EXHIBIT 4.1
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THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of May 6, 1997
among
WEIDER NUTRITION INTERNATIONAL, INC.
and
ITS SUBSIDIARIES NAMED HEREIN,
THE LENDERS NAMED HEREIN
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
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TABLE OF CONTENTS
PAGE
1. AMOUNT AND TERMS OF CREDIT.............................................1
1.1 REVOLVING CREDIT ADVANCES........................................1
1.2 LETTERS OF CREDIT................................................2
1.3 PREPAYMENT.......................................................3
1.4 USE OF PROCEEDS; OBLIGORS' REPRESENTATIVE........................3
1.5 INTEREST ON REVOLVING CREDIT LOAN................................4
1.6 FEES.............................................................7
1.7 CASH MANAGEMENT SYSTEMS..........................................7
1.8 RECEIPT OF PAYMENTS..............................................7
1.9 APPLICATION AND ALLOCATION OF PAYMENTS...........................7
1.10 LOAN ACCOUNT AND ACCOUNTING......................................8
1.11 ACCESS...........................................................8
1.12 INDEMNITY........................................................9
1.13 TAXES...........................................................10
1.14 CAPITAL ADEQUACY; INCREASED COSTS; ILLEGALITY...................11
1.15 REPLACEMENT OF LENDER IN RESPECT OF INCREASED COSTS.............12
1.16 SINGLE LOAN.....................................................13
2. CONDITIONS PRECEDENT..................................................13
2.1 CONDITIONS TO REVOLVING CREDIT LOAN.............................13
2.2 FURTHER CONDITIONS TO EACH REVOLVING CREDIT ADVANCE.............14
3. REPRESENTATIONS AND WARRANTIES........................................15
3.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW........................15
3.2 EXECUTIVE OFFICES...............................................16
3.3 CORPORATE POWER, AUTHORIZATION, ENFORCEABLE OBLIGATIONS.........16
3.4 FINANCIAL STATEMENTS AND PROJECTIONS............................16
3.5 COLLATERAL REPORTS..............................................17
3.6 MATERIAL ADVERSE EFFECT.........................................17
3.7 OWNERSHIP OF PROPERTY; LIENS....................................17
3.8 RESTRICTIONS; NO DEFAULT........................................18
3.9 LABOR MATTERS...................................................18
3.10 VENTURES, SUBSIDIARIES AND AFFILIATES; OUTSTANDING STOCK AND
INDEBTEDNESS....................................................18
3.11 GOVERNMENT REGULATION...........................................18
3.12 MARGIN REGULATIONS..............................................19
3.13 TAXES...........................................................19
3.14 ERISA...........................................................20
3.15 NO LITIGATION...................................................21
3.16 BROKERS.........................................................21
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3.17 EMPLOYMENT MATTERS..............................................21
3.18 PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES....................21
3.19 FULL DISCLOSURE.................................................21
3.20 HAZARDOUS MATERIALS.............................................22
3.21 INSURANCE POLICIES..............................................22
3.22 DEPOSIT AND DISBURSEMENT ACCOUNTS...............................22
3.23 GOVERNMENT CONTRACTS............................................22
3.24 CUSTOMER AND TRADE RELATIONS....................................22
3.25 AGREEMENTS AND OTHER DOCUMENTS..................................23
4. FINANCIAL STATEMENTS AND INFORMATION..................................23
4.1 REPORTS AND NOTICES.............................................23
4.2 COMMUNICATION WITH ACCOUNTANTS..................................23
5. AFFIRMATIVE COVENANTS.................................................24
5.1 MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS................24
5.2 PAYMENT OF OBLIGATIONS..........................................24
5.3 BOOKS AND RECORDS...............................................25
5.4 LITIGATION......................................................25
5.5 INSURANCE.......................................................25
5.6 COMPLIANCE WITH LAWS............................................26
5.7 AGREEMENTS......................................................26
5.8 SUPPLEMENTAL DISCLOSURE.........................................26
5.9 EMPLOYEE PLANS..................................................26
5.10 ENVIRONMENTAL MATTERS...........................................27
5.11 LANDLORDS' AGREEMENTS AND BAILEE LETTERS AND MORTGAGEE
AGREEMENTS.....................................................27
5.12 LEASED LOCATIONS OF COLLATERAL..................................27
6. NEGATIVE COVENANTS....................................................28
6.1 MERGERS, SUBSIDIARIES, ETC......................................28
6.2 INVESTMENTS; LOANS AND ADVANCES.................................30
6.3 INDEBTEDNESS....................................................30
6.4 EMPLOYEE LOANS AND AFFILIATE TRANSACTIONS.......................31
6.5 CAPITAL STRUCTURE AND BUSINESS..................................32
6.6 GUARANTEED INDEBTEDNESS.........................................32
6.7 LIENS...........................................................32
6.8 SALE OF ASSETS..................................................33
6.9 ERISA...........................................................33
6.10 HAZARDOUS MATERIALS.............................................33
6.11 SALE-LEASEBACKS.................................................33
6.12 CANCELLATION OF INDEBTEDNESS....................................34
6.13 RESTRICTED PAYMENTS.............................................34
6.14 LEASES..........................................................35
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6.15 FISCAL YEAR.....................................................35
6.16 CHANGE OF CORPORATE NAME........................................35
6.17 SALE OF STOCK...................................................35
6.18 CASH MANAGEMENT.................................................35
6.19 NO IMPAIRMENT OF CROSS-STREAMING, UPSTREAMING,
DOWNSTREAMING OR LIENS..........................................36
6.20 FINANCIAL COVENANTS.............................................36
6.21 INTERCOMPANY LOANS..............................................36
6.22 NEW YORK STOCK EXCHANGE LISTING.................................37
7. TERM .................................................................37
7.1 TERMINATION.....................................................37
7.2 SURVIVAL OF OBLIGATIONS UPON TERMINATION OF FINANCING
ARRANGEMENTS...................................................37
8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES................................37
8.1 EVENTS OF DEFAULT...............................................37
8.2 REMEDIES........................................................40
8.3 WAIVERS BY OBLIGORS.............................................41
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT...................41
9.1 ASSIGNMENT AND PARTICIPATIONS...................................41
9.2 APPOINTMENT OF AGENT............................................43
9.3 AGENT'S RELIANCE, ETC...........................................44
9.4 GE CAPITAL AND AFFILIATES.......................................44
9.5 LENDER CREDIT DECISION..........................................45
9.6 INDEMNIFICATION.................................................45
9.7 SUCCESSOR AGENT.................................................45
9.8 SETOFF AND SHARING OF PAYMENTS..................................46
9.9 ADVANCES; PAYMENTS; NON-FUNDING LENDERS; INFORMATION;
ACTIONS IN CONCERT..............................................47
10. SUCCESSORS AND ASSIGNS..................................................49
10.1 SUCCESSORS AND ASSIGNS..........................................49
11. MISCELLANEOUS...........................................................49
11.1 COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT...................49
11.2 AMENDMENTS AND WAIVERS..........................................49
11.3 FEES AND EXPENSES...............................................51
11.4 NO WAIVER.......................................................52
11.5 REMEDIES........................................................53
11.6 SEVERABILITY....................................................53
11.7 CONFLICT OF TERMS...............................................53
11.8 AUTHORIZED SIGNATURE............................................53
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11.9 GOVERNING LAW...................................................53
11.10 NOTICES.........................................................54
11.11 CONFIDENTIALITY.................................................54
11.12 SECTION TITLES..................................................55
11.13 COUNTERPARTS....................................................55
11.14 WAIVER OF JURY TRIAL............................................55
11.15 AMENDMENT AND RESTATEMENT.......................................55
11.16 REINSTATEMENT...................................................56
12. CROSS-GUARANTY........................................................56
12.1 CROSS-GUARANTY..................................................56
12.2 CONTRIBUTION WITH RESPECT TO GUARANTY OBLIGATIONS...............57
12.3 OBLIGATIONS ABSOLUTE............................................57
12.4 WAIVER..........................................................58
12.5 RECOVERY........................................................58
12.6 LIABILITY CUMULATIVE............................................58
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INDEX OF EXHIBITS, SCHEDULES AND ANNEXES
Exhibit A - Form of Notice of Revolving Credit Advance
Exhibit B - Form of Notice of Conversion/Continuation
Exhibit C - Form of Revolving Credit Note
Exhibit D - Form of Collateral Certificate
Schedule 1.7 - Bank Accounts
Schedule 3.2 - Executive Offices
Schedule 3.4 - Projections and Pro Forma
Schedule 3.7 - Real Estate and Leases
Schedule 3.9 - Labor Matters
Schedule 3.10 - Ventures, Subsidiaries and Affiliates;
Outstanding Stock
Schedule 3.13 - Tax Matters
Schedule 3.14 - ERISA Plans
Schedule 3.15 - Litigation
Schedule 3.16 - Brokers
Schedule 3.17 - Employment Matters
Schedule 3.18 - Intellectual Property
Schedule 3.20 - Hazardous Materials
Schedule 3.21 - Insurance Policies
Schedule 3.23 - Government Contracts
Schedule 3.25 - Material Agreements, Licenses, etc.
Schedule 5.1 - Trade Names
Schedule 6.3 - Indebtedness
Schedule 6.4 - Affiliate and Employee Loans, Transactions and
Employment Agreements
Schedule 6.7 - Liens
Schedule 11.8 - Authorized Signatures
Annex A (Recitals) - Definitions
Annex B (Section 1.2) - Letters of Credit Documents
Annex C (Section 1.7) - Cash Management System
Annex D (Section 2.1(b)) - Schedule of Additional Closing Documents
Annex E (Section 4.1(a)) - Financial Statements and Projections-Reporting
Annex F (Section 4.1(b)) - Collateral Reports
Annex G (Section 6.20) - Financial Covenants
Annex H (Section 9.9) - Lenders' Account Information
Annex I (Section 11.10) - Notice Addresses
Annex J - Revolving Credit Loan Commitments
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This THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of May 6,
1997 among AMERICAN NUTRITION BARS, INC., a Utah corporation, GREAT AMERICAN
FOODS, INC., a Utah corporation, SCHIFF PRODUCTS, INC., a Utah corporation,
WEIDER NUTRITION GROUP, INC., a Utah corporation ("NUTRITION") (the foregoing
collectively referred to herein as "BORROWERS" and individually as a
"Borrower"), WEIDER NUTRITION INTERNATIONAL, INC., a Delaware corporation
("HOLDINGS"), WNG HOLDINGS (INTERNATIONAL) LTD., a Nevada corporation (the
foregoing (a) excluding Borrowers, collectively referred to herein as
"GUARANTORS" and individually as a "GUARANTOR" and (b) including Borrowers,
collectively referred to herein as "OBLIGORS" and individually as an "OBLIGOR"),
GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation (in its individual
capacity, "GE CAPITAL"), for itself, as Lender, and as Agent for Lenders, and
the other Lenders from time to time signatory hereto.
RECITALS
WHEREAS, Obligors and Publishing Obligors (as hereinafter defined)
are parties to a Second Amended and Restated Credit Agreement dated as of April
8, 1997 (as heretofore amended, supplemented or otherwise modified, the "PRIOR
CREDIT AGREEMENT") pursuant to which the Lenders signatory thereto provided to
Borrowers and Publishing Borrowers (as hereinafter defined) aggregate
commitments of up to One Hundred Fifty Million Dollars ($150,000,000) on the
terms and conditions set forth therein;
WHEREAS, pursuant to a Suspension and Termination Agreement of even
date herewith (the "TERMINATION AGREEMENT") among Obligors, Publishing Obligors,
Agent, Lenders and GE Capital, such Persons have agreed that (a) insofar as it
relates to the Obligors, the Prior Credit Agreement shall be amended and
restated hereby to reflect aggregate commitments of up to One Hundred Thirty
Million Dollars ($130,000,000) to be provided by Lenders to Borrowers on the
terms and conditions set forth herein and (b) insofar as it relates to
Publishing Obligors, the Prior Credit Agreement shall remain in effect subject
to the terms of the Termination Agreement;
WHEREAS, capitalized terms used in this Agreement shall have the
meanings ascribed to them in ANNEX A. All Schedules, Exhibits, Annexes and other
attachments hereto, or expressly identified to this Agreement, are incorporated
herein by reference, and taken together, shall constitute but a single
agreement. These Recitals shall be construed as part of the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1 REVOLVING CREDIT ADVANCES. (a) Upon and subject to the terms and
conditions hereof, each Lender severally and not jointly agrees to make
available, from time to time, until the Revolving Commitment Termination Date,
for each Borrower's use and upon the request of Holdings therefor, its Pro Rata
Share of advances (each, a "REVOLVING CREDIT ADVANCE") in an aggregate
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amount which shall not at any given time exceed an amount equal to the sum of
(i) the Revolving Credit Loan Commitment LESS (ii) the amount of the Letter of
Credit Obligations outstanding at such time LESS (iii) such reserves as Agent
deems customary or appropriate for a transaction of the nature contemplated by
this Agreement and the other Loan Documents (collectively, "BORROWING
AVAILABILITY"); PROVIDED, THAT no Revolving Credit Advance shall be made to a
Borrower if, immediately prior and after giving actual and pro forma effect
thereto, such Borrower shall not be Solvent. Until all amounts outstanding in
respect of the Revolving Credit Loan shall become due and payable on the
Revolving Commitment Termination Date, Borrowers may from time to time borrow,
repay (subject to SECTION 1.12(C)) and reborrow under this SECTION 1.1(A). Each
Revolving Credit Advance shall be made on notice by Holdings to the individual
designated by Agent from time to time as its representative responsible for
receiving such notice, such notice to be given no later than (1) 11:00 a.m. (New
York time) on the Business Day of the proposed Revolving Credit Advance, in the
case of an Index Rate Loan, or (2) 11:00 a.m. (New York time) on the date which
is three (3) Business Days prior to the proposed Revolving Credit Advance, in
the case of a LIBOR Loan; PROVIDED, HOWEVER, that unless Holdings shall also
have complied with the requirements of SECTION 1.5(E), all such Revolving Credit
Advances shall bear interest by reference to the Index Rate. Each such notice (a
"NOTICE OF REVOLVING CREDIT ADVANCE") shall be substantially in the form of
EXHIBIT A hereto, specifying the information requested therein and such other
information as may be required by Agent and shall be given in writing (by
telecopy) or by telephone confirmed immediately in writing. Agent shall be
entitled to rely upon, and shall be fully protected under this Agreement in
relying upon, any Notice of Revolving Credit Advance believed by Agent to be
genuine and to assume that each Person executing and delivering the same was
duly authorized unless the responsible individual acting thereon for Agent shall
have, at the time of reliance thereon, actual knowledge to the contrary.
(b) Each Borrower shall execute and deliver to each Lender a third
amended and restated revolving credit note to evidence the Revolving Credit
Loan, such note to be in the principal amount of the Revolving Credit Loan
Commitment of such Lender and substantially in the form of EXHIBIT C hereto
(each a "REVOLVING CREDIT NOTE" and, collectively, the "REVOLVING CREDIT
NOTES"). The Revolving Credit Notes shall represent the obligation of each
Borrower to pay the amount of the Revolving Credit Loan Commitment or, if less,
the aggregate unpaid principal amount of all Revolving Credit Advances made by
Lenders to such Borrower and all other obligations with interest thereon as
prescribed in SECTION 1.5. The date and amount of each Revolving Credit Advance
and each payment of principal with respect thereto shall be recorded on the
books and records of Agent, which books and records shall constitute PRIMA FACIE
evidence of the accuracy of the information therein recorded. The entire unpaid
balance of the Revolving Credit Loan shall be immediately due and payable on the
Revolving Commitment Termination Date.
1.2 LETTERS OF CREDIT. Subject to the terms and conditions of ANNEX
B, Agent shall issue Letters of Credit or letter of credit guarantees in
accordance with such ANNEX B.
1.3 PREPAYMENT. (a) In the event that the outstanding balance of the
Revolving Credit Loan shall, at any time, exceed Borrowing Availability or any
other limitation contained in SECTION 1.1(A), Borrowers shall immediately repay
the Revolving Credit Loan in the amount of such excess.
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(b) Any prepayments required under CLAUSE (A) above shall be applied
as follows: FIRST, to Fees and reimbursable expenses of Agent then due and
payable pursuant to any of the Loan Documents; SECOND, to interest then due and
payable on Revolving Credit Advances made to the applicable Borrower; THIRD, to
the principal balance of Revolving Credit Advances outstanding to the applicable
Borrower until the same shall have been paid in full; FOURTH, to the Letter of
Credit Obligations of the applicable Borrower to provide cash collateral
therefor in the manner set forth in ANNEX B, until all such Letter of Credit
Obligations have been fully cash collateralized; FIFTH, to interest then due and
payable on the Revolving Credit Advances outstanding to each Borrower (or other
Borrower, as the case may be), PRO rata; SIXTH, to the principal balance of the
Revolving Credit Advances made to each Borrower (or other Borrower, as the case
may be), PRO RATA, until the same shall have been paid in full, and LAST to the
Letter of Credit Obligations of each Borrower (or other Borrower, as the case
may be), PRO RATA, to provide cash collateral therefor in the manner set forth
in ANNEX B, until all such Letter of Credit Obligations have been fully cash
collateralized. The Revolving Credit Loan Commitment shall not be permanently
reduced by the amount of any such prepayments.
(c) No prepayment fee or penalty (except as described in SECTION
1.12(C)) shall be payable in respect of any mandatory prepayment under this
SECTION 1.3.
1.4 USE OF PROCEEDS; OBLIGORS' REPRESENTATIVE. (a) Obligors shall
utilize the proceeds of Revolving Credit Advances solely for the financing of
ordinary working capital and general corporate needs and for other purposes not
prohibited by the terms hereof, including the financing of fees and expenses
incurred in connection with the consummation of the transactions contemplated
hereby, permitted Capital Expenditures, Permitted Acquisitions and permitted
intercompany loans (but excluding in any event any direct or indirect
redemption, purchase, repayment or defeasance of any Stock of any Obligor). In
addition to the foregoing, to the extent the proceeds of the IPO are
insufficient to repay the "Term Loan" (as defined in the Prior Credit Agreement)
in full on the Closing Date, proceeds of the initial Revolving Credit Advance
shall be utilized to make such repayment.
(b) Agent shall be entitled to rely upon, and shall be fully
protected in relying upon, any Notice of Revolving Credit Advance, Notice of
Conversion/Continuation or similar notice believed by Agent to be genuine. Agent
may assume that each Person executing and delivering such a notice was duly
authorized, unless the responsible individual acting thereon for Agent has
actual knowledge to the contrary. Each Obligor hereby designates Holdings as its
representative and agent on its behalf for the purposes of issuing Notices of
Revolving Credit Advances, giving instructions with respect to the disbursement
of the proceeds of the Revolving Credit Loan, selecting interest rate options,
requesting Letters of Credit, giving and receiving all other notices and
consents hereunder or under any of the other Loan Documents and taking all other
actions (including in respect of compliance with covenants) on behalf of any
Obligor or Obligors under the Loan Documents. Holdings hereby accepts such
appointment. Agent and each Lender may regard any notice or other
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communication pursuant to any Loan Document from Holdings as a notice or
communication from all Obligors, and may give any notice or communication
required or permitted to be given to any Obligor or Obligors hereunder to
Holdings on behalf of such Obligor or Obligors. Each Obligor agrees that each
notice, election, representation and warranty, covenant, agreement and
undertaking made on its behalf by Holdings shall be deemed for all purposes to
have been made by such Obligor and shall be binding upon and enforceable against
such Obligor to the same extent as if the same had been made directly by such
Obligor.
1.5 INTEREST ON REVOLVING CREDIT LOAN. (a) Borrowers shall pay
interest to Agent, for the ratable benefit of Lenders, in arrears on (i) the
first day of each month with respect to Index Rate Loans, commencing on June 1,
1997 and (ii) on the last day of each applicable LIBOR Period with respect to
LIBOR Loans, at a rate equal to (i) the Index Rate plus the applicable per annum
rate set forth in the following grid (the "INDEX Margin") or (ii) at Holdings'
election in accordance with SECTION 1.5(E), the applicable LIBOR Rate plus the
applicable per annum rate set forth in the following grid (the "LIBOR MARGIN";
the Index Margin, LIBOR Margin and L/C Margin (as hereinafter defined), each a
"MARGIN"), in each case based on the amounts outstanding from time to time under
the Revolving Credit Loan.
FUNDED DEBT TO REVOLVING CREDIT LOAN
EBITDA RATIO LIBOR MARGIN INDEX MARGIN
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> 3.0 2.50 1.00
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> 2.5 but < 3.0 2.25 0.75
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> 2.0 but < 2.5 2.00 0.50
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> 1.5 but < 2.0 1.50 0.00
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< 1.5 1.25 0.00
As of the Closing Date, the effective Margin for the Revolving Credit Loan shall
be the Margin in the foregoing grid corresponding to a Funded Debt to EBITDA
ratio of greater than or equal to 3.0. Thereafter, determinations of each Margin
will be based on a Funded Debt to EBITDA ratio calculated in accordance with
paragraph (e) of ANNEX G. The initial adjustment (up or down) in the Margins
will be effective June 1, 1997 based on the Pro Forma and, thereafter, all
further adjustments (up or down) in the Margins will be implemented
prospectively (A) on a quarterly basis, effective on the first Business Day of
the first calendar month that occurs more than five (5) days after delivery to
Lenders of Holdings' quarterly Financial Statements for the preceding Fiscal
Quarter, commencing with such Financial Statements delivered for the Fiscal
Quarter ending May 31, 1997 and (B) after giving pro forma effect to each
Permitted Acquisition involving aggregate consideration in excess of $5,000,000
(including assumed or consolidated liabilities), effective on the first Business
Day of the first calendar month that occurs more than five (5) days after
delivery to Lenders of certificates and pro forma financial information required
to be delivered in respect of such Permitted Acquisitions. Concurrently with the
delivery of the Pro Forma and the Financial Statements described in the
foregoing clause (A), Holdings shall deliver to Agent and Lenders a certificate,
signed by its chief financial officer, setting forth in reasonable detail the
basis for the determination of each Margin.
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Failure to timely deliver any of the foregoing Pro Forma or Financial
Statements, certificates or pro forma financial information shall, in addition
to any other remedy provided for in this Agreement, result in an increase in the
Margins to the highest level set forth in the foregoing grid, until the first
Business Day of the first calendar month following the delivery of such
applicable information demonstrating that such an increase is not required. If a
Default or Event of Default shall have occurred or be continuing at the time any
reduction in the Margin is to be implemented, that reduction shall be deferred
until the first Business Day of the first calendar month following the date on
which such Default or Event of Default is waived or cured.
(b) If any payment on the Revolving Credit Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day (except as set forth in the
definition of LIBOR Period) and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.
(c) All computations of interest shall be made by Agent on the basis
of a three hundred and sixty (360) day year, in each case for the actual number
of days occurring in the period for which such interest is payable. The Index
Rate shall be calculated based on the Index Rate as in effect each day. Each
determination by Agent of an interest rate hereunder shall be conclusive and
binding for all purposes, absent manifest error or bad faith.
(d) So long as any Default or Event of Default shall have occurred
and be continuing, and after written notice from Agent to Holdings, the interest
rates applicable to the Revolving Credit Loan and any other Obligations shall be
increased by two percent (2%) per annum above the rate of interest otherwise
applicable hereunder ("DEFAULT RATE").
(e) Provided no Default or Event of Default shall have occurred and
be continuing, Holdings may elect by 11:00 a.m. (New York time) on, the third
(3rd) Business Day prior to (i) the end of each LIBOR Period with respect to any
LIBOR Loans, or (ii) the date on which Holdings wishes to convert any Index Rate
Loan to a LIBOR Loan, with respect to an Index Rate Loan, to have all or some
portion of the Revolving Credit Loan bear interest at the LIBOR Rate for the
next succeeding LIBOR Period as designated by Holdings in such election. If no
election is received with respect to a LIBOR Loan by 11:00 A.M. (New York time)
on the third (3rd) Business Day prior to the end of the LIBOR Period with
respect to such LIBOR Loan (or a Default or Event of Default shall have occurred
and is continuing), such LIBOR Loan shall be converted to an Index Rate Loan at
the end of the LIBOR Period. Holdings shall make such election by notice to
Agent in writing, by telecopy, telex or cable. Holdings, on behalf of Borrowers,
shall have the option to (1) convert at any time all or any portion of the
Revolving Credit Loan, equal to $5,000,000 and integral multiples of $1,000,000
in excess of that amount, bearing interest at a rate determined by reference to
one basis to a rate determined by reference to an alternative basis or (2) upon
the expiration of any LIBOR Period applicable to a LIBOR Loan, to continue all
or any portion of the Revolving Credit Loan equal to $5,000,000 and integral
multiples of $1,000,000 in excess of that amount as a LIBOR Loan and the
succeeding Period(s) of such continued portion of the Revolving Credit Loan
shall commence on the last day of the LIBOR Period of the portion of the
Revolving Credit Loan to be continued;
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PROVIDED that LIBOR Loans may only be converted into Index Rate Loans on the
expiration date of a LIBOR Period applicable thereto; and PROVIDED, FURTHER,
that no portion of the Revolving Credit Loan may be continued as, or be
converted into, a LIBOR Loan when any Event of Default or Default has occurred
and is continuing. Each notice given by Holdings pursuant hereto (a "NOTICE OF
CONVERSION/CONTINUATION") shall be substantially in the form of EXHIBIT B
hereto, specifying the information requested therein and such other information
as may be required by Agent and shall be given in writing (by telecopy) or by
telephone confirmed immediately in writing. Agent shall be entitled to rely
upon, and shall be fully protected under this Agreement in relying upon, any
Notice of Conversion/Continuation believed by Agent to be genuine and to assume
that each Person executing and delivering the same was duly authorized unless
the responsible individual acting thereon for Agent shall have, at the time of
reliance thereon, actual knowledge to the contrary.
(f) Notwithstanding anything to the contrary set forth in this
SECTION 1.5, if, at any time until payment in full of all of the Obligations,
the rate of interest payable hereunder exceeds the highest rate of interest
permissible under any law which a court of competent jurisdiction shall, in a
final determination, deem applicable hereto (the "MAXIMUM LAWFUL RATE"), then in
such event and so long as the Maximum Lawful Rate would be so exceeded, the rate
of interest payable hereunder shall be equal to the Maximum Lawful Rate;
provided, HOWEVER, that if at any time thereafter the rate of interest payable
hereunder is less than the Maximum Lawful Rate, Borrowers shall continue to pay
interest hereunder at the Maximum Lawful Rate until such time as the total
interest received by Agent, on behalf of Lenders, from the making of such
advances hereunder is equal to the total interest which would have been received
had the interest rate payable hereunder been (but for the operation of this
paragraph) the interest rate payable since the Closing Date as otherwise
provided in this Agreement. Thereafter, the interest rate payable hereunder
shall be the rate of interest provided in SECTIONS 1.5(B) through (E) of this
Agreement, unless and until the rate of interest again exceeds the Maximum
Lawful Rate, in which event this paragraph shall again apply. In no event shall
the total interest received by any Lender pursuant to the terms hereof exceed
the amount which such Lender could lawfully have received had the interest due
hereunder been calculated for the full term hereof at the Maximum Lawful Rate.
In the event the Maximum Lawful Rate is calculated pursuant to this paragraph,
such interest shall be calculated at a daily rate equal to the Maximum Lawful
Rate divided by the number of days in the year in which such calculation is
made. In the event that a court of competent jurisdiction, notwithstanding the
provisions of this SECTION 1.5(f), shall make a final determination that a
Lender has received interest hereunder or under any of the other Loan Documents
in excess of the Maximum Lawful Rate, Agent shall, to the extent permitted by
applicable law, promptly apply such excess first to any interest due and not yet
paid hereunder in respect of the Revolving Credit Loan, then to the outstanding
principal of the Revolving Credit Loan, then to Fees and any other unpaid
Obligations and thereafter shall refund any excess to Borrowers or as a court of
competent jurisdiction may otherwise order.
1.6 FEES. As additional compensation for Lenders' costs and risks in
making the Revolving Credit Loan available to Borrowers, Borrowers agree to pay
to Agent, for the ratable benefit of Lenders, in arrears, on the first Business
Day of each month prior to the Revolving Commitment Termination Date or such
earlier date as the Lenders' obligations to make Revolving
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Credit Advances terminate or the Revolving Credit Loan becomes due and payable,
and on the Revolving Commitment Termination Date or such earlier date as the
Lenders' obligations to make Revolving Credit Advances terminate or the
Revolving Credit Loan becomes due and payable, a fee for Borrowers' non-use of
available funds (the "NON-USE FEE") in an amount equal to three-eighths of one
percent (.375%) per annum (calculated on the basis of a 360 day year and actual
days elapsed) of the difference between the respective daily averages of (i) the
Maximum Revolving Credit Loan (as it may be adjusted from time to time
hereunder) and (ii) the amount of the Revolving Credit Loan outstanding during
the period for which the Non-Use Fee is due.
1.7 CASH MANAGEMENT SYSTEMS. (a) Obligors shall maintain until the
Termination Date the cash management systems described on ANNEX C.
(b) If a Default shall occur and be continuing under SECTIONS 8.1(J)
or (K) or an Event of Default shall have occurred and be continuing, then in any
such case the Agent may (in its sole discretion) give the Activation Notice
referred to in ANNEX C.
1.8 RECEIPT OF PAYMENTS. Borrowers shall make each payment under
this Agreement not later than 1:00 p.m. (New York time) on the day when due in
lawful money of the United States of America in immediately available funds to
the Collection Account. For purposes of computing interest and fees and
determining the amount of funds available for borrowing by Borrowers pursuant to
SECTION 1.1(A), (a) all payments (including cash sweeps) consisting of cash,
wire or electronic transfers in immediately available funds shall be deemed
received on the date of deposit thereof in the Collection Account and notice to
Agent of such deposit before the time specified above, and (b) all payments
consisting of checks, drafts, or similar non-cash items shall be deemed received
on the day of receipt of good funds following deposit of any such payment in the
Collection Account and notice to Agent of such deposit.
1.9 APPLICATION AND ALLOCATION OF PAYMENTS. (a) So long as any
Default or Event of Default shall have occurred and be continuing, each Borrower
irrevocably waives the right to direct the application of any and all payments
at any time or times hereafter received from or on behalf of such Borrower and
each Borrower hereby irrevocably agrees that Agent shall have the continuing
exclusive right to apply any and all such payments against the then due and
payable Obligations of Borrowers and in repayment of the Revolving Credit Loan
as Agent may deem advisable notwithstanding any previous entry by Agent upon the
Loan Account or any other books and records. In the absence of a specific
determination by Agent with respect thereto, the same shall be applied in the
following order: (i) to then due and payable Fees and expenses; (ii) to then due
and payable interest payments on the Revolving Credit Loan; (iii) to Obligations
other than Fees, expenses and interest and principal payments; (iv) to then due
and payable principal payments on the Revolving Credit Loan; and (v) to all
other then due and payable Obligations. Agent is authorized and directed to, and
at its option may, make or cause to be made Revolving Credit Advances on behalf
of Borrowers for payment of all Fees, expenses, Charges, costs, principal,
interest, or other Obligations owing by Borrowers under this Agreement or any of
the other Loan Documents if and to the extent any such Borrower fails to
promptly pay any such amounts as and when due, even if such Revolving
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Credit Advance would cause total Revolving Credit Advances to exceed Borrowing
Availability or the Maximum Revolving Credit Loan amount. At Agent's option and
to the extent permitted by law, any advances so made shall be deemed Revolving
Credit Advances constituting part of the Revolving Credit Loan hereunder.
1.10 LOAN ACCOUNT AND ACCOUNTING. Agent shall maintain a loan
account (the "LOAN ACCOUNT") on its books to record: (a) all Revolving Credit
Advances, (b) all payments made by Borrowers and (c) all other appropriate
debits and credits as provided in this Agreement and the other Loan Documents
with respect to the Revolving Credit Loan or any other Obligations. All entries
in the Loan Account shall be made in accordance with Agent's customary
accounting practices as in effect from time to time. Borrowers shall pay all
Obligations as such amounts become due or are declared due pursuant to the terms
of this Agreement.
The balance in the Loan Account, as recorded on Agent's most recent
printout or other written statement, shall be presumptive evidence of the
amounts due and owing at such time to Agent and Lenders by Borrowers; PROVIDED,
THAT, any failure to so record or any error in so recording shall not limit or
otherwise affect Borrowers' obligations to pay the Obligations. Agent shall
render to Holdings a monthly accounting of transactions under the Revolving
Credit Loan setting forth the balance of the Loan Account. Each and every such
accounting shall (absent manifest error) be deemed final, binding and conclusive
upon Borrowers in all respects as to all matters reflected therein, unless
Holdings, within thirty (30) days after the date any such accounting is
rendered, shall notify Agent in writing of any objection which Borrowers may
have to any such accounting, describing the basis for such objection with
specificity. In that event, only those items expressly objected to in such
notice shall be deemed to be disputed by Borrowers.
1.11 ACCESS. Each Obligor shall (i) provide full access during
normal business hours, from time to time upon one (1) Business Day's prior
notice, to Agent and any of its officers, employees and agents, as frequently as
Agent determines, in its reasonable discretion, to be appropriate (unless a
Default or Event of Default shall have occurred and be continuing, in which
event Agent and Lenders and their respective officers, employees, designees,
agents and representatives shall have access at any and all times and without
any notice), to the properties, facilities, books, records, advisors and
employees (including officers) of Obligors and their Subsidiaries, to the
Collateral, to the accountants of Obligors and their Subsidiaries and to the
work papers of such accountants. In addition, during the pendency of an Event of
Default, the Agent and Lenders shall have access to the customers and suppliers
of Obligors and their Subsidiaries. Without limiting the generality of the
foregoing, Obligors shall (i) permit Agent, and any of its officers, employees,
agents and representatives, to inspect, audit and make extracts from all of the
records, files and books of account of Obligors and their Subsidiaries and (ii)
permit Agent, and any of its officers, employees, agents and representatives, to
inspect, review and evaluate the Accounts, Inventory at Obligors' and their
Subsidiaries' locations and at premises not owned by or leased to Obligors or
their Subsidiaries. Each Obligor shall make available to Agent and its counsel,
as quickly as is possible under the circumstances, copies of all books, records,
board minutes, contracts, insurance policies, environmental audits, business
plans, files, financial statements (actual and pro
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forma), filings with federal, state and local regulatory agencies, and other
instruments and documents which Agent may request. Each Obligor shall deliver
any document or instrument necessary for Agent, as it may from time to time
request, to obtain records from any service bureau or other Person which
maintains records for any Obligor. Each Obligor shall instruct their certified
public accountants and their banking and other financial institutions to make
available to Agent such information and records as Agent may reasonably request.
Agent will give Lenders at least ten (10) days' prior written notice of
regularly scheduled audits. Representatives of other Lenders may accompany
Agent's representatives on regularly scheduled audits at no charge to Obligors.
1.12 INDEMNITY. (a) Each Obligor shall jointly and severally
indemnify and hold each of Agent, Lenders and their respective Affiliates,
officers, directors, employees, attorneys, agents and representatives (each, an
"INDEMNIFIED PERSON"), harmless from and against any and all suits, actions,
proceedings, claims, damages, losses, liabilities and expenses (including
attorneys' fees and disbursements and other costs of investigation or defense,
including those incurred upon any appeal) which may be instituted or asserted
against or incurred by any such Indemnified Person as the result of credit
having been extended under this Agreement and the other Loan Documents or in
connection with or arising out of the transactions contemplated hereunder and
thereunder, (including any and all Environmental Liabilities and Costs);
PROVIDED, THAT no Obligor shall be liable for any indemnification to such
Indemnified Person to the extent that any such suit, action, proceeding, claim,
damage, loss, liability or expense results solely from such Indemnified Person's
gross negligence or willful misconduct, as finally determined by a court of
competent jurisdiction after all possible appeals have been exhausted. NEITHER
AGENT, ANY LENDER NOR ANY OTHER INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR
LIABLE TO ANY OTHER PARTY HERETO, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY
BENEFICIARY OF SUCH PARTY OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY
THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
(b) Each Obligor hereby acknowledges that Agent (i) is not now, and
has not ever been, in control of any of the Real Estate or any Obligor's
affairs, and (ii) does not have the capacity through the provisions of the Loan
Documents to influence any Obligor's conduct with respect to the ownership,
operation or management of any of its real property, including any of its Real
Estate.
(c) Borrowers understand that in connection with Lenders' arranging
to provide the LIBOR Rate interest option with respect to the Revolving Credit
Loan from time to time at the option of Borrowers on the terms provided herein,
Lenders may enter into funding arrangements with third parties ("FUNDING
ARRANGEMENTS") on terms and conditions which could result in substantial losses
to such Lenders if such LIBOR Rate funds do not remain outstanding at the
interest rates provided herein for the entire LIBOR Period with respect to which
the LIBOR Rate has been fixed. Consequently, in order to induce Lenders to
provide such LIBOR Rate option on the terms provided herein and in consideration
for the entering into by Lenders of Funding Arrangements from time to time in
contemplation thereof, if any LIBOR Rate funds are repaid in whole or in part
prior to the last
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day of any such LIBOR Period therefor, with respect to LIBOR Rate funds (whether
such repayment is made pursuant to any provision of this Agreement or any other
Loan Document or is the result of acceleration, by operation of law or
otherwise), Borrowers shall indemnify and hold harmless each Lender from and
against and in respect of any and all losses, costs and expenses resulting from,
or arising out of or imposed upon or incurred by such Lender by reason of the
liquidation or reemployment of funds acquired or committed to be acquired by
such Lender to fund such LIBOR Rate option pursuant to the Funding Arrangements.
The amount of any losses, costs or expenses resulting in an obligation of
Borrowers to make a payment pursuant to the foregoing sentence shall not include
any losses attributable to lost profit to Lenders but shall represent the
excess, if any, of (A) such Lender's cost of borrowing the LIBOR Rate funds
pursuant to the Funding Arrangements over (B) the return to such Lender on its
reasonable reinvestment of such funds; PROVIDED, HOWEVER, that if any Lender
terminates any Funding Arrangements in respect of the LIBOR Rate funds, the
amount of such losses, costs and expenses shall include the cost to such Lender
of such termination. In reinvesting any funds borrowed by any Lender pursuant to
the Funding Arrangements, such Lender shall take into consideration the
remaining maturity of such borrowings. As promptly as practicable under the
circumstances, each Lender shall provide Holdings with its written calculation
of all amounts payable pursuant to the next preceding sentence, and such
calculation shall be binding on the parties hereto unless Holdings shall object
thereto in writing within ten (10) Business Days of receipt thereof.
1.13 TAXES. (a) Any and all payments by each Borrower hereunder or
under the Revolving Credit Note shall be made, in accordance with this SECTION
1.13, free and clear of and without deduction for any and all present or future
Taxes except to the extent Borrowers are required to withhold such amounts
pursuant to SECTION 1.13(D). If any Borrower shall be required by law to deduct
any Taxes from or in respect of any sum payable hereunder or under the Revolving
Credit Note, (i) the sum payable shall be increased as much as shall be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this SECTION 1.13) Agent or Lenders,
as applicable, receive an amount equal to the sum they would have received had
no such deductions been made, (ii) such Borrower shall make such deductions, and
(iii) such Borrower shall pay the full amount deducted to the relevant taxing or
other authority in accordance with applicable law.
(b) Obligors shall indemnify and pay, within ten (10) days of demand
therefor, Agent and each Lender for the full amount of Taxes imposed as a result
of payments made by Obligors under any Loan Document (including any Taxes
imposed by any jurisdiction on amounts payable under this SECTION 1.13) paid by
Agent or such Lender, as appropriate, and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether or not
such Taxes were correctly or legally asserted.
(c) Within thirty (30) days after the date of any payment of Taxes,
Holdings shall furnish to Agent, at its address referred to in SECTION 11.10,
the original or a certified copy of a receipt evidencing payment thereof.
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(d) Prior to becoming a Lender hereunder and within fifteen (15)
days after a reasonable written request from Holdings or Agent thereafter, each
Lender organized under the laws of a jurisdiction outside the United States (a
"FOREIGN LENDER") shall provide to Holdings and Agent a properly completed and
executed Internal Revenue Service Form 4224 or Form 1001 or other applicable
form, certificate or document prescribed by the Internal Revenue Service or the
United States certifying as to such Foreign Lender's entitlement to such
exemption from withholding with respect to payments to be made to such Foreign
Lender under this Agreement and under the Revolving Credit Notes (a "CERTIFICATE
OF EXEMPTION"). If a Foreign Lender does not provide a Certificate of Exemption
to Holdings and Agent within the time periods set forth in the preceding
paragraph, Borrowers shall withhold taxes from payments to such Foreign Lender
at the applicable statutory rate and Borrowers shall not be required pursuant to
SECTION 1.13 or otherwise to pay any additional amounts as a result of such
withholding; provided, however, that all such withholding shall cease upon
delivery by such Foreign Lender of a Certificate of Exemption to Holdings and
Agent.
1.14 CAPITAL ADEQUACY; INCREASED COSTS; ILLEGALITY. (a) In the event
that any Lender shall have determined that the adoption after the Closing Date
of any law, treaty, governmental (or quasi-governmental) rule, regulation,
guideline or order regarding capital adequacy, reserve requirements or similar
requirements or compliance by any Lender with any request or directive issued
after the Closing Date regarding capital adequacy, reserve requirements or
similar requirements (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful) from any central bank or
governmental agency or body having jurisdiction does or would have the effect of
increasing the amount of capital, reserves or other funds required to be
maintained by such Lender and thereby reducing the rate of return on such
Lender's capital as a consequence of its obligations hereunder, then Borrowers
shall from time to time within fifteen (15) days after notice and demand on
Holdings by such Lender (together with the certificate referred to in the next
sentence and with a copy to Agent) pay to Agent, for the account of such Lender,
additional amounts sufficient to compensate such Lender for such reduction;
PROVIDED, HOWEVER, THAT, notwithstanding the foregoing, Borrowers shall have no
obligation to make any such payment in the event, if any, that such notice and
demand was sent by such Lender more than one-hundred and eighty (180) days after
it became or should reasonably have become aware of such law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline or order. A
certificate as to the amount of such cost and showing the basis of the
computation of such cost submitted by such Lender to Borrowers and Agent shall,
absent manifest error, be final, conclusive and binding for all purposes.
(b) If, after the Closing Date due to either (i) the introduction of
or any change in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to any Lender of agreeing to make or making, funding or
maintaining any LIBOR Loan, then Borrowers shall from time to time, within
fifteen (15) days after notice by such Lender (with a copy of such demand to
Agent), pay to Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost; PROVIDED, HOWEVER,
THAT, notwithstanding the foregoing, Borrowers shall have no obligation to make
any such payment in the event, if any, that such notice and demand was sent by
such Lender more than one-
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hundred and eighty (180) days after it became or should reasonably have become
aware of such law, treaty, governmental (or quasi-governmental) rule,
regulation, guideline or order. A certificate as to the amount of such increased
cost and showing the basis of such computation, submitted to Holdings and Agent
by such Lender, shall be conclusive and binding on Borrowers for all purposes,
absent manifest error. Each Lender agrees that, as promptly as practicable after
it becomes aware of any circumstances referred to in CLAUSE (I) or (II) above
which would result in any such increased cost to such Lender, such Lender shall,
to the extent not inconsistent with such Lender's internal policies of general
application, use reasonable commercial efforts to minimize costs and expenses
incurred by it and payable to it by Borrowers pursuant to this SECTION 1.14(B).
(c) Notwithstanding anything to the contrary contained herein, if
the introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other Governmental
Authority shall assert that it is unlawful, for any Lender to agree to make or
to make or to continue to fund or maintain any LIBOR Loan, then, unless such
Lender is able to agree to make or to make or to continue to fund or to maintain
such LIBOR Loans at another branch or office of such Lender without, in such
Lender's opinion, adversely affecting it or its Pro Rata Share of the Revolving
Credit Loan or the income obtained therefrom, on notice thereof and demand
therefor by such Lender to Borrowers through Agent, (i) the obligation of such
Lender to agree to make or to make or to continue to fund or maintain LIBOR
Loans shall terminate and (ii) Borrowers shall forthwith prepay in full all
outstanding LIBOR Loans, together with interest accrued thereon, of such Lender
UNLESS Borrowers, within five (5) Business Days after the delivery of such
notice and demand, convert all LIBOR Loans into Index Rate Loans.
(d) Upon the Agent obtaining actual knowledge of the occurrence of
any of the events set forth in this SECTION 1.14, Agent shall promptly notify
Holdings of the occurrence of such event. Borrowers shall have the right within
five (5) days of receipt of such notice to convert any outstanding LIBOR Loans
to an Index Rate Loan.
1.15 REPLACEMENT OF LENDER IN RESPECT OF INCREASED COSTS. Within
fifteen (15) days after receipt by Holdings of written notice and demand from
any Lender (an "AFFECTED LENDER") for payment of additional amounts or increased
costs as provided in SECTION 1.13(A), 1.14(A) or 1.14(B), Holdings may, at its
option, notify Agent and such Affected Lender in writing of its intention to
replace the Affected Lender. So long as no Default or Event of Default shall
have occurred and be continuing, Holdings, with the prior written consent of
Agent, may obtain, at Borrowers' expense, a replacement Lender ("REPLACEMENT
LENDER") for the Affected Lender, which Replacement Lender must be satisfactory
to Agent. If Borrowers obtain a Replacement Lender within ninety (90) days
following notice of their intention to do so, the Affected Lender must sell and
assign its Pro Rata Share of the Revolving Credit Loan and Revolving Credit Loan
Commitment to such Replacement Lender for an amount equal to the principal
balance of the Revolving Credit Loan held by the Affected Lender and all accrued
interest and Fees with respect thereto through the date of such sale, PROVIDED
that Borrowers shall have reimbursed such Affected Lender for the additional
amounts or increased costs that it is entitled to receive under this Agreement
through the date of such sale and assignment.
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Notwithstanding the foregoing, Borrowers shall not have the right to obtain a
Replacement Lender if the Affected Lender rescinds its demand for increased
costs or additional amounts within fifteen (15) days following its receipt of
Borrowers' notice of intention to replace such Affected Lender. Furthermore, if
Borrowers give a notice of intention to replace and do not so replace such
Affected Lender within ninety (90) days thereafter, Borrowers' rights under this
SECTION 1.15 shall terminate and Borrowers shall promptly pay all increased
costs or additional amounts demanded by such Affected Lender pursuant to
SECTIONS 1.13(A), 1.14(a) and 1.14(B).
1.16 SINGLE LOAN.The Revolving Credit Loan, as advanced to each
Borrower, and all of the other Obligations of each Borrower arising under this
Agreement and the other Loan Documents shall constitute one general obligation
of that Borrower secured, until the Termination Date, by all of its Collateral.
2. CONDITIONS PRECEDENT
2.1 CONDITIONS TO REVOLVING CREDIT LOAN.
Notwithstanding any other provision of this Agreement and without
affecting in any manner the rights of Agent and Lenders hereunder, Obligors
shall have no rights under this Agreement (but shall have all applicable
obligations hereunder), and no Lender shall be obligated to make any Revolving
Credit Advance, or to take, fulfill, or perform any other action hereunder,
until the following conditions have been satisfied, in Agent's sole discretion,
or waived in writing by Agent and Requisite Lenders:
(a) AGREEMENT. This Agreement or counterparts hereof shall have been
duly executed by, and delivered to, Obligors, Agent and Lenders.
(b) LOAN DOCUMENTS. Agent shall have received such guaranties,
documents, instruments, agreements and legal opinions as Agent shall request in
connection with the transactions contemplated by this Agreement and the other
Loan Documents, including all guaranties, documents, instruments, agreements and
legal opinions listed in the Schedule of Documents attached hereto as ANNEX D,
each in form and substance satisfactory to Agent.
(c) GOVERNMENTAL APPROVALS. Evidence satisfactory to Agent that
Obligors have obtained consents and acknowledgments of all Persons whose
consents and acknowledgments may be required, including, but not limited to, all
requisite Governmental Authorities, to the terms, and to the execution and
delivery, of this Agreement, the other Loan Documents, the IPO Documents and the
consummation of the transactions contemplated hereby and thereby.
(d) TERM LOAN. The "Term Loan" (as defined in the Prior Credit
Agreement), together with all interest, fees, expenses and other amounts accrued
or payable with respect thereto, shall have been paid in full as of the Closing
Date, first, with the proceeds of the IPO and, to the extent necessary
thereafter, with the proceeds of the initial Revolving Credit Advance.
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(e) IPO. The IPO shall have been consummated in accordance with the
terms of the IPO Documents and all applicable laws, and, Holdings shall have
received proceeds of the IPO, net of all fees, commissions, costs and expenses,
of not less than $55,900,000, not more than $25,000,000 of which shall be
distributed to Parent as a dividend and not more than $17,000,000 of which shall
be transferred to Parent as payment in full of all intercompany loans owing from
the Obligors to Parent and the other Publishing Obligors as of the Closing Date.
Upon consummation of the IPO, Holdings shall be, and be qualified to be, listed
on the New York Stock Exchange. No claim, suit, proceeding, petition,
governmental investigation, injunction or any other litigation shall have been
commenced or threatened against any Obligor or any Affiliate thereof with
respect to the IPO.
(f) OPENING AVAILABILITY. After giving effect to Revolving Credit
Advances made and Letter of Credit Obligations incurred on the Closing Date and
the consummation of the IPO, Borrowing Availability as of the Closing Date shall
be at least $70,000,000 (on a pro forma basis, with trade payables being paid
currently, and expenses and liabilities being paid in the ordinary course of
business and without acceleration of sales).
(g) COMPLIANCE WITH LAWS. Agent shall have received evidence
satisfactory to Agent and its counsel that each Obligor and Subsidiary thereof
is in compliance in all material respects, with all applicable foreign, federal,
state and local laws and regulations, including those relating to labor and
environmental matters and ERISA.
(h) PRIOR CREDIT AGREEMENT. No "Default" or "Event of Default" (each
as defined in the Prior Credit Agreement) shall have occurred and be continuing
and all the Obligors party to the Prior Credit Agreement and the "Loan
Documents" (as defined in the Prior Credit Agreement) shall have complied in all
respects with the covenants and agreements contained therein or made pursuant
thereto, including with respect to the Collateral.
2.2 FURTHER CONDITIONS TO EACH REVOLVING CREDIT ADVANCE. It shall be
a further condition to the initial and each subsequent Revolving Credit Advance
that the following statements shall be true on the date of each such advance or
funding, as the case may be:
(a) (i) With respect to the initial Revolving Credit Advance, all of
each Obligor's representations and warranties contained herein or in any of the
other Loan Documents shall be true and correct on and as of the Closing Date and
(ii) with respect to each subsequent Revolving Credit Advance, all of each
Obligor's representations and warranties contained herein or in any of the other
Loan Documents, shall be true and correct in all material respects on the date
on which each such Revolving Credit Advance is made as though made on and as of
such date, except to the extent that any such representation or warranty
expressly relates to an earlier date and except for changes therein expressly
permitted or expressly contemplated by this Agreement.
(b) Obligors and each of the Subsidiaries thereof shall be in
compliance in all material respects with all of the covenants and other
agreements contained herein or in any of the
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other Loan Documents including, without limitation, taking any further action
required after the Closing Date under SECTION 2.1.
(c) No event shall have occurred and be continuing, or would result
from the making of any Revolving Credit Advance which constitutes or would
constitute a Default or an Event of Default.
(d) After giving effect to such Revolving Credit Advance the
aggregate principal amount of the Revolving Credit Loan shall not exceed the
maximum amount permitted by SECTION 1.1(A) without requiring that a payment be
made to Agent or any Lender.
The request by Holdings and acceptance by any Borrower of the proceeds of any
Revolving Credit Advance shall be deemed to constitute, as of the date of such
request or acceptance, (i) a representation and warranty by Obligors that the
conditions in this SECTION 2.2 have been satisfied and (ii) a reaffirmation by
Obligors of the granting and continuance of Agent's Liens, on behalf of itself
and Lenders, pursuant to the Collateral Documents.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Revolving Credit Loan and to incur
Letter of Credit Obligations, Obligors, jointly and severally, make the
following representations and warranties to Agent and each Lender, each and all
of which shall be true and correct as of the date of execution and delivery of
this Agreement, and shall survive the execution and delivery of this Agreement:
3.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each Obligor and the
Subsidiaries thereof (i) is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation and has
been duly qualified to conduct business and is in good standing in each other
jurisdiction where its ownership or lease of property or the conduct of its
business requires such qualification, except where the failure to so qualify
would not be reasonably likely to have a Material Adverse Effect; (ii) has the
requisite corporate power and authority and the legal right to own, pledge,
mortgage or otherwise encumber and operate its properties, to lease the property
it operates under lease and to conduct its business as now, heretofore and
proposed to be conducted; (iii) has all material licenses, permits, consents or
approvals from or by, and has made all material filings with, and has given all
notices to, all Governmental Authorities having jurisdiction, to the extent
required for such ownership, operation and conduct; (iv) is in compliance with
its certificate or articles of incorporation and by-laws; and (v) is in
compliance in all material respects with all applicable provisions of law.
3.2 EXECUTIVE OFFICES. The current location of each Obligor's
executive office and principal place of business is set forth on SCHEDULE 3.2
and, except as set forth on SCHEDULE 3.2, none of such locations have changed
within the past six (6) months.
3.3 CORPORATE POWER, AUTHORIZATION, ENFORCEABLE OBLIGATIONS. The
execution,
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delivery and performance by each Obligor of the Loan Documents and all
instruments and documents to be delivered by such Obligor, to the extent it is a
party thereto, hereunder and thereunder and the creation of all Liens provided
for herein and therein: (i) are within such Person's corporate power; (ii) have
been duly authorized by all necessary or proper corporate and shareholder
action; (iii) are not in contravention of any provision of such Person's
respective certificate or articles or incorporation or bylaws; (iv) will not
violate any law or regulation, or any order or decree of any court or
governmental instrumentality; (v) will not conflict with or result in the breach
or termination of, constitute a default under or accelerate any performance
required by, any indenture, mortgage, deed of trust, lease, agreement or other
instrument to which such Person is a party or by which such Person or any of its
property is bound; (vi) will not result in the creation or imposition of any
Lien upon any of the property of such Person other than those in favor of Agent,
on behalf of itself and Lender, all pursuant to the Loan Documents; and (vii) do
not require the consent or approval of any Governmental Authority or any other
Person, except those referred to in SECTION 2.1(C), all of which will have been
duly obtained, made or complied with prior to the Closing Date. At or prior to
the Closing Date, each of the Loan Documents shall have been duly executed and
delivered for the benefit of or on behalf of each Obligor and each shall then
constitute a legal, valid and binding obligation of such Person, to the extent
it is a party thereto, enforceable against it in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency or other
similar laws affecting the rights of creditors generally or by application of
general principles of equity.
3.4 FINANCIAL STATEMENTS AND PROJECTIONS. All Financial Statements
(except for the Projections) concerning Obligors and their respective
Subsidiaries which will hereafter be furnished by or on behalf of any such
Persons to Agent or any Lender pursuant to this Agreement will be prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as disclosed therein and except, with respect to unaudited Financial
Statements, for the absence of footnotes and normal year-end audit adjustments)
and will present fairly in all material respects the financial position of the
corporations covered thereby as at the dates thereof and the results of their
operations for the periods then ended. The Projections attached to SCHEDULE 3.4
and those to be delivered after the Closing Date have been and will be prepared
by Holdings and its Subsidiaries in light of the then past operations of the
business of Holdings and its Subsidiaries. The Projections represent and will
represent as of the date thereof the good faith estimate of Holdings, Borrowers
and their senior management concerning the most probable course of their
businesses. The Pro Forma delivered on the Closing Date and attached to SCHEDULE
3.4 was prepared by Holdings giving PRO FORMA effect to the IPO, was based on
the unaudited consolidated and consolidating balance sheets of Holdings and its
Subsidiaries dated March 31, 1997, and was prepared in accordance with GAAP,
with only such adjustments thereto as would be required in accordance with GAAP.
3.5 COLLATERAL REPORTS. Holdings has delivered the Collateral
Reports identified on ANNEX F and each such Collateral Report conforms with the
description thereof contained on ANNEX F.
3.6 MATERIAL ADVERSE EFFECT. No Obligor or Subsidiary thereof, as of
May 31, 1996, had any obligations, contingent liabilities, or liabilities for
Charges, long-term leases or unusual
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forward or long-term commitments which are not reflected in the audited
consolidated balance sheet (or notes thereto) of Holdings and its Subsidiaries
for the Fiscal Year ended May 31, 1996 and which could, alone or in the
aggregate, be reasonably expected to have or result in a Material Adverse
Effect. As of the Closing Date, there has been no material adverse change in the
business, assets, operations, prospects or financial or other condition of any
Obligor or Subsidiary thereof since May 31, 1996.
3.7 OWNERSHIP OF PROPERTY; LIENS. (a) Except as described on
SCHEDULE 3.7 (or such other locations hereafter designated in writing by
Holdings as to which the provisions of SECTION 5.11 have been complied with),
the real estate ("REAL ESTATE") listed on SCHEDULE 3.7 constitutes all of the
real property owned, leased, or used in its business by each Obligor and its
Subsidiaries which is material to such Obligor or where material amounts of
Collateral are located. Each Obligor and Subsidiary thereof owns good and
marketable fee simple title to: (i) all of the owned Real Estate, and valid and
marketable leasehold interests in all of its Leases (both as lessor and lessee,
sublessee or assignee), all as described on SCHEDULE 3.7, and (ii) good and
marketable title to, or valid leasehold interests in, all of its other
properties and assets, and none of the properties and assets of any Obligor or
Subsidiary hereof are subject to any Liens, except Permitted Encumbrances.
Except as described on SCHEDULE 3.7, (i) no Obligor, Subsidiary thereof or other
party to any such Lease described on SCHEDULE 3.7 is in default in any material
respect of its obligations thereunder or has delivered or received any notice of
default under any such Lease (which has not been waived or cured), and no event
has occurred which, with the giving of notice, the passage of time or both,
would constitute a default under any such Lease; (ii) no Obligor or Subsidiary
thereof owns or holds or is obligated under or a party to, any option, right of
first refusal or any other contractual right to purchase, acquire, sell, assign
or dispose of any real property owned or leased by such Obligor or Subsidiary
except as set forth therein; and (iii) to Obligors' knowledge after reasonable
inquiry, no portion of any Real Estate owned or leased by any Obligor or
Subsidiary thereof has suffered any material damage by fire or other casualty
loss or a Release which has not heretofore either been repaired and restored to
its original condition or is in the process of being remedied in all material
respects. All material permits required to have been issued or appropriate to
enable the Real Estate owned or leased by such Obligor or Subsidiary to be
lawfully occupied and used for all of the purposes for which they are currently
occupied and used, have been lawfully issued and are, as of the Closing Date,
in full force and effect.
3.8 RESTRICTIONS; NO DEFAULT. No contract, lease, agreement or other
instrument to which any Obligor or Subsidiary thereof is a party or by which it
or any of its properties or assets is bound or affected and no provision of
applicable law or governmental regulation has or results in a Material Adverse
Effect, or is reasonably likely to have a Material Adverse Effect. No Obligor or
Subsidiary thereof is in default in any material respect, and to such Obligor's
or Subsidiary's knowledge no third party is in default in any material respect,
under or with respect to any contract, agreement, lease or other instrument to
which it is a party, which default is reasonably likely to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
3.9 LABOR MATTERS. There are no strikes or other labor disputes
against any
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Obligor or Subsidiary thereof that are pending or threatened. No hours worked by
and no payments made to employees of any Obligor or Subsidiary thereof have been
in violation of the Fair Labor Standards Act or any other applicable federal,
state, local or foreign law dealing with such matters. All payments due from
each Obligor or Subsidiary thereof on account of employee health and welfare
insurance have been paid or accrued as a liability on the books of such Obligor
or Subsidiary. Except as set forth on SCHEDULE 3.9, no Obligor or Subsidiary
thereof has any obligation under any collective bargaining agreement or any
employment agreement. To Obligors' knowledge after reasonable inquiry, there is
no organizing activity involving any Obligor or Subsidiary thereof pending or
threatened by any labor union or group of employees. Except as set forth on
SCHEDULE 3.9, there are no representation proceedings pending or threatened with
the National Labor Relations Board, and no labor organization or group of
employees of any Obligor or Subsidiary thereof has made a pending demand for
recognition. There are no material complaints or charges against any Obligor or
Subsidiary thereof pending or threatened to be filed with any federal, state,
local or foreign court, governmental agency or arbitrator based on, arising out
of, in connection with, or otherwise relating to the employment or termination
of employment by any Obligor or Subsidiary thereof of any individual.
3.10 VENTURES, SUBSIDIARIES AND AFFILIATES; OUTSTANDING STOCK AND
INDEBTEDNESS. Except as set forth on SCHEDULE 3.10, no Obligor has any
Subsidiaries or is engaged in any joint venture or partnership with any other
Person. Each person or group of persons (within the meaning of the Securities
Exchange Act of 1934, as amended) owning, directly or indirectly, five percent
(5%) or more of the issued and outstanding Stock of Holdings is named on
SCHEDULE 3.10, and the issued and outstanding Stock of each other Obligor and
Subsidiary thereof is owned by the Stockholders named on SCHEDULE 3.10. Except
as set forth on SCHEDULE 3.10, there are no outstanding rights to purchase,
options, warrants or similar rights or agreements pursuant to which any Obligor
or Subsidiary thereof may be required to issue or sell any Stock or other equity
security. As of the Closing Date, all outstanding Indebtedness and all Liens of
each Obligor and the Subsidiaries thereof are described in SECTION 6.3
(including SCHEDULE 6.3) and SECTION 6.7 (including SCHEDULE 6.7), respectively.
3.11 GOVERNMENT REGULATION. No Obligor or Subsidiary thereof is an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940 as amended. No Obligor or Subsidiary thereof is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act or any other federal or state
statute that restricts or limits its ability to incur Indebtedness or to perform
its obligations hereunder, and the making of Revolving Credit Advances by
Lenders, the application of the proceeds and repayment thereof by such Obligor
or Subsidiary, the IPO, and the consummation of the transactions contemplated by
this Agreement, the other Loan Documents and the IPO Documents will not violate
any provision of any such statute or any rule, regulation or order issued by the
Securities and Exchange Commission.
3.12 MARGIN REGULATIONS. No Obligor or Subsidiary thereof is
engaged, nor will
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it engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
security" within the respective meanings of each of the quoted terms under
Regulation U or G of the Board of Governors of the Federal Reserve System (the
"FEDERAL RESERVE BOARD") as now and from time to time hereafter in effect. No
Obligor or Subsidiary thereof owns any "margin security", as that term is
defined in Regulations G and U of the Board of Governors of the Federal Reserve
System (the "FEDERAL RESERVE BOARD"), and the proceeds of the Revolving Credit
Advances will not be used, directly or indirectly, for the purpose of purchasing
or carrying any margin security, for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any margin
security or for any other purpose which might cause any of the loans or other
extensions of credit under this Agreement to be considered a "purpose credit"
within the meaning of Regulation G, T, U or X of the Federal Reserve Board. No
Obligor or Subsidiary thereof will take or permit any agent acting on its behalf
to take any action which might cause this Agreement or any other Loan Document
or any document or instrument delivered pursuant hereto to violate any
regulation of the Federal Reserve Board.
3.13 TAXES. All federal, state, local and foreign tax returns,
reports and statements, including, but not limited to, informational returns
(Form 1120-S) required to be filed by each Obligor and Subsidiary thereof, have
been filed with the appropriate Governmental Authority and all Charges and other
impositions shown thereon to be due and payable have been paid prior to the date
on which any fine, penalty, interest or late charge may be added thereto for
nonpayment thereof, or any such fine, penalty, interest, late charge or loss has
been paid. Each Obligor and Subsidiary thereof has paid when due and payable all
Charges required to be paid by it, except for those being contested in
accordance with SECTION 5.2(B). Proper and accurate amounts have been withheld
by each Obligor or Subsidiary thereof from its respective employees for all
periods in full and complete compliance with the tax, social security and
unemployment withholding provisions of applicable federal, state, local and
foreign law and such withholdings have been timely paid to the respective
Governmental Authorities. SCHEDULE 3.13 sets forth those taxable years for which
any Obligor's tax returns are, as of the Closing Date, being audited by the IRS
or any other applicable Governmental Authority and any assessments or threatened
assessments in connection with such audit, or otherwise currently outstanding.
Except as described on SCHEDULE 3.13, no Obligor or Subsidiary thereof has
executed or filed with the IRS or any other Governmental Authority any agreement
or other document extending, or having the effect of extending, the period for
assessment or collection of any Charges. No Obligor or Subsidiary thereof has
filed a consent pursuant to IRC Section 341(f) or agreed to have IRC Section
341(f) (2) apply to any dispositions of subsection (f) assets (as such term is
defined in IRC Section 341(f)(4)). None of the property owned by any Obligor or
Subsidiary thereof is property which such Obligor or Subsidiary is required to
treat as being owned by any other Person pursuant to the provisions of IRC
Section 168(f)(8) of the Internal Revenue Code of 1954, as amended, and in
effect immediately prior to the enactment of the Tax Reform Act of 1986 or is
"tax-exempt use property" within the meaning of the IRC Section 168 (h). No
Obligor or Subsidiary thereof has agreed or been requested to make any
adjustment under IRC Section 481(a) by reason of a change in accounting method
or otherwise. Except as set forth on SCHEDULE 3.13, no Obligor or Subsidiary
thereof has any obligation under any written tax sharing agreement.
-19-
3.14 ERISA. (a) SCHEDULE 3.14 lists all Plans maintained or
contributed to by any Obligor or Subsidiary thereof and all Qualified Plans
maintained or contributed to by any ERISA Affiliate. None of the Plans or
Qualified Plans constitute Title IV Plans, Multiemployer Plans, any multiple
employer plans subject to Section 4064 of ERISA, unfunded Pension Plans, Welfare
Plans or Retiree Welfare Plans. Each Qualified Plan has been determined by the
IRS to qualify under Section 401 of the IRC, and the trusts created thereunder
have been determined to be exempt from tax under the provisions of Section 501
of the IRC, and to each Obligor's knowledge after reasonable inquiry, nothing
has occurred which would cause the loss of such qualification or tax-exempt
status. Each Plan is in compliance with the applicable provisions of ERISA and
the IRC, including the filing of reports required under the IRC or ERISA which
are true and correct as of the date filed, and with respect to each Plan, all
required contributions and benefits have been paid in accordance with the
provisions of each such Plan. No Obligor or Subsidiary thereof has engaged in a
prohibited transaction, as defined in Section 4975 of the IRC or Section 406 of
ERISA, in connection with any Plan, which would subject such Obligor or
Subsidiary (after giving effect to any exemption) to a material tax on
prohibited transactions imposed by Section 4975 of the IRC, Section 502 of ERISA
or any other material liability.
(b) Except as set forth on SCHEDULE 3.14: (i) there are no pending,
or to the knowledge of any Obligor or Subsidiary thereof, threatened claims,
actions or lawsuits (other than claims for benefits in the normal course),
asserted or instituted against (x) any Plan or its assets, (y) any fiduciary
with respect to any Plan or (z) any Obligor, Subsidiary thereof or ERISA
Affiliate with respect to any Plan; (ii) within the last five years no Obligor,
Subsidiary thereof, or ERISA Affiliate has engaged in a transaction which
resulted in a Title IV Plan with Unfunded Liabilities being transferred outside
of the "controlled group" (within the meaning of Section 4001(a)(14) of ERISA)
of any such entity; (iii) each Obligor, Subsidiary thereof and ERISA Affiliate
has complied with the notice and contribution coverage requirements of the IRC
and the regulations thereunder except where the failure to comply could not have
or result in any Material Adverse Effect; and (iv) no liability under any Plan
has been funded, nor has such obligation been satisfied, with the purchase of a
contract from an insurance company that is not rated AAA by the Standard &
Poor's Corporation and the equivalent by each other nationally recognized rating
agency.
3.15 NO LITIGATION. Except as set forth on SCHEDULE 3.15 (other than
with respect to the IPO), no action, claim or proceeding is now pending or, to
the knowledge of any Obligor or Subsidiary thereof, threatened against such
Obligor or Subsidiary, at law, in equity or otherwise, before any court, board,
commission, agency or instrumentality of any federal, state, local or foreign
government or of any agency or subdivision thereof, or before any arbitrator or
panel of arbitrators, (i) which challenges such Obligor's or Subsidiary's right,
power or competence to enter into or perform any of its obligations under the
Loan Documents, or the validity or enforceability of any Loan Document or any
action taken thereunder, (ii) which is reasonably likely to have or result in a
Material Adverse Effect, nor to the knowledge of such Obligor or Subsidiary
after reasonable inquiry, does a state of facts exist which is reasonably likely
to give rise to such proceedings or (iii) which relates to the IPO.
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3.16 BROKERS. Except as set forth on SCHEDULE 3.16 with respect to
the IPO, no broker or finder acting on behalf of any Obligor or Affiliate
thereof brought about the obtaining, making or closing of the loans made
pursuant to this Agreement or the transactions contemplated by the Loan
Documents or the IPO Documents, and no Obligor or Subsidiary thereof has any
obligation to any Person in respect of any finder's or brokerage fees in
connection therewith.
3.17 EMPLOYMENT MATTERS. Except as set forth on SCHEDULE 3.17, there
are no (i) employment, consulting or management agreements covering management
of any Obligor or Subsidiary thereof, or (ii) collective bargaining agreements
or other labor agreements covering any employees of any Obligor or Subsidiary
thereof. A true and complete copy of each such agreement has been furnished to
Agent.
3.18 PATENTS, TRADEMARKS, COPYRIGHTS AND LICENSES. Except as
otherwise set forth on SCHEDULE 3.18, each Obligor and Subsidiary thereof owns
or has valid, enforceable licenses to use all material licenses, patents, patent
applications, copyrights, service marks, trademarks, trademark applications, and
trade names necessary to continue to conduct its business as heretofore
conducted by it, now conducted by it and proposed to be conducted by it, each of
which is included, together with Copyright Office or Patent and Trademark Office
application or registration numbers, where applicable, on SCHEDULE 3.18.
SCHEDULE 3.18 (as the same may be updated periodically by Holdings in its
discretion) lists all tradenames or other names under which any Obligor or
Subsidiary thereof conducts business. Except as set forth in SCHEDULE 3.18
hereto, no Obligor has received any written notice that the conduct of its or
its Subsidiaries' business infringes upon any license, patent, copyright,
service ▇▇▇▇, trademark, trade name, trade secret or other intellectual property
right of others. Except as set forth on SCHEDULE 3.18 hereto, no Obligor or
Subsidiary thereof has asserted any infringement claim against any other Person
regarding any license, patent, copyright, service ▇▇▇▇, trademark, trade name,
trade secret or other intellectual property right of any Obligor or Subsidiary
thereof.
3.19 FULL DISCLOSURE. No information contained in this Agreement,
any of the other Loan Documents, the Projections, the Financial Statements, the
Collateral Reports or any written statement furnished by or on behalf of any
Obligors or Subsidiary thereof pursuant to the terms of this Agreement, which
has previously been delivered to Agent, contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements
contained herein or therein not misleading in light of the circumstances under
which they were made. The Liens granted to Agent, on behalf of itself and
Lenders, pursuant to the Collateral Documents will as of the Closing Date be
fully perfected first priority Liens in and to the Collateral described therein.
3.20 HAZARDOUS MATERIALS. Except as set forth on SCHEDULE 3.20, the
Real Estate is free of contamination from any Hazardous Material except in such
amounts as would not be reasonably likely to have a Material Adverse Effect. In
addition, SCHEDULE 3.20 discloses potential material environmental liabilities
of any Obligor or Subsidiary thereof of which any of them have knowledge (i)
related to noncompliance with the Environmental Laws, or (ii) associated with
the Real Estate. No Obligor or Subsidiary thereof has caused or suffered to
occur any Release with respect
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to any Hazardous Material at, under, above or within any real property which it
owns or leases. No Obligor or Subsidiary thereof is involved in operations which
are reasonably expected to lead to the imposition of any liability or Lien on
it, or any owner of any premises which it occupies, under any Environmental Law,
and no Obligor or Subsidiary thereof has permitted any tenant or occupant of
such premises to engage in any such activity. Holdings has provided to Agent
copies of all existing environmental reports, reviews and audits and all written
information pertaining to actual or potential Environmental Liabilities and
Costs, in each case relating to any Obligor or Subsidiary thereof.
3.21 INSURANCE POLICIES. SCHEDULE 3.21 (as the same may be updated
periodically by Holdings) lists all insurance of any nature maintained for
current occurrences by each Obligor or Subsidiary thereof, as well as a summary
of the terms of such insurance.
3.22 DEPOSIT AND DISBURSEMENT ACCOUNTS. As of the Closing Date
SCHEDULE 1.7 lists all banks and other financial institutions at which any
Obligor or Subsidiary thereof maintains deposits and/or other accounts,
including any disbursement accounts, and SCHEDULE 1.7 correctly identifies the
name, address and telephone number of each bank or other financial institution,
the name in which the account is held, a description of the purpose of the
account, and the complete account number.
3.23 GOVERNMENT CONTRACTS. Except as set forth on SCHEDULE 3.23, as
of the Closing Date no Obligor or Subsidiary thereof are a party to any contract
or agreement with the federal government which are subject to the Federal
Assignment of Claims Act (31 U.S.C. Section 3727) relative to the assignment of
the Accounts thereunder.
3.24 CUSTOMER AND TRADE RELATIONS. To each Obligor's knowledge,
there exists no actual or, to each Obligor's knowledge after reasonable inquiry,
threatened termination or cancellation of, or any material adverse modification
or change in: (a) the business relationship of any Obligor or Subsidiary thereof
with any customer or group of customers whose purchases individually or in the
aggregate are material to the operations of such Obligor and its Subsidiaries
taken as a whole; or (b) the business relationship of any Obligor or Subsidiary
thereof with any supplier material to the operations of such Obligor and its
Subsidiaries, taken as a whole.
3.25 AGREEMENTS AND OTHER DOCUMENTS. As of the Closing Date,
Holdings has provided to Agent or its counsel, on behalf of Lenders, accurate
and complete copies (or summaries) of all of the following agreements or
documents to which any Obligor or Subsidiary thereof is subject and each of
which are listed on SCHEDULE 3.25: (a) Plans; (b) supply agreements not
terminable by such Obligor or Subsidiary, as appropriate, within sixty (60) days
following written notice issued by such Obligor or Subsidiary; (c) purchase
agreements not terminable by such Obligor or Subsidiary, as appropriate, within
60 days following written notice issued by such Obligor or Subsidiary; (d)
leases of real property; (e) any lease of equipment having a remaining term of
one year or longer and requiring aggregate rental and other payments in excess
of $100,000 per annum; (f) material licenses and permits necessary for the
conduct of such Obligor's or Subsidiary's businesses; (g) employment,
consulting, severance, "golden parachute" and other similar agreements with any
officer of such
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Obligor or Subsidiary; (h) instruments or documents evidencing Indebtedness of
such Obligor or Subsidiary and any security interest granted by such Obligor or
Subsidiary with respect thereto; (i) agreements to acquire by asset purchase,
stock purchase, merger, consolidation or otherwise the business or all or
substantially all of the assets of any Person; and (j) instruments and
agreements evidencing the issuance of any equity securities, warrants, rights or
options to purchase equity securities of such Obligor or Subsidiary.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1 REPORTS AND NOTICES. (a) Obligors hereby jointly and severally
covenant and agree that from and after the Closing Date and until the
Termination Date, Holdings shall deliver to Agent and/or Lenders, as required,
the Financial Statements, notices and Projections at the times, to the Persons
and in the manner set forth on ANNEX E.
(b) Obligors hereby jointly and severally covenant and agree that
from and after the Closing Date, Holdings shall deliver to Agent and/or Lenders,
as required, the various Collateral Reports at the times, to the Persons and in
the manner set forth on ANNEX F.
4.2 COMMUNICATION WITH ACCOUNTANTS. Each Obligor authorizes Agent
and each Lender to communicate directly with its independent certified public
accountants and tax advisors, including Deloitte & Touche, and authorizes those
accountants and advisors to disclose to Agent and each Lender any and all
Financial Statements and other supporting financial documents and schedules
relating to any Obligor or Subsidiary thereof (including, without limitation,
copies of any issued management letters) with respect to the business, financial
condition and other affairs of any Obligor or Subsidiary thereof. Concurrently
with the delivery of any annual audited Financial Statements of any Obligor,
such Obligor shall deliver a letter addressed to such accountants and tax
advisors instructing them to comply with the provisions of this SECTION 4.2 and
indicating that a primary intent of Obligors is for Lenders to, and that Lenders
will, rely upon Financial Statements opined on by such accountants.
5. AFFIRMATIVE COVENANTS
Obligors, jointly and severally, covenant and agree that, unless
Agent and Requisite Lenders shall otherwise consent in writing, from and after
the Closing Date and until the
Termination Date:
5.1 MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS. Each Obligor
shall, and shall cause each Subsidiary thereof, to: (a) do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence and its material rights and franchises; (b) continue to conduct its
business substantially as now conducted or as otherwise permitted hereunder; (c)
at all times and in all material respects maintain, preserve and protect all of
its copyrights, patents, trademarks, trade names and all other intellectual
property and rights as licensee or licensor thereof and preserve all the
remainder of its property, in use or useful in the conduct of its business and
keep
-23-
the same in good repair, working order and condition (taking into consideration
ordinary wear and tear) and from time to time make, or cause to be made, all
necessary or appropriate repairs, replacements and improvements thereto
consistent with industry practices, so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
and (d) transact business only in such names as are set forth on SCHEDULE 5.1.
5.2 PAYMENT OF OBLIGATIONS. (a) Subject to SECTION 5.2(B), each
Obligor shall, and shall cause each Subsidiary thereof to, pay and discharge or
cause to be paid and discharged promptly all (i) Charges imposed upon it, its
income and profits, or any of its property (real, personal or mixed), and (ii)
lawful claims for labor, materials, supplies and services or otherwise, before
any thereof shall become in default.
(b) Any Obligor or Subsidiary thereof may in good faith contest, by
proper legal action or proceedings, the validity or amount of any Charges or
claims described in SECTION 5.2 (A); PROVIDED, THAT, at the time of commencement
of any such action or proceeding, and during the pendency thereof (i) adequate
reserves with respect thereto are maintained on the books of such Obligor in
accordance with GAAP, (ii) such contest operates to suspend collection of the
contested Charges or claims and such contest is maintained and prosecuted
continuously and with diligence, (iii) none of the Collateral would be subject
to forfeiture or loss or any Lien by reason of the institution or prosecution of
such contest, (iv) no Lien (other than inchoate Liens) shall exist, be imposed
or asserted for such Charges or claims during such action or proceeding, (v)
such Obligor or Subsidiary shall promptly pay or discharge such contested
Charges and all additional charges, interest, penalties and expenses, if any,
and shall deliver to Agent evidence acceptable to Agent of such compliance,
payment or discharge, if such contest is terminated or discontinued adversely to
such Obligor or Subsidiary, (vi) Agent has not advised Holdings or such other
Obligor in writing that Agent reasonably believes that nonpayment or
nondischarge thereof could have or result in a Material Adverse Effect, and
(vii) except as Agent may otherwise agree in writing, no Default or Event of
Default shall have occurred and be continuing.
5.3 BOOKS AND RECORDS. Each Obligor shall keep adequate records and
books of account with respect the business activities of such Obligor and its
Subsidiaries, in which proper entries, reflecting all financial transactions,
are made in accordance with GAAP and on a basis consistent with the Financial
Statements referred to in SECTION 3.4.
5.4 LITIGATION. Each Obligor shall notify Agent in writing, promptly
upon learning thereof, of any litigation commenced or threatened against such
Obligor or any Subsidiary thereof, and of the institution against it of any suit
or administrative proceeding that (a) involves an amount in excess of $100,000
not covered by insurance or (b) seeks injunctive relief or is reasonably likely
to have a Material Adverse Effect if adversely determined.
5.5 INSURANCE. (a) Obligors shall, at their sole cost and expense,
maintain the policies of insurance described on SCHEDULE 3.21 in form and with
insurers recognized as adequate by Agent and, in any event, shall at all times
maintain third party liability insurance covering all
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actions of Agent taken pursuant to the Loan Documents in, on or about any
premises where any Collateral may be located. Such policies shall be in such
amounts as are set forth on SCHEDULE 3.21 and, in no event, less than the
amounts maintained on the Closing Date. Holdings shall notify Agent promptly in
writing of any occurrence causing a material loss or decline in value of any
real or personal property and the estimated (or actual, if available) amount of
such loss or decline. Each Obligor hereby directs all present and future
insurers under its "All Risk" policies of insurance to pay all proceeds payable
thereunder directly to Agent, on behalf of itself and Lenders. Each Obligor
hereby irrevocably makes, constitutes and appoints Agent (and all officers,
employees or agents designated by Agent) so long as an Event of Default shall
have occurred and be continuing as such Obligor's true and lawful agent and
attorney-in-fact for the purpose of making, settling and adjusting claims under
the "All Risk" policies of insurance, endorsing the name of such Obligor or any
Subsidiary thereof on any check, draft, instrument or other item of payment for
the proceeds of such "All Risk" policies of insurance, and for making all
determinations and decisions with respect to such "All Risk" policies of
insurance. In the event any Obligor or Subsidiary thereof at any time or times
hereafter shall fail to obtain or maintain any of the policies of insurance
required above or to pay any premium in whole or in part relating thereto,
Agent, without waiving or releasing any Obligations or Default or Event of
Default hereunder, may at any time or times thereafter (but shall not be
obligated to) obtain and maintain such policies of insurance and pay such
premium and take any other action with respect thereto which Agent deems
advisable. Agent shall use its best efforts to give prior notice of such actions
to Obligors, but shall have no liability for its failure to do so. All sums so
disbursed, including attorneys, fees, court costs and other charges related
thereto, shall be payable, on demand, by Obligors to Agent and shall be
additional Obligations hereunder secured by the Collateral, PROVIDED, THAT, if
and to the extent Obligors fail to promptly pay any of such sums upon demand
therefor, Agent is authorized to, and at its option may, make or cause to be
made Revolving Credit Advances on behalf of Borrowers for payment thereof.
(b) Agent reserves the right at any time, upon any change in any
Obligor's risk profile (including, without limitation, any change in the product
mix maintained by any Obligor or any laws affecting the potential liability of
such Obligor), to require additional forms and limits of insurance to, in
Agent's reasonable opinion, ensure that each Obligor and Subsidiary thereof is
protected by insurance in amounts and with coverage customary for Persons
engaged in their businesses. Each Obligor shall, if so requested by Agent,
deliver to Agent, from time to time upon request of Agent, a report of a
reputable insurance broker, satisfactory to Agent, with respect to its insurance
policies.
(c) Holdings shall deliver to Agent endorsements (i) to all "All
Risk" and business interruption insurance of Obligors naming Agent, on behalf of
itself and Lenders, as loss payee, and (ii) to all general liability and other
liability policies of Obligors naming Agent, on behalf of itself and Lenders, as
additional insured.
5.6 COMPLIANCE WITH LAWS. (a) Each Obligor shall, and shall cause
each Subsidiary thereof to, comply in all material respects with all federal,
state and local laws and regulations applicable to it, including those relating
to licensing, environmental, consumer credit, truth-in-lending, ERISA and labor
matters.
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5.7 AGREEMENTS. Each Obligor shall, and shall cause each Subsidiary
thereof to, perform, within all required time periods (after giving effect to
any applicable grace periods), all of its obligations and enforce all of its
rights under each agreement to which it is a party, including any lease or
customer contracts to which it is a party, where the failure to do so is
reasonably likely to have a Material Adverse Effect. No Obligor or Subsidiary
thereof shall terminate or modify any provision of any agreement to which it is
a party which termination or modification is reasonably likely to have a
Material Adverse Effect.
5.8 SUPPLEMENTAL DISCLOSURE. At the request of Agent (in the event
that such information is not otherwise delivered by Holdings to Agent pursuant
to this Agreement), so long as there are Obligations outstanding hereunder, but
not more frequently than every fiscal quarter, Obligors will supplement each
schedule or representation herein with respect to any matter hereafter arising
which, if existing or occurring at the date of this Agreement, would have been
required to be set forth or described in such schedule or as an exception to
such representation or which is necessary to correct any information in such
schedule or representation which has been rendered inaccurate thereby; PROVIDED,
HOWEVER, THAT such supplement to such schedule or representation shall not be
deemed an amendment thereof unless expressly consented to in writing by Agent
and Requisite Lenders, and no such amendments, except as the same may be
consented to in a writing which expressly includes a waiver, shall be or be
deemed a waiver of any Default or Event of Default disclosed therein.
5.9 EMPLOYEE PLANS. Each Obligor shall notify Agent in writing of
(i) any and all claims, actions, or lawsuits asserted or instituted, and of any
threatened litigation or claims, against such Obligor, any Subsidiary thereof or
ERISA Affiliate in connection with any Plan maintained, at any time, by such
Obligor, Subsidiary or ERISA Affiliate, or to which such Obligor, Subsidiary or
ERISA Affiliate has or had at any time any obligation to contribute, or/and
against any such Plan itself, or against any fiduciary of or service provided to
any such Plan which is reasonably likely to result in liability in excess of
$100,000 in the aggregate and (ii) the occurrence of any "Reportable Event" with
respect to any Pension Plan of such Obligor, Subsidiary or ERISA Affiliate which
is reasonably likely to result in liability in excess of $100,000 in the
aggregate.
5.10 ENVIRONMENTAL MATTERS. Each Obligor shall, and shall cause each
Subsidiary thereof to, (i) comply in all material respects with the
Environmental Laws applicable to it, (ii) notify Agent promptly in writing after
such Obligor or Subsidiary becomes aware of any material Release upon any
premises owned or occupied by it, and (iii) promptly forward to Agent a copy of
any order, notice, permit, application, or any material communication or report
received by such Obligor or Subsidiary in connection with any such Release or
any other matter relating to the Environmental Laws that may adversely affect
such premises or such Obligor or Subsidiary. The provisions of this SECTION 5.10
shall apply whether or not the Environmental Protection Agency, any other
federal agency or any state, local or foreign environmental agency has taken or
threatened any action in connection with any Release or the presence of any
Hazardous Materials.
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5.11 LANDLORDS' AGREEMENTS AND BAILEE LETTERS AND MORTGAGEE
AGREEMENTS. Each Obligor shall use its good faith and commercially reasonable
efforts to obtain a landlord's agreement in form and substance acceptable to
Agent from the lessor of each leased premise currently being used by such
Obligor or any Subsidiary thereof and the lessor of any new leased premises, in
each case where Collateral is currently or may be located. Each Obligor shall
use its good faith and commercially reasonable efforts to obtain a bailee letter
in form and substance acceptable to Agent and with respect to any warehouse used
now or in the future, where Collateral is currently or may be located. Each
Obligor shall use its good faith and commercially reasonable efforts to obtain a
mortgagee's agreement in form and substance satisfactory to Agent from the
mortgagee, if any, of each owned premise currently being used by such Obligor or
any Subsidiary thereof, and the mortgagee of any new owned property subject to a
mortgage, in each case where Collateral is currently or may be located. With
respect to locations leased or owned on the Closing Date, in the event Obligors
are unable to obtain a landlord or mortgagee agreement or bailee letter as to
any location as of the Closing Date, until such time as such an agreement or
letter is obtained with respect to such location, Borrowing Availability will be
subject to a reserve equal to two (2) month's lease, rental or mortgage
payments. Except with respect to nonmaterial leases for locations where
Collateral will not be stored, no real property shall be leased or acquired by
any Obligor or Subsidiary thereof after the Closing Date, unless and until a
landlord agreement, as appropriate, shall first have been obtained with respect
to such location.
5.12 LEASED LOCATIONS OF COLLATERAL. Each Obligor shall timely and
fully pay and perform its obligations under all leases and other agreements with
respect to each leased location or public warehouse where any Collateral with a
value in excess of $200,000 is located. Holdings shall promptly deliver to Agent
copies of (i) any and all default notices received under or with respect to any
such leased location or public warehouse and (ii) such other notices or
documents as Agent may request in its reasonable discretion.
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6. NEGATIVE COVENANTS
Obligors, jointly and severally, covenant and agree that, without
the prior written consent of Agent and the Requisite Lenders, from and after the
Closing Date until the Termination Date:
6.1 MERGERS, SUBSIDIARIES, ETC. No Obligor shall, or shall cause or
permit any Subsidiary thereof to, directly or indirectly, by operation of law or
otherwise, merge with, consolidate with, acquire all or substantially all of the
assets or capital stock of, or otherwise combine with, any Person or form any
Subsidiary other than (i) a merger, consolidation or combination with, or the
acquisition of assets of, any Subsidiary of Holdings with or by any other
Subsidiary of Holdings or (ii) a merger, consolidation or other combination with
or the acquisition of assets or capital stock of another Person (other than
Holdings) not described in the preceding clause (i); PROVIDED, THAT if any
transaction described in the preceding clauses (i) or (ii) involves (A) a
Borrower, a Borrower shall be the surviving entity, (B) an Obligor (but not a
Borrower), an Obligor shall be the surviving entity or (C) a Subsidiary of
Holdings (but not a Borrower or an Obligor), a Subsidiary of Holdings shall be
the surviving entity.
Notwithstanding the foregoing, any merger, consolidation,
combination, or acquisition (each, a "PERMITTED ACQUISITION") with any Person or
of the assets of any Person permitted in accordance with clause (ii) above,
shall be subject to the following conditions precedent:
(a) Agent shall receive at least twenty (20) Business Days' prior
written notice of such Permitted Acquisition, which notice shall include a
reasonably detailed description of such Permitted Acquisition;
(b) such Permitted Acquisition shall only be of a Person engaged in,
or involve assets dedicated to, the same or a substantially similar business to
the businesses engaged in by one or more of Borrowers as of the Closing Date;
(c) such Permitted Acquisition shall not be with respect to Persons
or assets located in jurisdictions against which the United States has imposed
economic sanctions;
(d) such Permitted Acquisition will not subject Agent or any Lender
to regulatory or third party approvals in connection with the exercise of its
rights and remedies under this Agreement or any other Loan Documents other than
approvals applicable to the exercise of such rights and remedies with respect to
Obligors prior to such Permitted Acquisition;
(e) each such Permitted Acquisition of a Person shall be consensual
and shall have been approved by such Person's board of directors and, as
applicable, shareholders;
(f) no additional Indebtedness, contingent obligations or other
liabilities shall be incurred, assumed or otherwise be reflected on a
consolidated balance sheet of Holdings and
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its Subsidiaries after giving effect to such Permitted Acquisition, except (i)
obligations to trade creditors incurred in the ordinary course of business and
(ii) as permitted in accordance with SECTIONS 6.3 and 6.6;
(g) except as specified in clause (h) below, in the case of any
Permitted Acquisition of any Person, at or prior to the closing thereof the
Agent on behalf of the Lenders shall have received perfected Liens on all of
such Person's assets, real and personal, subject only to Liens permitted in
accordance with SECTION 6.7 hereof and other existing Liens approved in writing
in advance by Agent (which approval shall not be unreasonably withheld), and the
capital stock or other ownership interest of such Person shall be pledged and
delivered to Agent, for the benefit of Lenders, all on terms reasonably
acceptable to the Agent;
(h) in the case of any Permitted Acquisition of a Person located
outside of the United States as to which the application of clause (g) above
would result in a material incremental tax liability under Section 956 of the
IRC, the capital stock or other ownership interest of such Person shall be
contributed to WNG Holdings (International) Ltd. or another intermediate
domestic holding company approved in writing in advance by Agent (which approval
shall not be unreasonably withheld), all of the capital stock of which shall be
pledged to the Agent for the benefit of Lenders, and 65% of the capital stock or
other ownership interest of such Person to be acquired shall be pledged to the
Agent for the benefit of the Lenders, all on terms satisfactory to the Agent;
(i) at the time of such Permitted Acquisition and after giving
effect thereto, no Default or Event of Default shall have occurred and be
continuing;
(j) Concurrently with delivery of the notice referred to in CLAUSE
(A) above, Holdings shall have delivered to Agent, in form and substance
satisfactory to Agent a pro forma consolidated balance sheet of Holdings and its
Subsidiaries, based on recent financial data, which shall be complete and shall
accurately and fairly represent the assets, liabilities, financial position and
results of operations of Holdings and its Subsidiaries in accordance with GAAP
consistently applied, but taking into account such Permitted Acquisition and the
funding of all Revolving Credit Advances in connection therewith, together with
a certificate of Holdings' Chief Financial Officer stating that, based on such
pro forma balance sheet, Borrowing Availability shall be at least $15,000,000
(on a pro forma basis after giving effect to such Permitted Acquisition, with
trade payables being paid currently and expenses and liabilities being paid in
the ordinary course of business, and without acceleration of sales) after giving
effect to such Permitted Acquisition and all Revolving Credit Advances funded in
connection therewith;
(k) the aggregate principal amount of all Revolving Credit Advances
funded in connection with a Permitted Acquisition, together with all prior
Permitted Acquisitions, shall not exceed $50,000,000, subject to the further
limitations set forth in SECTION 6.21(IV); and
(l) reasonably prior to the date of such Permitted Acquisition,
Agent shall have received, in form and substance satisfactory to Agent, all
opinions, certificates, lien search results
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and other documents, including acquisition agreements, reasonably requested
by Agent, including proof of regulatory compliance.
6.2 INVESTMENTS; LOANS AND ADVANCES. Except (I) as otherwise
permitted by SECTION 6.1, 6.3, 6.4, or 6.21 and (II) for advances to suppliers
on an arm's length basis in connection with purchases in the ordinary course of
business, no Obligor shall, or shall cause or permit any Subsidiary thereof to,
make any investment in, or make or accrue loans or advances of money to any
Person, through the direct or indirect lending of money (including, without
limitation, the guarantee of any letters of credit issued for the benefit of
such Person), holding of securities or otherwise, other than (a) Accounts, (b)
investments in Obligors which are Subsidiaries of Holdings, (c) investments in
(i) marketable direct obligations issued or unconditionally guaranteed by the
United States of America or any agency thereof maturing within one year from the
date of acquisition thereof, (ii) commercial paper maturing no more than one
year from the date of creation thereof and currently having the highest rating
obtainable from either Standard & Poor's Corporation or ▇▇▇▇▇'▇ Investors
Service, Inc., (iii) certificates of deposit, maturing no more than one year
from the date of creation thereof, issued by commercial banks incorporated under
the laws of the United States of America, each having combined capital, surplus
and undivided profits of not less than $300,000,000 and having a senior secured
rating of "A" or better by a nationally recognized rating agency, provided that
the aggregate amount invested in such certificates of deposit shall not at any
time exceed $100,000 for any one such certificate of deposit and $200,000 for
any one such bank, (iv) time deposits, maturing no more than 30 days from the
date of creation thereof with commercial banks or savings banks or savings and
loan associations each having membership either in the Federal Deposit Insurance
Corporation or in the Federal Savings and Loan Insurance Corporation and in
amounts not exceeding the maximum amounts of insurance thereunder, (v) money
market funds and (iv) in accordance with paragraph (d) of ANNEX C and (d) any
other type of investment, loan or advance not exceeding $1,500,000 in the
aggregate at any time outstanding.
6.3 INDEBTEDNESS. No Obligor shall, or shall cause or permit any
Subsidiary thereof to, create, incur, assume or permit to exist any
Indebtedness, except (i) obligations of Borrowers or Subsidiaries thereof in
connection with Letter of Credit Obligations, (ii) Indebtedness secured by Liens
permitted under SECTION 6.7, (iii) the Revolving Credit Loan and the other
Obligations, (iv) deferred taxes, (v) unfunded pension fund and other employee
benefit plan obligations and liabilities to the extent they are permitted to
remain unfunded under applicable law, (vi) existing Indebtedness set forth on
SCHEDULE 6.3 and refinancings thereof on terms and conditions acceptable to
Agent, in its reasonable discretion, determined in a timely manner, which shall
in any event be on terms no less favorable to Agent, any Lender and the
applicable Obligors, (vii) obligations under or in connection with foreign
exchange forward purchase agreements for purposes of hedging Inventory
purchases, (viii) lease payment obligations under leases which an Obligor or
Subsidiary thereof is permitted to enter into under the Loan Documents, (ix)
other unsecured Indebtedness which, when taken together with (a) all Guaranteed
Indebtedness described in clause (iv) of SECTION 6.6 and (b) all Indebtedness
secured by Liens described in clause (v) of SECTION 6.7, does not exceed
$1,000,000 in principal amount in the aggregate outstanding at any one time, (x)
unsecured Indebtedness not exceeding $3,000,000 in
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the aggregate at any time outstanding assumed in connection with Permitted
Acquisitions and subordinated in right of payment to the Obligations on terms
and conditions satisfactory to Agent and (xi) intercompany loans made in
accordance with SECTION 6.21.
6.4 EMPLOYEE LOANS AND AFFILIATE TRANSACTIONS. (a) No Obligor shall,
or shall cause or permit any Subsidiary thereof to, enter into or be a party to
any transaction with any Affiliate of any such Person, other than (i) as
permitted by SECTIONS 6.2, 6.4(B), 6.13 or 6.21, (ii) in the ordinary course of
and pursuant to the reasonable requirements of such Person's business and upon
fair and reasonable terms that are fully disclosed to Agent in advance and are
no less favorable to such Person than would be obtained in a comparable arm's
length transaction with a third party not an Affiliate of such Person, (iii)
loans to employees or other transactions between or among Obligors providing
goods and services described on SCHEDULE 6.4, (iv) payments made pursuant to the
tax sharing agreement described on SCHEDULE 3.13 to the extent permitted by, and
made in accordance with, clause (i) of SECTION 6.13, and (v) cash payments to
Holdings to enable Holdings (contemporaneously with, and in the same amount of,
such payments) to (1) fund its obligations under "Executive Retirement Plans"
described on SCHEDULE 6.4 in an aggregate amount not to exceed $300,000 in any
Fiscal Year and (2) pay the general corporate, operating and administrative
expenses of Holdings allocated to such Obligor or Subsidiary PROVIDED THAT
payments made pursuant to this subclause (2) to Holdings by any Obligor or
Subsidiary thereof shall not exceed such Obligor's or Subsidiary's fair
allocable share of the expenses incurred by Holdings for the benefit of Obligors
and their Subsidiaries. Payments made in accordance with clauses (iv) and (v)
above may be accounted for by the applicable Obligor or Subsidiary as a cash
dividend to Holdings or as an expense for the reimbursement of Holdings'
expenses in the income statement of such Obligor or Subsidiary.
(b) No Obligor shall, or shall cause or permit any Subsidiary
thereof to, enter into any lending, borrowing or other commercial transaction
with any of its employees, directors, Subsidiaries, Affiliates, any other
Obligor or related parties without the prior written consent of Agent,
including, without limitation, payment of any management consulting, advisory or
similar fee based on or related to any such Person's operating performance or
income or any percentage thereof, other than (i) as permitted by SECTIONS 6.2,
6.4(A), 6.13 or 6.21, (ii) employment agreements and incentive compensation
programs with full-time employees on commercially reasonable terms substantially
similar to the agreements in effect on the Closing Date and described on
SCHEDULE 6.4, (iii) loans to their respective employees consisting of travel
advances in the ordinary course of business consistent with past practice up to
a maximum of $150,000 in the aggregate at any one time outstanding, (iv) loans
to their respective employees for the payment of taxes incurred in connection
with the conversion on or prior to the Closing Date of "Phantom Stock" of
Nutrition issued prior to the Closing Date into Stock of Holdings, (v) loans of
up to $500,000 during each Fiscal Year to their respective employees for the
payment of taxes incurred in connection with the conversion after the Closing
Date of "Phantom Stock" of Nutrition issued prior to the Closing Date into Stock
of Holdings, (vi) outstanding intercompany loans among the Obligors as set forth
on SCHEDULE 6.4 as of the Closing Date and intercompany loans permitted pursuant
to SECTION 6.21 and (vii) capital contributions to Obligors which are
Subsidiaries of Holdings, to the extent deemed necessary and appropriate by
Holdings in its
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reasonable discretion, not more than $500,000 in the aggregate of which shall be
contributed to Subsidiaries of WNG Holdings (International) Ltd.
6.5 CAPITAL STRUCTURE AND BUSINESS. No Obligor shall, or shall cause
or permit any Subsidiary thereof to (i) make any changes in any of its business
objectives, purposes or operations in each case which is reasonably likely to
adversely affect the repayment of the Revolving Credit Loan or any of the other
Obligations or could have or result in a Material Adverse Effect, (ii) except as
described on SCHEDULE 3.10 and, in the case of Holdings, for the IPO, issue any
shares of Stock, warrants or other securities convertible into Stock or revise
the terms of its outstanding Stock, or (iii) amend its certificate or articles
of incorporation or bylaws in a manner which is reasonably likely to have a
Material Adverse Effect. No Obligor shall, or shall cause or permit any
Subsidiary thereof to, engage in any business substantially different than the
lines of businesses currently engaged in by such Person or any lines of business
reasonably related thereto. Notwithstanding any other provision of this
Agreement or any other Loan Document, Holdings shall not incur any Indebtedness
or engage in any business activities other than (a) the performance of its
obligations under the Loan Documents to which it is a party and (b) those
activities incidental to (i) the IPO, (ii) its ownership of the capital stock of
the other Obligors, (iii) the Restricted Payments permitted to be made by it in
accordance with SECTION 6.13 and (iv) the maintenance of its corporate existence
in compliance with applicable law and this Agreement.
6.6 GUARANTEED INDEBTEDNESS. No Obligor shall, or shall cause or
permit any Subsidiary thereof to, incur any Guaranteed Indebtedness except (i)
by endorsement of instruments or items of payment for deposit to the general
account of any Obligor, (ii) for Guaranteed Indebtedness incurred for the
benefit of any Obligor or Subsidiary thereof if the primary obligation is
permitted by this Agreement, (iii) Guaranteed Indebtedness described on SCHEDULE
6.3 and (iv) other Guaranteed Indebtedness which, when taken together with (a)
all Indebtedness described in clause (ix) of SECTION 6.3 and (b) all
Indebtedness secured by Liens described in clause (v) of SECTION 6.7, does not
exceed $1,000,000 in principal amount in the aggregate outstanding at any one
time.
6.7 LIENS. No Obligor shall, or shall cause or permit any Subsidiary
thereof to, create, incur, assume or permit to exist any Lien on or with respect
to any properties or assets (including any document or instrument with respect
to Inventory or Accounts) of any such Person, whether now owned or hereafter
acquired, or any income or profits therefrom, except (i) existing Liens set
forth on SCHEDULE 6.7 hereto and Liens arising out of the refinancing of
obligations secured by such existing Liens (provided that the principal balance
of such obligations is not increased upon any such refinancing), (ii) Permitted
Encumbrances, (iii) presently existing or hereafter created Liens in favor of
Agent, on behalf of Lenders, (iv) Liens created after the Closing Date by
conditional sale or other title retention agreements (including, without
limitation, Capital Leases) or in connection with purchase money indebtedness
(for purposes of this clause (iv), meaning and including transactions in which
Indebtedness relating to the acquired property is incurred within ninety (90)
days after the date of acquisition of such property) with respect to properties
used or acquired by any such Person in the ordinary course of business,
involving the
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incurrence of an aggregate amount of purchase money indebtedness or Capital
Lease Obligations of not more than $1,500,000 outstanding at any one time for
all such Liens (provided that such Liens are limited to the properties subject
to such purchase money debt), and (v) other Liens securing Indebtedness which,
when taken together with (a) all Indebtedness described in clause (ix) of
SECTION 6.3 and (b) all Guaranteed Indebtedness described in clause (iv) of
SECTION 6.6, does not exceed $1,000,000 in principal amount in the aggregate
outstanding at any one time.
6.8 SALE OF ASSETS. No Obligor shall, or shall cause or permit any
Subsidiary thereof to, sell, transfer, convey, assign or otherwise dispose of
any of its properties or other assets, including the capital stock of any such
Person or any of their Accounts, other than Excluded Asset Sales.
6.9 ERISA. No Obligor shall, or shall cause or permit any Subsidiary
or ERISA Affiliate thereof (without Agent's prior written consent) to (i)
acquire any new ERISA Affiliate that maintains or has an obligation to
contribute to a Pension Plan that has either an "accumulated funding
deficiency", as defined in Section 302 of ERISA, or any "unfunded vested
benefits", as defined in Section 4006(a)(3)(e)(iii) of ERISA, in the case of any
plan other than a Multiemployer Plan, and in Section 4211 of ERISA in the case
of a Multiemployer Plan, (ii) permit or suffer any condition set forth on
SCHEDULE 3.14 to cease to be met and satisfied at any time, (iii) terminate any
Pension Plan that is subject to Title IV of ERISA where such termination could
reasonably be anticipated to result in a material liability to such Person, (iv)
permit any accumulated funding deficiency, as defined in Section 302(a)(2) of
ERISA, to be incurred with respect to any Pension Plan, (v) fail to make any
contributions or fail to pay any amounts due and owing as required by the terms
of any Plan before such contributions or amounts become delinquent, (vi) make a
complete or partial withdrawal (within the meaning of Section 4201 of ERISA)
from any Multiemployer Plan, or (vii) fail to promptly provide Agent with copies
of any Plan documents or governmental reports or filings, if requested by Agent.
6.10 HAZARDOUS MATERIALS. Except as set forth on SCHEDULE 3.20, no
Obligor shall, or shall cause or permit any Subsidiary thereof or any other
Person within its control, to cause or permit a Release or the presence, use,
generation, manufacture, installation, Release, discharge, storage or disposal
of any Hazardous Materials on, under, in, above or about any of its real estate
or the transportation of any Hazardous Materials to or from any real estate
where such Release or such presence, use, generation, manufacture, installation,
Release, discharge, storage or disposal would violate or form the basis for
liability under any Environmental Laws.
6.11 SALE-LEASEBACKS. No Obligor shall cause or permit any
Subsidiary thereof to, engage in any sale-leaseback or similar transaction
involving its assets, including the resale of assets in any transaction or
series of related transactions pursuant to which the subject assets are sold or
transferred in connection with the leasing or the resale against installment
payments, or as part of an arrangement involving the leasing or the resale
against installment payments, of such assets to the seller or transferor thereof
(in each case, a "SALE AND LEASEBACK TRANSACTION"); PROVIDED, THAT any Obligor
or Subsidiary thereof may engage in a Sale and Leaseback Transaction so long as
(a) such Sale and Leaseback Transaction is consummated within 180 days of the
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original purchase date of the subject asset, (b) the proceeds of such Sale and
Leaseback Transaction are used simultaneously with receipt thereof to repay
Indebtedness initially incurred to purchase the asset in question, (c) each
resulting lease or other transaction in connection with the Sale and Leaseback
Transaction is otherwise permitted under this Agreement, and (d) no Default or
Event of Default has occurred and is continuing or would result after giving
effect thereto.
6.12 CANCELLATION OF INDEBTEDNESS. No Obligor shall, or shall cause
or permit any Subsidiary thereof to, cancel any claim or debt owing to it,
except on an arm's-length basis and in the ordinary course of its business
consistent with past practices.
6.13 RESTRICTED PAYMENTS. No Obligor shall, or shall cause or permit
any Subsidiary thereof to, make or pay any Restricted Payment, other than (i)
Restricted Payments to Holdings to permit Holdings (contemporaneously with, and
in the same amount of, such payments) to (A) make Restricted Payments to Parent
pursuant to, and not in excess of the amounts required under, the tax sharing
agreements described on SCHEDULE 3.13 in respect of taxes payable for periods
(or portions thereof) ending on or prior to the closing on the Closing Date and
(B) pay Federal, state and local income tax obligations actually due and payable
in cash by Holdings for periods (or portions thereof) commencing after the
closing on the Closing Date, to the extent such obligations are the result of
the net income or loss of Obligors and their Subsidiaries being attributed to
Holdings for tax purposes, (ii) Restricted Payments to Holdings to permit
Holdings (contemporaneously with, and in the same amount of, such payments) to
pay fees and expenses necessary to maintain Holdings' corporate existence and
good standing, (iii) Restricted Payments to Holdings to permit Holdings
(contemporaneously with, and in the same amount of, such payments) to pay
quarterly cash dividends in respect of its common stock, PROVIDED that (A) only
one such set of Restricted Payments may be made during any Fiscal Quarter, (B)
all such Restricted Payments made during any Fiscal Quarter shall be made during
the fifteenth (15th) through the twentieth (20th) consecutive day immediately
following the end of the immediately preceding Fiscal Quarter, (C) at least five
(5) days prior to such Restricted Payment, Agent shall have received preliminary
versions of the Financial Statements to be delivered to Agent pursuant to ANNEX
E for the immediately preceding Fiscal Quarter, together with an attached
certificate of the Chief Financial Officer of Holdings (on behalf of itself and
each Borrower) to the effect that (1) the final Financial Statements to be
delivered to Agent for such immediately preceding Fiscal Quarter will not differ
in any material respect from such preliminary Financial Statements and (2) no
Default or Event of Default had occurred or been continuing as of the end of the
period covered by such Financial Statements, has occurred or is continuing as of
the date of such certificate or would result from the making of such Restricted
Payment, (D) the aggregate amount of all such Restricted Payments made during
(1) the first Fiscal Quarter of Fiscal Year 1998 shall not exceed $0.0375 per
each share of Holdings' common stock and (2) each other Fiscal Quarter shall not
exceed the lesser of (I) $0.0625 per each share of Holdings' common stock and
(II) the product of 7.5% of the sum of (x) the actual consolidated Net Income of
Holdings for that portion of the then-current Fiscal Year ending as of the close
of such immediately preceding Fiscal Quarter, based on the Financial Statements
described in clause (C) above for such period (except, as received, based on
Financial Statements
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delivered pursuant to ANNEX E for any portion of such period) plus (y) the
projected consolidated Net Income of Holdings for the remaining portion of such
Fiscal Year, based on the Projections delivered to Agent pursuant to ANNEX E for
such period and (E) concurrently with each delivery of the Financial Statements
described in clause (C) above, Holdings shall have delivered to Agent, in form
and substance satisfactory to Agent and based on recent financial data, a pro
forma consolidated balance sheet of Holdings and its Subsidiaries indicating
that Borrowing Availability shall be at least $5,500,000 (after giving effect to
such Restricted Payment and all Revolving Credit Advances to be made in
connection therewith, and with trade payables being paid currently, expenses and
liabilities being paid in the ordinary course of business and without
acceleration of sales); (iv) Restricted Payments not in excess of $700,000 in
the aggregate used to fund the purchase by Nutrition of its Stock pursuant to
any "Phantom Stock" agreement separately identified in SCHEDULE 3.10 on the
Closing Date from the other agreements described therein; (v) transactions
permitted under SECTION 6.4; (vi) Restricted Payments to one or more Borrowers;
and (vii) a one-time distribution within three (3) days after the Closing Date
by Holdings to Parent not in excess of $42,000,000 and otherwise in accordance
with SECTION 2.1(E), solely from proceeds of the IPO; PROVIDED THAT, in the case
of Restricted Payments described in the foregoing clauses (iii) through (vi), no
Default or Event of Default shall have occurred and be continuing or would
result after giving effect to such Restricted Payment.
6.14 LEASES. After the Closing Date, no Obligor shall, or shall
cause or permit any Subsidiary thereof to, enter into any material long term
lease of real property or similar agreement or arrangement, other than any lease
having a term (considered together with all renewal terms thereof) of less than
five (5) years, PROVIDED THAT (i) each such lease is in form and substance
satisfactory to Agent and (ii) Agent has received each landlord agreement,
mortgagee agreement, leasehold mortgage and other document which it may
reasonably request with respect to such lease, all in form and substance
reasonably acceptable to Agent.
6.15 FISCAL YEAR. No Obligor shall, or shall cause or permit any
Subsidiary thereof to, change its Fiscal Year.
6.16 CHANGE OF CORPORATE NAME. No Obligor shall, or shall cause or
permit any Subsidiary thereof to, change its corporate name except upon sixty
(60) days advance written notice to Agent and after taking any reasonable action
requested by Agent in connection therewith, including, without limitation, to
continue the perfection of any Liens in favor of Agent, on behalf of Lenders, in
any Collateral.
6.17 SALE OF STOCK. No Obligor shall, or shall cause or permit any
Subsidiary thereof to, issue or sell (whether in a public or private offering or
otherwise) any of its Stock except pursuant to agreements or arrangements
existing as of the Closing Date and described on SCHEDULE 3.10 hereto or, in the
case of Holdings, pursuant to the IPO.
6.18 CASH MANAGEMENT. No Obligor shall, or shall cause or permit any
Subsidiary thereof to, accumulate or maintain cash in disbursement accounts
(other than the Disbursement Account) or payroll accounts as of any date of
determination more than $200,000
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in the aggregate in excess of checks outstanding against such accounts as of
that date and amounts necessary to meet minimum balance requirements.
6.19 NO IMPAIRMENT OF CROSS-STREAMING, UPSTREAMING, DOWNSTREAMING OR
LIENS. No Obligor shall, or shall cause or permit any Subsidiary thereof to,
directly or indirectly, enter into or become bound by any agreement, instrument,
indenture or other obligation (other than this Agreement) which could directly
or indirectly restrict, prohibit or require the consent of any Person with
respect to (a) the payment of dividends or distributions or the making of
intercompany loans or investments by, between or among any of such Persons or
(b) the creation of a Lien in favor of Agent, on behalf of itself and Lenders,
as additional collateral for the Obligations, on the properties or other assets
of such Obligor or Subsidiary.
6.20 FINANCIAL COVENANTS. Obligors shall not breach or fail to
comply with any of the Financial Covenants set forth on ANNEX G.
6.21 INTERCOMPANY LOANS. Notwithstanding any provision contained in
this SECTION 6 to the contrary (a) each Obligor may make loans to Holdings (and
Holdings may incur the Indebtedness related thereto and repay such Indebtedness)
and (b) each Borrower or Subsidiary thereof may make loans to other Borrowers or
Subsidiaries thereof (and such Persons may incur the Indebtedness related
thereto and repay such Indebtedness), in all cases subject to the following
terms and conditions:
(i) such loans shall be unsecured and shall be payable on demand;
(ii) after giving effect to each such loan, each party to such loan
shall be Solvent;
(iii) each recipient of such a loan shall use the proceeds thereof
solely for its own working capital requirements arising in the ordinary
course of its business, as permitted by this Agreement and applicable law;
(iv) the cumulative amount of all such loans made from and after the
Closing Date to Subsidiaries of Obligors (which Subsidiaries are not
formed under the laws of a jurisdiction located within the United States
of America) in connection with Permitted Acquisitions shall not exceed
$15,000,000 in the aggregate;
(v) the aggregate amount of all such loans (other than those
described in clause (iv) above) made to Subsidiaries of Obligors (which
Subsidiaries are not formed under the laws of a jurisdiction located
within the United States of America) shall not exceed $5,000,000 at any
time outstanding; and
(vi) Holdings shall have delivered to the Agent a current list of
intercompany loans outstanding in accordance with CLAUSE (G) of ANNEX E
hereto.
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6.22 NEW YORK STOCK EXCHANGE LISTING. Holdings shall not at any time
fail to be, or fail to be qualified to be, listed on the New York Stock
Exchange.
7. TERM
7.1 TERMINATION. The financing arrangements contemplated hereby
shall be in effect until the Termination Date, and the Revolving Credit Loan and
all other Obligations shall be automatically due and payable in full on such
date.
7.2 SURVIVAL OF OBLIGATIONS UPON TERMINATION OF FINANCING
ARRANGEMENTS. Except as otherwise expressly provided for in the Loan Documents,
no termination or cancellation (regardless of cause or procedure) of any
financing arrangement under this Agreement shall in any way affect or impair the
obligations, duties and liabilities of Obligors or the rights of Agent and
Lenders relating to any unpaid portion of the Revolving Credit Loan or any other
Obligation, due or not due, liquidated, contingent or unliquidated or any
transaction or event occurring prior to such termination, or any transaction or
event, the performance of which is not required until after the Revolving
Commitment Termination Date. Except as otherwise expressly provided herein or in
any other Loan Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon Obligors, and all rights of Agent and
Lenders, all as contained in the Loan Documents shall not terminate or expire,
but rather shall survive such termination or cancellation and shall continue in
full force and effect until such time as the Revolving Credit Loan and all of
the other Obligations have been indefeasibly paid in full in accordance with the
terms of the agreements creating such Obligations.
8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES
8.1 EVENTS OF DEFAULT. The occurrence of any one or more of the
following events (regardless of the reason therefor) shall constitute an "EVENT
OF DEFAULT" hereunder:
(a) Any Obligor shall fail to make any payment of principal of, or
interest or Fees on, or any other amount owing by it in respect of, the
Revolving Credit Loan or any of the other Obligations (other than as set forth
in CLAUSE (B) below) when due and payable or declared due and payable.
(b) Any Obligor shall fail to pay any fees (other than Fees), costs
or expenses payable by it under this Agreement or under any other Loan Document,
and such failure shall have remained unremedied for a period of 5 days after
Holdings has received notice of such failure from Agent or any Lender.
(c) Any Obligor or Subsidiary thereof shall fail or neglect to
perform, keep or observe any of the provisions applicable to it contained in (i)
SECTION 4 or ANNEX E not covered in the following CLAUSE (II) within five (5)
days after written notice from Agent or (ii) SECTION 1.7 or SECTION 6 or ANNEXES
C, E (PARAGRAPH (F) ONLY) or F.
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(d) Any Obligor or Subsidiary thereof shall fail or neglect to
perform, keep or observe any other provision of this Agreement or of any of the
other Loan Documents applicable to it (except to the extent already covered by
CLAUSES (A), (B) or (C) above), and the same shall remain unremedied for a
period ending 30 days after Holdings shall receive written notice of any such
failure from Agent or any Lender; PROVIDED, HOWEVER, that if such failure cannot
be remedied during such 30 day period despite all reasonable efforts of
Obligors, then such 30 day period shall be extended by an additional 30 days or
such longer period of time (but not more than an additional 60 days without the
prior written consent of Agent and the Requisite Lenders, which shall not be
unreasonably withheld) as is necessary to cure such failure as long as Obligors
are proceeding diligently and in good faith to cure such failure and the delay
could not reasonably be expected to have a Material Adverse Effect.
(e) Any Obligor or Subsidiary thereof shall fail or neglect to
perform, keep or observe any provision of the Guaranty applicable to it, and the
same shall remain unremedied for a period ending 30 days after Holdings shall
have received written notice of any such failure from Agent or any Lender.
(f) A default or breach shall occur under any other agreement,
document or instrument to which any Obligor or Subsidiary thereof is a party and
such default is not cured within any applicable grace period, waived in writing
or being contested pursuant to the provisions of SECTION 5.2, and such default
or breach (i) involves the failure to make any payment when due (after giving
effect to any applicable grace periods, but exclusive of subsequent waivers) in
respect of any Indebtedness (other than the Obligations) of any Obligor or
Subsidiary thereof in excess of $1,000,000 in the aggregate, or (ii) causes such
Indebtedness or a portion thereof in excess of $1,000,000 in the aggregate to
become due prior to its stated maturity or prior to its regularly scheduled
dates of payment, or (iii) permits any holder of such Indebtedness or a trustee
to cause such Indebtedness or a portion thereof in excess of $1,000,000 in the
aggregate to become due prior to its stated maturity or prior to its regularly
scheduled dates of payment.
(g) Any representation or warranty herein or in any Loan Document or
in any written statement, report, financial statement or certificate made or
delivered to any Lender by any Obligor or Subsidiary thereof shall be untrue or
incorrect in any material respect as to any Obligor and its Subsidiaries taken
as a whole, as of the date when made or deemed made.
(h) Any representation or warranty herein or in any Loan Document or
in any written statement, report, financial statement or certificate made or
delivered to any Lender by any Obligor or Subsidiary thereof shall be untrue or
incorrect in any material respect as to Holdings and its Subsidiaries taken as a
whole, as of the date when made or deemed made.
(i) Assets of any Obligor or Subsidiary thereof with a fair market
value of $500,000 or more shall be attached, seized, levied upon or subjected to
a writ or distress warrant, or come within the possession of any receiver,
trustee, custodian or assignee for the benefit of creditors of any Obligor or
Subsidiary thereof and shall remain unstayed or undismissed for forty-five (45)
consecutive days; or any Person shall apply for the appointment of a receiver,
trustee or custodian for assets of any Obligor or Subsidiary thereof with a fair
market value of $500,000 or more and shall remain unstayed or undismissed for
forty-five (45) consecutive days; or any Obligor or Subsidiary thereof shall
have concealed, removed or permitted to be concealed or removed any part of its
property with intent to hinder, delay or defraud its creditors or any of them or
made or suffered a transfer of any of its property or incurred an obligation
which may be fraudulent under any bankruptcy, fraudulent conveyance or other
similar law.
(j) A case or proceeding shall have been commenced against any
Obligor or Subsidiary thereof in a court having competent jurisdiction seeking a
decree or order in respect of any Obligor or Subsidiary thereof (i) under Title
11 of the United States Code, as now constituted or hereafter amended or any
other applicable federal, state or foreign bankruptcy or other similar law, (ii)
appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator
(or similar official) of any Obligor or Subsidiary thereof or of any substantial
part of its properties, or (iii) ordering the winding-up or liquidation of the
affairs of any Obligor or Subsidiary thereof and such case or proceeding shall
remain undismissed or unstayed for forty-five (45) consecutive days or such
court shall enter a decree or order granting the relief sought in such case or
proceeding.
(k) Any Obligor or Subsidiary thereof shall (i) file a petition
seeking relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable federal, state or foreign bankruptcy
or other similar law, (ii) consent to the institution of proceedings thereunder
or to the filing of any such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) of any Obligor or Subsidiary thereof or of
any substantial part of such Person's properties, (iii) fail generally to pay
its debts as such debts become due, or (iv) take any corporate action in
furtherance of any such action.
(l) Final judgment or judgments (after the expiration of all times
to appeal therefrom) for the payment of money in excess of $500,000 in the
aggregate shall be rendered against any Obligor or Subsidiary thereof and the
same shall not (i) be fully covered by insurance in accordance with SECTION 5.5
hereof, or (ii) within 30 days after the entry thereof, have been discharged or
execution thereof stayed pending appeal, or shall not have been discharged prior
to the expiration of any such stay.
(m) With respect to any Plan: (i) or any Defined Contribution Plan
or Welfare Plan, any Obligor, ERISA Affiliate or other party-in-interest or
disqualified person shall engage in any transactions which in the aggregate
would reasonably result in a final assessment to any Obligor or Subsidiary
thereof in excess of $100,000 under Section 409 or 502 of ERISA or IRC Section
4975 which assessment has not been paid within 30 days of final assessment and
which is not being contested pursuant to SECTION 5.2(B) hereof; (ii) any Obligor
or ERISA Affiliate shall incur any accumulated funding deficiency, as defined in
IRC Section 412, in the aggregate excess of $100,000, or request a funding
waiver from the IRS for contributions in the aggregate in excess of $100,000;
(iii) any Obligor or ERISA Affiliate shall not pay any withdrawal liability
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which involves annual withdrawal liability payments which exceed $100,000, as a
result of a complete or partial withdrawal within the meaning of Section 4203 or
4205 of ERISA, within 30 days after the date such payment becomes due, unless
such payment is being contested pursuant to SECTION 5.2(B) hereof; (iv) any
Obligor or ERISA Affiliate shall fail to make a required contribution by the due
date under Section 412 of the IRC or Section 302 of ERISA which would result in
the imposition of a lien under Section 412 of the IRC or Section 302 of ERISA
within 30 days after the date such payment becomes due, unless such payment is
being contested pursuant to SECTION 5.2(B) hereof; or (v) any ERISA Event (other
than an event described in 29 CFR ss.2615.23) with respect to a Plan has
occurred, and within the time period described below, such ERISA Event has not
been contested, with the time periods to correct such ERISA Event being as
follows: (A) with respect to an event described clause (a) of the definition of
ERISA Event, within 60 days after the occurrence of such event; (B) with respect
to an event described in clause (b) of the definition of ERISA Event, within 30
days after the date on which withdrawal liability under Section 4063 becomes due
and owing; (C) with respect to an event described in clause (c)of the definition
of ERISA Event, before the final distribution of the assets from the Plan that
was terminated; or (D) with respect to an event described in clause (d) or
clause (e) of the definition of ERISA Event, within 30 days after the
institution of proceedings by the PBGC to terminate such Plan or any Obligor or
ERISA Affiliate has incurred liability under Title IV of ERISA; PROVIDED,
HOWEVER, that an ERISA Event shall not constitute an Event of Default if the
maximum liability (determined after the time periods for correction described
above) which any Obligor or ERISA Affiliate could incur under Section 4041,
4062, 4063, 4064, 4201, 4219 or 4243 of ERISA, or any other provision of law
with respect to a Plan, as a result of such event does not exceed $100,000
(computed by the actuary for the Plan taking into account any applicable rules
or regulations of the PBGC and based on actuarial assumptions used by the Plan),
or the ERISA Event is being contested under SECTION 5.2(B) hereof.
(n) Any material provision of any Collateral Document after delivery
thereof pursuant to SECTION 3.5, shall for any reason cease to be valid or
enforceable in accordance with its terms (or any Obligor or Subsidiary thereof
shall challenge the enforceability of any Collateral Document), or any security
interest created under any Collateral Document shall cease to be a valid and,
with respect Collateral in which a security interest may be perfected pursuant
to the Code, perfected first priority security interest or Lien (except as
otherwise permitted herein or therein) in any of the Collateral purported to be
covered thereby.
(o) Any Change of Control shall occur.
(p) Except to the extent otherwise permitted by this Agreement, any
Obligor shall cease to own all of the Stock of each of its Subsidiaries.
8.2 REMEDIES. (a) If any Default or Event of Default shall have
occurred and be continuing, Agent may (and at the written request of the
Requisite Lenders shall), without notice, suspend this facility with respect to
further Revolving Credit Advances and/or the incurrence of further Letter of
Credit Obligations whereupon any further Advances and Letter of Credit
Obligations shall be made or extended in Agent's sole discretion (or in the sole
discretion
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of the Requisite Lenders, if such suspension occurred at their direction) so
long as such Default or Event of Default is continuing. If any Default or Event
of Default shall have occurred and be continuing, Agent may (and at the written
request of Requisite Lenders shall), without notice except as otherwise
expressly provided herein, increase the rate of interest applicable to the
Revolving Credit Loan and the Letter of Credit Fees to the Default Rate.
(b) If any Event of Default shall have occurred and be continuing,
Agent may (and at the written request of the Requisite Lenders shall), without
notice, (i) terminate this facility with respect to further Advances or the
incurrence of further Letter of Credit Obligations; (ii) declare all or any
portion of the Obligations, including all or any portion of the Revolving Credit
Loan to be forthwith due and payable, and require that the Letter of Credit
Obligations be cash collateralized as provided in ANNEX B, all without
presentment, demand, protest or further notice of any kind, all of which are
expressly waived by Obligors, and (iii) exercise any rights and remedies
provided to Agent under the Loan Documents and/or at law or equity, including
all remedies provided under the Code; PROVIDED, HOWEVER, that upon the
occurrence of an Event of Default specified in SECTIONS 8.1(J) or (K), all of
the Obligations, including the aggregate Revolving Credit Loan, shall become
immediately due and payable without declaration, notice or demand by any Person.
8.3 WAIVERS BY OBLIGORS. Except as otherwise provided for in this
Agreement or by applicable law, each Obligor waives: (i) presentment, demand and
protest and notice of presentment, dishonor, notice of intent to accelerate,
notice of acceleration, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all commercial paper,
accounts, contract rights, documents, instruments, chattel paper and guaranties
at any time held by Agent on which any Obligor may in any way be liable, and
hereby ratifies and confirms whatever Agent may do in this regard, (ii) all
rights to notice and a hearing prior to Agent's taking possession or control of,
or to Agent's replevy, attachment or levy upon, the Collateral or any bond or
security which might be required by any court prior to allowing Agent to
exercise any of its remedies, and (iii) the benefit of all valuation, appraisal
and exemption laws. Each Obligor acknowledges that it has been advised by
counsel of its choice with respect to this Agreement, the other Loan Documents
and the transactions evidenced by this Agreement and the other Loan Documents.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1 ASSIGNMENT AND PARTICIPATIONS. (a) Each Obligor consents to any
Lender's assignment of, and/or sale of participations in, at any time or times
pursuant hereto, any of the Loan Documents, any Revolving Credit Loan Commitment
or of any portion thereof or interest therein, including any Lender's rights,
title, interests, remedies, powers or duties thereunder, whether evidenced by a
writing or not. Any assignment by a Lender shall (i) require the consent of
Agent and Holdings (neither of which consents shall be unreasonably withheld or
delayed and which consent of Holdings shall not be required during the existence
and continuance of an Event of Default or with respect to Persons designated on
a pre-approved list delivered to Holdings on or prior to the Closing Date); (ii)
require the execution of an assignment agreement (an
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"ASSIGNMENT AGREEMENT") in form and substance satisfactory to, and acknowledged
by, Agent; (iii) be conditioned on such assignee Lender representing to the
assigning Lender and Agent that it is purchasing the applicable portion of the
Revolving Credit Loan to be assigned to it for its own account, for investment
purposes and not with a view to the distribution thereof; (iv) if a partial
assignment, be in an amount at least equal to $5,000,000 and, after giving
effect to any such partial assignment, the assigning Lender shall have retained
a Revolving Credit Loan Commitment in an amount at least equal to $5,000,000;
and (v) include a payment by the assigning Lender or the assignee Lender to
Agent of an assignment fee of $3,500. In the case of an assignment by a Lender
under this SECTION 9.1, the assignee shall have, to the extent of such
assignment, the same rights, benefits and obligations as it would if it were a
Lender hereunder. The assigning Lender shall be relieved of its obligations
hereunder with respect to its Revolving Credit Loan Commitment or assigned
portion thereof from and after the date of such assignment. Each Obligor hereby
acknowledges and agrees that any assignment will give rise to a direct
obligation of Obligors to the assignee and that the assignee shall be considered
to be a "Lender". In all instances, each Lender's liability to make Revolving
Credit Advances hereunder shall be several and not joint and shall be limited to
such Lender's Pro Rata Share of the applicable Revolving Credit Loan Commitment.
In the event Agent or any Lender assigns or otherwise transfers all or any part
of a Revolving Credit Note, Agent or any such Lender shall so notify Holdings or
Borrowers and Borrowers shall, upon the request of Agent or such Lender to
Holdings or Borrowers, execute new Revolving Credit Notes in exchange for the
Revolving Credit Notes being assigned. Notwithstanding the foregoing provisions
of this SECTION 9.1(A), any Lender may at any time pledge or assign all or any
portion of such Lender's rights under this Agreement and the other Loan
Documents to a Federal Reserve Bank; PROVIDED, HOWEVER, that no such pledge or
assignment shall release such Lender from such Lender's obligations hereunder or
under any other Loan Document.
(b) Any participation by a Lender of all or any part of its
Revolving Credit Loan Commitment shall be made with the understanding that all
amounts payable by Obligors hereunder shall be determined as if that Lender had
not sold such participation, and that the holder of any such participation shall
not be entitled to require such Lender to take or omit to take any action
hereunder except actions directly affecting (i) any reduction in the principal
amount of, or interest rate or Fees payable with respect to, the Revolving
Credit Loan, (ii) any extension of the scheduled amortization of the principal
amount of the Revolving Credit Loan or the final maturity date thereof, and
(iii) any release of all or substantially all of the Collateral (other than in
accordance with the terms of this Agreement, the Collateral Documents or the
other Loan Documents). Solely for purposes of SECTIONS 1.12, 1.13, 1.14, 1.15
and 9.8, each Obligor acknowledges and agrees that a participation shall give
rise to a direct obligation of Obligors to the participant and the participant
shall be considered to be a "Lender". Except as set forth in the preceding
sentence, no Obligor shall have any obligation or duty to any participant.
Neither Agent nor any Lender (other than the Lender selling a participation)
shall have any duty to any participant and may continue to deal solely with the
Lender selling a participation as if no such sale had occurred.
(c) Except as expressly provided in this SECTION 9.1, no Lender
shall, as
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between Borrowers and that Lender, or Agent and that Lender, be relieved of any
of its obligations hereunder as a result of any sale, assignment, transfer or
negotiation of, or granting of participation in, all or any part of the
Revolving Credit Loan, the Revolving Credit Notes or other Obligations owed to
such Lender.
(d) Each Obligor shall assist any Lender permitted to sell
assignments or participations under this SECTION 9.1 as reasonably required to
enable the assigning or selling Lender to effect any such assignment or
participation, including the execution and delivery of any and all agreements,
notes and other documents and instruments as shall be requested and, if
requested by Agent, the preparation of informational materials for, and the
participation of management in meetings with, potential assignees or
participants. Each Obligor executing this Agreement shall certify the
correctness, completeness and accuracy of all descriptions of each Obligor and
their affairs contained in any selling materials provided by them and all other
information provided by them and included in such materials, except that any
Projections delivered on behalf of Holdings and Borrowers shall only be
certified by Holdings and Borrowers as having been prepared by Holdings and
Borrowers in compliance with the representations contained in SECTION 3.4.
(e) Subject to SECTION 11.11, a Lender may furnish any information
concerning any Obligor in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants).
9.2 APPOINTMENT OF AGENT. GE Capital is hereby appointed to act on
behalf of all Lenders as Agent under this Agreement and the other Loan
Documents. The provisions of this SECTION 9.2 are solely for the benefit of
Agent and Lenders and no Obligor or any other Person shall have any rights as a
third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement and the other Loan Documents, Agent
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for any Obligor or any other Person. Agent shall have no duties or
responsibilities except for those expressly set forth in this Agreement and the
other Loan Documents. The duties of Agent shall be mechanical and administrative
in nature and Agent shall not have, or be deemed to have, by reason of this
Agreement, any other Loan Document or otherwise a fiduciary relationship in
respect of any Lender. Neither Agent nor any of its Affiliates nor any of their
respective officers, directors, employees, agents or representatives shall be
liable to any Lender for any action taken or omitted to be taken by it hereunder
or under any other Loan Document, or in connection herewith or therewith, except
for damages solely caused by its or their own gross negligence or willful
misconduct.
If Agent shall request instructions from Requisite Lenders or all
affected Lenders with respect to any act or action (including failure to act) in
connection with this Agreement or any other Loan Document, then Agent shall be
entitled to refrain from such act or taking such action unless and until Agent
shall have received instructions from Requisite Lenders or all affected Lenders,
as the case may be, and Agent shall not incur liability to any Person by reason
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of so refraining. Agent shall be fully justified in failing or refusing to take
any action hereunder or under any other Loan Document (a) if such action would,
in the opinion of Agent, be contrary to law or the terms of this Agreement or
any other Loan Document, (b) if such action would, in the opinion of Agent,
expose Agent to Environmental Liabilities and Costs or (c) if Agent shall not
first be indemnified to its satisfaction against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. Without limiting the foregoing, no Lender shall have any right
of action whatsoever against Agent as a result of Agent acting or refraining
from acting hereunder or under any other Loan Document in accordance with the
instructions of Requisite Lenders or all affected Lenders, as applicable.
9.3 AGENT'S RELIANCE, ETC. Neither Agent nor any of its Affiliates
nor any of their respective directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or the other Loan Documents, except for damages
solely caused by its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, Agent: (a) may treat the
payee of any Revolving Credit Note as the holder thereof until Agent receives
written notice of the assignment or transfer thereof signed by such payee and in
form satisfactory to Agent; (b) may consult with legal counsel, independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with this
Agreement or the other Loan Documents; (d) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of this Agreement or the other Loan Documents on the part of any
Obligor or to inspect the Collateral (including the books and records) of
Obligors or their respective Subsidiaries; (e) shall not be responsible to any
Lender for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; and (f) shall incur
no liability under or in respect of this Agreement or the other Loan Documents
by acting upon any notice, consent, certificate or other instrument or writing
(which may be by telecopy, telegram, cable or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
9.4 GE CAPITAL AND AFFILIATES. With respect to its Revolving Credit
Loan Commitment hereunder, GE Capital shall have the same rights and powers
under this Agreement and the other Loan Documents as any other Lender and may
exercise the same as though it were not Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include GE Capital in its
individual capacity. GE Capital and its Affiliates may lend money to, invest in,
and generally engage in any kind of business with, any Obligor, any of their
Affiliates and any Person who may do business with or own securities of any
Obligor or any such Affiliate, all as if GE Capital were not Agent and without
any duty to account therefor to Lenders. GE Capital and its Affiliates may
accept fees and other consideration from any Obligor for services in connection
with this Agreement or otherwise without having to account for the same to
Lenders. Each Lender acknowledges the potential conflict of interest between GE
Capital as a
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Lender and GE Capital as Agent.
9.5 LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
the Financial Statements referred to in SECTION 3.4 and such other documents and
information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Each
Lender acknowledges the potential conflict of interest of each other Lender as a
result of Lenders holding disproportionate interests in the Revolving Credit
Loan, and expressly consents to, and waives any claim based upon, such conflict
of interest.
9.6 INDEMNIFICATION. Lenders agree to indemnify Agent (to the extent
not reimbursed by Obligors and without limiting the obligations of Obligors
hereunder), ratably according to their respective Pro Rata Shares, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against
Agent in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by Agent in connection therewith;
PROVIDED, HOWEVER, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from Agent's gross negligence
or willful misconduct. Without limiting the foregoing, each Lender agrees to
reimburse Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including counsel fees) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
and each other Loan Document, to the extent that Agent is not reimbursed for
such expenses by Obligors.
9.7 SUCCESSOR AGENT. Agent may resign at any time by giving not less
than thirty (30) days' prior written notice thereof to Lenders and Holdings.
Upon any such resignation, the Requisite Lenders shall have the right to appoint
a successor Agent. If no successor Agent shall have been so appointed by the
Requisite Lenders and shall have accepted such appointment within 30 days after
the resigning Agent's giving notice of resignation, then the resigning Agent
may, on behalf of Lenders, appoint a successor Agent, which shall be a Lender,
if a Lender is willing to accept such appointment, or otherwise shall be a
commercial bank or financial institution or a subsidiary of a commercial bank or
financial institution if such commercial bank or financial institution is
organized under the laws of the United States of America or of any State thereof
and has a combined capital and surplus of at least $300,000,000. If no successor
Agent has been appointed pursuant to the foregoing, by the 30th day after the
date such notice of resignation was given by the resigning Agent, such
resignation shall become effective and the Requisite Lenders shall thereafter
perform all the duties of Agent hereunder until such time, if any, as the
Requisite Lenders appoint a successor Agent as provided above. Any
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successor Agent appointed by Requisite Lenders hereunder shall be subject to the
approval of Holdings, such approval not to be unreasonably withheld or delayed;
PROVIDED that such approval shall not be required if a Default or an Event of
Default shall have occurred and be continuing. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning Agent. Upon the earlier of the acceptance of any appointment as
Agent hereunder by a successor Agent or the effective date of the resigning
Agent's resignation, the resigning Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents, except that any
indemnity rights or other rights in favor of such resigning Agent shall
continue. After any resigning Agent's resignation hereunder, the provisions of
this SECTION 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement and the other Loan
Documents. Agent may be removed at the written direction of the holders (other
than Agent) of two-thirds or more of the Revolving Credit Loan Commitments
(excluding Agent's Revolving Credit Loan Commitment); provided that in so doing,
such Lenders shall be deemed to have waived and released any and all claims they
may have against Agent.
9.8 SETOFF AND SHARING OF PAYMENTS. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default,
each Lender and each holder of any Revolving Credit Note is hereby authorized at
any time or from time to time, without notice to any Obligor or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply any and all balances held by it at any of its offices
for the account of any Obligor (regardless of whether such balances are then due
to such Obligor) and any other properties or assets any time held or owing by
that Lender or that holder to or for the credit or for the account of Obligors
against and on account of any of the Obligations which are not paid when due.
Any Lender or holder of any Revolving Credit Note exercising a right to set off
shall purchase for cash (and the other Lenders or holders shall sell) such
participations in each such other Lender's or holder's Pro Rata Share of the
Obligations as would be necessary to cause such Lender to share the amount so
set off with each other Lender or holder in accordance with their respective Pro
Rata Shares. Each Obligor agrees, to the fullest extent permitted by law, that
(a) any Lender or holder may exercise its right to set off with respect to
amounts in excess of its Pro Rata Share of the Obligations and may sell
participations in such amount so set off to other Lenders and holders and (b)
any Lender or holders so purchasing a participation in any portion of the
Revolving Credit Loan made or other Obligations held by other Lenders or holders
may exercise all rights of set-off, bankers' lien, counterclaim or similar
rights with respect to such participation as fully as if such Lender or holder
were a direct holder of the Revolving Credit Loan and the other Obligations in
the amount of such participation. Notwithstanding the foregoing, if all or any
portion of the set-off amount is thereafter recovered from the Lender that has
exercised the right of set-off, the purchase of participations by that Lender
shall be rescinded and the purchase price restored without interest.
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9.9 ADVANCES; PAYMENTS; NON-FUNDING LENDERS; INFORMATION;
ACTIONS IN CONCERT.
(a) ADVANCES; PAYMENTS. (i) By 12:30 p.m. (New York time) on the
date of Agent's receipt of a Notice of Revolving Credit Advance, Agent shall
notify Revolving Credit Lenders thereof by telecopy, telephone or other similar
form of transmission. Each Lender shall make the amount of such Lender's Pro
Rata Share of each Revolving Credit Advance available to Agent in same day funds
by wire transfer to Agent's account as set forth in ANNEX H, not later than 2:00
p.m. (New York time) on the requested funding date, in the case of an Index Rate
Loan and not later than 11:00 a.m. (New York time) on the requested funding date
in the case of a LIBOR Loan. After receipt of such wire transfers (or, in the
Agent's sole discretion, before receipt of such wire transfers), subject to the
terms hereof, Agent shall make the requested Revolving Credit Advance to the
Borrower designated by Holdings in the Notice of Revolving Credit Advance. All
payments by each Lender shall be made without setoff, counterclaim or deduction
of any kind.
(ii) On the second (2nd) Business Day of each calendar week or
more frequently as aggregate cumulative payments in excess of $10,000,000 are
received with respect to the Revolving Credit Loan (each, a "SETTLEMENT DATE"),
Agent will advise each Lender by telephone, or telecopy of the amount of such
Lender's Pro Rata Share of principal, interest and Fees paid for the benefit of
Lenders with respect to the Revolving Credit Loan. Provided that such Lender has
made all payments required to be made by it and has purchased all participations
required to be purchased by it under this Agreement and the other Loan Documents
as of such Settlement Date, Agent will pay to each Lender such Lender's Pro Rata
Share of principal, interest and Fees paid by Borrowers since the previous
Settlement Date for the benefit of that Lender on that portion of the Revolving
Credit Loan held by it. Such payments shall be made by wire transfer to such
Lender's account (as specified by such Lender in ANNEX H or the applicable
Assignment Agreement) not later than 2:00 p.m. (New York time) on the next
Business Day following each Settlement Date.
(b) AVAILABILITY OF LENDER'S PRO RATA SHARE. Agent may assume that
each Lender will make its Pro Rata Share of each Revolving Credit Advance
available to Agent on each funding date. If such Pro Rata Share is not, in fact,
paid to Agent by such Lender when due, Agent will be entitled to recover such
amount on demand from such Lender without set-off, counterclaim or deduction of
any kind. If any Lender fails to pay the amount of its Pro Rata Share forthwith
upon Agent's demand, Agent shall promptly notify Holdings and Borrowers shall
immediately repay such amount to Agent. Nothing in this SECTION 9.9(B) or
elsewhere in this Agreement or the other Loan Documents shall be deemed to
require Agent to advance funds on behalf of any Lender or to relieve any Lender
from its obligation to fulfill its Revolving Credit Loan Commitment hereunder or
to prejudice any rights that Borrowers may have against any Lender as a result
of any default by such Lender hereunder. To the extent that Agent advances funds
to any Borrower on behalf of any Lender and is not reimbursed therefor on the
same Business Day as such Advance is made, Agent shall be entitled to retain for
its account all interest accrued on such Advance until reimbursed by the
applicable Lender.
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(c) RETURN OF PAYMENTS(i) If Agent pays an amount to a Lender under
this Agreement in the belief or expectation that a related payment has been or
will be received by Agent from Borrowers and such related payment is not
received by Agent, then Agent will be entitled to recover such amount from such
Lender on demand without set-off, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any amount received by
Agent under this Agreement must be returned to any Borrower or paid to any other
Person pursuant to any insolvency law or otherwise, then, notwithstanding any
other term or condition of this Agreement or any other Loan Document, Agent will
not be required to distribute any portion thereof to any Lender. In addition,
each Lender will repay to Agent on demand any portion of such amount that Agent
has distributed to such Lender, together with interest at such rate, if any, as
Agent is required to pay to any Borrower or such other Person, without set-off,
counterclaim or deduction of any kind.
(d) NON-FUNDING LENDERS. The failure of any Lender (such Lender, a
"NON- FUNDING LENDER") to make any Revolving Credit Advance to be made by it on
the date specified therefor shall not relieve any other Lender (each such other
Lender, an "OTHER LENDER") of its obligations to make such Advance on such date,
but neither any Other Lender nor Agent shall be responsible for the failure of
any Non-Funding Lender to make an Advance to be made by such Non-Funding Lender.
Notwithstanding anything set forth herein to the contrary, a Non- Funding Lender
shall not have any voting or consent rights under or with respect to any Loan
Document or constitute a "Lender" (or be included in the calculation of
"Requisite Lenders" hereunder) for any voting or consent rights under or with
respect to any Loan Document.
(e) DISSEMINATION OF INFORMATION. Agent will (i) provide Lenders
with any notice of Default or Event of Default delivered by Agent to any Obligor
and (ii) use reasonable efforts to provide Lenders with notice of any action
taken by Agent following any Event of Default; provided that, with respect to
the foregoing clause (ii), Agent shall not be liable to any Lender for any
failure to provide such notice, except to the extent that such failure is
attributable solely to Agent's gross negligence or willful misconduct. Lenders
acknowledge that Holdings and Borrowers are required to provide Financial
Statements, Collateral Reports and notices of Events of Default to Lenders in
accordance with ANNEXES E and F hereto and agree that Agent shall have no duty
to provide the same to Lenders.
(f) ACTIONS IN CONCERT. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Revolving Credit Notes (including exercising any rights of
set-off) without first obtaining the prior written consent of Agent or Requisite
Lenders, it being the intent of Lenders that any such action to protect or
enforce rights under this Agreement and the Revolving Credit Notes shall be
taken in concert and at the direction or with the consent of Agent.
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10. SUCCESSORS AND ASSIGNS
10.1 SUCCESSORS AND ASSIGNS. This Agreement and the other Loan
Documents shall be binding on and shall inure to the benefit of Obligors, Agent,
Lenders and their respective successors and assigns, except as otherwise
provided herein or therein. No Obligor may assign, transfer, hypothecate or
otherwise convey its rights, benefits, obligations or duties hereunder or under
any of the other Loan Documents without the prior express written consent of
Agent and Requisite Lenders. No Lender may assign, transfer, hypothecate or
otherwise convey its rights, benefits, obligations or duties hereunder or under
any of the other Loan Documents other than in accordance with SECTION 9.1. Any
such purported assignment, transfer, hypothecation or other conveyance by any
Obligor without the prior express written consent of Agent shall be void. The
terms and provisions of this Agreement are for the purpose of defining the
relative rights and obligations of Obligors, Agent and Lenders with respect to
the transactions contemplated hereby and there shall be no third party
beneficiaries of any of the terms and provisions of this Agreement or any of the
other Loan Documents.
11. MISCELLANEOUS
11.1 COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT. The Loan
Documents constitute the complete agreement between the parties with respect to
the subject matter thereof and may not be modified, altered or amended except as
set forth in SECTION 11.2 below. Any Letter of Interest or Commitment Letter
and/or fee letter between any Obligor and Agent or any of its affiliates,
predating this Agreement and relating to a financing of substantially similar
form, purpose or effect shall be merged with and into and superseded by this
Agreement. Notwithstanding the date on which this Agreement or any other Loan
Document entered into concurrently herewith is executed, all of such documents
shall be deemed to be effective as of the Closing Date.
11.2 AMENDMENTS AND WAIVERS. (a) Except for actions expressly
permitted to be taken by Agent, no amendment, modification, termination or
waiver of any provision of this Agreement or any of the Revolving Credit Notes,
or any consent to any departure by any Obligor therefrom, shall in any event be
effective unless the same shall be in writing and signed by Agent and Holdings,
and by Requisite Lenders or all affected Lenders, as applicable. Except as set
forth in CLAUSES (B) and (C) below, all such amendments, modifications,
terminations or waivers requiring the consent of any Lenders shall require the
written consent of Requisite Lenders.
(b) No amendment, modification, termination or waiver of or consent
with respect to any provision of this Agreement which waives compliance with the
conditions precedent set forth in SECTION 2.2 to the making of any Revolving
Credit Advance or the incurrence of any Letter of Credit Obligations shall be
effective unless the same shall be in writing and signed by Agent, Requisite
Lenders and Holdings. Notwithstanding anything contained in this Agreement to
the contrary, no waiver or consent with respect to any Default (if in connection
therewith Agent or Requisite Lenders, as the case may be, have exercised its or
their right to suspend the making or incurrence of further Revolving Credit
Advances or Letter
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of Credit Obligations pursuant to SECTION 8.2(A)) or any Event of Default shall
be effective for purposes of the conditions precedent to the making of Revolving
Credit Advances or the incurrence of Letter of Credit Obligations set forth in
SECTION 2.2 unless the same shall be in writing and signed by Agent, Requisite
Lenders and Holdings.
(c) No amendment, modification, termination or waiver shall, unless
in writing and signed by Agent and each Lender directly affected thereby, do any
of the following: (i) increase the principal amount of any Lender's Revolving
Credit Loan Commitment (which action shall be deemed to directly affect all
Lenders); (ii) reduce the principal of, rate of interest on or Fees payable with
respect to the Pro Rata Share of the Revolving Credit Loan or Letter of Credit
Obligations of any affected Lender; (iii) change any scheduled payment date or
final maturity date of the principal amount of the Pro Rata Share of the
Revolving Credit Loan of any affected Lender; (iv) waive, forgive, defer, extend
or postpone any payment of interest or Fees as to any affected Lender; (v)
release any of the Guaranties or, except as otherwise permitted herein or in the
other Loan Documents, permit Obligors to sell or otherwise dispose of any
Collateral with a value exceeding $5,000,000 in the aggregate for all Obligors
(which action shall be deemed to directly affect all Lenders); (vi) change the
percentage of the Revolving Credit Loan Commitments or of the aggregate unpaid
principal amount of the Revolving Credit Loan which shall be required for
Lenders or any of them to take any action hereunder; and (vii) amend or waive
this SECTION 11.2 or the definitions of the terms "Requisite Lenders" insofar as
such definitions affect the substance of this SECTION 11.2. Furthermore, no
amendment, modification, termination or waiver affecting the rights or duties of
Agent under this Agreement or any other Loan Document shall be effective unless
in writing and signed by Agent, in addition to Lenders required hereinabove to
take such action. Each amendment, modification, termination or waiver shall be
effective only in the specific instance and for the specific purpose for which
it was given. No amendment, modification, termination or waiver shall be
required for Agent to take additional Collateral pursuant to any Loan Document.
No amendment, modification, termination or waiver of any provision of any
Revolving Credit Note shall be effective without the written concurrence of the
holder of that Revolving Credit Note. No notice to or demand on any Obligor in
any case shall entitle any such Person to any other or further notice or demand
in similar or other circumstances. Any amendment, modification, termination,
waiver or consent effected in accordance with this SECTION 11.2 shall be binding
upon each holder of the Revolving Credit Notes at the time outstanding and each
future holder of the Revolving Credit Notes.
(d) If, in connection with any proposed amendment, modification,
waiver or termination (a "PROPOSED CHANGE"):
(i) requiring the consent of all affected Lenders, the consent
of Requisite Lenders is obtained, but the consent of other Lenders
whose consent is required is not obtained (any such Lender whose
consent is not obtained as described in this CLAUSE (I) and in
CLAUSE (II) below being referred to as a "NONCONSENTING LENDER"), or
(ii) requiring the consent of Requisite Lenders, the
consent of Lenders
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holding 51% or more of the aggregate Revolving Credit Loan
Commitments is obtained, but the consent of Requisite Lenders is not
obtained,
then, so long as Agent is not a Non-Consenting Lender, at Holdings' request,
Agent or a Person acceptable to Agent shall have the right with Agent's consent
and in Agent's sole discretion (but shall have no obligation) to purchase from
such Non-Consenting Lenders, and such NonConsenting Lenders agree that they
shall, upon Agent's request, sell and assign to Agent or such Person, the
Revolving Credit Loan Commitment of such Non-Consenting Lender for an amount
equal to the principal balance of the portion of the Revolving Credit Loan held
by the NonConsenting Lender and all accrued interest and Fees with respect
thereto through the date of sale, such purchase and sale to be consummated
pursuant to an executed Assignment Agreement.
(e) Upon indefeasible payment in full in cash and performance of all
of the Obligations (other than indemnification Obligations under SECTION 1.12),
termination of the Revolving Credit Loan Commitments and a release of all claims
against Agent and Lenders, and so long as no suits, actions proceedings, or
claims are pending or threatened against any Indemnified Person asserting any
damages, losses or liabilities of the nature described in SECTION 1.12, Agent
shall deliver to Holdings termination statements, mortgage releases and other
documents necessary or appropriate to evidence the termination of the Liens
securing payment of the Obligations.
11.3 FEES AND EXPENSES. Obligors shall reimburse Agent for all
out-of-pocket expenses incurred in connection with the preparation of the Loan
Documents (including the reasonable fees and expenses of all of its special loan
counsel, advisors, consultants and auditors retained in connection with the Loan
Documents and the IPO Documents and advice in connection therewith). Obligors
shall reimburse Agent (and, with respect to CLAUSES (C) and (D) below, all
Lenders) for all fees, costs and expenses, including the fees, costs and
expenses of counsel or other advisors (including environmental and management
consultants and appraisers) for advice, assistance, or other representation in
connection with:
(a) the forwarding to Obligors or any other Person on behalf
of Obligors by Agent of the proceeds of the Revolving Credit Loan;
(b) any amendment, modification or waiver of, or consent with
respect to, any of the Loan Documents or IPO Documents or advice in connection
with the administration of the Revolving Credit Loan made pursuant hereto or its
rights hereunder or thereunder;
(c) any litigation, contest, dispute, suit, proceeding or
action (whether instituted by Agent, any Lender, any Obligor or any other
Person) in any way relating to the Collateral, any of the Loan Documents or any
other agreement to be executed or delivered in connection therewith or herewith,
whether as party, witness, or otherwise, including any litigation, contest,
dispute, suit, case, proceeding or action, and any appeal or review thereof, in
connection with a case commenced by or against any or all of the Obligors or any
other Person that may be
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obligated to Agent by virtue of the Loan Documents; including any such
litigation, contest, dispute, suit, proceeding or action arising in connection
with any work-out or restructuring of the Revolving Credit Loan during the
pendency of one or more Events of Default; PROVIDED that in the case of
reimbursement of counsel for Lenders other than Agent, such reimbursement shall
be limited to one counsel for all such Lenders;
(d) any attempt to enforce any remedies of Agent against any
or all of the Obligors or any other Person that may be obligated to Agent or any
Lender by virtue of any of the Loan Documents; including any such attempt to
enforce any such remedies in the course of any work-out or restructuring of the
Revolving Credit Loan during the pendency of one or more Events of Default;
PROVIDED that in the case of reimbursement of counsel for Lenders other than
Agent, such reimbursement shall be limited to one counsel for all such Lenders;
(e) any work-out or restructuring of the Revolving Credit Loan
during the pendency of one or more Events of Default;
(f) efforts to (i) monitor the Revolving Credit Loan or any of
the other Obligations, (ii) evaluate, observe or assess any Obligor or its
affairs, and (iii) verify, protect, evaluate, assess, appraise, collect, sell,
liquidate or otherwise dispose of any of the Collateral; including all
attorneys' and other professional and service providers' fees arising from such
services, including those in connection with any appellate proceedings; and all
expenses, costs, charges and other fees incurred by such counsel and others in
any way or respect arising in connection with or relating to any of the events
or actions described in this SECTION 11.3 shall be payable, on demand, by
Obligors to Agent. Without limiting the generality of the foregoing, such
expenses, costs, charges and fees may include: fees, costs and expenses of
accountants, environmental advisors, appraisers, investment bankers, management
and other consultants and paralegals; court costs and expenses; photocopying and
duplication expenses; court reporter fees, costs and expenses; long distance
telephone charges; air express charges; telegram or telecopy charges;
secretarial overtime charges; and expenses for travel, lodging and food paid or
incurred in connection with the performance of such legal or other advisory
services.
11.4 NO WAIVER. Agent's or any Lender's failure, at any time or
times, to require strict performance by any Obligor of Subsidiary thereof of any
provision of this Agreement and any of the other Loan Documents applicable to it
shall not waive, affect or diminish any right of Agent or such Lender thereafter
to demand strict compliance and performance therewith. Any suspension or waiver
of an Event of Default under this Agreement or any of the other Loan Documents
shall not suspend, waive or affect any other Event of Default under this
Agreement and any of the other Loan Documents whether the same is prior or
subsequent thereto and whether of the same or of a different type. None of the
undertakings, agreements, warranties, covenants and representations of any
Obligor contained in this Agreement or any of the other Loan Documents and no
Default or Event of Default by any Obligor under this Agreement and no defaults
by any Obligor under any of the other Loan Documents shall be deemed to have
been suspended or waived by Agent or any Lender, unless such waiver or
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suspension is by an instrument in writing signed by an officer of or other
authorized employee of Agent and Requisite Lenders and directed to Holdings
specifying such suspension or waiver.
11.5 REMEDIES. Agent's and Lenders' rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and remedies
which Agent or any Lender may have under any other agreement, including the
other Loan Documents, by operation of law or otherwise. Recourse to the
Collateral shall not be required.
11.6 SEVERABILITY. Wherever possible, each provision of this
Agreement and the other Loan Documents shall be interpreted in such a manner as
to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
11.7 CONFLICT OF TERMS. Except as otherwise provided in this
Agreement or any of the other Loan Documents by specific reference to the
applicable provisions of this Agreement, if any provision contained in this
Agreement is in conflict with, or inconsistent with, any provision in any of the
other Loan Documents, the provision contained in this Agreement shall govern and
control.
11.8 AUTHORIZED SIGNATURE. Until Agent shall be notified in writing
by Holdings to the contrary, the signature upon any document or instrument
delivered pursuant hereto of an officer of Holdings (as applicable) or any
Obligor listed on SCHEDULE 11.8 shall bind such Person and be deemed to be the
act of such Person affixed pursuant to and in accordance with resolutions duly
adopted by such Person's Board of Directors.
11.9 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF
THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER
SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF ILLINOIS APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE,
AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH OBLIGOR, AGENT AND
LENDER HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN
▇▇▇▇ COUNTY, CITY OF CHICAGO, ILLINOIS, SHALL HAVE EXCLUSIVE JURISDICTION TO
HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN OBLIGORS, AGENT AND LENDERS
PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS,
PROVIDED, THAT AGENT, LENDERS AND OBLIGORS ACKNOWLEDGE THAT ANY APPEALS FROM
THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF ▇▇▇▇ COUNTY,
CITY OF CHICAGO, ILLINOIS AND,
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PROVIDED, FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT.
EACH OBLIGOR, AGENT AND EACH LENDER EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO
SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH
OBLIGOR, AGENT AND EACH LENDER HEREBY WAIVES ANY OBJECTION WHICH SUCH OBLIGOR,
AGENT OR SUCH LENDER MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER
VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL
OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH OBLIGOR HEREBY
WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN
ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND
OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH
OBLIGOR AT THE ADDRESS SET FORTH ON ANNEX I OF THIS AGREEMENT AND THAT SERVICE
SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH OBLIGOR'S ACTUAL
RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER
POSTAGE PREPAID.
11.10 NOTICES. Except as otherwise expressly provided herein,
whenever it is provided herein that any notice, demand, request, consent,
approval, declaration or other communication shall or may be given to or served
upon any of the parties by the other party, or whenever any of the parties
desires to give or serve upon the other party any communication with respect to
this Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and shall be deemed to
have been validly served, given or delivered (i) upon the earlier of actual
receipt and three (3) Business Days after deposit in the United States Mail,
registered or certified mail, return receipt requested, with proper postage
prepaid, (ii) upon transmission, when sent by telecopy or other similar
facsimile transmission (with such telecopy or facsimile promptly confirmed by
delivery of a copy by personal delivery or United States Mail as otherwise
provided in this SECTION 11.10), (iii) one (1) Business Day after deposit with a
reputable overnight courier with all charges prepaid or (iv) when delivered, if
hand-delivered by messenger, all of which shall be addressed to the party to be
notified and sent to the address or facsimile number indicated on ANNEX I or to
such other address (or facsimile number) as may be substituted by notice given
as herein provided. The giving of any notice required hereunder may be waived in
writing by the party entitled to receive such notice. Failure or delay in
delivering copies of any notice, demand, request, consent, approval, declaration
or other communication to any Person (other than Holdings or Agent) designated
on ANNEX I to receive copies shall in no way adversely affect the effectiveness
of such notice, demand, request, consent, approval, declaration or other
communication.
11.11 CONFIDENTIALITY. Agent and each Lender agree to use
commercially
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reasonable efforts (equivalent to the efforts Agent or such Lender applies to
maintaining the confidentiality of its own confidential information) to maintain
as confidential all confidential information provided to them by the Credit
Parties and designated as confidential for a period of two (2) years following
receipt thereof, except that Agent and any Lender may disclose such information
(a) to Persons employed or engaged by Agent or such Lender in evaluating,
approving, structuring or administering the Revolving Credit Loan and the
Revolving Credit Loan Commitments; (b) to any bona fide assignee or participant
or potential assignee or participant that has agreed to comply with the covenant
contained in this SECTION 11.11 (and any such bona fide assignee or participant
or potential assignee or participant may disclose such information to Persons
employed or engaged by them as described in CLAUSE (A) above); (c) as required
or requested by any Governmental Authority or reasonably believed by Agent or
such Lender to be compelled by any court decree, subpoena or legal or
administrative order or process; (d) as, in the opinion of Agent's or such
Lender's counsel, required by law; (e) in connection with the exercise of any
right or remedy under the Loan Documents or in connection with any litigation to
which Agent or such Lender is a party; or (f) which ceases to be confidential
through no fault of Agent or such Lender.
11.12 SECTION TITLES. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.
11.13 COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.
11.14 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT
THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE,
TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND OBLIGORS ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG
THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR
THE TRANSACTIONS RELATED THERETO.
11.15 AMENDMENT AND RESTATEMENT. Insofar as this Agreement relates
to Obligors, Agent and Lenders:
(a) this Agreement amends and restates in its entirety the
Prior Credit Agreement
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and, upon effectiveness of this Agreement, the terms and provisions of the Prior
Credit Agreement shall, subject to this SECTION 11.15, be superseded hereby;
(b) all references to "Credit Agreement" contained in the Loan
Documents delivered in connection with the Prior Credit Agreement shall be
deemed to refer to this Third Amended and Restated Credit Agreement;
(c) notwithstanding the amendment and restatement of the Prior
Credit Agreement by this Agreement, that portion of the Revolving Credit Loan
owing to Lenders by Borrowers under the Prior Credit Agreement that remain
outstanding as of the Closing Date shall constitute continuing Obligations of
all Borrowers hereunder and shall continue to be secured by the Collateral;
(d) that portion of the Revolving Credit Loan owing to Lenders by
Borrowers under the Prior Credit Agreement and the Liens securing payment
thereof shall in all respects be continuing, and this Agreement shall not be
deemed to evidence or result in a novation, or repayment and reborrowing, of
that portion of the Revolving Credit Loan; and
(e) in furtherance of and without limiting the foregoing, from and
after the Closing Date, the terms, conditions, and covenants governing the
Revolving Credit Loan under the Prior Credit Agreement shall be solely as set
forth in this Agreement, which shall supersede the Prior Credit Agreement in its
entirety.
11.16 REINSTATEMENT. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Obligor for liquidation or reorganization, should any Obligor become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of any
Obligor's assets, and shall continue to be effective or to be reinstated, as the
case may be, if at any time payment and performance of the Obligations, or any
part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or
must otherwise be restored or returned by any obligee of the Obligations,
whether as a "voidable preference," "fraudulent conveyance," or otherwise, all
as though such payment or performance had not been made. In the event that any
payment, or any part thereof, is rescinded, reduced, restored or returned, the
Obligations shall be reinstated and deemed reduced only by such amount paid and
not so rescinded, reduced, restored or returned.
12. CROSS-GUARANTY
12.1 CROSS-GUARANTY. Each Obligor hereby acknowledges and agrees
that such Obligor is jointly and severally liable for, and hereby absolutely and
unconditionally guarantees to each other Obligor, Agent and Lenders the full and
prompt payment and performance of, all Obligations owed or hereafter owing to
Agent and/or Lenders by each other Obligor.
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12.2 CONTRIBUTION WITH RESPECT TO GUARANTY OBLIGATIONS.
(a) To the extent that any Obligor shall make a payment under this
SECTION 12 of all or any of the Obligations for which such Obligor is not
primarily liable as a Borrower (a "GUARANTOR PAYMENT") which, taking into
account all other Guarantor Payments then previously or concurrently made by the
other Obligors, exceeds the amount which such Obligor would otherwise have paid
if each Obligor had paid the aggregate Obligations satisfied by such Guarantor
Payment in the same proportion that such Obligor's "Allocable Amount" (as
defined below) (in effect immediately prior to such Guarantor Payment) bore to
the aggregate Allocable Amounts of all of Obligors in effect immediately prior
to the making of such Guarantor Payment, THEN such Obligor shall be entitled to
receive contribution and indemnification payments from, and be reimbursed by,
each of the other Obligors for the amount of such excess, PRO RATA based upon
their respective Allocable Amounts in effect immediately prior to such Guarantor
Payment.
(b) As of any date of determination, the "ALLOCABLE AMOUNT" of any
Obligor shall be equal to the maximum amount of the claim which could then be
recovered from such Obligor under this SECTION 12 without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or
under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law; PROVIDED that the foregoing
limitation on the Allocable Amount of any Obligor shall not apply to the
guaranty by any Obligor of the obligations of any of its Subsidiaries.
(c) This SECTION 12.2 is intended only to define the relative rights
of Obligors and nothing set forth in this SECTION 12.2 is intended to or shall
impair the obligations of Obligors, jointly and severally, to pay any amounts as
and when the same shall become due and payable in accordance with the terms of
this Agreement, including, without limitation, SECTION 1 hereof, and nothing
contained in this SECTION 12.2 shall limit the liability of any Obligor to pay
the Obligations for which it is primarily liable.
(d) The parties hereto acknowledge that the rights of contribution
and indemnification hereunder shall constitute assets of any Obligor to which
such contribution and indemnification is owing.
12.3 OBLIGATIONS ABSOLUTE. The liability of each Obligor to Agent
and Lenders hereunder shall not be affected or impaired by any of the following
acts by Agent or any Lender: (i) any acceptance of collateral security,
guarantors, accommodation parties or sureties for any or all Obligations; (ii)
one or more extensions or renewals of Obligations (whether or not for longer
than the original period) or any modification of the interest rates, fees,
maturities or principal amount of, or other contractual terms applicable to any
Obligations; (iii) any waiver or indulgence granted to an Obligor, any delay or
lack of diligence in the enforcement of Obligations, or any failure to institute
proceedings, file a claim, give any required notices or otherwise protect any
Obligations; (iv) any full or partial release of, compromise or settlement with,
or agreement not to ▇▇▇ an Obligor or any guarantor or other person liable in
respect of any Obligations; (v) any release, surrender, cancellation or other
discharge of any evidence of
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Obligations or the acceptance of any instrument in renewal or substitution
therefore; (vi) any failure to obtain collateral security (including rights of
setoff) for Obligations, or to obtain or maintain the proper or sufficient
creation and perfection thereof, or to establish the priority thereof, or to
preserve, protect, insure, care for, exercise or enforce any collateral
security; or any modification, alteration, substitution, exchange, surrender,
cancellation, termination, release or other change, impairment, limitation, loss
or discharge of any collateral security; (vii) any collection, sale, lease or
disposition of, or any other foreclosure or enforcement of or realization on,
any collateral security; (viii) any assignment, pledge or other transfer of any
Obligations or any evidence thereof; or (ix) any manner, order or method of
application of any payments or credits upon Obligations. Each Obligor hereby
waives any and all defenses and discharges available to a surety, guarantor, or
accommodation co-obligor.
12.4 WAIVER. EACH OBLIGOR HEREBY WAIVES PRESENTMENT, DEMAND FOR
PAYMENT, NOTICE OF DISHONOR OR NONPAYMENT, AND PROTEST OF ANY INSTRUMENT
EVIDENCING OBLIGATIONS.
12.5 RECOVERY. If any payment is applied by Agent or any Lender to
the Obligations and is thereafter set aside, recovered, rescinded or required to
be returned for any reason (including, without limitation, the bankruptcy,
insolvency or reorganization of an Obligor or any other obligor), the
Obligations to which such payment was applied shall for the purposes of this
SECTION 12 be deemed to have continued in existence, notwithstanding such
payment and application and this cross guaranty shall be enforceable as to such
Obligations as fully as if such payment and application had never been made.
12.6 LIABILITY CUMULATIVE. The liability of Obligors under this
SECTION 12 is in addition to and shall be cumulative with all liabilities of
each Obligor to Agent and Lenders under this Agreement and the other Loan
Documents to which such Obligor is a party or in respect of any Obligations or
obligation of the other Obligor, without any limitation as to amount, unless the
instrument or agreement evidencing or creating such other liability specifically
provides to the contrary.
[signature pages follow]
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
AMERICAN NUTRITION BARS, INC.
GREAT AMERICAN FOODS, INC.
SCHIFF PRODUCTS, INC.
WEIDER NUTRITION GROUP, INC.
WEIDER NUTRITION INTERNATIONAL, INC.
WNG HOLDINGS (INTERNATIONAL) LTD.
For each of the foregoing:
By: ________________________________
Title: Chief Financial Officer
[signature pages continue]
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GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
By: _______________________________
Title: Duly Authorized Signatory
[signature pages continue]
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CORESTATES BANK, N.A.
By: _______________________________
Title:_____________________________
[signature pages continue]
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LASALLE NATIONAL BANK
By: _______________________________
Title:_____________________________
[signature pages continue]
-▇▇-
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
By: _______________________________
Title:_____________________________
[signature pages continue]
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CREDITANSTALT-BANKVEREIN
By: _______________________________
Title:_____________________________
By: _______________________________
Title:_____________________________
[signature pages continue]
-▇▇-
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇ BRANCH
AND GRAND CAYMAN BRANCH
By: _______________________________
Title:_____________________________
By: _______________________________
Title:_____________________________
[signature pages continue]
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ZIONS FIRST NATIONAL BANK
By: _______________________________
Title:_____________________________
[signature pages end]
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ANNEX A (RECITALS)
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Agreement shall have (unless otherwise
provided elsewhere in the Agreement) the following respective meanings and all
section references in the following definitions shall refer to Sections of the
Agreement:
"ACCOUNT DEBTOR" shall mean any Person who may become obligated to
any Obligor with respect to, or on account of, an Account.
"ACCOUNTS" shall mean all "accounts," as such term is defined in the
Code, now owned or hereafter acquired by any Obligor or Subsidiary thereof and,
in any event, including (a) all accounts receivable, other receivables, book
debts and other forms of obligations (other than forms of obligations evidenced
by chattel paper, documents or instruments) now owned or hereafter received or
acquired by or belonging or owing to any Obligor or Subsidiary thereof whether
arising out of goods sold or services rendered by it or from any other
transaction (including any such obligations which may be characterized as an
account or contract right under the Code), (b) all of each Obligor's and its
Subsidiaries' rights in, to and under all purchase orders or receipts now owned
or hereafter acquired by it for goods or services, (c) all of each Obligor's and
each of its Subsidiaries' rights to any goods represented by any of the
foregoing (including unpaid sellers' rights of rescission, replevin, reclamation
and stoppage in transit and rights to returned, reclaimed or repossessed goods),
(d) all monies due or to become due to any Obligor or Subsidiary thereof under
all purchase orders and contracts for the sale of goods or the performance of
services or both by any Obligor or Subsidiary thereof or in connection with any
other transaction (whether or not yet earned by performance on the part of such
Obligor or Subsidiary, as appropriate) now or hereafter in existence, including
the right to receive the proceeds of said purchase orders and contracts, and (e)
all collateral security and guarantees of any kind, now or hereafter in
existence, given by any Person with respect to any of the foregoing.
"AFFILIATE" shall mean, with respect to any Person, (i) each Person
that, directly or indirectly, owns or controls, whether beneficially, or as a
trustee, guardian or other fiduciary, 10% or more of the Stock having ordinary
voting power in the election of directors of such Person, (ii) each Person that
controls, is controlled by or is under common control with such Person or any
Affiliate of such Person or (iii) each of such Person's officers, directors,
joint venturers and partners. For the purposes of this definition, "control" of
a Person shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of its management or policies, whether through the
ownership of voting securities, by contract or otherwise.
"AGENT" shall mean GE Capital or its successor appointed pursuant to
SECTION 9.2.
-1-
"AGREEMENT" shall mean the Third Amended and Restated Credit
Agreement by and among Obligors, General Electric Capital Corporation, as Agent
and Lender and the other Lenders from time to time signatory to the Agreement,
and shall include all appendices, annexes, exhibits or schedules thereto, in
each case as from time to time amended, restated, supplemented or otherwise
modified in accordance with the terms of the Agreement.
"ASSIGNMENT AGREEMENT" shall mean an agreement in form and substance
satisfactory to, and acknowledged by, Agent, whereby a portion of any Revolving
Credit Loan Commitment is assigned to a Lender after the Closing Date.
"BORROWERS" shall have the meaning assigned thereto in the recitals
to the Agreement, and shall include each other Person who becomes a Borrower
hereunder after the Closing Date.
"BORROWING AVAILABILITY" shall have the meaning assigned to it in
SECTION 1.1(A).
"BUSINESS DAY" shall mean any day that is not a Saturday, a Sunday
or a day on which banks are required or permitted to be closed in the State of
Illinois or State of New York.
"CAPITAL EXPENDITURES" shall mean all payments (including the
principal portion of payments under Capital Leases, installment purchase
agreements and other similar purchase money financing arrangements) for any
fixed assets or improvements or for replacements, substitutions or additions
thereto, that have a useful life of more than one year and that are required to
be capitalized under GAAP.
"CAPITAL LEASE" shall mean, with respect to any Person and without
duplication, any lease of any property (whether real, personal or mixed) by such
Person as lessee that, (i) in accordance with GAAP, any would be required to be
classified and accounted for as a capital lease on a balance sheet of such
Person or otherwise be disclosed as such in a note to such balance sheet, and
(ii) a lease type instrument, however denominated, which is the substantial
economic equivalent of a mortgage financing, conditional sale agreement, title
retention agreement, deferred purchase contract, or other loan secured by the
leased property, whether or not the residual value is retained by the lessor or
turned over to the lessee, such as, but not limited to, sale and leaseback
transactions, leases under which periodic rental payments are made during the
basic term of the lease which are calculated to return to the lessor
substantially the cost of the leased property and a sum providing the lessor
with a predetermined rate of return on such cost in which the lessor typically
does not engage in the regular business of owning and operating property of the
character of the leased property except as security for financial transactions
and under which the lessor is relieved in most material respects of the
responsibilities of ownership during the term of the lease, namely the ultimate
obligation to pay expenses of maintenance and taxes other than, in the case of
any clause (i) or (ii) above, any such lease under which such Person is the
lessor.
"CAPITAL LEASE OBLIGATION" shall mean, with respect to any
Capital Lease and
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without duplication, the amount of the obligation of the lessee thereunder that,
in accordance with GAAP, would appear on a balance sheet of such lessee in
respect of such Capital Lease or otherwise be disclosed in a note to such
balance sheet, plus (if any such Capital Lease need not be disclosed or
accounted for on the balance sheet, or the footnotes thereto, of such Person)
the amount of the liability reflecting the aggregate discounted amount of future
payments under such Capital Lease.
"CHANGE OF CONTROL" shall mean any event, transaction or condition
as a result of which or after giving effect to which (a) ▇▇▇ ▇▇▇▇▇▇ or his
immediate family members (or any entity controlled by such Persons) shall cease
to own, beneficially and of record with full voting and dispositive power,
shares of Voting Stock of Parent constituting at least 51% of the voting power
represented by the outstanding shares of each class of Voting Stock of Parent,
(b) Parent (or any entity controlled by Parent) shall cease to own, beneficially
and of record with full voting and dispositive power, shares of Voting Stock of
Holdings constituting at least 51% of the voting power represented by the
outstanding shares of Voting Stock of Holdings, (c) any person or group of
persons (within the meaning of the Securities Exchange Act of 1934, as amended)
shall have acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended) of 20% or more of the issued and outstanding
shares of any class of Voting Stock of Holdings or (d) during any period of
twelve consecutive calendar months, individuals who at the beginning of such
period constituted the board of directors of Holdings (together with any new
directors whose election by the board of directors of Holdings or whose
nomination for election by the stockholders of Holdings was approved by a vote
of at least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose elections or nomination for
election was previously so approved) cease for any reason other than death or
disability to constitute a majority of the directors then in office.
"CHARGES" shall mean all federal, state, county, city, municipal,
local, foreign or other governmental taxes (including, without limitation, taxes
owed to the PBGC at the time due and payable), levies, assessments, charges,
liens, claims or encumbrances upon or relating to (i) the Collateral, (ii) the
Obligations, (iii) the employees, payroll, income or gross receipts of any
Obligor or Subsidiary thereof, (iv) the ownership or use of any properties or
other assets of any Obligor or Subsidiary thereof, or (v) any other aspect of
the business of any Obligor or Subsidiary thereof.
"CHATTEL PAPER" shall mean any "chattel paper," as such term is
defined in the Code, now owned or hereafter acquired by any Obligor or
Subsidiary thereof, wherever located.
"CLOSING DATE" shall mean May 6, 1997.
"CODE" shall mean the Uniform Commercial Code as the same may, from
time to time, be in effect in the State of Illinois; PROVIDED, HOWEVER, in the
event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of Agent's or any Lender's security interest
in any Collateral is governed by the Uniform Commercial Code
-3-
as in effect in a jurisdiction other than the State of Illinois, the term "Code"
shall mean the Uniform Commercial Code as in effect in such other jurisdiction
solely for purposes of the provisions hereof relating to such attachment,
perfection or priority and for purposes of definitions related to such
provisions.
"COLLATERAL" shall mean the assets and property covered by the
Security Agreement, the Mortgages and the other Collateral Documents and any
other property, real or personal, tangible or intangible, now existing or
hereafter acquired, that shall at any time be or become subject to a security
interest or Lien in favor of Agent, on behalf of itself and Lenders, to secure
the Obligations.
"COLLATERAL CERTIFICATE" shall mean a certificate in the form
attached to the Agreement as EXHIBIT D.
"COLLATERAL DOCUMENTS" shall mean the Security Agreement, the
Guaranties, the Stock Pledge Agreements, the Copyright Assignments, the Patent
Assignments, the Trademark Assignments and any other agreement, document or
instrument now or hereafter in effect pursuant to which is granted a security
interest or Lien in favor of Agent, on behalf of itself and Lenders, to secure
the Obligations, in each case as from time to time amended, restated,
supplemented or otherwise modified in accordance with the terms of the Agreement
and such Collateral Document.
"COLLATERAL REPORTS" shall mean the reports with respect to the
Collateral referred to in ANNEX F.
"COLLECTION ACCOUNT" shall mean that certain account of Agent,
account number ▇▇▇▇▇▇▇▇ in the name of GECC/CF Depositary at Bankers Trust
Company, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ABA number 021 001 033.
"CONCENTRATION ACCOUNT" shall have the meaning assigned to it on
ANNEX C.
"CONTRACTS" shall mean all "contracts," as such term is defined in
the Code, now owned or hereafter acquired by any Obligor or Subsidiary thereof,
and, in any event, including all contracts, undertakings, or agreements (other
than rights evidenced by Chattel Paper, Documents or Instruments) in or under
which any Obligor or Subsidiary thereof may now or hereafter have any right,
title or interest, including any agreement relating to the terms of payment or
the terms of performance of any Account.
"CONTROL LETTER" means a letter agreement between Agent and (i) the
issuer of uncertificated securities with respect to uncertificated securities in
the name of any Obligor, (ii) a securities intermediary with respect to
securities, whether certificated or uncertificated, securities entitlements and
other financial assets held in a securities account in the name of any Obligor,
(iii) a futures commission merchant or clearing house with respect to commodity
accounts and commodity contracts held by any Obligor, whereby, among other
things, the issuer, securities
-4-
intermediary or futures commission merchant disclaims any security interest in
the applicable Investment Property, acknowledges the Lien of Agent, on behalf of
itself and Lenders, on such Investment Property, and agrees to follow the
instructions or entitlement orders of Agent without further consent by the
affected Obligor.
"COPYRIGHT ASSIGNMENTS" shall mean the copyright security agreements
at any time made in favor of Agent, on behalf of itself and Lenders, by each
Obligor or Subsidiary thereof, in each case as from time to time amended,
restated, supplemented or otherwise modified in accordance with the terms of the
Agreement and such Copyright Assignment.
"COPYRIGHT LICENSE" shall mean any and all rights now owned or
hereafter acquired by any Obligor or Subsidiary thereof under any written
agreement granting any right to use any Copyright or Copyright registration.
"COPYRIGHTS" shall mean all of the following now owned or hereafter
acquired by any Obligor or Subsidiary thereof: (i) all copyrights and general
intangibles of like nature (whether registered or unregistered), now owned or
existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, including all
registrations, recordings and applications in the United States Copyright Office
or in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof, and (ii) all
reissues, extensions or renewals thereof.
"DEBT SERVICE" shall mean for any period, an amount equal to the sum
of (i) the consolidated Interest Charges of Holdings and its Subsidiaries for
such period and (ii) the scheduled principal amortization of any outstanding
Indebtedness during such period, which Indebtedness is reflected on a
consolidated balance sheet of Holdings and its Subsidiaries prepared in
accordance with GAAP for the relevant period ended on such date.
"DEFAULT" shall mean any event which, with the passage of time or
notice or both, would, unless cured or waived, become an Event of Default.
"DEFAULT RATE" shall have the meaning assigned to it in SECTION
1.5(D).
"DISBURSEMENT ACCOUNT" shall have the meaning assigned to it on
ANNEX C.
"DOL" shall mean the United States Department of Labor or any
successor thereto.
"DOCUMENTS" shall mean any "documents," as such term is defined in
the Code, now owned or hereafter acquired by any Obligor or Subsidiary thereof
wherever located.
"EBITDA" shall mean, with respect to Holdings and its Subsidiaries
for any period, consolidated Net Income from operations (before extraordinary
items, interest, taxes, depreciation, amortization and expenses incurred during
such period in connection with the conversion of "Phantom Stock" of Nutrition
issued prior to the Closing Date into Stock of
-5-
Holdings in accordance with the Agreement) determined in accordance with GAAP
and in a manner consistent with the projections referred to in SECTION 3.4.
"ENVIRONMENTAL LAWS" shall mean all federal, state, local and
foreign laws, statutes, ordinances and regulations, now or hereafter in effect,
and in each case as amended or supplemented from time to time, and any
applicable judicial or administrative interpretation thereof, including any
applicable judicial or administrative order, consent decree or judgment,
relative to the applicable real estate, relating to the regulation and
protection of human health, safety, the environment and natural resources
(including ambient air, surface water, groundwater, wetlands, land surface or
subsurface strata, wildlife, aquatic species and vegetation). Environmental Laws
include, but are not limited to, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C. ▇▇.▇▇. 9601 ET
seq.) ("CERCLA"); the Hazardous Material Transportation Act, as amended (49
U.S.C. ▇▇.▇▇. 1801 ET SEQ.); the Federal Insecticide, Fungicide, and Rodenticide
Act, as amended (7 U.S.C. ▇▇.▇▇. 136 ET SEQ.); the Resource Conservation and
Recovery Act, as amended (42 U.S.C. ▇▇.▇▇. 6901 ET SEQ.) ("RCRA"); the Toxic
Substance Control Act, as amended (15 U.S.C. ▇▇.▇▇. 2601 ET SEQ.); the Clean AIr
Act, as amended (42 U.S.C. ▇▇.▇▇. 740 ET SEQ.); the Federal Water Pollution
Control Act, as amended (33 U.S.C. ▇▇.▇▇. 1251 ET SEQ.); the Occupational Safety
and Health Act, as amended (29 U.S.C. ▇▇.▇▇. 651 ET SEQ.) ("OSHA"); and the Safe
Drinking Water Act, as amended (42 U.S.C. ▇▇.▇▇. 300(f) ET SEQ.), and any and
all regulations promulgated thereunder, and all analogous state, local and
foreign counterparts or equivalents and any transfer of ownership notification
or approval statutes.
"ENVIRONMENTAL LIABILITIES AND COSTS" shall mean all liabilities,
obligations, responsibilities, remedial actions, removal actions, losses,
damages, punitive damages, consequential damages, treble damages, costs and
expenses (including all fees, disbursements and expenses of counsel, experts and
consultants and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim, suit,
action or demand by any Person, whether based in contract, tort, implied or
express warranty, strict liability, criminal or civil statute or common law
(including any thereof arising under any Environmental Law, permit, order or
agreement with any Governmental Authority) and which relate to any health or
safety condition regulated under any Environmental Law or in connection with any
other environmental matter or Release, threatened Release or the presence of a
Hazardous Material or threatened Release of a Hazardous Material.
"EQUIPMENT" shall mean all "equipment," as such term is defined in
the Code, now owned or hereafter acquired by any Obligor or Subsidiary thereof,
wherever located and, in any event, including all machinery and equipment of
each Obligor and Subsidiary thereof, including processing equipment, conveyors,
machine tools, data processing and computer equipment with software and
peripheral equipment (other than software constituting part of the Accounts),
and all engineering, processing and manufacturing equipment, office machinery,
furniture, materials handling equipment, tools, attachments, accessories,
automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motor
vehicles, rolling stock and other equipment of every kind and nature, trade
fixtures and fixtures not forming a part of real property, all whether now owned
or hereafter acquired, and wherever situated, together with all additions and
accessions thereto,
-6-
replacements therefor, all parts therefor, all substitutes for any of the
foregoing, fuel therefor, and all manuals, drawings, instructions, warranties
and rights with respect thereto, and all products and proceeds thereof and
condemnation awards and insurance proceeds with respect thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974 (or any successor legislation thereto), as amended from time to time, and
any regulations promulgated thereunder.
"ERISA AFFILIATE" shall mean, with respect to any Obligor or
Subsidiary thereof, any trade or business (whether or not incorporated) under
common control with such Obligor or Subsidiary, as appropriate, and which,
together with such Obligor or Subsidiary, as appropriate, are treated as a
single employer within the meaning of Sections 414(b), (c), (m) or (o) of the
IRC.
"ERISA EVENT" shall mean, with respect to any Obligor, Subsidiary
thereof or ERISA Affiliate, (i) a Reportable Event with respect to a Title IV
Plan or a Multiemployer Plan; (ii) the withdrawal of any Obligor, Subsidiary
thereof or ERISA Affiliate from a Title IV Plan subject to Section 4063 of ERISA
during a plan year in which it was a substantial employer, as defined in Section
4001(a)(2) of ERISA; (iii) the complete or partial withdrawal of any Obligor,
Subsidiary thereof or ERISA Affiliate from any Multiemployer Plan; (iv) the
filing of a notice of intent to terminate a Title IV Plan or the treatment of a
plan amendment as a termination under Section 4041 of ERISA; (v) the institution
of proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC;
(vi) the failure to make required contributions to a Qualified Plan; or (vii)
any other event or condition which might reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Title IV Plan or Multiemployer Plan or the
imposition of any liability under Title IV of ERISA, other than PBGC premiums
due but not delinquent under Section 4007 of ERISA.
"EVENT OF DEFAULT" shall have the meaning assigned to it in
SECTION 8.1.
"EXCLUDED ASSET SALES" shall mean the sale, transfer, conveyance or
other disposition of any assets or properties (i) to any Obligor other than
Holdings, (ii) consisting of sales of Inventory in the ordinary course of
business, (iii) consisting of licensing of items of intellectual property in the
ordinary course of business, (iv) consisting of the sale and leaseback of assets
or properties, if permitted by the terms of the Agreement, (v) to the extent the
Net Cash Proceeds of such disposition are used within six months of such
disposition to purchase an asset or property substantially similar to the asset
or properties disposed of, (vi) consisting of sales of obsolete or redundant
Equipment or Fixtures not to exceed $500,000 in the aggregate in any Fiscal
Year, (vii) consisting of the assignment for collection of up to $250,000 of
uncollectible Accounts each Fiscal Year, (viii) so long as no Default or Event
of Default shall have occurred and be continuing, or would result after giving
effect thereto, for fair sale consideration not exceeding $250,000 in the
aggregate for Obligors and their Subsidiaries in any Fiscal year.
"FEDERAL FUNDS RATE" shall mean, for any day, a floating rate
equal to the weighted
-7-
average of the rates on overnight Federal funds transactions among members of
the Federal Reserve System, as determined by Agent.
"FEDERAL RESERVE BOARD" shall have the meaning assigned to it in
SECTION 3.12.
"FEES" shall mean any and all fees due to Agent or any Lender
pursuant to the Agreement or any of the other Loan Documents.
"FINANCIAL STATEMENTS" shall mean the financial statements
referred to in SECTION 3.4.
"FISCAL MONTH" shall mean any of the monthly accounting periods
of Obligors.
"FISCAL QUARTER" shall mean any of the quarterly accounting
periods of Obligors.
"FISCAL YEAR" shall mean any fiscal accounting period of Obligors
consisting of twelve (12) consecutive months ending on May 31 of any calendar
year.
"FIXTURES" shall mean all "fixtures" as such term is defined in the
Code, now owned or hereafter acquired by any Obligor or Subsidiary thereof,
wherever located.
"FUNDED DEBT" shall mean, with respect to Holdings and its
Subsidiaries on a consolidated and consolidating basis and without duplication,
all of their outstanding Indebtedness which by the terms of the agreement
governing or instrument evidencing such Indebtedness matures more than one year
from, or is directly or indirectly renewable or extendible at its option under a
revolving credit or similar agreement obligating the lender or lenders to extend
credit over a period of more than one year from the date of creation thereof,
including current maturities of long-term debt, revolving credit and short-term
debt extendible beyond one year at the option of the debtor, and shall also
include, without limitation, the Revolving Credit Loan and the principal portion
of other Obligations and Indebtedness described in CLAUSES (II) and (X) of
SECTION 6.3.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect on the Closing Date, consistently applied.
"GE CAPITAL" shall mean General Electric Capital Corporation, a New
York corporation having an office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇.
"GENERAL INTANGIBLES" shall mean any "general intangibles," as such
term is defined in the Code, now owned or hereafter acquired by any Obligor or
Subsidiary thereof, and, in any event, including, without limitation, all right,
title and interest which any Obligor or Subsidiary thereof may now or hereafter
have in or under any Contract, all customer lists, Copyrights, Trademarks,
Patents, service marks, trade names, business names, corporate names, trade
styles, logos and other source or business identifiers, and all applications
therefor and reissues,
-8-
extensions or renewals thereof, rights in intellectual property, interests in
partnerships, joint ventures and other business associations, licenses, permits,
copyrights, trade secrets, proprietary or confidential information, inventions
(whether or not patented or patentable), technical information, procedures,
designs, knowledge, know-how, software, data bases, data, skill, expertise,
experience, processes, models, drawings, materials and records, goodwill
(including the goodwill associated with any Trademark, Trademark registration or
Trademark licensed under any Trademark license), all rights and claims in or
under insurance policies (including insurance for fire, damage, loss and
casualty, whether covering personal property, real property, tangible rights or
intangible rights, all liability, and business interruption insurance, and all
unearned premiums), uncertificated securities, choses in action, deposit,
checking and other bank accounts, rights to receive tax refunds and other
payments and rights of indemnification.
"GOODS" shall mean all "goods" as such term is defined in the Code,
now owned or hereafter acquired by any Obligor or Subsidiary thereof, wherever
located.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any
state or other political subdivision thereof, and any agency, department or
other entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"GROSS INTEREST CHARGES" shall mean the amount which, in conformity
with GAAP, would be set forth opposite the caption "interest expense, gross" (or
any similar caption) on a consolidated income statement of Holdings and its
Subsidiaries, prepared in accordance with GAAP for the relevant period ended on
such date.
"GUARANTEED INDEBTEDNESS" shall mean, as to any Person, any
obligation of such Person guaranteeing any indebtedness, lease, dividend, or
other obligation ("PRIMARY OBLIGATIONS") of any other Person (the "PRIMARY
OBLIGOR") in any manner, including any obligation or arrangement of such Person
(i) to purchase or repurchase any such primary obligation, (ii) to advance or
supply funds (a) for the purchase or payment of any such primary obligation or
(b) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency or any balance sheet condition
of the primary obligor, (iii) 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 (iv) to indemnify the owner of such primary obligation against
loss in respect thereof.
"GUARANTORS" shall have the meaning assigned thereto in the recitals
to the Agreement, and shall include each other Person who becomes a Subsidiary
of any Obligor (unless otherwise required by the Agreement) after the Closing
Date and each other Person, if any, which executes a guarantee or a support or
other similar agreement in favor of Agent or any Lender in connection with the
transactions contemplated by the Agreement and the other Loan Documents.
"GUARANTIES" shall mean the guaranty made by each Guarantor in favor
of Agent, on behalf of itself and Lenders, as contained in SECTION 12 of the
Agreement, and any other
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agreement to pay or perform, on behalf of Obligors, any of the Revolving Credit
Loan or any of the other Obligations, at any time made in favor of Agent or any
Lender, in form and substance satisfactory to Agent, in each case as from time
to time amended, restated, supplemented or otherwise modified in accordance with
the terms of the Agreement and such Guaranty.
"HAZARDOUS MATERIAL" shall mean any substance, material or waste,
the generation, handling, storage, treatment or disposal of which is regulated
by or forms the basis of liability now or hereafter under, any Government
Authority in any jurisdiction in which any Obligor or Subsidiary thereof has
owned, leased, or operated real property or disposed of hazardous materials, or
by any Federal government authority, including, without limitation, any material
or substance which is (i) defined as a "solid waste," "hazardous waste,"
"hazardous material," "hazardous substance," "extremely hazardous waste" or
"restricted hazardous waste" or other similar term or phrase under any
Environmental Laws, (ii) petroleum or any fraction or by-product thereof,
asbestos, polychlorinated biphenyls (PCB's), any radioactive substance, methane,
volatile hydrocarbons or any industrial solvent, (iii) designated as a
"hazardous substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C.
▇▇.▇▇. 1251 ET SEQ. (33 U.S.C. ▇▇.▇▇. 1321) or listed pursuant to Section 307 of
the Clean Water Act (33 U.S.C. ss. 1317), (iv) defined as a "hazardous waste"
pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42
U.S.C. ss. 6901, ET SEQ. (42 U.S.C. ss. 6903), or (v) defined AS a "hazardous
substance" pursuant to Section 1012 of the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. ss. 9601 ET SEQ. (42 U.S.C. ss.
9601).
"HOLDINGS" shall have the meaning assigned thereto in the recitals
to the Agreement.
"INDEBTEDNESS" of any Person shall mean (i) all indebtedness of such
Person for borrowed money or for the deferred purchase price of property or
services (including reimbursement and all other obligations with respect to
surety bonds, letters of credit and bankers' acceptances, whether or not
matured, but excluding obligations to trade creditors incurred in the ordinary
course of business), (ii) all obligations evidenced by notes, bonds, debentures
or similar instruments, (iii) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (iv) all Capital Lease Obligations, (v) all
Indebtedness referred to in clause (i), (ii), (iii) or (iv) above secured by (or
for which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property or other assets
(including accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness,
(vi) the Obligations, and (vii) all liabilities under Title IV or ERISA.
"INDEX MARGIN" shall have the meaning ascribed thereto in SECTION
1.5.
"INDEX RATE" shall mean, for any day, a floating rate equal to
the higher of (i) the
-10-
rate publicly quoted from time to time by THE WALL STREET JOURNAL as the "base
rate on corporate loans at large U.S. money center commercial banks" (or, if THE
WALL STREET JOURNAL ceases quoting a base rate of the type described, the
highest per annum rate of interest published by the Federal Reserve Board in
Federal Reserve statistical release H.15 (519) entitled "Selected Interest
Rates" as the Bank prime loan rate or its equivalent), and (ii) the Federal
Funds Rate plus fifty (50) basis points per annum. Each change in any interest
rate provided for in the Agreement based upon the Index Rate shall take effect
at the time of such change in the Index Rate.
"INDEX RATE LOAN" shall mean a Revolving Credit Advance then bearing
interest by reference to the Index Rate.
"INSTRUMENTS" shall mean any "instrument," as such term is defined
in the Code, now owned or hereafter acquired by any Obligor or Subsidiary
thereof wherever located, and, in any event, including all certificated
securities, all certificates of deposit, and all notes and other, without
limitation, evidences of indebtedness, other than instruments that constitute,
or are a part of a group of writings that constitute, Chattel Paper.
"INTEREST CHARGES" shall mean, with respect to Holdings and its
Subsidiaries for any period, the amount which, in conformity with GAAP, would be
set forth opposite the caption "INTEREST EXPENSE, NET" (or any like caption) on
a consolidated income statement of Holdings and its Subsidiaries, prepared in
accordance with GAAP for the relevant period ended on such date.
"INVENTORY" shall mean any "inventory," as such term is defined in
the Code, now or hereafter owned or acquired by, any Obligor or Subsidiary
thereof wherever located, and, in any event, including inventory, merchandise,
goods and other personal property which are held by or on behalf of any Obligor
or Subsidiary thereof for sale or lease or are furnished or are to be furnished
under a contract of service or which constitute raw materials, work in process
or materials used or consumed or to be used or consumed in the business of any
Obligor or Subsidiary thereof, or in the processing, production, packaging,
promotion, delivery or shipping of the same, including other supplies.
"INVESTMENT PROPERTY" shall have the meaning ascribed thereto in
Section 9-115 of the Code in those jurisdictions in which such definition has
been adopted and shall include (i) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of deposit, and
mutual fund shares; (ii) all securities entitlements of any Obligor, including
the rights of any Obligor to any securities account and the financial assets
held by a securities intermediary in such securities account and any free credit
balance or other money owing by any securities intermediary with respect to that
account; (iii) all securities accounts held by any Obligor; (iv) all commodity
contracts held by any Obligor; and (v) all commodity accounts held by any
Obligor.
"INVESTMENTS" shall have the meaning ascribed thereto in SECTION
6.2.
"IPO" shall mean the initial public offering consummated on the
Closing Date of
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5,600,000 shares of Class A Common Stock, par value $.01 per share, of Holdings
in accordance
with the terms of the Registration Statement.
"IPO DOCUMENTS" shall mean the Registration Statement and all other
agreements, certificates, documents, instruments, opinions and other written
matter delivered in connection with the IPO.
"IRC" shall mean the Internal Revenue Code of 1986, as amended, and
any successor thereto.
"IRS" shall mean the Internal Revenue Service, or any successor
thereto.
"L/C MARGIN" shall have the meaning ascribed thereto in ANNEX B.
"LEASES" shall mean all leasehold estates in real property now owned
or hereafter acquired by any Obligor or Subsidiary thereof, as lessee.
"LENDERS" shall mean GE Capital, the other Lenders, if any, named on
the signature page of the Agreement, and, if any such Lender shall decide to
assign or syndicate all or any portion of the Obligations, such term shall
include such assignee or such other members of the syndicate.
"LETTER OF CREDIT OBLIGATIONS" shall mean all outstanding
obligations incurred by Agent at the request of Holdings, whether direct or
indirect, contingent or otherwise, due or not due, in connection with the
issuance or guarantee, by Agent or another, of letters of credit, bank
acceptances in respect of letters of credit, or the like. The amount of such
Letter of Credit Obligations shall equal the maximum amount which may be payable
by Agent thereupon or pursuant thereto.
"LETTERS OF CREDIT" shall mean commercial or standby letters of
credit issued at the request of Holdings for the account of any Borrower, and
bankers' acceptances issued by any Borrower, for which Agent has incurred Letter
of Credit Obligations pursuant thereto.
"LIBOR BUSINESS DAY" shall mean a Business Day on which banks in the
city of London are generally open for interbank or foreign exchange
transactions.
"LIBOR LOAN" shall mean a Revolving Credit Loan then bearing
interest by reference to the LIBOR Rate.
"LIBOR MARGIN" shall have the meaning ascribed thereto in SECTION
1.5.
"LIBOR PERIOD" shall mean, with respect to any LIBOR Loan, each
period commencing on a Business Day selected by Holdings pursuant to the
Agreement and ending one, two or three months thereafter, as selected by
Holdings' irrevocable notice to Agent as set forth
-12-
in SECTION 1.5(E); PROVIDED that the foregoing provision relating to LIBOR
Periods is subject to the following:
(a) if any LIBOR Period would otherwise end on a day that is not a
LIBOR Business Day, such LIBOR Period shall be extended to the next
succeeding LIBOR Business Day unless the result of such extension would be
to carry such LIBOR Period into another calendar month in which event such
LIBOR Period shall end on the immediately preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the
Revolving Commitment Termination Date shall end two (2) LIBOR Business
Days prior to such date;
(c) any LIBOR Period pertaining to a LIBOR Loan that begins on the
last LIBOR Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of
such LIBOR Period) shall end on the last LIBOR Business Day of a calendar
month;
(d) Holdings shall select LIBOR Periods so as not to require a
payment or prepayment of any LIBOR Loan during a LIBOR Period for such
LIBOR Loan; and
(e) Holdings shall select LIBOR Periods so that there shall be no
more than five (5) separate LIBOR Loans in existence at any one time.
"LIBOR RATE" shall mean for each LIBOR Period, a rate of interest
determined by Agent equal to:
(a) the offered rate for deposits in United States Dollars for the
applicable LIBOR Period which appears on Telerate Page 3750 as of 11:00
a.m., London time, on the second full LIBOR Business Day next preceding
the first day of each LIBOR Period; divided by
(b) a number equal to 1.0 MINUS the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day which is two (2) LIBOR Business Days
prior to the beginning of such LIBOR Period (including basic,
supplemental, marginal and emergency reserves under any regulations of the
Board of Governors of the Federal Reserve system or other governmental
authority having jurisdiction with respect thereto, as now and from time
to time in effect) for Eurocurrency funding (currently referred to as
"Eurocurrency liabilities" in Regulation D of such Board which are
required to be maintained by a member bank of the Federal Reserve System
(such rate to be adjusted to the nearest one sixteenth of one percent
(1/16th of 1%) or, if there is not a nearest one sixteenth of one percent
(1/16th of 1%), to the next highest one sixteenth of one percent (1/16th
of 1%).
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If such interest rates shall cease to be available from Telerate
News Service, the LIBOR Rate shall be determined from such financial
reporting service or other information as shall be mutually acceptable to
Agent and Holdings.
"LICENSE" shall mean any Copyright License, Patent License,
Trademark License or other license of rights or interests now held or hereafter
acquired by any Obligor or Subsidiary thereof.
"LIEN" shall mean any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim, security
interest, easement or encumbrance, or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give, any financing statement perfecting a security interest
under the Code or comparable law of any jurisdiction).
"LOAN ACCOUNT" shall have the meaning assigned to it in SECTION
1.10.
"LOAN DOCUMENTS" shall mean the Agreement, the Revolving Credit
Notes, the Security Agreement, the other Collateral Documents, the Termination
Agreement and all other agreements, instruments, documents and certificates
identified in the Schedule of Documents, in favor of Agent and/or Lenders and
including (without limitation) all other pledges, powers of attorney, consents,
assignments, contracts, notices, and all other written matter whether
heretofore, now or hereafter executed by or on behalf of any Obligor or
Affiliate thereof, or any employee of any Obligor or such Affiliate, and
delivered to Agent or any Lender in connection with the Agreement or the
transactions contemplated hereby, in each case as from time to time amended,
restated, supplemented or otherwise modified in accordance with the terms of the
Agreement and such Loan Document.
"LOCK BOX ACCOUNT" shall have the meaning assigned to it on ANNEX
C.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on
(i) the business, assets, operations, prospects or financial or other condition
of (a) Holdings or (b) Obligors considered as a whole, (ii) Borrowers' ability
to pay the Revolving Credit Loan or any of the other Obligations in accordance
with the terms thereof, (iii) the Collateral or Agent's Liens, on behalf of
itself and Lenders, on the Collateral or the priority of any such Lien, or (iv)
Agent's or any Lender's rights and remedies under the Agreement and the other
Loan Documents.
"MAXIMUM LAWFUL RATE" shall have the meaning assigned to it in
SECTION 1.5(F).
"MAXIMUM REVOLVING CREDIT LOAN" shall mean, at any particular time,
an amount equal to the Revolving Credit Loan Commitment of all Lenders less the
then outstanding amount of the Letter of Credit Obligations.
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"MORTGAGED PROPERTIES" shall mean each parcel of Real Estate which,
pursuant to the Agreement, is required to be subject to a Mortgage.
"MORTGAGES" shall mean each of the mortgages, deeds of trust,
leasehold mortgages, leasehold deeds of trust, collateral assignments of leases
or other real estate security documents delivered by any Obligor or Subsidiary
thereof to Agent, with respect to the Mortgaged Properties, all in form and
substance satisfactory to Agent, in each case as from time to time amended,
restated, supplemented or otherwise modified in accordance with the terms of the
Agreement and such Mortgage.
"MULTIEMPLOYER PLAN" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, and to which any Obligor or Subsidiary thereof or
ERISA Affiliate is making, is obligated to make, has made or been obligated to
make, contributions on behalf of participants who are or were employed by any of
them.
"NET INCOME" shall mean consolidated net income from operations of
Holdings and its Subsidiaries after income and franchise taxes and shall have
the meaning given such term by GAAP, PROVIDED that there shall be specifically
excluded therefrom, without duplication (i) gains (or losses) net of taxes from
the sale or abandonment of capital assets in accordance with the reasonable
requirements of business, (ii) income (or loss) of Persons in which Holdings or
any Subsidiary thereof owns a minority interest and which, in accordance with
GAAP, should not be consolidated with Holdings for financial reporting purposes,
and (iii) for purposes of calculating compliance with the Financial Covenants
set forth on ANNEX G, the effect of "minority interests" (which for such
purposes shall mean that percentage of the consolidated net income of any
Subsidiary of Holdings equal to the percentage of such Subsidiary's capital
stock which is owned by Persons other than Holdings or any Borrower).
"NET WORTH" shall mean, with respect to Holdings and its
Subsidiaries, the gross book value of the consolidated assets of Holdings and
its Subsidiaries (inclusive of goodwill, patents, trademarks, tradenames,
copyrights, organization expenses, treasury stock, debt discount and expense,
deferred charges and other like intangibles) MINUS (i) reserves applicable
thereto, and (ii) all of Holdings' and its Subsidiaries' consolidated
liabilities (including accrued and deferred income taxes) all as determined in
accordance with GAAP; PROVIDED, THAT there shall be excluded from the definition
of "Net Worth" (a) the net worth of Persons in which Holdings or any Subsidiary
thereof owns a minority interest and which, in accordance with GAAP, should not
be consolidated with Holdings for financial reporting purposes and (b) the
effect of "minority interests" (which for purposes hereof shall mean that
percentage of the consolidated net worth of any Subsidiary of Holdings equal to
the percentage of such Subsidiary's capital stock which is owned by Persons
other than Holdings or any Borrower).
"NON-USE FEE" shall have the meaning assigned to it in SECTION
1.6.
"NOTICE OF CONVERSION/CONTINUATION" shall have the meaning
assigned to it in SECTION 1.5(E).
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"NOTICE OF REVOLVING CREDIT ADVANCE" shall have the meaning
assigned to it in SECTION 1.1.
"NUTRITION" shall have the meaning assigned to it in the recitals
to the Agreement.
"OBLIGATIONS" shall mean all loans, advances, debts, liabilities and
obligations, for the performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then required or
contingent, or amounts are liquidated or determinable) owing by any Obligor to
Agent or any Lender, and all covenants and duties regarding such amounts, of any
kind or nature, present or future, whether or not evidenced by any note,
agreement or other instrument, arising under the Agreement or any of the other
Loan Documents. This term includes all principal, interest, Fees, Charges,
expenses, attorneys' fees and any other sum chargeable to any Obligor under the
Agreement or any of the other Loan Documents.
"OBLIGOR ACCOUNT" shall have the meaning assigned to it on ANNEX C.
"OBLIGORS" shall have the meaning assigned thereto in the recitals
to the Agreement, and shall include each other Person who becomes a Borrower or
a Guarantor hereunder after the Closing Date.
"OTHER TAXES" shall have the meaning assigned to it in SECTION 1.13.
"PARENT" means Weider Health and Fitness, a Nevada corporation.
"PATENT ASSIGNMENTS" shall mean the patent security agreements at
any time made in favor of Agent, on behalf of itself and Lenders, by any Obligor
or Subsidiary thereof, in each case as from time to time amended, restated,
supplemented or otherwise modified in accordance with the terms of the Agreement
and such Patent Assignment.
"PATENT LICENSE" shall mean rights under any written agreement now
owned or hereafter acquired by any Obligor or Subsidiary thereof granting any
right with respect to any invention on which a Patent is in existence.
"PATENTS" shall mean all of the following in which any Obligor or
Subsidiary thereof now holds or hereafter acquires any interest: (i) all letters
patent of the United States or any other country, all registrations and
recordings thereof, and all applications for letters patent of the United States
or any other country, including registrations, recordings and applications in
the United States Patent and Trademark Office or in any similar office or agency
of the United States, any State or Territory thereof, or any other country, and
(ii) all reissues, continuations, continuations-in-part or extensions thereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
-16-
"PENSION PLAN" shall mean an employee pension benefit plan, as
defined in Section 3 (2) of ERISA (other than a Multiemployer Plan), which is
not an individual account plan, as defined in Section 3 (34) of ERISA, and which
any of Obligor or Subsidiary thereof or, if a Title IV Plan, any ERISA Affiliate
maintains, contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them.
"PERMITTED ACQUISITIONS" shall have the meaning assigned to it in
SECTION 6.1.
"PERMITTED ENCUMBRANCES" shall mean the following encumbrances: (i)
Liens for taxes or assessments or other governmental Charges or levies, any not
yet due and payable or to the extent that nonpayment thereof is permitted by the
terms of SECTION 5.2(b); (ii) pledges or deposits securing obligations under
workmen's compensation, unemployment insurance, social security or public
liability laws or similar legislation; (iii) pledges or deposits securing bids,
tenders, contracts (other than contracts for the payment of money) or leases to
which any Obligor is a party as lessee made in the ordinary course of business;
(iv) deposits securing public or statutory obligations of any Obligor; (v)
inchoate and unperfected workers', mechanics', suppliers' or similar liens
arising in the ordinary course of business; (vi) carriers', warehousemen's or
other similar possessory liens arising in the ordinary course of business and
securing indebtedness not yet due and payable in an outstanding aggregate amount
not in excess of $100,000 at any time; (vii) deposits securing, or in lieu of,
surety, appeal or customs bonds in proceedings to which any Obligor is a party;
(viii) any attachment or judgment lien, unless the judgment it secures shall
not, within 30 days after the entry thereof, have been discharged or execution
thereof stayed pending appeal, or shall not have been discharged within 30 days
after the expiration of any such stay; (ix) zoning restrictions, easements,
licenses, or other restrictions on the use of real property or other minor
irregularities in title (including leasehold title) thereto, so long as the same
do not materially impair the use, value, or marketability of such real property,
lease or leasehold estate; and (x) other Liens expressly permitted under SECTION
6.7.
"PERSON" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, institution, public benefit corporation, other entity or government
(whether federal, state, county, city, municipal, local, foreign, or otherwise,
including any instrumentality, division, agency, body or department thereof).
"PLAN" shall mean, with respect to any Obligor, Subsidiary thereof
or ERISA Affiliate, at any time, an employee benefit plan, as defined in Section
3(3) of ERISA, which any Obligor or Subsidiary thereof maintains, contributes to
or has an obligation to contribute to on behalf of participants who are or were
employed by any of them.
"PROCEEDS" shall mean "proceeds," as such term is defined in the
Code and, in any event, shall include (i) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to any Obligor or Subsidiary thereof
from time to time with respect to any of the Collateral, (ii) any and all
payments (in any form whatsoever) made or due and payable to any Obligor or
Subsidiary thereof from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any governmental body,
-17-
authority, bureau or agency (or any person acting under color of governmental
authority), (iii) any claim of any Obligor or Subsidiary thereof against third
parties (a) for past, present or future infringement of any Patent or Patent
License, (b) for past, present or future infringement or dilution of any
Copyright or Copyright License or (c) for past, present or future infringement
or dilution of any Trademark or Trademark License or for injury to the goodwill
associated with any Trademark, Trademark registration or Trademark licensed
under any Trademark License, (iv) any recoveries by any Obligor or Subsidiary
thereof against third parties with respect to any litigation or dispute
concerning any of the Collateral, and (v) any and all other amounts from time to
time paid or payable under or in connection with any of the Collateral, upon
disposition or otherwise.
"PRO FORMA" means the unaudited consolidated and consolidating
balance sheet of Holdings and its Subsidiaries as of March 31, 1997, after
giving PRO FORMA effect to the IPO and the other transactions contemplated by
the Loan Documents and the IPO Documents to be consummated as of the Closing
Date.
"PRO RATA SHARE" shall mean with respect to all matters relating to
any Lender, the percentage obtained by dividing (a) the Revolving Credit Loan
Commitment of that Lender by (b) the aggregate Revolving Credit Loan Commitments
of all Lenders, as any such percentages may be adjusted by assignments permitted
pursuant to SECTION 9.1.
"PROJECTIONS" shall mean any and all projections delivered
pursuant to or in connection with the Agreement.
"PUBLISHING BORROWERS" shall mean, collectively, Fit Pregnancy,
Inc., a California corporation, "I, Brute" Enterprises Inc., a California
corporation, Living Fit, Inc., a California corporation, Men's Fitness Magazine,
Inc., a California corporation, Prime Magazine, Inc., a California corporation,
Shape Magazine, a California corporation, Weider Publications, Inc., a Delaware
corporation, and Weider's Golf, Inc., a Delaware corporation.
"PUBLISHING OBLIGORS" shall mean, collectively, Parent, Weider
Communications, a California corporation, WPI Holdings (International) Ltd., a
Nevada corporation, and each Publishing Borrower.
"QUALIFIED PLAN" shall mean an employee pension benefit plan, as
defined in Section 3(2) of ERISA, which is intended to be tax-qualified under
Section 401(a) of the IRC, and which any Obligor, Subsidiary thereof or ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on
behalf of participants who are or were employed by any of them.
"REAL ESTATE" shall have the meaning assigned to it in SECTION 3.7.
"REGISTRATION STATEMENT" shall mean the Registration Statement on
Form S-1 filed by Holdings with the United States Securities and Exchange
Commission on September 27, 1996, as amended and made effective as of April 30,
1997.
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"RELEASE" shall mean, as to any Person, any release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials in the indoor or outdoor
environment by such Person, including the movement of Hazardous Materials
through or in the air, soil, surface water, ground water or property.
"REPORTABLE EVENT" shall mean any of the events described in Section
4043(b) (1), (2), (3), (5), (6), (8) or (9) of ERISA.
"REQUISITE LENDERS" shall mean (a) Lenders having more than 66 2/3%
in the aggregate of the Revolving Credit Loan Commitments of all Lenders, or (b)
if the Revolving Credit Loan Commitments have been terminated, more than 66 2/3%
of the aggregate outstanding amount of the Revolving Credit Loan and Letter of
Credit Obligations.
"RESTRICTED PAYMENT" shall mean (i) the declaration or payment of
any dividend or the incurrence of any liability to make any other payment or
distribution of cash or other property or assets in respect of a Person's Stock,
(ii) any payment on account of the purchase, redemption, defeasance or other
retirement of a Person's Stock or any other payment or distribution made in
respect thereof, either directly or indirectly, or (iii) any payment, loan,
contribution, or other transfer of funds or other property to any holder of
stock of such Person.
"RETIREE WELFARE PLAN" shall refer to any Welfare Plan providing for
continuing coverage or benefits for any participant or any beneficiary of a
participant after such participant's termination of employment, other than
continuation coverage provided pursuant to Section 4980B of the IRC and at the
sole expense of the participant or the beneficiary of the participant.
"REVOLVING COMMITMENT TERMINATION DATE" shall mean the earliest of
(i) February 29, 2000 (unless otherwise extended, if at all, pursuant to SECTION
7.2 of the Agreement) and (ii) the date of termination of Lenders' obligations
to make Revolving Credit Advances and the acceleration of the existing Revolving
Credit Loan then outstanding pursuant to SECTION 8.2.
"REVOLVING CREDIT ADVANCE" shall have the meaning assigned to it in
SECTION 1.1(A).
"REVOLVING CREDIT LOAN" shall mean the aggregate amount of Revolving
Credit Advances outstanding at any time.
"REVOLVING CREDIT LOAN COMMITMENT" shall mean (a) as to any Lender,
the aggregate commitment of such Lender to make Revolving Credit Advances as set
forth on ANNEX J, any amendment of the Agreement or in the most recent
Assignment Agreement executed by such Lender and (b) as to all Lenders, the
aggregate commitment (determined from the amounts referred to in clause (a)
hereof) of all Lenders to make Revolving Credit Advances, as such amount may be
further adjusted, if at all, from time to time in accordance with the Agreement,
which aggregate commitment shall be One Hundred Thirty Million Dollars
($130,000,000) on
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the Closing Date.
"REVOLVING CREDIT NOTE" shall have the meaning assigned to it in
SECTION 1.1(B) and shall be substantially in the form of EXHIBIT C, in each case
as from time to time amended, restated, supplemented or otherwise modified in
accordance with the terms of the Agreement and such Revolving Credit Note.
"SCHEDULE OF DOCUMENTS" shall mean the schedule, including all
appendices, annexes, exhibits or schedules thereto, listing certain documents
and information to be delivered in connection with the Agreement, the other Loan
Documents and the transactions contemplated thereunder, substantially in the
form attached hereto as ANNEX D.
"SECURITY AGREEMENT" shall mean the security agreement entered into
among Agent, on behalf of itself and Lenders, and each Obligor and domestic
Subsidiary thereof, in each case as from time to time amended, restated,
supplemented or otherwise modified in accordance with the terms of the Agreement
and such Security Agreement.
"SOLVENT" shall mean, with respect to any Person on a particular
date, that on such date (a) the fair value of the property of such Person is
greater than the total amount of liabilities, including contingent liabilities,
of such Person; (b) the present fair salable value of the assets of such Person
is not less than the amount that will be required to pay the probable liability
of such Person on its debts as they become absolute and matured; (c) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature; and (d) such Person is not engaged in a business or transaction, and is
not about to engage in a business or transaction, for which such Person's
property would constitute an unreasonably small capital. The amount of
contingent liabilities (such as litigation, guarantees and pension plan
liabilities) at any time shall be computed as the amount which, in light of all
the facts and circumstances existing at the time, represents the amount which
can reasonably be expected to become an actual or matured liability.
"STOCK" shall mean all shares, options, warrants, general or limited
partnership interests or other equivalents (regardless of how designated) of or
in a corporation, partnership or equivalent entity whether voting or nonvoting,
including common stock, preferred stock or any other "equity security" (as such
term is defined in Rule 3 a11-1 of the General Rules and Regulations promulgated
by the Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended).
"STOCK PLEDGE AGREEMENTS" shall mean the pledge agreements at any
time executed by each applicable Obligor or Subsidiary thereof in favor of
Agent, on behalf of itself and Lenders, pledging all (or such lesser amount as
is required by the Agreement) of the Stock of their respective Subsidiaries, in
each case as from time to time amended, restated, supplemented or otherwise
modified in accordance with the terms of the Agreement and such Stock Pledge
Agreement.
-20-
"SUBSIDIARY" shall mean, with respect to any Person, (i) any
corporation of which an aggregate of more than 50% of the outstanding Stock
having ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether, at the time, Stock of any other 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, directly or indirectly,
owned legally or beneficially by such Person and/or one or more Subsidiaries of
such Person, or with respect to which any such Person has the right to vote or
designate the vote of 50% or more of such Stock whether by proxy, agreement,
operation of law or otherwise and (ii) any partnership in which such Person
and/or one or more Subsidiaries of such Person shall have an interest (whether
in the form of voting or participation in profits or capital contribution) of
more than 50% or of which any such Person is a general partner or may exercise
the powers of a general partner.
"TAXES" shall mean taxes, levies, imposts, deductions, Charges or
withholdings, and all liabilities with respect thereto, excluding franchise
taxes and taxes imposed on or measured by the net income of Agent or a Lender by
the jurisdictions under the laws of which Agent and Lenders are organized or any
political subdivision thereof.
"TERMINATION AGREEMENT" shall have the meaning assigned to it in
the recitals to the Agreement.
"TERMINATION DATE" shall mean the date on which the Revolving Credit
Loan has been repaid in full and all other Obligations under the Agreement and
the other Loan Documents have been completely discharged and Obligors shall have
no further right to borrow any monies thereunder.
"TITLE IV PLAN" shall mean a Pension Plan, other than a
Multiemployer Plan, which is covered by Title IV of ERISA.
"TRADEMARK ASSIGNMENTS" shall mean the trademark security agreements
at any time made in favor of Agent, on behalf of Lenders, by any Obligor or
Subsidiary thereof, in each case as from time to time amended, restated,
supplemented or otherwise modified in accordance with the terms of the Agreement
and such Trademark Assignment.
"TRADEMARK LICENSE" shall mean rights under any written agreement
now owned or hereafter acquired by any Obligor or Subsidiary thereof granting
any right to use any Trademark or Trademark registration.
"TRADEMARKS" shall mean all of the following now owned or hereafter
acquired by any Obligor or Subsidiary thereof: (i) all trademarks, trade names,
corporate names, business names, trade styles, service marks, logos, other
source or business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered), now owned or existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, including registrations, recordings and applications in
the United States Patent and Trademark
-21-
Office or in any similar office or agency of the United States, any state or
territory thereof, or any other country or any political subdivision thereof;
and (ii) all reissues, extensions or renewals thereof.
"UNFUNDED PENSION LIABILITY" shall mean, at any time, the aggregate
amount, if any, of the sum of (i) the amount by which the present value of all
accrued benefits under each Title IV Plan exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, all determined as of the most recent valuation date for each such
Title IV Plan using the actuarial assumptions in effect under such Title IV
Plan, and (ii) for a period of five (5) years following a transaction reasonably
likely to be covered by Section 4069 of ERISA, the liabilities (whether or not
accrued) that could be avoided by any Obligor, Subsidiary thereof or ERISA
Affiliate as a result of such transaction.
"VOTING STOCK" with respect to any Person shall mean Stock of such
Person of any class or classes, the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of members of the
Board of Directors (or Persons performing similar functions) of such Person.
"WELFARE PLANS" shall mean any welfare plan, as defined in Section
3(1) of ERISA, which is maintained or contributed to by any Obligor, Subsidiary
thereof or ERISA Affiliate.
"WITHDRAWAL LIABILITY" shall mean, at any time, the aggregate amount
of the liabilities, if any, pursuant to Section 4201 of ERISA, and any increase
in contributions pursuant to Section 4243 of ERISA with respect to all
Multiemployer Plans.
Any accounting term used in the Agreement shall have, unless
otherwise specifically provided herein, the meaning customarily given such term
in accordance with GAAP, and all financial computations hereunder shall be
computed, unless otherwise specifically provided herein, in accordance with GAAP
consistently applied. That certain items or computations are explicitly modified
by the phrase "in accordance with GAAP" shall in no way be construed to limit
the foregoing. In the event that any "Accounting Changes" (as defined below)
occur and such changes result in a change in the calculation of the financial
covenants, standards or terms used in the Agreement or any other Loan Document,
then Obligors, Agent and Lenders agree to enter into negotiations in order to
amend such provisions of the Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating
Obligors' and their Subsidiaries' financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been made;
PROVIDED, HOWEVER, that the agreement of Requisite Lenders to any required
amendments of such provisions shall be sufficient to bind all Lenders.
"ACCOUNTING CHANGES" means (a) changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions), and (b)
changes in accounting principles concurred in by each Obligor's certified public
accountants. In the event, if any, that Agent, Holdings and Requisite Lenders
shall have agreed upon the required amendments, then after such
-22-
agreement has been evidenced in writing and the underlying Accounting Change
with respect thereto has been implemented, any reference to GAAP contained in
the Agreement or in any other Loan Document shall, only to the extent of such
Accounting Change, refer to GAAP, consistently applied after giving effect to
the implementation of such Accounting Change. If Agent, Holdings and Requisite
Lenders cannot agree upon the required amendments within thirty (30) days
following the date of implementation of any Accounting Change, then all
Financial Statements delivered and all calculations of financial covenants and
other standards and terms in accordance with the Agreement and the other Loan
Documents shall be prepared, delivered and made without regard to the underlying
Accounting Change.
All other undefined terms contained in the Agreement or any of the
other Loan Documents shall, unless the context indicates otherwise, have the
meanings provided for by the Code as in effect in the State of Illinois to the
extent the same are used or defined therein. The words "herein," "hereof" and
"hereunder" and other words of similar import refer to the Agreement as a whole,
including the Annexes, Exhibits and Schedules hereto, as the same may from time
to time be amended, modified or supplemented, and not to any particular section,
subsection or clause contained in the Agreement.
Wherever from the context it appears appropriate, each term stated
in either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including", "includes" and
"include" shall be deemed to be followed by the words "without limitation";
references to Persons include their respective successors and assigns (to the
extent and only to the extent permitted by the Loan Documents) or, in the case
of governmental Persons, Persons succeeding to the relevant functions of such
Persons; and all references to statutes and related regulations shall include
any amendments of the same and any successor statutes and regulations.
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ANNEX B (SECTION 1.2)
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
LETTERS OF CREDIT
(a) ISSUANCE. Subject to the terms and conditions of the Agreement,
the Revolving Credit Loan Commitment may, in addition to Revolving Credit Loan
Advances, be utilized, upon the request of Holdings, for the issuance of Letters
of Credit or guaranties thereof by Agent so long as GE Capital is Agent, on
behalf of each Lender (severally and not jointly) according to such Lender's Pro
Rata Share of the Revolving Credit Loan Commitment to guaranty payment to banks
(whether or not such banks are Lenders) which issue Letters of Credit for the
account of Borrowers; PROVIDED, HOWEVER, that the aggregate amount of all Letter
of Credit Obligations incurred by Agent and the Lenders pursuant to this
PARAGRAPH (A) shall not exceed Five Million Dollars ($5,000,000) and, PROVIDED,
FURTHER, that (1) no such Letter of Credit shall have an expiry date which is
more than one year following the date of issuance thereof and (2) Agent and the
Lenders shall be under no obligation to incur Letter of Credit Obligations in
respect of any Letter of Credit having an expiry date which is later than
November 30, 1999. It is understood that the determination of the bank or other
legally authorized Person (including any Lender) which shall issue any Letter of
Credit contemplated by this PARAGRAPH (A) shall be made by Agent, in its sole
discretion. It is further understood that Letter of Credit Obligations incurred
by any Borrower on behalf of Holdings are guaranteed by Holdings pursuant to the
Guaranty.
(b) ADVANCES AUTOMATIC. In the event that any Lender shall make any
payment on or pursuant to any Letter of Credit Obligation, such payment shall
then be deemed automatically to constitute a Revolving Credit Advance under
SECTION 1.1(A) of the Agreement.
(c) CASH COLLATERAL. In the event that any Letter of Credit
Obligation, whether or not then due and payable, shall for any reason be
outstanding on the Revolving Commitment Termination Date, Borrowers will pay to
Agent for the benefit of the Lenders cash or cash equivalents acceptable to
Agent ("CASH EQUIVALENTS") in an amount equal to the maximum amount then
available to be drawn under the applicable Letter of Credit. Such funds or Cash
Equivalents shall be held by Agent in a cash collateral account (the "CASH
COLLATERAL ACCOUNT"). The Cash Collateral Account shall be in the name of Agent
(as a cash collateral account), and shall be under the sole dominion and control
of Agent and subject to the terms of this ANNEX B. Obligors hereby pledge, and
grant to Agent, on behalf of Lenders, a security interest in, all such funds and
Cash Equivalents held in the Cash Collateral Account from time to time and all
proceeds thereof, as security for the payment of all amounts due in respect of
the Letter of Credit Obligations, whether or not then due. The Agreement shall
constitute a security agreement under applicable law.
From time to time after funds are deposited in the Cash Collateral
Account, Agent may apply such funds or Cash Equivalents then held in the Cash
Collateral Account to the payment of any amounts, in such order as Agent may
elect, as shall be or shall become due and
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payable by Borrowers to the Lenders with respect to such Letter of Credit
Obligations.
No Obligor nor any Person claiming on behalf of or through any
Obligor shall have any right to withdraw any of the funds or Cash Equivalents
held in the Cash Collateral Account, except that upon the termination of all
Letter of Credit Obligations and the payment of all amounts payable by Borrowers
to the Lenders in respect thereof, any funds remaining in the Cash Collateral
Account in excess of the then remaining Letter of Credit Obligations shall be
returned to Holdings.
Agent shall invest the funds in the Cash Collateral Account in
treasury bills or deposit such funds in an interest bearing account, and
interest and earnings thereon, if any, shall be paid over to Holdings upon
termination of the Cash Collateral Account.
(d) FEES AND EXPENSES. In the event that the Lenders shall incur any
Letter of Credit Obligation pursuant hereto at the request of Holdings, on
behalf of any Borrower, Borrowers agree to pay to:
(1) Agent for the benefit of the Lenders, as compensation to the
Lenders for such Letter of Credit Obligation, (i) all costs and expenses
incurred by Agent or any Lender on account of such Letter of Credit Obligation,
(ii) commencing with the month in which such Letter of Credit Obligation is
incurred by the Lenders and monthly thereafter for each month during which such
Letter of Credit Obligation shall remain outstanding, a fee in an amount equal
to (A) the maximum amount available from time to time to be drawn under the
applicable Letter of Credit multiplied by (B) the applicable per annum rate set
forth in the following grid (the "L/C MARGIN"):
FUNDED DEBT TO
EBITDA RATIO L/C MARGIN
---------------- -------------
> 3.0 2.75
-
> 2.5 but < 3.0 2.50
-
> 2.0 but < 2.5 2.25
-
> 1.5 but < 2.0 1.75
-
< 1.5 1.50
The effective L/C Margin will be based on a Funded Debt to EBITDA ratio
calculated in accordance with paragraph (e) of ANNEX G and shall be determined
and adjusted in a manner identical to that in which the effective Margin with
respect to the Revolving Credit Loan is determined and adjusted pursuant to
SECTION 1.5 of the Agreement; and
(2) any issuer of a Letter of Credit, if not Agent (the "L/C
ISSUER") (i) an additional fee for its own account computed at the rate of one
half of one percent (.5%) per annum of the maximum amount available to be drawn
from time to time under each Letter of Credit for the period from and including
the date of issuance of such Letter of Credit to and including the stated expiry
date of such Letter of Credit and (ii) on demand, such other
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administrative fees, charges and expenses of the L/C Issuer in respect of the
issuance, negotiation, acceptance, amendment, transfer and payment of such
Letter of Credit or otherwise payable pursuant to the application and related
documentation under which such Letter of Credit is issued.
All fees due under this PARAGRAPH (D) shall be calculated on the basis of a
360-day year and the actual number of days elapsed and shall be paid to Agent
for the benefit of the Lenders or the L/C Issuer, as the case may be, in
arrears, on the first day of each month.
(e) REQUEST FOR LENDER GUARANTIES. Holdings shall give Agent at
least two (2) Business Days prior written notice as to the issuance of a Letter
of Credit or letter of credit guaranty, specifying the date such Letter of
Credit or guaranty is to be issued, identifying the beneficiary and describing
the nature of the transactions proposed to be supported thereby. The notice
shall be accompanied by the form of the Letter of Credit to be guarantied.
(f) OBLIGATION ABSOLUTE. The obligation of Borrowers to reimburse
Agent and Lenders for payments made with respect to any Letter of Credit
Obligation shall be unconditional and irrevocable and shall be paid strictly in
accordance with the terms hereof under all circumstances including the following
circumstances:
(1) any lack of validity or enforceability of any Letter of Credit
or any other agreement;
(2) the existence of any claim, set-off, defense or other right
which any Obligor or Affiliate thereof or any Lender may at any time have
against a beneficiary or any transferee of any Letter of Credit (or any persons
or entities for whom any such transferee may be acting), any Lender, or any
other Person, whether in connection with the Agreement, the transactions
contemplated herein or any unrelated transaction (including any underlying
transaction between any Obligor or Affiliate thereof and the beneficiary for
which the Letter of Credit was procured);
(3) any draft, demand, certificate or any other document presented
under any 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;
(4) payment by Agent, any Lender, or the issuing bank under any
Letter of Credit against presentation of a demand, draft or certificate or other
document which does not comply with the terms of such Letter of Credit; PROVIDED
that, in the case of any payment by Agent or any Lender under any Letter of
Credit, Agent or such Lender has not acted with gross negligence or willful
misconduct in determining that the demand for payment under such Letter of
Credit or guaranty thereof complies on its face with any applicable requirements
for a demand for payment under such Letter of Credit or guaranty thereof;
(5) any other circumstance or happening whatsoever, which is similar
to any of the foregoing; or
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(6) the fact that a Default or an Event of Default shall have
occurred and be continuing.
(g) INDEMNIFICATION; NATURE OF LENDERS' DUTIES. In addition to
amounts payable as elsewhere provided in the Agreement, Obligors, jointly and
severally, hereby agree to protect, indemnify, pay and save Agent and each
Lender harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable attorneys'
fees and allocated costs of internal counsel) which Agent or any Lender may
incur or be subject to as a consequence, direct or indirect, of (1) the issuance
of any Letter of Credit or guaranty thereof, other than as a result of the gross
negligence or willful misconduct of Agent or such Lender as finally determined
by a court of competent jurisdiction or (2) the failure of Agent or any Lender
to honor a demand for payment under any Letter of Credit or guaranty thereof as
a result of any act or omission, whether rightful or wrongful, of any present or
future de jure or de facto government or governmental authority.
As between Agent and Obligors and any Lender and Obligors, Obligors
assume all risks of the acts and omissions of, or misuse of any Letter of Credit
by beneficiaries of any Letter of Credit. In furtherance and not in limitation
of the foregoing, neither Agent nor any Lender shall be responsible: (i) for the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
document issued by any party in connection with the application for and issuance
of any Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of
any Letter of Credit to comply fully with conditions required in order to demand
payment under such Letter of Credit; PROVIDED that, in the case of any payment
by Agent under any Letter of Credit or guaranty thereof, Agent has not acted
with gross negligence or willful misconduct (as finally determined by a court of
competent jurisdiction) in determining that the demand for payment under such
Letter of Credit or guaranty thereof complies on its face with any applicable
requirements for a demand for payment under such Letter of Credit or guaranty
thereof; (iv) for errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether
or not they be in cipher; (v) for errors in interpretation of technical terms;
(vi) for any loss or delay in the transmission or otherwise of any document
required in order to make a payment under any Letter of Credit or guaranty
thereof or of the proceeds thereof; (vii) for the credit of the proceeds of any
drawing under any Letter of Credit or guaranty thereof; and (viii) for any
consequences arising from causes beyond the control of Agent or any Lender. None
of the above shall affect, impair, or prevent the vesting of any of Agent's or
any Lender's rights or powers hereunder.
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ANNEX C (SECTION 1.7)
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
CASH MANAGEMENT SYSTEMS
Each Obligor shall, and each Obligor shall cause its Subsidiaries
to, establish and maintain the Cash Management Systems described below:
(a) For so long as the Revolving Credit Loan or any other
Obligations are outstanding, each Obligor and Subsidiary thereof shall (i)
establish lock boxes ("LOCK BOXES") at one or more of the banks set forth on
SCHEDULE 1.7 and shall request in writing and otherwise take such reasonable
steps to ensure that all Account Debtors forward payment directly to such Lock
Boxes and (ii) deposit and cause each Subsidiary thereof to deposit or cause to
be deposited promptly, and in any event no later than the first Business Day
after the date of receipt thereof, all cash, checks, drafts or other similar
items of payment relating to or constituting payments made in respect of any and
all Collateral (whether or not otherwise delivered to a Lock Box) into bank
accounts in such Obligor's or Subsidiary's name (collectively, the "OBLIGOR
ACCOUNTS") at banks set forth on SCHEDULE 1.7 (each, a "RELATIONSHIP BANK").
Prior to the Closing Date, Obligors shall have established a concentration
account in Obligors' name (the "CONCENTRATION ACCOUNT") at the bank which shall
be designated as the Concentration Account bank on SCHEDULE 1.7 (the
"CONCENTRATION ACCOUNT BANK"), in accordance with a blocked account agreement in
form and substance and with such bank as shall be satisfactory to Agent, in its
sole discretion.
(b) Prior to the Closing Date, the Concentration Account Bank, and
each of the banks set forth on SCHEDULE 1.7 shall have entered into triparty
blocked account agreements with Agent, for the benefit of itself and Lenders,
and each applicable Obligor and Subsidiary thereof, in form and substance
acceptable to Agent. Each such blocked account agreement shall provide, among
other things, that (i) all items of payment deposited in such account and
proceeds thereof deposited in such Concentration Account are held by such bank
as agent or bailee-in-possession for the Agent, on behalf of Lenders, (ii) the
bank executing such agreement has no rights of setoff or recoupment or any other
claim against such account, as the case may be, other than for payment of its
service fees and other charges directly related to the administration of such
account and for returned checks or other items of payment, and (iii) from and
after the date on which such bank receives an Activation Notice (as defined
below) (A) with respect to banks at which an Obligor Account is located, such
bank agrees to forward immediately all amounts in each Obligor Account to the
Concentration Account Bank and to commence the process of daily sweeps from such
Obligor Account into the Concentration Account and (B) with respect to the
Concentration Account Bank, such bank agrees to forward immediately all amounts
received in the Concentration Account to the Collection Account through daily
sweeps from such Concentration Account Bank into the Collection Account;
PROVIDED, HOWEVER, that prior to delivery by Agent of written notice
("ACTIVATION NOTICE") to the Concentration Account Bank, the Relationship Banks
and Holdings, each Obligor shall have access to and use of any cash or other
funds in the Obligor Accounts, and the Concentration Account Bank and the
Relationship Banks shall not be required to transfer cash in the Obligor
Accounts other than in accordance with the
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instructions of such Obligor.
(c) From and after the delivery of the Activation Notice, each
Obligor shall cause each and every bank at which any Obligor Account and Lock
Box is located, including each Relationship Bank and each of the other banks at
which any Obligor Account is located, to (i) deposit any checks, drafts or other
similar items of payment received in any Lock Box directly into an Obligor
Account, (ii) forward immediately, and in no event less frequently than once
each Business Day, all amounts in the Obligor Accounts at such bank to the
Concentration Account and (iii) commence, and continue each Business Day, the
process of daily sweeps from each Obligor Account into the Concentration
Account. Each Obligor shall (upon Holdings' receipt of an Activation Notice)
cause the Concentration Account Bank to forward immediately all amounts received
in the Concentration Account to the Collection Account through daily sweeps from
such Concentration Account into the Collection Account.
(d) So long as no Event of Default has occurred and is continuing,
Holdings may (i) amend SCHEDULE 1.7 to add or replace a Lock Box or Obligor
Account or replace the Concentration Account; PROVIDED, HOWEVER, THAT (A) Agent
shall have consented in writing to the opening of such account with the relevant
bank and (B) prior to the time of the opening of such account or Lock Box, such
bank and the applicable Obligor and/or Subsidiary thereof shall have executed
and delivered to Agent a triparty blocked account agreement, in form and
substance satisfactory to Agent and (ii) invest amounts maintained overnight in
the Concentration Account in accordance with this Agreement in overnight
deposits offered by the Concentration Account Bank.
(e) The Lock Boxes, Obligor Accounts, Disbursement Account and the
Concentration Account shall be cash collateral accounts, with all cash, checks
and other similar items of payment in such accounts securing payment of the
Revolving Credit Loan and all other Obligations, and in which such Obligor or
Subsidiary shall have granted a Lien to Agent, on behalf of itself and Lenders,
pursuant to the Security Agreement.
(f) All amounts deposited in the Collection Account shall be deemed
received by Agent in accordance with SECTION 1.8 of the Agreement and shall be
applied (and allocated) by Agent in accordance with SECTION 1.9 of the
Agreement. In no event shall any amount be so applied unless and until such
amount shall have been credited in immediately available funds to the Collection
Account.
(g) Each Borrower may maintain, in its name, an account (the
"DISBURSEMENT ACCOUNT") at a bank acceptable to Agent into which, Agent shall,
from time to time, deposit proceeds of Revolving Credit Advances made pursuant
to SECTION 1.1 for use by Borrowers solely in accordance with the provisions of
SECTION 1.4.
(h) Each Obligor shall and shall cause each Subsidiary thereof to
(i) hold in trust for the Agent, for the benefit of itself and Lenders, all
checks, cash and other items of payment received by such Obligor or Subsidiary,
and (ii) within one (1) Business Day after
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receipt by such Obligor or Subsidiary of any checks, cash or other items of
payment, deposit the same into an Obligor Account.
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ANNEX D (SECTION 2.1(B))
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
SCHEDULE OF DOCUMENTS
In addition to, and not in limitation of, the conditions described in SECTION
2.1 of the Agreement, pursuant to SECTION 2.1(B), the following items must be
received by Agent in form and substance satisfactory to Agent on or prior to the
Closing Date (each capitalized term used but not otherwise defined herein shall
have the meaning ascribed thereto in ANNEX A to the Agreement):
A. APPENDICES. All Schedules, Exhibits, Annexes and other attachments to
the Agreement, in form and substance satisfactory to Agent.
B. REVOLVING CREDIT NOTES. Duly executed originals of the Revolving Credit
Notes for each applicable Lender, dated the Closing Date.
C. SECURITY AGREEMENT. Originals of the Security Agreement, amended and
restated as of the Closing Date, duly executed by each Obligor, and all
instruments, documents and agreements executed pursuant thereto, including a
power of attorney dated the Closing Date and executed by all Obligors, including
revised schedules thereto.
D. SECURITY INTERESTS AND CODE FILINGS. Except as received by Agent
pursuant to the Prior Credit Agreement:
(a) evidence satisfactory to Agent that Agent (for the benefit of
itself and Lenders) has a valid and perfected first priority (other than to the
extent otherwise permitted in accordance with SECTION 6.7) security interest in
the Collateral, including (i) such documents duly executed by each Obligor
(including financing statements under the Code and other applicable documents
under the laws of any jurisdiction with respect to the perfection of Liens) in
order to perfect Agent's security interests in the Collateral and (ii) copies of
Code search reports listing all effective financing statements that name any
Obligor as debtor, together with copies of such financing statements, none of
which (other than to the extent permitted in accordance with SECTION 6.7) shall
cover the Collateral;
(b) evidence satisfactory to Agent, including copies, of all UCC-1
and other financing statements filed in favor of any Obligor, with respect to
each location, if any, at which Inventory may be consigned; and
(c) Control Letters for each Obligor from (i) all issuers of
uncertificated securities and other financial assets held by each Obligor, (ii)
all securities intermediaries with respect to all securities accounts and
securities entitlements of each Obligor and (iii) all futures commission agents
and clearing houses with respect to all commodities contracts and commodities
accounts held by any Obligor.
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E. CASH MANAGEMENT SYSTEM; BLOCKED ACCOUNT AGREEMENTS. Except as received
by Agent pursuant to the Prior Credit Agreement, evidence satisfactory to Agent
that, as of the Closing Date, Cash Management Systems complying with ANNEX C to
the Agreement have been established and are currently being maintained in the
manner set forth in such ANNEX C, together with copies of duly executed
amendments as may be necessary for each blocked account and lock box agreement
required by ANNEX C.
F. INTELLECTUAL PROPERTY ASSIGNMENTS AND SUPPLEMENTS. Duly executed
original amendments to each Copyright Assignment, Patent Assignment and
Trademark Assignment, all in form and substance satisfactory to Agent.
G. STOCK PLEDGE AGREEMENT. Originals of the Stock Pledge Agreement,
amended and restated as of the Closing Date, together with all schedules
thereto, duly executed by each Obligor with respect to the Stock of each
Subsidiary thereof, in each case accompanied by (to the extent not yet
delivered) (i) share certificates representing all of the outstanding Stock
being pledged pursuant to such Stock Pledge Agreement and stock powers for such
share certificates executed in blank and (ii) original intercompany notes and
other instruments evidencing Indebtedness being pledged pursuant to such Stock
Pledge Agreement, duly endorsed in blank.
H. WAIVERS. Except as received by Agent pursuant to the Prior Credit
Agreement, landlord waivers and consents, bailee letters and mortgagee
agreements in form and substance satisfactory to Agent, in each case as required
pursuant to SECTION 5.11; PROVIDED that, in the event Obligors are unable to
obtain the same as to any location on or before the Closing Date, until such
time as the same is obtained Borrowing Availability shall be subject to a
reserve established by Agent as set forth in SECTION 5.11.
I. MORTGAGES. Except as received by Agent pursuant to the Prior Credit
Agreement, Agent, shall have received first (or second, as herein permitted)
Mortgages (or amendments thereto, as required) covering all of the Mortgaged
Properties, together with as Agent may request: (a) title insurance policies
(copies thereof, as to second mortgages), current as-built surveys, zoning
letters and certificates of occupancy, in each case satisfactory in form and
substance to Agent, in its sole discretion; (b) evidence that counterparts of
the Mortgages (or amendments) have been recorded in all places to the extent
necessary or desirable, in the judgment of Agent, to create a valid and
enforceable first priority lien (subject to Permitted Encumbrances) on each
Mortgaged Property in favor of Agent for the benefit of itself and Lenders (or
in favor of such other trustee as may be required or desired under local law);
(c) an opinion of counsel in each state in which any Mortgaged Property is
located in form and substance and from counsel reasonably satisfactory to Agent;
and (d) from each existing mortgage lender having any Lien on any Mortgaged
Property, a consent to the grant of the applicable Mortgage (or amendment) in
favor of Agent and an acknowledgment of Agent's first priority security interest
in all Collateral consisting of personal property now or hereafter located at or
on such Mortgaged Property and Agent's ability to exercise all remedies provided
to it under the Loan Documents with respect to such Collateral, all in form and
substance satisfactory to Agent. Each Obligor hereby agrees that if, for any
reason, any document required pursuant to the
-2-
immediately preceding clause (d) has not been received by Agent as of the
Closing Date, then each applicable Obligor shall, on the Closing Date, pay out
such non-consenting mortgage lender, have its respective mortgage lien removed
from the property affected thereby and grant to Agent a first mortgage on such
Mortgaged Property.
J. SUBORDINATION AND INTERCREDITOR AGREEMENTS. Agent and Lenders shall
have received any and all subordination and/or intercreditor agreements, all in
form and substance reasonably satisfactory to Agent, in its sole discretion, as
Agent shall have deemed necessary or appropriate with respect to any
Indebtedness of any Obligor, and the terms and conditions of all such
Indebtedness shall be acceptable to Agent, in its sole discretion.
K. INSURANCE. Except as received by Agent pursuant to the Prior Credit
Agreement, satisfactory evidence that the insurance policies required by SECTION
5.5 are in full force and effect, together with appropriate evidence showing
currently effective loss payable and/or additional insured clauses or
endorsements, as requested by Agent, in favor of Agent, on behalf of Lenders.
L. APPOINTMENT OF AGENT FOR SERVICE. Except as received by Agent pursuant
to the Prior Credit Agreement, an appointment of CT Corporation as each
Obligor's agent for service of process.
M. ACCOUNTANTS' LETTEA letter authorizing the independent certified public
accountants of the Obligors to communicate with Agent and Lenders in accordance
with SECTION 4.2 and indicating Lenders' reliance on the auditor's certification
of past and future Financial Statements.
N. OFFICER'S CERTIFICATE. Agent shall have received duly executed
originals of a certificate of the Chief Executive Officer or Chief Financial
Officer of Holdings, dated the Closing Date, stating that, since May 31, 1996
(a) there has been no Material Adverse Effect on the business, operations,
financial condition or prospects of Holdings and its Subsidiaries and the
industries in which they operate; (b) no Litigation has been commenced which, if
successful, is reasonably likely to have any such Material Adverse Effect or
challenge any of the transactions contemplated by this Agreement and the other
Loan Documents; (c) there has been no material adverse change in the industry in
which any Obligor operates; (d) except as permitted in accordance with the Prior
Credit Agreement, there have been no Restricted Payments made by any Obligor;
and (e) there has been no material increase in liabilities, liquidated or
contingent, and no material decrease in assets of any Obligor or Subsidiary
thereof other than in the ordinary course of business.
O. SECRETARY'S CERTIFICATE. Agent shall have received duly executed
originals of a certificate of the Secretary of each Obligor, dated the Closing
Date, stating that (a) at all times from and after April 8, 1997 through the
Closing Date (i) there has been no change to such Obligor's charter or by-laws
as delivered to Agent under the Prior Credit Agreement, and each of the same
remains in full force and effect, (ii) such Obligor has remained qualified to do
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business and in good standing in its state of incorporation and each other
jurisdiction where the failure to so qualify would be reasonably likely to have
a Material Adverse Effect and (iii) there has been no change in the incumbency
of the officers of such Obligor as certified to Agent under the Prior Credit
Agreement and (b) attached are the true, accurate and complete resolutions of
such Obligor's Board of Directors and, as required, stockholders, approving and
authorizing the execution, delivery and performance of the Loan Documents to
which such Obligor is a party and the transactions to be consummated in
connection therewith.
P. OPINIONS OF COUNSEL. Duly executed originals of opinions of ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, counsel for the Obligors, together with any local counsel opinions
requested by Agent, each in form and substance satisfactory to Agent and its
counsel and including, as the case may be, each opinion of counsel for the
Obligors rendered in connection with the IPO, all dated the Closing Date. By its
signature to the Credit Agreement, each Obligor hereby authorizes and directs
each of the foregoing counsel to address its opinion to Agent, on behalf of
Lenders, and to include in such opinion an express statement to the effect that
Agent and Lenders are authorized to rely on such opinion.
Q. LETTER OF DIRECTION. Duly executed originals of a letter of direction
from Holdings addressed to Agent, on behalf of itself and Lenders, with respect
to the disbursement on the Closing Date of the proceeds of the initial Revolving
Credit Advance.
R. FINANCIAL STATEMENTS, SOLVENCY/PROJECTION CERTIFICATE AND OTHER
DELIVERIES. Agent shall have received all financial statements and other
deliveries required to be delivered as of the Closing Date pursuant to the Prior
Credit Agreement, together with Projections and Pro Forma annexed as SCHEDULE
3.4, and Agent shall be satisfied, in its sole discretion, with all of the
foregoing. Agent shall have further received a certificate of the Chief
Executive Officer or Chief Financial Officer of Holdings and each Borrower,
based on such Projections and Pro Forma, to the effect that (a) each Borrower
will be Solvent upon the consummation of the transactions contemplated herein;
(b) the Projections are based upon estimates and assumptions stated therein, all
of which Holdings and Borrowers believe to be reasonable and fair in light of
current conditions and current facts known to them and, as of the Closing Date,
reflect Holdings' and Borrowers' good faith and reasonable estimates of its
future financial performance and of the other information projected therein for
the period set forth therein; (c) the Pro Forma was prepared in accordance with
GAAP, with only such adjustments thereto as would be required in accordance with
GAAP, and (d) containing such other statements with respect to the solvency of
Borrowers and matters related thereto as Agent shall request.
S. IPO DOCUMENTS. Copies of all IPO Documents, certified by a Responsible
Officer of Holdings as being a true, accurate and complete set of all IPO
Documents.
T. OTHER DOCUMENTS. Such other certificates, documents and agreements
respecting any Obligor as Agent may, in its sole discretion, request, including
appraisals and environmental reports.
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ANNEX E (SECTION 4.1(A))
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
FINANCIAL STATEMENTS AND PROJECTIONS -- REPORTING
Holdings shall deliver or cause to be delivered to Agent and
Lenders, the following:
(a) To Agent and Lenders, within thirty (30) days after the end of
each Fiscal Month (other than a Fiscal Month end for which a quarterly report
under CLAUSE (B) is required) (i) for Holdings and its Subsidiaries on a
consolidated and consolidating basis, unaudited balance sheets as of the close
of such Fiscal Month and the related statements of income and cash flow for that
portion of the Fiscal Year ending as of the close of such Fiscal Month, in each
case setting forth in comparative form the figures for the corresponding period
in the prior year and the figures contained in the budget, all prepared in
accordance with GAAP (subject to normal year-end adjustments) and (ii) a
certificate of the Chief Financial Officer of Holdings (on behalf of itself and
each Borrower) attached to the foregoing financial information to the effect
that (A) the attached Financial Statements present fairly in all material
respects and in accordance with GAAP (subject to normal year-end adjustments and
the absence of footnotes) the financial position and results of operations of
Holdings and its Subsidiaries, on a consolidated and consolidating basis, in
each case as at the end of, and for, such Fiscal Month, (B) all other attached
financial information is true, correct and complete in all material respects and
(C) there was no Default or Event of Default in existence as of such time or, if
a Default or Event of Default shall have occurred and be continuing, describing
the nature thereof and all efforts undertaken to cure such Default or Event of
Default;
(b) To Agent and Lenders, within forty-five (45) days after the end
of each Fiscal Quarter (i) for Holdings and its Subsidiaries on a consolidated
and consolidating basis, unaudited balance sheets as of the close of such Fiscal
Quarter and the related statements of income and cash flow for that portion of
the Fiscal Year ending as of the close of such Fiscal Quarter, in each case
setting forth in comparative form the figures for the corresponding period in
the prior year and the figures contained in the budget, all prepared in
accordance with GAAP (subject to normal year-end adjustments and the absence of
footnotes), (ii) a certificate of the Chief Financial Officer of Holdings (on
behalf of itself and each Borrower) attached to the foregoing financial
information to the effect that (A) the attached Financial Statements present
fairly in all material respects and in accordance with GAAP (subject to normal
year-end adjustments and the absence of footnotes) the financial position and
results of operations of Holdings and its Subsidiaries, on a consolidated and
consolidating basis, in each case as at the end of, and for, such Fiscal
Quarter, (B) all other attached financial information is true, correct and
complete in all material respects and (C) there was no Default or Event of
Default in existence as of such time or, if a Default or Event of Default shall
have occurred and be continuing, describing the nature thereof and all efforts
undertaken to cure such Default or Event of Default, (iii) a statement setting
forth the calculations used in determining compliance with each financial
covenant set forth on ANNEX G and (iv) a management discussion and analysis
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which includes a comparison to budget for that Fiscal Quarter and a comparison
of performance for that Fiscal Quarter to the corresponding period in the prior
year;
(c) To Agent and Lenders, as soon as available, but not later than
thirty (30) days after the end of each Fiscal Year, an operating plan for the
next three years, approved by the Board of Directors of Holdings, on behalf of
Holdings and each Borrower, which will include a complete statement of the
material assumptions on which such plan is based, a monthly budget for the first
year, quarterly projections for the following two years (in each case along with
the respective balance sheets, statements of income and cash flows, all prepared
on the same basis and in similar detail as the Financial Statements delivered
pursuant to paragraphs (a) and (b) hereof), and plans for personnel, capital
expenditures and facilities; all of which shall be in detail acceptable to Agent
in its sole discretion;
(d) To Agent and Lenders, within ninety (90) days after the end of
each Fiscal Year, audited Financial Statements, for Holdings and its
Subsidiaries on a consolidated basis, consisting of balance sheets and
statements of income and stockholders equity and cash flows, setting forth in
comparative form in each case the figures for the previous Fiscal Year, which
Financial Statements shall be prepared in accordance with GAAP, certified
without qualification, by an independent certified public accounting firm of
national standing or otherwise acceptable to Agent, and accompanied by (i) a
statement prepared in reasonable detail setting forth the calculations used in
determining compliance with each of the financial covenants set forth on ANNEX
G, (ii) a report from such accounting firm to the effect that, in connection
with their audit examination, nothing has come to their attention to cause them
to believe that a Default or Event of Default has occurred (or specifying those
Defaults and Events of Default that they became aware of), (iii) the annual
letters to such accountants in connection with their audit examination detailing
contingent liabilities and material litigation matters and (iv) the
certification of the Chief Executive Officer or Chief Financial Officer of
Holdings (on behalf of itself and each Borrower) that all such Financial
Statements present fairly in accordance with GAAP the financial position,
results of operations and statements of cash flows of Holdings and its
Subsidiaries on a consolidated basis, as at the end of, and for, such Fiscal
Year, and that there was no Default or Event of Default in existence as of such
time or, if a Default or Event of Default shall have occurred and be continuing,
describing the nature thereof and all efforts undertaken to cure such Default or
Event of Default;
(e) To Agent and Lenders, within five (5) Business Days after
receipt thereof by any Obligor, copies of all management letters, exception
reports or similar letters or reports received by any Obligor from their
independent certified public accountants;
(f) To Agent and Lenders, as soon as practicable, and in any event
within five (5) Business Days after any Obligor becomes aware of the existence
of any Default or Event of Default, or any development or other information
which to the knowledge of any Obligor after reasonable inquiry could reasonably
be expected to have a Material Adverse Effect, telephonic or telecopied notice
specifying the nature of such Default or Event of Default or development or
information with respect thereto, including the anticipated effect thereof,
which notice, if given
-2-
telephonically, shall be promptly confirmed in writing on the next Business
Day;
(g) To Agent and Lenders, within thirty (30) days after the end of
each Fiscal Month (or more frequently if requested by Agent), an intercompany
loan summary itemizing the then current balance of each intercompany loan
between or among the Obligors and their Subsidiaries; and
(h) To Agent and Lenders, such other financial and other information
respecting the businesses, financial condition or prospects of Holdings or any
of its Subsidiaries as Agent or any Lender shall, from time to time, reasonably
request.
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ANNEX F (SECTION 4.1(B))
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
COLLATERAL REPORTS
(a) To Agent and Lenders, together with delivery of each Notice of
Revolving Credit Advance and Notice of Conversion/Continuation, a certificate of
the Chief Financial Officer of Holdings certifying that at the time of and after
giving actual and pro forma effect to the proposed Revolving Credit Advance,
conversion or continuation, each Borrower for which such advance, conversion or
continuation is requested is and will be Solvent.
(b) To Agent, upon its request, and in any event, to Agent and
Lenders, together with delivery of each of the monthly and quarterly Financial
Statements delivered pursuant to ANNEX E, (i) a Collateral Certificate delivered
by the Chief Financial Officer of Holdings on behalf of each Obligor,
accompanied by such supporting detail and documentation as shall be requested by
Agent in its reasonable discretion and (ii) a summary of all current Investments
made by each Obligor as of the last day of the applicable month or quarter (in
the form of APPENDIX I hereto) by (A) investor and amount, nature and, if any,
maturity of such Investment, (B) if in cash, cash equivalents or marketable
securities, the financial institution at which such Investment is held and (C)
if not described in clause (B) above, the Person in which such investment is
made, in each case accompanied by such supporting detail and documentation as
shall be requested by Agent in its reasonable discretion.
(c) Such other reports, statements and reconciliations with respect
to the Collateral or the solvency of any Obligor as Agent shall from time to
time request in its reasonable discretion.
-4-
APPENDIX I TO ANNEX F
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
FORM OF INVESTMENT SCHEDULE
This Investment Schedule is submitted as of __________, ____, under and pursuant
to that certain Third Amended and Restated Credit Agreement dated May 6, 1997,
by and among the undersigned ("Holdings"), the other Obligors named therein,
General Electric Capital Corporation ("Agent") and the Lenders named therein,
and is certified to be true and correct in all particulars.
INVESTMENT MANAGER /
INVESTOR AMOUNT DESCRIPTION MATURITY INVESTMENT COMPANY ACCOUNT NO.
---------- ------- ------------- ---------- -------------------- -----------
IN WITNESS WHEREOF, Holdings has caused this Collateral Certificate
to be executed and delivered by its duly authorized Chief Financial Officer as
of the date first set forth
above.
WEIDER NUTRITION INTERNATIONAL, INC.
By:________________________________
Chief Financial Officer
-2-
ANNEX G (SECTION 6.20)
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
FINANCIAL COVENANTS
Holdings shall not breach or fail to comply with any of the
following financial covenants, each of which shall be calculated in accordance
with GAAP, consistently applied:
(a) MAXIMUM CAPITAL EXPENDITURES. Holdings and its Subsidiaries on a
consolidated basis shall not make Capital Expenditures during any Fiscal
Year set forth below that exceed the amount set forth opposite such Fiscal
Year:
FISCAL YEAR AMOUNT
Fiscal Year 1997 $18,500,000
Fiscal Year 1998 $12,000,000
Fiscal Year 1999 and each $ 8,000,000
Fiscal Year thereafter
(b) MINIMUM NET WORTH. Holdings shall maintain on a consolidated
basis at all times during the period ending at the end of each Fiscal
Quarter described below Net Worth equal to or greater than the amount set
forth opposite such Fiscal Quarter:
FISCAL QUARTER AMOUNT
Each Fiscal Quarter ending May 31, 1997 $ 75,000,000
through February 28, 1998
Fiscal Quarters ending May 31, 1998 $ 90,000,000
and August 31, 1998
Fiscal Quarters ending November 30, 1998 $ 95,000,000
and February 28, 1999
Each Fiscal Quarter ending thereafter $ 105,000,000
(c) MINIMUM INTEREST COVERAGE RATIO. Holdings, on a consolidated
basis, shall have at the end of each Fiscal Quarter described below a
ratio of (i) the sum of (A) EBITDA LESS (B) Capital Expenditures LESS (C)
taxes paid in cash to (ii) Gross Interest Charges, in each case for the 12
month period then ended, equal to or greater than the ratio set forth
opposite such Fiscal Quarter:
FISCAL QUARTER RATIO
Each Fiscal Quarter ending May 31, 1997 1.75:1.00
through February 28, 1998
Fiscal Quarters ending May 31, 1998 2.25:1.00
and August 31, 1998
Each Fiscal Quarter ending November 30, 1998 3.25:1.00
through May 31, 1999
Each Fiscal Quarter ending thereafter 4.50:1.00
-1-
(d) MAXIMUM FUNDED DEBT TO EBITDA RATIO. Holdings, on a consolidated
basis, shall have at the end of each Fiscal Quarter described below a
ratio of (i) Funded Debt to (ii) EBITDA, in each case for the 12 month
period then ended, less than or equal to the ratio set forth opposite such
Fiscal Quarter:
FISCAL QUARTER RATIO
Each Fiscal Quarter ending May 31, 1997 3.50:1.00
through November 30, 1997
Each Fiscal Quarter ending February 28, 1998 3.00:1.00
through November 30, 1998
Each Fiscal Quarter ending thereafter 2.50:1.00
-2-
ANNEX H (SECTION 9.9)
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
LENDERS' ACCOUNT INFORMATION
Lender: General Electric Capital Corporation
Bank: Bankers Trust Company
ABA #: 021 001 033
Acct #: 50232854
Name: GECC/CF Depositary
Ref: Weider Nutrition / CFC4070
Lender: CoreStates Bank, N.A.
Bank: CoreStates Bank, N.A.
ABA: 031 000 011
Acct #: ▇▇▇▇▇▇▇▇▇▇
Name: Weider Nutrition
Ref: Loan Department
Lender: LaSalle National Bank
Bank: LaSalle National Bank
ABA: 071 000 505
Acct #: 1378018-7300
Name: Commercial Loans
Ref: Weider
Lender: The Bank of Nova Scotia
Bank: The Bank of Nova Scotia
ABA: 026 002 532
Acct #: ▇▇▇▇▇▇▇
Name: The Bank of Nova Scotia, San Francisco, CA
Loan Servicing Account
Ref: Weider Nutrition
Lender: Creditanstalt-Bankverein
Bank: Chase Manhattan
ABA: 021 000 021
Acct #: ▇▇▇-▇-▇▇▇▇▇
Name: Creditanstalt, New York
Ref: Weider Nutrition
-1-
Lender: Dresdner Bank AG, New York Branch
and Grand Cayman Branch
Bank: Dresdner Bank AG, New York Branch
ABA: 026 008 303
Acct #: 115241/15
Name: Weider Nutrition
Ref: Weider Nutrition Group
Lender: Zions First National Bank
Bank: Zions First National Bank
ABA: 124 000 054
Acct #: 9542817-9001
Name: Weider Nutrition
Ref: ▇▇▇ ▇▇▇▇▇▇▇▇
-2-
ANNEX I (SECTION 11.10)
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
NOTICE ADDRESSES
(a) If to Agent or any Lender, at:
General Electric Capital Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Weider Account Manager
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Weider Account Manager
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
General Electric Capital Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Counsel
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Winston & ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
-1-
(b) If to any Obligor:,
c/o Weider Nutrition International, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
-2-
ANNEX J
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
COMMITMENTS
REVOLVING CREDIT
LENDER LOAN COMMITMENT PERCENTAGE
General Electric Capital Corporation $ 43,550,000.00 33.50000%
CoreStates Bank, N.A. $ 22,425,000.00 17.25000%
LaSalle National Bank $ 22,425,000.00 17.25000%
The Bank of Nova Scotia $ 10,400,000.00 8.▇▇▇▇▇%
Creditanstalt-Bankverein $ 10,400,000.00 8.00000%
Dresdner Bank AG $ 10,400,000.00 8.00000%
Zions First National Bank $ 10,400,000.00 8.00000%
--------------- ----------
Total: $130,000,000.00 100.00000%
=============== ==========
-3-
EXHIBIT A
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
FORM OF
NOTICE OF REVOLVING CREDIT ADVANCE
Reference is made to that certain Third Amended and Restated Credit
Agreement dated as of May 6, 1997 by and among the undersigned ("HOLDINGS"), the
other Obligors named therein, General Electric Capital Corporation ("AGENT") and
all Lenders named therein (including all annexes, exhibits or schedules thereto,
as from time to time amended, restated, supplemented or otherwise modified, the
"CREDIT AGREEMENT"). Capitalized terms used herein without definition are so
used as defined in the Credit Agreement.
Holdings hereby gives irrevocable notice, pursuant to SECTION 1.1(A)
of the Credit Agreement, of a request hereby for a Revolving Credit Advance as
follows:
AGGREGATE AMOUNT OF ADVANCE: $____________
DATE OF ADVANCE: ____________
BORROWER AMOUNT OF ADVANCE TYPE OF REVOLVING CREDIT LOAN INTEREST PERIOD
__________ $________________ [Index Rate][LIBOR] Loan ___ Months
The requested Revolving Credit Advance is to be wired as follows:
[Name of Bank]
[City of Bank]
Beneficiary: _______________
Account No.: ______________
ABA No.: _________________
Attn: _____________________
-1-
Holdings hereby certifies that all of the statements contained in
Section 2.2 of the Credit Agreement and in Section 4 of the Security Agreement
are true and correct on the date hereof, and will be true and correct on the
date of the Advance(s) requested hereby, before and after giving effect thereto
and to the application of the proceeds therefrom. In the case of any Revolving
Credit Advance bearing interest at the LIBOR Rate, Holdings certifies that it
has complied with the requirements of Section 1.5(e) of the Credit Agreement.
Holdings' Chief Financial Officer hereby certifies that at the time
of and after giving actual and pro forma effect to the requested Revolving
Credit Advance each Borrower for which such advance is requested is and will be
Solvent.
IN WITNESS WHEREOF, Holdings has caused this Notice of Revolving
Credit Advance to be executed and delivered by its duly authorized Chief
Financial Officer as of the
date first set forth above.
WEIDER NUTRITION INTERNATIONAL, INC.
By:
Chief Financial Officer
-2-
EXHIBIT B
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
FORM OF
NOTICE OF CONVERSION/CONTINUATION
Reference is made to that certain Third Amended and Restated Credit
Agreement dated as of May 6, 1997 by and among the undersigned ("HOLDINGS"), the
other Obligors named therein, General Electric Capital Corporation ("AGENT") and
all Lenders named therein (including all annexes, exhibits or schedules thereto,
as from time to time amended, restated, supplemented or otherwise modified, the
"CREDIT AGREEMENT"). Capitalized terms used herein without definition are so
used as defined in the Credit Agreement.
Holdings hereby gives irrevocable notice, pursuant to SECTION
1.5(E) of the Credit Agreement, of a request hereby to:
(a) convert $________ of the aggregate outstanding principal amount
of the Revolving Credit Loan advanced to [Borrower], bearing interest at
the [LIBOR][Index] Rate, into a(n) [LIBOR][Index Rate] Loan and, in the
case of a LIBOR Loan, having an interest period of _____ month(s)
(b) continue $________of the aggregate outstanding principal amount
of the Revolving Credit Loan advanced to [Borrower], bearing interest at
the LIBOR Rate, as a LIBOR Loan having an interest period of _____
month(s)
Holdings hereby certifies that all of the statements contained in
Section 2.2 of the Credit Agreement and in Section 4 of the Security Agreement
are true and correct on the date hereof, and will be true and correct on the
date of the conversion(s)/continuation(s) requested hereby, before and after
giving effect thereto. In the case of a conversion to or continuation of any
Revolving Credit Advance bearing interest at the LIBOR Rate, Holdings certifies
that the requirements of Section 1.5(e) of the Credit Agreement have been
complied with.
Holdings' Chief Financial Officer hereby certifies that at the time
of and after giving actual and pro forma effect to the requested
conversion/continuation each Borrower for which such advance is requested is and
will be Solvent.
IN WITNESS WHEREOF, Holdings has caused this Notice of Conversion/
Continuation to be executed and delivered by its duly authorized Chief Financial
Officer as of the date first set forth above.
WEIDER NUTRITION INTERNATIONAL, INC.
By:
Chief Financial Officer
-3-
EXHIBIT C
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
FORM OF
THIRD AMENDED AND RESTATED REVOLVING CREDIT NOTE
Chicago, Illinois
$__________________ _______________, _______
FOR VALUE RECEIVED, each of the undersigned (collectively,
"Borrowers"), HEREBY JOINTLY AND SEVERALLY PROMISES TO PAY to the order of
_________________________ ("Lender"), at the address of General Electric Capital
Corporation, as Agent for Lenders, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as Agent may designate from time
to time in writing, in lawful money of the United States of America and in
immediately available funds, the amount of __________________________ DOLLARS
AND ___ CENTS ($____________) as such amount may be adjusted from time to time,
if at all, pursuant to the "Credit Agreement" (as hereinafter defined), or, if
less, the aggregate outstanding amount of Lender's Pro Rata Share of the
Revolving Credit Loan. Capitalized terms, unless otherwise defined herein, shall
have the respective meanings assigned to such terms in the Credit Agreement and
ANNEX A thereof.
This Third Amended and Restated Revolving Credit Note (this "Note")
is issued pursuant to that certain Third Amended and Restated Credit Agreement,
dated as of May 6, 1997, by and among Borrowers, the other Obligors named
therein, Agent and Lenders (as the same may from time to time be amended,
restated, supplemented or modified, the "Credit Agreement"), and is entitled to
the benefit and security of the Credit Agreement, the Security Agreement and the
other Loan Documents. Reference is hereby made to the Credit Agreement for a
statement of all of the terms and conditions under which the Revolving Credit
Loan evidenced hereby was made and is to be repaid.
The principal amount of the Indebtedness evidenced hereby shall be
payable in the amounts and on the dates specified in the Credit Agreement, the
terms of which are hereby incorporated herein by reference. Interest thereon
shall be paid until such principal amount is paid in full at such interest rates
and at such times as are specified in the Credit Agreement. If any payment on
this Note becomes due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day and with
respect to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.
Upon and after the occurrence of any Event of Default, this Note
may, as provided in the Credit Agreement, and without demand, notice or legal
process of any kind, be declared, and immediately shall become, due and payable.
Demand, presentment, protest and notice of nonpayment and protest are hereby
waived by Borrowers.
-1-
THIS NOTE HAS BEEN EXECUTED, DELIVERED AND ACCEPTED AT CHICAGO,
ILLINOIS AND SHALL BE INTERPRETED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH,
THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS) OF THE STATE OF
ILLINOIS.
The Revolving Credit Notes issued and delivered on the date hereof
to the Lenders are issued in replacement of and substitution for, and not in
payment of, the Revolving Credit Loan made to the Borrowers pursuant to the
Prior Credit Agreement, and the amount of said Revolving Credit Loan shall be
deemed to continue as the Revolving Credit Loan on the Closing Date, including,
without limitation, all accrued and unpaid interest thereon, and shall hereafter
be evidenced by such Revolving Credit Notes.
WEIDER NUTRITION GROUP, INC.
SCHIFF PRODUCTS, INC.
GREAT AMERICAN FOODS, INC.
AMERICAN NUTRITION BARS, INC.
For each of the foregoing:
By: ________________________________
Title: _____________________________
-2-
EXHIBIT D
TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
FORM OF
COLLATERAL CERTIFICATE
This Collateral Certificate is submitted as of __________, ____, under and
pursuant to that certain Third Amended and Restated Credit Agreement dated May
6, 1997, by and among the undersigned ("Holdings"), the other Obligors named
therein, General Electric Capital Corporation ("Agent") and the Lenders named
therein, is tendered for the purpose of inducing the Lenders to continue to make
Revolving Credit Advances and incur Letter of Credit Obligations to or for the
benefit of Borrowers and is certified to be true and correct in all particulars.
▇▇▇▇▇ R ABB NION NUTRITION SCHIFF GAF ANB
--------- ------ ------ ----------- -------- ----- -------
Accounts
> 60 days past due
intercompany
contracts
Inventory
at outside vendors
WIP
__________________________
Weider all operations of Nutrition other than ABB, NION, Schiff, GAF and ANB
ABB American Body Building, a division of Nutrition
NION National Institute of Nutrition, a division of Nutrition
Nutrition Weider Nutrition Group, Inc.
Schiff Schiff Products, Inc.
GAF Great American Foods, Inc.
ANB American Nutrition Bars, Inc.
IN WITNESS WHEREOF, Holdings has caused this Collateral Certificate
to be executed and delivered by its duly authorized Chief Financial Officer as
of the date first set forth
above.
WEIDER NUTRITION INTERNATIONAL, INC.
By:_______________________________
Chief Financial Officer
-1-
