Subordination and Participation Agreement dated as of August
2, 1999 (as the same may be amended, amended and restated,
supplemented or otherwise modified, renewed or replaced from time
to time, the "Participation Agreement") among (i) Canadian
Imperial Bank of Commerce as administrative agent and as
collateral agent for the Banks referred to in the Credit
Agreement defined below (in such capacities, the "Administrative
Agent"); (ii) each of the banks listed in Section C of Schedule 1
hereto (each, a "Selling Bank" and collectively, the "Selling
Banks"); (iii) Martin Crane L.L.C. (the "Initial Sponsor") and
any other Person (acceptable to the Administrative Agent and the
Required Banks) making any of the Sponsor Loans (as hereinafter
defined) pursuant hereto (each, an "Additional Sponsor" and
collectively, the "Additional Sponsors"); (iv) MMH Holdings,
Inc., a Delaware corporation ("Holdings"); (v) Morris Material
Handling, Inc., a Delaware corporation (the "Company") and Morris
Material Handling, LLC, a Delaware limited liability Company
("MMH LLC"; the Company and MMH LLC may be referred to herein
individually as a "U.S. Borrower" and collectively, as the "U.S.
Borrowers") and (vi) each other Subsidiary of the Company listed
on the signature pages hereto (such Subsidiaries, together with
Holdings and the U.S. Borrowers, shall be referred to herein
collectively as the "Credit Parties").
INTRODUCTORY STATEMENT
Reference is hereby made to that certain Credit Agreement dated as of March
30, 1998 (as heretofore and hereafter amended, amended and restated,
supplemented or otherwise modified, renewed or replaced from time to time,
including, without limitation, by Amendment No. 2, the "Credit Agreement") among
(i) Holdings, (ii) the U.S. Borrowers, (iii) Morris Material Handling Equipment
Limited, a company organized under the laws of England and Wales, (iv) Mondel
ULC, an unlimited liability company organized under the laws of Nova Scotia, (v)
Kaverit Steel and Crane ULC, an unlimited liability company organized under the
laws of Nova Scotia, (vi) the Banks referred to therein, (vii) the New York
branch of Credit Agricole Indosuez, as syndication agent for the Banks, (viii)
BankBoston, N.A., as documentation agent for the Banks and (ix) the
Administrative Agent.
1
The Banks currently hold the Total Acquisition Term Loan Commitment under
the Credit Agreement and have made Acquisition Term Loans to the U.S. Borrowers
in the aggregate outstanding principal amount of $7,430,083 as of the date
hereof.
The Initial Sponsor desires to purchase from each of the Selling Banks, and
each of the Selling Banks are willing to sell to the Initial Sponsor, an
undivided participating interest in the unfunded Acquisition Term Loan
Commitment of such Selling Bank in the amounts and in accordance with the terms
and conditions hereinafter set forth.
Each of the Sponsors (as hereinafter defined) acknowledges and agrees that
any Acquisition Term Loans that are funded by the Sponsors in accordance with
the terms of this Participation Agreement shall, in all respects, be subordinate
and junior pursuant to the terms of, and as set forth in, this Participation
Agreement, to all Loans made by the Banks and all Bank Obligations (as
hereinafter defined) owing to the Administrative Agent and the Banks pursuant to
the Credit Agreement.
NOW THEREFORE, the parties hereto hereby agree as follows:
1. Definitions: Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement. As used herein, the following terms shall have the meanings set
forth below:
"Additional Sponsor Loan" shall mean any Acquisition Term Loan
made after the Effective Date (such term being used herein as defined
in Amendment No. 2) of Amendment No. 2 (i) which is made to the U.S.
Borrowers pursuant to the Additional Sponsor Participation, (ii) which
is funded by one or more of the Sponsors and (iii) the proceeds of
which are to be utilized for working capital and other general
corporate purposes.
"Additional Sponsor Participation" shall mean the aggregate
amount of the unfunded Acquisition Term Loan Commitments held by the
Selling Banks in which the participations are being purchased pursuant
to Section 2 hereof (which amount as of the date hereof does not
exceed $22,569,917).
"Amendment No. 2" shall mean that certain Amendment No. 2 dated
as of August 2, 1999 to the Credit Agreement.
"Bank Credit Termination Date" shall mean the date on which all
of the Bank Obligations have been repaid in full in cash, each of the
Commitments has been terminated in its entirety and all Letters of
Credit have expired or been terminated, canceled or cash
collateralized in an amount equal to 105% of the face amount of such
Letters of Credit.
2
"Bank Obligations" shall mean the Obligations other than the Sponsor
Obligations.
"Initial Sponsor Loan" shall have the meaning assigned to such term in
Section 3 hereof.
"Insolvency Event" shall mean (a) any Credit Party or any Subsidiary
thereof commencing any case, proceeding or other action (1) under any existing
or future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, conservatorship or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to adjudicate it
a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (2) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official of it or for all or any
substantial part of its assets; or (b) any Credit Party or any Subsidiary
thereof making a general assignment for the benefit of its creditors or becoming
unable, admitting in writing its inability, or failing generally, to pay its
debts as they become due; or (c) there being commenced against any Credit Party
or any Subsidiary thereof any case, proceeding or other action of a nature
referred to in clause (a) above which (1) results in the entry of an order for
relief or any such adjudication or appointment or (2) remains undismissed,
undischarged or unbonded for a period of 60 days; or (d) there being commenced
against any Credit Party or any Subsidiary thereof any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets which results
in the entry of an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the entry
thereof; or (e) any Credit Party or any Subsidiary thereof taking any action in
furtherance of, or indicating its consent to, approval of, authorization of, or
acquiescence in, any of the acts set forth in clause (a), (b), (c) or (d) above.
"Obligations" shall mean all obligations (a) whether, direct or indirect,
contingent or absolute, of every type or description and at any time existing,
of the Borrowers to make due and punctual payment of (i) principal of and all
interest on the Loans, the Commitment Commission, any reimbursement obligations
in respect of Letters of Credit, costs and attorneys' fees and all other
monetary obligations of any of the Borrowers to any of the Agents, any Issuing
Bank or any Bank under or in respect of the Credit Agreement, any Note, any
other Credit Document or any fee letter, (ii) all amounts payable by any of the
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Borrowers to any Bank under any Currency Protection Agreement or Interest Rate
Agreement, provided that the Administrative Agent shall have received written
notice thereof within ten (10) Business Days after execution of such Currency
Protection Agreement or Interest Rate Agreement and (iii) amounts payable to
Canadian Imperial Bank of Commerce in connection with any bank account
maintained by any of the Borrowers or any other Credit Party at Canadian
Imperial Bank of Commerce or any other banking services provided to any of the
Borrowers or any other Credit Party by Canadian Imperial Bank of Commerce with
respect to, or in any way related to, any of the Credit Documents (including,
without limitation, interest accruing at the then applicable rate provided in
the Credit Agreement after the maturity of the Loans and interest accruing at
the then applicable rate provided in the Credit Agreement after the filing of
any petition in bankruptcy or the commencement of any insolvency, reorganization
or like proceeding, relating to any of the Borrowers, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) and (b) all
other obligations of any of the Borrowers or any other Credit Party pursuant to
the Credit Agreement and any other Credit Document.
"Original Financial Covenants" shall mean the covenants set forth in
Sections 7.10 through 7.13 of the Credit Agreement as in effect on March 30,
1998 (without giving effect to any change in such covenants after such date as a
result of any waiver or amendment to the Credit Agreement).
"Participation" shall have the meaning assigned to such term in Section 2
hereof.
"PIK Interest" shall have the meaning assigned to such term in Section 5
hereof.
"Reimbursement Obligation" shall have the meaning assigned to such term in
Section 7(c)(iii).
"Required Selling Banks" shall mean, at any time, one or more Selling Banks
holding at least 51% of the aggregate Acquisition Term Loan Commitments held by
the Selling Banks (or, if the Acquisition Term Loan Commitments shall have been
terminated, Selling Banks holding at least 51% of the outstanding Acquisition
Term Loans held by the Selling Banks).
4
"Required Sponsors" shall mean, at any time, one or more Sponsors holding
at least 51% of the outstanding Sponsor Loans (or, if no Sponsor Loans are
outstanding, Sponsors holding at least 51% of the Additional Sponsor
Participation).
"Sponsor Loans" shall mean, collectively, the Initial Sponsor Loan and the
Additional Sponsor Loans.
"Sponsor Loan Repayment Date" shall mean the earlier to occur of (i) the
Bank Credit Termination Date and (ii) the date on which the Company and its
Subsidiaries have met the Original Financial Covenants for more than two (2)
consecutive fiscal quarters, which date shall not be earlier than April 30,
2001.
"Sponsor Obligations" shall mean all obligations of the Borrowers to make
payment, at the times and on the terms set forth herein, of the unpaid principal
amount of and interest on the Sponsor Loans.
"Sponsor Percentage" shall mean, with respect to any Sponsor, the
percentage of the Additional Sponsor Participation purchased by such Sponsor as
set forth in Section A of Schedule 1 hereto.
"Sponsors" shall mean the Initial Sponsor and the Additional Sponsors.
2. Sale and Purchase of a Participating Interest in Unfunded Acquisition
Term Loan Commitments and Acquisition Term Loans. Upon and subject to the terms
and conditions of this Participation Agreement, each Selling Bank hereby agrees
to sell, transfer, and convey to the Initial Sponsor, and the Initial Sponsor
hereby agrees to purchase, acquire and take from each of the Selling Banks by
way of a sale without recourse, an undivided participating interest in the
following:
(1) (i) the percentage and the maximum amount specified on
Schedule 1 (as in effect on the Effective Date) of the unfunded
Acquisition Term Loan Commitment of such Selling Bank pursuant to the
Credit Agreement and (ii) any Acquisition Term Loans hereafter made by
such Selling Bank in respect of such unfunded Acquisition Term Loan
Commitment pursuant to the Credit Agreement, to the extent funded by
the Initial Sponsor in accordance with the terms hereof;
(2) any Acquisition Term Note issued to such Selling Bank, but
only to the extent of any Sponsor Loans funded by the Initial Sponsor;
and
(3) any Credit Documents and any rights with respect to any
Collateral, but only to the extent of any Sponsor Loans funded by the
Initial Sponsor. (1)
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After the Effective Date, if there is an Additional Sponsor
which will be funding one or more Additional Sponsor Loans, then each of the
then existing Sponsors hereby agrees to transfer to such Additional Sponsor a
pro rata portion (or such other portion as the Sponsors may agree) of such
existing Sponsor's participation in the unfunded Acquisition Term Loan
Commitment so that such Additional Sponsor shall hold a participation in the
unfunded Acquisition Term Loan Commitment in an amount at least equal to the
Additional Sponsor Loan to be funded by such Additional Sponsor.
Upon and subject to the terms and conditions of this
Participation Agreement, each Selling Bank hereby agrees to sell, transfer, and
convey to each of the Additional Sponsors, if any, and each of the Additional
Sponsors hereby agrees to purchase, acquire and take from each of the Selling
Banks by way of a sale without recourse, an undivided participating interest in
the following:
(x) any Acquisition Term Loans thereafter made by such Selling
Bank in respect of such unfunded Acquisition Term Loan Commitment, pursuant to
the Credit Agreement, to the extent funded by such Additional Sponsor;
(y) any Acquisition Term Note issued to such Selling Bank, but
only to the extent of any Additional Sponsor Loans made by such Additional
Sponsor; and
(z) any Credit Documents and any rights with respect to any
Collateral, but only to the extent of any Additional Sponsor Loans made by such
Additional Sponsor.
With respect to each Sponsor, each of the foregoing
participating interests purchased from the Selling Banks (or the Initial
Sponsor, if applicable) shall be referred to herein as such Sponsor's
"Participation" and shall be deemed to include the right of each of the Sponsors
to receive at the time and on the terms set forth herein, to the extent of its
Participation, an amount equal to the amount of principal and interest received
or collected by the Selling Banks in respect of the Sponsor Loans; provided,
however, that each Sponsor's right to receive such amounts shall be subordinate
and junior (as more fully set forth in Section 7 below) to the rights of the
Administrative Agent and the Banks to receive and retain payment of the Bank
Obligations (the "Retained Interests'). Each of the Selling Banks represents and
warrants to the Sponsors that it is the legal and beneficial owner of the
interests in which it is granting a Participation hereunder and that such
interests are free and clear of any adverse claim. The obligations of the
Selling Banks hereunder are several and not joint.
6
3. Acquisition Term Loan to be made on the Effective Date of Amendment No.
2. Each of the parties hereto hereby acknowledges and agrees that on the
Effective Date, and as a condition of the effectiveness of Amendment No. 2, the
Selling Banks shall make an Acquisition Term Loan to the U.S. Borrowers in the
principal amount of $5,000,000 (such loan shall be referred to herein as, the
"Initial Sponsor Loan") provided that (a) all conditions precedent to the making
of such loan under the Credit Agreement have been satisfied; (b) 100% of such
Initial Sponsor Loan shall have been funded by the Initial Sponsor pursuant to
and in accordance with this Participation Agreement and (c) the effective date
of Amendment No. 2 occurs on or before August 2, 1999. On the date the Initial
Sponsor Loan is to be made, the Initial Sponsor will purchase its Participation
hereunder and will pay to the Administrative Agent (for the benefit of each
Selling Bank) by wire transfer, in U.S. Dollars, immediately available funds,
$5,000,000 by no later than 2:00 p.m. (New York City time), or such other time
as the Administrative Agent shall agree, on the date the Initial Sponsor Loan is
to be made. The wire transfer instructions for the Administrative Agent are as
follows:
BANK OF NEW YORK
NEW YORK, NY
ABA #021-000-018
FOR ACCOUNT OF: CIBC, NEW YORK BRANCH
ACCOUNT NO. 890-0331-046
FOR FURTHER CREDIT TO: AGENTED LOANS
ACCOUNT NO. 07-09611
ATTENTION: AGENCY SERVICES
REFERENCE: Morris Materials Handling
Notwithstanding anything to the contrary contained in the
Credit Agreement, the Initial Sponsor Loan shall not be made by the Selling
Banks unless and until the Administrative Agent shall have received the full
amount of the Initial Sponsor Loan from the Sponsors in accordance with this
Participation Agreement. The U.S. Borrowers hereby agree to give the Sponsors at
least one (1) prior Business Day notice of the expected Effective Date of
Amendment No. 2.
4. Additional Acquisition Term Loans pursuant to the Additional Sponsor
Participation.
(a) Each of the parties hereto hereby acknowledges and agrees
that (i) no Sponsor shall have any obligation to fund any Additional Sponsor
Loans; and (ii) except as expressly provided in Section 5 below, any such
Additional Sponsor Loans shall only be made in accordance with the provisions of
subsection (B) of Section 1.12 of the Credit Agreement.
7
(b) If any Sponsor agrees to fund any Additional Sponsor Loan,
then on the date such Additional Sponsor Loan is to be made by the Selling
Banks, such Sponsor shall fund its participation therein and will pay to the
Administrative Agent (on behalf of the Selling Banks) by wire transfer (as
provided in Section 3 above) in U.S. Dollars, in immediately available funds, an
amount equal to such Sponsor's participation in such Additional Sponsor Loan by
no later than 2:00 p.m. (New York City time) on the date the Additional Sponsor
Loan is to be made. The Additional Sponsor Loans may be funded by one or more of
the Sponsors provided, that each Additional Sponsor Loan shall be approved by
the Administrative Agent and the Required Banks prior to the funding thereof.
(c) Each of the parties hereto hereby acknowledges and agrees
that the Banks shall not be required to fund any portion of the Initial Sponsor
Loan or the Additional Sponsor Loans and that any such loans shall be funded
solely by the Sponsors pursuant to, and in accordance with, this Participation
Agreement. Each of the Borrowers acknowledges and agrees that it shall not
request, and it shall not be entitled to receive, any Acquisition Term Loans
funded by the Banks in excess of $7,430,082.82 (which is the amount of
Acquisition Term Loans outstanding as of the date hereof).
5. Terms of the Sponsor Loans.
(1) The outstanding principal amount of the Sponsor Loans shall be payable
to the Sponsors out of funds received by the Administrative Agent on behalf of
the Selling Banks from the Borrowers, in cash, only on the Sponsor Loan
Repayment Date. The Sponsor Loans shall accrue interest on the outstanding
principal amount thereof plus interest accrued thereon from the date the Sponsor
Loans are made until the Sponsor Loan Repayment Date at a rate per annum equal
to the Eurodollar Rate plus 6.00%, compounded monthly (the "PIK Interest").
Interest on the Sponsor Loans shall be payable out of funds received by the
Administrative Agent from the Borrowers, in cash, only on the Sponsor Loan
Repayment Date. Subject to Section 7(c)(iii) hereof and notwithstanding anything
else to the contrary contained in this Participation Agreement, nothing
contained in this Participation Agreement, the Credit Agreement or the
Acquisition Term Notes shall affect the right of the Sponsors to receive payment
of principal and interest payable hereunder in accordance with the terms of this
Participation Agreement.
(2) Except to the extent expressly provided herein or in the Credit
Agreement, the terms of the Sponsor Loans shall be the same as all other
Acquisition Term Loans under the Credit Agreement.
(3) The Administrative Agent, upon determining the applicable interest rate
for the Sponsor Loans for any Interest Period, shall promptly notify the
Sponsors and the applicable U.S. Borrower thereof. Such determination shall,
absent manifest error, be final, conclusive and binding upon all parties hereto.
The Administrative Agent shall not be responsible for any error in connection
with its determination of the applicable interest rate, or any action taken or
omitted to be taken by the Administrative Agent as a result thereof, except for
gross negligence or willful misconduct on the part of the Administrative Agent
as determined by a final order or judgment of a court of competent jurisdiction.
6. Waivers.
8
(a) Each of the Sponsors acknowledges and agrees that it shall
not be entitled to any of the rights of a participant pursuant to the Credit
Agreement (except the right to repayment pursuant to the terms hereof and the
right to receive interest at the rate provided for herein) and hereby expressly
waives any such rights (including, without limitation, any rights that are
granted under Section 11.04(b) of the Credit Agreement). Each of the Sponsors
hereby agrees that, notwithstanding any term, phrase or provision contained
herein, the Sponsors are purchasing participations in Acquisition Term Loans
made or to be made by the Selling Banks and that all of its rights with respect
to the Sponsor Loans are solely as set forth in this Participation Agreement.
(b) Each of the Selling Banks and each of the Sponsors hereby
waives the obligation of the Borrowers to pay any Commitment Commission on the
Additional Sponsor Participation.
(c) Until the Bank Credit Termination Date shall have
occurred, each of the Sponsors hereby waives any and all rights, claims and
privileges with respect to the Sponsor Loans and the Acquisition Term Loan
Commitment (other than the right of repayment pursuant to this Participation
Agreement, the right to receive interest at the rate provided for herein and any
other right set forth in the Participation Agreement ) and expressly agrees that
all such rights, claims and privileges with respect to the Sponsor Loans (other
than the right of repayment pursuant hereto) and the Acquisition Term Loan
Commitment shall remain with the Banks. Each Sponsor further agrees that, prior
to the Sponsor Loan Repayment Date, all payments received pursuant to the Credit
Agreement (including, without limitation, all scheduled payments and all
mandatory and optional prepayments thereunder) shall be applied to the Bank
Obligations until the Bank Credit Termination Date.
7. Subordination; Repayment.
(1) Subordination. Holdings, each Borrower and each other Credit Party, on
the one hand, and each of the Sponsors, on the other hand, agrees, for itself
and each future holder of the Sponsor Obligations, that the Sponsor Obligations
are expressly "subordinate and junior in right of payment" (as that phrase is
hereinafter defined) to all Bank Obligations. "Subordinate and junior in right
of payment" means that:
(1) no part of the Sponsor Obligations shall have any claim to
the assets of any Credit Party on a parity with or prior to the claim
of the Bank Obligations; and
9
(2) until the Bank Credit Termination Date, other than payment
due to the Sponsors on the Sponsor Loan Repayment Date in accordance
with Section 5 hereof, no Sponsor will take, demand or receive from
any Credit Party, and no Credit Party will make, give or permit,
directly or indirectly, by set-off, redemption, purchase or in any
other manner, any payment of or security for the whole or any part of
the Sponsor Obligations, including, without limitation, any letter of
credit or similar credit support facility to support payment of the
Sponsor Obligations.
(2) Additional Provisions Concerning Subordination. (i) The Sponsors and
each Credit Party agree that upon the occurrence of any Insolvency Event:
(A) all Bank Obligations shall be paid in full
in cash before any payment or distribution
is made with respect to the Sponsor
Obligations; and
(B) any payment or distribution of assets of any
Credit Party, whether in cash, property or
securities, to which any Sponsor would be
entitled except for the provisions hereof
shall be paid or delivered by such Credit
Party, or any receiver, trustee in
bankruptcy, liquidating trustee, disbursing
agent or other Person making such payment or
distribution, directly to the Administrative
Agent, for the account of the Banks, to the
extent necessary to pay in full in cash all
Bank Obligations, before any payment or
distribution shall be made to any Sponsor.
(ii) If any payment or distribution, whether consisting of
money, property or securities, be collected or received by any Sponsor in
respect of the Sponsor Obligations, such Sponsor forthwith shall deliver the
same to the Administrative Agent for the account of the Banks, in the form
received, duly endorsed to the Administrative Agent, if required, to be applied
to the payment or prepayment of the Bank Obligations until the Bank Obligations
are paid in full in cash. Until so delivered, such payment or distribution shall
be held in trust by such Sponsor as the property of the Banks, segregated from
other funds and properly held by such Sponsor.
(3) Rights. (i) So long as the Bank Obligations have not been paid in full
in cash, whether or not any "Insolvency Event" has occurred,
(A) no Sponsor will (1) exercise or seek to exercise any
rights or exercise any remedies with respect to any
Collateral, any Credit Document or this Participation
Agreement (other than the right to receive payment
under Section 5 hereof on or after the Sponsor Loan
Repayment Date) or (2) institute any action or
proceeding with respect to such rights or remedies,
including without limitation, any action of
foreclosure or (3) contest, protest or object to any
foreclosure proceeding or action brought by any of
the Agents or any Bank or any other exercise by any
of the Agents or any Bank of any rights and remedies
under any of the Credit Documents; and
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(B) the Administrative Agent and the requisite number of
Banks shall have the exclusive right to administer
the Credit Agreement and the other Credit Documents
and to enforce any and all rights and exercise any
and all remedies with respect thereto and the
Collateral.
(ii) In exercising rights and remedies with respect to the
Credit Agreement, the other Credit Documents and the Collateral, the
Administrative Agent and the requisite number of Banks may enforce the
provisions of the Credit Documents and exercise remedies thereunder, all in such
order and in such manner as they may determine in the exercise of their sole
business judgment. Such exercise and enforcement shall include, without
limitation, the rights to sell or otherwise dispose of Collateral, to incur
expenses in connection with such sale or disposition and to exercise all the
rights and remedies of a secured lender under the Uniform Commercial Code or any
other applicable law of any applicable jurisdiction.
(iii) Contemporaneously with and effective upon the occurrence
of the Bank Credit Termination Date, the Credit Documents and all remaining
obligations thereunder shall be deemed assigned to the Sponsors without
representation, warranty or recourse of any kind or nature whatsoever (other
than beneficial ownership) and without the necessity of any further action by
any party. From and after the Bank Credit Termination Date, if the Sponsors, or
any of them, shall receive any payment on account of the Sponsor Loans and if
the Selling Banks are required to return to any of the Credit Parties, or any of
their respective bankruptcy estates, any amounts received in respect of the Bank
Obligations, then the Sponsors hereby agree to reimburse the Selling Banks an
amount equal to the lesser of (a) the amounts returned by the Selling Banks to
any of the Credit Parties or their respective bankruptcy estates, and (b) the
amounts received by the Sponsors on account of the Sponsor Loans less any
amounts that the Sponsors have previously returned to any of the Credit Parties
or any of their respective bankruptcy estates (subclauses (a) and (b) above
being collectively referred to as the "Reimbursement Obligations"). The
Reimbursement Obligations shall be secured by a retained security interest in
favor of the Administrative Agent for the benefit of the Selling Banks in the
obligations due under the Credit Documents and all collateral and guaranties
securing such obligations. Following the effectiveness of the assignment
referenced above, the Administrative Agent may resign as Administrative Agent
and in such event, the Sponsors may appoint a successor Administrative Agent in
accordance with the terms of the Credit Agreement. The Sponsors agree to
promptly execute and deliver or cause to be executed and delivered all such
other and further instruments and documents, and promptly do or cause to be done
all such other and further things as may be necessary and reasonably required,
in order to perfect and protect the security interest granted hereunder and to
enable the Administrative Agent, on behalf of the Selling Banks, to enforce the
security granted hereunder.
(iv) Any payment collected under the Credit Agreement
(including, but not limited to, scheduled payments of principal and interest,
mandatory prepayments and optional prepayments thereunder) or under any other
Credit Document and money, property or securities realized upon the sale,
disposition or other realization by the Agents upon all or any part of the
Collateral, shall be applied by the Agents in the following order:
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(A) First, to the payment in full of all costs and
expenses (including, without limitation, attorneys'
fees and disbursements) paid or incurred by the
Agents or the Banks in connection with the collection
of any of the Bank Obligations, the realization on
the Collateral or the protection of their rights and
interests with respect thereto; and
(B) Second, to the payment in full of all Bank
Obligations in such order as provided in the Credit
Documents, giving effect to the subordination
provisions of this Participation Agreement; and
(C) Third, to the payment in full of all Sponsor
Obligations as provided for by this Participation
Agreement; and
(D) Fourth, as directed by a court of competent
jurisdiction or returned to the applicable Credit
Parties.
provided, that if the Sponsor Loan Repayment Date occurs prior to the Bank
Credit Termination Date, then the Sponsors may receive payment in accordance
with Section 5 hereof without prior application as provided in subclauses (A)
and (B) above.
(v) The Administrative Agent's and the Banks' rights with
respect to the Collateral include the right to release any or all of the
Collateral from the Lien of any Credit Document or in connection with the sale
of such Collateral, notwithstanding that the net proceeds of any such sale may
not be used to permanently prepay any Bank Obligations or Sponsor Obligations.
(4) Consents of Sponsors. Each Sponsor hereby agrees that, without the
necessity of any reservation of rights against any Sponsor, and without notice
to or further assent by any Sponsor:
(A) any demand for payment of any Bank Obligations or any Sponsor
Obligations made by any of the Agents or any Bank may be rescinded in whole
or in part by any such Agent or any such Bank, and any Bank Obligation or
Sponsor Obligation may be continued, and the Bank Obligations and the
Sponsor Obligations, or the liability of any Borrower, any Credit Party or
any other party upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, or any
obligation or liability of Holdings, any Borrower, any Credit Party or any
other party under the Credit Agreement or any other Credit Document, may,
from time to time, in whole or in part, be renewed, extended, modified,
accelerated, compromised, waived, surrendered, or released by the
Administrative Agent or any Bank; and
12
(B) the Credit Agreement, any Note and any other Credit Document may
be amended, amended and restated, modified, supplemented or terminated, in
whole or in part, as the Administrative Agent or the requisite number of
Banks may deem advisable from time to time, and any Collateral at any time
held by the Administrative Agent or the Banks for the payment of any of the
Bank Obligations or any of the Sponsor Obligations may be sold, exchanged,
waived, surrendered or released,
in each case all without notice to or further assent by any Sponsor, which will
remain bound under this Participation Agreement, and all without impairing,
abridging, releasing or affecting the subordination provided for herein.
(5) Bank Obligations Unconditional. All rights and interests of the Agents
and the Banks hereunder, and all agreements and obligations of the Sponsors,
Holdings, the Borrowers and any other Credit Party hereunder, shall remain in
full force and effect irrespective of:
(1) any lack of validity or enforceability of any of the
Credit Documents, any Currency Protection Agreement,
any Interest Rate Agreement or this Participation
Agreement;
(2) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Bank
Obligations or the Sponsor Obligations, or any
amendment or waiver or other modification, whether by
course of conduct or otherwise, of the terms of the
Credit Agreement, any other Credit Document, any
Interest Rate Agreement, any Currency Protection
Agreement or this Participation Agreement;
(3) any exchange, release or nonperfection of any
security interest in any Collateral, or any release,
amendment, waiver or other modification, whether in
writing or by course of conduct or otherwise, of all
or any of the Bank Obligations or the Sponsor
Obligations or any guarantee thereof; or
(4) any other circumstances which otherwise might
constitute a defense available to, or a discharge of,
Holdings, any of the Borrowers or any other Credit
Party in respect of the Bank Obligations or the
Sponsor Obligations, or of any Sponsor or Holdings,
Borrowers, or any other Credit Party in respect of
this Participation Agreement.
(6) Provisions Applicable After Bankruptcy; No Turnover.
13
(1) The provisions of this Participation Agreement shall
continue in full force and effect notwithstanding the
occurrence of any event contemplated under clauses
(a) or (c) of the definition of "Insolvency Event."
(2) To the extent that any Sponsor has or acquires any
rights under Section 363 or Section 364 of the
Bankruptcy Code with respect to the Collateral, such
Sponsor hereby agrees not to assert such rights
without the prior written consent of the
Administrative Agent, provided, that, if requested by
the Administrative Agent, such Sponsor shall seek to
exercise such rights in the manner requested by the
Administrative Agent.
(3) No Sponsor or any Affiliate thereof (other than
Canadian Imperial Bank of Commerce, CIBC, Inc. and
Credit Agricole Indosuez) shall, prior to and upon
the occurrence and during the continuance of any
event or proceeding described in clause (a) or clause
(c) of the definition of "Insolvency Event" commenced
by or against any Credit Party, extend credit or make
other financial accommodations to any Credit Party
that is entitled to priority or loan status superior
or equal to that granted to the Agents and the Banks
pursuant to the Credit Documents.
8. Consent to Amendment No. 2. The Sponsors hereby consent to the terms and
provisions of Amendment No. 2. Each Sponsor waives any and all notice of the
creation, renewal, extension or accrual of any of the Bank Obligations or any of
the Sponsor Obligations, the notice of or proof of reliance by the Banks upon
this Participation Agreement and notice of protest, demand for payment and
notice of default. Amendment No. 2 shall be deemed conclusively to have been
entered into by the Banks in reliance upon this Participation Agreement.
9. Repayment of Certain Amounts by the Sponsors; Payment by Agent.
(a) If the Administrative Agent or any Bank shall pay any amount to a Sponsor
pursuant hereto in the belief or expectation that a related payment has been or
will be received or collected in connection with the Sponsor Loans or with any
of the Credit Documents and such related payment is not received or collected by
the Administrative Agent or the appropriate Bank, as the case may be, then such
Sponsor will promptly on demand return such amount to the Administrative Agent,
together with interest thereon at the Effective Federal Funds Rate (as defined
below). If the Administrative Agent or any Bank shall determine at any time that
any amount received or collected by it and subsequently paid to any of the
Sponsors must be returned to either of the U.S. Borrowers or paid to any other
Person pursuant to any insolvency law, any sharing clause in any document or
otherwise, then, notwithstanding any other provision of this Participation
Agreement to the contrary, neither the Administrative Agent nor any Bank shall
be required to distribute any portion thereof to any Sponsor, and the applicable
Sponsors will promptly on demand by the Administrative Agent repay (which
obligation shall survive the termination of this Participation Agreement) any
14
portion thereof that either the Administrative Agent or any Bank shall have
distributed to any Sponsor, together with interest thereon at such rate, if any,
as shall be paid to the U.S. Borrowers or such other Person with respect
thereto. As used herein, "Effective Federal Funds Rate" shall mean, for any day,
the weighted average of the per annum rates on overnight Federal funds
transactions, with members of the Federal Reserve System, only, arranged by
Federal funds brokers, as published as of such day by the Federal Reserve Bank
of New York.
(b) On or after the occurrence of the Sponsor Loan Repayment
Date, the Administrative Agent will cause to be distributed on the same day
received (if payment is actually received by the Administrative Agent in New
York prior to 2:00 P.M. (New York time) on such day) funds relating to the
payment of principal or interest on the Sponsor Loans ratably to the Sponsors
entitled to receive any such payment. If and to the extent that any such
distribution shall not be so made by the Administrative Agent in full on the
same day received (if payment is actually received by the Administrative Agent
prior to 2:00 P.M. (New York time) on such day), the Administrative Agent shall
pay to each Sponsor its ratable amount thereof and each such Sponsor shall be
entitled to receive from the Administrative Agent upon demand, interest on such
amount at the Federal Funds Rate (according to the U.S. Council on International
Banking Interbank Compensation Rules), until the date the Administrative Agent
pays such amount to such Sponsor. If payment is received by the Administrative
Agent in New York later than 2:00 P.M. (New York time), such payment shall be
deemed to have been made on the next succeeding Business Day.
10. No Responsibility of the Administrative Agent or the Banks.
(1) Each of the Sponsors acknowledges that as a direct or indirect equity
owner of Holdings, the direct or indirect (as applicable) corporate parent of
each of the U.S. Borrowers, it has had and will continue to have, complete
access to the Credit Documents and all other documents and information relating
to the Loans under the Credit Agreement. Neither the Administrative Agent nor
any of the Banks makes any representation, and shall have no responsibility,
with respect to (i) any financial information, certificates, receipts or other
documents furnished or to be furnished to the Sponsors in connection with the
Sponsor Loans or the Participations; (ii) the due execution, validity or
enforceability of the Loans or any of the Credit Documents; (iii) the
collectibility of the Loans or the sufficiency or transferability of any
Collateral or security therefor; (iv) the priority or perfection of any Lien in
respect of the Loans or any of the Credit Documents; (v) the financial or other
condition of the U.S. Borrowers, any of the other Credit Parties or any other
Person or (vi) the performance of the U.S. Borrowers or any of the Credit
Parties of their obligations under any of the Credit Documents. Each of the
Sponsors represents that it has made such independent investigation and
determination of the foregoing matters as it considers appropriate, and accepts
full responsibility therefor. Neither the Administrative Agent nor any Bank
shall be liable to a Sponsor for any error in judgment or for any action taken
or omitted to be taken by the Administrative Agent or such Bank or any of their
respective agents except for gross negligence or willful misconduct of the
Administrative Agent or any such Bank, as applicable, as determined by a final
order or judgment of a court of competent jurisdiction.
15
(2) None of the Administrative Agent or any Bank will have any obligation
whatsoever to furnish to the Sponsors copies of any document, certificate,
report and financial statement which the Administrative Agent or any Bank shall
receive or generate from time to time with respect to the Credit Documents. Each
of the Sponsors acknowledges and agrees that (i) it has no right to receive any
of the documents, certificates, reports or financial statements which the
Administrative Agent or any Bank shall receive or generate from time to time
with respect to the Credit Documents and (ii) it is not entitled to access to
confidential or privileged information or any information which the
Administrative Agent or any Bank is prohibited from disclosing by the Credit
Agreement or any other Credit Document. Failure of the Administrative Agent or
any Bank to provide any information to the Sponsors shall not result in any
liability of the Administrative Agent or any Bank.
11. Rights under the Credit Documents.
(1) The Administrative Agent and the Selling Banks shall retain all their
respective rights and powers under the Credit Documents other than the right to
retain for their own account amounts of principal and interest on the Sponsor
Loans allocable to the Participations and to be paid to the Sponsors in
accordance with this Participation Agreement.
(2) The Administrative Agent and the Banks shall continue to administer all
the Loans under the Credit Agreement and all the Credit Documents. Each of the
Sponsors hereby irrevocably designates the Administrative Agent and the
requisite number of Banks under the Credit Documents as its exclusive agents for
the administration of the Sponsor Loans and enforcement of the Credit Documents.
The Administrative Agent and the Banks accept such appointment on the
understanding that (i) they may use their sole discretion with respect to
exercising or refraining from exercising any rights, or taking or refraining
from taking any actions, which may be vested in any of them or which they may be
entitled to take or assert under or in respect of any of the Credit Documents,
including, without limitation, rights and actions, relating to any waiver or
amendment of any term thereof; (ii) they shall not be liable to any Sponsor with
respect to anything any of them may do or omit to do in relation to the Loans
other than to account in accordance with this Participation Agreement for moneys
actually received which are allocable to Participations in accordance with this
Participation Agreement above; and (iii) the Administrative Agent and the Banks
may accept deposits from, make loans or otherwise extend credit to, and
generally engage in any kind of banking, trust or other business with, the U.S.
Borrowers, any of the other Credit Parties or any other Person having
obligations relating to the Loans, or the Credit Documents and receive payment
on such loans or extensions of credit and otherwise act with respect thereto
freely and without accountability in the same manner as if the Participations
did not exist. Without limiting the generality of the foregoing, the
Administrative Agent and the Banks (x) may rely upon the advice of legal
16
counsel, accountants and other experts (including those retained by the U.S.
Borrowers) and upon any written communication or any telephone conversation
believed to be genuine and correct or to have been signed, sent or made by the
proper person or entity; (y) shall not be required to make any inquiry
concerning the performance by the U.S. Borrowers, any of the other Credit
Parties or any other Person of any of its obligations and liabilities under or
relating to the Loans, the Credit Documents or the Collateral; and (z) shall
have no obligation to make any claim against, or to assert any Lien upon, any
property held by any of them or to assert any offset there against.
(3) The Credit Agreement provides for the election of the duration of
interest periods applicable to Loans thereunder. Neither the Administrative
Agent nor any of the Selling Banks will have any obligation to advise any
Sponsor of any notice the Administrative Agent or such Selling Bank receives of
any such election; provided, however, that upon the request of any Sponsor, the
Administrative Agent will advise such Sponsor of any such elections made by the
U.S. Borrowers with respect to the Sponsor Loans.
(4) Without limiting the generality of the foregoing, the Administrative
Agent and each Selling Bank reserves the right, in its sole discretion in each
instance, without prior notice to any Sponsor (a) to agree to the modification
or waiver of any of the terms of the Credit Agreement or any other Credit
Document, (b) to consent to any action or failure to act by the Borrowers or any
other Credit Party to the Credit Documents and (c) to exercise or refrain from
exercising any rights or remedies which the Administrative Agent or such Selling
Bank may have under the Credit Agreement or any other Credit Document,
including, without limitation, the right at any time, in its sole discretion, to
declare, or refrain from declaring, any Loan and/or any Note due and payable
when permitted to do so pursuant to the Credit Agreement and to foreclose and
sell and otherwise deal with, or refrain from foreclosing and selling or
otherwise dealing with, any Collateral or to enforce, or refrain from enforcing,
the Credit Documents.
12. Legal Action; Reimbursement of Expenses therefor. Until the Bank Credit
Termination Date, each of the Sponsors agrees not to assert any direct right of
legal redress against either of the U.S. Borrowers, any of the other Credit
Parties or any other Person having obligations relating to the Loans or the
Credit Documents, with respect to the Sponsor Loans or the Credit Documents.
Each of the Sponsors hereby authorizes the Administrative Agent and the
requisite number of Banks to take legal action to enforce or protect their
interests with respect to the Loans and the Credit Documents as they may from
time to time see fit. If the Administrative Agent incurs any liabilities, costs
or expenses (including without limitation those for legal services) in
connection with the Loans or the Credit Documents, with any actual or proposed
amendment or waiver of any term thereof or restructuring or refinancing thereof
or with any effort to enforce or protect any rights or interest with respect
thereto, then each of the Sponsors will reimburse the Administrative Agent on
demand for such Sponsor's pro rata share of any portion of such liabilities,
costs and expenses which is not reimbursed by or on behalf of the U.S.
Borrowers, which reimbursement obligation will survive the termination of this
Participation Agreement.
17
13. Assignments and Participations.
(1) Any Bank may at any time or from time to time grant to others
assignments of, or participations in, its Commitments and the Loans under the
Credit Agreement, provided, that (i) no Bank shall grant participations in the
portion of the Acquisition Term Loan Commitment and the Loans allocated to the
Participations herein and (ii) each assignee under any such assignment shall
expressly assume the rights and obligations under this Participation Agreement.
Any such assignment or participation shall continue to be treated as a Retained
Interest and any holder of such an assignment or participation shall be entitled
to the benefits of the subordination set forth in Section 7 hereof.
(2) None of the Sponsors will sell, assign, transfer or otherwise dispose
of , or create, incur or suffer to exist any security interest, lien, charge or
other encumbrance whatsoever upon, the Sponsor Obligations, the Additional
Sponsor Participation or any of the Sponsor Loans or any portion of any thereof,
or grant any subparticipation therein, without the prior written consent of the
Administrative Agent and the Required Banks; provided, that any sale,
assignment, transfer or other disposition to (i) Harnischfeger Corporation which
is consummated within 45 days of the Effective Date (or such later date
established by court order; provided, that any motion or application seeking
such court order shall have been filed with the applicable court within 30 days
of the Effective Date) or (ii) to a Person who is a direct or indirect equity
owner of the Company on the Effective Date, shall not require the prior written
consent of the Administrative Agent and the Required Banks.
14. Performance by Agents or Employees. The Administrative Agent and the
Banks may perform any of their obligations under any Credit Documents and
hereunder by or through agents or employees and neither shall be liable for any
actions taken or omitted under the Credit Documents or hereunder.
15. Representations and Agreements by Sponsors.
(1) Each Sponsor represents and warrants to the Agents and the Banks
that:
(1) such Sponsor has the corporate power and authority and the legal
right to execute and deliver and to perform its obligations under this
Participation Agreement and has taken all necessary corporate action to
authorize its execution, delivery and performance of this Participation
Agreement;
(2) this Participation Agreement constitutes a legal, valid and
binding obligation of such Sponsor;
(3) the execution, delivery and performance of this Agreement will not
violate any provisions of any law, statute, rule, regulation, order, writ,
injunction or decree of any court or governmental instrumentality
17
applicable to any Sponsor or any indenture, mortgage, deed of trust,
agreement or other instrument to which any Sponsor is a party and will not
result in the creation or imposition of any Lien on any of the properties
or revenues of such Sponsor pursuant to any law, statute, rule, regulation,
order, writ, injunction or decree of any court or governmental
instrumentality affecting any Sponsor or any indenture, mortgage, deed of
trust, agreement or other instrument to which any Sponsor is a party;
(4) no consent or authorization of, filing with, or other act by or in
respect of, any arbitrator or governmental authority and no consent of any
other Person (including, without limitation, any stockholder or creditor of
such Sponsor), is required in connection with the execution, delivery,
performance, validity or enforceability of this Participation Agreement;
(5) such Sponsor has not entered into any agreement or relationship
with any other Person that would prevent it from entering into this
Participation Agreement; and
(6) such Sponsor is a direct or indirect equity owner of the Company
and if such Sponsor is a limited liability company, each of its members is
a direct or indirect equity owner of the Company and if such Sponsor is a
partnership, each of its partners is a direct or indirect equity owner of
the Company.
(2) Each Sponsor confirms that (i) it has entered into this Participation
Agreement on the basis of its own credit evaluation of, or independent
commercial relationship with, the Credit Parties, based on such documents and
information as such Sponsor has deemed appropriate, independently and without
reliance upon the Administrative Agent or any of the Banks, (ii) the
Administrative Agent and the Banks have made no representations or warranties to
such Sponsor except for the representation and warranty expressly set forth in
the penultimate sentence of Section 2 hereof and (iii) no act hereafter taken by
the Administrative Agent or any of the Banks, including, without limitation, any
review of the affairs of the Credit Parties, shall be deemed to constitute any
representation or warranty by the Administrative Agent or the Banks to any
Sponsor.
(3) Each Sponsor will continue to make, independently and without reliance
upon the Administrative Agent or any of the Banks, and based on such documents
and information as it deems appropriate, its own appraisal of and investigation
into the financial condition, creditworthiness, affairs, status and nature of
the Credit Parties.
16. Entire Agreement.
19
(1) This Participation Agreement supersedes any prior agreement, and sets
forth the entire agreement between the parties relating to the subject matter
hereof. None of the Agents or any Bank shall have any liability or obligation to
any Sponsor relating to the Participation or the Loans except as specifically
set forth in this Participation Agreement.
(2) In the event of any inconsistency between the terms of this
Participation Agreement and those of the Credit Agreement or any Acquisition
Term Note, the terms of this Participation Agreement shall control.
(3) All determinations made by the Administrative Agent or any Bank
relating to the Participations or the Loans shall be conclusive and binding on
the Sponsors, absent manifest error.
17. Invalidity; Severability. If any provision hereof would be invalid
under applicable law, then such provision shall be deemed modified to the extent
necessary to render it valid while most nearly preserving its original intent;
no provision hereof shall be affected by another provision of this Participation
Agreement being held invalid.
18. Notices. All notices, requests and demands under this Participation
Agreement to be effective shall be in writing (or by telex, facsimile or similar
electronic transfer confirmed in writing) and shall be deemed to have been duly
given or made (a) when delivered by hand or (b) if given by mail, five (5)
Business Days after deposit in the mails by certified mail, return receipt
requested, or (c) if by telex, facsimile or similar electronic transfer, when
sent and receipt has been confirmed, if addressed to the applicable party to
whom such notice, request or demand is given or made, at its address or
transmission number for notices provided on Schedule 2 hereto. The parties
hereto may change their addresses and transmission numbers for notices by giving
notice in the manner provided in this Section.
19. Waivers and Amendments; Successors and Assigns.
(1) None of the terms or provisions of this Participation Agreement may be
waived, amended, supplemented or otherwise modified except by a written
instrument executed by the Administrative Agent, the Required Selling Banks, the
Required Sponsors and, if rights or obligations of Credit Parties are adversely
affected, the Credit Parties.
(2) This Participation Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the parties hereto.
20. Indemnity by the Sponsor. Each Sponsor agrees (a) to indemnify and hold
harmless the Administrative Agent, each Selling Bank and its directors,
officers, employees, attorneys and agents (each an "Indemnified Party") (to the
full extent permitted by applicable law) from and against any and all claims,
demands, losses, judgments, damages and liabilities (including liabilities for
penalties) of whatsoever nature, and (b) to pay to each Indemnified Party an
20
amount equal to the amount of all costs and expenses, including legal fees and
disbursements, solely with regard to both (a) and (b), growing out of or
resulting from any misrepresentation or breach of this Participation Agreement
(including, without limitation, in respect of any breach of representation or
warranty set forth in Section 15 hereof) or the Credit Documents by the Sponsor,
but excluding therefrom, in each case, all claims, losses, damages and
liabilities of an Indemnified Party arising out of or resulting from the gross
negligence or willful misconduct of such Indemnified Party as determined by a
final order or judgment of a court of competent jurisdiction. The foregoing
indemnity agreement includes any costs incurred by an Indemnified Party in
connection with any action or proceeding which may be instituted in respect of
the foregoing by the Indemnified Party or by any other Person either against the
Indemnified Party or in connection with which any Indemnified Party is called as
a witness or deponent, including, but not limited to, any out-of-pocket costs
incurred by the Indemnified Party in appearing as a witness or in otherwise
complying with legal process served upon it. To the extent indemnification
payments made by a Sponsor pursuant to this Section 20 are subsequently
recovered by an Indemnified Party from any other Person (including, without
limitation, any Credit Party) such Indemnified Party will promptly refund such
payments to such Sponsor.
The indemnity contained in this Section 20 shall survive the expiration or
earlier termination of this Participation Agreement.
21. Payments under Chartwell Management Consulting Agreement. The parties
hereto hereby agree that, from and after the Effective Date, notwithstanding
anything to the contrary contained herein, in the Credit Agreement or in the
Chartwell Management Consulting Agreement, Chartwell shall be entitled to
receive payment for management services pursuant to the Chartwell Management
Consulting Agreement in an amount not to exceed $500,000 in cash on or about
each April 1 and October 1 of each year plus reasonable expenses; provided,
however, that (a) 50% of such fees due on each such date to Chartwell shall be
deferred until the Sponsor Loan Repayment Date and (b) 100% of such fees shall
accrue and not be paid by the Company at any time after the occurrence and
during the continuance of an Event of Default pursuant to Section 8.01 of the
Credit Agreement until such Event of Default is cured, whereupon (1) if it is
prior to the Sponsor Loan Repayment Date, 50% of such accrued and unpaid fees
may be paid to Chartwell and (2) if it is on or after the Sponsor Loan Repayment
Date, 100% of such accrued and unpaid fees may be paid to Chartwell.
22. CHOICE OF LAW. THIS PARTICIPATION AGREEMENT SHALL IN ALL RESPECTS BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE.
23. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, AND COVENANTS
THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY
RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND,
ACTION, OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS PARTICIPATION
21
AGREEMENT OR THE SUBJECT MATTER HEREOF OR ANY CREDIT DOCUMENT, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING OR WHETHER IN CONTRACT OR TORT OR
OTHERWISE. EACH PARTY ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER
PARTIES HERETO THAT THE PROVISIONS OF THIS SECTION CONSTITUTE A MATERIAL
INDUCEMENT UPON WHICH SUCH OTHER PARTIES HAVE RELIED, ARE RELYING AND WILL RELY
IN ENTERING INTO THIS PARTICIPATION AGREEMENT. ANY PARTY MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF ANY OTHER PARTY TO THE WAIVER OF ITS RIGHTS TO TRIAL BY JURY.
24. SERVICE OF PROCESS. EACH SPONSOR AND EACH CREDIT PARTY HEREBY
IRREVOCABLY SUBMITS ITSELF TO THE JURISDICTION OF THE STATE COURTS OF THE STATE
OF NEW YORK IN NEW YORK COUNTY AND TO THE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK SITTING IN NEW YORK COUNTY,
FOR THE PURPOSES OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF OR BASED
UPON THIS PARTICIPATION AGREEMENT OR THE SUBJECT MATTER HEREOF BROUGHT BY THE
ADMINISTRATIVE AGENT, A BANK OR ANY OF THEIR RESPECTIVE SUCCESSORS OR ASSIGNS IN
EITHER OF THE ABOVE-REFERENCED FORUMS AT THE SOLE OPTION OF THE ADMINISTRATIVE
AGENT OR SUCH BANK (AS APPLICABLE). EACH SPONSOR AND EACH CREDIT PARTY TO THE
EXTENT PERMITTED BY APPLICABLE LAW (A) HEREBY WAIVES, AND AGREES NOT TO ASSERT,
BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH COURTS, ANY CLAIM THAT IT IS NOT SUBJECT PERSONALLY
TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT ITS PROPERTY IS EXEMPT OR
IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE SUIT, ACTION OR PROCEEDING IS
BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR
PROCEEDING IS IMPROPER OR THAT THIS PARTICIPATION AGREEMENT OR THE SUBJECT
MATTER HEREOF MAY NOT BE ENFORCED IN OR BY SUCH COURT, (B) HEREBY WAIVES THE
RIGHT TO REMOVE ANY SUCH ACTION, SUIT OR PROCEEDING INSTITUTED BY THE
ADMINISTRATIVE AGENT OR A BANK IN STATE COURT TO FEDERAL COURT, AND (C) HEREBY
WAIVES THE RIGHT TO ASSERT IN ANY SUCH ACTION, SUIT OR PROCEEDING ANY OFFSETS OR
COUNTERCLAIMS EXCEPT COUNTERCLAIMS THAT ARE COMPULSORY OR OTHERWISE ARISE FROM
THE SAME SUBJECT MATTER. EACH SPONSOR AND EACH CREDIT PARTY HEREBY CONSENTS TO
SERVICE OF PROCESS BY MAIL AT THE ADDRESS TO WHICH NOTICES ARE TO BE GIVEN
PURSUANT TO SECTION 18 HEREOF. EACH SPONSOR AND EACH CREDIT PARTY AGREES THAT
22
ITS SUBMISSION TO JURISDICTION AND CONSENT TO SERVICE OF PROCESS BY MAIL IS MADE
FOR THE EXPRESS BENEFIT OF THE ADMINISTRATIVE AGENT AND EACH BANK. FINAL
JUDGMENT AGAINST A SPONSOR OR A CREDIT PARTY IN ANY SUCH ACTION, SUIT OR
PROCEEDING SHALL BE CONCLUSIVE, AND MAY BE ENFORCED IN ANY OTHER JURISDICTION
(A) BY SUIT, ACTION OR PROCEEDING ON THE JUDGMENT, A CERTIFIED OR TRUE COPY OF
WHICH SHALL BE CONCLUSIVE EVIDENCE OF THE FACT AND OF THE AMOUNT OF
INDEBTEDNESS, LIABILITY OR OTHER OBLIGATION OF A SPONSOR OR A CREDIT PARTY
THEREIN DESCRIBED OR (B) IN ANY OTHER MANNER PROVIDED BY, OR PURSUANT TO, THE
LAWS OF SUCH OTHER JURISDICTION, PROVIDED, HOWEVER, THAT, THE ADMINISTRATIVE
AGENT, AND TO THE EXTENT PERMITTED BY THE CREDIT DOCUMENTS, ANY BANK MAY AT ITS
OPTION BRING SUIT, OR INSTITUTE OTHER JUDICIAL PROCEEDINGS AGAINST A SPONSOR OR
A CREDIT PARTY OR ANY OF THEIR RESPECTIVE ASSETS IN ANY STATE OR FEDERAL COURT
OF THE UNITED STATES OR OF ANY COUNTRY OR PLACE WHERE SUCH SPONSOR, SUCH CREDIT
PARTY OR SUCH ASSETS MAY BE FOUND.
25. Execution in Counterparts. This Participation Agreement may be executed
in counterparts, each of which shall be deemed to constitute an original, but
all of which, when taken together, shall constitute one and the same instrument.
Signature pages may be detached from counterpart documents and reassembled to
form duplicate executed originals. Delivery of an executed signature page to
this Participation Agreement by facsimile shall be effective as delivery of a
manually executed counterpart of this Participation Agreement.
26. Expenses. Whether or not this Participation Agreement becomes effective
or the transactions contemplated hereby are consummated, each of the Borrowers
agrees, on a joint and several basis, to pay all out-of-pocket expenses incurred
by the Administrative Agent in connection with the preparation, execution and
delivery of this Participation Agreement and any other documentation
contemplated hereby, including, but not limited to, the fees and disbursements
of counsel for the Administrative Agent.
27. Headings. The headings of this Participation Agreement are for the
purposes of reference only and shall not affect the construction of, or be taken
into consideration in interpreting, this Participation Agreement.
28. Provisions Relating to Collateral and Loan Documents.
(1) All Credit Documents shall be held by the Selling Banks or their
respective agents in their respective names; provided, however, that to the
extent of the Sponsor's undivided Participation, in accordance with this
Participation Agreement, the Credit Documents shall be held by the Selling Bank
or its agent for the benefit of the Sponsors.
(2) All Collateral shall be held by the Administrative Agent on behalf of
the Selling Banks. (1)
23
(3) Notwithstanding the provisions of paragraphs (a) and (b) of this
Section 28, the Sponsors shall have no interest in (i) any property taken as
collateral security for any other loan or loans (other than in connection with
the Credit Agreement) made to a Borrower by a Selling Bank or (ii) any property
now or hereafter in the possession or control of the Administrative Agent or a
Selling Bank or its agent which may be or become collateral security for the
Loans by reason of (A) the general description contained in any general loan
agreement, note, security agreement or other collateral document (other than the
Credit Agreement or other Credit Document) held by the Administrative Agent or a
Selling Bank or (B) any right of set-off, counterclaim, banker's lien or
otherwise, provided, however, that if such property or the proceeds thereof
shall be applied in reduction of the Loans, then the Sponsors shall be entitled
to its share in such application to the extent provided herein.
29. Further Assurances. The Sponsor and each Credit Party, at their own
expense and at any time from time to time, upon the written request of the
Administrative Agent, will promptly and duly execute and deliver such further
instruments and documents and take such further actions as the Administrative
Agent reasonable may request for the purposes of obtaining or preserving the
full benefits of this Participation Agreement and of the rights and powers
herein granted.
30. Powers Coupled With An Interest. All powers, authorizations and
agencies contained in this Participation Agreement are coupled with an interest
and are irrevocable until the Bank Credit Termination Date.
[Signature Pages follow.]
24
Subordination and Participation Agreement IN WITNESS WHEREOF, the parties
hereto have caused this Participation Agreement to be executed by their
respective duly authorized officers.
ADMINISTRATIVE AGENT:
CANADIAN IMPERIAL BANK
OF COMMERCE, as Administrative Agent
By:______________________________
Name:
Title:
SELLING BANKS:
CIBC INC.
By:______________________________
Name:
Title:
CREDIT AGRICOLE INDOSUEZ
By:______________________________
Name:
Title:
By:______________________________
Name:
Title:
BANKBOSTON, N.A.
By:______________________________
Name:
Title:
ABN-AMRO BANK N.V.
By:______________________________
Name:
Title:
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.
By:______________________________
Name:
Title:
By:______________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO
By:______________________________
Name:
Title:
FIRST UNION NATIONAL BANK
By:______________________________
Name:
Title:
FLEET NATIONAL BANK
By:______________________________
Name:
Title:
RIGGS BANK N.A.
By:______________________________
Name:
Title:
FLEET BUSINESS CREDIT CORPORATION
By:______________________________
Name:
Title:
WELLS FARGO BANK, N.A.
By:______________________________
Name:
Title:
SPONSORS:
MARTIN CRANE L.L.C.
By:______________________________
Name:
Title:
ACKNOWLEDGED AND AGREED TO BY:
CREDIT PARTIES:
MMH HOLDINGS, INC.
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Secretary
MORRIS MATERIAL HANDLING, INC.
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Secretary
MORRIS MATERIAL HANDLING, LLC
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Manager
MORRIS MATERIAL HANDLING
EQUIPMENT LIMITED
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Director
MONDEL ULC
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Secretary
KAVERIT STEEL AND CRANE ULC
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Secretary
MHE TECHNOLOGIES, INC.
By: /s/ David W. Dupert
Name: David W. Dupert
Title: President
PHMH HOLDING COMPANY
By: /s/ David W. Dupert
Name: David W. Dupert
Title: President
MATERIAL HANDLING EQUIPMENT
NEVADA CORPORATION
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Secretary
CMH MATERIAL HANDLING, LLC
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Manager
EPH MATERIAL HANDLING, LLC
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Manager
HARNISCHFEGER DISTRIBUTION &
SERVICE, LLC
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Manager
HPH MATERIAL HANDLING, LLC
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Manager
MERWIN, LLC
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Manager
MORRIS MECHANICAL HANDLING, INC.
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Secretary
MPH CRANE, INC.
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Secretary
NPH MATERIAL HANDLING, INC.
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Secretary
PHME SERVICE, INC.
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Secretary
SPH CRANE & HOIST, INC.
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Secretary
MHE CANADA ULC
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Secretary
3016117 NOVA SCOTIA ULC
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Secretary
HYDRAMACH ULC
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Secretary
BUTTERS ENGINEERING SERVICES LIMITED
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Director
INVERCOE ENGINEERING LIMITED
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Director
LOWFILE LIMITED
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Director
REDCROWN ULC
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Director
MMH (HOLDINGS) LIMITED
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Director
MORRIS MATERIAL HANDLING LIMITED
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Director
M.M.H. INTERNATIONAL LIMITED
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Director
MORRIS MATERIAL HANDLING MEXICO
S.A. DE C.V.
By: /s/ Peter A. Kerrick
Name: Peter A. Kerrick
Title: Director
BIRMINGHAM CRANE & HOIST, INC.
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Secretary
ARIZONA MOTOR AND CONTROL CORPORATION
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Secretary
DAJU HOLDINGS LTD.
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Secretary
OVERHEAD CRANE SERVICE & SUPPLY
COMPANY LIMITED
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Secretary
OVERHEAD CRANE SERVICE AND SUPPLY
COMPANY (SUDBURY) LIMITED
By: /s/ Martin L. Ditkof
Name: Martin L. Ditkof
Title: Secretary
MORRIS MATERIAL HANDLING
AUSTRALIA PTY LIMITED
By: /s/ Michael John Maddock
Name: Michael John Maddock
Title: Director
MORRIS JDN PTY LIMITED
By: /s/ Michael John Maddock
Name: Michael John Maddock
Title: Director
MORRIS POWERLEC PTY LIMITED
By: /s/ Michael John Maddock
Name: Michael John Maddock
Title: Director
Schedule 1
A. Percentage of the Additional Sponsor Participation purchased by each Sponsor:
Martin Crane L.L.C. 100%
B. Aggregate amount of unfunded Total Acquisition Term Loan Commitment purchased
by each Sponsor:
Martin Crane L.L.C. $20,501,008.11
C. Amount of the
unfunded Acquisition
Term Loan
Commitment
of each
Selling Bank
purchased by
each Sponsor:
Martin Crane L.L.C.
CIBC Inc. $2,821,239.67
Credit Agricole Indosuez $2,068,909.07
Bank Boston, N.A. $2,256,991.72
ABN-AMRO Bank N.V. $1,692,743.79
Bank Austria Creditanstalt Corporate Finance, Inc. $2,068,909.07
The First National Bank of Chicago $1,692,743.79
First Union National Bank $2,068,909.07
Fleet National Bank $2,068,909.07
Fleet Business Credit Corporation $1,692,743.79
Wells Fargo Bank, N.A. $2,068,909.07
---------------
Total $20,501,008.11
Schedule 2
Addresses and Transmission Numbers
for Notices
Administrative Agent:
Canadian Imperial Bank of Commerce 425 Lexington Avenue
New York, NY 10017
F:212-856-3991
Contact: Lindsay Gordon
Selling Banks:
CIBC Inc. 425 Lexington Avenue
New York, NY 10017
F:212-856-3991
Contact: Lindsay Gordon
Credit Agricole Indosuez 1211 Avenue of the Americas
New York, NY 10036
F:212-278-2285
Contact: Matthew Linett
Bank Boston, N.A. 100 Federal Street
Boston, MA 02110
F:617-434-4929
Contact: Linda Alto
ABN-AMRO Bank N.V. North American Special Credits
10 East 53rd Street
New York, NY 10022
F:212-891-0650
Contact: William Fitzgerald
Bank Austria Creditanstalt 4 Embarcadero Center, Suite 630
Corporate Finance, Inc. San Francisco, CA 94111
F:415-781-0622
Contact: Patrick J. Rounds
Page 2
Schedule 2
The First National Bank One First National Plaza
of Chicago Mail Suite 0088
Chicago, IL 60670
F:312-732-5161
Contact: Deborah Stevens
First Union National Bank One First Union Center
301 S. College, 5th Floor
Charlotte, NC 28288-7045
F:704-374-4793
Contact: Scott Santa Cruz
Fleet National Bank Mail Code: RIMOM20A
111 Westminster Street
Providence, RI 02903
F:401-278-6026
Contact: Alisa Cure
Fleet Business Credit 500 Greenpointe Center West
Corporation Teaneck, NJ 07666
F:201-836-4744
Contact: Alan Lyster
Wells Fargo Bank, N.A. 1445 Ross Avenue, Suite 400
Dallas, TX 75202
F:214-777-4044
Contact: Dana D. Cagle
Sponsors:
Martin Crane L.L.C. 717 Fifth Avenue, 23rd Floor
New York, NY 10022
F:212-521-5533
Contact: David Stonehill
Credit Parties: The address and transmission number for each of the Credit
Parties is:
4915 South Howell Avenue
Milwaukee, WI 53207
F: 414-486-6146
Contact: Martin Ditkof