--------------------------------------------------------------------------------
CREDIT AGREEMENT
among
LABTEC ENTERPRISES, INC.,
VARIOUS LENDING INSTITUTIONS,
and
BANKERS TRUST COMPANY,
AS AGENT
--------------------------------
Dated as of October 7, 1997
--------------------------------
$40,000,000
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TABLE OF CONTENTS
SECTION 1. Amount and Terms of Credit.........................................1
1.01 Commitments................................................1
1.02 Minimum Borrowing Amounts, etc.............................3
1.03 Notice of Borrowing........................................3
1.04 Disbursement of Funds......................................4
1.05 Notes......................................................5
1.06 Conversions................................................6
1.07 Pro Rata Borrowings........................................6
1.08 Interest...................................................6
1.09 Interest Periods...........................................7
1.10 Increased Costs, Illegality, etc...........................8
1.11 Compensation..............................................10
1.12 Change of Lending Office..................................11
1.13 Replacement of Banks......................................11
SECTION 2. Letters of Credit.........................................12
2.01 Letters of Credit.........................................12
2.02 Letter of Credit Requests; Notices of Issuance............13
2.03 Agreement to Repay Letter of Credit Drawings..............14
2.04 Letter of Credit Participations...........................14
2.05 Increased Costs...........................................16
SECTION 3. Fees; Commitments.........................................17
3.01 Fees......................................................17
3.02 Voluntary Termination or Reduction of Commitments.........18
3.03 Mandatory Adjustments of Commitments, etc.................19
SECTION 4. Payments..................................................19
4.01 Voluntary Prepayments.....................................19
4.02 Mandatory Prepayments.....................................20
4.03 Method and Place of Payment...............................24
4.04 Net Payments..............................................24
SECTION 5. Conditions Precedent......................................26
5.01 Execution of Agreement; Notes.............................26
5.02 No Default; Representations and Warranties................26
5.03 Officer's Certificate.....................................26
5.04 Opinions of Counsel.......................................27
5.05 Corporate Proceedings.....................................27
5.06 Adverse Change, etc. .....................................27
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TABLE OF CONTENTS (cont'd)
5.07 Litigation................................................28
5.08 Approvals.................................................28
5.09 Consummation of the Equity Financing and the Mergers......28
5.10 Subordinated Financing....................................29
5.11 Refinancing...............................................29
5.12 Documents.................................................30
5.13 Financing Proceeds........................................30
5.14 Pledge Agreement..........................................30
5.15 Security Agreement........................................31
5.16 Mortgages; Title Insurance; Surveys, etc..................31
5.17 Plans; Collective Bargaining Agreements; Existing
Indebtedness Agreements; Shareholders' Agreements;
Management Agreements; Employment Agreements;
Non-Compete Agreements; Tax Allocation Agreements;
Material Contracts...................................32
5.18 Solvency Opinion; Evidence of Insurance...................33
5.19 Pro Forma Balance Sheets..................................34
5.20 Projections...............................................34
5.21 Existing Indebtedness.....................................34
5.22 Payment of Fees...........................................34
5.23 Notice of Borrowing; Letter of Credit Request.............34
SECTION 6. Representations, Warranties and Agreements................35
6.01 Corporate Status..........................................35
6.02 Corporate Power and Authority.............................35
6.03 No Violation..............................................35
6.04 Litigation................................................36
6.05 Use of Proceeds; Margin Regulations.......................36
6.06 Governmental Approvals....................................36
6.07 Investment Company Act....................................36
6.08 Public Utility Holding Company Act........................37
6.09 True and Complete Disclosure..............................37
6.10 Financial Condition; Financial Statements.................37
6.11 Security Interests........................................38
6.12 Representations and Warranties in Other Documents.........39
6.13 Transaction...............................................39
6.14 Compliance with ERISA.....................................39
6.15 Capitalization............................................40
6.16 Subsidiaries..............................................41
6.17 Intellectual Property.....................................41
6.18 Compliance with Statutes, etc.............................41
6.19 Environmental Matters.....................................41
6.20 Properties................................................42
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TABLE OF CONTENTS (cont'd)
6.21 Labor Relations...........................................42
6.22 Tax Returns and Payments..................................42
6.23 Existing Indebtedness.....................................43
6.24 Subordination.............................................43
SECTION 7. Affirmative Covenants.....................................43
7.01 Information Covenants.....................................43
7.02 Books, Records and Inspections............................46
7.03 Insurance.................................................46
7.04 Payment of Taxes..........................................47
7.05 Corporate Franchises......................................47
7.06 Compliance with Statutes, etc.............................47
7.07 Compliance with Environmental Laws........................47
7.08 ERISA.....................................................48
7.09 Good Repair...............................................49
7.10 End of Fiscal Years; Fiscal Quarters......................49
7.11 Additional Security; Further Assurances...................49
7.12 Register..................................................50
7.13 Foreign Subsidiaries Security.............................51
7.14 Interest Rate Protection..................................51
SECTION 8. Negative Covenants........................................52
8.01 Changes in Business.......................................52
8.02 Consolidation, Merger, Sale or Purchase of Assets, etc....52
8.03 Liens.....................................................56
8.04 Indebtedness..............................................58
8.05 Advances, Investments and Loans...........................59
8.06 Dividends, etc............................................63
8.07 Transactions with Affiliates..............................63
8.08 Capital Expenditures......................................64
8.09 Minimum Consolidated EBITDA...............................65
8.10 Interest Coverage Ratio...................................66
8.11 Leverage Ratio............................................67
8.12 Limitation on Voluntary Payments and Modifications
of Indebtedness; Modifications of Certificate
of Incorporation, By-Laws and Certain
Other Agreements; etc................................68
8.13 Limitation on Certain Restrictions on Subsidiaries........68
8.14 Limitation on the Creation of Subsidiaries................69
SECTION 9. Events of Default.........................................69
9.01 Payments..................................................69
9.02 Representations, etc. ....................................69
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TABLE OF CONTENTS (cont'd)
9.03 Covenants.................................................69
9.04 Default Under Other Agreements............................70
9.05 Bankruptcy, etc...........................................70
9.06 ERISA.....................................................70
9.07 Security Documents........................................71
9.08 Subsidiary Guaranties.....................................71
9.09 Judgments.................................................71
9.10 Ownership.................................................72
SECTION 10. Definitions...............................................72
SECTION 11. The Agent........................................................95
11.01 Appointment...............................................95
11.02 Delegation of Duties......................................96
11.03 Exculpatory Provisions....................................96
11.04 Reliance by Agent.........................................96
11.05 Notice of Default.........................................97
11.06 Non-Reliance on Agent and Other Banks.....................97
11.07 Indemnification...........................................98
11.08 Agent in its Individual Capacity..........................98
11.09 Holders...................................................98
11.10 Resignation of the Agent; Successor Agent.................98
SECTION 12. Miscellaneous....................................................99
12.01 Payment of Expenses, etc..................................99
12.02 Right of Setoff..........................................100
12.03 Notices..................................................100
12.04 Benefit of Agreement.....................................100
12.05 No Waiver; Remedies Cumulative...........................102
12.06 Payments Pro Rata........................................102
12.07 Calculations; Computations...............................103
12.08 Governing Law; Submission to Jurisdiction; Venue.........103
12.09 Counterparts.............................................104
12.10 Effectiveness............................................104
12.11 Headings Descriptive.....................................104
12.12 Amendment or Waiver; etc.................................104
12.13 Survival.................................................105
12.14 Domicile of Loans........................................105
12.15 Confidentiality..........................................105
12.16 Waiver of Jury Trial.....................................106
12.17 Post-Closing Actions.....................................106
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CREDIT AGREEMENT, dated as of October 7, 1997, among LABTEC
ENTERPRISES, INC., a Delaware corporation , as the surviving corporation of the
Speaker Merger (the "Borrower"), the lenders from time to time party hereto
(each, a "Bank" and, collectively, the "Banks"), and BANKERS TRUST COMPANY, as
Agent (in such capacity, the "Agent"). Unless otherwise defined herein, all
capitalized terms used herein and defined in Section 10 are used herein as so
defined.
W I T N E S S E T H:
WHEREAS, subject to and upon the terms and conditions herein
set forth, the Banks are willing to make available the credit facilities
provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 Commitments. (A) Subject to and upon the terms and
conditions herein set forth, each Bank severally agrees to make a loan or loans
to the Borrower, which loans shall be drawn, to the extent such Bank has a
commitment under such Facility, under the Term Loan Facility and the Revolving
Loan Facility, as set forth below:
(a) Each loan under the Term Loan Facility (each, a "Term
Loan" and, collectively, the "Term Loans"), (i) shall be incurred by
the Borrower pursuant to a single drawing, which shall be on the
Initial Borrowing Date, (ii) shall be denominated in U.S. Dollars,
(iii) except as hereinafter provided, may, at the option of the
Borrower, be incurred and maintained as and/or converted into Base Rate
Loans or Eurodollar Loans, provided, that (x) all Term Loans made by
all Banks pursuant to the same Borrowing shall, unless otherwise
specifically provided herein, consist entirely of Term Loans of the
same Type and (y) no incurrences of, or conversions into, Term Loans
maintained as Eurodollar Loans may be effected prior to the earlier of
(1) the 60th day after the Initial Borrowing Date and (2) that date
(the "Syndication Date ") upon which the Agent determines in its sole
discretion (and notifies the Borrower) that the primary syndication
(and resultant additions of institutions as Banks pursuant to Section
12.04) has been completed, and (iv) shall not exceed for any Bank at
the time of incurrence thereof on the Initial Borrowing Date that
aggregate principal amount which equals the Term Loan Commitment, if
any, of such Bank at such time. Once repaid, Term Loans may not be
reborrowed.
(b) Each loan under the Revolving Loan Facility (each, a
"Revolving Loan" and, collectively, the "Revolving Loans"), (i) may be
incurred by the Borrower at any time and from time to time on and after
the Initial Borrowing Date and prior to the Revolving Loan Maturity
Date, (ii) shall be denominated in U.S. Dollars, (iii)except as
hereinafter provided, may, at the option of the Borrower, be incurred
and maintained as and/or converted into Base Rate Loans or Eurodollar
Loans, provided, that (x) all Revolving Loans made as part of the
same Borrowing shall, unless otherwise specifically provided herein,
consist of Revolving Loans of the same Type and (y) no incurrences of,
or conversions into, Revolving Loans maintained as Eurodollar Loans may
be effected prior to the earlier of (1) the 60th day after the Initial
Borrowing Date and (2) the Syndication Date, (iv) may be repaid and
reborrowed in accordance with the provisions hereof and (v) shall not
exceed for any Bank at any time outstanding that aggregate principal
amount which, when combined with (I) the aggregate principal amount of
all other then outstanding Revolving Loans made by such Bank and (II)
such Bank's RL Percentage, if any, of the Swingline Loans then
outstanding and the Letter of Credit Outstandings (exclusive of Unpaid
Drawings relating to Letters of Credit which are repaid with the
proceeds of, and simultaneously with the incurrence of, Revolving Loans
or Swingline Loans) at such time, equals the Revolving Loan Commitment,
if any, of such Bank at such time. Notwithstanding anything to the
contrary contained herein, the aggregate amount of Revolving Loans
incurred on the Initial Borrowing Date may not exceed $1,500,000.
(B) Subject to and upon the terms and conditions herein set
forth, BTCo in its individual capacity agrees to make at any time and from time
to time after the Initial Borrowing Date and prior to the Swingline Expiry Date,
a loan or loans to the Borrower (each, a "Swingline Loan" and, collectively, the
"Swingline Loans"), which Swingline Loans (i) shall be made and maintained as
Base Rate Loans, (ii) shall be denominated in U.S. Dollars, (iii) may be repaid
and reborrowed in accordance with the provisions hereof, (iv) shall not exceed
in aggregate principal amount at any time outstanding, when combined with the
aggregate principal amount of all Revolving Loans then outstanding and the
Letter of Credit Outstandings (exclusive of Unpaid Drawings relating to Letters
of Credit which are repaid with the proceeds of, and simultaneously with the
incurrence of, Revolving Loans or Swingline Loans) at such time, an amount equal
to the Total Revolving Loan Commitment then in effect and (v) shall not exceed
in aggregate principal amount at any time outstanding the Maximum Swingline
Amount. BTCo shall not be obligated to make any Swingline Loans at a time when a
Bank Default exists unless BTCo has entered into arrangements satisfactory to it
and the Borrower to eliminate BTCo's risk with respect to the Defaulting Bank's
or Banks' participation in such Swingline Loans, including by cash
collateralizing such Defaulting Bank's or Banks' RL Percentage of the
outstanding Swingline Loans. BTCo will not make a Swingline Loan after it has
received written notice from the Borrower or the Required Banks stating that a
Default or an Event of Default exists until such time as BTCo shall have
received a written notice of (i) rescission of such notice from the party or
parties originally delivering the same or (ii) a waiver of such Default or Event
of Default from the Required Banks (or all the Banks to the extent required by
Section 12.12).
(C) On any Business Day, BTCo may, in its sole discretion,
give notice to the XX Xxxxx that its outstanding Swingline Loans shall be funded
with a Borrowing of Revolving Loans (provided that each such notice shall be
deemed to have been automatically given upon the occurrence of a Default or an
Event of Default under Section 9.05 or upon the exercise of any of the remedies
provided in the last paragraph of Section 9), in which case a Borrowing of
Revolving Loans constituting Base Rate Loans (each such Borrowing, a "Mandatory
Borrowing") shall be made on the immediately succeeding Business Day by all XX
Xxxxx pro rata based on each RL Bank's RL
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Percentage, and the proceeds thereof shall be applied directly to repay BTCo for
such outstanding Swingline Loans. Each RL Bank hereby irrevocably agrees to make
Base Rate Loans upon one Business Day's notice pursuant to each Mandatory
Borrowing in the amount and in the manner specified in the preceding sentence
and on the date specified in writing by BTCo notwithstanding (i) that the amount
of the Mandatory Borrowing may not comply with the Minimum Borrowing Amount
otherwise required hereunder, (ii) whether any conditions specified in Section 5
are then satisfied, (iii) whether a Default or an Event of Default has occurred
and is continuing, (iv) the date of such Mandatory Borrowing and (v) any
reduction in the Total Revolving Loan Commitment after any such Swingline Loans
were made. In the event that any Mandatory Borrowing cannot for any reason be
made on the date otherwise required above (including, without limitation, as a
result of the commencement of a proceeding under the Bankruptcy Code in respect
of the Borrower), each RL Bank (other than BTCo) hereby agrees that it shall
forthwith purchase from BTCo (without recourse or warranty) such assignment of
the outstanding Swingline Loans as shall be necessary to cause the XX Xxxxx to
share in such Swingline Loans ratably based upon their respective RL
Percentages, provided that all interest payable on the Swingline Loans shall be
for the account of BTCo until the date the respective assignment is purchased
and, to the extent attributable to the purchased assignment, shall be payable to
the RL Bank purchasing same from and after such date of purchase.
1.02 Minimum Borrowing Amounts, etc. The aggregate principal
amount of each Borrowing under a Facility shall not be less than the Minimum
Borrowing Amount for such Facility. More than one Borrowing may be incurred on
any day; provided, that at no time shall there be outstanding more than six
Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to
incur Loans under any Facility (excluding Borrowings of Swingline Loans and
Mandatory Borrowings), it shall give the Agent at its Notice Office, prior to
1:00 P.M. (New York time), at least three Business Days' prior written notice
(or telephonic notice promptly confirmed in writing) of each Borrowing of
Eurodollar Loans and at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in writing) of each Borrowing of Base Rate
Loans to be made hereunder. Each such notice (each, a "Notice of Borrowing")
shall, except as provided in Section 1.10, be irrevocable, and, in the case of
each written notice and each confirmation of telephonic notice, shall be in the
form of Exhibit -1, appropriately completed to specify (i) the Facility pursuant
to which such Borrowing is to be made, (ii) the aggregate principal amount of
the Loans to be made pursuant to such Borrowing, (iii) the date of such
Borrowing (which shall be a Business Day) and (iv) whether the respective
Borrowing shall consist of Base Rate Loans or, to the extent permitted
hereunder, Eurodollar Loans and, if Eurodollar Loans, the Interest Period to be
initially applicable thereto. The Agent shall promptly give each Bank written
notice (or telephonic notice promptly confirmed in writing) of each proposed
Borrowing, of such Bank's proportionate share thereof, if any, and of the other
matters covered by the Notice of Borrowing.
(b)(i) Whenever the Borrower desires to make a Borrowing of
Swingline Loans hereunder, it shall give BTCo not later than 2:00 P.M. (New York
time) on the day such Swingline Loan is to be made, written notice (or
telephonic notice promptly confirmed in writing) of each
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Swingline Loan to be made hereunder. Each such notice shall be irrevocable and
shall specify in each case (x) the date of such Borrowing (which shall be a
Business Day) and (y) the aggregate principal amount of the Swingline Loan to be
made pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice
specified in Section (C), with the Borrower irrevocably agreeing, by its
incurrence of any Swingline Loan, to the making of Mandatory Borrowings as set
forth in such Section.
(c) Without in any way limiting the obligation of the Borrower
to confirm in writing any telephonic notice permitted to be given hereunder, the
Agent or BTCo (in the case of a Borrowing of Swingline Loans) or the respective
Letter of Credit Issuer (in the case of Letters of Credit), as the case may be,
may prior to receipt of written confirmation act without liability upon the
basis of such telephonic notice, believed by the Agent, BTCo or such Letter of
Credit Issuer, as the case may be, in good faith to be from an Authorized
Officer of the Borrower. In each such case, the Borrower hereby waives the right
to dispute the Agent's, BTCo's or such Letter of Credit Issuer's record of the
terms of such telephonic notice (except in the case of gross negligence or bad
faith).
1.04 Disbursement of Funds. (a) No later than 1:00 P.M. (New
York time) on the date specified in each Notice of Borrowing (or (x) in the case
of Swingline Loans, not later than 4:00 P.M. (New York time) on the date
specified in Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, not
later than 1:00 P.M. (New York time) on the date specified in Section 1.01(C)),
each Bank with a Commitment under the respective Facility will make available
its pro rata share, if any, of each Borrowing requested to be made on such date
(or in the case of Swingline Loans, BTCo shall make available the full amount
thereof) in the manner provided below. All amounts shall be made available to
the Agent in U.S. Dollars and immediately available funds at the Payment Office
and the Agent promptly will make available to the Borrower by depositing to its
account at the Payment Office the aggregate of the amounts so made available in
the type of funds received. Unless the Agent shall have been notified by any
Bank prior to the date of Borrowing that such Bank does not intend to make
available to the Agent its portion of the Borrowing or Borrowings to be made on
such date, the Agent may assume that such Bank has made such amount available to
the Agent on such date of Borrowing, and the Agent, in reliance upon such
assumption, may (in its sole discretion and without any obligation to do so)
make available to the Borrower a corresponding amount. If such corresponding
amount is not in fact made available to the Agent by such Bank and the Agent has
made available same to the Borrower, the Agent shall be entitled to recover such
corresponding amount from such Bank. If such Bank does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent shall
promptly notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Agent. The Agent shall also be entitled to recover
from the Bank or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Borrower to the date such
corresponding amount is recovered by the Agent, at a rate per annum equal to (x)
if paid by such Bank, the overnight Federal Funds rate or (y) if paid by the
Borrower, the then applicable rate of interest, calculated in accordance with
Section 1.08, for the respective Loans.
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(b) Nothing herein shall be deemed to relieve any Bank from
its obligation to fulfill its commitments hereunder or to prejudice any rights
which the Borrower may have against any Bank as a result of any default by such
Bank hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal
of, and interest on, all the Loans made to it by each Bank shall be evidenced
(i) if Term Loans, by a promissory note substantially in the form of Exhibit B-1
with blanks appropriately completed in conformity herewith (each, a "Term Note"
and, collectively, the "Term Notes"), (ii) if Revolving Loans, by a promissory
note substantially in the form of Exhibit B-2 with blanks appropriately
completed in conformity herewith (each, a "Revolving Note" and, collectively,
the "Revolving Notes") and (iii) if Swingline Loans, by a promissory note
substantially in the form of Exhibit B-3 with blanks appropriately completed in
conformity herewith (the "Swingline Note").
(b) The Term Note issued to each Bank shall (i)be executed by
the Borrower, (ii) be payable to the order of such Bank or its registered
assigns and be dated the Initial Borrowing Date, (iii)be in a stated principal
amount equal to the Term Loans made by such Bank, (iv) mature on the Term Loan
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to voluntary prepayment as provided
in Section 4.01 and mandatory repayment as provided in Section 4.02, and (vii)
be entitled to the benefits of this Agreement and the other Credit Documents.
(c) The Revolving Note issued to each Bank shall (i) be
executed by the Borrower, (ii) be payable to the order of such Bank or its
registered assigns and be dated the Initial Borrowing Date, (iii) be in a stated
principal amount equal to the Revolving Loan Commitment of such Bank and be
payable in the principal amount of the Revolving Loans evidenced thereby, (iv)
mature on the Revolving Loan Maturity Date, (v) bear interest as provided in the
appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 4.01 and mandatory repayment as
provided in Section 4.02, and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents.
(d) The Swingline Note issued to BTCo shall (i) be executed by
the Borrower, (ii) be payable to the order of BTCo or its registered assigns and
be dated the Initial Borrowing Date, (iii) be in a stated principal amount equal
to the Maximum Swingline Amount and be payable in the principal amount of the
Swingline Loans evidenced thereby, (iv) mature on the Swingline Expiry Date, (v)
bear interest as provided in Section 1.08 in respect of the Base Rate Loans
evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01 and mandatory repayment as provided in Section 4.02, and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(e) Each Bank will note on its internal records the amount of
each Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on
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the reverse side thereof the outstanding principal amount of Loans evidenced
thereby. Failure to make any such notation shall not affect the Borrower's
obligations in respect of such Loans.
1.06 Conversions. The Borrower shall have the option to
convert on any Business Day occurring on or after the earlier of (x) the 60th
day after the Initial Borrowing Date and (y) the Syndication Date, all or a
portion at least equal to the applicable Minimum Borrowing Amount of the
outstanding principal amount of the Loans (other than Swingline Loans which at
all times shall be maintained as Base Rate Loans) owing by the Borrower pursuant
to a single Facility into a Borrowing or Borrowings of another Type of Loan
under such Facility; provided, that (i) except as otherwise provided in Section
1.10(b), Eurodollar Loans may be converted into Base Rate Loans only on the last
day of an Interest Period applicable thereto and no partial conversion of a
Borrowing of Eurodollar Loans shall reduce the outstanding principal amount of
the Eurodollar Loans made pursuant to such Borrowing to less than the Minimum
Borrowing Amount applicable thereto, (ii) Base Rate Loans may only be converted
into Eurodollar Loans if no Default or Event of Default is in existence on the
date of the conversion and (iii) Borrowings of Eurodollar Loans resulting from
this Section 1.06 shall be limited in number as provided in Section 1.02. Each
such conversion shall be effected by the Borrower by giving the Agent at its
Notice Office, prior to 1:00 P.M. (New York time), at least three Business Days'
(or one Business Day's in the case of a conversion into Base Rate Loans) prior
written notice (or telephonic notice promptly confirmed in writing) (each a
"Notice of Conversion") specifying the Loans to be so converted, the Type of
Loans to be converted into and, if to be converted into a Borrowing of
Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Agent shall give each Bank prompt notice of any such proposed conversion
affecting any of its Loans.
1.07 Pro Rata Borrowings. All Borrowings of Loans (other than
Swingline Loans) under this Agreement shall be made by the Banks pro rata on the
basis of their Term Loan Commitments or Revolving Loan Commitments, as the case
may be. It is understood that no Bank shall be responsible for any default by
any other Bank of its obligation to make Loans hereunder and that each Bank
shall be obligated to make the Loans to be made by it hereunder, regardless of
the failure of any other Bank to fulfill its commitments hereunder.
1.08 Interest. (a) The unpaid principal amount of each Base
Rate Loan shall bear interest from the date of the Borrowing thereof until the
earlier of (i) the maturity (whether by acceleration or otherwise) of such Base
Rate Loan and (ii) the conversion of such Base Rate Loan to a Eurodollar Loan
pursuant to Section 1.06, at a rate per annum which shall at all times be the
Applicable Base Rate Margin plus the Base Rate in effect from time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall
bear interest from the date of the Borrowing thereof until the earlier of (i)
the maturity (whether by acceleration or otherwise) of such Eurodollar Loan and
(ii) the conversion of such Eurodollar Loan to a Base Rate Loan pursuant to
Section 1.06, 1.09 or 1.10(b), as applicable, at a rate per annum which shall at
all times be the Applicable Eurodollar Margin plus the relevant Eurodollar Rate.
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(c) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan shall bear interest at a rate per annum
equal to the rate which is 2% in excess of the rate otherwise applicable to Base
Rate Loans of such Facility from time to time; provided that principal in
respect of Eurodollar Loans shall bear interest after the same becomes due
(whether by acceleration or otherwise) until the end of the applicable Interest
Period for such Eurodollar Loan at a per annum rate equal to 2% in excess of the
rate of interest applicable on the due date therefor. Interest which accrues
under this Section 1.08(c) shall be payable on demand.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on each
Quarterly Payment Date, (ii) in respect of each Eurodollar Loan, on (x) the date
of any prepayment or repayment thereof (on the amount prepaid or repaid), (y)
the date of any conversion into a Base Rate Loan pursuant to Section 1.06, 1.09
or 1.10(b), as applicable (on the amount converted) and (z) the last day of each
Interest Period applicable thereto and, in the case of an Interest Period in
excess of three months, on each date occurring at three month intervals after
the first day of such Interest Period and (iii) in respect of each Loan, at
maturity (whether by acceleration or otherwise) and, after such maturity, on
demand.
(e) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).
(f) The Agent, upon determining the interest rate for any
Borrowing of Eurodollar Loans for any Interest Period, shall promptly notify the
Borrower and the Banks thereof.
1.09 Interest Periods. At the time the Borrower gives a Notice
of Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 1:00 P.M. (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans, it shall have the right to elect by giving the
Agent written notice (or telephonic notice promptly confirmed in writing) of the
Interest Period applicable to such Borrowing, which Interest Period shall, at
the option of the Borrower, be a one, two, three or six month period.
Notwithstanding anything to the contrary contained above:
(i) all Eurodollar Loans comprising a Borrowing shall have the
same Interest Period;
(ii) the initial Interest Period for any Borrowing of
Eurodollar Loans shall commence on the date of such Borrowing
(including the date of any conversion from a Borrowing of Base Rate
Loans) and each Interest Period occurring thereafter in respect of such
Borrowing shall commence on the day on which the next preceding
Interest Period expires;
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(iii) if any Interest Period begins on a day for which there
is no numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day, provided, that if any Interest Period
would otherwise expire on a day which is not a Business Day but is a
day of the month after which no further Business Day occurs in such
month, such Interest Period shall expire on the next preceding Business
Day;
(v) no Interest Period for a Borrowing under a Facility may be
elected if it would extend beyond the respective Maturity Date for such
Facility;
(vi) no Interest Period may be elected at any time when a
Default or an Event of Default is then in existence unless the Required
Banks otherwise agree; and
(vii) no Interest Period with respect to any Borrowing of Term
Loans shall extend beyond any date upon which a mandatory prepayment of
such Term Loans is required to be made under Section 4.02(A)(b) if,
after giving effect to the selection of such Interest Period, the
aggregate principal amount of such Term Loans maintained as Eurodollar
Loans with Interest Periods ending after such date of mandatory
repayment would exceed the aggregate principal amount of such Term
Loans permitted to be outstanding after such mandatory prepayment.
If upon the expiration of any Interest Period, the Borrower
has failed to elect, or is not permitted to elect by virtue of the application
of clause (vi) above, a new Interest Period to be applicable to the respective
Borrowing of Eurodollar Loans as provided above, the Borrower shall be deemed to
have elected to convert such Borrowing into a Borrowing of Base Rate Loans
effective as of the expiration date of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that
(x) in the case of clause (i) below, the Agent or (y) in the case of clauses
(ii) and (iii) below, any Bank, shall have determined (which determination
shall, absent manifest error, be final and conclusive and binding upon all
parties hereto):
(i) on any date for determining the Eurodollar Rate for any
Interest Period, that, by reason of any changes arising after the date
of this Agreement affecting the interbank Eurodollar market, adequate
and fair means do not exist for ascertaining the applicable interest
rate on the basis provided for in the definition of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs
or reductions in the amounts received or receivable hereunder with
respect to any Eurodollar Loans (other than any increased cost or
reduction in the amount received or receivable resulting from the
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imposition of or a change in the rate of net income taxes or similar
charges) because of (x) any change since the date of this Agreement in
any applicable law, governmental rule, regulation, guideline, order or
request (whether or not having the force of law), or in the
interpretation or administration thereof and including the introduction
of any new law or governmental rule, regulation, guideline, order or
request (such as, for example, but not limited to a change in official
reserve requirements, but, in all events, excluding reserves required
under Regulation D to the extent included in the computation of the
Eurodollar Rate) and/or (y) other circumstances affecting such Bank,
the interbank Eurodollar market or the position of such Bank in such
market; or
(iii) at any time since the date of this Agreement, that the
making or continuance of any Eurodollar Loan has become unlawful by
compliance by such Bank in good faith with any law, governmental rule,
regulation, guideline or order (or would conflict with any such
governmental rule, regulation, guideline or order not having the force
of law but with which such Bank customarily complies even though the
failure to comply therewith would not be unlawful), or has become
impracticable as a result of a contingency occurring after the date of
this Agreement which materially and adversely affects the interbank
Eurodollar market;
then, and in any such event, such Bank (or the Agent in the case of clause (i)
above) shall (x) on such date and (y) within five Business Days of the date on
which such event no longer exists give notice (by telephone confirmed in
writing) to the Borrower and (except in the case of clause (i)) to the Agent of
such determination (which notice the Agent shall promptly transmit to each of
the other Banks). Thereafter (x) in the case of clause (i) above, Eurodollar
Loans shall no longer be available until such time as the Agent notifies the
Borrower and the Banks that the circumstances giving rise to such notice by the
Agent no longer exist, and any Notice of Borrowing or Notice of Conversion given
by the Borrower with respect to Eurodollar Loans which have not yet been
incurred shall be deemed rescinded by the Borrower, (y) in the case of clause
(ii) above, the Borrower agrees to pay to such Bank, upon written demand
therefor (accompanied by the written notice referred to below), such additional
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Bank in its sole discretion shall
determine) as shall be required to compensate such Bank for such increased costs
or reductions in amounts received or receivable hereunder (a written notice as
to the additional amounts owed to such Bank, showing the basis for the
calculation thereof, submitted to the Borrower by such Bank shall, absent
manifest error, be final and conclusive and binding upon all parties hereto) and
(z) in the case of clause (iii) above, the Borrower shall take one of the
actions specified in Section 1.10(b) as promptly as possible and, in any event,
within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and,
in the case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii), the
Borrower shall) either (i) if the affected Eurodollar Loan is then being made
pursuant to a Borrowing, cancel said Borrowing by giving the Agent telephonic
notice (confirmed promptly in writing) thereof on the same date that the
Borrower was notified by a Bank pursuant to Section 1.10(a)(ii) or (iii)), or
(ii) if the affected Eurodollar Loan is then
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outstanding, upon at least three Business Days' notice to the Agent, require the
affected Bank to convert each such Eurodollar Loan into a Base Rate Loan (which
conversion, in the case of the circumstances described in Section 1.10(a)(iii),
shall occur no later than the last day of the Interest Period then applicable to
such Eurodollar Loan (or such earlier date as shall be required by applicable
law)); provided, that if more than one Bank is affected at any time, then all
affected Banks must be treated the same pursuant to this Section 1.10(b).
(c) If any Bank shall have determined that after the date
hereof, the adoption or effectiveness of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by such Bank with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on such Bank's capital or assets as a consequence of its
commitments or obligations hereunder to a level below that which such Bank could
have achieved but for such adoption, effectiveness, change or compliance (taking
into consideration such Bank's policies with respect to capital adequacy), then
from time to time, upon written demand by such Bank (with a copy to the Agent),
accompanied by the notice referred to in the last sentence of this clause (c),
the Borrower agrees to pay to such Bank such additional amount or amounts as
will compensate such Bank for such reduction. Each Bank, upon determining in
good faith that any additional amounts will be payable pursuant to this Section
1.10(c), will give prompt written notice thereof to the Borrower, which notice
shall set forth the basis of the calculation of such additional amounts,
although the failure to give any such notice shall not release or diminish the
Borrower's obligations to pay additional amounts pursuant to this Section
1.10(c) upon the subsequent receipt of such notice.
1.11 Compensation. The Borrower agrees to compensate each
Bank, upon its written request (which request shall set forth the basis for
requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Bank to fund its Eurodollar Loans but excluding loss of
anticipated profit with respect to any Loans) which such Bank may sustain: (i)
if for any reason (other than a default by such Bank or the Agent) a Borrowing
of Eurodollar Loans does not occur on a date specified therefor in a Notice of
Borrowing or Notice of Conversion (whether or not withdrawn by the Borrower or
deemed withdrawn pursuant to Section 1.10(a)); (ii) if any repayment (including
any repayment made pursuant to Section 4.01 or 4.02 or as a result of an
acceleration of the Loans pursuant to Section 9) or conversion of any Eurodollar
Loans occurs on a date which is not the last day of an Interest Period
applicable thereto; (iii) if any prepayment of any Eurodollar Loans is not made
on any date specified in a notice of prepayment given by the Borrower; or (iv)
as a consequence of (x) any other default by the Borrower to repay its
Eurodollar Loans when required by the terms of this Agreement or (y) an election
made pursuant to Section 1.10(b). Calculation of all amounts payable to a Bank
under this Section 1.11 shall be made as though that Bank had actually funded
its relevant Eurodollar Loan through the purchase of a Eurodollar deposit
bearing interest at the Eurodollar Rate in an amount equal to the amount of that
Loan, having a maturity comparable to the relevant Interest
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Period and through the transfer of such Eurodollar deposit from an offshore
office of that Bank to a domestic office of that Bank in the United States of
America; provided, however, that each Bank may fund each of its Eurodollar Loans
in any manner it sees fit and the foregoing assumption shall be utilized only
for the calculation of amounts payable under this Section 1.11. It is further
understood and agreed that if any repayment of Eurodollar Loans pursuant to
Section 4.01 or any conversion of Eurodollar Loans pursuant to Section 1.06 in
either case occurs on a date which is not the last day of an Interest Period
applicable thereto, such repayment or conversion shall be accompanied by any
amounts owing to any Bank pursuant to this Section 1.11.
1.12 Change of Lending Office. Each Bank agrees that, upon the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), 1.10(c), 2.05 or 4.04 with respect to such Bank, it will, if requested by
the Borrower, use reasonable efforts (subject to overall policy considerations
of such Bank) to designate another lending office for any Loans or Letters of
Credit affected by such event; provided, that such designation is made on such
terms that, in the sole judgment of such Bank, such Bank and its lending office
suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequences of the event giving rise to the operation of any such
Section. Nothing in this Section 1.12 shall affect or postpone any of the
obligations of the Borrower or the right of any Bank provided in Section 1.10,
2.05 or 4.04.
1.13 Replacement of Banks. (x) If any Bank becomes a
Defaulting Bank, (y) upon the occurrence of any event giving rise to the
operation of Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.05 or
Section 4.04 with respect to any Bank which results in such Bank charging to the
Borrower increased costs in excess of those being generally charged by the other
Banks or (z) in the case of a refusal by a Bank to consent to a proposed change,
waiver, discharge or termination with respect to this Agreement which has been
approved by the Required Banks as provided in Section 12.12(b), the Borrower
shall have the right, if no Default or Event of Default then exists or, in the
case of clause (z) above, would exist after giving effect to such replacement,
to replace such Bank (the "Replaced Bank") with one or more other Eligible
Transferee or Transferees, none of whom shall constitute a Defaulting Bank at
the time of such replacement (collectively, the "Replacement Bank") reasonably
acceptable to the Agent and, to the extent such Replacement Bank shall be
assuming any portion of the Total Revolving Loan Commitment, each Letter of
Credit Issuer, provided that (i) at the time of any replacement pursuant to this
Section 1.13, the Replacement Bank shall enter into one or more Assignment and
Assumption Agreements pursuant to Section 12.04(b) (and with all fees payable
pursuant to said Section 12.04(b) to be paid by the Replacement Bank) pursuant
to which the Replacement Bank shall acquire all of the Commitments and
outstanding Loans of, and in each case participations in Letters of Credit by,
the Replaced Bank and, in connection therewith, shall pay to (x) the Replaced
Bank in respect thereof an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued interest on, all outstanding Loans of the Replaced
Bank, (B) an amount equal to all Unpaid Drawings that have been funded by (and
not reimbursed to) such Replaced Bank, together with all then unpaid interest
with respect thereto at such time and (C) an amount equal to all accrued, but
theretofore unpaid, Fees owing to the Replaced Bank pursuant to Section 3.01,
(y) the respective Letter of Credit Issuer an amount equal to such Replaced
Bank's RL Percentage of any Unpaid Drawing (which at such time remains an Unpaid
Drawing) with respect to
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a Letter of Credit issued by it to the extent such amount was not theretofore
funded by such Replaced Bank and (z) BTCo an amount equal to such Replaced
Bank's RL Percentage of any Mandatory Borrowing to the extent such amount was
not theretofore funded by such Replaced Bank, and (ii) all obligations
(including, without limitation, all such amounts, if any, owing under Section
1.11) of the Borrower owing to the Replaced Bank (other than those specifically
described in clause (i) above in respect of which the assignment purchase price
has been, or is concurrently being, paid) shall be paid in full to such Replaced
Bank concurrently with such replacement. Upon the execution of the respective
Assignment and Assumption Agreements, the payment of amounts referred to in
clauses (i) and (ii) above, recordation of the assignment on the Register by the
Agent pursuant to Section 7.12 and, if so requested by the Replacement Bank,
delivery to the Replacement Bank of the appropriate Note or Notes executed by
the Borrower, the Replacement Bank shall become a Bank hereunder and the
Replaced Bank shall cease to constitute a Bank hereunder, except with respect to
indemnification provisions under this Agreement, which shall survive as to such
Replaced Bank.
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request a Letter of Credit Issuer
at any time and from time to time after the Initial Borrowing Date and prior to
the Business Day (or the 30th day in the case of trade Letters of Credit)
preceding the Revolving Loan Maturity Date to issue, for the account of the
Borrower and in support of (A) trade obligations of the Borrower or any of its
Subsidiaries that arise in the ordinary course of business and are in respect of
general corporate purposes of the Borrower or its Subsidiaries, as the case may
be, and/or (B) on a standby basis, L/C Supportable Indebtedness, and subject to
and upon the terms and conditions herein set forth each Letter of Credit Issuer
agrees to issue from time to time, irrevocable sight letters of credit in such
form as may be approved by such Letter of Credit Issuer (each such letter of
credit, a "Letter of Credit" and, collectively, the "Letters of Credit").
Notwithstanding the foregoing, no Letter of Credit Issuer shall be under any
obligation to issue any Letter of Credit if at the time of such issuance:
(i) any order, judgment or decree of any governmental
authority or arbitrator shall purport by its terms to enjoin or
restrain such Letter of Credit Issuer from issuing such Letter of
Credit or any requirement of law applicable to such Letter of Credit
Issuer or any request or directive (whether or not having the force of
law) from any governmental authority with jurisdiction over such Letter
of Credit Issuer shall prohibit, or request that such Letter of Credit
Issuer refrain from, the issuance of letters of credit generally or
such Letter of Credit in particular or shall impose upon such Letter of
Credit Issuer with respect to such Letter of Credit any restriction or
reserve or capital requirement (for which such Letter of Credit Issuer
is not otherwise compensated) not in effect on the date hereof, or any
unreimbursed loss, cost or expense which was not applicable, in effect
or known to such Letter of Credit Issuer as of the date hereof and
which such Letter of Credit Issuer in good xxxxx xxxxx material to it;
or
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(ii) such Letter of Credit Issuer shall have received notice
from the Required Banks prior to the issuance of such Letter of Credit
of the type described in clause (vi) of Section 2.01(b).
(b) Notwithstanding the foregoing, (i) no Letter of Credit
shall be issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings relating to Letters of Credit which
are repaid on the date of, and prior to the issuance of, the respective Letter
of Credit) at such time, would exceed either (x) $3,000,000 or (y) when added to
the aggregate principal amount of all Revolving Loans and Swingline Loans then
outstanding, the Total Revolving Loan Commitment at such time; (ii) (x) each
standby Letter of Credit shall have an expiry date occurring not later than one
year after such standby Letter of Credit's date of issuance, provided, that any
standby Letter of Credit may be automatically extended for periods of up to one
year so long as such standby Letter of Credit provides that the respective
Letter of Credit Issuer retains an option, satisfactory to such Letter of Credit
Issuer, to terminate such standby Letter of Credit within a specified period of
time prior to each scheduled extension date and (y) each trade Letter of Credit
shall have an expiry date occurring not later than 180 days after such trade
Letter of Credit's date of issuance; (iii) (x) no standby Letter of Credit shall
have an expiry date occurring later than the Business Day next preceding the
Revolving Loan Maturity Date and (y) no trade Letter of Credit shall have an
expiry date occurring later than 30 days prior to the Revolving Loan Maturity
Date; (iv) each Letter of Credit shall be denominated in U.S. Dollars and will
be issued on a sight basis only; (v) the Stated Amount of each Letter of Credit
shall not be less than $100,000 or such lesser amount as is acceptable to the
Letter of Credit Issuer; and (vi) no Letter of Credit Issuer will issue any
Letter of Credit after it has received written notice from the Borrower or the
Required Banks stating that a Default or an Event of Default exists until such
time as such Letter of Credit Issuer shall have received a written notice of (i)
rescission of such notice from the party or parties originally delivering the
same or (ii) a waiver of such Default or Event of Default by the Required Banks
(or all the Banks to the extent required by Section 12.12).
(c) Notwithstanding the foregoing, in the event a Bank Default
exists, no Letter of Credit Issuer shall be required to issue any Letter of
Credit unless the respective Letter of Credit Issuer has entered into
arrangements satisfactory to it and the Borrower to eliminate such Letter of
Credit Issuer's risk with respect to the participation in Letters of Credit of
the Defaulting Bank or Banks, including by cash collateralizing such Defaulting
Bank's or Banks' RL Percentage of the applicable Letter of Credit Outstandings.
2.02 Letter of Credit Requests; Notices of Issuance. (a)
Whenever it desires that a Letter of Credit be issued, the Borrower shall give
the Agent and the respective Letter of Credit Issuer written notice thereof
prior to 12:00 Noon (New York time) at least five Business Days (or such shorter
period as may be acceptable to such Letter of Credit Issuer) prior to the
proposed date of issuance (which shall be a Business Day) which written notice
shall be in the form of Exhibit A-2 (each, a "Letter of Credit Request"). Each
Letter of Credit Request shall include any other documents as the respective
Letter of Credit Issuer customarily requires in connection therewith. The Agent
shall promptly transmit copies of each Letter of Credit Request to each Bank.
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(b) Each Letter of Credit Issuer shall, on the date of each
issuance of or amendment or modification to a Letter of Credit by it, give the
Agent, each Bank and the Borrower written notice of the issuance of or amendment
or modification to such Letter of Credit, accompanied by a copy to the Agent of
the Letter of Credit or Letters of Credit issued by it and each such amendment
or modification thereto. In the event that any Letter of Credit Issuer other
then BTCo shall issue trade Letters of Credit, such Letter of Credit Issuer
shall notify the Agent on the first Business Day of each calendar week, of the
daily average Stated Amount of its trade Letters of Credit for previous week.
2.03 Agreement to Repay Letter of Credit Drawings. (a) The
Borrower hereby agrees to reimburse each respective Letter of Credit Issuer, by
making payment to the Agent in immediately available funds at the Payment
Office, for any payment or disbursement made by such Letter of Credit Issuer
under any Letter of Credit issued by it (each such amount so paid or disbursed
until reimbursed, an "Unpaid Drawing") no later than two Business Days following
the date of such payment or disbursement, with interest on the amount so paid or
disbursed by such Letter of Credit Issuer, to the extent not reimbursed prior to
1:00 P.M. (New York time) on the date of such payment or disbursement, from and
including the date paid or disbursed to but not including the date such Letter
of Credit Issuer is reimbursed therefor at a rate per annum which shall be the
Applicable Base Rate Margin plus the Base Rate as in effect from time to time
for Revolving Loans (plus an additional 2% per annum if not reimbursed by the
third Business Day after the date of such payment or disbursement), such
interest also to be payable on demand. Each Letter of Credit Issuer shall
provide the Borrower prompt notice of any payment or disbursement made by it
under any Letter of Credit issued by it, although the failure of, or delay in,
giving any such notice shall not release or diminish the obligations of the
Borrower under this Section 2.03(a) or under any other Section of this
Agreement.
(b) The Borrower's obligation under this Section 2.03 to
reimburse the respective Letter of Credit Issuer with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower may have or have had against such Letter
of Credit Issuer, the Agent or any Bank, including, without limitation, any
defense based upon the failure of any drawing under a Letter of Credit issued by
it to conform to the terms of the Letter of Credit or any non-application or
misapplication by the beneficiary of the proceeds of such drawing; provided,
however, that the Borrower shall not be obligated to reimburse such Letter of
Credit Issuer for any wrongful payment made by such Letter of Credit Issuer
under a Letter of Credit issued by it as a result of acts or omissions
constituting willful misconduct or gross negligence as determined by a court of
competent jurisdiction on the part of such Letter of Credit Issuer.
2.04 Letter of Credit Participations. (a) Immediately upon the
issuance by a Letter of Credit Issuer of any Letter of Credit, such Letter of
Credit Issuer shall be deemed to have sold and transferred to each RL Bank, and
each such RL Bank (each, a "L/C Participant") shall be deemed irrevocably and
unconditionally to have purchased and received from such Letter of Credit
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such RL Bank's
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RL Percentage, in such Letter of Credit, each substitute letter of credit, each
drawing made thereunder and the obligations of the Borrower under this Agreement
with respect thereto (although Letter of Credit Fees shall be payable directly
to the Agent for the account of the XX Xxxxx as provided in Section 3.01(b) and
the L/C Participants shall have no right to receive any portion of any Facing
Fees) and any security therefor or guaranty pertaining thereto. Upon any change
in the Revolving Loan Commitments of the XX Xxxxx pursuant to Section 1.13 or
12.04(b), it is hereby agreed that, with respect to all outstanding Letters of
Credit and Unpaid Drawings relating to Letters of Credit, there shall be an
automatic adjustment to the participations pursuant to this Section 2.04(a) to
reflect the new RL Percentages of the assigning and assignee Banks.
(b) In determining whether to pay under any Letter of Credit,
the respective Letter of Credit Issuer shall not have any obligation relative to
the L/C Participants other than to determine that any documents required to be
delivered under such Letter of Credit have been delivered and that they appear
to substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Letter of Credit Issuer
under or in connection with any Letter of Credit issued by it if taken or
omitted in the absence of gross negligence or willful misconduct as determined
by a court of competent jurisdiction, shall not create for such Letter of Credit
Issuer any resulting liability.
(c) In the event that any Letter of Credit Issuer makes any
payment under any Letter of Credit issued by it and the Borrower shall not have
reimbursed such amount in full to such Letter of Credit Issuer pursuant to
Section 2.03(a), such Letter of Credit Issuer shall promptly notify the Agent,
and the Agent shall promptly notify each L/C Participant of such failure, and
each such L/C Participant shall promptly and unconditionally pay to the Agent
for the account of such Letter of Credit Issuer, the amount of such L/C
Participant's RL Percentage of such payment in U.S. Dollars and in same day
funds; provided, however, that no L/C Participant shall be obligated to pay to
the Agent its RL Percentage of such unreimbursed amount for any wrongful payment
made by such Letter of Credit Issuer under a Letter of Credit issued by it as a
result of acts or omissions constituting willful misconduct or gross negligence
as determined by a court of competent jurisdiction on the part of such Letter of
Credit Issuer. If the Agent so notifies any L/C Participant required to fund a
payment under a Letter of Credit prior to 11:00 A.M. (New York time) on any
Business Day, such L/C Participant shall make available to the Agent for the
account of the respective Letter of Credit Issuer such L/C Participant's RL
Percentage of the amount of such payment on such Business Day in same day funds.
If and to the extent such L/C Participant shall not have so made its RL
Percentage of the amount of such payment available to the Agent for the account
of the respective Letter of Credit Issuer, such L/C Participant agrees to pay to
the Agent for the account of such Letter of Credit Issuer, forthwith on demand
such amount, together with interest thereon, for each day from such date until
the date such amount is paid to the Agent for the account of such Letter of
Credit Issuer at the overnight Federal Funds rate. The failure of any L/C
Participant to make available to the Agent for the account of the respective
Letter of Credit Issuer its RL Percentage of any payment under any Letter of
Credit issued by it shall not relieve any other L/C Participant of its
obligation hereunder to make available to the Agent for the account of such
Letter of Credit Issuer its RL Percentage of any payment under any such Letter
of Credit on the date required, as specified above,
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but no L/C Participant shall be responsible for the failure of any other L/C
Participant to make available to the Agent for the account of such Letter of
Credit Issuer such other L/C Participant's RL Percentage of any such payment.
(d) Whenever any Letter of Credit Issuer receives a payment of
a reimbursement obligation as to which the Agent has received for the account of
such Letter of Credit Issuer any payments from the L/C Participants pursuant to
clause (c) above, such Letter of Credit Issuer shall pay to the Agent and the
Agent shall promptly pay to each applicable L/C Participant which has paid its
RL Percentage thereof, in U.S. Dollars and in same day funds, an amount equal to
such L/C Participant's RL Percentage of the principal amount thereof and
interest thereon accruing after the purchase of the respective participations.
(e) The obligations of each respective L/C Participant to make
payments to the Agent for the account of each respective Letter of Credit Issuer
with respect to Letters of Credit issued by it which such L/C Participant has a
participation in shall be irrevocable and not subject to counterclaim, set-off
or other defense or any other qualification or exception whatsoever and shall be
made in accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other
right which the Borrower may have at any time against a beneficiary
named in a Letter of Credit, any transferee of any Letter of Credit (or
any Person for whom any such transferee may be acting), the Agent, any
Letter of Credit Issuer, any Bank, any L/C Participant or other Person,
whether in connection with this Agreement, any Letter of Credit, the
transactions contemplated herein (including the Transaction) or any
unrelated transactions (including any underlying transaction between
the Borrower or any of its Subsidiaries and the beneficiary named in
any such Letter of Credit);
(iii) any draft, certificate or other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Increased Costs. If after the date hereof, the adoption
or effectiveness of any applicable law, rule or regulation, or any change
therein, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Letter of Credit
Issuer or any
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L/C Participant with any request or directive (whether or not having the force
of law) by any such authority, central bank or comparable agency shall either
(i) impose, modify or make applicable any reserve, deposit, capital adequacy or
similar requirement against Letters of Credit issued by such Letter of Credit
Issuer or such L/C Participant's participation therein, or (ii) impose on any
Letter of Credit Issuer or any L/C Participant any other conditions affecting
this Agreement, any Letter of Credit or such L/C Participant's participation
therein; and the result of any of the foregoing is to increase the cost to such
Letter of Credit Issuer or such L/C Participant of issuing, maintaining or
participating in any Letter of Credit, or to reduce the amount of any sum
received or receivable by such Letter of Credit Issuer or such L/C Participant
hereunder, then, upon written demand to the Borrower by such Letter of Credit
Issuer or such L/C Participant (a copy of which notice shall be sent by such
Letter of Credit Issuer or such L/C Participant to the Agent), accompanied by
the certificate described in the last sentence of this Section 2.05, the
Borrower shall pay to such Letter of Credit Issuer or such L/C Participant such
additional amount or amounts as will compensate such Letter of Credit Issuer or
such L/C Participant for such increased cost or reduction. A certificate
submitted to the Borrower by such Letter of Credit Issuer or such L/C
Participant, as the case may be (a copy of which certificate shall be sent by
such Letter of Credit Issuer or such L/C Participant to the Agent), setting
forth the basis for the determination of such additional amount or amounts
necessary to compensate such Letter of Credit Issuer or such L/C Participant as
aforesaid shall be final and conclusive and binding on the Borrower absent
manifest error, although the failure to deliver any such certificate shall not
release or diminish the Borrower's obligations to pay additional amounts
pursuant to this Section 2.05 upon subsequent receipt of such certificate.
SECTION 3. Fees; Commitments.
3.01 Fees. (a) The Borrower shall pay to the Agent for
distribution to each Bank a commitment fee (the "Commitment Fee") for the period
from the Effective Date to and including the date the Total Commitment has been
terminated, computed at the rate of 1/2 of 1% per annum on the daily Aggregate
Unutilized Commitment of such Bank. Accrued Commitment Fees shall be due and
payable in arrears on the Initial Borrowing Date and thereafter, in arrears on
each Quarterly Payment Date and the date upon which the Total Revolving Loan
Commitment is terminated.
(b) The Borrower shall pay to the Agent for the account of the
XX Xxxxx pro rata on the basis of their RL Percentages, a fee in respect of each
Letter of Credit (the "Letter of Credit Fee") computed at a rate per annum equal
to the Applicable Eurodollar Margin then in effect with respect to Revolving
Loans on the daily Stated Amount of such Letter of Credit. Accrued Letter of
Credit Fees shall be due and payable quarterly in arrears on each Quarterly
Payment Date and upon the first day after the termination of the Total Revolving
Loan Commitment upon which no Letters of Credit remain outstanding.
(c) The Borrower shall directly pay to the respective Letter
of Credit Issuer a fee in respect of each Letter of Credit issued by such Letter
of Credit Issuer (the "Facing Fee") computed at the rate of 1/4 of 1% per annum
on the daily Stated Amount of such Letter of Credit; provided, that in no event
shall the annual Facing Fee with respect to each Letter of Credit be less than
$500;
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it being agreed that, on the date of issuance of any Letter of Credit and on
each anniversary thereof prior to the termination of such Letter of Credit, if
$500 will exceed the amount of Facing Fees that will accrue with respect to such
Letter of Credit for the immediately succeeding 12-month period, the full $500
shall be payable on the date of issuance of such Letter of Credit and on each
such anniversary thereof prior to the termination of such Letter of Credit.
Except as provided in the immediately preceding sentence, accrued Facing Fees
shall be due and payable quarterly in arrears on each Quarterly Payment Date and
upon the first day after the termination of the Total Revolving Loan Commitment
upon which no Letters of Credit remain outstanding.
(d) The Borrower hereby agrees to pay directly to the
respective Letter of Credit Issuer upon each issuance of, payment under, and/or
amendment of, a Letter of Credit issued by it such amount as shall at the time
of such issuance, payment or amendment be the administrative charge which such
Letter of Credit Issuer is customarily charging for issuances of, payments under
or amendments of, letters of credit issued by it.
(e) The Borrower shall pay to the Agent, for its own account,
such fees as may be agreed to from time to time between the Borrower and the
Agent, when and as due.
(f) All computations of Fees shall be made in accordance with
Section 12.07(b).
3.02 Voluntary Termination or Reduction of Commitments. (a)
Upon at least two Business Days' prior written notice (or telephonic notice
promptly confirmed in writing) to the Agent at its Notice Office (which notice
the Agent shall promptly transmit to each of the Banks), the Borrower shall have
the right, without premium or penalty, to terminate or partially reduce (i) the
unutilized portion of the Total Unutilized Revolving Loan Commitment; provided
that (x) any such termination or partial reduction shall apply to
proportionately and permanently reduce the Revolving Loan Commitment of each
Bank with a Revolving Loan Commitment and (y) any partial reduction pursuant to
this Section 3.02 shall be in the amount of at least $500,000.
(b) In the event of certain refusals by a Bank to consent to
certain proposed changes, waivers, discharges or terminations with respect to
this Agreement which have been approved by the Required Banks as provided in
Section 12.12(b), the Borrower shall have the right, upon five Business Days'
prior written notice to the Agent at its Notice Office (which notice the Agent
shall promptly transmit to each of the Banks), to terminate the entire Revolving
Loan Commitment of such Bank, so long as all Loans, together with accrued and
unpaid interest, Fees and all other amounts, owing to such Bank are repaid
concurrently with the effectiveness of such termination pursuant to Section
4.01(b), and the Borrower shall pay to the Agent at such time an amount in cash
and/or Cash Equivalents equal to such Bank's RL Percentage of the outstanding
Letters of Credit (which cash and/or Cash Equivalents shall be held by the Agent
as security for the obligations of the Borrower hereunder in respect of such
outstanding Letters of Credit pursuant to a cash collateral agreement to be
entered into in form and substance reasonably satisfactory to the Agent, which
shall permit certain investments in Cash Equivalents reasonably satisfactory to
the Agent until the proceeds are applied to the secured obligations) (at which
time Annex I shall be
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deemed modified to reflect such changed amounts), and at such time, such Bank
shall no longer constitute a "Bank" for purposes of this Agreement, except with
respect to indemnifications under this Agreement (including, without limitation,
Sections 1.10, 1.11, 2.05, 4.04, 12.01 and 12.06), which shall survive as to
such repaid Bank.
3.03 Mandatory Adjustments of Commitments, etc. (a) The Total
Commitment (and the Term Loan Commitment and Revolving Loan Commitment of each
Bank with such a Commitment) shall terminate on October 31, 1997 unless the
Initial Borrowing Date has occurred on or before such date.
(b) The Total Term Loan Commitment shall terminate on the
Initial Borrowing Date, after giving effect to the making of such Term Loans on
such date.
(c) The Total Revolving Loan Commitment (and the Revolving
Loan Commitment of each Bank with such a Commitment) shall terminate on the
earlier of (i) the date on which a Change of Control Event occurs and (ii) the
Revolving Loan Maturity Date.
(d) On each date upon which a mandatory repayment of Term
Loans pursuant to Section 4.02(A)(c), (d), (e), (f), (g) or (h) is required (and
exceeds in amount the aggregate principal amount of Term Loans then outstanding)
or would be required if an unlimited amount of Term Loans were then outstanding,
the Total Revolving Loan Commitment shall be permanently reduced by the amount,
if any, by which the amount required to be applied pursuant to said Sections
(determined as if an unlimited amount of Term Loans were actually outstanding)
exceeds the aggregate principal amount of Term Loans then outstanding.
(e) Each reduction or adjustment of the Total Term Loan
Commitment or the Total Revolving Loan Commitment pursuant to this Section 3.03
(or pursuant to Section 4.02) shall apply proportionately to the Term Loan
Commitment or the Revolving Loan Commitment, as the case may be, of each Bank
with such a Commitment.
SECTION 4. Payments.
4.01 Voluntary Prepayments. (a) The Borrower shall have the
right to prepay the Loans made to it, in whole or in part, without premium or
penalty except as otherwise provided in this Agreement, from time to time on the
following terms and conditions: (i) the Borrower shall give the Agent at its
Notice Office written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay such Loans, whether such Loans are Term Loans,
Revolving Loans or Swingline Loans, the amount of such prepayment and (in the
case of Eurodollar Loans) the specific Borrowing(s) pursuant to which made,
which notice shall be given by the Borrower prior to 1:00 P.M. (New York time)
(x) at least one Business Day prior to the date of such prepayment in the case
of Term Loans or Revolving Loans maintained as Base Rate Loans, (y) on the date
of such prepayment in the case of Swingline Loans and (z) at least three
Business Days prior to the date of such prepayment in the case of Eurodollar
Loans, which notice shall, except in the case of Swingline
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Loans, promptly be transmitted by the Agent to each of the Banks; (ii) each
prepayment shall be in an aggregate principal amount of at least $500,000 (or
$100,000 in the case of Swingline Loans); provided, that no partial prepayment
of Eurodollar Loans made pursuant to a Borrowing shall reduce the aggregate
principal amount of the Loans outstanding pursuant to such Borrowing to an
amount less than the Minimum Borrowing Amount applicable thereto; (iii)
Eurodollar Loans may only be prepaid pursuant to this Section 4.01(a) on the
last day of an Interest Period applicable thereto; (iv) each prepayment in
respect of any Loans made pursuant to a Borrowing shall be applied pro rata
among such Loans; provided, that at the Borrower's election in connection with
any prepayment of Revolving Loans pursuant to this Section 4.01(a), such
prepayment shall not be applied to any Revolving Loans of a Defaulting Bank at
any time when the aggregate amount of Revolving Loans of any Non-Defaulting Bank
exceeds such Non-Defaulting Bank's RL Percentage of all Revolving Loans then
outstanding; and (v) each prepayment of Term Loans pursuant to this Section
4.01(a) shall reduce the then remaining Scheduled Repayments on a pro rata basis
(based upon the then remaining principal amount of each such Scheduled
Repayment).
(b) In the event of certain refusals by a Bank to consent to
certain proposed changes, waivers, discharges or terminations with respect to
this Agreement which have been approved by the Required Banks as provided in
Section 12.12(b), the Borrower shall have the right, upon five Business Days'
prior written notice to the Agent at its Notice Office (which notice the Agent
shall promptly transmit to each of the Banks) to repay all Loans, together with
accrued and unpaid interest, Fees and all other amounts owing to such Bank in
accordance with said Section 12.12(b) so long as (A) in the case of the
repayment of Revolving Loans of any RL Bank pursuant to this clause(b) the
Revolving Loan Commitment of such RL Bank is terminated concurrently with such
repayment pursuant to Section 3.02(b) (at which time Annex I shall be deemed
modified to reflect the changed Revolving Loan Commitments) and (B) in the case
of the repayment of Loans of any Bank, the consents required by Section 12.12(b)
in connection with the repayment pursuant to this clause (b) shall have been
obtained.
4.02 Mandatory Prepayments.
(A) Requirements:
(a) If on any date the sum of (i) the aggregate outstanding
principal amount of Revolving Loans and Swingline Loans (after giving effect to
all other repayments thereof on such date) plus (ii) the Letter of Credit
Outstandings on such date exceeds the Total Revolving Loan Commitment as then in
effect, the Borrower shall repay on such date the principal of Swingline Loans,
and if no Swingline Loans are or remain outstanding, Revolving Loans, in an
aggregate amount equal to such excess. If, after giving effect to the prepayment
of all outstanding Swingline Loans and Revolving Loans, the aggregate amount of
Letter of Credit Outstandings exceeds the Total Revolving Loan Commitment as
then in effect, the Borrower agrees to pay to the Agent an amount in cash and/or
Cash Equivalents equal to such excess (up to the aggregate amount of Letter of
Credit Outstandings at such time) and the Agent shall hold such payment as
security for the obligations of the Borrower hereunder pursuant to a cash
collateral agreement to be entered into in form and
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substance satisfactory to the Agent (which shall permit certain investments in
Cash Equivalents satisfactory to the Agent until the proceeds are applied to the
secured obligations or are released to the Borrower at such time as the
aggregate amount of Letter of Credit Outstandings shall no longer be in excess
of the Total Revolving Loan Commitment then in effect).
(b) The Borrower shall be required to repay the principal
amount of Term Loans on each date set forth below in the amount set forth
opposite such date below (each such repayment, as the same may be reduced as
provided in Sections 4.01 and 4.02(B), a "Scheduled Repayment"):
Scheduled Repayment Date Amount
------------------------- ------
the last Business Day in December, 1997 $ 62,500
the last Business Day in March, 1998 $ 62,500
the last Business Day in June, 1998 $ 62,500
the last Business Day in September, 1998 $ 62,500
the last Business Day in December, 1998 $ 250,000
the last Business Day in March, 1999 $ 250,000
the last Business Day in June, 1999 $ 250,000
the last Business Day in September, 1999 $ 250,000
the last Business Day in December, 1999 $ 437,500
the last Business Day in March, 2000 $ 437,500
the last Business Day in June, 2000 $ 437,500
the last Business Day in September, 2000 $ 437,500
the last Business Day in December, 2000 $ 500,000
the last Business Day in March, 2001 $ 500,000
the last Business Day in June, 2001 $ 500,000
the last Business Day in September, 2001 $ 500,000
the last Business Day in December, 2001 $ 625,000
the last Business Day in March, 2002 $ 625,000
the last Business Day in June, 2002 $ 625,000
the last Business Day in September, 2002 $ 625,000
the last Business Day in December, 2002 $ 1,125,000
the last Business Day in March 2003 $ 1,125,000
the last Business Day in June 2003 $ 1,125,000
the last Business Day in September 2003 $ 1,125,000
the last Business Day in December 2003 $ 3,750,000
the last Business Day in March 2004 $ 3,750,000
the last Business Day in June 2004 $ 3,750,000
Term Loan Maturity Date $ 3,750,000
(c) On the Business Day after the date of receipt thereof by
the Borrower and/or any of its Subsidiaries of Proceeds from any Asset Sale, an
amount equal to 100% of the Net Proceeds from such Asset Sale shall be applied
as a mandatory repayment of principal of the Term Loans, provided that with
respect to no more than $500,000 in the aggregate of such Proceeds in any
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Measurement Period of the Borrower, the Net Proceeds therefrom shall not be
required to be so applied on such date to the extent that no Default or Event of
Default then exists and the Borrower delivers a certificate to the Agent on or
prior to such date stating that such Net Proceeds shall be used to purchase
assets used or to be used in the businesses referred to in Section 8.01(a)
(including, without limitation (but only to the extent permitted by Section
8.02), capital stock of a corporation engaged in any such business) within 360
days following the date of such Asset Sale (which certificate shall set forth
the estimates of the proceeds to be so expended), provided, that (1) if all or
any portion of such Net Proceeds not so applied to the repayment of Term Loans
are not so used (or contractually committed to be used) within such 360 day
period, such remaining portion shall be applied on the last day of such period
as a mandatory repayment of principal of outstanding Term Loans as provided
above in this Section 4.02(A)(c) and (2) if all or any portion of such Net
Proceeds are not required to be applied on the 360th day referred to in clause
(1) above because such amount is contractually committed to be used and
subsequent to such date such contract is terminated or expires without such
portion being so used, then such remaining portion shall be applied on the date
of such termination or expiration as a mandatory repayment of principal of
outstanding Term Loans as provided in this Section 4.02(A)(c).
(d) On the date of the receipt thereof by the Borrower and/or
any of its Subsidiaries, an amount equal to 100% of the cash proceeds (net of
underwriting discounts and commissions and other reasonable costs associated
therewith) of the sale or issuance of preferred or common equity of (or cash
capital contributions to) the Borrower or any of its Subsidiaries (other than
proceeds of (w) the Equity Financing, (x) issuances of Common Stock (including
as a result of the exercise of any options with regard thereto) to management of
the Borrower and its Subsidiaries, (y) Common Stock issued in connection with a
Permitted Acquisition to the extent permitted by this Agreement and (z) equity
contributions to any Subsidiary of the Borrower made by the Borrower or any
other Subsidiary of the Borrower and otherwise permitted by this Agreement)
shall be applied as a mandatory repayment of principal of the Term Loans.
(e) On the date of the receipt thereof by the Borrower and/or
any of its Subsidiaries, an amount equal to 100% of the proceeds (net of
underwriting discounts and commissions and other reasonable costs associated
therewith) of the incurrence of Indebtedness by the Borrower and/or any of its
Subsidiaries (other than Indebtedness permitted to be incurred by Section 8.04
as in effect on the Effective Date) shall be applied as a mandatory repayment of
principal of the Term Loans.
(f) On each Excess Cash Payment Date, an amount equal to 75%
of Excess Cash Flow of the Borrower and its Subsidiaries for the most recent
Excess Cash Flow Period ending prior to such Excess Cash Payment Date shall be
applied as a mandatory repayment of principal of the Term Loans.
(g) Within 10 days following each date on which the Borrower
or any of its Subsidiaries receives any proceeds from any Recovery Event, an
amount equal to 100% of the proceeds of such Recovery Event (net of reasonable
costs and taxes incurred in connection with such
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Recovery Event) shall be applied as a mandatory repayment of principal of the
Term Loans, provided that so long as no Default or Event of Default then exists
and such proceeds do not exceed $1,000,000, such proceeds shall not be required
to be so applied on such date to the extent that the Borrower has delivered a
certificate to the Agent on or prior to such date stating that such proceeds
shall be used to replace or restore any properties or assets in respect of which
such proceeds were paid within 360 days following the date of the receipt of
such proceeds (which certificate shall set forth the estimates of the proceeds
to be so expended), and provided further, that (i) if the amount of such
proceeds exceeds $1,000,000, then the portion in excess of $1,000,000 shall be
applied as a mandatory repayment of Term Loans as provided above in this Section
4.02(A)(g), (ii) if all or any portion of such proceeds not required to be
applied to the repayment of Term Loans pursuant to the preceding proviso are not
so used (or contractually committed to be used) within 360 days after the date
of the receipt of such proceeds, such remaining portion shall be applied on the
last day of such period as a mandatory repayment of principal of the Term Loans
as provided in this Section 4.02(A)(g) and (iii) if all or any portion of such
proceeds are not required to be applied on the 360th day referred to in clause
(ii) above because such amount is contractually committed to be used and
subsequent to such date such contract is terminated or expires without such
portion being so used, then such remaining portion shall be applied on the date
of such termination or expiration as a mandatory repayment of principal of
outstanding Term Loans as provided in this Section 4.02(A)(g).
(h) On the date of the receipt thereof by the Borrower and/or
any of its Subsidiaries of a Pension Plan Refund, an amount equal to 100% of
such Pension Plan Refund shall be applied as a mandatory repayment of principal
of Term Loans.
(i) Notwithstanding anything to the contrary contained
elsewhere in this Agreement, (i) all then outstanding Swingline Loans shall be
repaid in full on the Swingline Expiry Date and (ii) all other then outstanding
Loans of the respective Facility shall be repaid in full on the Maturity Date
for such Facility.
(B) Application:
(a) All repayments of Term Loans pursuant to Section 4.02(A)
shall be applied to reduce the then remaining Scheduled Repayments pro rata
based on the then remaining Scheduled Repayments.
(b) With respect to each repayment of Loans required by this
Section 4.02, the Borrower may designate the Types of Loans which are to be
repaid and the specific Borrowing(s) under the affected Facility pursuant to
which made; provided, that (i) Eurodollar Loans made pursuant to a specific
Facility may be designated for repayment pursuant to this Section 4.02 only on
the last day of an Interest Period applicable thereto unless all Eurodollar
Loans made pursuant to such Facility with Interest Periods ending on such date
of required prepayment and all Base Rate Loans made pursuant to such Facility
have been paid in full; (ii) if any repayment of Eurodollar Loans made pursuant
to a single Borrowing shall reduce the outstanding Loans made pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount, such Borrowing
shall be immediately
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converted into Base Rate Loans; and (iii) each repayment of any Loans made
pursuant to a Borrowing shall be applied pro rata among such Loans; provided,
that no repayment pursuant to Section 4.02(A) (a) shall be applied to any
Revolving Loans of a Defaulting Bank at any time when the aggregate amount of
the Revolving Loans of any Non-Defaulting Bank exceeds such Non- Defaulting
Bank's RL Percentage of Revolving Loans then outstanding. In the absence of a
designation by the Borrower as described in the preceding sentence, the Agent
shall, subject to the above, make such designation in its sole discretion with a
view, but no obligation, to minimize breakage costs owing under Section 1.11.
Notwithstanding the foregoing provisions of this Section 4.02(B)(b), if at any
time the mandatory prepayment of Loans pursuant to Section 4.02(A)(c), (d), (e),
(g) or (h) would result, after giving effect to the procedures set forth above
in this clause (b), in the Borrower incurring breakage costs under Section 1.11
as a result of Eurodollar Loans being repaid other than on the last day of an
Interest Period applicable thereto (the "Affected Eurodollar Loans"), then the
Borrower may in its sole discretion initially deposit a portion (up to 100%) of
the amounts that otherwise would have been paid in respect of the Affected
Eurodollar Loans with the Agent to be held as security for the obligations of
the Borrower hereunder pursuant to a cash collateral agreement to be entered
into in form and substance satisfactory to the Agent, with such cash collateral
to be released from such cash collateral account upon the first occurrence (or
occurrences) thereafter of the last day of an Interest Period applicable to the
relevant Loans that are Eurodollar Loans (or such earlier date or dates as shall
be requested by the Borrower), to repay an aggregate principal amount of such
Loans equal to the Affected Eurodollar Loans not initially repaid pursuant to
this sentence.
4.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement shall be made to
the Agent for the ratable account of the Banks entitled thereto, not later than
1:00 P.M. (New York time) on the date when due and shall be made in immediately
available funds and in U.S. Dollars at the Payment Office, it being understood
that written, telex or facsimile transmission notice by the Borrower to the
Agent to make a payment from the funds in the Borrower's account at the Payment
Office shall constitute the making of such payment to the extent of such funds
held in such account. Any payments under this Agreement which are made later
than 1:00 P.M. (New York time) shall be deemed to have been made on the next
succeeding Business Day. Whenever any payment to be made hereunder shall be
stated to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day and, with respect to
payments of principal, interest shall be payable during such extension at the
applicable rate in effect immediately prior to such extension.
4.04 Net Payments. (a) All payments made by the Borrower
hereunder or under any Note will be made without setoff, counterclaim or other
defense. Except as provided in Section 4.04(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding, except as provided in the second succeeding sentence, any tax
imposed on or measured by the net income or net profits of a Bank pursuant to
the laws of the jurisdiction in which it is organized or the jurisdiction in
which the
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principal office or applicable lending office of such Bank is located or any
subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect thereto (all such non-excluded taxes, levies, imposts,
duties, fees, assessments or other charges being referred to collectively as
"Taxes"). If any Taxes are so levied or imposed, the Borrower agrees to pay the
full amount of such Taxes, and such additional amounts as may be necessary so
that every payment of all amounts due under this Agreement or under any Note,
after withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for herein or in such Note. If any amounts are payable
in respect of Taxes pursuant to the preceding sentence, the Borrower agrees to
reimburse each Bank, upon the written request of such Bank, for taxes imposed on
or measured by the net income or net profits of such Bank pursuant to the laws
of the jurisdiction in which the principal office or applicable lending office
of such Bank is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which the principal office or applicable
lending office of such Bank is located and for any withholding of taxes as such
Bank shall determine are payable by, or withheld from, such Bank in respect of
such amounts so paid to or on behalf of such Bank pursuant to the preceding
sentence and in respect of any amounts paid to or on behalf of such Bank
pursuant to this sentence. The Borrower will furnish to the Agent within 45 days
after the date the payment of any Taxes is due pursuant to applicable law
certified copies of tax receipts evidencing such payment by the Borrower. The
Borrower agrees to indemnify and hold harmless each Bank, and reimburse such
Bank upon its written request, for the amount of any Taxes so levied or imposed
and paid by such Bank.
(b) Each Bank that is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower
and the Agent on or prior to the Initial Borrowing Date, or in the case of a
Bank that is an assignee or transferee of an interest under this Agreement
pursuant to Section 1.13 or 12.04 (unless the respective Bank was already a Bank
hereunder immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Bank, (i) two accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001 (or successor forms)
certifying to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Note, or (ii) if the Bank is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue
Service Form 1001 or 4224 pursuant to clause (i) above, (x)a certificate
substantially in the form of Exhibit C (any such certificate, a "Section
4.04(b)(ii) Certificate") and (y)two accurate and complete original signed
copies of Internal Revenue Service Form W-8 (or successor form) certifying to
such Bank's entitlement to a complete exemption from United States withholding
tax with respect to payments of interest to be made under this Agreement and
under any Note. In addition, each Bank agrees that from time to time after the
Initial Borrowing Date, when a lapse in time or change in circumstances renders
the previous certification obsolete or inaccurate in any material respect, it
will deliver to the Borrower and the Agent two new accurate and complete
original signed copies of Internal Revenue Service Form 4224 or 1001, or Form
W-8 and a Section 4.04(b)(ii) Certificate, as the case may be, and such other
forms as may be required in order to confirm or establish the entitlement of
such Bank to a continued exemption from or reduction in United States
withholding tax with respect to payments under this Agreement and any Note, or
it shall immediately notify the Borrower and the
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Agent of its inability to deliver any such Form or Certificate. Notwithstanding
anything to the contrary contained in Section 4.04(a), but subject to Section
12.04(b) and the immediately succeeding sentence, (x)the Borrower shall be
entitled, to the extent it is required to do so by law, to deduct or withhold
income or similar taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, fees or other
amounts payable hereunder for the account of any Bank which is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) for
U.S. Federal income tax purposes to the extent that such Bank has not provided
to the Borrower U.S. Internal Revenue Service Forms that establish a complete
exemption from such deduction or withholding and (y)the Borrower shall not be
obligated pursuant to Section 4.04(a) hereof to gross-up payments to be made to
a Bank in respect of income or similar taxes imposed by the United States if (I)
such Bank has not provided to the Borrower the Internal Revenue Service Forms
required to be provided to the Borrower pursuant to this Section 4.04(b) or (II)
in the case of a payment, other than interest, to a Bank described in clause
(ii) above, to the extent that such Forms do not establish a complete exemption
from withholding of such taxes. Notwithstanding anything to the contrary
contained in the preceding sentence or elsewhere in this Section 4.04 and except
as set forth in Section 12.04(b), the Borrower agrees to pay additional amounts
and to indemnify each Bank in the manner set forth in Section 4.04(a) (without
regard to the identity of the jurisdiction requiring the deduction or
withholding) in respect of any amounts deducted or withheld by it as described
in the immediately preceding sentence as a result of any changes after the
Effective Date in any applicable law, treaty, governmental rule, regulation,
guideline or order, or in the interpretation thereof, relating to the deducting
or withholding of income or similar Taxes.
SECTION 5. Conditions Precedent. The obligation of each Bank
to make each Loan to the Borrower hereunder, and the obligation of any Letter of
Credit Issuer to issue each Letter of Credit hereunder, is subject, at the time
of each such Credit Event (except as otherwise hereinafter indicated), to the
satisfaction of the following conditions:
5.01 Execution of Agreement; Notes. On or prior to the Initial
Borrowing Date, (i) the Effective Date shall have occurred and (ii) there shall
have been delivered to the Agent for the account of each Bank the appropriate
Term Note and Revolving Note, if any, and to BTCo the Swingline Note, in each
case executed by the Borrower and in the amount, maturity and as otherwise
provided herein.
5.02 No Default; Representations and Warranties. At the time
of each Credit Event and also after giving effect thereto (i) there shall exist
no Default or Event of Default and (ii) all representations and warranties
contained herein or in the other Credit Documents in effect at such time shall
be true and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Credit Event, unless stated to relate to a specific earlier date, in which case
such representations and warranties shall be true and correct in all material
respects as of such earlier date.
5.03 Officer's Certificate. On the Initial Borrowing Date, the
Agent shall have received a certificate dated such date signed by an appropriate
officer of the Borrower stating that
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all of the applicable conditions set forth in Sections 5.02, 5.07, 5.08, 5.09,
5.10, 5.11, 5.13 and 5.21 exist as of such date.
5.04 Opinions of Counsel. On the Initial Borrowing Date, the
Agent shall have received opinions, addressed to the Agent and each of the Banks
and dated the Initial Borrowing Date, from (i) counsel to the Credit Parties,
which opinion(s) shall cover the matters contained in Exhibit D and such other
matters incident to the transactions contemplated herein as the Agent may
reasonably request and (ii) local counsel to the Credit Parties reasonably
satisfactory to the Agent, which opinions shall cover such matters incident to
the transactions contemplated herein and in the other Credit Documents as the
Agent may reasonably request and shall be in form and substance reasonably
satisfactory to the Agent.
5.05 Corporate Proceedings. (a) On the Initial Borrowing Date,
the Agent shall have received from the Borrower and each of its Subsidiaries a
certificate, dated the Initial Borrowing Date, signed by the chairman, a vice
chairman, the president or any vice-president of such corporation, and attested
to by the secretary or any assistant secretary thereof, in the form of Exhibit E
with appropriate insertions, together with copies of the Certificate of
Incorporation and By-Laws of such corporation and the resolutions (if any) of
such corporation referred to in such certificate and all of the foregoing
(including each such Certificate of Incorporation and By-Laws) shall be
satisfactory to the Agent.
(b) On the Initial Borrowing Date, all corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Documents shall be
reasonably satisfactory in form and substance to the Agent, and the Agent shall
have received all information and copies of all certificates, documents and
papers, including good standing certificates, bring-down certificates and any
other records of corporate proceedings and governmental approvals, if any, which
the Agent reasonably may have requested in connection therewith, such documents
and papers, where appropriate, to be certified by proper corporate or
governmental authorities.
(c) On the Initial Borrowing Date, the ownership and capital
structure (including, without limitation, the terms of any capital stock,
options, warrants or other securities issued by the Borrower or any of its
Subsidiaries) and management of the Borrower and its Subsidiaries shall be in
form and substance reasonably satisfactory to the Agent and the Required Banks.
5.06 Adverse Change, etc. On or prior to the Initial Borrowing
Date, nothing shall have occurred since March 31, 1997 (and neither the Banks
nor the Agent shall have become aware of any facts or conditions not previously
known) which the Required Banks or the Agent shall reasonably determine (a) has,
or could have, a material adverse effect on the rights or remedies of the Banks
or the Agent, or on the ability of any Credit Party to perform its obligations
to them hereunder or under any other Credit Document or (b) has, or could have,
a Material Adverse Effect.
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5.07 Litigation. On the Initial Borrowing Date, there shall be
no actions, suits or proceedings pending or threatened (a) with respect to this
Agreement or any other Document or (b) which the Agent or the Required Banks
shall determine could reasonably be expected to (i) have a Material Adverse
Effect or (ii) have a material adverse effect on the Transaction, the rights or
remedies of the Banks or the Agent hereunder or under any other Credit Document
or on the ability of any Credit Party to perform its respective obligations to
the Banks or the Agent hereunder or under any other Credit Document.
5.08 Approvals. On or prior to the Initial Borrowing Date, all
necessary governmental (domestic and foreign) and third party approvals in
connection with the Transaction, the transactions contemplated by the Documents
and otherwise referred to herein or therein shall have been obtained and remain
in effect, and all applicable waiting periods shall have expired without any
action being taken by any competent authority which restrains, prevents or
imposes materially adverse conditions upon the consummation of the Transaction,
the transactions contemplated by the Documents and otherwise referred to herein
or therein. Additionally, there shall not exist any judgment, order, injunction
or other restraint issued or filed or a hearing seeking injunctive relief or
other restraint pending or notified prohibiting or imposing materially adverse
conditions upon the consummation of the Transaction or the making of Loans or
the issuance of Letters of Credit.
5.09 Consummation of the Equity Financing and the Mergers. (a)
On or prior to the Initial Borrowing Date, the Initial Merger, including all
terms and conditions thereof, shall be reasonably satisfactory in form and
substance to the Agent and the Required Banks, and shall have been duly approved
by the board of directors and (if required by law) the shareholders of all the
parties thereto. Each of the conditions precedent to the obligations of the
parties to the Initial Merger to consummate such Initial Merger as set forth in
the Initial Merger Documents shall have been satisfied in all material respects
to the satisfaction of the Agent and the Required Banks or waived with the
consent of the Agent and the Required Banks, and the Initial Merger shall have
been consummated in accordance with all applicable laws and the Initial Merger
Documents.
(b) On or prior to the Initial Borrowing Date, Speaker and the
Borrower shall have received gross cash proceeds of at least $4,800,000 from the
Equity Financing. The Equity Financing, including all terms and conditions
thereof, shall be reasonably satisfactory in form and substance to the Agent and
the Required Banks, and shall have been duly approved by the board of directors
and (if required by applicable law) the shareholders of Speaker. Each of the
conditions precedent to the obligations of Speaker and of the purchasers of
equity in the Equity Financing to consummate the Equity Financing as set forth
in the Equity Financing Documents shall have been satisfied in all material
respects to the satisfaction of the Agent and the Required Banks or waived with
the consent of the Agent and the Required Banks, and the Equity Financing shall
have been consummated in accordance with all applicable laws and the Equity
Financing Documents.
(c) On or prior to the Initial Borrowing Date, the Speaker
Merger, including all terms and conditions thereof, shall be reasonably
satisfactory in form and substance to the Agent and the Required Banks, and
shall have been duly approved by the board of directors and (if required by
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applicable law) the shareholders of all the parties thereto. Each of the
conditions precedent to the obligations of the parties to the Speaker Merger to
consummate such Merger as set forth in the Speaker Merger Documents shall have
been satisfied in all material respects to the satisfaction of the Agent and the
Required Banks or waived with the consent of the Agent and the Required Banks,
and the Speaker Merger shall have been consummated in accordance with all
applicable laws and the Speaker Merger Documents.
(d) On the Initial Borrowing Date and immediately after giving
effect to the Equity Financing and the Mergers, (i) Xxxx Capital, Sun Capital or
their respective Affiliates shall own, directly or indirectly, at least 65% of
the issued and outstanding Common Stock, (ii) the Existing Shareholders shall
own no more than 25% of the issued and outstanding Common Stock and (iii) the
Borrower shall have no capital stock (or warrants with respect thereto)
outstanding other than the Common Stock.
5.10 Subordinated Financing. The Borrower shall have received
gross cash proceeds of at least $6,000,000 from the issuance of the Subordinated
Debt pursuant to the Subordinated Financing. The Subordinated Financing,
including all terms and conditions thereof, shall be satisfactory in form and
substance to the Agent and the Required Banks, and shall have been duly approved
by the board of directors and (if required by applicable law) the shareholders
of the Borrower. Each of the conditions precedent to the obligations of the
Borrower and the purchasers in the Subordinated Financing to consummate the
Subordinated Financing as set forth in the Subordinated Financing Documents
shall have been satisfied, to the satisfaction of the Agent and the Required
Banks or waived with the consent of the Agent and the Subordinated Financing
shall have been consummated in accordance with all applicable laws and the
Subordinated Financing Documents.
5.11 Refinancing. (a) On or prior to the Initial Borrowing
Date, the total commitments in respect of the Existing Credit Agreement shall
have been terminated, and all loans and notes with respect thereto shall have
been repaid in full, together with interest thereon, all letters of credit
issued thereunder and foreign currency contracts contemplated thereunder shall
have been terminated and all other amounts (including premiums) owing pursuant
to the Existing Credit Agreement shall have been repaid in full and all
documents in respect of the Existing Credit Agreement and all guarantees with
respect thereto shall have been terminated and be of no further force and
effect.
(b) On or prior to the Initial Borrowing Date, the Borrower
shall have repurchased, retired or redeemed all of the outstanding Existing
Subordinated Notes for cash, in accordance with their terms, or on such other
terms and conditions as may be satisfactory to the Agent and the Required Banks,
and all securities and note purchase agreements, purchase or sale agreements or
other agreements pursuant to which the Existing Subordinated Notes were issued
and all guaranties and security documents with respect thereto shall have been
terminated and be of no further force or effect.
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(c) On the Initial Borrowing Date, the creditors in respect of
the Indebtedness to be Refinanced shall have terminated and released all
security interests and Liens on the assets owned by the Borrower and its
Subsidiaries. The Agent shall have received such releases of security interests
in and Liens on the assets owned by the Borrower and its Subsidiaries as may
have been requested by the Agent, which releases shall be in form and substance
reasonably satisfactory to the Agent. Without limiting the foregoing, there
shall have been delivered (i) proper termination statements (Form UCC-3 or the
appropriate equivalent) for filing under the UCC of each jurisdiction where a
financing statement (Form UCC-1 or the appropriate equivalent) was filed with
respect to the Borrower or any of its Subsidiaries in connection with the
security interests created with respect to the Indebtedness to be Refinanced and
the documentation related thereto, (ii) termination or reassignment of any
security interest in, or Lien on, any patents, trademarks, copyrights, or
similar interests of the Borrower or any of its Subsidiaries on which filings
have been made, (iii) terminations of all mortgages, leasehold mortgages, deeds
of trust and leasehold deeds of trust created with respect to property of the
Borrower or any of its Subsidiaries, in each case, to secure the obligations in
respect of the Indebtedness to be Refinanced, all of which shall be in form and
substance reasonably satisfactory to the Agent, (iv) termination notices and
agreements with respect to all lockbox, warehousing, bailee and similar
agreements, duly acknowledged by all counterparties thereto, all of which shall
be in form and substance reasonably satisfactory to the Agent, and (v) all
collateral owned by the Borrower or any of its Subsidiaries in the possession of
any of the creditors in respect of the Indebtedness to be Refinanced or any
collateral agent or trustee under any related security document shall have been
returned to the Borrower or such Subsidiary.
5.12 Documents. On or prior to the Initial Borrowing Date,
there shall have been delivered to the Banks true and correct copies of all
Documents entered into in connection with the Transaction (including, without
limitation, the Equity Financing Documents, the Merger Documents, the
Subordinated Financing Documents, and the Refinancing Documents), and all of the
terms and conditions of such Documents (without limitation, with respect to the
Subordinated Debt, amortization, maturities, interest rates, limitations on cash
interest payable, covenants, defaults, remedies, sinking fund provisions, and
subordination provisions), as well as the structure of the Transaction and the
ownership interests in the Borrower after giving effect to the Transaction,
shall be in form and substance reasonably satisfactory to the Agent and the
Required Banks.
5.13 Financing Proceeds. On the Initial Borrowing Date and
immediately prior to the incurrence of Loans hereunder, the Borrower shall have
used the net cash proceeds from the Equity Financing and the Subordinated
Financing to pay amounts owing in respect of the Transaction.
5.14 Pledge Agreement. On the Initial Borrowing Date, each
Credit Party shall have duly authorized, executed and delivered a Pledge
Agreement in the form of Exhibit F, together with such changes (or with such
other documents) as may be requested by the Collateral Agent in connection with
local law (as modified, amended or supplemented from time to time in accordance
with the terms thereof and hereof, the "Pledge Agreement") and shall have
delivered to the Collateral Agent, as pledgee thereunder, all of the Pledged
Securities referred to therein, endorsed in blank in
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the case of promissory notes or accompanied by executed and undated stock powers
in the case of capital stock, and the Pledge Agreement and such other documents
shall be in full force and effect.
5.15 Security Agreement. On the Initial Borrowing Date, each
Credit Party shall have duly authorized, executed and delivered a Security
Agreement in the form of Exhibit G, together with such changes (or with such
other documents) as may be requested by the Collateral Agent in connection with
local law (as modified, amended or supplemented from time to time in accordance
with the terms thereof and hereof, the "Security Agreement") covering all of the
Security Agreement Collateral, together with:
(A) executed copies of Financing Statements (Form UCC-1 and/or
UCC-3) or appropriate local equivalent in appropriate form for filing
under the UCC or appropriate local equivalent of each jurisdiction as
may be necessary to perfect the security interests purported to be
created by the Security Agreement;
(B) certified copies of Requests for Information or Copies
(Form UCC-11), or equivalent reports, each of a recent date listing all
effective financing statements that name the Borrower or any of its
Subsidiaries or a division or operating unit of any such Person, as
debtor, and that are filed in the jurisdictions referred to in clause
(A) above, together with copies of such financing statements (none of
which shall cover the Collateral except (x) those with respect to which
appropriate termination statements executed by the secured lender
thereunder have been delivered to the Agent and (y) to the extent
evidencing Permitted Liens);
(C) evidence of the completion of all other recordings and
filings of, or with respect to, the Security Agreement as may be
necessary or, in the opinion of the Collateral Agent, desirable to
perfect the security interests intended to be created by the Security
Agreement; and
(D) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect the
security interests purported to be created by the Security Agreement
have been taken; and the Security Agreement and such other documents
shall be in full force and effect.
5.16 Mortgages; Title Insurance; Surveys, etc. (a) On the
Initial Borrowing Date, the Collateral Agent shall have received fully executed
counterparts of deeds of trust, mortgages and similar documents in each case in
form and substance satisfactory to the Collateral Agent (as amended, modified or
supplemented from time to time in accordance with the terms hereof and thereof,
each a "Mortgage" and collectively, the "Mortgages") with respect to each of the
Mortgaged Properties, and arrangements reasonably satisfactory to the Collateral
Agent shall be in place to provide that counterparts of such Mortgages shall be
recorded on the Initial Borrowing Date in all places to the extent necessary or
desirable, in the judgment of the Collateral Agent, effectively to create a
valid and enforceable first priority Lien, subject only to Permitted
Encumbrances, on each
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such Mortgaged Property in favor of the Collateral Agent (or such other trustee
as may be required or desired under local law) for the benefit of the Secured
Creditors.
(b) On the Initial Borrowing Date, the Collateral Agent shall
have received mortgagee title insurance policies (or binding commitments to
issue such title insurance policies) issued by title insurers reasonably
satisfactory to the Collateral Agent (the "Mortgage Policies") in amounts
reasonably satisfactory to the Collateral Agent and assuring the Collateral
Agent that the Mortgages are valid and enforceable first priority mortgage Liens
on the respective Mortgaged Properties, free and clear of all defects and
encumbrances except Permitted Encumbrances. Such Mortgage Policies shall be in
form and substance reasonably satisfactory to the Collateral Agent and (i) shall
include an endorsement for future advances under this Agreement, the Notes and
the Mortgages and for any other matter that the Collateral Agent in its
discretion may reasonably request (to the extent available in the respective
jurisdiction of each Mortgaged Property), (ii) shall not include an exception
for mechanics' liens, and (iii) shall provide for affirmative insurance and such
reinsurance (including direct access agreements) as the Collateral Agent in its
discretion may reasonably request.
(c) On the Initial Borrowing Date, the Collateral Agent shall
have also received surveys in form and substance reasonably satisfactory to the
Collateral Agent of each Mortgaged Property designated as "owned" on Annex III
hereto, dated a recent date reasonably acceptable to the Collateral Agent,
certified in a manner reasonably satisfactory to the Collateral Agent by a
licensed professional surveyor reasonably satisfactory to the Collateral Agent.
5.17 Plans; Collective Bargaining Agreements; Existing
Indebtedness Agreements; Shareholders' Agreements; Management Agreements;
Employment Agreements; Non-Compete Agreements; Tax Allocation Agreements;
Material Contracts. On or prior to the Initial Borrowing Date, there shall have
been delivered to the Agent and made available to the Banks copies, certified as
true and correct by an appropriate officer of the Borrower, of:
(a) all Plans (and for each Plan that is required to file an
annual report on Internal Revenue Service Form 5500-series, a copy of
the most recent such report (including, to the extent required, the
related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information), and
for each Plan that is a "single-employer plan", as defined in Section
4001(a)(15) of ERISA, the most recently prepared actuarial valuation
therefor) and any other "employee benefit plans", as defined in Section
3(3) of ERISA, and any other material agreements, plans or
arrangements, with or for the benefit of current or former employees of
the Borrower or any of its Subsidiaries or any ERISA Affiliate
(provided that the foregoing shall apply in the case of any
multiemployer plan, as defined in Section 4001(a)(3) of ERISA, only to
the extent that any document described therein is in the possession of
the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate or
reasonably available thereto from the sponsor or trustees of such
plan);
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(b) any collective bargaining agreements or any other similar
agreement or arrangement covering the employees of the Borrower or any
of its Subsidiaries (collectively, the "Collective Bargaining
Agreements");
(c) all agreements evidencing or relating to the Existing
Indebtedness that are to remain in effect after giving effect to the
consummation of the Transaction (collectively, the "Existing
Indebtedness Agreements");
(d)(A) the Stockholders Agreement and (B) all other agreements
entered into by the Borrower or any of its Subsidiaries governing the
terms and relative rights of its capital stock, and any agreements
entered into by shareholders relating to any such entity with respect
to their capital stock, in each case that are to remain in effect after
giving effect to the consummation of the Transaction (collectively, the
"Shareholders' Agreements");
(e) any material agreements (or the forms thereof) with
members of, or with respect to, the management of the Borrower or any
of its Subsidiaries that are to remain in effect after giving effect to
the consummation of the Transaction, (collectively, the "Management
Agreements");
(f) any employment agreements entered into by the Borrower or
any of its Subsidiaries (collectively, the "Employment Agreements");
(g) any non-compete agreement entered into by the Borrower or
any of its Subsidiaries (collectively, the "Non-Compete Agreements");
(h) any tax sharing or tax allocation agreements entered into
by the Borrower or any of its Subsidiaries (collectively, the "Tax
Allocation Agreements"); and
(i) all material contracts and licenses of the Borrower or any
of its Subsidiaries that are to remain in effect after giving effect to
the consummation of the Transaction (collectively, the "Material
Contracts"); all of which Employee Benefit Plans, Collective Bargaining
Agreements, Existing Indebtedness Agreements, Shareholders' Agreements,
Management Agreements, Employment Agreements, Non-Compete Agreements,
Tax Allocation Agreements and Material Contracts shall be in form and
substance reasonably satisfactory to the Agent and shall be in full
force and effect on the Initial Borrowing Date.
5.18 Solvency Opinion; Evidence of Insurance. On the
Initial Borrowing Date, the Agent shall have received:
(a) a solvency opinion from Valuation Research, addressed to
the Agent and each of the Banks and dated the Initial Borrowing Date
and supporting the conclusions, that, after giving effect to the
Transaction and the incurrence of all financings contemplated herein,
the Borrower (on a stand-alone basis) and the Borrower and its
Subsidiaries (on a consolidated
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basis) are not insolvent and will not be rendered insolvent by the
indebtedness incurred in connection herewith, will not be left with
unreasonably small capital with which to engage in their respective
businesses and will not have incurred debts beyond their ability to pay
such debts as they mature and become due;
(b) evidence of insurance complying with the requirements of
Section 7.03 for the business and properties of the Borrower and its
Subsidiaries, in scope, form and substance reasonably satisfactory to
the Agent and the Required Banks and naming the Collateral Agent as an
additional insured, mortgagee and/or loss payee, as appropriate, and
stating that such insurance shall not be cancelled or revised without
30 days prior written notice by the insurer to the Collateral Agent.
5.19 Pro Forma Balance Sheets. On or prior to the Initial
Borrowing Date, there shall have been delivered to the Agent, an unaudited pro
forma consolidated balance sheet of each of the Borrower and its Subsidiaries
after giving effect to the Transaction and prepared in accordance with GAAP,
together with a related funds flow statement, which pro forma balance sheets and
funds flow statement shall be reasonably satisfactory in form and substance to
the Agent and the Required Banks.
5.20 Projections. On or prior to the Initial Borrowing Date,
the Banks shall have received the financial projections (the "Projections") set
forth on Annex IV hereto, for the period through March 31, 2004.
5.21 Existing Indebtedness. On the Initial Borrowing Date and
after giving effect to the Transaction, neither the Borrower nor any of its
Subsidiaries shall have any preferred stock or Indebtedness outstanding except
for the Loans, the Subordinated Debt, and the Existing Indebtedness. On and as
of the Initial Borrowing Date, all of the Existing Indebtedness shall remain
outstanding after giving effect to the Transaction and the other transactions
contemplated hereby without any default or events of default existing thereunder
or arising as a result of the Transaction and the other transactions
contemplated hereby, and there shall not be any amendments or modifications to
the Existing Indebtedness Agreements other than as requested or approved by the
Agent or the Required Banks. On and as of the Initial Borrowing Date, the Agent
and the Required Banks shall be satisfied with the amount of and the terms and
conditions of all Existing Indebtedness.
5.22 Payment of Fees. On the Initial Borrowing Date, all
costs, fees and expenses, and all other compensation contemplated by this
Agreement, due to the Agent or the Banks (including, without limitation, legal
fees and expenses) shall have been paid to the extent due.
5.23 Notice of Borrowing; Letter of Credit Request. The Agent
shall have received a Notice of Borrowing satisfying the requirements of Section
1.03 with respect to each incurrence of Loans, and the Agent and the respective
Letter of Credit Issuer shall have received a Letter of Credit Request
satisfying the requirements of Section 2.02 with respect to each issuance of a
Letter of Credit.
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The acceptance of the benefits of each Credit Event shall
constitute a representation and warranty by each Credit Party to each of the
Banks that all of the applicable conditions specified above exist as of the date
of such Credit Event. All of the certificates, legal opinions and other
documents and papers referred to in this Section 5, unless otherwise specified,
shall be delivered to the Agent at its Notice Office for the account of each of
the Banks and, except for the Notes, in sufficient counterparts for each of the
Banks and shall be satisfactory in form and substance to the Agent and the
Required Banks.
SECTION 6. Representations, Warranties and Agreements. In
order to induce the Banks to enter into this Agreement and to make the Loans and
issue and/or participate in the Letters of Credit provided for herein, the
Borrower makes the following representations, warranties and agreements with the
Banks in each case after giving effect to the Transaction, all of which shall
survive the execution and delivery of this Agreement, the making of the Loans
and the issuance of the Letters of Credit (with the occurrence of each Credit
Event being deemed to constitute a representation and warranty that the matters
specified in this Section 6 are true and correct in all material respects on and
as of the date of each such Credit Event, unless stated to relate to a specific
earlier date in which case all such representations and warranties shall be true
and correct in all material respects as of such earlier date):
6.01 Corporate Status. The Borrower and each of its
Subsidiaries (i) is a duly organized and validly existing corporation in good
standing under the laws of the jurisdiction of its organization, (ii) has the
corporate power and authority to own its property and assets and to transact the
business in which it is engaged and presently proposes to engage and (iii) is
duly qualified and is authorized to do business and is in good standing in all
jurisdictions where it is required to be so qualified and where the failure to
be so qualified would have a Material Adverse Effect.
6.02 Corporate Power and Authority. Each Credit Party has the
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Documents to which it is a party and has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Documents to which it is a party. Each Credit Party has duly executed and
delivered each Document to which it is a party and each such Document
constitutes the legal, valid and binding obligation of such Credit Party
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting creditors' rights
and by equitable principles (regardless of whether enforcement is sought in
equity or at law).
6.03 No Violation. Neither the execution, delivery or
performance by any Credit Party of the Documents to which it is a party nor
compliance by them with the terms and provisions thereof, nor the consummation
of the transactions contemplated herein or therein, (i) will contravene any
applicable provision of any law, statute, rule or regulation, or any order,
writ, injunction or decree of any court or governmental instrumentality, (ii)
except as set forth on Annex XII, will conflict or be inconsistent with or
result in any breach of, any of the terms, covenants, conditions or provisions
of, or constitute a default under, or (other than pursuant to the Security
Documents) result in the
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creation or imposition of (or the obligation to create or impose) any Lien upon
any of the property or assets of the Borrower or any of its Subsidiaries
pursuant to the terms of any indenture, mortgage, deed of trust, loan agreement,
credit agreement or any other material agreement or instrument to which the
Borrower or any of its Subsidiaries is a party or by which it or any of its
property or assets are bound or to which it may be subject or (iii) will violate
any provision of the Certificate of Incorporation or By-Laws of the Borrower or
any of its Subsidiaries.
6.04 Litigation. There are no actions, suits or proceedings
pending or, to the knowledge of the Borrower or any of its Subsidiaries,
threatened, with respect to the Borrower or any of its Subsidiaries (i) that are
likely to have a Material Adverse Effect or (ii) that could reasonably be
expected to have a material adverse effect on the rights or remedies of the
Banks or on the ability of any Credit Party to perform its respective
obligations to the Banks hereunder and under the other Credit Documents to which
it is, or will be, a party. Additionally, there does not exist any judgment,
order or injunction prohibiting or imposing material adverse conditions upon the
occurrence of any Credit Event.
6.05 Use of Proceeds; Margin Regulations. (a) The proceeds of
all Term Loans and Revolving Loans incurred on the Initial Borrowing Date shall
be utilized to finance the Transaction; provided that, no more than $1,500,000
in aggregate principal amount of Revolving Loans may be incurred on the Initial
Borrowing Date.
(b) The proceeds of Revolving Loans and Swingline Loans
incurred after the Initial Borrowing Date shall be utilized for the general
corporate and working capital purposes of the Borrower and its Subsidiaries;
provided that the proceeds of Revolving Loans incurred after the Initial
Borrowing Date and Swingline Loans may be used to finance the Transaction only
to the extent that the aggregate amount of proceeds so used, when added to the
aggregate principal amount of Revolving Loans incurred on the Initial Borrowing
Date, shall not exceed $5,600,000.
(c) Neither the making of any Loan hereunder, nor the use of
the proceeds thereof, will violate the provisions of Regulation G, T, U or X of
the Board of Governors of the Federal Reserve System and no part of the proceeds
of any Loan will be used to purchase or carry any Margin Stock or to extend
credit for the purpose of purchasing or carrying any Margin Stock.
6.06 Governmental Approvals. No order, consent, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, any foreign or domestic governmental or public body or
authority, or any subdivision thereof, is required to authorize or is required
in connection with (i) the execution, delivery and performance of any Document
or (ii) the legality, validity, binding effect or enforceability of any
Document.
6.07 Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
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6.08 Public Utility Holding Company Act. Neither the Borrower
nor any of its Subsidiaries is a "holding company," or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
6.09 True and Complete Disclosure. All factual information
(taken as a whole) heretofore or contemporaneously furnished by or on behalf of
the Borrower or any of its Subsidiaries in writing to the Agent or any Bank
(including, without limitation, all information contained in the Documents) for
purposes of or in connection with this Agreement or any transaction contemplated
herein is, and all other such factual information (taken as a whole) hereafter
furnished by or on behalf of any such Persons in writing to the Agent or any
Bank will be, true and accurate in all material respects on the date as of which
such information is dated or certified and not incomplete by omitting to state
any material fact necessary to make such information (taken as a whole) not
misleading at such time in light of the circumstances under which such
information was provided.
6.10 Financial Condition; Financial Statements. (a) On and as
of the Initial Borrowing Date, on a pro forma basis after giving effect to the
Transaction and to all Indebtedness incurred, and to be incurred (including,
without limitation, the Loans and the Subordinated Debt), and Liens created, and
to be created, by each Credit Party in connection therewith, with respect to the
Borrower (on a stand-alone basis) and the Borrower and its Subsidiaries (on a
consolidated basis), (x) the sum of the assets, at a fair valuation, of the
Borrower (on a stand-alone basis) and the Borrower and its Subsidiaries (on a
consolidated basis), will exceed its debts, (y) it has not incurred nor intended
to, nor believes that it will, incur debts beyond its ability to pay such debts
as such debts mature and (z) it will have sufficient capital with which to
conduct its business. For purposes of this Section 6.10, "debt" means any
liability on a claim, and "claim" means (i) right to payment whether or not such
a right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured
or (ii) right to an equitable remedy for breach of performance if such breach
gives rise to a payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured, unmatured, disputed,
undisputed, secured or unsecured.
(b)(i) The pro forma (both immediately before and after giving
effect to the Transaction, the related financing thereof (including the Loans
and the Subordinated Debt) and the other transactions contemplated hereby and
thereby) consolidated balance sheets of the Borrower and its Subsidiaries taken
as a whole as at August 30, 1997 prepared on a basis consistent with the
Projections and copies of which have heretofore been delivered to each Bank, and
(ii) the audited consolidated balance sheet of Holdings for the fiscal year
ended March 31, 1997, and the unaudited consolidated balance sheet of Holdings
at June 30, 1997 and the related combined statements of operations and cash flow
of the Borrower for the fiscal year or three-month period, as the case may be,
ended as of said dates, which annual financial statements have been examined by
Price Waterhouse LLP, certified public accountants, who delivered an unqualified
opinion with respect thereto and copies of which have heretofore been delivered
to each Bank, each of which financial statements referred to in the preceding
clauses (i)-(ii) present fairly in all material respects the
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financial position of Holdings and its Subsidiaries on a consolidated basis or
the Borrower and its Subsidiaries on a consolidated basis, as the case may be,
at the dates of said statements and the results of operations for the periods
covered thereby (or, in the case of the pro forma balance sheets, present a good
faith estimate of the pro forma financial condition of the Borrower and its
Subsidiaries on a consolidated basis both immediately before and after giving
effect to the Transaction, and the related financing thereof (including the
Loans and the Subordinated Debt) at the date thereof)). All such financial
statements referred to in the preceding clause (ii) have been prepared in
accordance with GAAP consistently applied except to the extent provided in the
notes to said financial statements and subject, in the case of the June 30, 1997
statements (which were prepared substantially in accordance with GAAP), to
normal year-end audit adjustments and the absence of footnotes.
(c) Since March 31, 1997, nothing has occurred that has had or
could reasonably be expected to have a Material Adverse Effect.
(d) Except as fully reflected in the financial statements
described in Section 6.10(b) and the Indebtedness incurred under this Agreement,
there were as of the Initial Borrowing Date (and after giving effect to any
Loans made on such date and the issuance of the Subordinated Debt), no
liabilities or obligations (excluding current obligations incurred in the
ordinary course of business) with respect to the Borrower or any of its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due), and the Borrower does not know of any basis
for the assertion against it or any of its Subsidiaries of any such liability or
obligation which, either individually or in the aggregate, are or would be
reasonably likely to have, a Material Adverse Effect.
(e) The Projections are based on good faith estimates and
assumptions made by the management of the Borrower, and on the Initial Borrowing
Date such management believed that the Projections were reasonable and
attainable, it being recognized by the Banks, however, that projections as to
future events are not to be viewed as facts and that the actual results during
the period or periods covered by the Projections probably will differ from the
projected results and that the differences may be material.
6.11 Security Interests. On and after the Initial Borrowing
Date, each of the Security Documents creates (or after the execution and
delivery thereof will create), as security for the Obligations, a valid and
enforceable perfected security interest in and Lien on all of the Collateral
subject thereto, superior to and prior to the rights of all third Persons and
subject to no other Liens (except that the Security Agreement Collateral, the
Mortgaged Properties and the collateral covered by the Additional Security
Documents may be subject to Permitted Liens relating thereto), in favor of the
Collateral Agent. No filings or recordings are required in order to perfect the
security interests created under any Security Document except for filings or
recordings required in connection with any such Security Document which shall
have been made as contemplated by Section 5.14 or on or prior to the execution
and delivery thereof as contemplated by Sections 7.11, 7.13 and 8.14.
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6.12 Representations and Warranties in Other Documents. All
representations and warranties set forth in the other Documents were true and
correct in all respects as of the time such representations and warranties were
made and shall be true and correct in all respects as of the Initial Borrowing
Date as if such representations and warranties were made on and as of such date,
unless stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct in all respects as of
such earlier date, in each case except to the extent that the failure of any
such representation and warranty to be true and correct in all respects, either
individually or in the aggregate with other such representations and warranties,
is not reasonably likely to have a Material Adverse Effect.
6.13 Transaction. At the time of consummation thereof, the
Transaction shall have been consummated in all material respects in accordance
with the terms of the respective Documents and in accordance with all applicable
laws. At the time of consummation thereof, all consents and approvals of, and
filings and registrations with, and all other actions in respect of, all
governmental agencies, authorities or instrumentalities required in order to
make or consummate the Transaction have been obtained, given, filed or taken or
waived and are or will be in full force and effect (or effective judicial relief
with respect thereto has been obtained) except where the failure to obtain,
give, file, or take would not reasonably be expected to have a Material Adverse
Effect. All applicable waiting periods with respect thereto have or, prior to
the time when required, will have, expired without, in all such cases, any
action being taken by any competent authority which restrains, prevents, or
imposes material adverse conditions upon the Transaction. Additionally, there
does not exist any judgment, order or injunction prohibiting or imposing
material adverse conditions upon the Transaction, or the performance by the
Borrower and its Subsidiaries of their obligations under the Documents and all
applicable laws.
6.14 Compliance with ERISA. (a) Annex V sets forth each Plan;
each Plan (and each related trust, insurance contract or fund) is in substantial
compliance with its terms and with all applicable laws, including without
limitation ERISA and the Code; each Plan (and related trust, if any) which is
intended to be qualified under Section 401(a) of the Code has received a
determination letter from the Internal Revenue Service to the effect that it
meets the requirements of Sections 401(a) and 501(a) of the Code; no Reportable
Event has occurred; no Plan which is a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) is insolvent or in reorganization; no Plan has an Unfunded
Current Liability; no Plan which is subject to Section 412 of the Code or
Section 302 of ERISA has an accumulated funding deficiency, within the meaning
of such sections of the Code or ERISA, or has applied for or received a waiver
of an accumulated funding deficiency or an extension of any amortization period,
within the meaning of Section 412 of the Code or Section 303 or 304 of ERISA;
all contributions required to be made with respect to a Plan have been timely
made; neither the Borrower nor any Subsidiary of the Borrower nor any ERISA
Affiliate has incurred any material liability (including any material indirect,
contingent or secondary liability) to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or Section 401(a)(29), 4971 or 4975 of the Code or expects to incur any
such liability under any of the foregoing sections with respect to any Plan; no
proceedings have been instituted to terminate, or to appoint a trustee to
administer, any Plan which is subject to Title IV of ERISA; no condition exists
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which presents a material risk to the Borrower or any Subsidiary of the Borrower
or any ERISA Affiliate of incurring a liability to or on account of a Plan
pursuant to the foregoing provisions of ERISA and the Code; no action, suit,
proceeding, hearing, audit or investigation with respect to the administration,
operation or the investment of assets of any Plan (other than routine claims for
benefits) is pending, expected or threatened; using actuarial assumptions and
computation methods consistent with Part 1 of subtitle E of Title IV of ERISA,
the aggregate liabilities of the Borrower and its Subsidiaries and its ERISA
Affiliates to all Plans which are multiemployer plans (as defined in Section
4001(a)(3) of ERISA) in the event of a complete withdrawal therefrom, as of the
close of the most recent fiscal year of each such Plan ended prior to the date
of the most recent Credit Event, would not exceed $500,000; each group health
plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code
which covers or has covered employees or former employees of the Borrower, any
subsidiary of the Borrower or any ERISA Affiliate has at all times been operated
in compliance with the provisions of Part 6 of subtitle B of Title I of ERISA
and Section 4980B of the Code; no lien imposed under the Code or ERISA on the
assets of the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate
exists or is likely to arise on account of any Plan; and the Borrower and its
Subsidiaries may cease contributions to or terminate any employee benefit plan
maintained by any of them without incurring any material liability.
(b) Each Foreign Pension Plan has been maintained in
substantial compliance with its terms and with the requirements of any and all
applicable laws, statutes, rules, regulations and orders and has been
maintained, where required, in good standing with applicable regulatory
authorities. All contributions required to be made with respect to a Foreign
Pension Plan have been timely made. Neither the Borrower nor any of its
Subsidiaries has incurred any obligation in connection with the termination of
or withdrawal from any Foreign Pension Plan. The present value of the accrued
benefit liabilities (whether or not vested) under each Foreign Pension Plan,
determined as of the end of the most recently ended fiscal year of the Borrower
on the basis of actuarial assumptions, each of which is reasonable, did not
exceed the current value of the assets of such Foreign Pension Plan allocable to
such benefit liabilities.
6.15 Capitalization. On the Initial Borrowing Date and after
giving effect to the Transaction and the other transactions contemplated hereby,
the authorized capital stock of the Borrower shall consist of (i) 2,500,000
shares of common stock, $0.01 par value per share (such authorized shares of
common stock, together with any subsequently authorized shares of common stock
of the Borrower, the "Common Stock"), of which 1,258,236 shares shall be issued
and outstanding and (ii) 3,000 shares of preferred stock, $0.01 par value per
share, none of which shall be issued and outstanding. All such outstanding
shares have been duly and validly issued, are fully paid and nonassessable and
are owned of record by those Persons set forth on Annex VI hereto. Except as set
forth on Annex VI, the Borrower does not have outstanding any securities
convertible into or exchangeable for its capital stock or outstanding any rights
to subscribe for or to purchase, or any options for the purchase of, or any
agreement providing for the issuance (contingent or otherwise) of, or any calls,
commitments or claims of any character relating to, its capital stock.
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6.16 Subsidiaries. On and as of the Initial Borrowing Date and
after giving effect to the consummation of the Transaction, the Borrower has no
Subsidiaries other than those Subsidiaries listed on Annex VII. Annex VII
correctly sets forth, as of the Initial Borrowing Date and after giving effect
to the Transaction, the percentage ownership (direct and indirect) of the
Borrower in each class of capital stock of each of its Subsidiaries and also
identifies the direct owner thereof.
6.17 Intellectual Property. The Borrower and each of its
Subsidiaries owns or holds a valid license to use all the material patents,
trademarks, permits, service marks, trade names, technology, know-how and
formulas or other rights with respect to the foregoing, free from restrictions
that are materially adverse to the use thereof, that are used in the operation
of the business of the Borrower and each of its Subsidiaries as presently
conducted.
6.18 Compliance with Statutes, etc. The Borrower and each of
its Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including compliance with all applicable Environmental Laws
with respect to any Real Property or governing its business and the requirements
of any permits issued under such Environmental Laws with respect to any such
Real Property or the operations of the Borrower or any of its Subsidiaries),
except such non-compliance as is not likely to, individually or in the
aggregate, have a Material Adverse Effect.
6.19 Environmental Matters. (a) The Borrower, each of its
Subsidiaries and each Predecessor Corporation has complied with, and on the date
of each Credit Event, the Borrower and each of its Subsidiaries is in compliance
with, all applicable Environmental Laws and the requirements of any permits
issued under such Environmental Laws. There are no pending or, to the best
knowledge of the Borrower, past or threatened Environmental Claims against the
Borrower or any of its Subsidiaries or any Real Property owned or operated by
the Borrower or any of its Subsidiaries. There are no facts, circumstances,
conditions or occurrences on any Real Property owned or operated by the Borrower
or any of its Subsidiaries or, to the best knowledge of the Borrower, on any
property adjoining or in the vicinity of any such Real Property that would
reasonably be expected (i) to form the basis of an Environmental Claim against
the Borrower or any of its Subsidiaries or any such Real Property or (ii) to
cause any such Real Property to be subject to any restrictions on the ownership,
occupancy, use or transferability of such Real Property by Borrower or any of
its Subsidiaries under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated,
used, treated or stored on, or transported to or from, any Real Property owned
or operated by the Borrower or any of its Subsidiaries or any Predecessor
Corporation where such generation, use, treatment or storage has violated or
would reasonably be expected to violate any Environmental Law. Hazardous
Materials have not at any time been Released on or from any Real Property owned
or operated by the Borrower or any of its Subsidiaries or any Predecessor
Corporation. There are not now any
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underground storage tanks located on any Real Property owned or operated by the
Borrower or any of its Subsidiaries.
(c) Notwithstanding anything to the contrary in this Section
6.19, the representations made in this Section 6.19 shall only be untrue if the
aggregate effect of all conditions, failures, noncompliances, Environmental
Claims, Releases and presence of underground storage tanks, in each case of the
types described above, could reasonably be expected to have a Material Adverse
Effect.
6.20 Properties. All Real Property owned by the Borrower or
any of its Subsidiaries and all material Leaseholds leased by the Borrower or
any of its Subsidiaries, in each case as of the Initial Borrowing Date and after
giving effect to the Transaction, and the nature of the interest therein, is
correctly set forth in Annex III. The Borrower and each of its Subsidiaries has
good and marketable title to, or a validly subsisting leasehold interest in, all
material properties owned or leased by it, including all Real Property reflected
in Annex III or in the financial statements referred to in Section 6.10(b), free
and clear of all Liens, other than Permitted Liens.
6.21 Labor Relations. Neither the Borrower nor any of its
Subsidiaries nor any Predecessor Corporation is engaged in any unfair labor
practice that could reasonably be expected to have a Material Adverse Effect.
There is (i) no unfair labor practice complaint pending against the Borrower or
any of its Subsidiaries or, to the best knowledge of the Borrower, threatened
against any of them, before the National Labor Relations Board, and no grievance
or arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against the Borrower or any of its Subsidiaries or, to
the best knowledge of the Borrower, threatened against any of them, (ii) no
strike, labor dispute, slowdown or stoppage pending against the Borrower or any
of its Subsidiaries or, to the best knowledge of the Borrower, threatened
against the Borrower or any of its Subsidiaries and (iii) to the best knowledge
of the Borrower, no union representation question existing with respect to the
employees of the Borrower or any of its Subsidiaries and, to the best knowledge
of the Borrower, no union organizing activities are taking place, except (with
respect to any matter specified in clause (i), (ii) or (iii) above, either
individually or in the aggregate) such as could not be reasonably likely to have
a Material Adverse Effect.
6.22 Tax Returns and Payments. All Federal, material state and
other material returns, statements, forms and reports for taxes (the "Returns")
required to be filed by or with respect to the income, properties or operations
of the Borrower and/or any of its Subsidiaries and/or any Predecessor
Corporation have been timely filed with the appropriate taxing authority. The
Returns accurately reflect all liability for taxes of the Borrower and its
Subsidiaries and/or such Predecessor Corporation, as the case may be, for the
periods covered thereby. The Borrower and each of its Subsidiaries and each
Predecessor Corporation has paid all taxes payable by it other than immaterial
taxes and other taxes which are not yet due and payable, and other than those
contested in good faith by appropriate proceedings and for which adequate
reserves have been established in accordance with GAAP. Except as disclosed in
the financial statements referred to in Section 6.10(b), there is no material
action, suit, proceeding, investigation, audit, or claim now pending or, to the
knowledge of
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the Borrower, threatened by any authority regarding any taxes relating to the
Borrower or any of its Subsidiaries or any Predecessor Corporation. As of the
Initial Borrowing Date, neither the Borrower nor any of its Subsidiaries has
entered into an agreement or waiver or been requested to enter into an agreement
or waiver extending any statute of limitations relating to the payment or
collection of taxes of the Borrower or any of its Subsidiaries, or is aware of
any circumstances that would cause the taxable years or other taxable periods of
the Borrower or any of its Subsidiaries or any Predecessor Corporation not to be
subject to the normally applicable statute of limitations. Neither the Borrower
nor any of its Subsidiaries nor any Predecessor Corporation has provided, with
respect to themselves or property held by them, any consent under Section 341 of
the Code. Neither the Borrower nor any of its Subsidiaries nor any Predecessor
Corporation has incurred, or will incur, any material tax liability in
connection with the Transaction and the other transactions contemplated hereby.
6.23 Existing Indebtedness. Annex IX sets forth a true and
complete list of all Indebtedness of the Borrower and its Subsidiaries (other
than Indebtedness that in the aggregate does not exceed $100,000) as of the
Initial Borrowing Date and which is to remain outstanding after giving effect to
the Transaction and the incurrence of Loans on such date (excluding the Loans,
the Letters of Credit, and the Subordinated Debt, the "Existing Indebtedness"),
in each case showing the aggregate principal amount thereof and the name of the
respective borrower, any security therefor, and any other entity which directly
or indirectly guaranteed such debt.
6.24 Subordination. The subordination provisions contained in
the Subordinated Financing Documents are enforceable against the Borrower and
the holders thereof, and all Obligations are within the definition of "Senior
Debt" included in such subordination provisions.
SECTION 7. Affirmative Covenants. The Borrower hereby
covenants and agrees that on the Initial Borrowing Date and thereafter for so
long as this Agreement is in effect and until the Commitments have terminated,
no Letters of Credit or Notes are outstanding and the Loans and Unpaid Drawings,
together with interest, Fees and all other Obligations (other than any
indemnities described in Section 12.13 hereof which are not then due and
payable) incurred hereunder, are paid in full:
7.01 Information Covenants. The Borrower will furnish to each
Bank:
(a) Monthly Reports. Within 30 days after the end of each
fiscal month of the Borrower, the consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such month and the
related consolidated statements of income and retained earnings and of
cash flows for such month and for the elapsed portion of the fiscal
year ended with the last day of such month, in each case setting forth
comparative figures for the corresponding month in the prior fiscal
year, all of which shall be certified by the chief financial officer or
other Authorized Officer of the Borrower, subject to normal year-end
audit adjustments and the absence of footnotes.
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(b) Quarterly Financial Statements. Within 45 days after the
close of each quarterly accounting period in each fiscal year of the
Borrower, the consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such quarterly accounting period and the
related consolidated statements of income and retained earnings and of
cash flows for such quarterly accounting period and for the elapsed
portion of the fiscal year ended with the last day of such quarterly
accounting period; all of which shall be in reasonable detail and
certified by the chief financial officer or other Authorized Officer of
the Borrower that they fairly present the financial condition of the
Borrower and its Subsidiaries as of the dates indicated and the results
of their operations and changes in their cash flows for the periods
indicated, subject to normal year-end audit adjustments and the absence
of footnotes.
(c) Annual Financial Statements. Within 90 days after the
close of each fiscal year of the Borrower, the consolidated balance
sheets of the Borrower and its Subsidiaries as at the end of such
fiscal year and the related consolidated statements of income and
retained earnings and of cash flows for such fiscal year and setting
forth comparative consolidated figures for the preceding fiscal year
and certified by Price Waterhouse LLP or such other independent
certified public accountants of recognized national standing as shall
be reasonably acceptable to the Agent, in each case to the effect that
such statements fairly present in all material respects the financial
condition of the Borrower and its Subsidiaries as of the dates
indicated and the results of their operations and changes, together
with a certificate of such accounting firm stating that in the course
of its regular audit of the business of the Borrower and its
Subsidiaries, which audit was conducted in accordance with generally
accepted auditing standards, no Default or Event of Default with
respect to financial or accounting related covenants which has occurred
and is continuing has come to their attention or, if such a Default or
Event of Default has come to their attention a statement as to the
nature thereof.
(d) Budgets, etc. Not more than 60 days after the commencement
of each fiscal year of the Borrower, budgets of the Borrower and its
Subsidiaries in reasonable detail for each of the four fiscal quarters
of such fiscal year as customarily prepared by management for its
internal use setting forth, with appropriate discussion, the principal
assumptions upon which such budgets are based. Together with each
delivery of financial statements pursuant to Section 7.01(b) and (c), a
comparison of the current year to date financial results (other than in
respect of the balance sheets included therein) against the budgets
required to be submitted pursuant to this clause (d) shall be
presented.
(e) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Section 7.01(b) and (c), a
certificate of the chief financial officer or other Authorized Officer
of the Borrower to the effect that no Default or Event of Default
exists or, if any Default or Event of Default does exist, specifying
the nature and extent thereof, which certificate shall set forth the
calculations required to establish whether the Borrower and its
Subsidiaries were in compliance with the provisions of Sections
8.02(r), 8.04(d), (l) and (m), 8.06 and 8.08 through and including
8.11, as at the end of such fiscal quarter or year, as the case may be.
In addition, at the time of the delivery of the financial statements
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provided for in Section 7.01(c), a certificate of the chief financial
officer or other Authorized Officer of the Borrower setting forth (i)
the amount of, and calculations required to establish the amount of,
Excess Cash Flow for the Excess Cash Flow Period ending on the last day
of the respective Measurement Period and (ii) the calculations required
to establish whether the Borrower was in compliance with Section
4.02(A)(c) for the respective Measurement Period.
(f) Notice of Default or Litigation. Promptly, and in any
event within three Business Days (or 10 Business Days in the case of
clause (y) below) after any officer of the Borrower or any of its
Subsidiaries obtains knowledge thereof, notice of (x) the occurrence of
any event which constitutes a Default or an Event of Default, which
notice shall specify the nature thereof, the period of existence
thereof and what action the Borrower proposes to take with respect
thereto and (y) the commencement of, or threat of, or any significant
development in, any litigation or governmental proceeding pending
against the Borrower or any of its Subsidiaries which is likely to have
a Material Adverse Effect, or a material adverse effect on the ability
of any Credit Party to perform its respective obligations hereunder or
under any other Credit Document.
(g) Auditors' Reports. Promptly upon receipt thereof, a copy
of each report or "management letter" submitted to the Borrower or any
of its Subsidiaries by its independent accountants in connection with
any annual, interim or special audit made by them of the books of the
Borrower or any of its Subsidiaries.
(h) Environmental Matters. Promptly after obtaining knowledge
of any of the following, written notice of any of the following
environmental matters which could reasonably be expected to result in a
remedial cost to the Borrower or any of its Subsidiaries in excess of
$100,000:
(i) any pending or threatened material Environmental Claim
against the Borrower or any of its Subsidiaries or any Real Property
owned or operated by the Borrower or any of its Subsidiaries;
(ii) any condition or occurrence on any Real Property owned or
operated by the Borrower or any of its Subsidiaries that (x) results in
material noncompliance by the Borrower or any of its Subsidiaries with
any applicable Environmental Law or (y) could reasonably be anticipated
to form the basis of a material Environmental Claim against the
Borrower or any of its Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property owned
or operated by the Borrower or any of its Subsidiaries that could
reasonably be anticipated to cause such Real Property to be subject to
any material restrictions on the ownership, occupancy, use or
transferability by the Borrower or its Subsidiary, as the case may be,
of its interest in such Real Property under any Environmental Law; and
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(iv) the taking of any material removal or remedial action in
response to the actual or alleged presence of any Hazardous Material on
any Real Property owned or operated by the Borrower or any of its
Subsidiaries.
All such notices shall describe in reasonable detail the
nature of the claim, investigation, condition, occurrence or removal or
remedial action and the Borrower's response thereto. In addition, the
Borrower agrees to provide the Banks with copies of all material
written communications by the Borrower or any of its Subsidiaries with
any Person, government or governmental agency relating to any of the
matters set forth in clauses (i)-(iv) above, and such detailed reports
relating to any of the matters set forth in clauses (i)-(iv) above as
may reasonably be requested by the Agent or the Required Banks.
(i) Other Information. Promptly upon transmission thereof,
copies of any filings and registrations with, and reports to, the SEC
by the Borrower or any of its Subsidiaries and copies of all financial
statements, proxy statements, notices and reports as the Borrower or
any of its Subsidiaries shall generally send to analysts or the holders
of their capital stock or of the Subordinated Debt in their capacity as
such holders (in each case to the extent not theretofore delivered to
the Banks pursuant to this Agreement) and, with reasonable promptness,
such other information or documents (financial or otherwise) as the
Agent on its own behalf or on behalf of any Bank may reasonably request
from time to time.
7.02 Books, Records and Inspections. The Borrower will, and
will cause each of its Subsidiaries to, permit, upon reasonable notice to the
chief financial officer or other Authorized Officer of the Borrower, (x)
officers and designated representatives of the Agent or any Bank to visit and
inspect any of the properties or assets of the Borrower and any of its
Subsidiaries in whomsoever's possession, and to examine the books of account of
the Borrower and any of its Subsidiaries and discuss the affairs, finances and
accounts of the Borrower and of any of its Subsidiaries with, and be advised as
to the same by, their officers and independent accountants, all at such
reasonable times and intervals and to such reasonable extent as the Agent or any
Bank may desire and (y) the Agent, at the request of the Required Banks, to
conduct, at the Borrower's expense, an audit of the accounts receivable and/or
inventories of the Borrower and its Subsidiaries at such times (but no more
frequently than once a year unless an Event of Default has occurred and is
continuing) as the Required Banks shall reasonably require.
7.03 Insurance. The Borrower will, and will maintain on behalf
of or will cause each of its Subsidiaries to, at all times from and after the
Effective Date maintain in full force and effect insurance with reputable and
solvent insurance carriers in such amounts, covering such risks and liabilities
and with such deductibles or self-insured retentions as are consistent with the
Borrower's past practices, or if different, adequate in the management of the
Borrower's prudent judgment and consistent with the practices of similarly
situated companies. At any time that insurance at the levels described in Annex
VIII is not being maintained by the Borrower and its Subsidiaries, the Borrower
will notify the Banks in writing thereof and, if thereafter notified by the
Agent to do so, the Borrower will obtain insurance at such levels to the extent
then generally available (but in any
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event within the deductible or self-insured retention limitations set forth in
the preceding sentence) or otherwise as are reasonably acceptable to the Agent.
The Borrower will furnish to the Agent on the Initial Borrowing Date and on each
date on which financial statements are delivered pursuant to Section 7.01(c) a
summary of the insurance carried in respect of the Borrower and its Subsidiaries
and the assets of the Borrower and its Subsidiaries together with certificates
of insurance and other evidence of such insurance, if any, naming the Collateral
Agent as mortgagee with respect to any mortgaged real property, lenders loss
payee with respect to personal property, additional insured with respect to
general liability and umbrella liability coverage and certificate holder with
respect to workers' compensation insurance.
7.04 Payment of Taxes. The Borrower will pay and discharge,
and will cause each of its Subsidiaries to pay and discharge, all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which material penalties attach thereto, and all lawful claims for sums that
have become due and payable which, if unpaid, might become a Lien not otherwise
permitted under Section 8.03(a) or charge upon any properties of the Borrower or
any of its Subsidiaries; provided, that neither the Borrower nor any of its
Subsidiaries shall be required to pay any such tax, assessment, charge, levy or
claim which is being contested in good faith and by proper proceedings if it has
maintained adequate reserves with respect thereto in accordance with GAAP.
7.05 Corporate Franchises. The Borrower will do, and will
cause each of its Subsidiaries to do, or cause to be done, all things necessary
to preserve and keep in full force and effect its existence and its material
rights, franchises and authority to do business; provided, however, that any
transaction permitted by Section 8.02 will not constitute a breach of this
Section 7.05.
7.06 Compliance with Statutes, etc. The Borrower will, and
will cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls) except for such non-compliance as would not have a Material Adverse
Effect or a material adverse effect on the ability of any Credit Party to
perform its obligations under any Credit Document to which it is a party.
7.07 Compliance with Environmental Laws. (a) The Borrower will
pay, and will cause each of its Subsidiaries to pay, all costs and expenses
incurred by it in keeping in compliance with all Environmental Laws, and will
keep or cause to be kept all Real Properties owned or operated by the Borrower
or any of its Subsidiaries free and clear of any Liens imposed pursuant to such
Environmental Laws; and (b) neither the Borrower nor any of its Subsidiaries
will generate, use, treat, store, release or dispose of, or permit the
generation, use, treatment, storage, release or disposal of, Hazardous Materials
on any Real Property owned or operated by the Borrower or any of its
Subsidiaries, or transport or permit the transportation of Hazardous Materials
to or from any such Real Property, unless the failure to comply with the
requirements specified in clause (a) or (b) above, either individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
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Effect. If the Borrower or any of its Subsidiaries, or any tenant or occupant of
any Real Property owned or operated by the Borrower or any of its Subsidiaries,
cause or permit any intentional or unintentional act or omission resulting in
the presence or Release of any Hazardous Material (except in compliance with
applicable Environmental Laws), the Borrower agrees to undertake, and/or to
cause any of its Subsidiaries, tenants or occupants to undertake, at their sole
expense, any clean up, removal, remedial or other action required pursuant to
Environmental Laws to remove and clean up any Hazardous Materials from any Real
Property, except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect; provided, that neither the Borrower nor any of
its Subsidiaries shall be required to comply with any such order or directive
which is being contested in good faith and by proper proceedings so long as it
has maintained adequate reserves with respect to such compliance to the extent
required in accordance with GAAP.
7.08 ERISA. As soon as possible and, in any event, within 10
days after the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate
knows or has reason to know of the occurrence of any of the following events to
the extent that one or more of such events is reasonably likely to result in a
material liability to the Borrower or any Subsidiary of the Borrower, the
Borrower will deliver to each of the Banks a certificate of the chief financial
officer or other Authorized Officer of the Borrower setting forth details as to
such occurrence and the action, if any, which the Borrower, such Subsidiary or
such ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given to or filed with or by the Borrower, such
Subsidiary, such ERISA Affiliate, the PBGC, a Plan participant or the Plan
administrator with respect thereto: that a Reportable Event has occurred (except
to the extent that the Borrower has previously delivered to the Banks a
certificate and notices (if any) concerning such event pursuant to the next
clause hereof); that a contributing sponsor (as defined in Section 4001(a)(13)
of ERISA) of a Plan subject to Title IV of ERISA is subject to the advance
reporting requirement of PBGC Regulation Section 4043.61 (without regard to
subparagraph (b)(1) thereof), and an event described in subsection .62, .63,
.64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected
to occur with respect to such Plan within the following 30 days; that an
accumulated funding deficiency, within the meaning of Section 412 of the Code or
Section 302 of ERISA has been incurred or an application may be or has been made
for a waiver or modification of the minimum funding standard (including any
required installment payments) or an extension of any amortization period under
Section 412 of the Code or Section 303 or 304 of ERISA with respect to a Plan;
that a contribution required to be made to a Plan or Foreign Pension Plan has
not been timely made; that a Plan has been or may e terminated, reorganized,
partitioned or declared insolvent under Title IV of ERISA; that a Plan has an
Unfunded Current Liability giving rise to a lien under ERISA or the Code; that
proceedings may be or have been instituted to terminate or appoint a trustee to
administer a Plan which is subject to Title IV of ERISA; that a proceeding has
been instituted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Plan; that the Borrower, any Subsidiary of the Borrower or any
ERISA Affiliate will or may incur any liability (including any indirect,
contingent or secondary liability) to or on account of the termination of or
withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212
of ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980
of the Code or Section 409, 502(i) or 502(l) of ERISA or with respect to a group
health plan (as defined in Section 607(1) of ERISA or Section
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4908B(g)(2) of the Code) under Section 4980B of the Code; or that the Borrower
or any Subsidiary of the Borrower has or may incur any liability under any
employee welfare benefit plan (within the meaning of Section 3(1) of ERISA) that
provides benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or any Plan or any Foreign Pension Plan. At
the request of any Bank, the Borrower will deliver to such Bank (a) a complete
copy of the annual report (Form 5500) (including, to the extent requested, the
related financial and actuarial statements and opinions and other supporting
statements, certifications, schedules and information) of each Plan required to
be filed with the Internal Revenue Service and (b) copies of any records,
documents or other information that must be furnished to the PBGC with respect
to any Plan pursuant to Section 4010 of ERISA. In addition to any certificates
or notices delivered to the Banks pursuant to the first sentence hereof, copies
of annual reports and any records, documents or other information required t be
furnished to the PBGC, and any material notices received by the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate with respect to any Plan or
Foreign Pension Plan shall be delivered to the Banks no later than 10 days after
the date such annual report has been filed with the Internal Revenue Service or
such records, documents and/or information has been furnished to the PBGC or
such notice has been received by the Borrower, the Subsidiary or the ERISA
Affiliate, as applicable.
7.09 Good Repair. The Borrower will, and will cause each of
its Subsidiaries to, ensure that its material properties and equipment used in
its business are kept in good repair, working order and condition, normal wear
and tear excepted, and, subject to Section 8.08, that from time to time there
are made in such properties and equipment all needful and proper repairs,
renewals, replacements, extensions, additions, betterments and improvements
thereto, to the extent and in the manner useful or customary for companies in
similar businesses.
7.10 End of Fiscal Years; Fiscal Quarters. The Borrower will,
for financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries', fiscal years to end on March 31 of each year, and (ii) each of
its, and each of its Subsidiaries', fiscal quarters to end on June 30, September
30, December 31 and March 31 of each year; provided that the Borrower may, after
the Initial Borrowing Date, change its, and each of its Subsidiaries', fiscal
years to end on any of June 30, September 30 or December 31 of each year
(promptly following which change the Borrower shall give notice thereof to each
of the Banks).
7.11 Additional Security; Further Assurances. (a) The Borrower
will, and will cause each of its Domestic Subsidiaries (and subject to Section
7.13, each of its Foreign Subsidiaries) to, grant to the Collateral Agent
security interests and mortgages in such assets and properties of the Borrower
and its Domestic Subsidiaries (and, subject to Section 7.13, its Foreign
Subsidiaries) as are not covered by the original Security Documents, and as may
be requested from time to time by the Agent (collectively, the "Additional
Security Documents"). All such security interests and mortgages shall be granted
pursuant to documentation reasonably satisfactory in form and substance to the
Agent and shall constitute valid and enforceable perfected security interests
and mortgages superior to and prior to the rights of all third Persons and
subject to no other Liens except for Permitted Liens. The Additional Security
Documents or instruments related thereto shall have been duly recorded or
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filed in such manner and in such places as are required by law to establish,
perfect, preserve and protect the Liens in favor of the Collateral Agent
required to be granted pursuant to the Additional Security Documents and all
taxes, fees and other charges payable in connection therewith shall have been
paid in full.
(b) The Borrower will, and will cause each of its applicable
Subsidiaries party to any Security Document to, at the expense of the Borrower,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent
from time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, real property surveys, reports and other assurances or instruments
and take such further steps relating to the collateral covered by any of the
Security Documents as the Collateral Agent may reasonably require. Furthermore,
the Borrower shall cause to be delivered to the Collateral Agent such opinions
of counsel, title insurance and other related documents as may be reasonably
requested by the Agent to assure it that this Section 7.11 has been complied
with.
(c) If the Agent or the Required Banks determine that they are
required by law or regulation to have appraisals prepared in respect of the Real
Property of the Borrower and its Subsidiaries constituting Collateral, the
Borrower shall provide to the Agent appraisals which satisfy the applicable
requirements of the Real Estate Appraisal Reform Amendments of the Financial
Institution Reform, Recovery and Enforcement Act of 1989, as amended, and which
shall be in form and substance reasonably satisfactory to the Agent.
(d) The Borrower agrees that each action required above by
this Section 7.11 shall be completed as soon as possible, but in no event later
than 90 days after such action is either requested to be taken by the Agent or
the Required Banks or required to be taken by the Borrower and its Subsidiaries
pursuant to the terms of this Section 7.11; provided that in no event shall the
Borrower be required to take any action, other than using its reasonable
efforts, to obtain consents from third parties with respect to its compliance
with this Section 7.11.
7.12 Register. The Borrower hereby designates the Agent to
serve as the Borrower's agent, solely for purposes of this Section 7.12, to
maintain a register (the "Register") on which it will record the Commitments
from time to time of each of the Banks, the Loans made by each of the Banks and
each repayment in respect of the principal amount of the Loans of each Bank.
Failure to make any such recordation, or any error in such recordation shall not
affect the Borrower's obligations in respect of such Loans. With respect to any
Bank, the transfer of the Commitments of such Bank and the rights to the
principal of, and interest on, any Loan made pursuant to such Commitments shall
not be effective until such transfer is recorded on the Register maintained by
the Agent with respect to ownership of such Commitments and Loans and prior to
such recordation all amounts owing to the transferor with respect to such
Commitments and Loans shall remain owing to the transferor. The registration of
assignment or transfer of all or part of any Commitments and Loans shall be
recorded by the Agent on the Register only upon the acceptance by the Agent of a
properly executed and delivered Assignment and Assumption Agreement pursuant to
Section 12.04(b). Coincident with the delivery of such an Assignment and
Assumption Agreement to the
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Agent for acceptance and registration of assignment or transfer of all or part
of a Loan, or as soon thereafter as practicable, the assigning or transferor
Bank shall surrender the Note evidencing such Loan, and thereupon one or more
new Notes in the same aggregate principal amount shall be issued to the
assigning or transferor Bank and/or the new Bank. The Borrower agrees to
indemnify the Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on, asserted against or
incurred by the Agent in performing its duties under this Section 7.12 (except
when caused by the gross negligence or willful misconduct of the Agent).
7.13 Foreign Subsidiaries Security. If following a change in
the relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder, counsel for the
Borrower acceptable to the Agent and the Required Banks does not within 30 days
after a request from the Agent or the Required Banks deliver evidence, in form
and substance mutually satisfactory to the Agent and the Borrower, with respect
to any Foreign Subsidiary which has not already had all of its stock pledged
pursuant to the Pledge Agreement that (i) a pledge (x) of 66-2/3% or more of the
total combined voting power of all classes of capital stock of such Foreign
Subsidiary entitled to vote, and (y) of any promissory note issued by such
Foreign Subsidiary to the Borrower or any of its Domestic Subsidiaries, (ii) the
entering into by such Foreign Subsidiary of a security agreement in
substantially the form of the Security Agreement and (iii) the entering into by
such Foreign Subsidiary of a guaranty in substantially the form of the
Subsidiary Guaranty, in any such case would cause the undistributed earnings of
such Foreign Subsidiary as determined for Federal income tax purposes to be
reasonably likely to be treated as a deemed dividend to such Foreign
Subsidiary's United States parent for Federal income tax purposes, then in the
case of a failure to deliver the evidence described in clause (i) above, that
portion of such Foreign Subsidiary's outstanding capital stock or any promissory
notes so issued by such Foreign Subsidiary, in each case not theretofore pledged
pursuant to the Pledge Agreement shall be pledged to the Collateral Agent for
the benefit of the Secured Creditors pursuant to the Pledge Agreement (or
another pledge agreement in substantially similar form, if needed), and in the
case of a failure to deliver the evidence described in clause (ii) above, such
Foreign Subsidiary shall execute and deliver the Security Agreement (or another
security agreement in substantially similar form, if needed), granting the
Secured Creditors a security interest in all of such Foreign Subsidiary's assets
and securing the Obligations of the Borrower under the Credit Documents and
under any Interest Rate Protection Agreement or Other Hedging Agreement and, in
the event the Subsidiary Guaranty shall have been executed by such Foreign
Subsidiary, the obligations of such Foreign Subsidiary thereunder, and in the
case of a failure to deliver the evidence described in clause (iii) above, such
Foreign Subsidiary shall execute and deliver the Subsidiary Guaranty (or another
guaranty in substantially similar form, if needed), guaranteeing the Obligations
of the Borrower under the Credit Documents and under any Interest Rate
Protection Agreement or Other Hedging Agreement, in each case to the extent that
the entering into such Security Agreement or Subsidiary Guaranty is permitted by
the laws of the respective foreign jurisdiction and with all documents delivered
pursuant to this Section 7.13 to be in form and substance reasonably
satisfactory to the Agent.
7.14 Interest Rate Protection. The Borrower shall no later
than 60 days following the Initial Borrowing Date enter into Interest Rate
Protection Agreements, reasonably satisfactory
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to the Agent, with a term of at least three years, establishing a fixed or
maximum interest rate acceptable to the Agent in respect of at least 50% of the
then outstanding Term Loans.
SECTION 8. Negative Covenants. The Borrower hereby covenants
and agrees that as of the Initial Borrowing Date and thereafter for so long as
this Agreement is in effect and until the Commitments have terminated, no
Letters of Credit (other than Letters of Credit, together with all Fees that
have accrued and will accrue thereon through the stated termination date of such
Letters of Credit, which have been supported in a manner satisfactory to the
respective Letter of Credit Issuer in its sole and absolute discretion) or Notes
are outstanding and the Loans and Unpaid Drawings, together with interest, Fees
and all other Obligations (other than any indemnities described in Section 12.13
hereof which are not then due and payable) incurred hereunder, are paid in full:
8.01 Changes in Business. The Borrower and its Subsidiaries
will not engage in any business other than the business engaged in by Old Labtec
and its Subsidiaries as of the Effective Date and activities directly related
thereto, and similar or related businesses.
8.02 Consolidation, Merger, Sale or Purchase of Assets, etc.
The Borrower will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of (or agree to do
any of the foregoing at any future time) all or any part of its property or
assets (other than inventory and product displays in the ordinary course of
business), or enter into any partnerships, joint ventures or sale-leaseback
transactions, or purchase or otherwise acquire (in one or a series of related
transactions) any part of the property or assets (other than purchases or other
acquisitions of inventory, materials and equipment in the ordinary course of
business) of any Person, except that the following shall be permitted:
(a) the Transaction;
(b) the Borrower and its Subsidiaries may (i) lease as lessee
or license as licensee real or personal property in the ordinary course
of business and otherwise in compliance with this Agreement and (ii)
sublease as lessor real or personal property located at a place of
business where it has ceased to continue its operations until the
expiration of the principal lease with respect to such property;
(c) Capital Expenditures by the Borrower and its
Subsidiaries to the extent not in violation of Section 8.08;
(d) the advances, investments and loans permitted pursuant to
Section 8.05;
(e) each of the Borrower and its Subsidiaries may sell assets,
provided that (w) each such sale shall be for an amount at least equal
to the fair market value thereof (as determined in good faith by senior
management of the Borrower), (x) each such sale results in
consideration at least 80% of which (taking the amount of cash, the
principal amount of
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any promissory notes and the fair market value, as determined in good
faith by senior management of the Borrower, of any other consideration)
shall be in the form of cash, (y) the aggregate sale proceeds from all
assets subject to such sales pursuant to this clause (e) shall not
exceed $500,000 in any Measurement Period of the Borrower and (z) the
Net Proceeds therefrom are either applied to repay Term Loans as
provided in Section 4.02(A)(c) or reinvested in replacement assets to
the extent permitted by Section 4.02(A)(c);
(f) each of the Borrower and its Subsidiaries may sell assets,
provided that (w) each such sale shall be for an amount at least equal
to the fair market value thereof (as determined in good faith by senior
management of the Borrower), (x) each such sale results in
consideration at least 80% of which (taking the amount of cash, the
principal amount of any promissory notes and the fair market value, as
determined in good faith by senior management of the Borrower, of any
other consideration) shall be in the form of cash, and (y) the
aggregate sale proceeds from all assets subject to such sales pursuant
to this clause (f) shall not exceed $100,000 in any Measurement Period
of the Borrower;
(g) the Borrower and its Subsidiaries may sell or discount, in
each case without recourse, accounts receivables arising in the
ordinary course of business, but only in connection with the compromise
or collection thereof;
(h) the Borrower and its Subsidiaries may sell for cash or
exchange specific items of equipment, so long as the purpose of each
such sale or exchange is to acquire (and results within 360 days of
such sale or exchange in the acquisition of) replacement items of
equipment which are the functional equivalent of the item of equipment
so sold or exchanged;
(i) the Borrower and its Subsidiaries may, in the ordinary
course of business, license patents, trademarks, copyrights and
know-how to third Persons and to one another, so long as each such
license is permitted to be assigned pursuant to the Security Agreement
(to the extent that a security interest in such patents, trademarks,
copyrights and know-how is granted thereunder) and does not otherwise
prohibit the granting of a Lien by the Borrower or any of its
Subsidiaries pursuant to the Security Agreement in the intellectual
property covered by such license;
(j) any Foreign Subsidiary of the Borrower may be merged with
and into, or be voluntarily dissolved or liquidated into, or transfer
any of its assets to, any Wholly-Owned Foreign Subsidiary of the
Borrower so long as in each case at least 65% of the total combined
voting power of all classes of capital stock of all first-tier Foreign
Subsidiaries of the Borrower are pledged pursuant to the Pledge
Agreement;
(k) the assets of any Foreign Subsidiary of the Borrower may
be transferred to the Borrower or any of its Wholly-Owned Domestic
Subsidiaries, and any Foreign Subsidiary of the Borrower may be merged
with and into, or be voluntarily dissolved or liquidated into, the
Borrower or any of its Wholly-Owned Domestic Subsidiaries so long as
the Borrower or such
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Wholly-Owned Domestic Subsidiary is the surviving corporation of any
such merger, dissolution or liquidation;
(l) the Borrower or any of its Wholly-Owned Domestic
Subsidiaries may (x) transfer to one or more Wholly-Owned Foreign
Subsidiaries of the Borrower those assets theretofore transferred to
the Borrower or such Wholly-Owned Domestic Subsidiary by a Foreign
Subsidiary (whether by merger, liquidation, dissolution or otherwise)
pursuant to clause (k) of this Section 8.02, and (y) in lieu of selling
inventory outside the United States directly to third Persons, the
Borrower and its Wholly-Owned Domestic Subsidiaries may sell such
inventory in the ordinary course of business to Foreign Subsidiaries
for resale by such Foreign Subsidiaries;
(m) the Borrower and its Wholly-Owned Domestic Subsidiaries
may sell or otherwise transfer inventory between or among themselves in
the ordinary course of business for resale by the Borrower or such
Wholly-Owned Domestic Subsidiaries, as the case may be, so long as the
security interest granted to the Collateral Agent for the benefit of
the Secured Creditors pursuant to the Security Agreement in the
inventory so transferred shall remain in full force and effect and
perfected (to at least the same extent as in effect immediately prior
to such transfer);
(n) the Borrower may lease as lessor equipment, machinery or
its Real Property to one or more Wholly-Owned Domestic Subsidiaries of
the Borrower so long as (x) such lease is for fair market value
(determined in good faith by the Board of Directors or senior
management of the Borrower) and (y) the security interests granted to
the Collateral Agent for the benefit of the Secured Creditors pursuant
to the Security Documents in the assets so leased shall remain in full
force and effect and perfected (to at least the same extent as in
effect immediately prior to such transfer);
(o) any Domestic Subsidiary of the Borrower may transfer
assets to the Borrower or to any other Wholly-Owned Domestic Subsidiary
of the Borrower so long as the security interests granted to the
Collateral Agent for the benefit of the Secured Creditors pursuant to
the Security Documents in the assets so transferred shall remain in
full force and effect and perfected (to at least the same extent as in
effect immediately prior to such transfer);
(p) any Domestic Subsidiary of the Borrower may merge with and
into, or be voluntarily dissolved or liquidated into, the Borrower so
long as (i) the Borrower is the surviving corporation of such merger,
dissolution or liquidation and (ii) the security interests granted to
the Collateral Agent for the benefit of the Secured Creditors pursuant
to the Security Documents in the assets of such Domestic Subsidiary so
merged, dissolved or liquidated shall remain in full force and effect
and perfected (to at least the same extent as in effect immediately
prior to such merger, dissolution or liquidation);
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(q) any Domestic Subsidiary of the Borrower may merge with and
into, or be voluntarily dissolved or liquidated into, any other
Wholly-Owned Domestic Subsidiary of the Borrower so long as (i) such
Wholly-Owned Domestic Subsidiary of the Borrower is the surviving
corporation of such merger, dissolution or liquidation and (ii) the
security interests granted to the Collateral Agent for the benefit of
the Secured Creditors pursuant to the Security Documents in the assets
of such Domestic Subsidiary so merged, dissolved or liquidated shall
remain in full force and effect and perfected (to at least the same
extent as in effect immediately prior to such merger, dissolution or
liquidation); and
(r) so long as no Default or Event of Default then exists or
would result therefrom, the Borrower may acquire assets constituting
all or substantially all of a business, business unit, division or
product line of any Person not already a Subsidiary of the Borrower or
the capital stock of any such Person (any such acquisition permitted by
this clause (r), a "Permitted Acquisition"), provided, that (i) such
Person (or the assets so acquired) was, immediately prior to such
acquisition, engaged (or used) primarily in the business permitted
pursuant to Section 8.01, (ii) if such acquisition is structured as a
stock acquisition, then either (A) the Person so acquired becomes a
Domestic Subsidiary of the Borrower or (B) such Person is merged with
and into a Domestic Subsidiary of the Borrower (with such Domestic
Subsidiary being the surviving corporation of such merger), and in any
case, all of the provisions of Section 8.15 have been complied with in
respect of such Person, (iii) any Liens or Indebtedness assumed or
issued in connection with such acquisition are otherwise permitted
under Section 8.03 or 8.04, as the case may be, (iv) the only
consideration paid by the Borrower in respect of any such Permitted
Acquisition consists of cash, the Common Stock permitted to be issued
under Section 8.13 and/or Indebtedness to the extent permitted by
Section 8.04, (v) all representations and warranties contained herein
and in the other Credit Documents shall be true and correct in all
material respects with the same effect as though such representations
and warranties had been made on and as of the date of such Permitted
Acquisition (both before and after giving effect thereto), unless
stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct in all
material respects as of such earlier date, and (vi) after giving effect
to any Permitted Acquisition, the aggregate amount paid (including for
this purpose all cash consideration paid, the face amount of all
Indebtedness incurred in connection with such Permitted Acquisition,
and the fair market value (determined as of the proposed date of
consummation of such Permitted Acquisition in good faith by senior
management of the Borrower) of any Common Stock, if any, issued as
consideration in connection with such Permitted Acquisition), in
connection with such Permitted Acquisition when added to the aggregate
amount paid (including for this purpose all cash consideration paid,
the face amount of all Indebtedness incurred in connection with each
such Permitted Acquisition and the fair market value (determined as of
the date of consummation of each such Permitted Acquisition in good
faith by senior management of the Borrower) of any Common Stock, if
any, issued as consideration in connection with each such Permitted
Acquisition) in connection with all other Permitted Acquisitions
consummated prior to such proposed Permitted Acquisition, shall not
exceed (A) $1,000,000 or (B) $5,000,000 at any time that (I) the Pro
Forma Leverage Ratio
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on the date of such Permitted Acquisition is equal to or less than 3:1,
and (II) the Total Unutilized Revolving Loan Commitment after giving
effect to such Permitted Acquisition is equal to or greater than
$3,000,000.
To the extent the Required Banks waive the provisions of this Section 8.02 with
respect to the sale or other disposition of any Collateral, or any Collateral is
sold or otherwise disposed of as permitted by this Section 8.02, such Collateral
in each case shall be sold or otherwise disposed of free and clear of the Liens
created by the Security Documents and the Agent shall take such actions
(including, without limitation, directing the Collateral Agent to take such
actions) as are appropriate in connection therewith.
8.03 Liens. The Borrower will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or
with respect to any property or assets of any kind (real or personal, tangible
or intangible) of the Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable or notes with recourse to the
Borrower or any of its Subsidiaries) or assign any right to receive income,
except for the following (collectively, the "Permitted Liens"):
(a) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due or Liens for taxes, assessments or
governmental charges or levies being contested in good faith by
appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP;
(b) Liens in respect of property or assets of the Borrower or
any of its Subsidiaries imposed by law which were incurred in the
ordinary course of business and which have not arisen to secure
Indebtedness for borrowed money, such as carriers', warehousemen's and
mechanics' Liens, statutory landlord's Liens, and other similar Liens
arising in the ordinary course of business, and which either (x) do not
in the aggregate materially detract from the value of such property or
assets or materially impair the use thereof in the operation of the
business of the Borrower or any of its Subsidiaries or (y) are being
contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing the forfeiture or sale of the property or
asset subject to such Lien;
(c) Liens created by or pursuant to this Agreement and the
Security Documents;
(d) Liens in existence on the Initial Borrowing Date which are
listed, and the property subject thereto described, in Annex X, without
giving effect to any extensions or renewals thereof;
(e) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 9.09;
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(f) Liens incurred or deposits made (x) in the ordinary course
of business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, government contracts, performance and return-of-money bonds and
other similar obligations incurred in the ordinary course of business
(exclusive of obligations in respect of the payment for borrowed
money); and (y) to secure the performance of leases of Real Property,
to the extent incurred or made in the ordinary course of business
consistent with past practices;
(g) licenses, leases or subleases granted to third Persons not
interfering in any material respect with the business of the Borrower
or any of its Subsidiaries;
(h) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the
business of the Borrower or any of its Subsidiaries;
(i) Liens arising from precautionary UCC financing statements
regarding operating leases permitted by this Agreement;
(j) any interest or title of a licensor, lessor or sublessor
under any lease permitted by this Agreement;
(k) Liens created pursuant to Capital Leases permitted
pursuant to Section 8.04(d);
(l) Permitted Encumbrances;
(m) Liens arising pursuant to purchase money mortgages or
security interests securing Indebtedness representing the purchase
price (or financing of the purchase price within 90 days after the
respective purchase) of assets acquired after the Initial Borrowing
Date, provided that (i) any such Liens attach only to the assets so
purchased, (ii) the Indebtedness secured by any such Lien does not
exceed 100%, nor is less than 80% of the lesser of the fair market
value or the purchase price of the property being purchased at the time
of the incurrence of such Indebtedness and (iii) the Indebtedness
secured thereby is permitted to be incurred pursuant to Section
8.04(d);
(n) Liens on property or assets acquired pursuant to a
Permitted Acquisition, or on property or assets of a Subsidiary of the
Borrower in existence at the time such Subsidiary is acquired pursuant
to a Permitted Acquisition, provided that (i) any Indebtedness that is
secured by such Liens is permitted to exist under Section 8.04(k), and
(ii) such Liens are not incurred in connection with, or in
contemplation or anticipation of, such Permitted Acquisition and do not
attach to any other asset of the Borrower or any of its Subsidiaries;
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(o) Liens on assets of Foreign Subsidiaries of the Borrower to
the extent securing Indebtedness of such Foreign Subsidiaries permitted
pursuant to Section 8.04(l); and
(p) additional Liens incurred by the Borrower and its
Subsidiaries so long as the value of the property subject to such
Liens, and the Indebtedness and other obligations secured thereby, do
not exceed $500,000.
8.04 Indebtedness. The Borrower will not, and will not permit
any of its Subsidiaries to, contract, create, incur, assume or suffer to exist
any Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
(b) Existing Indebtedness outstanding on the Initial Borrowing
Date and listed on Annex IX, without giving effect to any subsequent
extension, renewal or refinancing thereof;
(c) Indebtedness under Interest Rate Protection Agreements
entered into to protect the Borrower against fluctuations in interest
rates in respect of the Obligations and the Subordinated Debt;
(d) Capitalized Lease Obligations and Indebtedness of the
Borrower and its Subsidiaries incurred pursuant to purchase money Liens
permitted under Section 8.03(m); provided, that (x) all such
Capitalized Lease Obligations are permitted under Section 8.08 and (y)
the sum of (i) the aggregate Capitalized Lease Obligations plus (ii)
the aggregate principal amount of such purchase money Indebtedness
incurred during any Measurement Period of the Borrower shall not exceed
$1,000,000;
(e) Indebtedness of the Borrower under the Shareholder
Subordinated Notes;
(f) Indebtedness of the Borrower constituting Subordinated
Debt incurred under the respective Subordinated Debt Documents in an
aggregate principal amount not to exceed $6,000,000;
(g) Indebtedness constituting Intercompany Loans to the extent
permitted by Section 8.05(g);
(h) Indebtedness under Other Hedging Agreements providing
protection against fluctuations in currency values in connection with
the Borrower's or any of its Subsidiaries' operations so long as
management of the Borrower or such Subsidiary, as the case may be, has
determined that the entering into of such Other Hedging Agreements are
bona fide hedging activities;
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(i) Indebtedness of Foreign Subsidiaries to the Borrower or
any of its Domestic Subsidiaries as a result of any investment made
pursuant to Section 8.05(m);
(j) Indebtedness consisting of guaranties (w) by the Borrower
of Indebtedness and leases permitted to be incurred by Wholly-Owned
Domestic Subsidiaries of the Borrower, (x) by Domestic Subsidiaries of
the Borrower of Indebtedness (other than the Subordinated Debt) and
leases permitted to be incurred by the Borrower or other Wholly-Owned
Domestic Subsidiaries of the Borrower, (y) by Foreign Subsidiaries of
Indebtedness and leases permitted to be incurred by other Wholly-Owned
Foreign Subsidiaries of the Borrower and (z) by the Borrower and its
Subsidiaries of Indebtedness of any Foreign Subsidiaries permitted
under Section 8.04(l) below;
(k) Indebtedness of a Subsidiary acquired pursuant to a
Permitted Acquisition (or Indebtedness assumed at the time of a
Permitted Acquisition of an asset securing such Indebtedness), provided
that (i) such Indebtedness was not incurred in connection with, or in
anticipation or contemplation of, such Permitted Acquisition, (ii) such
Indebtedness does not constitute debt for borrowed money, it being
understood and agreed that Capitalized Lease Obligations and purchase
money Indebtedness shall not constitute debt for borrowed money for
purposes of this clause (k), and (iii) at the time of such Permitted
Acquisition such Indebtedness does not exceed 10% of the total value of
the assets of the Subsidiary so acquired, or of the assets so acquired,
as the case may be;
(l) Indebtedness of Foreign Subsidiaries not otherwise
permitted hereunder; provided that (x) the aggregate amount of
Indebtedness permitted under this clause (l) shall not exceed
$1,000,000 at any time outstanding and (y) the aggregate amount of such
Indebtedness, when added to (i) the aggregate outstanding principal
amount of all Intercompany Loans made pursuant to Section 8.05(g) and
(ii) the amount of contributions, capitalizations and forgiveness
theretofore made pursuant to Section 8.05(l), shall not exceed
$2,000,000 at any time (determined without regard to any write-offs or
write-downs of such loans and advances); and
(m) additional Indebtedness of the Borrower and its Domestic
Subsidiaries not otherwise permitted hereunder not exceeding $500,000
in aggregate principal amount at any time outstanding.
8.05 Advances, Investments and Loans. The Borrower will not,
and will not permit any of its Subsidiaries to, lend money or credit or make
advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any Person, or purchase or own a futures contract or otherwise become liable for
the purchase or sale of currency or other commodities at a future date in the
nature of a futures contract, or hold any cash, Cash Equivalents or Foreign Cash
Equivalents, except:
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(a) at any time when no Revolving Loans or Swingline Loans are
then outstanding, the Borrower and its Subsidiaries may invest in cash
and Cash Equivalents; provided that the Borrower and its Subsidiaries
may hold and invest in Cash and Cash Equivalents in an aggregate amount
not to exceed $2,000,000 at any time when Revolving Loans and/or
Swingline Loans are outstanding;
(b) the Borrower and its Subsidiaries may acquire and hold
receivables owing to it, if created or acquired in the ordinary course
of business and payable or dischargeable in accordance with customary
trade terms of the Borrower or such Subsidiary;
(c) the Borrower and its Subsidiaries may acquire and own
investments (including debt obligations) received in connection with
the bankruptcy or reorganization of suppliers and customers and in good
faith settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(d) Interest Rate Protection Agreements entered into in
compliance with Section 8.04(c) shall be permitted;
(e) The Borrower may acquire and hold obligations of one or
more officers or other employees of the Borrower or its Subsidiaries in
connection with such officers' or employees' acquisition of shares of
Common Stock so long as no cash is paid by the Borrower or any of its
Subsidiaries in connection with the acquisition of any such
obligations;
(f) deposits made in the ordinary course of business
consistent with past practices to secure the performance of leases
shall be permitted;
(g) the Borrower may make (x) advances to its Foreign
Subsidiaries in the ordinary course of business and consistent with
past practices based on and in connection with the payment by such
Foreign Subsidiaries of operating expenses and, to the extent permitted
by Section 8.08 hereof, Capital Expenditures, in each case of such
Foreign Subsidiaries and (y) intercompany loans and advances to any of
its Subsidiaries, any Subsidiary of the Borrower may make intercompany
loans and advances to the Borrower, and any Subsidiary of the Borrower
may make intercompany loans and advances to any other Subsidiary of the
Borrower (all such loans and advances described in this clause (g)(y),
collectively, "Intercompany Loans"), provided, that (w) at no time
shall the aggregate outstanding principal amount of all Intercompany
Loans made pursuant to this clause (g) by the Borrower and its
Wholly-Owned Domestic Subsidiaries to non-Wholly-Owned Domestic
Subsidiaries and Foreign Subsidiaries, when added to (I) the amount of
contributions, capitalizations and forgiveness theretofore made
pursuant to Section 8.05(l) and (II) the aggregate amount of
Indebtedness of Foreign Subsidiaries permitted under Section 8.04(l)
then outstanding, exceed $2,000,000 (determined without regard to any
write-downs or write-offs of such loans and advances), (x) each
Intercompany Loan made by a Foreign Subsidiary or a non-Wholly- Owned
Domestic Subsidiary to the Borrower or a Wholly-Owned Domestic
Subsidiary of the
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Borrower shall contain the subordination provisions set forth on
Exhibit I, (y) each Intercompany Loan shall be evidenced by an
Intercompany Note and (z) each such Intercompany Note (other than (1)
Intercompany Notes issued by Foreign Subsidiaries of the Borrower to
the Borrower or any of its Domestic Subsidiaries and (2) Intercompany
Notes held by Foreign Subsidiaries of the Borrower, in each case except
to the extent provided in Section 7.13) shall be pledged to the
Collateral Agent pursuant to the Pledge Agreement;
(h) loans and advances by the Borrower and its Subsidiaries to
employees of the Borrower and its Subsidiaries (x) for moving and
travel expenses and other similar expenses, in each case incurred in
the ordinary course of business, in an aggregate outstanding principal
amount not to exceed $250,000 at any time and (y) to finance the
purchase by such employees of Common Stock of the Borrower in the
ordinary course of business in an aggregate outstanding principal
amount not to exceed $60,000 at any time, in each case determined
without regard to any write-downs or write-offs of such loans and
advances, shall be permitted;
(i) Foreign Subsidiaries of the Borrower may invest in Foreign
Cash Equivalents;
(j) Other Hedging Agreements may be entered into in compliance
with Section 8.04(h);
(k) advances, loans and investments in existence on the
Initial Borrowing Date (other than any such loans, advances or
investments described in clause (t) hereof) and listed on Annex XI
shall be permitted, without giving effect to any additions thereto or
replacements thereof;
(l) the Borrower and its Wholly-Owned Domestic Subsidiaries
may make cash capital contributions to non-Wholly-Owned Domestic
Subsidiaries and Foreign Subsidiaries of the Borrower, and may
capitalize or forgive any Indebtedness owed to them by a non-
Wholly-Owned Domestic Subsidiary or Foreign Subsidiary of the Borrower
and outstanding under clause (g)(y) of this Section 8.05, provided that
the aggregate amount of such contributions, capitalizations and
forgiveness, when added to (I) the aggregate outstanding principal
amount of Intercompany Loans made to non-Wholly-Owned Domestic
Subsidiaries and Foreign Subsidiaries under such clause (g) (determined
without regard to any write-downs or write-offs thereof) and (II) the
aggregate amount of Indebtedness of Foreign Subsidiaries permitted
under Section 8.04(l) then outstanding, shall not exceed an amount
equal to $2,000,000;
(m) the Borrower and its Subsidiaries may make investments in
their respective Subsidiaries in connection with the transfers of those
assets permitted to be transferred pursuant to Sections 8.02(j), (k)
and (l), it being understood that the Borrower and its Subsidiaries may
convert any investment initially made as an equity investment to
intercompany Indebtedness held by the Borrower or such Subsidiary;
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(n) the Borrower and its Domestic Subsidiaries may make and
hold investments in their respective Foreign Subsidiaries to the extent
that such investments arise from the sale of inventory in the ordinary
course of business by the Borrower or such Domestic Subsidiary to such
Foreign Subsidiaries for resale by such Foreign Subsidiaries (including
any such investments resulting from the extension of the payment terms
with respect to such sales);
(o) the Borrower and its Subsidiaries may hold additional
investments in their respective Subsidiaries to the extent that such
investments reflect an increase in the value of such Subsidiaries;
(p) the Borrower and its Subsidiaries may make transfers of
assets to their respective Subsidiaries in accordance with Section
8.02(m) and (o);
(q) the Borrower may contribute cash to one or more of its
Wholly-Owned Domestic Subsidiaries formed after the Initial Borrowing
Date in accordance with Section 8.14 so long as the aggregate amount of
such cash so contributed to all such Wholly-Owned Domestic Subsidiaries
does not exceed $2,000,000;
(r) Permitted Acquisitions shall be permitted in accordance
with Section 8.02(r);
(s) the Borrower and its Subsidiaries may acquire and hold
debt securities as partial consideration for a sale of assets pursuant
to Section 8.02(e) or (f) to the extent permitted by any such Section;
(t) so long as no Default or Event of Default then exists or
would result therefrom, the Borrower may make Joint Venture Investments
in Permitted Joint Ventures, provided that the aggregate amount of all
Joint Venture Investments in Permitted Joint Ventures made after the
Initial Borrowing Date pursuant to this clause (t) shall not exceed
$100,000; and
(u) in addition to investments permitted by clauses (a)
through (t) above, the Borrower and its Subsidiaries may make
additional loans, advances and investments to or in a Person (other
than loans, advances or investments, (x) in or to any Permitted Joint
Venture or (y) of the type constituting a permitted existing investment
pursuant to clause (k) of this Section 8.05), so long as the amount of
any such loan, advance or investment (at the time of the making
thereof) does not exceed an amount equal to $200,000 less the aggregate
amount of such $200,000 previously used to make loans, advances and
investments pursuant to this clause (u) to the extent same are then
still outstanding (determined without regard to any write-downs or
write-offs thereof and net of cash repayments of principal in the case
of loans and cash equity returns (whether as a dividend or redemption)
in the case of equity investments) provided, that (1) no single loan,
advance or investment (or series of related loans, advances or
investments) in excess of $100,000 may be made, and (2) neither the
Borrower nor any of its Subsidiaries may make or own any investment in
Margin Stock.
-62-
8.06 Dividends, etc. The Borrower will not, and will not
permit any of its Subsidiaries to, declare or pay any dividends (other than
dividends payable solely in common stock of the Borrower or any such Subsidiary,
as the case may be) or return any capital to, its stockholders or authorize or
make any other distribution, payment or delivery of property or cash to its
stockholders as such, or redeem, retire, purchase or otherwise acquire, directly
or indirectly, for a consideration, any shares of any class of its capital
stock, now or hereafter outstanding (or any warrants for or options or stock
appreciation rights in respect of any of such shares), or set aside any funds
for any of the foregoing purposes, and the Borrower will not permit any of its
Subsidiaries to purchase or otherwise acquire for consideration any shares of
any class of the capital stock of the Borrower or any other Subsidiary, as the
case may be, now or hereafter outstanding (or any options or warrants or stock
appreciation rights issued by such Person with respect to its capital stock)
(all of the foregoing "Dividends"), except that:
(i) any Subsidiary of the Borrower may pay Dividends to its
stockholders, provided that with respect to Dividends paid by
non-Wholly-Owned Subsidiaries, the Borrower and its Subsidiaries must
receive at least their proportionate share of any Dividends paid by any
such Subsidiary;
(ii) The Borrower may redeem or purchase shares of the Common
Stock or options to purchase Common Stock, respectively, held by former
employees of the Borrower or any of its Subsidiaries following the
termination of their employment, provided that (w) the only
consideration paid by the Borrower in respect of such redemptions
and/or purchases shall be cash and Shareholder Subordinated Notes, (x)
the sum of (A) the aggregate amount paid by the Borrower in cash in
respect of all such redemptions and/or purchases plus (B) the aggregate
amount of all principal and interest payments made on Shareholder
Subordinated Notes, shall not exceed $200,000 in any Measurement Period
of the Borrower, provided that such amount shall be increased by an
amount (not to exceed $500,000 for purposes of this clause (ii)) equal
to the proceeds received by the Borrower after the Initial Borrowing
Date from the sale or issuance of Common Stock to management of the
Borrower or any of its Subsidiaries and (y) at the time of any cash
payment permitted to be made pursuant to this Section 8.06(ii),
including any cash payment under a Shareholder Subordinated Note, no
Default or Event of Default shall then exist or result therefrom;
8.07 Transactions with Affiliates. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into any transaction or series
of transactions with any Affiliate other than in the ordinary course of business
and on terms and conditions substantially as favorable to the Borrower or such
Subsidiary as would be obtainable by the Borrower or such Subsidiary at the time
in a comparable arm's-length transaction with a Person other than an Affiliate;
provided, that the following shall in any event be permitted: (i) the
Transaction; (ii) the payment on the Initial Borrowing Date of the reasonable
out-of-pocket expenses incurred by Xxxx Capital, Sun Capital and/or their
respective Affiliates in providing services to the Borrower in connection with
the Transaction; (iii) so long as no Default or an Event of Default then exists,
the payment, on a quarterly basis, of management fees (each, a "Management Fee")
to Xxxx Capital, the Bain Affiliates and/or Sun
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Capital and the Sun Affiliates in an aggregate amount (for all such Persons
taken together) not to exceed $125,000 in any fiscal quarter of the Borrower
unless such amount was not paid in any prior fiscal quarter in which case such
amount can be paid, together with accrued interest thereon in a subsequent
fiscal quarter so long as no Default or Event of Default exists or would result
therefrom; provided that (x) on any date on which any such Management Fee is
paid, the Adjusted Leverage Ratio on such date shall be equal to or less than
4:1 and (y) no such management fees shall be paid prior to the fiscal quarter
beginning April 1, 1998 (although prior to that time such fees may accrue,
together with interest thereon, and such accrued fees may be paid after March
31, 1998 if the foregoing conditions are satisfied at the time of payment); (iv)
the reimbursement of Xxxx Capital, the Bain Affiliates and/or Sun Capital and
the Sun Affiliates for their reasonable out-of-pocket expenses incurred by them
in connection with performing management services to the Borrower and its
Subsidiaries under the Consulting Agreement; and (v) transactions permitted
under Section 8.05.
8.08 Capital Expenditures. (a) The Borrower will not, and will
not permit any of its Subsidiaries to, make any Capital Expenditures, except
that (x) during the period (taken as one accounting period) commencing on the
Initial Borrowing Date and ending on March 31, 1998, the Borrower and its
Subsidiaries may make Capital Expenditures so long as the amount thereof does
not exceed $1,900,000 during such period, and (y) subject to clause (b) below,
during any Measurement Period thereafter set forth below, the Borrower and its
Subsidiaries may make Capital Expenditures so long as the aggregate amount of
such Capital Expenditures does not exceed the amount set forth opposite such
Measurement Period below:
Measurement Period Ending Amount
------------------------- ------
March 31, 1999 $2,200,000
March 31, 2000 $2,200,000
March 31, 2001 $2,200,000
March 31, 2002 $2,200,000
March 31, 2003 $2,200,000
March 31, 2004 $2,200,000
Term Loan Maturity Date $2,200,000
(b) Notwithstanding the foregoing, in the event that the
amount of Capital Expenditures permitted to be made by the Borrower and its
Subsidiaries pursuant to clause (a) above in any Measurement Period (before
giving effect to any increase in such permitted expenditure amount pursuant to
this clause (b)) is greater than the amount of such Capital Expenditures made by
the Borrower and its Subsidiaries during such Measurement Period, such excess
(the "Rollover Amount") may be carried forward and utilized to make Capital
Expenditures in succeeding Measurement Periods, provided that in no event shall
the aggregate amount of Capital Expenditures made by the Borrower and its
Subsidiaries during any Measurement Period pursuant to Section 8.08(a) exceed
125% of the amount set forth in such Section 8.08(a).
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(c) Notwithstanding the foregoing, the Borrower and its
Subsidiaries may make Capital Expenditures (which Capital Expenditures will not
be included in any determination under the foregoing clause (a)) with the
insurance proceeds received by the Borrower or any of its Subsidiaries from any
Recovery Event so long as such Capital Expenditures are to replace or restore
any properties or assets in respect of which such proceeds were paid within 360
days following the date of the receipt of such insurance proceeds to the extent
such insurance proceeds are not required to be applied to repay Term Loans
pursuant to Section 4.02(A)(g) and are not used by the Borrower to effect
Permitted Acquisitions.
(d) Notwithstanding the foregoing, the Borrower and its
Subsidiaries may make Capital Expenditures (which Capital Expenditures will not
be included in any determination under the foregoing clause (a)) with the Net
Proceeds of Asset Sales, to the extent such Net Proceeds are not required to be
applied to repay Term Loans pursuant to Section 4.02(A)(c).
(e) Notwithstanding the foregoing, the Borrower may make
Capital Expenditures (which Capital Expenditures will not be included in any
determination under the foregoing clause (a)) constituting Permitted
Acquisitions.
(f) Notwithstanding the foregoing, the Borrower and its
Subsidiaries may make Capital Expenditures at any time in an aggregate amount
equal to the Excess Proceeds Amount at such time (which Capital Expenditures
will not be included in any determination under the foregoing clause (a)).
8.09 Minimum Consolidated EBITDA. The Borrower will not permit
Consolidated EBITDA for the fiscal quarter of the Borrower ending December 31,
1997 (taken as one accounting period), to be less than $1,700,000, (x) for the
two fiscal quarters of the Borrower ending March 31, 1998 (taken as one
accounting period), to be less than $3,400,000, (y) for the three fiscal
quarters of the Borrower ending June 30, 1998 (taken as one accounting period),
to be less than $4,800,000, and (z) thereafter, for any period of four fiscal
quarters (taken as one accounting period) ending on a date set forth below to be
less than the amount set forth opposite such date:
Minimum Consolidated
Date EBITDA
---- -----------------
September 30, 1998 $ 6,900,000
December 31, 1998 $ 7,300,000
March 31, 1999 $ 6,900,000
June 30, 1999 $ 7,200,000
September 30, 1999 $ 7,700,000
December 31, 1999 $ 8,200,000
March 31, 2000 $ 8,500,000
June 30, 2000 $ 8,800,000
September 30, 2000 $ 9,200,000
December 31, 2000 $ 9,600,000
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Minimum Consolidated
Date EBITDA
---- -----------------
March 31, 2001 $ 9,900,000
June 30, 2001 $10,300,000
September 30, 2001 $10,700,000
December 31, 2001 $11,200,000
March 31, 2002 $11,600,000
June 30, 2002 $11,900,000
September 30, 2002 $12,500,000
December 31, 2002 $13,100,000
March 31, 2003 $13,500,000
June 30, 2003 $13,900,000
September 30, 2003 $14,600,000
December 31, 2003 $15,300,000
March 31, 2004 $15,800,000
June 30, 2004 $16,300,000
September 30, 2004 $17,000,000
8.10 Interest Coverage Ratio. The Borrower will not permit the
Interest Coverage Ratio for any Test Period ending on a date set forth below to
be less than the amount set forth opposite such date:
Date Interest Coverage Ratio
---- -----------------------
December 31, 1997 2.1:1.0
March 31, 1998 2.1:1.0
June 30, 1998 2.0:1.0
September 30, 1998 2.1:1.0
December 31, 1998 2.2:1.0
March 31, 1999 2.1:1.0
June 30, 1999 2.1:1.0
September 30, 1999 2.3:1.0
December 31, 1999 2.4:1.0
March 31, 2000 2.5:1.0
June 30, 2000 2.6:1.0
September 30, 2000 2.7:1.0
December 31, 2000 2.8:1.0
March 31, 2001 2.9:1.0
June 30, 2001 3.0:1.0
September 30, 2001 3.1:1.0
December 31, 2001 3.2:1.0
March 31, 2002 3.3:1.0
June 30, 2002 3.4:1.0
September 30, 2002 3.6:1.0
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Date Interest Coverage Ratio
---- -----------------------
December 31, 2002 3.8:1.0
March 31, 2003 3.9:1.0
June 30, 2003 4.0:1.0
September 30, 2003 4.2:1.0
December 31, 2003 4.4:1.0
March 31, 2004 4.6:1.0
June 30, 2004 4.8:1.0
September 30, 2004 5.0:1.0
8.11 Leverage Ratio. The Borrower will not permit the Leverage
Ratio at any time during a fiscal quarter set forth below to be more than the
ratio set forth opposite such fiscal quarter:
Fiscal Quarter Ending Ratio
--------------------- ------
March 31, 1998 5.7:1.0
June 30, 1998 5.6:1.0
September 30, 1998 5.9:1.0
December 31, 1998 5.5:1.0
March 31, 1999 5.2:1.0
June 30, 1999 5.5:1.0
September 30, 1999 5.2:1.0
December 31, 1999 4.9:1.0
March 31, 2000 4.6:1.0
June 30, 2000 4.4:1.0
September 30, 2000 4.3:1.0
December 31, 2000 4.1:1.0
March 31, 2001 3.9:1.0
June 30, 2001 3.9:1.0
September 30, 2001 3.7:1.0
December 31, 2001 3.6:1.0
March 31, 2002 3.4:1.0
June 30, 2002 3.3:1.0
September 30, 2002 3.2:1.0
December 31, 2002 3.1:1.0
March 31, 2003 3.0:1.0
June 30, 2003 2.9:1.0
September 30, 2003 2.8:1.0
December 31, 2003 2.6:1.0
March 31, 2004 2.5:1.0
June 30, 2004 2.5:1.0
Term Loan Maturity Date 2.5:1.0
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8.12 Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain
Other Agreements; etc. The Borrower will not, and will not permit any of its
Subsidiaries to:
(i) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption or acquisition for
value of (including, without limitation, by way of depositing with the
trustee with respect thereto or any other Person money or securities
before due for the purpose of paying when due) any Existing
Indebtedness or any Subordinated Debt.
(ii) make (or give any notice in respect of) any principal or
interest payment on, or any redemption or acquisition for value of, any
Shareholder Subordinated Note, except to the extent permitted by
Section 8.06(ii);
(iii) amend or modify, or permit the amendment or modification
of, any provision of any Existing Indebtedness, any Existing
Indebtedness Agreement, any Subordinated Debt Document, or any
Shareholder Subordinated Note;
(iv) amend, modify or change in any way adverse to the
interests of the Banks, any Management Agreement (including, without
limitation, the Consulting Agreement), its Certificate of Incorporation
(including, without limitation, by filing or modification of any
certificate of designation or By-Laws, or any agreement entered into by
it, with respect to its capital stock (including any Shareholders'
Agreement (including, without limitation, the Stockholders Agreement)),
or enter into any new agreement with respect to its capital stock which
in any way could be adverse to the interests of the Banks or enter into
any Tax Allocation Agreement;
(v) issue any class of capital stock other than issuances of
the Common Stock where, after giving effect to such issuance, no Event
of Default will exist under Section 9.10 and to the extent the proceeds
thereof are applied in accordance with, and to the extent required by,
Sections 4.02(A)(d).
8.13 Limitation on Certain Restrictions on Subsidiaries. The
Borrower will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Borrower or any Subsidiary
of the Borrower, or pay any Indebtedness owed to the Borrower or a Subsidiary of
the Borrower other then a requirement pursuant to the Subordinated Loan
Agreement providing that all dividends or other distributions in respect of the
capital stock of any Subsidiary of the Borrower be paid on a pro rata basis to
all holders of such capital stock, (b) make loans or advances to the Borrower or
any of the Borrower's Subsidiaries or (c) transfer any of its properties or
assets to the Borrower or any of the Borrower's Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (i) applicable law,
(ii) this
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Agreement and the other Credit Documents, (iii) customary provisions restricting
subletting or assignment of any lease governing a leasehold interest of the
Borrower or a Subsidiary of the Borrower, (iv) customary provisions restricting
assignment of any licensing agreement entered into by the Borrower or a
Subsidiary of the Borrower in the ordinary course of business, (v) customary
provisions restricting the transfer of assets subject to Liens permitted under
Sections 8.03(k) and (m) and (vi) the Subordinated Debt Documents.
8.14 Limitation on the Creation of Subsidiaries.
Notwithstanding anything to the contrary contained in this Agreement, the
Borrower will not, and will not permit any of its Subsidiaries to, establish,
create or acquire after the Initial Borrowing Date any Subsidiary; provided
that, the Borrower and its Wholly-Owned Subsidiaries shall be permitted to
establish or create (x) Subsidiaries as a result of investments made pursuant to
Section 8.05(u); (y) Subsidiaries in connection with, or pursuant to, a
Permitted Acquisition as set forth in Section 8.02(r), and (z) other
Wholly-Owned Subsidiaries, in each case, so long as (i) at least 30 days' prior
written notice thereof is given to the Agent, (ii) the capital stock of such new
Subsidiary is pledged pursuant to, and to the extent required by, the Pledge
Agreement and the certificates representing such stock, together with stock
powers duly executed in blank, are delivered to the Collateral Agent, (iii) such
new Subsidiary (other than a Foreign Subsidiary except to the extent otherwise
required pursuant to Section 7.13) executes a counterpart of the Subsidiary
Guaranty, the Pledge Agreement and the Security Agreement, and (iv) to the
extent requested by the Agent or the Required Banks, takes all actions required
pursuant to Section 7.11. In addition, each new Subsidiary shall execute and
deliver, or cause to be executed and delivered, all other relevant documentation
of the type described in Section 5 as such new Subsidiary would have had to
deliver if such new Subsidiary were a Subsidiary of the Borrower on the Initial
Borrowing Date.
SECTION 9. Events of Default. Upon the occurrence of any of
the following specified events (each an "Event of Default"):
9.01 Payments. The Borrower shall (i) default in the payment
when due of any principal of the Loans or (ii)default, and such default shall
continue for three or more days, in the payment when due of any Unpaid Drawing,
any interest on the Loans or any Fees or any other amounts owing hereunder or
under any other Credit Document;
9.02 Representations, etc. Any representation, warranty or
statement made by the Borrower or any other Credit Party herein or in any other
Credit Document or in any statement or certificate delivered pursuant hereto or
thereto shall prove to be untrue in any material respect on the date as of which
made or deemed made; or
9.03 Covenants. Any Credit Party shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained in
Sections 7.10, 7.11 or 8, or (b) default in the due performance or observance by
it of any term, covenant or agreement (other than those referred to in Section
9.01, 9.02 or clause (a) of this Section 9.03) contained in this Agreement
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and such default shall continue unremedied for a period of at least 30 days
after notice to the defaulting party by the Agent or the Required Banks; or
9.04 Default Under Other Agreements. (a)The Borrower or any of
its Subsidiaries shall (i) default in any payment with respect to any
Indebtedness (other than the Obligations) beyond the period of grace, if any,
provided in the instrument or agreement under which Indebtedness was created or
(ii) default in the observance or performance of any agreement or condition
relating to any such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause any such Indebtedness to
become due prior to its stated maturity; or (b) any Indebtedness (other than the
Obligations) of the Borrower or any of its Subsidiaries shall be declared to be
due and payable, or shall be required to be prepaid other than by a regularly
scheduled required prepayment or as a mandatory prepayment (unless such required
prepayment or mandatory prepayment results from a default thereunder or an event
of the type that constitutes an Event of Default), prior to the stated maturity
thereof; provided, that it shall not constitute an Event of Default pursuant to
clause (a) or (b) of this Section 9.04 unless the principal amount of any one
issue of such Indebtedness, or the aggregate amount of all such Indebtedness
referred to in clauses (a) and (b) above, exceeds $1,000,000 at any one time; or
9.05 Bankruptcy, etc. The Borrower or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against the Borrower or any of its Subsidiaries and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
the Borrower or any of its Subsidiaries; or the Borrower or any of its
Subsidiaries commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to the Borrower or any of its Subsidiaries; or there is
commenced against the Borrower or any of its Subsidiaries any such proceeding
which remains undismissed for a period of 60 days; or the Borrower or any of its
Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief or
other order approving any such case or proceeding is entered; or the Borrower or
any of its Subsidiaries suffers any appointment of any custodian or the like for
it or any substantial part of its property to continue undischarged or unstayed
for a period of 60 days; or the Borrower or any of its Subsidiaries makes a
general assignment for the benefit of creditors; or any corporate action is
taken by the Borrower or any of its Subsidiaries for the purpose of effecting
any of the foregoing; or
9.06 ERISA. (a) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof under Section 412 of
the Code or Section 302 of ERISA or a waiver of such standard or extension of
any amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred,
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a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) or a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and any event described in subsection .62, .63, .64, .65, .66,
.67 and .68 of PBGC Regulation Section 4043 shall be reasonably expected to
occur with respect to such Plan within the following 30 days, any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be terminated or the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made to a Plan or a Foreign Pension
Plan has not been timely made, the Borrower or any Subsidiary of the Borrower or
any ERISA Affiliate has incurred or is likely to incur a liability to or on
account of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the
Code or on account of a group health plan (as defined in Section 607(1) of ERISA
or Section 4980B(g)(2) of the Code) under Section 4980B of the Code, or the
Borrower or any Subsidiary of the Borrower has incurred or is likely to incur
liabilities pursuant to one or more employee welfare benefit plans (as defined
in Section 3(1) of ERISA) that provide benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or Plans or
Foreign Pension Plans; (b) there shall result from any such event or events te
imposition of a lien, the granting of a security interest, or a liability or a
material risk of incurring a liability; and (c) which lien, security interest or
liability, individually, and/or in the aggregate, has had or is reasonably
likely to have, a Material Adverse Effect; or
9.07 Security Documents. (a)Except in each case to the extent
resulting from the failure of the Collateral Agent to retain possession of the
applicable Pledged Securities, any Security Document shall cease to be in full
force and effect, or shall cease to give the Collateral Agent the Liens, rights,
powers and privileges purported to be created thereby in favor of the Collateral
Agent, or (b)any Credit Party shall default in the due performance or observance
of any term, covenant or agreement on its part to be performed or observed
pursuant to any such Security Document and such default shall continue beyond
any cure or grace period specifically applicable thereto pursuant to the terms
of such Security Document, provided that, it shall not constitute an Event of
Default under this Section 9.07 to the extent that all such events and defaults
shall relate only to Security Agreement Collateral having an aggregate value not
exceeding $100,000; or
9.08 Subsidiary Guaranties. At any time after execution
thereof, any Subsidiary Guaranty entered into pursuant to this Agreement or any
provision thereof shall cease to be in full force and effect, or any Subsidiary
Guarantor or any Person acting by or on behalf of such Subsidiary Guarantor
shall deny or disaffirm such Subsidiary Guarantor's obligations under any
Subsidiary Guaranty or any Subsidiary Guarantor shall default in the due
performance or observance of any material term, covenant or agreement on its
part to be performed or observed pursuant to any Subsidiary Guaranty;
9.09 Judgments. One or more judgments or decrees shall be
entered against the Borrower or any of its Subsidiaries involving a liability
(not paid or not fully covered by insurance) in excess of $1,000,000 for all
such judgments and decrees and all such judgments or decrees shall
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not have been vacated, discharged or stayed or bonded pending appeal within 60
days from the entry thereof; or
9.10 Ownership. A Change of Control Event shall have occurred;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agent shall, upon the written request of the
Required Banks, by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of the Agent or any Bank to
enforce its claims against any Subsidiary Guarantor or the Borrower, except as
otherwise specifically provided for in this Agreement (provided, that if an
Event of Default specified in Section 9.05 shall occur with respect to the
Borrower, the result which would occur upon the giving of written notice by the
Agent as specified in clauses (i) and (ii) below shall occur automatically
without the giving of any such notice): (i) declare the Total Commitment (or the
unutilized portion thereof) terminated, whereupon the Commitment of each Bank
(or the unutilized portion thereof) shall forthwith terminate immediately and
any Commitment Fees shall forthwith become due and payable without any other
notice of any kind; (ii) declare the principal of and any accrued interest in
respect of all Loans and all Obligations owing hereunder (including Unpaid
Drawings) to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower; (iii) enforce, as Collateral Agent (or direct
the Collateral Agent to enforce), any or all of the Liens and security interests
created pursuant to the Security Documents; (iv) terminate any Letter of Credit
which may be terminated in accordance with its terms; and (v) direct the
Borrower to pay (and the Borrower hereby agrees upon receipt of such notice, or
upon the occurrence of any Event of Default specified in Section 9.05, to pay)
to the Collateral Agent at the Payment Office such additional amounts of cash,
to be held as security for the Borrower's reimbursement obligations in respect
of Letters of Credit then outstanding, equal to the aggregate Stated Amount of
all Letters of Credit then outstanding.
SECTION 10. Definitions. As used herein, the following terms
shall have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Acquired Entity or Business" shall have the meaning provided
in the definition of Consolidated Net Income.
"Additional Security Documents" shall have the meaning
provided in Section 7.11.
"Adjusted Leverage Ratio" shall mean, at each time when a
determination is made as to whether a Management Fee may be paid pursuant to
Section 8.07(iii), the ratio of (x) Consolidated Debt at such time less the
aggregate amount of Subordinated Debt at such time to (y) Consolidated EBITDA
for the four consecutive fiscal quarters of the Borrower then last ended.
"Affected Eurodollar Loans" shall have the meaning provided in
Section 4.02(B)(b).
"Affiliate" shall mean, with respect to any Person, any other
Person directly or
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indirectly controlling (including but not limited to all directors and officers
of such Person), controlled by, or under direct or indirect common control with
such Person. A Person shall be deemed to control a corporation if such Person
possesses, directly or indirectly, the power (i) to vote 10% or more of the
securities having ordinary voting power for the election of directors of such
corporation or (ii) to direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Agent" shall have the meaning provided in the first paragraph
of this Agreement and shall include any successor to the Agent appointed
pursuant to Section 11.10.
"Aggregate Unutilized Commitment" with respect to any Bank at
any time shall mean the sum of (i) such Bank's Term Loan Commitment at such
time, if any, and (ii) such Bank's Revolving Loan Commitment at such time less
the sum of (x) the aggregate outstanding principal amount of all Revolving Loans
made by such Bank and (y) such Bank's RL Percentage of the Letter of Credit
Outstandings at such time.
"Agreement" shall mean this Credit Agreement, as the same may
be from time to time modified, amended and/or supplemented.
"Applicable Base Rate Margin" shall mean (i) in the case of
Term Loans, 2.00% and (ii) in the case of Revolving Loans, 1.50%.
"Applicable Eurodollar Margin" shall mean (i) in the case of
Term Loans, 3% and (ii) in the case of Revolving Loans, 2.50%.
"Asset Sale" shall mean any sale, transfer or other
disposition by the Borrower or any of its Subsidiaries to any Person other than
any Wholly-Owned Subsidiary of the Borrower of any asset (including, without
limitation, any capital stock or other securities of another Person) of the
Borrower or such Subsidiary other than (i) sales, transfers or other
dispositions of inventory made in the ordinary course of business and (ii) sales
of assets pursuant to Section 8.02(f), (g), (h) and (i).
"Assignment and Assumption Agreement" shall mean the
Assignment and Assumption Agreement substantially in the form of Exhibit J
(appropriately completed).
"Authorized Officer" shall mean any senior officer of the
Borrower designated as such in writing to the Agent the Borrower, in each case
to the extent reasonably acceptable to the Agent.
"Bain Affiliates" shall mean any Affiliate (including any
employee) of Xxxx Capital, provided that for purposes of the definition of
"Change of Control Event", the term Bain Affiliate shall not include (x) any
portfolio company of either Xxxx Capital or any Affiliate of Xxxx Capital or (y)
any officer or director of the Borrower or any of its Subsidiaries that is not
also a partner, stockholder, employee or officer of Xxxx Capital.
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"Xxxx Xxxxxxx" shall mean Xxxx Capital, Inc., a Delaware
corporation.
"Bank" shall have the meaning provided in the first paragraph
of this Agreement.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing (including
any Mandatory Borrowing) or to fund its portion of any unreimbursed payment
under Section 2.04(b) or (ii) a Bank having notified the Agent and/or the
Borrower that it does not intend to comply with the obligations under Section
1.01(A), 1.01(C) or 2.04(b), in the case of either clause (i) or (ii) above as a
result of the appointment of a receiver or conservator with respect to such Bank
at the direction or request of any regulatory agency or authority.
"Bankruptcy Code" shall have the meaning provided in Section
9.05.
"Base Rate" at any time shall mean the higher of (x) the Prime
Lending Rate and (y) 1/2 of 1% in excess of the overnight Federal Funds rate.
"Base Rate Loan" shall mean each Loan bearing interest at the
rates provided in Section 1.08(a).
"Borrower" shall have the meaning provided in the first
paragraph hereof.
"Borrowing" shall mean the incurrence of one Type of Loan
pursuant to a single Facility by the Borrower from all of the Banks having
Commitments with respect to such Facility on a pro rata basis on a given date
(or resulting from conversions on a given date), having in the case of
Eurodollar Loans the same Interest Period; provided, that Base Rate Loans
incurred pursuant to Section 1.10(b) shall be considered part of any related
Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company, in its individual
capacity, and any successor corporation thereto by merger, consolidation or
otherwise.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which shall be in the City of New York a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close and
(ii) with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) and which is also a day for trading by and
between banks in U.S. dollar deposits in the interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person,
all expenditures by such Person which should be capitalized as property, plant
and equipment or leasehold improvements in accordance with GAAP, including,
without duplication, all such expenditures with respect to fixed or capital
assets (including, without limitation, expenditures for maintenance and repairs
which should
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be capitalized and/or depreciated or amortized in accordance with GAAP) and all
amounts related to "Deferred Charges" as set forth in the Borrower's audited
financial statements and the amount of all Capitalized Lease Obligations
incurred by such Person, provided that, in the event that any amounts which
would have been capitalized as "Deferred Charges" as accounted for by the
Borrower as of the Effective Date are retroactively or prospectively expensed
due to an accounting change or mandated by a change in GAAP, such expensed
amounts shall nevertheless constitute Capital Expenditures for all purposes of
this Agreement.
"Capital Lease," as applied to any Person, shall mean any
lease of any property (whether real, personal or mixed) by that Person as lessee
which, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of that Person.
"Capitalized Lease Obligations" shall mean all obligations
under Capital Leases of the Borrower or any of its Subsidiaries in each case
taken at the amount thereof accounted for as liabilities in accordance with
GAAP.
"Cash Equivalents" shall mean (i) securities issued or
directly and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided, that the full faith and credit of
the United States of America is pledged in support thereof) having maturities of
not more than six months from the date of acquisition, (ii) U.S. dollar
denominated time deposits, certificates of deposit and bankers acceptances of
(x) any Bank or (y) any bank whose short-term commercial paper rating from S&P
is at least A-1 or the equivalent thereof or from Xxxxx'x is at least P-1 or the
equivalent thereof (any such bank or Bank, an "Approved Bank"), in each case
with maturities of not more than six months from the date of acquisition, (iii)
commercial paper issued by any Approved Bank or by the parent company of any
Approved Bank and commercial paper issued by, or guaranteed by, any industrial
or financial company with a short-term commercial paper rating of at least A-1
or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody's, or guaranteed by any industrial company with a long term unsecured debt
rating of at least A or A2, or the equivalent of each thereof, from S&P or
Moody's, as the case may be, and in each case maturing within six months after
the date of acquisition, (iv) marketable direct obligations issued by any state
of the United States of America or any political subdivision of any such state
or any public instrumentality thereof maturing within six months from the date
of acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or Moody's and (v) investments in
money market funds substantially all the assets of which are comprised of
securities of the types described in clauses (i) through (iv) above.
"Change of Control Event" shall mean (a) prior to the date of
a Qualified IPO, Xxxx Capital and/or the Bain Affiliates and Sun Capital and/or
Sun Affiliates shall cease to have the right, directly or indirectly to elect a
majority of the Board of Directors through stock ownership, voting agreement or
otherwise or (b) on or after the date of a Qualified IPO, any other Person or
"group" (within the meaning of Rules 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, as in effect on the Initial Borrowing Date) shall own at
least 30% of the Voting Stock and Xxxx Capital, the Bain
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Affiliates, Sun Capital and/or the Sun Affiliates shall, directly or indirectly
control less Voting Stock than such Person or "group".
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to the Code are to the Code, as in effect at the
date of this Agreement and any subsequent provisions of the Code amendatory
thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean all of the Collateral as defined in
each of the Security Documents.
"Collateral Agent" shall mean the Agent acting as collateral
agent for the Secured Creditors.
"Collective Bargaining Agreements" shall have the meaning
provided in Section 5.17.
"Commitment" shall mean, with respect to each Bank, such
Bank's Term Loan Commitment and Revolving Loan Commitment.
"Commitment Fee" shall have the meaning provided in Section
3.01(a).
"Common Stock" shall have the meaning provided in Section
6.15.
"Consolidated Current Assets" shall mean, at any time, the
current assets of the Borrower and its Subsidiaries at such time determined on a
consolidated basis.
"Consolidated Current Liabilities" shall mean, at any time,
the current liabilities of the Borrower and its Subsidiaries determined on a
consolidated basis, but excluding deferred income taxes and the current portion
of and accrued but unpaid interest on any Indebtedness under this Agreement and
any other long-term Indebtedness which would otherwise be included therein.
"Consolidated Debt" shall mean, at any time, all Indebtedness
of Borrower and its Subsidiaries determined on a consolidated basis, provided
that for purposes of this definition, the amount of Indebtedness in respect of
Interest Rate Protection Agreements shall be at any time the unrealized net loss
portion, if any, of the Borrower and/or its Subsidiaries thereunder on a
marked-to- market basis determined no more than one month prior to such time.
"Consolidated EBIT" shall mean, for any period, Consolidated
Net Income, before total interest expense (inclusive of amortization of deferred
financing fees, premiums on Interest Rate Protection Agreements and any original
issue discount) and interest income of the Borrower and its Subsidiaries
determined on a consolidated basis, and provisions for taxes based on income and
foreign withholding taxes, and determined (i) without giving effect to any
extraordinary gains or losses but with giving effect to gains or losses from
sales of assets sold in the ordinary course of business, (ii)
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without giving effect to any gains, income, losses or charges otherwise included
in Consolidated Net Income for such period and related to a Joint Venture
Investment made by the Borrower or any of its Subsidiaries, (iii) without giving
effect to any non-cash compensation expense with respect to management
restricted stock and stock option arrangements, and (iv) to the extent any
amounts which would have been capitalized as "Deferred Charges" as accounted for
by the Borrower as of the Effective Date are retroactively or prospectively
expensed due to any accounting change or mandated by a change in GAAP, without
giving effect to deduction for such expenses.
"Consolidated EBITDA" shall mean, for any period, Consolidated
EBIT, adjusted by adding thereto the amount of all depreciation expense and
amortization expense that were deducted in determining Consolidated EBIT for
such period; provided that for purposes of the definition of Leverage Ratio
only, (x) for the Test Period ending December 31, 1997, Consolidated EBITDA
shall be the actual Consolidation EBITDA for such Test Period multiplied by 4,
(y) for the Test Period ending March 31, 1998, Consolidated EBITDA shall be the
actual Consolidated EBITDA for such Test Period multiplied by 2, and (z) for the
Test Period ending June 30, 1998, Consolidated EBITDA shall be the actual
Consolidated EBITDA for such Test Period multiplied by 4/3.
"Consolidated Interest Expense" shall mean, for any period,
total interest expense (including that attributable to Capital Leases in
accordance with GAAP) of the Borrower and its Subsidiaries determined on a
consolidated basis with respect to all outstanding Indebtedness of the Borrower
and its Subsidiaries, including, without limitation, all commissions, discounts
and other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs or benefits under Interest Rate Protection
Agreements, but excluding, however, amortization of deferred financing costs,
original issue discount attributable to the Subordinated Debt and any interest
expense on deferred compensation arrangements to the extent included in total
interest expense.
"Consolidated Net Income" shall mean, for any period, the net
income (or loss), after provision for taxes, of the Borrower and its
Subsidiaries on a consolidated basis for such period taken as a single
accounting period but excluding any unrealized losses and gains for such period
resulting from xxxx-to-market of Other Hedging Agreements; provided, however,
that (A) there shall be excluded (without duplication) (i) income (or loss) of
any Person (other than a consolidated Subsidiary of such Person) in which any
other Person (other than such Person or any of its consolidated Subsidiaries)
has a joint interest, except to the extent of the amount of dividends or other
distributions actually paid to such Person or (subject to subclause (iii) below)
any of its consolidated Subsidiaries by such other Person during such period,
(ii) the income (or loss) of any Person during such period accrued prior to the
date it becomes a consolidated Subsidiary of such Person or is merged into or
consolidated with such Person or any of its consolidated Subsidiaries, (iii) the
income of any consolidated Subsidiary of the Borrower to the extent attributable
to minority interests held therein by Persons other than the Borrower and its
Wholly-Owned Subsidiaries, and (iv) the income of any consolidated Subsidiary of
the Borrower during such period to the extent that the declaration or payment of
dividends or similar distributions by that consolidated Subsidiary of such
income is not at the time permitted by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that
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Subsidiary or the Borrower or any of its other Subsidiaries, (B) for all
purposes other than the calculation of Adjusted Leverage Ratio, Management Fees
shall be deducted in determining Consolidated Net Income in any period only to
the extent that such Management Fees were actually paid in such period, (C)
there shall be included (to the extent not already included) in determining
Consolidated Net Income for any period the net income (or loss) of any Person,
business, property or asset acquired during such period pursuant to a Permitted
Acquisition and not subsequently sold or otherwise disposed of by the Borrower
or one of its Subsidiaries during such period (each Person, business, property
or asset acquired and not subsequently disposed of during such period, an
"Acquired Entity or Business") based on the actual net income (or loss) of such
Acquired Entity or Business for the entire period (including the portion thereof
occurring prior to such acquisition) and (D) for purposes of calculating
Consolidated Net Income for any period, Consolidated Net Income shall be
adjusted for factually supportable and identifiable pro forma cost savings for
such period that are directly attributable to the acquisition of an Acquired
Entity or Business (it being understood that in order for the Borrower to adjust
Consolidated Net Income pursuant to this clause (D), the Borrower shall deliver
to the Agent and the Banks a certificate of an Authorized Officer demonstrating
in reasonable detail such factually supportable and identifiable cost savings).
"Consulting Agreement" shall mean the Management Services
Agreement, dated as of the Initial Borrowing Date by and between the Borrower
and Sun Multimedia Advisors Inc., as amended, modified or supplemented from time
to time, in accordance with the terms hereof and thereof.
"Contingent Obligations" shall mean as to any Person any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (x) for the purchase or payment of any such primary obligation or
(y) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (d) otherwise to assure or hold
harmless the owner of such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection or standard contractual
indemnities entered into, in each case in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Continuing Directors" shall mean the directors of the
Borrower on the Initial Borrowing Date and each other director if such
director's nomination for the election to the Board of Directors of the Borrower
is recommended by a majority of the then Continuing Directors.
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"Credit Documents" shall mean this Agreement, the Notes, the
Subsidiary Guaranties and each Security Document.
"Credit Event" shall mean the making of a Loan (other than a
Revolving Loan made pursuant to a Mandatory Borrowing) or the issuance of a
Letter of Credit.
"Credit Party" shall mean the Borrower and each Subsidiary
Guarantor.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a
Bank Default is in effect.
"Dividends" shall have the meaning provided in Section 8.06.
"Documents" shall mean the Credit Documents, the Equity
Financing Documents, the Merger Documents, the Subordinated Financing Documents
and the Refinancing Documents.
"Domestic Subsidiary" shall mean each Subsidiary of the
Borrower which is not a Foreign Subsidiary.
"Effective Date" shall have the meaning provided in Section
12.10.
"Eligible Transferee" shall mean and include a commercial
bank, financial institution or other "accredited investor" (as defined in
Regulation D of the Securities Act).
"Employee Benefit Plans" shall have the meaning provided in
Section 5.17.
"Employment Agreements" shall have the meaning provided in
Section 5.17.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance or violation, investigations or proceedings relating
in any way to any violation (or alleged violation) by the Borrower or any of its
Subsidiaries under any Environmental Law (hereafter "Claims") or any permit
issued to the Borrower or any of its subsidiaries under any such law, including,
without limitation, (a) any and all Claims by governmental or regulatory
authorities for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law, and (b) any and
all Claims by any third party seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from Hazardous
Materials or arising from alleged injury or threat of injury to health, safety
or the environment.
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"Environmental Law" shall mean any federal, state or local
statute, law, rule, regulation, ordinance, code, policy or rule of common law
now or hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent, decree or judgment (for purposes of this definition
(collectively, "Laws")), relating to the environment or Hazardous Materials or
health and safety to the extent such health and safety issues arise under the
Occupational Safety and Health Act of 1970, as amended, or any such similar
Laws.
"Equinox" shall mean Equinox Investment Partners, L.L.C. a
Delaware limited liability company.
"Equity Financing" shall mean the issuance by Speaker, for an
aggregate cash amount of at least $4,450,000, of certificates representing 3,000
shares of its common stock, par value $0.01, to Xxxx Capital, Sun Capital,
Equinox and/or their respective Affiliates and certain other investors
reasonably acceptable to the Agent and the receipt of at least $350,000 in
respect of the issuance of shares of Common Stock to management of the Borrower
which receipt shall occur on the Initial Borrowing Date or within 90 days
thereafter.
"Equity Financing Documents" shall mean Stock Subscription
Agreement between Speaker and Sun Multimedia Partners, L.P. and each other
agreement, document and instrument entered into in connection with the Equity
Financing.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and the
rulings issued thereunder. Section references to ERISA are to ERISA as in effect
at the date of this Agreement and any subsequent provisions of ERISA amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which together with the Borrower or any Subsidiary of the
Borrower would be deemed to be a "single employer" (i) within the meaning of
Section 414(b), (c), (m) or (o) of the Code or (ii) as a result of the Borrower
or a Subsidiary of the Borrower being or having been a general partner of such
person.
"Eurodollar Loans" shall mean each Loan bearing interest at
the rates provided in Section 1.08(b).
"Eurodollar Rate" shall mean with respect to each Interest
Period for a Eurodollar Loan, (i) the arithmetic average (rounded to the nearest
1/100 of 1%) of the offered quotation to first-class banks in the interbank
Eurodollar market by the Agent for U.S. dollar deposits of amounts in same day
funds comparable to the outstanding principal amount of the Eurodollar Loan of
the Agent for which an interest rate is then being determined with maturities
comparable to the Interest Period to be applicable to such Eurodollar Loan,
determined as of 10:00 A.M. (New York time) on the date which is two Business
Days prior to the commencement of such Interest Period divided (and rounded
upward to the next whole multiple of 1/16 of 1%) by (ii) a percentage equal to
100% minus
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the then stated maximum rate of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D (or any successor category
of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section
9.
"Excess Cash Flow" shall mean, for any period (i) the sum of
(A) Consolidated Net Income for such period, plus (B) the amount of all non-cash
charges (including, without limitation or duplication, depreciation,
amortization and non-cash interest expense, but excluding those non-cash charges
that had the effect of decreasing or increasing Working Capital for such period)
included in determining Consolidated Net Income for such period plus (C) the
decrease, if any, in Working Capital from the first day to the last day of such
period, minus (ii) the sum (without duplication) of (A) any non-cash credits
(including from sales of assets) included in determining Consolidated Net Income
for such period, (B) gains from sales of assets (other than sales of inventory
in the ordinary course of business) included in determining Consolidated Net
Income for such period, (C) an amount equal to (1) all Capital Expenditures
(excluding Capital Expenditures made pursuant to Section 8.08(c), (d), (e) or
(f)) made during such period that are not financed by Indebtedness (including
Capitalized Lease Obligations but excluding Loans hereunder) plus (or minus, if
negative) (2) the Rollover Amount for such period to be carried forward to the
next period less the Rollover Amount (if any) for the preceding period carried
forward to the current period, (D) the amount expended in respect of Permitted
Acquisitions during such period, except to the extent constituting Capital
Expenditures or financed with Indebtedness, (E) the aggregate principal amount
of permanent principal payments of Indebtedness for borrowed money of the
Borrower and its Subsidiaries (other than (1) repayments in respect of the
Indebtedness to be Refinanced, (2) repayments of Indebtedness with proceeds of
the issuance of other Indebtedness or equity or with proceeds of assets sales,
Recovery Events or Pension Plan Refunds and (3) repayments of Loans or other
Obligations, provided that repayments of Loans shall be deducted in determining
Excess Cash Flow if such repayments were (x) required as a result of a Scheduled
Repayment under Section 4.02(A)(b) or (y) made as a voluntary prepayment with
internally generated funds (but in the case of a voluntary prepayment of
Revolving Loans or Swingline Loans, only to the extent accompanied by a
voluntary reduction to the Total Revolving Loan Commitment)) during such period,
(F) non-cash charges added back in a previous period pursuant to clause (i)(B)
above to the extent any such charge has become a cash item in the current
period, (G) the increase, if any, in Working Capital from the first day to the
last day of such period, (H) any cash disbursements made against non-current
liabilities to the extent included in determining Consolidated Net Income for
such period or, to the extent added back in determining Excess Cash Flow in such
prior period pursuant to clause (i)(B) above, any prior period and (I) to the
extent not already deducted in the determination of Consolidated Net Income or
Excess Cash Flow, the aggregate amount of cash payments in respect of Joint
Venture Investments made during such period, except to the extent financed with
Indebtedness.
"Excess Cash Flow Period" shall mean with respect to the
repayment required on each Excess Cash Payment Date, the immediately preceding
Measurement Period of the Borrower.
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"Excess Cash Payment Date" shall mean the date occurring 90
days after the last day of a Measurement Period of the Borrower (beginning with
its Measurement Period ending on March 31, 1998).
"Excess Proceeds Amount" shall initially be zero, which amount
shall be (A) increased on each Excess Cash Payment Date (commencing with the
Excess Cash Payment Date occurring 90 days after the Measurement Period ending
March 31, 1998) so long as any repayment required pursuant to Section 4.02(A)(f)
has been made, by an amount equal to 25% of Excess Cash Flow of the Borrower and
its Subsidiaries for the immediately preceding Excess Cash Flow Period, and (B)
reduced (i) on each Excess Cash Payment Date (commencing with the Excess Cash
Payment Date occurring 90 days after the Measurement Period ending March 31,
1998) where Excess Cash Flow for the immediately preceding Excess Cash Flow
Period is a negative number, by such amount, and (ii) at the time any Capital
Expenditure is made pursuant to Section 8.08(f), by the amount thereof (it being
understood that the Excess Proceeds Amount may be reduced to an amount below
zero after giving effect to the reductions enumerated in clause (B) above).
"Existing Credit Agreement" shall mean the Loan and Security
Agreement, dated as of June 27, 1996, between Old Labtec and Fleet Capital
Corporation, together with all other agreements, instruments and documents
executed or delivered pursuant thereto or in connection therewith (including,
without limitation, any promissory notes, guarantees and security documents), in
each case as amended to the Initial Borrowing Date.
"Existing Indebtedness" shall have the meaning provided in
Section 6.23.
"Existing Indebtedness Agreements" shall have the meaning
provided in Section 5.17.
"Existing Shareholders" shall mean each individual or entity
designated as such in Annex VI attached hereto.
"Existing Subordinated Notes" shall mean the subordinated
notes issued by Holdings pursuant to the Subordinate Loan and Warrant Purchase
Agreement, dated September 16, 1994, among Banc One Capital Partners
Corporation, Banc One Capital Partners II, Limited Partnership and Holdings.
"Facility" shall mean any of the credit facilities established
under this Agreement, i.e., the Term Loan Facility or the Revolving Loan
Facility.
"Facing Fee" shall have the meaning provided in Section
3.01(c).
"Fees" shall mean all amounts payable pursuant to, or referred
to in, Section 3.01.
"Foreign Cash Equivalents" shall mean certificates of deposit
or bankers acceptances of any bank organized under the laws of Hong Kong or any
country that is a member of the European
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Economic Community whose short-term commercial paper rating from S&P is at least
A-1 or the equivalent thereof or from Xxxxx'x is at least P-1 or the equivalent
thereof, in each case with maturities of not more than six months from the date
of acquisition.
"Foreign Pension Plan" shall mean any plan, fund (including,
without limitation, any superannuation fund) or other similar program
established or maintained outside the United States of America by the Borrower
or any one or more of its Subsidiaries primarily for the benefit of employees of
the Borrower or such Subsidiaries residing outside the United States of America,
which plan, fund or other similar program provides, or results in, retirement
income, a deferral of income in contemplation of retirement or payments to be
made upon termination of employment, and which plan is not subject to ERISA or
the Code.
"Foreign Subsidiary" shall mean each Subsidiary of the
Borrower that is incorporated under the laws of any jurisdiction other than the
United States of America, any State thereof, or any territory thereof.
"GAAP" shall mean generally accepted accounting principles in
the United States of America as in effect from time to time; it being understood
and agreed that determinations in accordance with GAAP for purposes of Section
8, including defined terms as used therein, are subject (to the extent provided
therein) to Section 12.07(a).
"Hazardous Materials" shall mean (a) any petrochemical or
petroleum products, radioactive materials, asbestos in any form that is or could
become friable, urea formaldehyde foam insulation, transformers or other
equipment that contain dielectric fluid containing levels of polychlorinated
biphenyls, and radon gas; and (b) any chemicals, materials or substances defined
as or included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "restricted hazardous materials," "extremely hazardous
wastes," "restrictive hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants" or "pollutants," or words of similar meaning and regulatory
effect.
"Holdings" shall mean LEI Holdings, Inc., a Delaware
corporation.
"Indebtedness" of any Person shall mean without duplication
(i) all indebtedness of such Person for borrowed money, (ii) the deferred
purchase price of assets or services payable to the sellers thereof or any of
such seller's assignees which in accordance with GAAP would be shown on the
liability side of the balance sheet of such Person but excluding deferred rent
as determined in accordance with GAAP, (iii) the face amount of all letters of
credit issued for the account of such Person and, without duplication, all
drafts drawn thereunder, (iv) all Indebtedness of a second Person secured by any
Lien on any property owned by such first Person, whether or not such
Indebtedness has been assumed, (v) all Capitalized Lease Obligations of such
Person, (vi) all obligations of such Person to pay a specified purchase price
for goods or services whether or not delivered or accepted, i.e., take-or-pay
and similar obligations, (vii) all obligations under Interest Rate Protection
Agreements and Other Hedging Agreements and (viii) all Contingent Obligations of
such Person,
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provided, that Indebtedness shall not include trade payables and accrued
expenses, in each case arising in the ordinary course of business.
"Indebtedness to be Refinanced" shall mean, collectively, the
indebtedness arising pursuant to (i) the Existing Credit Agreement, and (ii) the
Existing Subordinated Notes.
"Initial Borrowing Date" shall mean the date upon which the
Term Loans are initially incurred hereunder.
"Initial Merger" shall mean the merger of Old Labtec with and
into Holdings, with Holdings as the surviving corporation of such merger, in
accordance with the Initial Merger Documents.
"Initial Merger Documents" shall mean the Certificate of
Ownership and Merger, filed with the Delaware Secretary of State, the Articles
of Merger and Plan of Merger, filed with the Washington Secretary of State, and
each other agreement, document or instrument entered into, or filed, in
connection with the Initial Merger.
"Intercompany Loan" shall have the meaning provided in Section
8.05(g).
"Intercompany Notes" shall mean promissory notes, in the form
of Exhibit K, evidencing Intercompany Loans.
"Interest Coverage Ratio" shall mean, for any period, the
ratio of Consolidated EBITDA to Consolidated Interest Expense for such period.
"Interest Period," with respect to any Eurodollar Loan, shall
mean the interest period applicable thereto, as determined pursuant to Section
1.09.
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedging agreement or other similar agreement or
arrangement.
"Joint Venture Investments" shall mean any investment, capital
contribution, advance, loan, or guaranty, or any other investment by the
Borrower or any of its Subsidiaries in a joint venture related to any business
permitted by Section 8.01.
"L/C Participant" shall have the meaning provided in Section
2.04(a).
"L/C Supportable Indebtedness" shall mean (i) obligations of
the Borrower or its Subsidiaries incurred in the ordinary course of business
with respect to insurance obligations and workers' compensation, surety bonds
and other similar statutory obligations and (iii) such other obligations of the
Borrower or any of its Subsidiaries as are reasonably acceptable to the Agent
and
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the respective Letter of Credit Issuer and otherwise permitted to exist pursuant
to the terms of this Agreement.
"Leasehold" of any Person shall mean all of the right, title
and interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in
Section 3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the
sum of, without duplication, (i) the aggregate Stated Amount of all outstanding
Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings in
respect of all Letters of Credit.
"Letter of Credit Issuer" shall mean BTCo and any Bank which
at the request of the Borrower and with the consent of the Agent agrees, in such
Bank's sole discretion, to become a Letter of Credit Issuer for the purpose of
issuing Letters of Credit pursuant to Section 2.
"Letter of Credit Request" shall have the meaning provided in
Section 2.02(a).
"Leverage Ratio" shall mean, at any time, the ratio of
Consolidated Debt at such time to Consolidated EBITDA for the Test Period then
last ended.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any similar
recording or notice statute, and any lease having substantially the same effect
as the foregoing).
"Loan" shall mean each and every Loan made by any Bank
hereunder, including Term Loans, Revolving Loans or Swingline Loans.
"Management Agreements" shall have the meaning provided in
Section 5.17.
"Management Fee" shall have the meaning provided in Section
8.07(iii).
"Mandatory Borrowing" shall have the meaning provided in
Section 1.01(C).
"Margin Stock" shall have the meaning provided in Regulation
U.
"Material Adverse Effect" shall mean a material adverse effect
on the business, properties, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower, or the Borrower and its Subsidiaries
taken as a whole.
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"Material Contracts" shall have the meaning provided in
Section 5.17.
"Maturity Date" with respect to any Facility shall mean either
the Term Loan Maturity Date or the Revolving Loan Maturity Date, as the case may
be.
"Maximum Swingline Amount" shall mean $2,500,000.
"Measurement Period" shall mean the four consecutive fiscal
quarters of the Borrower ending on March 31 of each year (taken as one
accounting period).
"Merger Documents" shall mean and include each of the Initial
Merger Documents and each of the Speaker Merger Documents.
"Mergers" shall mean and include the Initial Merger and the
Speaker Merger.
"Minimum Borrowing Amount" shall mean (i) for Base Rate Loans
(other than Swingline Loans), $500,000; (ii) for Eurodollar Loans, $1,000,000
and (iii) for Swingline Loans, $250,000.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Mortgage" shall have the meaning provided in Section 5.16(a).
"Mortgage Policies" shall have the meaning provided in Section
5.16(b).
"Mortgaged Properties" shall mean and include (i) all Real
Properties owned or leased by the Borrower and its Domestic Subsidiaries to the
extent designated as such on Annex III and (ii) each Real Property subjected to
a mortgage in favor of the Collateral Agent for the benefit of the Secured
Creditors pursuant to Section 7.11.
"Net Proceeds" shall mean, with respect to any Asset Sale, the
Proceeds resulting therefrom net of (a) cash expenses of sale (including
brokerage fees, if any, transfer taxes and payment of principal, premium and
interest of Indebtedness other than the Loans required to be repaid as a result
of such Asset Sale) and (b)incremental income taxes paid or payable as a result
thereof.
"Non-Compete Agreements" shall have the meaning provided in
Section 5.17.
"Non-Defaulting Bank" shall mean each Bank other than a
Defaulting Bank.
"Note" shall mean each Term Note, each Revolving Note and the
Swingline Note.
"Notice of Borrowing" shall have the meaning provided in
Section 1.03.
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"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice Office" shall mean the office of the Agent located at
Xxx Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other office as the
Agent may designate to the Borrower and the Banks from time to time.
"Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time existing,
owing to the Agent, the Collateral Agent or any Bank pursuant to the terms of
this Agreement or any other Credit Document.
"Old Labtec" shall mean Labtec Enterprises, Inc. a Washington
corporation.
"Other Hedging Agreements" shall mean any foreign exchange
contracts, currency swap agreements or other similar agreements or arrangements
designed to protect against fluctuations in currency values.
"Payment Office" shall mean the office of the Agent located at
Xxx Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other office as the
Agent may designate to the Borrower and the Banks from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Pension Plan Refund" shall mean any cash payments (net of
reasonable costs associated therewith, including income, excise and other taxes
payable thereon) received by the Borrower and/or of its Subsidiaries from any
return of any surplus assets from any single Plan or Foreign Pension Plan.
"Permitted Acquisition" shall have the meaning provided in
Section 8.02(r).
"Permitted Encumbrances" shall mean (i) those liens,
encumbrances and other matters affecting title to any Mortgaged Property listed
in the Mortgage Policies in respect thereof and found, on the date of delivery
of such Mortgage Policies to the Agent in accordance with the terms hereof,
reasonably acceptable by the Agent, (ii) as to any particular Mortgaged Property
at any time, such easements, encroachments, covenants, rights of way, minor
defects, irregularities or encumbrances on title which do not, in the reasonable
opinion of the Agent, materially impair such Mortgaged Property for the purpose
for which it is held by the mortgagor thereof, or the lien held by the
Collateral Agent, (iii) zoning and other municipal ordinances, which are not
violated in any material respect by the existing improvements and the present
use made by the mortgagor thereof of the Premises (as defined in the respective
Mortgage), (iv) general real estate taxes and assessments not yet delinquent,
and (v) such other items as the Agent may consent to (such consent not to be
unreasonably withheld).
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"Permitted Joint Venture" shall mean any Person engaged in
business of the type described in Section 8.01 of which the Borrower shall own,
directly or indirectly, 25% or more but less than or equal to 50% of the equity
and voting interests and another Person (or group of Persons which acts together
in relation to such Permitted Joint Venture) owns the remaining equity and
voting interests.
"Permitted Liens" shall have the meaning provided in Section
8.03.
"Person" shall mean any individual, partnership, joint
venture, firm, corporation, limited liability company, association, trust or
other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2)
of ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) the Borrower, any of its Subsidiaries or any ERISA
Affiliate and each such plan for the five year period immediately following the
latest date on which the Borrower, any of its Subsidiaries or any ERISA
Affiliate maintained, contributed to or had an obligation to contribute to such
plan.
"Pledge Agreement" shall have the meaning provided in Section
5.14.
"Pledged Securities" shall mean all the Pledged Securities as
defined in the Pledge Agreement.
"Predecessor Corporation" shall mean and include each of
Holdings and Old Labtec.
"Prime Lending Rate" shall mean the rate which BTCo announces
from time to time as its prime lending rate, the Prime Lending Rate to change
when and as such prime lending rate changes. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. BTCo may make commercial loans or other loans
at rates of interest at, above or below the Prime Lending Rate.
"Proceeds" shall mean with respect to any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred payment
pursuant to a note receivable issued in connection with such Asset Sale, other
than the portion of such deferred payment constituting interest, but only as and
when so received) received by the Borrower and/or any of its Subsidiaries from
such Asset Sale.
"Pro Forma Leverage Ratio" shall mean, at any time for the
determination thereof, the ratio of (x) Consolidated Debt at such time to (y)
Consolidated EBITDA for the Test Period then last ended, with such Pro Forma
Leverage Ratio to be determined on a pro forma basis as if such Permitted
Acquisition (and the incurrence, assumption and/or repayment of any Indebtedness
in connection with such Permitted Acquisition) had occurred on the first day of
such Test Period (and such Indebtedness, if any, had remained outstanding (or
had not been outstanding, as the case may
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be) throughout such period). On the date of any Permitted Acquisition pursuant
to which the Pro Forma Leverage Ratio is to be calculated, the Borrower shall
deliver to the Agent a certificate of the Borrower's chief financial officer
setting forth in reasonable detail the pro forma calculations required to
establish the Pro Forma Leverage Ratio (with such pro forma calculations (x) to
be made on a basis reasonably satisfactory to the Agent and to assume that the
interest expense attributable to any Indebtedness (whether existing or being
incurred) bearing a floating interest rate shall be computed as if the rate in
effect on the date of such Permitted Acquisition (taking into account any
Interest Rate Protection Agreement applicable to such Indebtedness if such
Interest Rate Protection Agreement has a remaining term in excess of 12 months)
had been the applicable rate for the entire period and (y) to set forth any
factually supportable and identifiable cost savings resulting in an adjustment
to Consolidated EBITDA as described below), it being understood that in
calculating the Pro Forma Leverage Ratio in connection with any Permitted
Acquisition, Consolidated EBITDA for the relevant Test Period shall include the
results of operations of the Person or assets acquired pursuant to such
Permitted Acquisition on a pro forma basis as well as the effects of factually
supportable and identifiable pro forma cost savings for such Test Period to the
extent directly attributable to such Permitted Acquisition, in each case, as if
such acquisition had occurred on the first day of the respective period of four
consecutive fiscal quarters.
"Projections" shall have the meaning provided in Section 5.20.
"Qualified IPO" shall mean the first public offering pursuant
to an effective registration statement under the Securities Act covering the
primary offering and sale of Common Stock for the account of the Borrower in
which the aggregate gross cash proceeds received by the Borrower at the public
offering price are at least $15,000,000, which proceeds are applied in
accordance with Section 4.02(A)(d).
"Quarterly Payment Date" shall mean the last Business Day of
each January, April, July and October.
"Real Property" of any Person shall mean all of the right,
title and interest of such Person in and to land, improvements and fixtures,
including Leaseholds.
"Recovery Event" shall mean the receipt by the Borrower or any
of its Subsidiaries of any insurance or condemnation proceeds payable (i) by
reason of any theft, physical destruction or damage or any other similar event
with respect to any properties or assets of the Borrower or any of its
Subsidiaries, (ii) by reason any condemnation, taking, seizing or similar event
with respect to any properties or assets of the Borrower or any of its
Subsidiaries and (iii) under any policy of insurance required to be maintained
under Section 7.03.
"Refinancing" shall mean the refinancing and repayment in full
of all amounts outstanding under, and the termination in full of all commitments
and letters of credit in respect of, the Indebtedness to be Refinanced.
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"Refinancing Documents" shall mean each of the agreements,
documents and instruments entered into in connection with the Refinancing.
"Register" shall have the meaning provided in Section 7.12.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing margin requirements.
"Release" means disposing, discharging, injecting, spilling,
pumping, leaking, leaching, dumping, emitting, escaping, emptying, seeping,
placing, pouring and the like, into or upon any land or water or air, or
otherwise entering into the environment.
"Replaced Bank" shall have the meaning provided in Section
1.13.
"Replacement Bank" shall have the meaning provided in Section
1.13.
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan that is subject to Title IV of ERISA
other than those events as to which the 30-day notice period is waived under
subsection .22, .23, .25, .27, or .28 of PBGC Regulation Section 4043.
"Required Banks" shall mean Non-Defaulting Banks the sum of
whose outstanding Term Loans and Revolving Loan Commitments (or, if after the
Total Revolving Loan Commitment has been terminated, outstanding Revolving Loans
and RL Percentages of outstanding Swingline Loans and Letter of Credit
Outstandings) constitute greater than 50% of the sum of (i) the total
outstanding Term Loans of Non-Defaulting Banks and (ii) the Total Revolving Loan
Commitment less the aggregate Revolving Loan Commitments of Defaulting Banks
(or, if after the Total Revolving Loan Commitment has been terminated, the total
outstanding Revolving Loans of Non-Defaulting Banks and the aggregate RL
Percentages of all Non-Defaulting Banks of the total outstanding Swingline Loans
and Letter of Credit Outstandings at such time).
"Returns" shall have the meaning provided in Section 6.22.
"Revolving Loan" shall have the meaning provided in Section
1.01(A)(b).
"Revolving Loan Commitment" shall mean, with respect to each
Bank, the amount set forth opposite such Bank's name in Annex I directly below
the column entitled "Revolving Loan Commitment," as the same may be reduced from
time to time pursuant to Section 3.02, 3.03 and/or 9.
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"Revolving Loan Facility" shall mean the Facility evidenced by
the Total Revolving Loan Commitment.
"Revolving Loan Maturity Date" shall mean October 7, 2002.
"Revolving Note" shall have the meaning provided in Section
1.05(a).
"RL Bank" shall mean at any time each Bank with a Revolving
Loan Commitment or with outstanding Revolving Loans.
"RL Percentage" shall mean at any time for each Bank, the
percentage obtained by dividing such Bank's Revolving Loan Commitment by the
Total Revolving Loan Commitment; provided, that if the Total Revolving Loan
Commitment has been terminated, the RL Percentage of each Bank shall be
determined by dividing such Bank's Revolving Loan Commitment immediately prior
to such termination by the Total Revolving Loan Commitment immediately prior to
such termination.
"Rollover Amount" shall have the meaning provided in Section
8.08(b).
"S&P" shall mean Standard & Poor's Corporation, a division of
the XxXxxx-Xxxx Companies.
"Scheduled Repayment" shall have the meaning provided in
Section 4.02(A)(b).
"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Section 4.04(b)(ii) Certificate" shall have the meaning
provided in Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning provided in the
Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Security Agreement" shall have the meaning provided in
Section 5.15.
"Security Agreement Collateral" shall mean all "Collateral" as
defined in the Security Agreement.
"Security Documents" shall mean and include the Security
Agreement, the Pledge Agreement, each Mortgage, each Additional Security
Document, if any and each other document or instrument entered into pursuant to
Sections 5.14, 5.15 and 7.13, if any, in each case as and when executed and
delivered in accordance with the terms of this Agreement.
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"Shareholder Subordinated Note" shall mean an unsecured junior
subordinated note issued by the Borrower (and not guaranteed or supported in any
way by the Borrower or any of its Subsidiaries) in the form of Exhibit L.
"Shareholders' Agreements" shall have the meaning set forth in
Section 5.17(d).
"Speaker" shall mean the Speaker Acquisition Corp., a Delaware
corporation. "Speaker Merger" shall mean the merger of Speaker with and into
Holdings, with Holdings as the surviving corporation of such merger and the
changing of the name of Holdings to Labtec Enterprises, Inc., all in accordance
with the Speaker Merger Documents.
"Speaker Merger Documents" shall mean the Recapitalization
Agreement and Plan of Merger dated as of August 26, 1997 between Speaker and
Holdings, and each other agreement, document and instrument entered into or
filed in connection with the Speaker Merger.
"Stated Amount" of each Letter of Credit shall mean at any
time the maximum amount available to be drawn thereunder (regardless of whether
any conditions for drawing could then be met).
"Stockholders Agreement" shall mean the Stockholders
Agreement, dated as of the Initial Borrowing Date, among the Borrower, Sun
Multimedia Partners, L.P., The KB Mezzanine Fund II, L.P., the Existing
Shareholders and the other stockholders of the Borrower party thereto, as
amended, modified or supplemented from time to time, in accordance with the
terms hereof and thereof.
"Subordinated Debt" shall mean general unsecured and
unguaranteed subordinated Indebtedness of the Borrower incurred under the
Subordinated Loan Agreement, in an aggregate principal amount not to exceed
$6,000,000.
"Subordinated Financing" shall mean the issuance of the
Subordinated Debt and of 50,000 shares of Common Stock of the Borrower, in each
case, to Equinox and/or its Affiliates.
"Subordinated Financing Documents" shall mean and include each
of the documents and other agreements entered into (including, without
limitation, the Subordinated Loan Agreement) relating to the consummation by the
Borrower of the Subordinated Financing.
"Subordinated Loan Agreement" shall mean the Purchase
Agreement, dated as of the Initial Borrowing Date, among the Borrower and an
Affiliate of Equinox as in effect on the Initial Borrowing Date and as the same
may be modified, amended or supplemented from time to time in accordance with
the terms hereof and thereof.
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"Subsidiary" of any Person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person directly
or indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries, has more than a 50% voting equity interest at the time.
"Subsidiary Guarantor" shall mean each Subsidiary of the
Borrower (other than a Foreign Subsidiary except to the extent otherwise
provided in Section 7.13) that is or becomes a party to the Subsidiary Guaranty.
"Subsidiary Guaranty" shall mean, after the execution and
delivery thereof, the Subsidiary Guaranty, entered into by each Subsidiary of
the Borrower pursuant to Section 7.13 or Section 8.14, in the form of Exhibit H,
as the same may be amended, modified or supplemented form time to time and shall
include after the execution and delivery thereof any similar guaranty required
to be delivered pursuant to Sections 7.11, 7.13 and/or 8.14.
"Sun Affiliates" shall mean any Affiliate (including any
employee) of Sun Capital, provided that for purposes of the definition of
"Change of Control Event", the term Sun Affiliate shall not include (x) any
portfolio company of either Sun Capital or any Affiliate of Sun Capital or (y)
any officer or director of the Borrower or any of its Subsidiaries that is not
also a partner, stockholder, employee or director of Sun Capital.
"Sun Capital" shall mean Sun Capital Partners, Inc., a Florida
corporation.
"Swingline Expiry Date" shall mean the date which is five
Business Days prior to the Revolving Loan Maturity Date.
"Swingline Loan" shall have the meaning provided in Section
1.01(B).
"Swingline Note" shall have the meaning provided in Section
1.05(a).
"Syndication Date" shall have the meaning provided in Section
1.01(A)(a).
"Tax Allocation Agreements" shall have the meaning provided in
Section 5.17(h).
"Taxes" shall have the meaning provided in Section 4.04.
"Term Loans" shall have the meaning provided in Section
1.01(A)(a).
"Term Note" shall have the meaning provided in Section
1.05(a).
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"Term Loan Facility" shall mean the Facility evidenced by the
Total Term Loan Commitment.
"Term Loan Maturity Date" shall mean October 7, 2004.
"Test Period" shall mean, at the time of any determination
thereof, (i) the fiscal quarter of the Borrower ended December 31, 1997 (taken
as one accounting period), (ii) the two consecutive fiscal quarters of the
Borrower ended March 31, 1998 (taken as one accounting period), (iii) the three
consecutive fiscal quarters of the Borrower ended June 30, 1998 (taken as one
accounting period), (iv) the four consecutive fiscal quarters of the Borrower
ended September 30, 1998 (taken as one accounting period) and (v) each period of
four consecutive fiscal quarters of the Borrower ending thereafter (taken as one
accounting period).
"Total Term Loan Commitment" shall mean the sum of the Term
Loan Commitments of each of the Banks.
"Total Commitment" shall mean the sum of the Total Term Loan
Commitment and the Total Revolving Loan Commitment.
"Total Revolving Loan Commitment" shall mean the sum of the
Revolving Loan Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at
any time, (i) the Total Revolving Loan Commitment at such time less (ii) the sum
of the aggregate principal amount of all Revolving Loans and Swingline Loans at
such time plus the Letter of Credit Outstandings at such time.
"Transaction" shall mean, collectively, (i) the Equity
Financing, (ii) the Mergers, (iii) the Refinancing, (iv) the Subordinated
Financing, (v) the incurrence of the Loans hereunder on the Initial Borrowing
Date and (vi) the payment of fees and expenses in connection with the foregoing.
"Type" shall mean any type of Loan determined with respect to
the interest option applicable thereto, i.e., a Base Rate Loan or a Eurodollar
Loan.
"UCC" shall mean the Uniform Commercial Code as in effect from
time to time in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the
amount, if any, by which the actuarial present value of the accumulated plan
benefits under the Plan as of the close of its most recent plan year exceeds the
fair market value of the assets allocable thereto, each determined in accordance
with Statement of Financial Accounting Standards No. 87, based upon the
actuarial assumptions used by the Plan's actuary in the most recent annual
valuation of the Plan.
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"Unpaid Drawing" shall have the meaning provided in Section
2.03(a).
"U.S. Dollars" and the sign "$" shall each mean freely
transferable lawful money of the United States of America.
"Voting Stock" shall mean, with respect to any corporation,
the outstanding stock of all classes (or equivalent interest) which ordinarily,
in the absence of contingencies, entitles holders thereof to vote for the
election of directors (or Persons performing similar functions) of such
corporation, even though the right so to vote has been suspended by the
happening of such a contingency.
"Wholly-Owned Domestic Subsidiary" shall mean a corporation
which is both a Wholly-Owned Subsidiary and a Domestic Subsidiary of another
Person.
"Wholly-Owned Foreign Subsidiary" shall mean a corporation
which is both a Wholly- Owned Subsidiary and a Foreign Subsidiary of another
Person.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i)
any corporation 100% of whose capital stock (other than director's qualifying
shares and/or other nominal amounts of shares required to be held other than by
such Person under applicable law) is at the time owned by such Person and/or one
or more Wholly-Owned Subsidiaries of such Person and (ii) any partnership,
association, joint venture or other entity in which such Person and/or one or
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.
"Working Capital" shall mean the excess of Consolidated
Current Assets (but excluding therefrom all cash, Cash Equivalents and deferred
income taxes to the extent included in current assets) over Consolidated Current
Liabilities.
"Written," "written" or "in writing" shall mean any form of
written communication or a communication by means of telex, facsimile device,
telegraph or cable.
SECTION 11. The Agent.
11.01 Appointment. Each Bank hereby irrevocably designates and
appoints BTCo as Agent of such Bank (such term to include for purposes of this
Section 11, BTCo acting as Collateral Agent) to act as specified herein and in
the other Credit Documents, and each such Bank hereby irrevocably authorizes
BTCo as the Agent to take such action on its behalf under the provisions of this
Agreement and the other Credit Documents and to exercise such powers and perform
such duties as are expressly delegated to the Agent by the terms of this
Agreement and the other Credit Documents, together with such other powers as are
reasonably incidental thereto. The Agent agrees to act as such upon the express
conditions contained in this Section 11. Notwithstanding any provision to the
contrary elsewhere in this Agreement or in any other Credit Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
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herein or in the other Credit Documents, or any fiduciary relationship with any
Bank, and no implied covenants, functions, responsibilities, duties, obligations
or liabilities shall be read into this Agreement or otherwise exist against the
Agent. The provisions of this Section 11 are solely for the benefit of the Agent
and the Banks, and neither the Borrower nor any of its Subsidiaries shall have
any rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Banks and the Agent does not assume and shall not be
deemed to have assumed any obligation or relationship of agency or trust with or
for the Borrower or any of its Subsidiaries.
11.02 Delegation of Duties. The Agent may execute any of its
duties under this Agreement or any other Credit Document by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care except to the extent otherwise required by Section 11.03.
11.03 Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(i) liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or the other Credit Documents
(except for its or such Person's own gross negligence or willful misconduct) or
(ii) responsible in any manner to any of the Banks for any recitals, statements,
representations or warranties made by the Borrower, any of its Subsidiaries or
any of their respective officers contained in this Agreement or the other Credit
Documents, any other Document or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Document or for any failure of the
Borrower or any of its Subsidiaries or any of their respective officers to
perform its obligations hereunder or thereunder. The Agent shall not be under
any obligation to any Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or the other Documents, or to inspect the properties, books or records
of the Borrower or any of its Subsidiaries. The Agent shall not be responsible
to any Bank for the effectiveness, genuineness, validity, enforceability,
collectability or sufficiency of this Agreement or any other Document or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents in connection herewith
or therewith furnished or made by the Agent to the Banks or by or on behalf of
the Borrower or any of its Subsidiaries to the Agent or any Bank or be required
to ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained herein or therein or
as to the use of the proceeds of the Loans or of the existence or possible
existence of any Default or Event of Default.
11.04 Reliance by Agent. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, facsimile,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without
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limitation, counsel to the Borrower or any of its Subsidiaries), independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Credit Document unless it shall first receive such advice or concurrence
of the Required Banks as it deems appropriate or it shall first be indemnified
to its satisfaction by the Banks against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
The Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Credit Documents in accordance with a
request of the Required Banks, and such request and any action taken or failure
to act pursuant thereto shall be binding upon all the Banks.
11.05 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has actually received notice from a Bank or the
Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default." In the event that
the Agent receives such a notice, the Agent shall give prompt notice thereof to
the Banks. The Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Banks;
provided, that, unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Banks.
11.06 Non-Reliance on Agent and Other Banks. Each Bank
expressly acknowledges that neither the Agent nor any of its respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by the Agent
hereinafter taken, including any review of the affairs of the Borrower or any of
its Subsidiaries, shall be deemed to constitute any representation or warranty
by the Agent to any Bank. Each Bank represents to the Agent that it has,
independently and without reliance upon the Agent or any other Bank, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, assets, operations, property,
financial and other condition, prospects and creditworthiness of the Borrower
and its Subsidiaries and made its own decision to make its Loans hereunder and
enter into this Agreement. Each Bank also represents that it will, independently
and without reliance upon the Agent or any other Bank, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, assets, operations, property,
financial and other condition, prospects and creditworthiness of the Borrower
and its Subsidiaries. The Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the business,
operations, assets, property, financial and other condition, prospects or
creditworthiness of the Borrower or any of its Subsidiaries which may come into
the possession of the Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates.
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11.07 Indemnification. The Banks agree to indemnify the Agent
in its capacity as such ratably according to their respective "percentages" as
used in determining the Required Banks at such time (determined as if there are
no Defaulting Banks), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, reasonable
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the
Obligations) be imposed on, incurred by or asserted against the Agent in its
capacity as such in any way relating to or arising out of this Agreement or any
other Credit Document, or any documents contemplated by or referred to herein or
the transactions contemplated hereby or any action taken or omitted to be taken
by the Agent under or in connection with any of the foregoing, but only to the
extent that any of the foregoing is not paid by the Borrower or any of its
Subsidiaries; provided, that no Bank shall be liable to the Agent for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
primarily from the gross negligence or willful misconduct of the Agent. To the
extent any Bank would be required to indemnify the Agent pursuant to the
immediately preceding sentence but for the fact that it is a Defaulting Bank,
such Defaulting Bank shall not be entitled to receive any portion of any payment
or other distribution hereunder until each other Bank shall have been reimbursed
for the excess, if any, of the aggregate amount paid by such Bank under this
Section 11.07 over the aggregate amount such Bank would have been obligated to
pay had such first Bank not been a Defaulting Bank. If any indemnity furnished
to the Agent for any purpose shall, in the opinion of the Agent be insufficient
or become impaired, the Agent may call for additional indemnity and cease, or
not commence, to do the acts indemnified against until such additional indemnity
is furnished. The agreements in this Section 11.07 shall survive the payment of
all Obligations.
11.08 Agent in its Individual Capacity. The Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower and its Subsidiaries as though the Agent were
not the Agent hereunder. With respect to the Loans made by it and all
Obligations owing to it, the Agent shall have the same rights and powers under
this Agreement as any Bank and may exercise the same as though it were not the
Agent and the terms "Bank" and "Banks" shall include the Agent in its individual
capacity.
11.09 Holders. The Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment, transfer or endorsement thereof, as the case may be,
shall have been filed with the Agent. Any request, authority or consent of any
Person or entity who, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee, assignee or indorsee, as the case may be,
of such Note or of any Note or Notes issued in exchange therefor.
11.10 Resignation of the Agent; Successor Agent. The Agent may
resign as the Agent upon 20 days' notice to the Banks. Upon the resignation of
the Agent, the Required Banks shall appoint from among the Banks a successor
Agent which is a bank or a trust company for the Banks subject, to the extent
that no payment Default or Event of Default has occurred and is then
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continuing, to prior approval by the Borrower (such approval not to be
unreasonably withheld or delayed), whereupon such successor agent shall succeed
to the rights, powers and duties of the Agent, and the term "Agent" shall
include such successor agent effective upon its appointment, and the resigning
Agent's rights, powers and duties as the Agent shall be terminated, without any
other or further act or deed on the part of such former Agent or any of the
parties to this Agreement. If a successor Agent shall not have been so appointed
within such 20 day period after the date such notice of resignation was given by
the Agent, the Agent's resignation shall become effective and the Banks shall
thereafter perform all duties of the Agent hereunder and/or under any other
Credit Documents until such time, if any, as the Required Banks appoint a
successor Agent as provided above. After the resignation of the Agent hereunder,
the provisions of this Section 11 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
SECTION 12. Miscellaneous.
12.01 Payment of Expenses, etc. The Borrower hereby agrees to:
(i) whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Agent (including, without
limitation, the reasonable fees and disbursements of White & Case and local
counsel) in connection with the negotiation, preparation, execution and delivery
of the Credit Documents and the documents and instruments referred to therein
and any amendment, waiver or consent relating thereto and in connection with the
Agent's syndication efforts with respect to this Agreement; (ii) pay all
reasonable out-of-pocket costs and expenses of the Agent and each of the Banks
in connection with the enforcement of the Credit Documents and the documents and
instruments referred to therein and, after an Event of Default shall have
occurred and be continuing, the protection of the rights of the Agent and each
of the Banks thereunder (including, without limitation, the reasonable fees and
disbursements of counsel (including in-house counsel) for the Agent and for each
of the Banks); (iii) pay and hold each of the Banks harmless from and against
any and all present and future stamp and other similar taxes with respect to the
foregoing matters and save each of the Banks harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Bank) to pay such taxes; and (iv)
indemnify the Agent, the Collateral Agent and each Bank, its officers,
directors, employees, representatives and agents from and hold each of them
harmless against any and all losses, liabilities, claims, damages or expenses
incurred by any of them as a result of, or arising out of, or in any way related
to, or by reason of, (a) any investigation, litigation or other proceeding
(whether or not the Agent, the Collateral Agent or any Bank is a party thereto)
related to the entering into and/or performance of this Agreement or any other
Document or the use of the proceeds of any Loans hereunder or the Transaction or
the consummation of any other transactions contemplated in any Document (but
excluding any such losses, liabilities, claims, damages or expenses to the
extent incurred by reason of the gross negligence or willful misconduct of the
Person to be indemnified), or (b) the actual or alleged presence of Hazardous
Materials in the air, surface water or groundwater or on the surface or
subsurface of any Real Property or any Environmental Claim, in each case,
including, without limitation, the reasonable fees and disbursements of counsel
and independent consultants incurred in connection with any such investigation,
litigation or other proceeding.
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12.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence of an Event of Default, each
Bank is hereby authorized at any time or from time to time, without presentment,
demand, protest or other notice of any kind to the Borrower or any of its
Subsidiaries or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special) and any other Indebtedness at any time held or owing by such Bank
(including, without limitation, by branches and agencies of such Bank wherever
located) to or for the credit or the account of the Borrower or any of its
Subsidiaries against and on account of the Obligations and liabilities of the
Borrower or any of its Subsidiaries to such Bank under this Agreement or under
any of the other Credit Documents, including, without limitation, all interests
in Obligations of the Borrower or any of its Subsidiaries purchased by such Bank
pursuant to Section 12.06(b), and all other claims of any nature or description
arising out of or connected with this Agreement or any other Credit Document,
irrespective of whether or not such Bank shall have made any demand hereunder
and although said Obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.
12.03 Notices. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered, if to any Credit Party,
at the address specified opposite its signature below or in the other relevant
Credit Documents, as the case may be; if to any Bank, at its address specified
for such Bank on Annex II; or, at such other address as shall be designated by
any party in a written notice to the other parties hereto. All such notices and
communications shall be mailed, telegraphed, telexed, telecopied or cabled or
sent by overnight courier, and shall be effective when received.
12.04 Benefit of Agreement. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided, however, no Credit Party
may assign or transfer any of its rights, obligations or interest hereunder or
under any other Credit Document without the prior written consent of all of the
Banks and, provided further, that, although any Bank may transfer, assign or
grant participations in its rights hereunder, such Bank shall remain a "Bank"
for all purposes hereunder (and may not transfer or assign all or any portion of
its Commitments hereunder except as provided in Section 12.04(b)) and the
transferee, assignee or participant, as the case may be, shall not constitute a
"Bank" hereunder and, provided further, that no Bank shall transfer or grant any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Loan, Note or Letter of Credit (unless such Letter of Credit is
not extended beyond the Revolving Loan Maturity Date) in which such participant
is participating, or reduce the rate or extend the time of payment of interest
or Fees thereon (except in connection with a waiver of applicability of any
post-default increase in interest rates) or reduce the principal amount thereof,
or increase the amount of the participant's participation over the amount
thereof then in effect (it being understood that a waiver of any Default or
Event of Default or of a mandatory reduction in the Total Commitment shall not
constitute a change in the terms of such participation, and that an increase in
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any Commitment or Loan shall be permitted without the consent of any participant
if the participant's participation is not increased as a result thereof), (ii)
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement or (iii) release all or substantially all of
the Collateral under all of the Security Documents (except as expressly provided
in the Credit Documents) supporting the Loans hereunder in which such
participant is participating. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Bank in respect of such
participation to be those set forth in the agreement executed by such Bank in
favor of the participant relating thereto) and all amounts payable by the
Borrower hereunder shall be determined as if such Bank had not sold such
participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank
together with one or more other Banks) may (x) assign all or a portion of its
Revolving Loan Commitment (and related outstanding Obligations hereunder) and/or
its outstanding Term Loans to (i) its parent company and/or any affiliate of
such Bank which is at least 50% owned by such Bank or its parent company or to
one or more Banks or (ii) in the case of any Bank that is a fund that invests in
bank loans, any other fund that invests in bank loans and is managed by the same
investment advisor of such Bank or by an Affiliate of such investment advisor or
(y) assign all, or if less than all, a portion equal to at least $5,000,000 in
the aggregate for the assigning Bank or assigning Banks, of such Revolving Loan
Commitments and/or outstanding principal amount of Term Loans hereunder to one
or more Eligible Transferees (treating any fund that invests in bank loans and
any other fund that invests in bank loans and is managed by the same investment
advisor of such fund or by an Affiliate of such investment advisor as a single
Eligible Transferee), each of which assignees shall become a party to this
Agreement as a Bank by execution of an Assignment and Assumption Agreement,
provided that (i) at such time Annex I shall be deemed modified to reflect the
Revolving Loan Commitments (and/or outstanding Term Loans, as the case may be)
of such new Bank and of the existing Banks, (ii) upon surrender of the old
Notes, new Notes will be issued, at the Borrower's expense, to such new Bank and
to the assigning Bank, such new Notes to be in conformity with the requirements
of Section 1.05 (with appropriate modifications) to the extent needed to reflect
the revised Revolving Loan Commitments (and/or outstanding Term Loans, as the
case may be), (iii) the consent of the Agent shall be required in connection
with any such assignment pursuant to clause (y) of this Section 12.04(b) (which
consent shall not be unreasonably withheld or delayed), (iv) the consent of each
Letter of Credit Issuer shall be required in connection with any such assignment
of Revolving Loan Commitments pursuant to clause (y) of this Section 12.04(b)
(which consent shall not be unreasonably withheld), and (v) the Agent shall
receive at the time of each such assignment, from the assigning or assignee
Bank, the payment of a non-refundable assignment fee of $3,500 and, provided
further, that such transfer or assignment will not be effective until recorded
by the Agent on the Register pursuant to Section 7.12 hereof. To the extent of
any assignment pursuant to this Section 12.04(b), the assigning Bank shall be
relieved of its obligations hereunder with respect to its assigned Revolving
Loan Commitments. At the time of each assignment pursuant to this Section
12.04(b) to a Person which is not already a Bank hereunder and which is not a
United States person (as such term is defined in Section 7701(a)(30) of the
Code) for Federal income tax purposes, the respective assignee Bank shall
provide to the Borrower and the Agent the appropriate Internal Revenue Service
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Forms (and, if applicable a Section 4.04(b)(ii) Certificate) described in
Section 4.04(b). To the extent that an assignment of all or any portion of a
Bank's Commitments and related outstanding Obligations pursuant to Section 1.13
or this Section 12.04(b) would, at the time of such assignment, result in
increased costs under Section 1.10, 1.11, 2.05 or 4.04 from those being charged
by the respective assigning Bank prior to such assignment, then the Borrower
shall not be obligated to pay such increased costs (although the Borrower shall
be obligated to pay any other increased costs of the type described above
resulting from changes after the date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any
Bank from pledging its Loans and Notes hereunder to a Federal Reserve Bank in
support of borrowings made by such Bank from such Federal Reserve Bank and, with
the consent of the Agent, any Bank which is fund may pledge all or any portion
of its Loans and Notes to its trustee in support of its obligations to its
trustee. No pledge pursuant to this clause (c) shall release the transferor Bank
from any of its obligations hereunder.
12.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Agent or any Bank in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
any Credit Party and the Agent or any Bank shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power or privilege
hereunder or under any other Credit Document preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which the Agent or any
Bank would otherwise have. No notice to or demand on any Credit Party in any
case shall entitle any Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the Agent
or the Banks to any other or further action in any circumstances without notice
or demand.
12.06 Payments Pro Rata. (a) The Agent agrees that promptly
after its receipt of each payment from or on behalf of any Credit Party in
respect of any Obligations of such Credit Party, it shall, except as otherwise
provided in this Agreement, distribute such payment to the Banks (other than any
Bank that has consented in writing to waive its pro rata share of such payment)
pro rata based upon their respective shares, if any, of the Obligations with
respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security, by
the exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings or Fees, of a sum which with respect to the
related sum or sums received by other Banks is in a greater proportion than the
total of such Obligation then owed and due to such Bank bears to the total of
such Obligation then owed and due to all of the Banks immediately prior to such
receipt, then such Bank receiving such excess payment shall purchase for cash
without recourse or warranty from the other Banks an interest in the Obligations
of the respective Credit
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Party to such Banks in such amount as shall result in a proportional
participation by all of the Banks in such amount; provided, that if all or any
portion of such excess amount is thereafter recovered from such Bank, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
12.07 Calculations; Computations. (a) The financial statements
to be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Banks); provided, that except as otherwise specifically
provided herein, all computations determining compliance with Sections 4.02 and
8, including definitions used therein, shall utilize accounting principles and
policies in effect at the time of the preparation of, and in conformity with
those used to prepare, the March 31, 1997 financial statements delivered to the
Banks pursuant to Section 6.10(b), but shall not give effect to purchase
accounting adjustments required or permitted by APB 16 and its interpretations
(including non-cash write-ups and non-cash charges relating to inventory, fixed
assets and in-process research and development), in each case arising in
connection with any Permitted Acquisition..
(b) All computations of interest and Fees hereunder shall be
made on the actual number of days elapsed over a year of 360 days.
12.08 Governing Law; Submission to Jurisdiction; Venue. (a)
THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Agreement or any other Credit Document may be brought in
the courts of the State of New York or of the United States for the Southern
District of New York, and, by execution and delivery of this Agreement and the
other Credit Documents, each Credit Party hereby irrevocably accepts for itself
and in respect of its property, generally and unconditionally, the jurisdiction
of the aforesaid courts. Each Credit Party hereby further irrevocably waives any
claim that any such courts lack jurisdiction over such Credit Party, and agrees
not to plead or claim, in any legal action or proceeding with respect to this
Agreement or any other Credit Document brought in any of the aforesaid courts,
that any such court lacks jurisdiction over such Credit Party. Each Credit Party
irrevocably consents to the service of process in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to such Credit Party, at its address for notices pursuant to Section
12.03, such service to become effective 30 days after such mailing. Each Credit
Party hereby irrevocably waives any objection to such service of process and
further irrevocably waives and agrees not to plead or claim in any action or
proceeding commenced hereunder or under any other Credit Document that service
of process was in any way invalid or ineffective. Nothing herein shall affect
the right of the Agent, any Bank or the holder of any Note to serve process in
any other manner permitted by law or to commence legal proceedings or otherwise
proceed against any Credit Party in any other jurisdiction.
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(b) Each Credit Party hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Agreement or any other Credit Document brought in the courts referred to in
clause (a) above and hereby further irrevocably waives and agrees not to plead
or claim in any such court that any such action or proceeding brought in any
such court has been brought in an inconvenient forum.
12.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A
complete set of counterparts executed by all the parties hereto shall be lodged
with the Borrower and the Agent.
12.10 Effectiveness. This Agreement shall become effective on
the date (the "Effective Date") on which the Borrower and each of the Banks
shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered the same to the Agent at the Notice
Office or, in the case of the Banks, shall have given to the Agent telephonic
(confirmed in writing), written, telex or facsimile notice (actually received)
at such office that the same has been signed and mailed to it. The Agent will
give the Borrower and each Bank prompt written notice of the occurrence of the
Effective Date.
12.11 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.
12.12 Amendment or Waiver; etc. (a) Neither this Agreement nor
any other Credit Document nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the respective Credit Parties party thereto
and the Required Banks, provided that no such change, waiver, discharge or
termination shall, without the consent of each Bank (other than a Defaulting
Bank) (with Obligations being directly affected thereby in the case of following
clause (i)), (i) extend the final scheduled maturity of any Loan or Note or
extend the stated maturity of any Letter of Credit beyond the Revolving Loan
Maturity Date, or reduce the rate or extend the time of payment of interest or
Fees thereon, or reduce the principal amount thereof, (ii) release all or
substantially all of the Collateral (except as expressly provided in the
Security Documents) under all the Security Documents, (iii) amend, modify or
waive any provision of this Section 12.12, (iv) reduce the percentage specified
in the definition of Required Banks (it being understood that, with the consent
of the Required Banks, additional extensions of credit pursuant to this
Agreement may be included in the determination of the Required Banks on
substantially the same basis as the extensions of Term Loans and Revolving Loan
Commitments are included on the Effective Date) or (v) consent to the assignment
or transfer by the Borrower of any of its rights and obligations under this
Agreement; provided further, that no such change, waiver, discharge or
termination shall (1) increase the Commitments of any Bank over the amount
thereof then in effect without the consent of such Bank (it being understood
that waivers or modifications
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of conditions precedent, covenants, Defaults or Events of Default or of a
mandatory reduction in the Total Commitment shall not constitute an increase of
the Commitment of any Bank, and that an increase in the available portion of any
Commitment of any Bank shall not constitute an increase in the Commitment of
such Bank), (2) without the consent of BTCo, alter its rights or obligations
with respect to Swingline Loans, and without the consent of BTCo or any other
Letter of Credit Issuer, amend, modify or waive any provision of Section 2 or
alter its rights or obligations with respect to Letters of Credit, (3) without
the consent of the Agent, amend, modify or waive any provision of Section 11 as
same applies to the Agent or any other provision as same relates to the rights
or obligations of the Agent, or (4) without the consent of the Collateral Agent,
amend, modify or waive any provision relating to the rights or obligations of
the Collateral Agent.
(b) If, in connection with any proposed change, waiver,
discharge or termination to any of the provisions of this Agreement as
contemplated by clause (a)(i) through (v), inclusive, of the first proviso to
Section 12.12(a), the consent of the Required Banks is obtained but the consent
of one or more of such other Banks whose consent is required is not obtained,
then the Borrower shall have the right, so long as all non-consenting Banks
whose individual consent is required are treated as described in either clause
(A) or (B) below, to either (A) replace each such non-consenting Bank or Banks
with one or more Replacement Banks pursuant to Section 1.13 so long as at the
time of such replacement, each such Replacement Bank consents to the proposed
change, waiver, discharge or termination or (B) terminate all of such
non-consenting Bank's Commitments and repay in full its outstanding Loans, in
accordance with Sections 3.02(b) and/or 4.01(b), provided that, unless the
Commitments terminated and Loans repaid pursuant to preceding clause(B) are
immediately replaced in full at such time through the addition of new Banks or
the increase of the Commitments and/or outstanding Loans of existing Banks (who
in each case must specifically consent thereto), then in the case of any action
pursuant to preceding clause(B), the Required Banks (determined before giving
effect to the proposed action) shall specifically consent thereto, provided
further, that the Borrower shall not have the right to replace a Bank solely as
a result of the exercise of such Bank's rights (and the withholding of any
required consent by such Bank) pursuant to the second proviso to Section
12.12(a).
12.13 Survival. All indemnities set forth herein including,
without limitation, in Section 1.10, 1.11, 2.05, 4.04, 11.07 or 12.01, shall
survive the execution and delivery of this Agreement and the making and
repayment of the Loans.
12.14 Domicile of Loans. Each Bank may transfer and carry its
Loans at, to or for the account of any branch office, subsidiary or affiliate of
such Bank; provided, that the Borrower shall not be responsible for costs
arising under Section 1.10, 1.11, 2.05 or 4.04 resulting from any such transfer
(other than a transfer pursuant to Section 1.12) to the extent such costs would
not otherwise be applicable to such Bank in the absence of such transfer.
12.15 Confidentiality. (a) Each of the Banks agrees that it
will use its best efforts not to disclose without the prior consent of the
Borrower (other than to its employees, auditors, counsel or other professional
advisors, to affiliates or to another Bank if the Bank or such Bank's
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holding or parent company in its sole discretion determines that any such party
should have access to such information) any information with respect to the
Borrower or any of its Subsidiaries which is furnished pursuant to this
Agreement; provided, that any Bank may disclose any such information (a) as has
become generally available to the public or has become available to such Bank on
a non- confidential basis, (b) as may be required or appropriate in any report,
statement or testimony submitted to any municipal, state or Federal regulatory
body having or claiming to have jurisdiction over such Bank or to the Federal
Reserve Board or the Federal Deposit Insurance Corporation or similar
organizations (whether in the United States or elsewhere) or their successors,
(c) as may be required or appropriate in response to any summons or subpoena or
in connection with any litigation, (d) in order to comply with any law, order,
regulation or ruling applicable to such Bank, and (e) to any prospective
transferee in connection with any contemplated transfer of any of the Notes or
any interest therein by such Bank; provided, that such prospective transferee
agrees, for the benefit of such Bank and the Borrower, to provisions
substantially identical to those contained in this Section.
(b) The Borrower hereby acknowledges and agrees that each Bank
may share with any of its affiliates any information related to the Borrower or
any of its Subsidiaries (including, without limitation, any nonpublic customer
information regarding the creditworthiness of the Borrower and its Subsidiaries,
provided that such Persons shall be subject to the provisions of this Section
12.15 to the same extent as such Bank).
12.16 Waiver of Jury Trial. EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
12.17 Post-Closing Actions. Notwithstanding anything to the
contrary contained in this Agreement, no later than 30 days following the
Initial Borrowing Date, the Borrower shall deliver to the Agent (u) replacement
share certificates with respect to the outstanding stock of each of its Foreign
Subsidiaries to enable the possession by the Collateral Agent of 65% of the
outstanding stock of each such Foreign Subsidiary, (v) UCC-11 lien searches (or
other appropriate searches) reflecting all filings, judgments and/or tax liens
filed against the Borrower (or against any name used by the Borrower in the past
as set forth on Annex C to the Security Agreement) for all relevant state and
local filing offices in the states of Washington and Oregon, together with
appropriate releases with respect to all filings appearing thereon, (w) an
appropriately revised landlord consent and subordination agreement with respect
to the real property lease described in paragraph 2 of Annex III hereto, (x)
original and appropriately completed Officer's Certificates of each Subsidiary
if the Borrower, together with evidence of the amendment of the Articles of
Association or other relevant charter document of Labtec Electronics (HK),
Limited as notified to the Borrower by the Agent prior to the Initial Borrowing
Date together with a certificate of such Subsidiary certifying as to such
amendment and such other matters as shall be reasonably requested by the Agent,
(y) certificates of insurance with respect to each insurance policy of the
Borrower reflecting the addition of the Collateral Agent as additional insured
with respect to each liability policy and as loss payee with
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respect to all property, cargo and similar insurance policies, and (z) evidence
of the termination of each security agreement or other document entered into in
respect of the Existing Credit Agreement (including a written acknowledgment of
such termination from each counterparty thereto), and all of the foregoing shall
be in form and substance satisfactory to the Agent.
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
0000 XX Xxxx Xxxxxx Xxxxx LABTEC ENTERPRISES, INC.
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000 By /s/ Xxxxxx Xxxxxx
Telecopy:(000) 000-0000 Title: Vice-President
BANKERS TRUST COMPANY,
Individually and as Agent
By /s/ Xxxx Xxx Xxxxx
Title: Managing Director
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