amount of the initial Lessor's Cost of the
Equipment.
The Interest Component of Basic Rent payable on each Rental
Payment Date shall be an amount equal to interest on the unpaid balance of
Lessor's Cost of the Equipment then subject to this Agreement at a rate
per annum (based on a year of 360 days and actual days elapsed) computed
at the Applicable Rate (or, for any period during which an Event of
Default under Section 14.1(a) of the Agreement shall be continuing, the
Late Payment Rate) for the period commencing on the prior Rental Payment
Date (or in the case of the first Rental Payment Date the Base Lease Term
Commencement Date) and ending on the day before such Rental Payment Date.
(b) Interest Rate. "Applicable Rate" shall mean the "Applicable
Margin", as hereinafter defined, plus the "Euro-Rate", as hereinafter
defined, or, if pursuant to paragraph (iii) below the Euro-Rate Option is
not available, the "Base Rate", as hereinafter defined.
(i) Euro-Rate Option. "Euro-Rate" for any day, as used herein,
shall mean for each Euro-Rate Funding Period the rate per annum determined
by Lessor by dividing (the resulting quotient to be rounded upward to the
nearest 1/100 of 1%) (A) the rate of interest (which shall be the same for
each day in such Euro-Rate Funding Period) determined in good faith by
Lessor in accordance with its usual procedures (which determination shall
be conclusive) to be the average of the rates per annum for deposits in
Dollars offered to major money center banks in the London interbank market
at approximately 11:00 a.m., London time, two London Business Days prior
to the first day of such Euro-Rate Funding Period for delivery on the
first day of such Euro-Rate Funding Period in amounts comparable to the
outstanding balance on such day and having maturities comparable to such
Funding Period by (B) a number equal to 1.00 minus the Euro-Rate Reserve
Percentage.
The "Euro-Rate" may also be expressed by the following formula:
[average of the rates offered to major money ]
[center banks in the London interbank market ]
Euro-Rate = [determined by Lessor per clause (A) ]
-----------------------------------------------
[1.00 - Euro-Rate Reserve Percentage ]
"Euro-Rate Reserve Percentage" for any day shall mean the
percentage (expressed as a decimal, rounded upward to the nearest 1/100 of
1%), as determined in good faith by Lessor (which determination shall be
conclusive), which is in effect on such day as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) representing
the maximum reserve requirement (including, without limitation,
supplemental, marginal and emergency reserve requirements) with respect to
eurocurrency funding (currently referred to as "Eurocurrency liabilities")
of a member bank in such System. The Euro-Rate shall be adjusted
automatically as of the effective date of each change in the Euro-Rate
Reserve Percentage. The Euro-Rate Option shall be calculated in
accordance with the foregoing whether or not Lessor is actually required
to hold reserves in connection with its eurocurrency funding or, if
required to hold such reserves, is required to hold reserves at the "Euro-
Rate Reserve Percentage" as herein defined.
Lessor shall give prompt notice to Lessee of the Euro-Rate
determined or adjusted in accordance with the definition of the Euro-Rate,
which determination or adjustment shall be conclusive if made in good
faith.
(ii) Euro-Rate Funding Periods. "Euro-Rate Funding Period" shall
mean, initially, the period commencing on the Base Lease Term Commencement
Date and ending three months thereafter; and thereafter, each period
commencing on the last day of the next preceding Euro-Rate Funding Period
and ending three months thereafter; provided that, (1) if any Euro-Rate
Funding Period would otherwise end on a day that is not a London Business
Day, such Euro-Rate Funding Period shall be extended to the next
succeeding London Business Day unless the result of such extension would
be to carry such Euro-Rate Funding Period into another calendar month in
which event such Euro-Rate Funding Period shall end on the immediately
preceding London Business Day; (2) no Euro-Rate Funding Period shall
extend beyond the end of the Base Lease Term; and (3) any Euro-Rate
Funding Period that begins on the last London Business Day of a calendar
month (or on a day for day in the calendar month at the end of such Euro-
Rate Funding Period) shall end on the last London Business Day of a
calendar month. Lessee shall, in slecting any Euro-Rate Funding Period,
allow for scheduled payments of Basic Rent; and
(iii) Base Rate Option. If
(A) on any date on which a Euro-Rate would otherwise be set
Lessor shall have determined in good faith (which determination shall be
conclusive) that:
(1) adequate and reasonable means do not exist for ascertaining
such Euro-Rate,
(2) the effective cost to Lessor of funding the outstanding
balance of Lessor's Cost from a Corresponding Source of Funds shall exceed
the Euro-Rate, or
(B) at any time Lessor shall have determined in good faith
(which determination shall be conclusive) that the making, maintenance or
funding of any part of the principal balance of Basic Rent at the
Euro-Rate Option has been made impracticable or unlawful by compliance by
Lessor in good faith with any Law or guideline or interpretation or
administration thereof by any Official Body charged with the
interpretation or administration thereof or with any request or directive
of any such Official Body (whether or not having the force of Law);
then, and in any such event, Lessor may notify Lessee of such
determination. Upon such date as shall be specified in such
notice (which shall not be earlier than the next Rental Payment
Date or such earlier date as shall be required by Law, the
outstanding principal balance of unpaid Lessor's Cost shall
automatically bear interest at the Base Rate plus the Applicable
Margin as of the date specified in such notice (and accrued
interest thereon shall be due and payable on such date).
The "Base Rate" for any day shall mean the greater of (A) the
Prime Rate for such day or (B) 0.50% plus the Federal Funds Effective Rate
for such day, such interest rate to change automatically from time to time
effective as of the effective date of each change in the Prime Rate or the
Federal Funds Effective Rate.
(iv) Applicable Margins.
The Applicable Margin for each interest rate Option for any day
shall mean the percentage set forth below opposite the relevant Level:
Level Euro-Rate Option Base Rate Option
----- ---------------- ----------------
I 1-3/8% 3/8%
II 1-5/8% 5/8%
III 1-7/8% 7/8%
IV 2-1/8% 1-1/8%
V 2-1/4% 1-1/4%
VI 2-1/2% 1-1/2%
As used herein, "Level" shall mean, as of any date of
determination, the level set forth below then in effect, as determined in
accordance with the following provisions:
Interest
Level Leverage Ratio Coverage Ratio
----- -------------- --------------
I Less than or equal to Greater than or equal
3.0 to 1.0 to 3.75 to 1.0
II Less than or equal to Greater than or equal
3.50 to 1.0 but greater to 3.25 to 1.0 but
than 3.0 to 1.0 less than 3.75 to 1.0
III Less than or equal to Greater than or equal
3.875 to 1.0 but greater to 2.75 to 1.0 but
than 3.50 to 1.0 less than 3.25 to 1.0
IV Less than or equal to Greater than or equal
4.0 to 1.0 but greater to 2.50 to 1.0 but
than 3.875 to 1.0 less than 2.75 to 1.0
V Less than or equal to Greater than or equal
4.25 to 1.0 but greater to 2.25 to 1.0 but
than 4.0 to 1.0 less than 2.50 to 1.0
VI Greater than 4.25 to Less than 2.25 to 1.0
1.0
-3-
For the purposes of this definition, the Level shall be determined as at
the end of each of the first three quarterly periods of each fiscal year
of Holdings and as at the end of each fiscal year of Holdings, for the
period (a "Level Test Period") of four consecutive fiscal quarters ending
on the last day of such quarterly period or fiscal year, as the case may
be, based on the relevant financial statements delivered pursuant to
Section 7.1; changes in the Level shall become effective on the date on
which such financial statements are delivered to Lessor (but in any event
not later than the 50th day after the end of each of the first three
quarterly periods of each fiscal year or the 105th day after the end of
each fiscal year, as the case may be) and shall remain in effect until the
next change to be effected pursuant to this definition, provided, that,
until the effectiveness of any change in the Level based upon the
financial statements of Holdings for the quarterly period ending March 31,
1995, the Level shall be deemed to be Level III, and provided, further,
that if any financial statements referred to above are not delivered
within the time periods specified above, then, until such financial
statements are delivered, the Level as at the end of the fiscal period
that would have been covered thereby shall be deemed to be Level VI. In
the event that the Level corresponding to the Leverage Ratio (as defined
in the Credit Agreement) and the Interest Coverage Ratio (as defined in
the Credit Agreement) shall differ in respect of any Level Test Period,
the higher-numbered Level (with Level VI being the highest-numbered
Level) shall govern until the next determination of the Level pursuant to
this definition. For the purposes of this definition, in the event that
Holdings shall consummate a Holdings Common Equity Offering (as defined in
the Credit Agreement) during any Level Test Period commencing after
June 30, 1995, the Interest Coverage Ratio shall be calculated after
giving effect on a pro forma basis to the discharge of any Indebtedness
(as defined in the Credit Agreement) repaid, repurchased, defeased or
otherwise discharged with the proceeds of such offering (but only to the
extent, in the case of revolving Indebtedness, accompanied by a commitment
reduction) as if such discharge had occurred on the first day of such
Level Test Period.
(v) Additional Compensation in Certain Circumstances.
(A) If any Law or guideline or interpretation or application
thereof by any Official Body charged with the interpretation or
administration thereof or compliance with any request or directive of any
Official Body (whether or not having the force of Law) now existing or
hereafter adopted:
(1) imposes, modifies or deems applicable any reserve,
special deposit or similar requirement against credits or
commitments to extend credit extended by, assets (funded or
contingent) of, deposits with or for the account of, other
acquisitions of funds by, Lessor (other than requirements
expressly included herein in the determination of the Euro-Rate
hereunder),
(2) imposes, modifies or deems applicable any capital
adequacy or similar requirement (a) against assets (funded or
contingent) of, or credits or commitments to extend credit
extended by, or (b) otherwise applicable to the obligations of
Lessor under this Agreement, or
-4-
(3) imposes upon Lessor any other condition or expense
with respect to this Agreement,
and the result of any of the foregoing is to increase the cost to, reduce
the income receivable by, or impose any expense (including loss of margin)
upon Lessor or any Person controlling Lessor, with respect to this
Agreement (or, in the case of any capital adequacy or similar requirement,
to have the effect of reducing the rate of return on Lessor's or
controlling Person's capital, taking into consideration Lessor's or such
controlling Person's policies with respect to capital adequacy) by an
amount which Lessor deems to be material (Lessor being deemed for this
purpose to have made, maintained or funded Lessor's Cost from a
Corresponding Source of Funds), Lessor may from time to time notify Lessee
of the amount determined in good faith (using any reasonable averaging and
attribution methods) by Lessor (which determination shall be conclusive)
to be necessary to compensate for such increase, reduction or imposition.
Such amount shall be due and payable by Lessee to Lessor ten Business Days
after such notice is given.
(B) In addition to all other amounts payable hereunder, if and to
the extent for any reason, at any time that Lessor's Cost is bearing
interest at the Euro-Rate Option, any Principal Component of Basic Rent
becomes due (by acceleration or otherwise), or is paid, prepaid or
converted to the Base Rate Option (whether or not such payment, prepayment
or conversion is mandatory or automatic and whether or not such payment or
prepayment is then due), on a day other than the last day of the
corresponding Euro-Rate Funding Period (the date such amount so becomes
due, or is so paid, prepaid or converted, being referred to as the
"Funding Breakage Date"), Lessee shall pay Lessor an amount ("Funding
Breakage Indemnity") equal to the loss or expense sustained or incurred by
Lessor as a consequence thereof, calculated as though Lessor had actually
funded such Principal Component through the purchase of a deposit bearing
interest at the Euro-Rate Option in an amount equal to the amount of such
Principal Component and having a maturity comparable to the relevant Euro-
Rate Funding Period; provided, however that Lessor may fund the Lessor's
Cost in any manner it sees fit, and the foregoing assumption shall be
utilized only for the calculation of amounts payable under this Section
(v).
Such Funding Breakage Indemnity shall be due and payable on
demand. In addition, Lessee shall, on the due date for payment of any
Funding Breakage Indemnity, pay to Lessor an additional amount equal to
interest on such Funding Breakage Indemnity from the Funding Breakage Date
to but not including such due date at the Base Rate Option. The amount
payable to Lessor under this clause (v) shall be determined in good faith
by Lessor, and such determination shall be conclusive.
(c) Definitions. As used in this Annex 1, the following terms
shall have the following meanings:
"Corresponding Source of Funds" shall mean the proceeds of
hypothetical receipts by Lessor of one or more Dollar deposits in the
interbank eurodollar market at the beginning of the applicable Euro-Rate
Funding Period having maturities approximately equal to such Euro-Rate
Funding Period and in an aggregate amount approximately equal to the then
unpaid balance of Lessor's Cost.
-5-
"Debt/EBITDA Ratio" shall have the meaning assigned to that term
in the Credit Agreement.
"Dollar," "Dollars" and the symbol "$" shall mean lawful money of
the United States of America.
"Federal Funds Effective Rate" for any day shall mean the rate per
annum (rounded upward to the nearest 1/100 of 1%) determined by Lessor
(which determination shall be conclusive) to be the rate per annum
announced by the Federal Reserve Bank of New York (or any successor) on
such day as being the weighted average of the rates on overnight Federal
funds transactions arranged by Federal funds brokers on the previous
trading day, as computed and announced by such Federal Reserve Bank (or
any successor) in substantially the same manner as such Federal Reserve
Bank computes and announces the weighted average it refers to as the
"Federal Funds Effective Rate" as of the date of this Agreement; provided,
that if such Federal Reserve Bank (or its successor) does not announce
such rate on any day, the "Federal Funds Effective Rate" for such day
shall be the Federal Funds Effective Rate for the last day on which such
rate was announced.
"Interest Coverage Ratio" shall have the meaning assigned to that
term in the Credit Agreement.
"London Business Day" shall mean a day for dealing in deposits in
Dollars by and among banks in the London interbank market and which is a
Business Day.
"Prime Rate" as used herein, shall mean the interest rate per
annum announced from time to time by Mellon Bank, N.A. as its prime rate.
"Treasury Rate" as of any Funding Breakage Date shall mean the
rate per annum determined by Lessor (which determination shall be
conclusive) to be the semiannual equivalent yield to maturity (expressed
as a semiannual equivalent and decimal and, in the case of United States
Treasury bills, converted to a bond equivalent yield) for United States
Treasury securities maturing on the last day of the corresponding Euro-
Rate Funding Period and trading in the secondary market in reasonable
volume (or if no such securities mature on such date, the rate determined
by standard securities interpolation methods as applied to the series of
securities maturing as close as possible to, but earlier than, such date,
and the series of such securities maturing as close as possible to, but
later than, such date).
-6-
ANNEX 2
TO
LEASE SCHEDULE
RFA# Description Location Year
---- ----------- -------- ----
90310 DeAngeli No-slip Rod Mill Vincennes 1992
92095 22' Twin Acrometal Oven Replacement Vincennes 1993-94
92194 22' Twin Acrometal Oven Replacement Vincennes 1993-94
93193 22' Twin Acrometal Oven Replacement Vincennes 1994
94002 22' Twin Acrometal Oven Replacement Vincennes 1994
94027 2 - 14' Twin Acrometal Oven Replacements Vincennes 1994
92437 Wire Mill/Rod Mill Upgrade/Cabler/Bunchers Orleans 1993-94
93696 Used CV line Orleans 1994
93713 Wire Drawing, Bunching Equipment Orleans 1994
350-589 Conversion to 19 Wire Strand/Cabler Col City 1992-93
LESS AND EXCEPT THE FOLLOWING:
RFA # ASSET # DESCRIPTION
----- ------- -----------
350-589 AA75921 Payoff-Multiwire 10-Station
350-589 AA76836 Payoff-multiwire Buncher
350-589 AA76837 Payoff-multiwire Buncher
350-589 AA76838 Payoff-multiwire Buncher
350-589 AA76839 Payoff-multiwire Buncher
350-589 AA76840 Payoff-multiwire Buncher
350-589 AA76843 Payoff-multiwire
350-589 AA76844 Payoff-multiwire
350-589 AA76845 Payoff-multiwire
350-589 AA76846 Payoff-multiwire
350-589 AA76847 Payoff-multiwire
350-589 AA76848 Payoff-multiwire
350-589 AA76855 Single Wire Payoff
350-589 AA75921A Add'l Cost Multi-wire Payoff
350-589 AA76836A Add'l Cost Multi-wire Payoff
350-589 AA76837A Add'l Cost Multi-wire Payoff
350-589 AA76838A Add'l Cost Multi-wire Payoff
350-589 AA76839A Add'l Cost Multi-wire Payoff
350-589 AA76840A Add'l Cost Multi-wire Payoff
350-589 AA75943A Add'l Cost Multi-wire Payoff
350-589 AA76844A Add'l Cost Multi-wire Payoff
350-589 AA76845A Add'l Cost Multi-wire Payoff
350-589 AA76846A Add'l Cost Multi-wire Payoff
350-589 AA76847A Add'l Cost Multi-wire Payoff
350-589 AA76848A Add'l Cost Multi-wire Payoff
350-589 AA76855A Add'l Cost Single Wire Payoff
RFA# Description Location Year
---- ----------- -------- ----
350-627 Line 22 T Wire Conversion/Rod Mill Upgrade Col City 1992-93-94
350-694 Upgrade Rod Mill - add 6" Extrusion Capacity Col City 1994
92462 Wire Mill and Insulating Operation Lafayette 1994
90185 Essex Plant Equipment Franklin IN 1993-94
323-098 Convert 091 Concast to 5/16" rod and In-line Coiling Col City Metals 1993-94
323-100 Add Second Concast Line MPC Rod Mills per Exhibit I Col City Metals 1994
See Exhibit I
94053 2 - 14' Twin Acrometal Oven Replacements Vincennes 1995
92462 Wire Mill and Insulating Operation Lafayette 1995
-2-
EXHIBIT I
Asset No. Description Location Year
--------- ----------- -------- ----
2618 Rod Mill Orleans 1968
AA71257 Rod Mill Columbia City 1984
AA52753 Rod Mill Columbia City 1984
RAA52194 Rod Mill Lafayette 1989
-3-
ANNEX 3
TO
LEASE SCHEDULE
Decker Road
Vincennes, IN 47591-0259
3400 Union Street
Lafayette, IN 47903-7000
190 East Polk Street
Orleans, IN 47452-1027
3200 Earlywood Drive
Franklin, IN 46131
U.S. Highway 30 West & 600 East
Columbia City, IN 46725
EXHIBIT A
CERTIFICATE OF ACCEPTANCE
Dated the ___ day of
________________, 1995
to Agreement and Lease (the
"Agreement") dated as of April 12, 1995
between MELLON FINANCIAL SERVICES CORPORATION #3 ("Lessor") and
ESSEX GROUP, INC. ("Lessee")
THIS CERTIFICATE OF ACCEPTANCE is executed pursuant to the
Agreement and the terms herein shall have the meanings ascribed to them in
the Agreement.
Lessor and Lessee do hereby confirm and agree that (i) the Units
described in Attachment l hereto, having an aggregate Lessor's Cost as set
forth below, have been delivered as of the date hereof at the location or
locations indicated on said Attachment l, (ii) such Units have been duly
accepted by Lessee as the Equipment for leasing under the Agreement, (iii)
such Units are hereby made subject to, and the rights and duties of the
parties with respect thereto shall be governed by, the Agreement, and (iv)
Lessee has become obligated to pay Basic Rent in the amounts contemplated
by the Agreement:
Lessor's Cost: $25,000,000
Lessee hereby certifies to Lessor that the description of the
Units set forth in Attachment 1, including their status for sales tax
purposes, is accurate and complete and the representations and warranties
contained in Section 5.2 of the Agreement are true and correct on and as
of the date hereof and on the date hereof no Event of Default or Unmatured
Default has occurred and is continuing.
Lessee confirms that it has caused to be affixed to each Unit
described in Attachment l hereto the identification tag indicating
Lessor's ownership of such Unit as required by the Agreement.
WITNESS the due execution hereof as of the day and year first
above written.
LESSEE: LESSOR:
ESSEX GROUP, INC. MELLON FINANCIAL SERVICES
CORPORATION #3
By:__________________________ By:__________________________
Title:_______________________ Title:_______________________
ATTACHMENT 1
RFA# Description Location Year
---- ----------- -------- ----
90310 DeAngeli No-slip Rod Mill Vincennes 1992
92095 22' Twin Acrometal Oven Replacement Vincennes 1993-94
92194 22' Twin Acrometal Oven Replacement Vincennes 1993-94
93193 22' Twin Acrometal Oven Replacement Vincennes 1994
94002 22' Twin Acrometal Oven Replacement Vincennes 1994
94027 2 - 14' Twin Acrometal Oven Replacements Vincennes 1994
92437 Wire Mill/Rod Mill Upgrade/Cabler/Bunchers Orleans 1993-94
93696 Used CV line Orleans 1994
93713 Wire Drawing, Bunching Equipment Orleans 1994
350-589 Conversion to 19 Wire Strand/Cabler Col City 1992-93
LESS AND EXCEPT THE FOLLOWING:
RFA # ASSET # DESCRIPTION
----- ------- -----------
350-589 AA75921 Payoff-Multiwire 10-Station
350-589 AA76836 Payoff-multiwire Buncher
350-589 AA76837 Payoff-multiwire Buncher
350-589 AA76838 Payoff-multiwire Buncher
350-589 AA76839 Payoff-multiwire Buncher
350-589 AA76840 Payoff-multiwire Buncher
350-589 AA76843 Payoff-multiwire
350-589 AA76844 Payoff-multiwire
350-589 AA76845 Payoff-multiwire
350-589 AA76846 Payoff-multiwire
350-589 AA76847 Payoff-multiwire
350-589 AA76848 Payoff-multiwire
350-589 AA76855 Single Wire Payoff
350-589 AA75921A Add'l Cost Multi-wire Payoff
350-589 AA76836A Add'l Cost Multi-wire Payoff
350-589 AA76837A Add'l Cost Multi-wire Payoff
350-589 AA76838A Add'l Cost Multi-wire Payoff
350-589 AA76839A Add'l Cost Multi-wire Payoff
350-589 AA76840A Add'l Cost Multi-wire Payoff
350-589 AA75943A Add'l Cost Multi-wire Payoff
350-589 AA76844A Add'l Cost Multi-wire Payoff
350-589 AA76845A Add'l Cost Multi-wire Payoff
350-589 AA76846A Add'l Cost Multi-wire Payoff
350-589 AA76847A Add'l Cost Multi-wire Payoff
350-589 AA76848A Add'l Cost Multi-wire Payoff
350-589 AA76855A Add'l Cost Single Wire Payoff
RFA# Description Location Year
---- ----------- -------- ----
350-627 Line 22 T Wire Conversion/Rod Mill Upgrade Col City 1992-93-94
350-694 Upgrade Rod Mill - add 6" Extrusion Capacity Col City 1994
92462 Wire Mill and Insulating Operation Lafayette 1994
90185 Essex Plant Equipment Franklin IN 1993-94
323-098 Convert 091 Concast to 5/16" rod and In-line Coiling Col City Metals 1993-94
323-100 Add Second Concast Line MPC Rod Mills per Exhibit I Col City Metals 1994
See Exhibit I
94053 2 - 14' Twin Acrometal Oven Replacements Vincennes 1995
92462 Wire Mill and Insulating Operation Lafayette 1995
/TABLE
EXHIBIT I
Asset No. Description Location Year
--------- ----------- -------- ----
2618 Rod Mill Orleans 1968
AA71257 Rod Mill Columbia City 1984
AA52753 Rod Mill Columbia City 1984
RAA52194 Rod Mill Lafayette 1989
-3-
EXHIBIT B
[Counsel to Essex Group, Inc.]
April __, 1995
Mellon Financial Services
Corporation #3
c/o Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Ladies and Gentlemen:
I have acted as counsel to Essex Group, Inc., a Michigan
corporation ("Essex"), in connection with the negotiation, execution and
delivery of the Agreement and Lease dated as of April 12, 1995 (the
"Agreement"), between Essex and Mellon Financial Services Corporation #3
("MFSC") and the negotiation, execution and delivery of the Bill of Sale
and the Certificate of Acceptance (together with the Agreement,
collectively, the "Transaction Documents").
This opinion is furnished to you pursuant to Section 6.1(e) of the
Agreement. Unless otherwise defined herein, terms defined in the
Agreement are used herein as therein defined.
In rendering this opinion, I have reviewed the Agreement and the
other Transaction Documents, such corporate records of Essex and such
other documents and instruments, and have made such examinations of
matters of law as I have deemed necessary or relevant in connection with
the opinions set forth in this letter. In my examination, I have assumed
the genuineness of all signatures, the due authorization, execution and
delivery of the Transaction Documents by the parties thereto (other than
Essex), the authenticity of all documents submitted to me as originals and
the conformity to authentic, original documents of all documents submitted
to me as certified, conformed or photostatic copies. As to any facts
material to this opinion set forth below which I did not independently
establish or verify, I have relied upon representations of officers or
representatives of Essex.
Based on the foregoing, we are of the opinion that:
1. Essex is a corporation duly organized, validly existing and in
good standing under the laws of the State of Michigan. Essex is qualified
to do business as a foreign corporation and is in good standing in the
State of Indiana. Essex and each of its Subsidiaries is qualified to do
business in each jurisdiction where such qualification is necessary except
where the failure to so qualify could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
2. Essex and each of its Subsidiaries has the full corporate
power and authority to own, pledge, mortgage and operate its property and
to conduct the business in which it is currently engaged, and Essex has
full power, authority and legal right to execute and deliver the
Transaction Documents to which it is a party and to perform its
obligations thereunder, and all such action has been duly and validly
authorized by all necessary corporate proceedings on its part.
3. Assuming that the Transaction Documents are governed by the
laws of the State of Indiana rather than the laws of the Commonwealth of
Pennsylvania, the Transaction Documents have been duly and validly
executed and delivered by Essex and constitute legal, valid and binding
obligations of Essex, enforceable in accordance with the terms thereof,
except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other laws of general
application affecting the enforcement of creditors' rights and by
equitable principles (whether enforcement is sought by proceedings in
equity or at law).
4. No authorization, consent, approval, license, exemption or
other action by, and no registration, qualification, designation,
declaration or filing with, any Official Body is or will be necessary or
advisable in connection with the execution and delivery of the Transaction
Documents, consummation of the transactions therein contemplated or
performance of or compliance with the terms and conditions thereof, other
than the filing of the Termination Statements and the Financing Statements
(each as hereinafter defined).
5. Neither the execution and delivery of the Transaction
Documents nor consummation of the transactions therein contemplated nor
performance of or compliance with the terms and conditions thereof will
(a) violate any Law, (b) conflict with or result in a breach of or a
default under the articles of incorporation or by-laws of Essex or, to the
best of our knowledge after due inquiry, any agreement or instrument to
which Essex is a party or by which Essex or any of its properties (now
owned or hereafter acquired) may be subject or bound or (c) to the best of
our knowledge after due inquiry, result in the creation or imposition of
any lien, charge, security interest or encumbrance upon any property (now
owned or hereafter acquired) of Essex other than the Lien and security
interest created by the Transaction Documents in favor of MFSC.
6. There are no pending or, to the best of our knowledge after
due inquiry, threatened actions or proceedings before any Official Body
against Holdings, Essex or any of its Subsidiaries which have had or could
reasonably be expected to have a Material Adverse Effect.
7. When the termination statements (the "Termination
Statements"), copies of which are attached hereto as Exhibit A, and the
financing statements (the "Financing Statements"), copies of which are
attached hereto as Exhibit B, have each been filed in the offices listed
on Exhibit C hereto, the Agreement shall constitute a fully perfected
security interest in all personal property and fixtures subject to the
Agreement. The Termination Statements and the Financing Statements are in
proper form for filing and for perfecting such security interest.
Very truly yours,
-2-
EXHIBIT C
BILL OF SALE
FOR GOOD AND VALUABLE CONSIDERATION, the receipt of which is
hereby acknowledged, and intending to be legally bound hereby, ESSEX
GROUP, INC. ("Essex") has bargained, sold, conveyed, transferred and
assigned and by these presents does hereby bargain, sell, convey, transfer
and assign to MELLON FINANCIAL SERVICES CORPORATION #3 ("Lessor"), its
permitted successors and assigns, forever, good and marketable title to
the personal property described in Attachment l attached hereto (the
"Units").
AND, Essex hereby covenants and warrants to Lessor, its permitted
successors and assigns, that Essex is the lawful owner of the Units and
has full power and authority to sell the same as aforesaid, and the Units
are on the date hereof free and clear of all claims, liens, encumbrances
and claims of any nature.
AND, the sale and assignment of the Units to Lessor is for the
purpose of permitting Essex to obtain funds and to secure the repayment by
Essex of such funds.
IN WITNESS WHEREOF Essex has caused this Bill of Sale to be
executed and delivered this ____ day of ______________, 1995.
ESSEX GROUP, INC.
By:______________________________________
Title:___________________________________